Dyal Closes Largest Minority Fund Ever Raised

Dyal Capital Partners, a division of Neuberger Berman, has held a final closing of Dyal Capital Partners IV LP (Fund IV) with over $9 billion of committed capital.

The new fund increased its target by more than $3.5 billion during its marketing period and was heavily oversubscribed at its final close on October 31, 2019. According to Dyal, Fund IV is the largest fund ever raised to acquire minority interests in institutional private market firms. With the closing of Fund IV, total commitments across all Dyal funds and co-investment vehicles now total more than $21.6 billion.

Limited partners in Fund IV include sovereign wealth funds, public and corporate pension plans, endowments, foundations and family offices. Approximately 51% of Fund IV’s capital comes from the Americas and more than a third comes from Asia.

Dyal makes minority equity investments in private equity and hedge fund management companies worldwide and since its founding in 2011 has invested in 41 firms.

“As the private equity industry continues to grow and evolve, we want to remain the go-to strategic partner for established firms,” said Michael Rees, managing director and head of Dyal. “We believe that no one else offers our combination of permanent capital, a large and diverse operating team and the experience of customizing bespoke solutions across our partners’ capital structures.”

The firm’s earlier fund, Dyal Capital Partners III LP, closed in December 2016 with $5.3 billion of committed capital, more than $2 billion above its original target size.

Like its predecessor funds, Fund IV will make minority equity investments in approximately 15 private equity firms across a range of asset classes, strategy, and geography.

To date, Fund IV has closed on ten investments; H.I.G. Capital (August 2016), Clearlake Capital Group (May 2018), HPS Investment Partners (July 2018), Golub Capital (August 2018), Bridgepoint (August 2018), American Securities (October 2018), HGGC (March 2019), I Squared Capital (October 2019), Arcmont Asset Management (November 2019), and Owl Rock (November 2019). These ten investments comprise 64% of Fund IV’s total capital.

In addition to providing minority capital, Dyal also has a Business Services Platform (BSP), a 26-person post-investment team led by Managing Director John Dyment that provides senior management, business development, and back-office personnel of its investment partners with a range of services including client development and marketing, talent development, business strategy, management consulting, and operational advisory.

Neuberger Berman, founded in 1939, is a private, independent, employee-owned investment manager. The firm manages equities, fixed income, private equity and hedge fund portfolios for institutions and advisors worldwide with $339 billion in client assets as of September 30, 2019. The firm has offices in 23 countries and is headquartered in New York City.

Dyal has offices in New York, London, and Hong Kong and a worldwide team of 14 investment professionals.

© 2019 Private Equity Professional | December 4, 2019

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