Investing in private companies

to generate long-term growth

Annual Report 2021

$401m

83%

3.3x

Announced realisations Realisation uplift Return on cost

45%

65%

$0.72

NAV Total Return ($) Total Shareholder Return (£) Dividends per share

Delivering strong NAV growth

Outperforming the MSCI World Index TR

NB Private Equity Partners (“NBPE”) invests

directly in private companies, alongside some of

the world’s leading private equity managers.

NBPE is managed by the private equity 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.

2021 marks the strongest year for

performance in NBPE’s history,

and our third consecutive year

of double-digit growth.”

Peter von Lehe, Head of Investment Solutions and Strategy, Managing Director

Neuberger Berman

Performance highlights

12 months to 31 December 2021

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

NAV Total Return ($)

MSCI World Index TR ($)

45%

22%

94%

83%

132%

107%

NAV Total Return

Cumulative at 31 December 2021 (% total return)

One year Three year Five year

››

P114 Notes to page IFC

NB Private Equity Partners

Annual Report 2021

STRATEGIC REPORT

02 Chairman’s statement

05 Private equity –

accessing true alpha

08 Why invest in NBPE?

09 Our Manager

11 Our business model

13 Our investment strategy

16 Portfolio at a glance

17 Investing in two core themes

18 Manager’s review

27 Top 20 companies

29 Key Performance Indicators

31 Environmental, Social

and Governance

39 Manager – people & culture

43 Stakeholder engagement

46 Risk management

47 Principal risks and uncertainties

49 Going concern and

Viability Statements

GOVERNANCE

52 Governance overview

53 The Board

55 Governance

61 Directors’ Report

64 Investment Objective and Policy

65 Remuneration Report

67 Report of the Audit Committee

71 Statement of Directors’

Responsibilities

FINANCIALS

74 Independent Auditor’s Report

79 Consolidated financial statements

84 Notes to consolidated

financial statements

OTHER

99 AIFMD Disclosures

101 Schedule of Investments

104 Appendix

108 Glossary

110 Directors, Advisors and

contact information

111 Useful information

113 How to Invest

nbprivateequitypartners.com

– Latest Insights and case studies

– Portfolio information

– Responsible investing

– All investor materials

Interview with the Manager,

Neuberger Berman

For more

information

on our Top 20

companies

About NB Private Equity Partners

Portfolio company

case studies

22››

Constellation Automotive

20››

24›› 27››

AutoStore Auctane

Chairman’s statement

A record year

I am delighted to report on a year

of excellent performance. We finished

the year with net assets of $1.5bn,

an increase of 45% on a total return

basis, marking the third consecutive year

of double digit NAV growth. Performance

was driven by a record level of realisations

at significant uplifts to 31 December

2020 values and cost, as well as strong

operating performance in companies

across the portfolio.

The groundwork for last year’s

performance began a number of years

ago. Benefitting from Neuberger

Berman’s deep network of relationships

within the private equity industry and

its expertise in analysing investments,

the portfolio is proactively positioned

in line with two core themes: long-term

secular growth and/or businesses with

low cyclicality. This focus has meant

that the portfolio has been and remains

well positioned to weather an uncertain

macro-economic environment, while

benefitting from secular tailwinds such

as tech-enabled services, automation

and e-commerce.

High-quality

companies continue

delivering growth

Our strong performance speaks to the

quality and resilience of the portfolio

in a year dominated by the challenges

presented by COVID-19, with portfolio

companies successfully navigating the

uncertain economic environment to

deliver weighted average last 12-month

(LTM) revenue and EBITDA growth

of 27% and 28%

respectively. There

were over $400 million of announced

realisations, at average uplifts of 83%

relative to 31 December 2020 values

and a 3.3x multiple of cost on the

14 full or partial realisations during the

year. NBPE’s assets have been attractive

to financial and strategic buyers, as

well as to public markets. As investors

increasingly seek assets that are resilient

to macro-economic headwinds, and

given the maturity of the portfolio, we are

optimistic that realisations will continue

in 2022.

65%

Total Shareholder Return

65%

109%

18%

27%

30%

131%

One year

NBPE Share Price (GBP) Total Returns

FTSE All Share (GBP) Total Returns

Cumulative return as at 31 December 2021

over time periods shown

Three year Five year

Share price total return (GBP)

% total return

Our strong performance speaks

to the quality and resilience of

the portfolio, and the benefits

of our focus on investing in two

core themes; secular growth and

companies with low cyclicality.”

William Maltby Chairman

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

››

P114 Notes to page 02

Chairman’s statement continued

decision to maximise the strength

and flexibility of NBPE’s balance sheet

in uncertain times. Since we are fully

invested, we are under no pressure to

invest and are being highly selective.

Share price outpaces

FTSE All-Share

The share price generated a total return

of 65% during the year, outperforming

the FTSE All-Share Total Return

, which

returned 18%. NBPE was highlighted by

the Association of Investment Companies

as a Top 10 performing investment trust

in 2021, one of only two listed private

equity investment trusts to be included.

Volatility and sentiment towards risk

assets in 2022 has meant that some of

these gains have been given up in the first

quarter. We have seen share prices across

the listed private equity sector retreat

and discounts widen again, as concerns

around inflation, and more recently

Russia’s invasion of Ukraine, overshadow

the outlook.

NBPE’s portfolio has deliberately

been positioned for a range of

macro-economic conditions. With a

focus on secular growth and/or low

cyclicality we believe the portfolio

will continue to generate value for

shareholders. We do not believe the

current share price reflects the value

or prospects of these companies and

remain very focused on narrowing

the discount.

Selective investment

in high-quality

private companies

We made nine new investments

during the year, investing $144 million

into attractive, market-leading businesses

in sectors backed by megatrends,

high-growth or secular tailwinds, and in

many cases, high barriers to entry or the

delivery of mission-critical products or

services. Key sectors included technology,

industrials, consumer/e-commerce and

business and financial services. We are

excited by the potential of these new

portfolio companies.

Strong balance sheet

and significant liquidity

The record level of proceeds received

in 2021 meant that we finished the

year with $116 million of cash and an

undrawn $300 million credit line. This

puts the Company in a strong position

to take advantage of new investment

opportunities, as well as repay the 2022

ZDPs which mature in September.

NBPE’s co-investment model enables

the Company to be nimble and capital

efficient. By investing on a deal-by-

deal basis our Manager can adjust

the investment pace as necessary.

This allows us to position the portfolio

for prevailing market conditions. It also

means that we do not need to take

off-balance sheet risk by over-committing

to underlying funds in order to achieve a

target investment level.

Over the year, our investment level

moved from 110% to 106%, below our

long-term target level of 110%-115%.

This is in part a reflection of the high

level of realisations, but also a deliberate

A growing dividend

Our dividend allows shareholders to

participate in NBPE’s NAV growth

directly and we have a policy to pay

an annualised yield of 3.0% of NAV

through semi-annual dividend payments

to shareholders. Given the Company’s

significant growth in NAV, NBPE’s

dividends to shareholders in 2021 totalled

$0.72 per share, versus $0.58 per share

paid in 2020, an increase of 24%.

In January 2022, subsequent to

this reporting period, the Company

declared its first 2022 semi-annual

dividend of $0.47 per share, a further

increase of 15% from the Company’s

August 2021 dividend.

2120191817

$0.50

$0.53

$0.57

$0.58

$0.72

As at 31 December 2021

Dividend growth

US$ per share

24%

growth in

21 vs. 2020

Summary balance sheet

31 Dec 2021

(Audited)

31 Dec 2020

(Audited)

Direct equity investments $1,430.2 $1,091.6

Income investments $125.1 $140.5

Total investments

$1,569.3 $1,254.6

Investment level 106% 119%

Cash $116.5 $3.0

Credit facility drawn – ($35.0)

ZDPs ($162.0) ($157.0)

Other ($43.6) ($14.0)

Net Asset Value $1,480.2 $1,051.7

NAV per share ($) $31.65 $22.49

NAV per share (£) £23.37 £16.45

* Total investments include approximately $14.0 million of fund investments as of 31 December 2021 and

$22.5 million as of 31 December 2020

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

››

P114 Notes to page 03

A focus on ESG and

responsible investment

The Board continues to increase its

focus on ESG and Responsible Investing,

benefitting from the expertise at

Neuberger Berman, which is a leader

in this field. For two consecutive years,

Neuberger Berman has been awarded

an A+ for ESG integration, the top score

given by the UN-supported Principles for

Responsible Investment (PRI), and in 2020

became part of the PRI Leaders’ Group.

The PRI Leaders’ Group showcases

signatories at the cutting edge of

responsible investment and Neuberger

Berman was one of only 20 investors to

be named.

Both the Board and Neuberger

Berman have a firmly held view that

better outcomes, both financial and

non-financial, can be achieved through

incorporating ESG considerations into

investment decisions. We are fortunate

that ESG considerations have been a

core part of the investment process

over many years and 99% of NBPE’s

portfolio does not have significant

adverse sustainability potential. More

information on Neuberger Berman’s

approach to ESG can be found on

pages 31 to 38.

A refreshed,

independent board

We were delighted to welcome Louisa

Symington-Mills to the Board in June

2021. Louisa brings significant buy

and sell-side private equity and broader

listed private equity experience, which

we believe will complement the Board’s

expertise. We now have a Board of five

independent Directors, with a broad cross

section of business skills and experience.

Expanding our investor

relations programme

We have continued to expand our

investor relations programme and

launched several new initiatives during

the year, including a new website,

factsheet and a greater focus on

increasing the Company’s profile among

new and existing investors. In March

2022, NBPE was promoted to the FTSE

250 Index, an important milestone for

the Company, and I would like to thank

our shareholders for their continued

support. We remain focused on

expanding our shareholder base and

raising the Company’s profile among

both retail and institutional investors.

