Distressed debt manager puts newly raised capital to work

Neuberger Berman announced today that it has invested 32% of the capital raised for a new closed-ended fund that it listed on the London Stock Exchange in June, raising $197 million. It says it has bought into 12 companies at an average price of 56 cents in the dollar.

The shares have traded up following the IPO and now trade at a premium of 7.3% to the NAV. According to specialist broker Liberum Capital this reflects the strong demand for distressed debt exposure in this liquid format. Neuberger Berman is now planning a secondary offering for the fund of $75 million.

The distressed debt fund targets returns of 20% a year and plans to buy the debt of mainly US companies. Its main portfolio manager is Michael Holmberg, who joined Neuberger Berman in 2009 when it bought the firm he founded, Newberry Capital. Before setting up Newberry, Holmberg ran distressed debt at Ritchie Capital.