NBPE Navigates Private Equity Headwinds with Resilient NAV and Strategic Edge

In a month marked by turbulence in private markets, NB Private Equity Partners (NBPE) has demonstrated remarkable resilience, posting a NAV per share of $27.24 as of 31 May 2025. Despite a marginal -0.2% monthly return, the fund's stable performance, robust liquidity, and cost-efficient structure position it as a compelling alternative to traditional listed private equity vehicles. Let's dissect what makes NBPE a standout play in today's challenging market environment.

NAV Performance and Liquidity Fortitude

NBPE's May 2025 NAV held steady despite headwinds in private equity markets, with private holdings declining by 0.4% in Q1 2025. What's striking is the fund's ability to offset this drag through its quoted portfolio, which rose 0.6% as public securities now account for 6% of fair value. Meanwhile, liquidity remains a bulwark: $285 million is available, including $75 million in cash and a $210 million undrawn credit line. This financial flexibility allows NBPE to execute its share buyback program aggressively.

In May alone, ~51,000 shares were repurchased at a 30% discount, accretive by $0.01 per share. Year-to-date, ~$14 million has been deployed to buy back ~738,000 shares, boosting NAV by ~$0.11. These accretive buybacks are a stark contrast to many peers struggling with overleveraged balance sheets or stagnant NAVs.

Cost Efficiency and Structural Advantages

A key differentiator for NBPE is its low-cost structure. Unlike most listed private equity funds that pay management fees and carried interest to third-party GPs, NBPE's portfolio is managed by Neuberger Berman, which incurs no such fees for the majority of its investments. This eliminates a recurring expense burden, funneling more capital toward direct equity stakes. With ~77% of assets focused on North America—a region with strong private equity exit opportunities—and a vintage distribution skewed toward recent years (e.g., 2021 and 2024), the fund is well-positioned to capitalize on upcoming realizations.

Year-to-date realizations of $66 million, including $8 million in May, suggest a pipeline capable of delivering liquidity over the next 12–18 months.

Portfolio Diversification and Top Holdings

NBPE's portfolio is intentionally diversified across sectors and geographies. The top three sectors—Tech, Media & Telecom (22%), Consumer/E-commerce (22%), and Industrials/Industrial Tech (17%)—align with secular growth trends. Notable holdings include:
- Action ($83.7M): A leading SaaS platform for enterprise workflow automation.
- Osaic ($65.5M): A cybersecurity firm with a growing footprint in cloud security.
- Solenis ($59.8M): A chemicals specialist serving industrial clients.

Geographically, 77% exposure to North America balances risk with opportunity, while Europe's 22% stake anchors the fund in a region with improving macroeconomic conditions.

Alignment with Neuberger Berman's Track Record

As a $1.2 billion FTSE 250 entity managed by Neuberger Berman—a $515 billion asset management giant—NBPE benefits from its parent's global reach and engaged ownership philosophy. Neuberger's focus on active management and long-term value creation has produced a 10-year NAV total return of 13.2%, outperforming the FTSE All-Share (11.1%) over the same period.

Investment Considerations

While NBPE's 1-year NAV return of 2.5% lags behind broader markets like the MSCI World (14.2%), its private equity focus demands a longer-term lens. The fund's current share price discount of ~29% to NAV creates a margin of safety, and the accretive buyback program reduces dilution while signaling management confidence.

Investors should weigh the risks: private equity valuations remain volatile, and the fund's heavy reliance on North America could amplify downside if U.S. economic growth stalls. However, NBPE's liquidity buffer, fee-efficient structure, and Neuberger Berman's credibility mitigate these concerns.

Final Take: A Contrarian Play with Long-Term Appeal

In a market where private equity funds often face NAV drags and fee-heavy structures, NBPE stands out. Its resilient NAV, disciplined capital allocation, and alignment with a top-tier manager make it a compelling alternative to high-fee listed funds or volatile public equities. For investors willing to embrace private markets' longer time horizons, NBPE offers a rare blend of liquidity, diversification, and value—making it a top pick in the listed private equity space.

Recommendation: Consider accumulating NBPE on dips, especially if the discount to NAV widens further. Monitor Q3 realizations and private portfolio valuations for catalysts.