Market environment

The last two years have been defined by

the broader healthcare and economic

impacts of COVID-19 and the world’s

adjustment to changes in work and

lifestyle habits. As vaccines paved the

way for an easing of restrictions and the

reopening of economies, 2021 marked

a turning point for many economies

with a strong rebound in growth, albeit

clouded by inflationary pressures, and the

prospect of higher interest rates. Against

this backdrop, the portfolio has continued

to perform incredibly well.

Looking ahead

Volatility increased across markets at the

start of 2022, with many indices declining

significantly in the early months of the

year. The terrible events in Ukraine have

led to heightened volatility in markets as

governments grapple with the potential

longer-term impacts to economies and

international relations, not to mention the

devastating humanitarian crisis.

We believe the private equity model

– control ownership of underlying

companies – is a significant advantage

in this uncertain environment. Private

equity managers can be quick to react to

change, and importantly take advantage

of opportunities. For NBPE, our focus

on secular growth and low cyclicality

has resulted in a portfolio that should

be relatively resilient to inflationary

pressures. Energy is not a significant

input cost across the portfolio and many

of NBPE’s portfolio companies provide

critical solutions to their clients; we would

therefore expect less pressure on margins.

In addition, over 70% of NBPE’s portfolio

companies are headquartered in the US,

and 25% in Western Europe; the portfolio

has no direct investment exposure to

Russia, Ukraine or Belarus.

Despite the obvious challenges that the

current uncertain environment presents,

we are optimistic about the future for

the portfolio. We enter 2022 in a strong

financial position and with a portfolio that

is well positioned to generate significant

value for shareholders.

William Maltby

Chairman

25 April 2022

Chairman’s statement continued

Board evolution

Louisa Symington-

Mills joined the Board

in June 2021 and has

significant experience

in the listed private

equity sector.

53››

Board biographies

NBPE has a strong track record

and a unique co-investment

model, and I am excited about

working with the rest of

the Board as NBPE seeks to

engage with a wider range

ofinvestors.”

Louisa Symington-Mills

Independent Director

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Private equity is a long-term asset class driving returns in excess of public markets

An expanding investment universe

Investing in private equity offers

exposure to a wide universe

of companies.

Chief among these are small

to medium sized businesses,

operating in sectors that are often

harder to reach through public

markets. These businesses are

better suited to the private

markets, where transformation

can happen away from the glare of

the public markets and its focus on

shorter-term earnings.

In 2022 Investors that ignore private

markets are missing out on access to

a significant and growing investment

universe, likely limiting both

diversification and return potential.

Access to a wide opportunity set

The private companies universe has

continued to grow, with over 9,500

private

equity-owned companies in the US alone.

These companies represent all sizes and

industries, offering the potential for returns

that outperform the public markets.

$5.3trn

Private equity assets under

management globally

Global PE

Buyout –

First Quartile

Global PE

Buyout – Pooled

MSCI World

10-year return

as at 30 September 2021

.1%

for Global Buyout Index

first quartile

13.3%

16.2%

26.1%

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Private equity – accessing true alpha

››

P114 -115 Notes to page 05

The power of private equity

A hands-on

investment model

A key driver of private equity’s

outperformance of public indices

is its ‘hands-on’ investment model

and a focus on generating growth

through operational and strategic

change. By working closely with

companies to drive value through

sustained earnings growth, private

equity can generate returns that

outperform wider equity markets.

Private equity managers, as control

investors, are ideally placed to drive

these changes and work closely with

portfolio company management teams

to meaningfully improve performance.

Private equity managers as owners,

rather than minority shareholders,

can drive strategy and change to

build long-term value.

Control

investors

Sustained

earnings growth

Entering new markets or

products, accretive acquisitions

Deep understanding of each

company and its market informs

investment decision

Focus on increasing efficiencies

to enhance margins

Prioritising fundamental value

creation over short-term

profit targets

Management teams, private equity

managers and investors are fully

aligned to achieve goals

Strategic

change

Due

diligence

Operational

change

Alignment

of interests

Long-term

investment horizon

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Private equity – accessing true alpha continued

Access to private equity returns

Portfolio company diversification

Top 10 concentration

Number of PE managers Over commitment level Fees

Single manager

MEDIUM1

55 VERY LOW

Single layer, higher performance fee

Single layer, lower performance fee

Double layer, higher performance fee

NB Private

Equity Partners

Fund of Funds

1.5%

vehicle

management fee

7.5%

performance fee

1.0%-1.5%

vehicle

management fee

15%-20%

performance fee

0.8%-1.5%

vehicle management fee

1.5%-2.0%

underlying fund

management fee

20%

performance fee

NBPE offers investors exposure

to a well-diversified portfolio of

companies, with visibility of key

underlying positions.

Investing alongside numerous

leading private equity managers,

limits single manager and

strategy risk.

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.

Around 97% of the direct

investment portfolio incurs

neither management nor

performance fees to underlying

third-party managers.

50%+

34%

~10%

NBPE’s co-investment

approach aims to

combine the best of

both the direct and fund

of funds’ models

HIGH50+

<40 companies

94 companies

500+ companies

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Private equity – accessing true alpha continued

Listed private equity funds bridge the gap

between private and public equity, and are

typically split between specialist direct investors

and highly diversified ‘fund of funds’.

23%

Average gross IRR on direct

equity investments (5 years)

2.9x

Average multiple of cost

on realisations (5 years)

Direct investments

in highly attractive

private companies

Investing globally, with a

focus on the US, the largest

private equity market

Investing alongside

top-tier managers,

in their core areas

of expertise

Leveraging the strength

of Neuberger Berman’s

platform, relationships,

deal flow and expertise to

access the most attractive

investment opportunities

A highly selective

and responsible

investment approach

Focusing on sectors and

companies that benefit from

long-term structural growth

trends, such as changing

consumer patterns,

demographic shifts or

less cyclical industries

Access to high-quality private equity investments

44%

Average uplift on

IPOs/realisations (5 years)

Diversified across sectors, private equity managers and company size

Focus on the best opportunities – controlling the investment decision

Dynamic – able to respond to market conditions

ESG due diligence – both manager and company-level assessment

Fee efficiency – single layer of fees

Benefits of NBPE’s co-investment model

Underpinned by a strong focus on responsible investment,

with ESG considerations fully integrated into the investment process

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Why invest in NBPE?

››

P114 Notes to page 08

Our Manager has over 30 years’ experience

in private equity investing

The private markets team

at Neuberger Berman, is an

industry-leading private equity

platform, with robust dealflow,

demonstrated access and

selectivity, and a vast network

of relationships.

NBPE leverages the strength

of the Neuberger Berman

private equity platform to

seek what we believe are the

most attractive direct investment

opportunities.

$86bn

private equity

commitments managed

150+

team members

590+

fund commitments

offices globally

years average experience

among Managing Directors

240+

limited partner Advisory

Committee seats

A+

UN PRI score

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Our Manager

››

p31 Environmental, Social and Governance

US Headquarters

New York City

European Headquarters

London

Asian Headquarters

Hong Kong

››

P114 -115 Notes to page 09

Over 30 years as a private market

leader with a unique position in

the private market ecosystem, and

recognised within the industry.

$29bn

Primaries

$22bn

$14bn

$12bn

Co-investments

Secondaries

Direct private credit

$9bn

Direct specialty

strategies

An industry leader with an integrated

platform and attractive market position

385 208

unique managers

ensured strong

deal flow

2021

co-investment

deal flow

The strength and depth of the

relationships on NB’s Private Markets’

platform are the principle source

of deal flow for Neuberger Berman’s

co-investment programme

With over 275 private equity

manager relationships and $86

billion invested in the asset class,

we believe we have a deep and wide

lens on the private equity market.”

David Stonberg, Managing Director,

Global Co-Head of Private Equity Co-investments

Over

$86bn

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Our Manager continued

opportunities

reviewed

››

P115 Notes to page 10

NBPE’s approach to generating

long-term growth

Our business model How we create value

Strength and depth of the team

p09 ››

Expertise and strong track record

p09››

Extensive insight into the

private equitymarketplace

p10››

Highly selective investment approach

p12››

Strong ESG credentials

p31 ››

Client-focused culture

p39 ››

Integrated private equity

investmentplatform

benefitting from

the strengths of

Neuberger Berman...

Co-investing alongside

high-quality private

equity managers

Building a portfolio of direct

investments, diversified by

manager, strategy and sector.

››

How we invest p12

Focusing on buyout

transactions

Our primary focus is on

buyout transactions

(acquisition of a controlling

interest in a company), for

example, take-privates,

buyouts of family businesses,

carve-outs or divisional sales.

Growth strategies are usually

through some combination

of organic revenue growth,

cost efficiencies or M&A.

››

Manager’s review p18

Investing globally,

with a focus on the US

Our portfolio is geographically

representative of the global

private equity market of which

the US is the largest and

deepest market.

››

Portfolio p16

Investing on a

deal-by-deal basis

Investment decisions are

taken on a deal-by-deal

basis. We can speed up or

slow down our investment

pace, depending on market

conditions and our capital

structure needs.

Prudently managed

balance sheet

Disciplined capital allocation

and access to long-term

credit facility to ensure

we can be fully invested,

without the need for

significant long-term off-

balance sheet commitments.

››

Chairman’s statement p2

Effective risk

management

Our comprehensive risk

management framework

supports long-term

investment goals.

››

Risk management p46

We invest in

high-quality private

companies...

in a disciplined

way...

