NB Private Equity Partners : Annual Report for the year ending 31 December 2023

Investing in private companies to generate long-term growth

2023 Annual Report

NB Private Equity Partners invests directly in private companies, alongside some of the world's leading private equity managers

02

STRATEGIC

NB Private Equity Partners ("NBPE")

is managed by the private markets division of Neuberger Berman (the "Manager" or the "Investment Manager"), a leading private markets investor. NBPE leverages the strength of Neuberger Berman's platform, relationships, deal flow and expertise to access the most attractive investment opportunities, providing shareholders with access to a portfolio of direct investments diversified by manager, sector, geography and size.

The architectural photography used in this report displays Neuberger Berman offices in New York, London, Hong Kong, Toronto, Boston, Dubai, Frankfurt and Tokyo.

STRATEGIC REPORT

03 Overview

08  Chairman's statement 12  Our business model 13  KPIs

15  Manager's review 22  Top 20 companies

24  Navigating value creation in private equity

26  ESG

32  People and culture

36  Stakeholder engagement 40 Risk management

44  Going concern and viability

GOVERNANCE

47  Governance overview 48  The Board

50  Corporate governance 57  Directors' report

60  Investment objective and policy 61  Remuneration report

64  Report of the Audit Committee

1. Statement of Compliance with the AIC Code of Corporate Governance
2. Statement of Directors' responsibilities

FINANCIALS

71  Independent Auditor's Report 75  Consolidated financial statements 81  Notes to consolidated financial

statements

OTHER

98  AIFMD Disclosures

1. Schedule of investments

1. Appendix

1. Glossary

1. Directors, Advisors and contact information
   111  Useful information 113  How to Invest 114  Endnotes

REPORT GOVERNANCE FINANCIALS  OTHER

Overview Chairman's statement

03

08

Manager's review		Top 20		Navigating value		ESG
		companies		creation in private
				equity

15

22

24

26

NBPrivate Equity Partners Annual Report 2023

OVERVIEW

Our year in numbers

Performance highlights

12 months to 31 December 2023

NAV growth

Cumulative at 31 December 2023 (% Total Return)

03

STRATEGIC REPORT GOVERNANCE FINANCIALS

2.3%1

NAV Total Return ($)

$0.94

Dividends per share

2.1x2

Average multiple of cost on realisations

9.4%1

Total Shareholder Return (£)

4.4%

Dividend yield on share price

$171m

Proceeds received in 2023

100	2.3%	24.4%	37.0%	25.2%	83.5%	87.3%
80
60
40
20
0	One year	Three years	Five years

NBPENAVTotalReturn($)3

MSCIWorldIndexTotal Return ($)4

 OTHER

NBPrivate Equity Partners Annual Report 2023

›› See footnotes on pages 114-115

OVERVIEW

Investing in private companies to generate long-term growth

04

STRATEGIC REPORT GOVERNANCE

Access to an active investment model

With a focus on two core themes

FINANCIALS

As owners, rather than minority shareholders, private equity managers can drive strategy and change to build long-term value, and generate returns that have outperformed public markets over multiple cycles.

A bespoke portfolio

Co-investing alongside leading private equity managers provides direct exposure to private companies and allows NBPE to build a portfolio of the best opportunities, leveraging the strength of Neuberger Berman's network.

Long-term secular growth trends

Companies that are expected to benefit from higher growth rates due

to long-term trends or behaviour changes:

- Companies which exploit

structural changes driven

by changes in customer

demand

Businesses with low expected cyclicality

These companies tend to be characterised by more defensive sectors or end markets:

- Generally companies which

are less susceptible to

changes in overall GDP

- May offer reasonable

downside protection

 OTHER

  NB Private

NBPE track record

2.4x5

Average multiple of cost on realisations (five years)

16.1%

Average gross IRR on direct equity investments (five years)

›› See footnotes on pages 114-115

39%6

Average uplift on realisations (five years)

- Creates new sources of

demand, which can often

be sustainable over long

periods (versus more

cyclical demand)

- Not confined to any one

type of business or sector

during periods of

economic contraction

- Can often be 'essential

services' or quasi-

infrastructure, such as waste

management, insurance

or other mission-critical

products or services

Patricia Miller Zollar

Managing Director, Member of the Investment Committee

Equity Partners Annual Report 2023

OVERVIEW

Leveraging the strength of the Neuberger Berman Private Markets platform

5 12,13

Policy, Governance and Strategy

2714

ESG investing professionals

05

STRATEGIC REPORT GOVERNANCE

An industry leader

The Private Markets platform at Neuberger Berman is industry-leading, with robust deal flow, demonstrated access and selectivity, and a vast network of relationships.

