NB Private Equity Partners' Strategic Share Buybacks Signal Confidence in Long-Term Value

In a move underscoring its commitment to optimizing capital structure and enhancing shareholder value, NB Private Equity Partners (NBPE) executed two share buy-back transactions in early April 2025. These moves, part of a broader $120 million repurchase program, reflect a disciplined strategy to reduce outstanding shares and align with its closed-end investment mandate.

Transaction Details: Precision in Capital Allocation

On April 16, NBPE repurchased 18,116 Class A Shares at prices between £14.48 and £14.90, reducing outstanding shares to 45,634,273 after cancellation. A second transaction on April 17 saw the purchase of 4,200 shares, further trimming the outstanding total to 45,630,073. Combined with 3.15 million treasury shares, this reduces the total issued shares to approximately 48.78 million, while adhering to the annual 14.99% buy-back limit set by shareholders in June 2024.

The Buy-Back Program: Context and Objectives

The transactions are part of a multi-year initiative aimed at optimizing capital structure by retiring shares permanently. This reduces dilution and may bolster per-share metrics like NAV and dividends. NBPE’s closed-end structure—focusing on direct private equity investments—means buy-backs can counteract liquidity imbalances or discounts to net asset value (NAV).

Crucially, the program avoids management fees and carried interest for third-party general partners, a fee-efficient model that distinguishes NBPE in its sector. With Neuberger Berman (its $515 billion AUM parent) overseeing operations, the buy-backs align with a long-term focus on capital appreciation and bi-annual dividends.

Regulatory Compliance and Transparency

The transactions were executed under the FCA’s Disclosure Guidance and Transparency Rules, mandating that post-cancellation share counts—45,630,073 as of April 17—be used for voting rights calculations. This ensures regulatory rigor, a key factor for investor confidence.

Strategic Implications: Capacity, Risks, and ESG

Remaining Buy-Back Capacity:
As of April 2025, NBPE has utilized $3.23 million of its $120 million reserved capital, leaving ~$116.78 million available for future repurchases. The annual share repurchase limit permits up to 7.15 million additional shares this year, providing ample flexibility.

Risks and Considerations:
- Market Conditions: Buy-backs will hinge on share price discounts to NAV and broader market sentiment.
- Dividend Balance: With a $0.47 per share annual dividend, the board must balance buy-backs and payouts to maintain liquidity.
- ESG Integration: NBPE’s adherence to PRI principles and Neuberger Berman’s ESG focus may attract sustainability-conscious investors, a growing priority in private equity.

Conclusion: A Prudent Play for Long-Term Value

NBPE’s share buy-backs are a strategic response to optimize capital and signal confidence in its underlying assets. With $116.78 million in reserved capital and a robust parent in Neuberger Berman, the company is positioned to navigate market volatility while enhancing shareholder returns.

The April transactions, while modest in scale, demonstrate discipline in execution. Over time, such actions could narrow the discount to NAV and support price stability. Investors should monitor future repurchase activity, NAV trends, and the utilization of reserved capital—key indicators of NBPE’s long-term health and management’s alignment with shareholder interests.

In an era of heightened scrutiny over corporate capital allocation, NBPE’s approach—combining regulatory compliance, fee efficiency, and ESG integration—sets a benchmark for its peers. For now, the buy-backs are a clear vote of confidence in its future trajectory.