27 ››Top 20 companies

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Our business model Investment process

A fully integrated private

equity investment platform

With strong co-investment capabilities

and expertise

Source

Preliminary

analysis

Deep due

diligence

Investment

Committee

Monitor

Realisation

and reinvest

Active origination

and investment

approach, leveraging

broad private equity

relationships of the

NB Private Markets’

platform and network

built over 20 years

Highly selective

with a focus on

strategic proprietary

transactions. 10-15%

of opportunities

typically taken to full

due diligence stage

– Valuation and

capital structure

– Business model

characteristics

– Value creation plans

– Underlying

growth drivers

– Manager’s

track record

– Portfolio company

management team

– ESG opportunities

and risks

Formal presentation

of the proposed

investment to the

Investment Committee

for final investment

decision. Members

of the Investment

Committee have

an average of 30

years of professional

experience

The Neuberger

Berman team works

closely with private

equity managers

to understand

performance drivers

of the underlying

companies. The team

actively engages

with underlying

managers on portfolio

monitoring on an

ongoing basis

Proceeds from the

sales of portfolio

companies are

reinvested in

new investment

opportunities

Neuberger Berman works alongside private equity managers throughout the due diligence process,

and often engages very early in transactions. ESG factors are a standard part of the process,

mitigating material risks and uncovering value-creation opportunities

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

A focus on resilience and growth

Investing in high-quality companies

Neuberger Berman looks to invest in

market-leading companies and those

with sustainable competitive advantages,

suchas:

– Business models that are hard

to replicate

– High barriers to entry

– Recurring revenue streams

– Ability to maintain revenue stability in

the face of macro-economic headwinds

– Strong management teams with the

resources and incentives to implement

the changes necessary to create value

investing in

high-quality companies

in their core areas

of expertise

alongside premier private

equity managers

in companies with the potential

to create strong earnings growth

and prudent

capital structures

A focus on...

portfolio companies

Market trend

Competition for high-quality

assets has led to an elevated

valuation environment, aided

by a strong fundraising market.

Response

A highly selective investment approach

and a focus on sectors and businesses

with expected faster earnings growth

and companies with protected business

models. Businesses that have multiple

levers for growth, which we believe will

generate strong risk adjusted returns.

We focus on companies which will create

value over the lifecycle of the investment,

even if there is a possible compression in

multiples on exit.

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Our investment strategy

Our investment strategy continued

Investing alongside premier

private equity managers

...in their core area

of expertise

Neuberger Berman has a deep

understanding of private markets.

Its strong relationships give access to

investment opportunities as well as

the ability to choose some of the best

managers to work alongside.

The team targets managers who have

demonstrated a track record of:

– Investment discipline

– Value creation

– Generating strong performance

through changing investment

environments

Neuberger Berman’s co-investment

strategy focuses on partnering with the

right private equity managers, with the

right experience for the right opportunity.

This experience includes:

– Deep sector expertise, such as

technology, industrials or

financial services

– Geographic focus

– Ability and track record of investing

in complex transactions

– Generating value through accretive

bolt-on acquisitions

underlying managers in

NBPE’s portfolio

Market trend

Top performing managers

are becoming increasingly

over- subscribed and their

funds are harder to access.

Market trend

Demand from investors

for high-quality co-investment

opportunities has become

increasingly competitive.

Response

Neuberger Berman’s strong relationships,

significant commitments and in many cases

years of working in partnership with many

of the world’s leading managers help ensure

continued access.

Response

Neuberger Berman has a large team focused

on co-investments and is often brought

in early to a transaction. It is considered a

strategic partner as well as a supportive

provider of capital by many of its private

equity managers and is able to commit

significant sums of capital from across its

platform to a single transaction.

2 3

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Our investment strategy continued

Investing in companies

with the potential to create

strong earnings growth

...with prudent

capital structures

Neuberger Berman aims to invest in

opportunities where private equity

managers can add value and generate

sustained earnings growth.

Examples of this include:

– Introducing new products or entering

new markets or geographies

– Finding efficiencies, or optimising

management teams and people,

such as ramping up a sales force.

– Acquiring complementary businesses

through M&A to capture synergies,

increasing market share and overall

scale, as well as the attractiveness to

potential buyers

Investing in companies with prudent

capital structures is paramount.

Companies should have the ability to

support the investment thesis, without

raising concerns about managing

their debt.

Neuberger Berman looks for companies

that have:

– Prudent absolute leverage level

– Covenant lite debt

– Strong interest coverage

28%

27% 5.2x

LTM EBITDA growth (at December 2021)

LTM revenue growth (at December 2021) net debt to EBITDA ratio

(at December 2021)

Market trend

Investor concern about how

higher inflation and a more

uncertain macro-economic and

geopolitical outlook will impact

earnings growth and margins of

underlying investments.

Market trend

In 2021, the average net debt/

EBITDA ratio for new private equity

deals in the US was 5.8x and Europe

was 6.8x. While below 2008 highs,

average debt ratios have steadily been

increasing over the last decade.

Response

We believe NBPE’s portfolio has been built

to be able to outperform on a relative basis

through an economic contraction. We believe

many of NBPE’s companies are ‘essential

services’ for other businesses, which we think

provides some level of inflation protection.

Response

Neuberger Berman focuses on companies

with strong cash flow characteristics and

interest coverage. NBPE’s portfolio is

reasonably leveraged and with an average

age of private companies of 3.4 years many

companies have reduced their level of

leverage since acquisition, when leverage

is usually the highest.

4 5

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››

P114 -115 Notes to page 15

Portfolio at a glance

$1.4bn 91%

94 55

value of direct

equity investments

of fair value invested

in direct equity

portfolio

companies

private equity managers

co-invested alongside

53% 3.4

fair value of top

20companies

years private company

average age

Our direct private

equity portfolio

Total portfolio composition

A well-diversified portfolio

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Investment

type

91% Direct equity

8% Income investments

Legacy Fund investments

Geography

72% North America

24% Europe

4% Asia and rest of the world

Vintage

year

5% 2014 & earlier

4% 2015

8% 2016

23% 2017

21% 2018

20% 2019

9% 2020

10% 2021

Industry

21% Tech, media & telecom

19% Consumer/e-commerce

18% Industrials/industrial tech

10% Healthcare

10% Financial services

14% Business services

1% Energy

7% Other

We invest in companies that are expected to

benefit from two core themes, positioning the

portfolio for a range of macro-economic conditions

Investing in two core themes

Technology

Consumer/E-commerce

Industrial technology

Healthcare-related

Themes Key sectors

– Significant exposure to software

across industry verticals

– Companies with diversified end

markets/applications

– Mission-critical applications and

sticky customer bases

– Companies with large scale competitive

positioning and strong brands

– Companies benefitting from significant

e-commerce trends

– Focus on ‘enabling’ businesses helping to drive

macro trends

– Companies supporting growth of e-commerce,

efficiencies and automation

– Long-term demographic trends providing

industry tailwinds

– Companies which focus on healthcare delivery,

efficiency and cost improvements

Businesses with low 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 during periods of

economic contraction

– Can often be ‘essential services’

or quasi-infrastructure, such as

waste management, insurance or

mobile phone towers

Long-term secular growth trends

Companies that are expected

to benefit from higher growth

rates due to long-term trends

or behaviour changes

– Often structural changes driven

by changes in customer demands

– 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

+ other business that

exhibit our key themes

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Manager’s review

Can you tell us what

thekey drivers of value

were in 2021?

PvL

2021 marks the strongest year for

performance in NBPE’s history, and our

third consecutive year of double-digit

growth. The portfolio grew by over

$300 million during 2021, and generated

an IRR of 46% and was valued at

$1.6 billion at year end.

In broad terms, the portfolio’s growth

was not isolated to one sector, vintage

or geography. Industrial technology,

business services, consumer and

technology all drove significant value

in 2021. 2019 and 2018 vintage

years performed strongly, driven by

investments in AutoStore, Constellation

and Renaissance Learning. While 72%

of the portfolio is invested in the US, of

the 10 largest value drivers during 2021,

four companies were headquartered in

Europe, which highlights the strength

of the portfolio’s investments outside

of the US and benefits of the portfolio’s

geographic diversification.

There were three drivers behind the

portfolio’s performance: realisations,

third-party pricings and private

valuation adjustments. Of the total value

appreciation of $536 million during 2021,

39% was attributable to realisations,

both full and partial sales of companies

or assets. A further 5% of growth was

driven by portfolio company financing

rounds, which provided additional capital

from new investors, to support growth.

Private company valuation adjustments

were generally driven by improved

company operating performance and

the weighted average multiple across

the portfolio was 17.4x. This multiple is

based on data of 54 underlying portfolio

companies, rather than those which are

included in note 3 on page 90.

One of the advantages of

NBPE’s strategy is that investors can

see the underlying performance drivers,

while still benefitting from a diversified

portfolio. From a bottom up, company

specific basis, the 10 investments with

the biggest increases in value, grew

by $349 million, with the two largest

increases in valuation, AutoStore and

Constellation Automotive, generating

$219 million of value, moving from NBPE’s

seventh and sixteenth largest companies

to first and second largest portfolio

companies, respectively (see case studies

on pages 21 and 22).

Paul Daggett Managing Director,

Neuberger Berman

Peter von Lehe Managing Director, Head of

Investment Solutions and Strategy, Neuberger Berman

Drivers of portfolio

valuation changes

5% Transaction pricings

39% Realisations

56% Net valuation adjustments

A record year of

performance, with the

portfolio generating

an IRR of 46%.”

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

While these 10 investments generated

$349 million of total valuation increases

during the year, the next 30 investments

generated $177 million in aggregate, and

no company in the top 40 generated less

than $2 million of uplift. Furthermore,

the next 31 positive value drivers

generated $58 million in aggregate

of value appreciation. We believe this

speaks to the broad-based performance

that the portfolio experienced during the

year, with strong growth from a number

of investments.

