Tracker Certificat - NB Select Opportunities Fund VII

Why investing with Neuberger Berman in a co-investment private equity fund

Insightful Deal Flow and Substantial Assets Under Management
Neuberger Berman, a top-tier private equity firm, capitalizes on its distinct position within the private equity landscape and its extensive network of general partner relationships to access valuable insights and robust deal flow. With total assets under management reaching $91 billion USD, their influence in the market is formidable.

Independent Ownership Structure
Neuberger Berman stands out as a private, independent, and employee-owned investment manager, a rarity in the asset management industry where most firms are publicly traded or owned by financial institutions.

Client-Centric Approach and Employee Ownership
With a belief that their 100% independent, employee-owned structure aligns them closely with their clients' long-term interests, Neuberger Berman operates without external parent companies or public shareholders. Their commitment is evident through significant personal investments from employees and a direct link between employee compensation and the firm's performance.

Experienced and Cohesive Team
Neuberger Berman boasts a highly stable team, with a remarkable 98% retention rate and an average of over 20 years of experience among senior investment team members. Their expertise is complemented by the extensive resources available across the organization in research, risk management, and ESG considerations.

Strategic Advantage in Deal Sourcing
The firm leverages its advantageous position in the private equity ecosystem, fostering a seamless flow of information and fostering deep relationships with general partners. This positioning enhances their capabilities in deal sourcing, due diligence, and execution.

Industry Recognition and ESG Integration
Neuberger Berman's commitment to excellence is evident through numerous industry accolades, including Private Equity Manager of the Year and recognition for their ESG integration efforts. They believe that incorporating environmental, social, and governance considerations can lead to more consistent and favorable investment outcomes.

Why invest in a Co-Investment Fund?
Observing a Window of Opportunity
The scarcity of co-investment capital might be creating a promising window of opportunity.

Notable Growth in Co-Investment Opportunities
Since the second half of 2022, there has been significant growth in the number of co-investment opportunities observed by private equity fund managers. Invitations have been extended to make direct minority investments in individual companies alongside the manager's private equity fund.

Factors Influencing Co-Investment Demand
The demand for co-investment capital from general partners (GPs) appears to be increasing amid a lower supply of capital from co-investors. This trend is occurring despite a decline in overall private equity transaction value, as reported by PitchBook.

Understanding the Attractiveness of the Current Co-Investment Environment
The current environment for co-investments is believed to be particularly attractive due to several factors, including heightened demand for equity financing, challenges in private equity fundraising, and the preference among GPs to preserve dry powder.

Boosting Midlife Co-Investments
A surge in "midlife" co-investments has been observed, driven by the need for liquidity among limited partners (LPs) and the desire of GPs to maintain majority ownership and control of assets. These midlife investments offer an alternative to traditional exit routes, such as IPOs, amidst challenging market conditions.

Capital Constraints and Decreased Co-Investment Supply
The high demand for capital is juxtaposed with a lower supply of co-investors, influenced by factors such as economic uncertainty and the "denominator effect," which limits investors' ability to increase exposure to private equity.

Opportunity for Experienced Co-Investors
Despite these challenges, seasoned co-investors with established GP relationships and proven deal-sourcing capabilities may find an expanded opportunity set. Economic uncertainty and capital scarcity, coupled with dislocated financing markets, present a notable window of co-investment opportunity for these investors.

Why invest in a Splint Invest tracker certificate with the NB Select Opportunities Fund VII as underlying?
NB Select Opportunities Fund VII seeks to build a diversified portfolio of attractive direct private equity investments in what we believe is a fee and capital efficient manner.

Here's why it's a standout choice:

• Short Investment Period and Investment Horizon: 1-Year Investment Period and 6-year term from the final closing date; serial funds expected to be offered on an annual basis
• Differentiated Strategy: Co-underwrite, mid-life and traditional co-investment deals
• Fee Efficient: Access to private equity investments at lower cost than traditional private equity funds
• Attractive Track Record: Aggregate net IRR of approximately 20% across NB Select Opportunities Funds I-V

Differentiated Co Investment Strategy:

• Mid-Life: Investment into an existing portfolio company of a lead private equity firm, providing capital for growth / add on acquisitions, recapitalizations and partial divestitures from existing shareholders; Potential benefits of NB mid life approach: Less competitive process, moderated valuations, potential for earlier monetization, risk mitigation: sponsor knows asset well
• Co-Underwrite / Pre-Syndicated: Active work alongside lead sponsor in deal diligence, structuring and execution, with more influence, access to information and capital; Capital is critical to the deal’s completion
• Traditional: Deal broadly syndicated by lead sponsor to investors after transaction has been signed

NB Select Opportunities Fund VII presents the following key attributes:
Fund Size: USD 750 million.
Investment Period: Approximately 1 year.
Investment Type: Co-Investments

Portfolio Construction:
Co-Investments: Portfolio to comprise ~25-35 underlying investments diversified across sponsor, industry, enterprise value, geography and transaction type.
Geographies: Investments span across North America, Europe, and Rest of World.
Investing Across All Enterprise Value: The fund will co-invest in companies with an enterprise value ranging from 0 to 5,000+ $ mm.