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Dyal Capital Partners III closes with $5.3 billion

Dyal Capital Partners III closed in December with $5.3 billion of committed capital, more than $2 billion above the fund’s original cap.

The fund, which acquires minority interests in institutional private equity managers, was “heavily oversubscribed at the final close,” said a news release Tuesday from Dyal’s parent company Neuberger Berman Group.

Dyal Capital said its third fund is the largest raised to invest in private equity specialists.

Dyal Capital Partners III will invest in 10 to 12 private equity managers diversified by geography, asset class and strategy. The fund’s goals are to provide passive equity capital to assist private equity managers with generational transfers and more often with the creation of balance sheet capital, according to the news release.

To date, the fund has invested more than 50% of capital raised from institutional investors in minority stakes in Vista Equity Partners, EnCap Investments, Silver Lake Technology Management, H.I.G. Capital, Starwood Capital Group and KPS Capital Partners.

“We remain optimistic on the role that private market managers will play in the future of the asset management industry. As the industry continues to grow and evolve, established firms may require strategic capital. We want to provide that capital,” said Michael Rees, Neuberger managing director and head of Dyal Capital Partners, in the release.

Investors in Dyal Capital Partners III include the $186 billion New York State Common Retirement Fund, Albany; the Minnesota State Board of Investment, which oversees $80.9 billion; the $71.2 billion New Jersey Pension Fund, Trenton; and the $10.5 billion endowment of University of Michigan, Ann Arbor.

With the close of the fund, aggregate commitments to Dyal Capital Partners’ three funds total more than $8.7 billion from 160 asset owners and have acquired minority partnerships in 20 firms, according to the release.