2021 was a record year

for realisations, how

much of NAV growth

did this drive?

The portfolio benefitted from

significant liquidity in 2021, with 31%

of the opening portfolio realised during

the year and $401 million of proceeds

announced in the year.

14 companies announced full or

partial realisations during the year,

at an 83% uplift to prior year values

and 3.3x multiple of cost. Broadly

speaking, these realisations were

diversified by sector, exit type, underlying

manager and date of first investment;

however, we believe a common element

among these assets were the high-quality

of the companies, and their attractive

operating performance.

As shown in the graph overleaf, of the

14 realisations, six were full exits, which

generated a 2.7x multiple of cost and

42% uplift to 31 December 2020. Exits

were varied – two companies were sold

to strategic buyers (Aldevron and CSS),

one company (Hivory) sold its portfolio of

infrastructure assets to a larger strategic

buyer, and the remaining sales were

to financial buyers. There were also six

partial sales or partial asset sales during

the year, which generated $56 million of

realisation proceeds for NBPE at a 2.6x

multiple of cost (including unrealised

value) and an uplift of 54% to their 31

December 2020 values. In these cases,

underlying managers sought liquidity

events for these assets, but retained

meaningful ownership positions as

conviction of the future prospects

remained high. As a result, in these

instances, NBPE remains a holder of

these businesses.

Manager’s review continued

The top 10 value drivers collectively

generated $349 million of value

appreciation in 2021

Branded Toy Company

(Undisclosed)

NB Credit

Opportunities

Program

2021 portfolio

value appreciation

All other negative

value drivers

Top 5 negative

value drivers

All other positive

value drivers

Next 30 positive

value drivers

Top 10 positive

value drivers

Key performance drivers in 2021

349

177

(19)

(25)

536

83%

3.3x

uplift to 31 December 2020 value

cost

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Total

value

31 Dec

2021

Total

value

31 Dec

2020

Invested

capital

127

Full sales

2.7x multiple/42% uplift

Total

value

31 Dec

2021

Total

value

31 Dec

2020

Invested

capital

104

159

Partial sales/Asset sales

2.6x multiple/54% uplift

Total

value

31 Dec

2021

Total

value

31 Dec

2020

Invested

capital

108

242

IPO/Merger with SPAC

4.9x multiple/125% uplift

Public exits were the final type of liquidity

events in the portfolio during 2021.

There were two public listings and one

merger with a special purpose acquisition

company, or SPAC. NBPE received $39

million of proceeds from AutoStore

in connection with its IPO in October

on the Norwegian exchange. Holley

Performance Products merged with a

Special Purpose Acquisition Company

(SPAC), resulting in $8 million of proceeds

for NBPE. Finally, Agiliti completed an IPO

in April 2021, however, no shares were

sold as part of the IPO.

Have you continued to

see strong operating

performance across your

portfolio? Were any

sectors particularly

strong in 2021?

PvL

Despite the challenging backdrop

with the ongoing restrictions due to the

pandemic during 2021, we saw continued

strong operating performance across

the portfolio. The portfolio companies

generated weighted average LTM revenue

and EBITDA growth of 27% and 28%,

respectively. In particular, we saw strong

performance within the business services,

industrials and consumer sectors. Many

companies within the business services

and industrials sectors are essential to

their customers’ operations, which should

provide some stability to their financials.

Consumer performance was driven by

the continued strong performance at

one retail company, and a number of

other small investments which showed

favourable growth following some level

of COVID impact during 2020.

Manager’s review continued

$127m

total value of full or final

exits in 2021

$159m

total value of partial sales,

re-capitalisations

and dividends

$242m

total value of IPO/merger

with SPAC

Realisations and IPOs

Undisclosed Consumer

Company

››

P114 Notes to page 20

In terms of the operating environment,

the weighted average compression

in gross margin was only 0.1% year

over year across NBPE’s portfolio. In

general, companies in the industrials

and consumer sectors did see some

impact to margins where there was more

sensitivity to shipping or raw material

costs. In certain businesses where labour

costs are a greater cost input, there was

some evidence of inflationary pressure

due to higher wage costs. However,

we believe the overall muted impact

across the portfolio is the result of two

factors: first, the portfolio’s positioning to

businesses and sectors which do not have

heavy energy or other raw material input

costs; second, many of these businesses

have reasonable pricing power and can

ultimately pass on rising costs.

27%

28%

17.4x

LTM Revenue Growth

LTM EBITDA Growth

Average valuation multiple

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

In addition, M&A activity was able to drive

inorganic growth at a number of portfolio

companies as private equity managers

saw growth opportunities through bolt-

on acquisitions. One of private equity’s

strengths is the ability of underlying private

equity managers to drive value through

operational improvements and M&A

activity – finding attractive consolidation

opportunities in fragmented markets

to pursue ‘bolt-on’ acquisitions and

integration to expand a company’s size

and leverages economies of scale.

We think this performance speaks to the

quality of the companies in the portfolio

and the benefits of its positioning around

two core themes, long-term secular

growth and/or businesses which are

less exposed to the ups and downs of

economic cycles. This has meant that the

portfolio has been, and we believe will

remain well positioned to weather an

uncertain macro-economic environment.

You invest in companies

that can benefit from

secular growth trends or

have non-cyclical growth

drivers – what does this

mean in practice?

PvL

Companies that benefit from

fundamental, or secular, growth trends

are typically able to generate growth

based on a long-term structural trends

that are not normally impacted by market

and economic cycles, making them more

resilient to macro-economic headwinds.

Secular growth trends can take many

forms and are not necessarily isolated to a

particular type of company or industry.

For example, one secular growth trend is

the ongoing shift in purchasing behaviour

from bricks-and-mortar retail to online,

a trend that was accelerated by the

pandemic. This trend is further supported

by a growing demand for automation

and supply chain efficiency. Both of these

secular growth trends feature in NBPE’s

portfolio, via investments in consumer/

e-commerce and industrial technology

companies, such as Material Handling

Systems, or MHS, which NBPE invested

in alongside THL Partners in 2017. MHS

provides systems and solutions utilised in

distribution centres to support a variety

of material handling processes including

conveying, sortation and scanning. The

growing need for automated parcel

sortation systems was a substantial

future growth prospect for the company

and THL Partners brought extensive

expertise, financial and operational

resources to accelerate the company’s

growth strategy, both in terms of new

products and geographies. Today, MHS’

global installed base is over $6.5 billion for

small to large distribution and fulfilment

projects in a variety of industries including

e-commerce, parcel delivery, third-party

logistics and outside integrators.

Renaissance Learning, NBPE’s sixth

largest company, is another example

of a company benefitting from long-

term secular growth trends, in this case

in education technology. Renaissance

Learning provides solutions for teachers

and administrators to plan, teach and help

motivate students to learn. The company

is one of the most trusted and recognised

brands in the K-12 (primary and senior)

education space serving more than 40%

Manager’s review continued

AutoStore develops proprietary

software and robotics technology

for collection of warehouse-stored

goods, providing significant

improvements in warehouse capacity

and packing/picking performance.

AutoStore has a strong competitive

position in the warehouse automation

market. AutoStore’s technology (cubic) is

relatively new versus other types (shuttle/

mini-load) and there is less knowledge

accumulated in the market – as one of

the leaders in the space, it has an

advantage through its patents and

developed know-how.

In March 2021, Softbank acquired

40% of AutoStore at a valuation

of $7.7bn, describing the asset as a

‘foundational technology that enables

rapid and cost-effective logistics for

companies across the globe’. AutoStore

subsequently completed its IPO in

October 2021 and is listed on the OSLO

Bors under the ticker AUTO.

NBPE received a total of $91 million

during 2021, including $39 million from

the sale of a percentage of its holding

at the IPO, with the remaining holding

valued at $97 million at the year end.

AutoStore is an automated

robotic storage and retrieval

system equipment and software

manufacturer for the warehouse

& distribution end market.

NBPE invested $22 million in

AutoStore alongside THL in 2019.

Investment thesis

– Secular industry growth driven by

megatrends – Robotics/Automation/

E-commerce/Urbanization

– Winning customer value proposition

with attractive financial characteristics

– Embedded growth options through

new system launches and after

market services

››

P115 Notes to page 21

Fair value

$97.4m

Theme/sector

INDUSTRIAL TECH

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Manager’s review continued

Enabling digital transformation

TDR Capital, a leading European

private equity manager, acquired

BCA Marketplace in a public to private

transaction in 2019. At the time of

the investment, BCA Marketplace

was the largest B2B provider of

vehicle remarketing through physical

auctions. Constellation Automotive had

significant scale, data and technological

know-how to source and provide the

physical logistics for car auctions, serving

as a strong core business platform for

TDR’s acquisition. WeBuyAnyCar, the

UK’s leading C2B online buying car

platform owned by BCA Marketplace,

was also acquired in the take private

transaction which further diversified

sourcing channels.

Under TDR’s ownership, the company has

focused on digitisation and technological

transformation, moving from a physical

auction marketplace to 100% digital

auctions while also driving growth.

Today, the company’s technological

transformation has enabled it to become

a comprehensive digital auction platform

that allows large vendors including

dealers, fleet managers and car rental

companies to sell their stocks of used

cars quickly and easily. Constellation

Automotive then sells this stock of used

cars directly to dealers through its BCA

division and to consumers through Cinch,

the B2C online used car marketplace,

which raised over £1bn in May 2021 from

new and third-party investors. Today,

Cinch is a UK household name. Finally, in

October 2021, Constellation Automotive

acquired CarNext, a leading B2B and

B2C digital used car sales marketplace

present across 22 European countries.