745+7

Fund commitments

410+10

$110bn+8,9

Private equity commitments managed

$34bn

FINANCIALS  OTHER

Anthony Tutrone

Global Head of NB Alternatives, Managing Director, Member of the Investment Committee

NBPE leverages the strength of the Neuberger Berman Private Markets platform to seek the most attractive direct co-investment opportunities.

With more than 430 private market professionals across 12 global locations, the strength and depth of the relationships across the platform are the principal source of deal flow for the co-investment programme.

Neuberger Berman focuses on the best opportunities, controlling the investment decision at entry, investing deal by deal, with ESG assessments made at the manager and company level.

Limited partner Advisory Committee seats

~2511

Years average experience among Managing Directors

$4bn

Direct specialty strategies

$6bn

Capital solutions

$16bn

Private debt

Co-investments

$34bn

Primaries

$17bn

Secondaries

NBPrivate Equity Partners Annual Report 2023

›› See footnotes on pages 114-115

OVERVIEW

David Stonberg

Deputy Head of NB Alternatives and Global

Co-Head of Private Equity Co-Investments,

Managing Director, Member of the

Investment Committee

We have a portfolio of

87 companies alongside

53 private equity managers

06

STRATEGIC REPORT GOVERNANCE

A portfolio that is built investment by investment

Diversified across sector, manager, geography and company size. NBPE's portfolio is built from the bottom up, investment

by investment, investing in high-quality companies with resilient business models, high barriers to entry and recurring revenue streams.

Sector

Geography

FINANCIALS  OTHER

›› See footnotes on pages 114-115

$1.3bn

Portfolio

71%

Fair value in Top 30 companies

93%

Fair value in private investments

11.4%15

LTM revenue growth (at December 2023)

15.2%15

LTM EBITDA growth (at December 2023)

5.3%

Aggregate increase in private company valuations (ex-FX)

	Tech, Media & Telecom	22%
	Consumer/E-commerce	21%
	Industrials/Industrial	18%
	Technology
	Business Services	12%
	Financial Services	12%
	Healthcare	9%
	Energy	1%
	Other	5%

	North America	72%
	Europe	25%
	Asia/RoW	3%

  NB Private Equity Partners Annual Report 2023

OVERVIEW

We offer the best of both worlds

Listed Private Equity funds bridge the gap between private and public equity, and are typically split between specialist 'single manager' direct investors and highly diversified 'fund of funds'.

NBPE's co-investment approach aims to combine the best of both the direct and 'fund of funds' models.

NBPE's portfolio is:

Diversified

Across sectors, private equity managers and company size

Typical single manager

Portfolio company diversification

NBPE offers investors exposure to a well- diversified portfolio of companies, with visibility of key underlying positions.

< 40 companies

Top 10 concentration 50%+

Number of

PE managers

Investing alongside numerous leading private equity managers limits typical single manager and strategy risk.

1

Over-commitment level

NBPE's deal-by-deal investment approach means that it can be more capital efficient and remain fully invested without taking on over-commitment risk.

Medium

Fees

98%16 of the direct investment portfolio incurs neither management nor performance fees to underlying third-party managers.

Single layer, higher performance fee

1.0%−1.5%

vehicle management fee

15%−20% performance fee

07

STRATEGIC REPORT GOVERNANCE FINANCIALS  OTHER

Capital efficient

We control the investment decision

at entry, and can be tactical in choosing the opportunities and responding to market conditions

Fee efficient

A single layer of fees

Responsible

ESG assessments made at both the manager and the company level

›› See footnotes on pages 114-115

NBPE

Typical fund of funds

87 companies

53

Top 10 concentration 34%

500+ companies	50+

Top 10 concentration ~10%

Very low

High

Single layer, lower performance fee

1.5%

vehicle management fee

7.5% performance fee

Double layer, higher performance fee

0.8%−1.5%

vehicle management fee

1.5%−2.0% underlying fund management fee

20% performance fee

  NB Private Equity Partners Annual Report 2023

CHAIRMAN'S STATEMENT

NBPE ended the year with net assets of $1.3bn ($28.07 per share), a 2.3% total return for the 12 months. Growth has once again been driven by the private portfolio companies, which delivered a 5.3% constant currency return, which was partially offset by weaker performance from our quoted holdings.

