Exclusive: Neuberger debut fund fees below average

The private debt group, headed by Susan Kasser, who came over from Carlyle in 2013, is said to be offering lower than average fees to LPs.  

Neuberger Berman, the US investment management firm, is raising its first private debt fund, having hired Susan Kasser (pictured) from The Carlyle Group to lead the strategy in 2013. The firm is targeting $400 million for its first private debt vehicle. According to a filing for the NB Private Debt ASP Fund on 12 May, the firm had raised $80.6 million for the strategy. Sources tell PDI that Neuberger Berman is offering below average fees to LPs in this fund.

Kasser referred questions to a Neuberger Berman spokesman, who declined to comment.

According to sources familiar with the fundraise, the firm is charging a 1 percent management fee on invested capital with no fees on committed capital, while its performance fees are tiered depending on mandate size. The firm is charging a 10 percent performance fee on a 7 percent hurdle for mandates of $25 million or more. For commitments under $25 million, the carry is 12.5 percent over the same 7 percent hurdle.

Neuberger Berman hired Kasser as a managing director and head of private debt in its alternatives division in April 2013. She joined from The Carlyle Group, where she was a founding member of Carlyle Mezzanine Partners. While there, she focused on privately-negotiated junior debt and equity securities of mid-market and large-cap leveraged buyouts, refinancing and growth financings across a range of industries. Before Carlyle, she worked at several groups within Goldman Sachs including leveraged finance, private equity and global investment research.

Neuberger Berman is an independent, employee-controlled investment manager. The firm handles a variety of traditional and alternative investment strategies, including equities, fixed-income, hedge funds and private equity. The investment manager was founded in 1939 and has about $250 billion in assets under management. Neuberger Berman spun out from Lehman Brothers' asset management arm, after the bank shuttered following the financial crisis of 2008.

(The headline in this story was changed from the original to clarify that the fees were not cut from a higher level).