This acquisition created Europe’s largest

digital used car marketplace, selling more

than 2.5 million cars annually for a gross

merchandise value of €21 billion.

TDR’s acquisition and value creation

strategies have completely repositioned

the business and enabled the digital

transformation of the company into

a high-growth platform with a fully

integrated C2B/B2B/B2C marketplace.

This transformation would have been

difficult in the public markets outside the

control of a private equity investor with

the skills and expertise and long-term

focus to drive such a change.

Constellation Automotive

(formerly BCA), is a provider

of vehicle remarketing services.

NBPE co-invested $17 million in

BCA Marketplace alongside

TDR Capital in 2019.

Investment thesis

– Market leader

– Defensive business model with

B2C sales opportunity

– Strong cash flow generation

Fair value

$87.3m

Logo

BUSINESS SERVICES

of US schools and more than 16 million

students worldwide. NBPE originally

invested in Renaissance Learning in 2018,

alongside Francisco Partners, a leading

private equity manager focused on

technology and tech-enabled businesses.

Since 2018, the company has scaled its

platform and product suite, organically

and through acquisitions, and in

November 2021, Blackstone announced

a significant equity investment to further

accelerate growth initiatives. In early

2022, NBPE received proceeds from this

partial sale which returned more than its

original cost; however, NBPE still retains

meaningful ownership in the company to

participate in its future growth.

NBPE also targets investments in sectors

or sub-sectors with low expected

cyclicality. These type of investments vary

by sector but are generally characterised

by businesses in more defensive sectors

or end markets. Broadly, we look for

companies that provide essential products

or services, or have high-switching costs

resulting in a sticky customer base. These

types of businesses can be found in a

variety of sectors including healthcare,

business services, communications and

certain sectors of consumer and financial

services. For example, in NBPE’s portfolio

this includes businesses in insurance,

communications, and waste management

– which we believe demonstrate a healthy

level of resilience based on the services they

offer, providing some level of downside

protection. As a result, we believe many of

these businesses have the ability to perform

well across diverse economic environments

as these investments should generally be

less impacted by economic cycles.

Theme/sector

››

P115 Notes to page 22

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Can you talk us through

some of the new

investments you made in

2021 and what investment

themes you looked for?

During 2021, NBPE invested

$144m into nine new direct equity

investments. Five of these investments

were in the technology sector, including

software, government IT services and

fintech. These investments were made

in sub-sectors that we believe are highly

attractive, where companies can benefit

from strong secular growth trends and

have multiple avenues for growth. Several

investments were made into companies

which can serve as a platform for future

M&A opportunities. Eight companies

are headquartered in the US and one is

headquartered in Israel.

These investments were in market-

leading platforms, with mission-critical

software and services, backed by strong

growth opportunities. For example,

NBPE invested $30 million in Auctane

(formerly Stamps.com), a software

provider for e-commerce shipping,

which is another investment which should

benefit from the e-commerce megatrend

(see case study on page 24). NBPE also

invested $12 million in RealPage, the

leading payment and software solutions

for the real estate rental housing industry

in the US. The company has built a

market-leading franchise, with growth

both organically and through M&A over

time, and the Manager believes there are

multiple levers for future value creation.

In addition, NBPE invested in two

industrials companies, with $19 million in

Solenis, a specialty chemicals and services

provider, and $15 million in Monroe

Engineering, an industrial products

distributor. Solenis is a global leader in

supplying innovative specialty chemicals

and services for process, functional,

and water treatment applications

to consumer and industrial markets.

Solenis was a mid-life investment in

a Platinum Equity portfolio company,

meaning NBPE invested new equity into

an existing portfolio company, rather

than a new buyout, alongside Platinum

Equity. Mid-life investment opportunities

can occur for a number of reasons, but

in this case, the investment enabled

Solenis to complete a transformative

business acquisition and combination

and we believe the combined company

will benefit from additional scale and

diversified end markets. Following the

combination Solenis is expected to

generate approximately $3.5 billion of

revenue and serve a diverse range of

customers around the world in industrials

and pool water treatment markets.

Manager’s review continued

$144 million invested in nine new companies, including:

Investment Theme/Sector PE manager Description Investment thesis

TECH, MEDIA

& TELECOM

Thoma Bravo Software solutions

for the rental

housing industry

– Market-leading franchise

– Build on M&A track record

– Multiple levers for value creation

TECH, MEDIA

& TELECOM

Veritas Capital Enterprise IT services

serving the US

government

– Scaled franchise player in government

IT/mission-critical services market

– Differentiated IP portfolio

INDUSTRIALS

INDUSTRIAL

TECHNOLOGY

AEA Investors Industrial products

distributor

– Leading market opportunity with

diverse end markets

– Significant growth opportunities

– Proven acquisition platform

BUSINESS

SERVICES

Trilantic Capital Professional

services provider

– Scaled business with diversified

end markets

– Attractive financial profile

– Large and growing market with

industry and talent tailwinds

– Proven M&A platform

SOFTWARE

Thoma Bravo Software provider for

e-commerce shipping

– Market leader with significant scale

– Growing e-commerce megatrend

– Attractive financial profile

TECH, MEDIA

& TELECOM

Thoma Bravo Business platform

for app developers

– Market-leading platform

– Strong secular tailwinds through

mobile device growth

CONSUMER

INDUSTRIALS

Platinum

Equity

Specialty chemicals

and services provider

– Sticky and diverse customer

base/trusted provider

– Natural barriers to entry,

benefitting from scale

– Mid-life investment/

transformative M&A

CONSUMER

AEA Investors Provider of premium

branded automotive

care products

– Leading enthusiast brand

– Strong historical performance and

multiple growth avenues

– Attractive financial profile

NBPE also invested $2m into one undisclosed fintech company.

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Monroe Engineering was an investment

alongside AEA Investors, a leading

US mid-market buyout fund. Monroe is

a provider of mission-critical hardware

components to a diverse set of original

equipment manufacturers. The company

supplies a broad suite of engineered

products, including fasteners, casters,

hinges and wire/cable assemblies that

are mission-critical to customers’ final

product performance and require

technical consultation. The company is

a leading business with a one-stop shop

offering, providing simplification to

component design and procurement,

to diverse end markets. We believe

this investment provided an opportunity

to invest in platform growth, alongside

AEA Investors, a leading private

equity manager with a core focus

on this segment.

In the consumer sector, NBPE invested

$21 million in Chemical Guys, a leading

enthusiast brand of premium automotive

care products, also alongside AEA

Investors. The company’s products are

positioned for the premium segment of

the do-it-yourself automotive detailing

market and span nearly all detailing

needs across exterior and interior vehicle

care. Market dynamics are compelling

with accelerating growth through

e-commerce, a characteristic well-aligned

with our core investment themes. We

believe the company has a differentiated

brand with a unique model of customer

interaction; the company has a strong

social media presence, and strong

channel capabilities to attract, upgrade

and retain customers. With a market-

leading position, we believe the company

has the opportunity to continue to grow

its addressable market by attracting new

customers and cross-selling to existing

customers. Expansion of products and

services and entering new markets

provides additional growth opportunities.

NBPE also invested $18 million in Addison

Group, a provider of professional services,

alongside Trilantic Capital. Addison

Group specialises in talent solutions and

consulting services, offering a full suite

of capabilities across multiple sectors

including information technology, finance

and accounting, healthcare, human

resources, administrative and digital

marketing. Since 2016, Addison Group

has grown through national expansion,

investment in project consulting services,

and has completed five strategic

acquisitions of high-growth consulting

services and talent solutions firms. Over

the last several years, the company has

consistently grown, even during the

pandemic, and new opportunities are

increasing in areas such as fintech and

automation, cyber security, compliance,

digital transformation and others

which we believe offer highly attractive

growth opportunities and end market

diversification. Finally, with Addison

Group’s expansion into consulting

services, the company has expanded

its addressable market into staffing

segments which have high growth and

accelerating shortages in talent for

highly-skilled positions.

Manager’s review continued

E-commerce shipping software

provider to customers including

consumers, small businesses,

e-commerce shippers, enterprises

and high-volume shippers.

Investment thesis

– Leading market position in US

e-commerce shipping software

– Large addressable market

– Significant free cash flow

Theme/sectorFair value

$12.2m

TECH/ IT

In October 2021, NBPE invested alongside

Thoma Bravo, a leading software

private equity manager, in the take-

private transaction of Stamps.com

(now Auctane), a leading provider of

e-commerce shipping software solutions.

The company’s multi-carrier solutions

enable customers to print approved

shipping labels for more than 350

carriers and integrate with more than

300 partners including shopping

carts, marketplaces, e-commerce tools

and various other software products.

Auctane solutions also provide customers

with access to discounted carrier rates

including the US Postal Service and

UPS. In 2020, its software products

enabled ~3.5 billion of shipped packages

representing ~5% of worldwide

e-commerce, and over 15% of

US e-commerce GMV.

Neuberger Berman believe this was

an attractive opportunity to invest

in the theme of a large and growing

e-commerce market. Importantly,

this was also an opportunity to partner

with Thoma Bravo, which brings extensive

software and operational expertise,

to support the company’s next phase

of growth.

››

P115 Notes to page 25

Investing in a leader

in shipping and

fulfillment software

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

The final three investments were

$10 million in Peraton, an Enterprise

IT services company, $15 million in

IronSource, a business platform for

app developers, and $2 million into

an undisclosed fintech company.

We believe all of these new investments

were compelling new opportunities with

multiple growth avenues and attractive

financial profiles, backed by leading

private equity sponsors.

How important is

ESG and sustainability

in your investment

decision making?

