This article first appeared in The Edge Financial Daily, on July 28, 2016.

KUALA LUMPUR: RHB Asset Management (RHB AM) has inked a strategic partnership agreement with New York-based private investment manager Neuberger Berman, following which they jointly launched the new private equity-focused RHB Private Equity Opportunity Fund 1.

RHB AM managing director and regional head Eliza Ong said the fund is the first of its kind in Asia, employing a multi-strategy approach, leveraging on Neuberger Berman’s big platform and private equity strategies.

“With Neuberger Berman’s 29 years of experience and expertise, strong relationships with more than 300 general partners and over 14,000 private equity-owned companies, we believe we can achieve long-term capital appreciation of 15% to 20% of gross IRR (internal rate of return) for this fund,” she said.

Neuberger Berman principal D Brock Williams said the group employs different investment strategies, namely direct private equity investments, opportunistic secondary investments, private debt investments and other specialty strategies, which include investments in pharmaceutical intellectual property and brand royalties.

“We invest predominantly in US companies. For the next year or two, there will be much volatility in the market. We have Brexit behind us and the US elections ahead of us. Certainly, there are a lot of different events that introduce a lot of volatility into the market.

“We like companies that are relatively less cyclical, [are] steady profit generators and [enjoy] high margins as well. From an industry perspective, it’s usually around healthcare, business services, software businesses and anything that is not commodity-related,” he said.

Neuberger Berman Asia Ltd managing director and head of marketing Nick Hoar said the partnership with RHB is not just a one-off capital-raising exercise.

“We manage roughly about US$250 billion (RM1.02 trillion); one half of that is for big institutions such as central banks, sovereign wealth funds, corporate pension funds and insurance companies. The other half is for individual investors, in which we get access to distribution partners. In this case, it’s RHB.

“This isn’t just a one-off capital raising with RHB. What we mean by [a] strategic partnership is it’s something we can develop over time,” he said, adding that the two parties intend to introduce more funds in the future.

The RHB Private Equity Opportunity Fund 1, with a fund size of US$100 million, is offered at RM1 per unit, with a minimum initial investment of RM100,000.