Evercore gains placement arm with Neuberger deal

Major changes in the fundraising industry continue with Evercore’s purchase of an eight-person private placement team from the former Lehman division. The Evercore Private Funds Group will place infrastructure, real estate, buyouts and other alternative strategies.

Evercore Partners has paid an undisclosed sum to buy the private funds business of Neuberger Berman, a former asset management division of Lehman Brothers that was purchased by its management in December 2008.

Financial details were not disclosed, though Evercore said in a statement that Neuberger Berman will receive earn-out payments which would “provide them with an economic interest in the success of the group for a period of time.”

The eight-person Neuberger team, headed by Richard Anthony, is based in London and will operate as Evercore Private Funds Group. It advises fund managers in alternative asset strategies including real estate, infrastructure, buyouts, co-investments, distressed assets, credit and mezzanine products, fund of funds and venture capital.

The placement group will initially serve clients in Europe and the US, however, Evercore said the platform is expected to establish “a broader presence” in the US as well as expand its coverage across continental Europe and the Middle East.

The move comes amid a period of intense turmoil in the placement industry. A slowed fundraising environment and increased scrutiny from US lawmakers amid an unfolding kick-back scandal are among developments that have caused some institutions like Citi, Deloitte and Merrill Lynch Bank of America to wind down or reduce placement activities. The changes at these groups have in turn seen some fundraisers to join rival groups or spin out to form their own.

Ralph Schlosstein, president and chief executive officer at Evercore Partners, said the addition of the Neuberger platform would complement “strong relationships with leading fund sponsors, and will add significantly to our network of relationships with institutional investors”.

Neuberger Berman was previously owned by Lehman Brothers, the collapsed Wall Street bank. In late 2008, it was purchased out of bankruptcy by management, beating bids from private equity firms including Bain Capital and Hellman & Friedman.