PvL

ESG is integrated into our

investment due diligence. We consider

material ESG factors prior to making any

new investment. We have a dedicated

team of ESG professionals led by Jennifer

Signori who oversee environmental, social

and governance integration in private

markets. Broadly speaking, each member

of our investment team is responsible

for conducting analysis on material ESG

factors of the underlying investments

as part of their due diligence. We seek

to identify ESG factors as part of, not

outside, financial performance, as we

believe ESG characteristics can be

an important driver of long-term

returns from both an opportunity

and risk-mitigation perspective.

Because NBPE invests on a deal-by-deal

basis, we can analyse ESG at the company

level, prior to making an investment.

We also analyse the ESG credentials

of the lead private equity managers.

However, as a result of analysing ESG

on a deal-by-deal basis, our team actively

reviews ESG factors for each investment,

rather than effectively outsourcing this to

the underlying manager as in the fund of

funds approach.

Once the company level analysis is done,

ESG factors influence our investment

decisions and material unmitigated risks

constitute a ‘no-go’ for an investment.

For example, we would decline to

invest in a company that, based on

our due diligence findings, operates

without sufficient regard to pollution,

environmental laws and best practices.

In addition, this company specific

analysis helps us to identify and invest

in companies that are deemed to

have neutral or positive sustainability

potential while avoiding exposure to

companies that have known ESG-related

controversies or business models

deemed to have adverse sustainability

potential. (See further information on

ESG beginning on page 31).

The world and

markets have changed

significantly in 2022,

how has this impacted

the portfolio and the new

investment pipeline?

Global events during 2022 have

certainly increased risk and volatility in

markets, while creating new uncertainties

for investors in all asset classes. Broadly

speaking there has been recognition

of inflationary pressures for some time

now but in the first quarter of 2022, risks

around inflation heightened, exacerbated

by higher commodity costs, and other

pressures caused by the war in Ukraine.

The rise in interest rates around the world

have triggered declines in equity markets

broadly and this had some level of impact

on NBPE’s quoted portfolio companies.

For the private companies, we think our

long-term focus on secular growth and

low cyclicality has positioned NBPE well

for an inflationary environment, due to

the ability of many companies to pass

on higher input costs. Energy is not a

significant input cost across the portfolio

and many of NBPE’s portfolio companies

provide critical solutions to their clients.

Manager’s review continued

For new investments, we focus on

investing alongside private equity

managers with long track records, who

have a demonstrated ability to invest

across economic conditions and cycles.

While we invest across sectors and

industries, certain sectors are naturally

better positioned to withstand a variety

of economic conditions while also being

well positioned for growth, such as

technology (especially software),

and certain areas of healthcare.

We look for opportunities where

value creation can occur over a three

to five-year period, across market

cycles or environments. We continue

to actively review opportunities, and

remain focused on our core investment

themes. NBPE is in a strong position

to make new investments but is under

no pressure to deploy capital which

makes it well positioned to respond

to market opportunities.

31 March

2022

31 December

2021

Changes in value of public stocks

in 2022

307

273

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Key private market stats

Manager’s review continued

What is your outlook

for private equity in

the current market

environment?

PvL

We are optimistic that the buyout

market will continue to offer attractive

investment opportunities even in the

current macro-economic environment

and during these times of market

uncertainty. Heightened risk levels and

volatility in markets in response to recent

global events, as well as inflationary

pressure and risks associated with rising

interest rates, are all significant concerns

for investors. However, we believe the

private equity model is at an advantage

in the current environment with the

ability to drive value creation and manage

through a difficult environment because

of the proactive ownership model.

Figure 1 shows the relative market

capitalisation of private equity versus

public indices. As an asset class, private

equity provides exposure to a highly

differentiated investment universe,

which is difficult to access through public

markets. Many of these companies are

small to medium size businesses relative

to the size of many of the large-cap

companies within public markets.

Combined with the strong historical

returns of the asset class relative to public

markets, we believe investor appetite will

continue for higher returning assets and

that investors will seek to maintain private

equity exposure.

As shown in Figure 2, global private

equity capital and deal count increased

meaningfully versus the prior year. With

continued private equity activity, we

would expect competition and pricing

for high-quality assets to remain strong.

Because of this, we believe investment

selection will be critical going forward.

In terms of valuations, Figure 3 shows

the EV/EBITDA multiple of private

companies in both the US and Europe.

Private equity valuations have steadily

increased since the global financial crisis.

In a highly competitive market, private

equity managers have generally focused

on deploying capital in high-quality

companies with predictable revenues,

strong cash flows and multiple levers for

growth. These types of assets attract

higher multiples, which contributed to

the increase in market valuations overall.

Debt continues to be available with

borrower-friendly terms despite rising

interest rates. Because of this, we focus

on investing alongside private equity

managers that can fundamentally drive

value creation at portfolio companies

by improving operations meaningfully

and adding long-term value, rather than

relying simply on financial engineering.

Global private

equity median

Russell 2000MSCI ACWIRussell 1000S&P 500

34.0

15.1

6.7

1.2

0.4

Figure 1: Relative market capitalisation of public indices vs. private equity

Median company market capitalisations ($bn)

1. S&P Capital IQ.

202120202019

20182017

Total capital invested (bn)

Deal count

868

1,040

934

896

1,435

Figure 2: Market environment

Global private equity capital invested and deal count

2. Source: Pitchbook as of 2021 Q4. Includes buyout, late stage VC, and growth equity.

20212020201920182017

Figure 3: US and European buyout valuations

US and Europe private – EV/EBITDA

multiple

US private

Europe private

12.6x

15.4x

12.8x

12.9x

13.4x

12.6x

12.0x

14.1x

13.7x

3. FTSE, MSCI, S&P and Pitchbook.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Top 20 companies

PE manager PE managerInvestment thesis Investment thesis

Theme/Sector Theme/SectorDescription Description

% of FV/$m % of FV/$m

Investment Investment

Leading provider of vehicle

remarketing services

TDR Capital

– Market leader

– Defensive business model

– B2C sales opportunity

– Strong cash flow generation

BUSINESS SERVICES

Leading provider of

automation technology

European discount retailer

– Growth driven by megatrends

– Strong value proposition with

attractive financial characteristics

– Embedded growth options

– Grow store network and expand to

other European countries

– Strengthen supply chain

– Operational enhancements

Medical equipment management

and services

– Industry dynamics support growth

– Leading provider in end-to-end medical

equipment solutions

– Diversified and loyal customer and

supplier base

Systems and solutions utilised in

distribution centres

– Rapidly growing market driven

by e-commerce

– Strong market position

– High visibility on revenue

Insurance brokerage and

consulting services

– Favourable industry dynamics

– Attractive financial profile and

high-quality cash flow

– Ability to grow organically and

through M&A

Multinational financial consultancy firm

Waste management services

– Market-leading businesses

– Recent M&A has diversified revenue

streams and reduced cyclicality

– Continued execution of accretive M&A

– Favourable environmental services

industry dynamics

– Sticky and diverse customer base

– Fragmented industry provides

opportunities for M&A

Online and offline pet supplies retailer

– Attractive pet market tailwinds

– Full range of services offered

– Strong financial performance and

cash flow generation profile

THL

KKR

Further Global

BC Partners

INDUSTRIALS

CONSUMER

HEALTHCARE

FINANCIAL SERVICES

BUSINESS SERVICES

E-COMMERCE

INDUSTRIALS

INDUSTRIAL

TECHNOLOGY

CONSUMER

E-COMMERCE

INDUSTRIAL

TECHNOLOGY

K-12 (primary and secondary school)

education technology

– Well-known brand

– Loyal customer base

– Highly fragmented industry

– Broad product suite

– Opportunity for M&A

Francisco Partners

EDUCATION

TECHNOLOGY

$98m $44m

$42m

$41m

$37m

$34m

$87m

$58m

$52m

$45m

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Top 20 companies continued

12 17

14 19

1813

Sensing, optical and

illumination technology

– Market leader with a large and diverse

product portfolio

– Industry tailwinds from increased

penetration of photonic technologies

– Diversified end markets with low

customer concentration

Cyber security and secure

access solutions

Leading provider of e-commerce

shipping software solutions

– Business combinations create a highly

attractive position in the market

– Blue chip customer base

– Market leader with significant scale

– Growing e-commerce megatrend

– Attractive financial profile

Business services company

– Low expected cyclicality end markets

– Essential service with ‘utility-like’

characteristics

– Attractive financial profile with

stable cash flows

Ticket exchange and resale platform

for buyers and sellers

– Large scale and competitive positioning

– High barriers to entry

– Attractive entry price

Provider of systems integration,

consulting and outsourcing services

Branded toy company

– Leading technology company in Italy

– Attractive IT services market with secular

growth from digital transformation

– Strong brand with high-quality products

– Multiple avenues for growth

– Strong financial profile

Payment accuracy and clinical software

solutions for the healthcare industry

– Compelling strategic rationale for the

combination of two businesses

– Market leader with enduring

competitive advantages

– Attractive financial profile and free

cash flow generation

AEA Investors

TECHNOLOGY/IT

Francisco

Partners

Thoma Bravo

Undisclosed

TECHNOLOGY/IT

Neuberger

Berman

NB Renaissance

UndisclosedVeritas Capital

TECHNOLOGY/IT

BUSINESS SERVICES CONSUMER

TECHNOLOGY

HEALTHCARE

E-COMMERCE

CONSUMER

Portfolio of consumer-branded IP assets,

licensed to third parties with a number

of internally managed DTC platforms

– Established platform with experienced

management team

– Unique business model

– Strong free cash flow with

revenue visibility

Neuberger

Berman

Independent network of wealth

management firms

– Strong M&A track record in a

fragmented, consolidating industry

– Secular tailwinds support share gains

for independent platforms

– Multiple levers for organic growth

and value creation

Reverence Capital

FINANCIAL SERVICES

CONSUMER

E-COMMERCE

Not

disclosed

Not

disclosed

$33m $30m

$28m

$27m

$26m

$23m

$33m

$32m

$31m

PE manager PE managerInvestment thesis Investment thesis

Theme/Sector Theme/SectorDescription Description

% of FV/$m % of FV/$m

Investment Investment

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Key Performance Indicators

Rationale

1 2 3

NAV total return ($) Total shareholder

return (£)

