NB Private Equity Partners (LON: NBPE)
Is NB Private Equity Partners the Unloved Bargain Hiding in Plain Sight?
Price to Book (NAV): 0.64x
Discount to NAV: 36%
Dividend yield: 5.4%
10-year annualised return: 10.4%
Portfolio revenue growth (LTM): 9.1%
Portfolio EBITDA growth (LTM): 9.7%
Dear reader,
Right now, you can buy £1 of professionally managed private equity assets for 64p. The company offering that trade is NB Private Equity Partners (NBPE), a £1.1 billion FTSE 250 listed investment company managed by Neuberger Berman. The question is whether that 36% discount is a genuine opportunity or a price the market has set for good reason.
To understand which side of that argument you land on, you need to understand how the business model works.
Private equity firms, think 3i, Francisco Partners, Thoma Bravo raise large funds from institutional investors, use that money to buy controlling stakes in private companies, spend several years improving those businesses, and then sell them at a profit. Investors in those funds typically wait years to see returns and pay two layers of fees: one to the buyout firm running the fund, and one to whatever vehicle they used to access it.
NBPE sits alongside that process rather than inside it. When a buyout firm is completing a deal, it will sometimes offer co-investment to trusted partners, the chance to invest directly in that specific company, on the same terms as the fund. NBPE, through Neuberger Berman’s relationships with over 48 buyout managers globally, is one of those trusted partners. Neuberger’s platform sees more than 12 potential opportunities every week, and NBPE selects the ones it wants.
The result is a portfolio of direct stakes in 72 individual private companies, not a fund of funds, not an indirect exposure, but actual ownership of specific businesses, chosen deal by deal. Because it invests this way, NBPE typically avoids paying additional fees to the underlying buyout managers, almost all of the portfolio carries no extra charge at the deal level. Investors pay only NBPE’s own fees: 1.5% annually on the portfolio value and a performance fee of 7.5% of gains above a 7.5% annual return hurdle. That single-layer structure is materially cheaper than most routes into private equity.
The portfolio spans industrials, financial services, consumer, technology, healthcare and business services, across North America (78%) and Europe (22%). These are not startups. They are established, cash-generative businesses a specialty chemicals company, a wealth management platform, an aerospace parts distributor, a cybersecurity firm, a European discount retailer.
The average holding has been owned for 5.8 years. Many are approaching the natural exit window where the buyout firm will look to sell and when that happens, NBPE gets its share of the proceeds. In 2025, those exits came in at a 17% premium to the value at which they were carried on the books three quarters earlier. When NBPE sells things, it tends to get more than it said they were worth.
In theory, this should be a genuinely attractive structure. In practice, the shares trade at a steep discount to the value of what it owns. That is the central tension.
The key financials (March 2026):
Share price: £13.24 vs asset value per share of £20.57 a discount of ~36%
Dividend yield on share price: ~5.4%
2025 total return: 5.0% | 10-year annualised return: 10.4%
Cash and available credit: $196 million
The Financials: What the Numbers Actually Say
Balance Sheet
The balance sheet is the first thing to stress-test with any private equity vehicle. The risk that keeps investors up at night is a forced seller a company that needs cash at the wrong moment and has to sell assets cheaply to get it.
Total assets stood at $1.3 billion at year-end 2025, almost entirely made up of the investment portfolio. Against that, the company had drawn just $90 million on its $300 million revolving credit facility, leaving $210 million of undrawn capacity. Add $91 million of cash and liquid investments, and available liquidity at 31 December 2025 was $302 million falling to a still-healthy $196 million by 31 March 2026 after funding new investments and paying the dividend. There are no significant unfunded commitments sitting off balance sheet waiting to be called. What you see is what there is.
The portfolio is invested at 110% of NAV. NBPE uses modest borrowing to keep slightly more money working than it has in equity. That is within its stated target range and is not aggressive by sector standards. The credit facility costs SOFR plus 2.875%, a real cost in the current rate environment, but manageable against a portfolio generating high single-digit operating returns.
Income Statement
NBPE does not produce a conventional income statement. Its earnings are essentially the change in value of the portfolio plus cash received from exits. In 2025, NAV moved from $1,273 million to $1,209 million, a fall in absolute terms, but almost entirely explained by the $102 million returned to shareholders through dividends and buybacks. Strip that out and the portfolio generated meaningful value.
The private company portfolio appreciated $46 million on a constant currency basis, a 3.9% gain driven by genuine operating performance. Portfolio companies grew revenues 9.1% and EBITDA 9.7% over the last twelve months, solid for a diversified group of mature businesses in a difficult macro environment. The top ten holdings did better still, delivering double-digit growth on both measures. The drag was the smaller quoted holdings the 6% of the portfolio already listed on public markets which fell $10 million on broader market weakness. Foreign exchange added back $35 million from dollar strength. Management fees, financing costs and operating expenses consumed around $32 million in total.
The net result was a 5.0% NAV total return. Unspectacular but real, and built on underlying business performance rather than rising valuation multiples.
Cash Flow
For an investment company, cash flow tells you whether the model is actually working, are exits happening, is cash coming back, and is management deploying it sensibly?
In 2025, the answer was yes. NBPE received $180 million from realisations, a 57% increase on 2024’s $110 million, at a 2.8x multiple on invested capital and a 17% premium to carrying value three quarters before each exit was announced. When NBPE actually sells things, it gets more than it said they were worth and that matters enormously when assessing whether the book value of the remaining portfolio is credible.
Against those inflows, only $23 million went into new investments during 2025 deliberately cautious while exit markets were uncertain. That has since changed, with $89 million committed to six new deals since September 2025. Shareholders received $44 million in dividends and $59 million in buybacks, funded entirely by realisation proceeds. The company did not need to borrow to return capital. That is an important distinction.
Betting on AI
Since September 2025, NBPE has committed $89 million to six new investments, four of which are described as AI-driven or positioned to benefit from AI. The named deals include:
Infra Group — a European infrastructure services company with exposure to energy transition and digital infrastructure, backed by PAI Partners
Conservice — the largest utility management and billing platform for US property managers, backed by TPG
Ryan — a B2B tax services business helping corporates recover tax savings, backed by Ares and Onex, in which NBPE invested $35 million
Two undisclosed technology companies described as AI-theme related
The AI framing deserves some healthy scepticism nearly every investor document in 2026 mentions artificial intelligence. But the underlying businesses here are defensible regardless: tax recovery, utility billing, and infrastructure services are not speculative. They are recurring-revenue, non-discretionary businesses that happen to have AI as a margin expansion lever. That is a more grounded thesis than the label suggests.
Early results from the 2024 and 2025 vintages are encouraging. On $104 million of invested capital, total value stands at $143 million, a 1.4x gross return and roughly 20% gross IRR. Revenue and EBITDA growth for these newer holdings are running at 21.5% and 22.8% respectively, well ahead of the broader portfolio.
The Valuation:
This is the section that matters most.
NBPE’s shares trade at £13.24 against an independently calculated asset value of £20.57 per share, a 36% discount. You are paying 64p for every pound of assets. The obvious question is why, and whether that gap is structural or cyclical.