Private Portfolio Increase

5.3%

Constant Currency Basis

Continued portfolio company growth and execution of value creation strategies

On a weighted average basis, the portfolio generated last twelve month (LTM) Revenue and EBITDA growth of 11.4% and 15.2% respectively15. Many of the companies within our portfolio provide essential products

or services which enable other businesses to function, or are otherwise well positioned to be resilient even in an uncertain economic climate. Supported by an improving macroeconomic outlook in the second half of the year, it was the resilience of these businesses, as well as a focus on growth by private equity and portfolio company managers, that drove our portfolio's return. In particular, M&A was a significant focus for private equity managers. Several companies within the portfolio completed highly attractive

M&A transactions, which in some cases fundamentally transformed their businesses. We are excited by the prospects for these companies. At the same time, organic growth also positively contributed to overall growth within the portfolio.

Significant realisation activity in 2023 demonstrates the attractiveness of portfolio companies to strategic and financial buyers

In general, 2023 was a difficult year for private equity exits, with industry-wide deal volumes about 30% lower than in 2022, and about 45% lower than 2021 levels. Despite this, NBPE's portfolio generated $171 million

of cash proceeds from 12 partial and full exits. A further $39 million was received post year end from transactions which had been announced but had not yet closed, taking total announced realisations to $210 million19. Overall, we believe the level of cash proceeds received by NBPE - a 42% increase relative to 2022 - speaks to the high-quality, and the "in demand" nature of many of the companies in the portfolio. Realisations in 2023 were at an average of 2.1x2 cost and an 11%17 uplift to carrying value.

Webelievethecurrentmarket environmentiswellsuitedto privateequityinvesting.

William Maltby

Chairman

08

STRATEGIC REPORT GOVERNANCE FINANCIALS  OTHER

NBPrivate Equity Partners Annual Report 2023

›› See footnotes on pages 114-115

CHAIRMAN'S STATEMENT

09

Total proceeds received

$171m

in 2023

Follow-on investments in the year to support transformative M&A

One of the advantages of NBPE's co- investment model is that the Manager's investment team can be highly selective, with new investment decisions taken on a case by case basis. The team can choose its pace of investment activity depending on the portfolio construction and market outlook,

as well as ensuring the maintenance of a strong balance sheet. During the year, NBPE invested $22 million including follow-on opportunities in existing portfolio companies to support M&A and transformative acquisitions. The Company ended the year with an investment level of 101%, which

is at the lower end of the long-term target investment level range of 100-110%. Neuberger Berman maintained a strong pipeline of potential new co-investments throughout the year and, given NBPE's investment level at the year end, we anticipate new investment activity for NBPE to increase in 2024. Since the year end NBPE has deployed $38 million into two new investments in the healthcare sector; Benecon, an employee health benefits solutions provider, and Zeus,

1. leader in mission-critical components for lifesaving medical procedures. At 31 March 2024 the investment level was 102%.

Strong balance sheet and liquidity

NBPE ended the year with a strong balance sheet and available liquidity of $376 million (comprised of $166 million of cash/liquid investments and $210 million of available capacity on the Company's credit facility). As previously announced, NBPE intends to repay the 2024 ZDP final entitlement

of £65 million ($83 million) at maturity in October 2024.

Ten years of dividend payments

In 2023, NBPE paid $44 million of dividends to shareholders. This marks the 10th consecutive year of dividends paid to shareholders, which

Dividend growth $ per share

1.25	0.57	0.58	0.72	0.94	0.94
1.00
0.75
0.50
0.25
0.00	19	20	21	22	23

Improving sentiment, but wide discounts persist across the listed private equity sector

STRATEGIC REPORT GOVERNANCE FINANCIALS  OTHER

Summary balance sheet

	31 Dec 2023	31 Dec 2022
$m	(Audited)	(Audited)
Direct equity investments	$1,223.5	$1,286.4
Income investments	$90.0	$107.3
Total investments*	$1,321.3	$1,401.4
Investment level	101%	106%
Cash and Cash Equivalents/Liquid Investments	$165.8	$7.0
Credit facility drawn	($90.0)	-
ZDPs	($80.4)	($72.8)
Other	($11.2)	($8.4)
Net Asset Value	$1,305.5	$1,327.3
NAV per share ($)	$28.07	$28.38
NAV per share (£)	£22.02	£23.59

• Total investments include approximately $7.8 million of fund investments as of 31 December 2023 and $7.7 million as of 31 December 2022

• See footnotes on pages 114-115

total $316 million in capital returned by way of dividends as of 31 December 2023. Over the same time period, the dividend has grown from $0.20 per share to $0.47 per share, representing a compound annual growth rate of 8.5%. The Directors view this as very attractive dividend growth over a decade. The dividend plays an important role as one of the pillars of our approach to capital allocation (see page 10) and we recognise the importance to shareholders of maintaining the Company's annual dividend yield target at 3.0% of NAV or greater. We believe this long history

of reliable dividend payments demonstrates the Company's focus on prudent balance sheet management.