Dividend growth

over time

Reflects the growth in the value of the

Company’s assets less its liabilities. It

includes all the components of NBPE’s

investment performance and is shown net

of all costs and includes dividends paid

Measures performance in the delivery of

shareholder value, after considering share

price movements (capital growth) and any

dividends paid in the period

A reliable source of income is important for

shareholders. NBPE targets an annualised

dividend yield of 3.0% of NAV

– NAV total return increased by 45%

– Five-year cumulative NAV total return of 132%

– Performance underpinned by strong operating

performance and realisations at significant uplifts

to carrying value and cost

– 65% share price total return during 2021

– Five-year cumulative share price total return

of 131%

– Total dividend increase of 24% to $0.72 per share in

2021 versus 2020

– Nine-year track record of dividend payments

with prudent increases over time

– Performance and valuations of the

underlying investments

– Efficiency of NBPE’s balance sheet

– Ongoing charges ratio

– Rate of NAV growth

– Share price performance relative to wider public

markets and listed private equity peer group

– Level of discount in absolute terms and relative

to the wider listed private equity peer group

– Trading liquidity and demand for NBPE’s shares

– Available liquidity

– Proceeds received and expected during the year

– Investment pipeline

– Capital appreciation through growth in net asset

value over time while returning capital by paying

a semi-annual dividend

– Shareholder returns through long-term capital

growth and dividend

– Returning capital to shareholders by paying a

semi-annual dividend

Progress

Examples of

related factors

that we

monitor

Link to

objectives

Five

Year

Three

Year

One

Year

94%

45%

132%

Five

Year

Three

Year

One

Year

109%

65%

131%

2120191817

0.53

0.50

0.57

0.58

0.72

››

P114 Notes to page 29

Dividend growth $ per shareTotal Shareholder Return cumulative, £NAV Total Return cumulative, $

$0.72

dividends

2.9%

yield on share price

+24%

dividend increase

on 2020

+65%

2021

45%

2021

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Key Performance Indicators continued

4 5 6

Maintain healthy

pace of realisations

and uplift on exit

Invest selectively

in new investment

opportunities over time

Prudent and

efficient balance

sheet management

Realisations are a core driver of NAV growth

and a source of liquidity to make new

investments and dividend payments

Maintain a prudent investment pace based

on the level of portfolio realisations,

quality of investment pipeline and

market environment

Maintaining a robust financial position and

strong asset coverage in a range of forecast

scenarios. NBPE has a long-term investment

level target range of 110%-115%

– $401 million of realisations announced; $389 million

of proceeds received

– Announced realisations at a 83% uplift to December

2020 values and a 3.3x multiple to cost

– 10-year average annual liquidity of ~20% of

the opening portfolio value

– $168 million invested, including $144 million into

nine new investments

– Investing in key themes and sectors

– Strong balance sheet with $116 million of gross

cash and $416 million of available liquidity

– 106% investment level

– Unfunded commitments are adjusted for amounts

the Manager believes are unlikely to be called.

As of 31 December 2021, unadjusted unfunded

commitments were $129.3 million, total private

equity exposure was $1.7 billion, and the unadjusted

commitment coverage ratio was 322.1%

– Will repay 2022 ZDPs on maturity in September 2022

– Vintage year diversification, maturity of the

portfolio, average holding periods

– Uplifts to carrying value and cost

– Liquidity as a percentage of opening portfolio

– Available liquidity and realisation outlook

– Balance sheet strength

– Market environment and pricing

– Available liquidity and realisation outlook

– Compliance with financial covenants of RCF

– Ensure the maturity profile of ZDPs and RCF are well

covered

– Capital appreciation through growth in net asset

value over time while returning capital by paying a

semi-annual dividend

– Capital appreciation through growth in net asset

value over time through a highly selective

investment approach

– Long-term investment target level range of

110%-115%

Rationale

Progress

Examples of

related factors

that we

monitor

Link to

objectives

212019

200

179

389

212019

132

122

168

ZDP

Total

liquidity

416

››

P114 Notes to page 30

Maturity profile/total liquidity $mTotal new investment $mTotal proceeds received $m

$1.6 bn

gross assets

106%

invested

$116m

gross cash balances

$300m

undrawn bank line

$16 8 m

Invested in 2021

$389m

proceeds received

+83%

2021 uplift to

carrying value*

3.3x

original cost*

* Announced direct equity sales/

IPO in 2021

1. Unfunded commitments are adjusted for amounts the Manager

believes are unlikely to be called.

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Environmental, Social and Governance

The three pillars of NBPE’s

Responsible Investment Policy

Our policy is centered on the objective of

seeking to achieve better investment outcomes

through incorporating Environmental,

Social and Governance (ESG) considerations

into the investment process.

Focus on ‘better’ companies based

on environmental, social and

governance characteristics

Simultaneously seeking to minimise exposure

to companies with potential adverse social

and/or environmental impacts

Ability to exclude particular

companies or whole sectors from

the investable universe

NBPE seeks to avoid companies that produce

controversial weapons, tobacco, civilian firearms,

fossil fuels and private prisons. NBPE also

seeks to avoid companies with known serious

controversies related to human rights or serious

damage to the environment, including as

outlined by the United Nations Global

Compact (UNGC) and OECD Guidelines

for MultinationalEnterprises

Avoid Assess Amplify

Consider the valuation implications

of ESG risks and opportunities

alongside traditional factors in

the investment process

Material ESG factors are formally incorporated

in Investment Committee memorandums

www

Full Responsible Investment Policy

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

››

P114 Notes to page 32

Environmental, Social and Governance continued

Our Manager is a global leader in

ESG-integrated private equity investing

Neuberger Berman has been integrating

ESG into its investment process since 2007

Deep resources

– NBPE benefits from the ESG

leadership and resources of

Neuberger Berman

– Responsible & Sustainable Investment

Policy: Dedicated NBPE Responsible

and Sustainable Investment Policy

formalises NBPE’s commitment

to integrating ESG throughout its

investment process

– NB ESG Integration Framework:

Provides framework for ESG

integration (e.g. ‘Avoid’, ‘Assess’

and ‘Amplify’)

Direct investments

– NBPE invests directly into companies

and conducts ESG due diligence

directly at the company-level

– NB materiality matrix: Identifies

categories of factors likely to be

financially material to a company

given its industry/sector

– Sustainability Potential: Applies

a lens to understand a company’s

potential positive benefit to people

and the environment

NBPE’s differentiated approach to ESG

A+

rating by PRI for private

equity ESG integration

150+

investment professionals

with ESG responsibility

100%

of co-investments are

ESG Integrated

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Environmental, Social and Governance continued

Environmental Social Workforce Supply chain Leadership & governance

Emissions Water

management

Data privacy &

security

Pricing

transparency

Health &

safety

Human capital

development

Product safety

& integrity

Materials

sourcing

Innovation Policy &

regulation risk

Consumer goods

Extractives &

mineral processing

Food & beverage

Healthcare

Infrastructure

Renewable resources

Resource transformation

Services

Technology &

communication

Transportation

How ESG is integrated into

the investment process

How ESG materiality

is assessed

When conducting due diligence on direct

investments, the investment team utilises

our proprietary NB Materiality Matrix

to assess industry-specific ESG factors

that are likely to be financially material

(informed by the firm’s research sector

experts and highlighted in orange in the

matrix on the right) as well as the lead

GP’s level of ESG integration based on

our Manager ESG Scorecard.

Neuberger Berman Private Markets is able

to leverage its position as a diversified asset

manager, integrating ESG insights in order

toidentify opportunities with respect to

direct private markets investments

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Environmental, Social and Governance continued

Creating value through

better ESG performance

Integrating ESG is a natural fit

for private equity investors

How ESG factors

can affect valuations

Sector focus

Private equity managers

tend to focus on sectors

that are less resource

intensive or asset heavy.

As such, these also tend

to be sectors that are more

efficient and experience

less volatility, benefitting

from secular tailwinds

Deep due diligence

Private equity managers

are able to conduct deep

and meaningful due

diligence on a company’s

specific ESG factors that

are financially material

Control

Private equity managers

own and control their

portfolio companies

and may improve

the environmental,

social or governance

aspects of a company

during ownership

Day-to-day operations

Incremental improvements

may have positive

implications for profits

Examples

– Proactive approach to

environmental issues, such

as resource consumption

and waste management,

may lower operating costs

– Conscientious employee

policies may lead to greater

retention and productivity

Tail risks

Addressing systematic

ESG issues that have the

potential to affect business

Examples

– Seeking to understand

climate risk on portfolio

companies may mitigate

risks associated with

extreme weather

– Pre-empting potential

ESG issues may mitigate risk

of breaches and cost

of compliance

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

››

P115 Notes to page 35

Environmental, Social and Governance continued

The process in action:

GFL Environmental

GFL Environmental Inc. is a leading

North American provider of

diversified environmental solutions.

GFL is one of the only major

diversified environmental

services companies in North

America offering services in

solid waste management,

liquid waste management and

infrastructure development.