NBPE's share price increased 9.4% on a total return basis in 2023, narrowing the discount to NAV from 32% at the beginning of the year to 24% as of 31 December 2023, broadly

in line with other direct focused listed private equity funds. Despite this positive share price performance and improving sentiment more generally for listed private equity, discounts remain wide for many funds in the sector. We believe NBPE's co-investment model - offering the transparency and fee efficiency of direct investments, while allowing for prudent manager diversification - positions NBPE uniquely. The Board is united in its strong conviction that NBPE's discount level does not reflect the strength of its model

or the quality of its portfolio. We continue

to expand and enhance our investor relations

NBPrivate Equity Partners Annual Report 2023

CHAIRMAN'S STATEMENT

10

Approach to capital allocation

initiatives to increase NBPE's profile among existing and new investors. Towards the end of the year we were delighted to welcome Luke Mason, who now leads NBPE's investor relations efforts, to the Neuberger Berman London team.

Discounts remain relatively wide across the entire investment company sector, not helped by the current cost disclosure regime which the Board believes disadvantages investment companies unfairly compared with competing products leading to sub-optimal investor decisions. Extensive efforts are being made by a coordinated group of fund managers, brokers, parliamentarians and others, working alongside the London Stock Exchange, to campaign for a change in this regime. The Board of NBPE is proactively supporting these efforts.

During the course of 2023, NBPE repurchased $5 million of shares, resulting in a NAV accretion of $0.05 per share. The Board believes that buybacks can be an attractive tactical use of capital in certain market environments and in January 2024, alongside the Company's first half 2024 dividend,

we increased the amount of capital allocated for share repurchases. During the first quarter of 2024, NBPE repurchased an additional $5.4 million of shares, resulting in additional NAV accretion of $0.04 per share.

NBPE's objective is to invest in private companies to generate long-term growth.

The Board oversees the capital allocation framework for the Company. Alongside allocating capital to NBPE's investment programme, the Board is committed to NBPE's long-term dividend policy and regularly reviews the capital allocated to the Company's buyback policy. As part of this framework, the Board considers, among other factors, the financial position of the Company, use and cost of leverage, the Company's investment level relative to its target and the vintage year diversification of the portfolio.

New investments

NBPE's co-investment model provides flexibility, with new investment decisions being made on a real-time basis, balanced against the pace of realisations as well as other capital requirements. As a result, NBPE can manage its overall investment level without the need for significant unfunded commitments. While the investment level may temporarily rise above or fall below its target for periods of time, over the long term, the Board and the Manager believe that a target investment level in the range of 100−110% is optimal.

We believe that NBPE's strategy of investing in high-quality private companies and aiming to deliver strong compounding returns over time will drive the best long-term performance for shareholders. New investments should drive long-term NAV growth and are also considered in the context of the existing portfolio in order to maintain appropriate levels of diversification. Given NBPE's objective and the Board's focus on driving long-term returns for shareholders, the Board considers new investments to be the core use of NBPE's capital.

Dividends

The Directors remain committed to the Company's dividend policy of targeting an annualised yield on NAV of 3.0% or greater, with the goal of maintaining or progressively increasing the level of dividends over time.

The dividend underpins NBPE's Total Shareholder Return. It allows shareholders the opportunity to participate directly in the performance of the underlying portfolio and is the primary method of returning capital to shareholders. Since the Board implemented a dividend policy in 2013, taking into account the 1H 2024 dividend payment, the Company will have returned $338 million to investors through a semi- annual dividend.

Share buybacks

The Board believes that buybacks can be an attractive tactical use of capital in certain market environments. Inherently, buybacks can represent an opportunity to purchase the Company's shares at a discount to NAV per share, realise a return that is immediately NAV accretive and invest in a portfolio that is performing well and is well known by the Manager.

The effectiveness of buybacks in NAV per share accretion, providing liquidity in the shares under certain circumstances and in signalling the Board's confidence in the prospects of NBPE's portfolio, are well understood by the Board.

STRATEGIC REPORT GOVERNANCE FINANCIALS  OTHER

NBPrivate Equity Partners Annual Report 2023