Investment thesis

– Uniquely positioned to win in an attractive market

– Diversified business model

– Meaningful consolidation opportunity

– Operational value creation

– Exceptional entrepreneurial management team

– Exit optionality and upside

Financing

milestones

Company

milestones

BC Partners, together with

co-investors, invests in GFL

for c. 54% ownership of

the Company at entry

In March 2020, BC

Partners successfully

completed the IPO of

GFL on the NYSE and TSX

In April 2021, announced

follow-on offering

GFL rolled out the

HR software,

Workday, providing

metrics into GFL’s

workforce to facilitate

employee engagement

and training

At the end of 2019,

14%of GFL’s solid

waste collection fleet

was powered by

Compressed Natural

Gas (CNG), and had

22CNG fuelling

stations across North

America: the more

sustainable fleet

reduces GHG emissions

by up to 25% per truck,

compared to a diesel-

powered vehicle

Awarded 2020 SEAL

sustainability award in

recognition of leading

approach to ESG in

environmental services

in North America

Awarded 2020

Recycling Facility

of the Year for its

Material Recovery

Facility in Winnipeg,

Canada for innovation

and environmental

impact ownership

2018 2019

Ownership timeline

2020 2021

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

››

P115 Notes to page 36

Environmental, Social and Governance continued

An interview with Jennifer Signori

and Maura Reilly Kennedy

Can you tell us how

ESG is embedded into

the Neuberger Berman

investment process?

We believe the most effective way to

integrate ESG into an investment process

is for investment teams to consider

ESG as part of rigorous due diligence

and portfolio management. We are

able to leverage the broader firm’s ESG

capabilities and processes, from initial

due diligence to ongoing investment

monitoring which allows us to integrate

ESG throughout the lifecycle of the

investment process

We do this in three ways:

Firstly, we apply robust oversight and

responsibility to our process. Our

investment teams are responsible

for conducting the ESG analysis

which is then complemented by the

Investment Committee’s evaluation

of ESG considerations when the final

investment decision is taken. Our ESG

team is able to leverage the broader

firm’s ESG capabilities and resources,

including Neuberger Berman’s ESG policy,

proprietary ESG materiality assessments,

and ESG data and analytics.

The second part of the process is due

diligence and selection. ESG analysis

is included in Investment Committee

memorandums and forms an essential

part of the due diligence in direct

investments we consider. This analysis

includes an assessment of material

ESG factors specific to the potential

investment’s industry sector. We also

measure and assess the ESG integration

of the lead private equity managers with

which NBPE will co-invest before the final

decision is taken.

Thirdly, we continue considering

ESG once the investment decision is

taken, through careful monitoring and

ownership. Importantly, we monitor

investments for ESG violations and risks.

We also engage with all of our private

equity managers to share ESG best

practices and resources where possible

and aim to take an active leadership role

in ESG-related industry collaborations.

We perform a deep level of

due diligence, which allows us

to unturn every stone, including ESG.

A forensic approach like this is

a fundamental part of our

investment process.”

Jennifer Signori, Managing Director Maura Reilly Kennedy, Managing Director

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Environmental, Social and Governance continued

For co-investments what

additional screening do

you do?

MRK

ESG factors form a crucial part

of our rigorous and resource-intensive

company due diligence process. Specific

to co-investments, the team conduct

diligence on the specific co-investment

opportunity to ensure the potential

portfolio company and underlying

private equity manager are appropriately

managing ESG risks. We use the NB

Materiality Matrix (see page 33) to assess

industry-specific ESG factors that are

likely to be financially material, as well

as the private equity manager’s level of

ESG integration based on Neuberger

Berman’s manager ESG Scorecard.

Lastly, we have introduced specific

investment screening and monitoring

tools. For private market investments

where disclosure is more limited, we

use a reputable data science monitoring

tool to identify past ESG issues at private

companies. This helps us supplement

direct dialogue with the private equity

manager when making co-investments.

Our investment professionals are also

responsible for considering international

standards violations and other topic

areas in accordance with our Responsible

Avoidance policy. Finally, but importantly,

we engage with the private equity

co-investment managers to understand

how the company is managing and

mitigating material ESG factors, and

how the manager intends to improve

on these over time.

NBPE’s portfolio is

also viewed through

asustainability lens.

Howis this assessed?

Each investment is made according

to NBPE’s Responsible and Sustainable

Investment Policy. For every direct

investment, we assign an overall

sustainability rating of positive, neutral

or adverse. As of 31 December 2021,

approximately 24% of the portfolio

shows an overall positive sustainability

potential or an overall benefit to people

or the environment. These companies

operate in sectors such as healthcare or

education. For example, Aldevron, which

was realised in 2021, was a co-investment

alongside EQT. Aldevron is a significant

producer of plasmid DNA, which is a

critical input into gene therapy and certain

mRNA vaccines, including COVID-19, and

was classified as a company with positive

sustainability potential in the portfolio.

We designate 75% of the portfolio

as neutral, with a mixed or unknown

benefit to people or the environment.

These companies operate in sectors such

as technology, financial and business

services. Finally, 1% is designated as

having adverse sustainability potential or

could contribute to significant adverse

outcomes for people or the environment.

75%

Neutral

+ +

–

Adverse potential

Companies that have the

potential to contribute

to significant adverse

outcomes to people

or the environment

Companies that

have a mixed or

unknown benefit

to people or the

environment

Companies that have an

overall positive benefit

potential to people or

the environment

Companies that have

the potential to

contribute to solutions

to pressing social or

environmental challenges

24%

positive sustainability

potential

The portfolio through

a sustainability lens

››

P115 Notes to page 37

– + + +

Oil and gas

exploration

company

Consumer

retailer

Healthcare

services

Recycling

management

company

Examples

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Environmental, Social and Governance continued

In addition to communicating and

engaging with private equity managers

on an ongoing basis, we monitor ESG

violations and risks in real time by

leveraging our big data capabilities.

Our ESG watchlists are updated regularly

based on current portfolio investments,

and we are alerted to controversial

ESG issues that may affect portfolio

companies, such as those related to the

UNGC, of which Neuberger Berman

is a signatory. When appropriate, we

proactively engage with the private equity

managers on these topics.

What role can private

equity play in the

challenges the world

faces on climate change?

MRK

We believe that climate change

can be a material driver of investment risk

and return across industries and asset

classes and, as such, cannot be ignored.

Private equity companies generally have

lower carbon intensities based on sector

representation. Furthermore, the private

markets are generally where innovation

and growth can be found. Private

equity has an important role to play for

safeguarding the planet – providing

opportunities to invest in climate

solutions, transition and adaptation.

What were Neuberger

Berman’s private markets

key achievements in ESG

over the last 12 months?

Continued industry leadership

and collaboration

We actively participate in industry

engagement and collaborate with other

PE managers. For example, in December

2021, Neuberger Berman co-hosted a

webinar with the Institutional Investor

Group on Climate Change to help

educate private equity managers on how

to implement net zero objectives

in private equity investing. We are

also a member of the ILPA Diversity in

Action working group, highlighting

our engagement on diversity and

inclusion initiatives.

Launched a dedicated

impact strategy

Neuberger Berman closed its Private

Equity Impact Fund in March 2021.

The fund invests in direct and fund

investments that seek to achieve positive

social and environmental outcomes.

Implemented carbon footprint

due diligence

In 2021, we implemented a formal

step in our ESG due diligence process for

co-investments to collect carbon footprint

information. We are also a supporter

of the CDP’s private equity technical

working group to encourage greater

carbon disclosure in the private equity

industry, among other initiatives such

as Initiative Climate International.

What are Neuberger

Berman’s aspirations

for ESG?

MRK

We want to be our clients’

partner of choice for their most innovative

and forward-looking ESG objectives.

We continually seek to improve how we

incorporate ESG in our investment process

in a way that is consistent, rigorous and

evidenced. We also remain focused on

solving collective challenges facing the

private equity industry, such as greater

ESG data consistency and transparency,

and helping our clients understand the

sustainability characteristics of their

portfolios and how their investments

have real world outcomes.

NBPE portfolio company:

FV Hospital

Leading hospital provider

in Vietnam

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Manager – people & culture

Neuberger Berman,

a client-led partnership

98%

Retention levels of NB

Private Markets Managing

Directors and Principals

Neuberger Berman’s business principles

As a private, independent, employee-

owned investment manager,

Neuberger Berman has the freedom

to focus exclusively on investing

for its clients forthe long term.

By design, Neuberger Berman attracts

individuals who share a passion

for investing and who thrive in an

environment of rigorous analysis,

challenging dialogue, and

professional andpersonal respect.

Our clients

come first

motivate

through

alignment

We are

passionate

about

investing

Our culture

is key to

our long-term

success

We invest in

our people

continuously

improve and

innovate

Award-winning culture

For eight consecutive years, Neuberger

Berman has been named first or second in

Pensions & Investments Best Places to Work

in Money Management survey (among

those with 1,000 employees or more)

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

We are committed to our efforts around

sourcing and hiring the best talent from a

broad and diverse population. We believe

it is also crucial to focus on supporting

the development and success, especially

of under-represented groups, in order

to maintain our team’s diversity

and growth over time.”

Joana Rocha Scaff, Head of Europe Private Equity,

Managing Director

of Neuberger Berman

private equity employees

are female

of Neuberger Berman

global Managing Director

business unit heads

are female

of Neuberger Berman

private equity senior

investment team members

are female

33% 24%

22%

Manager – people & culture continued

Neuberger Berman’s commitment

to equity, inclusion and diversity

We believe firms perform better for

clients and stakeholders when there

isadiverse population, and atrue

equitable and inclusive environment.

Diversity alone is not enough.

Inclusion

An environment

where everyone can

flourish and be their

best selves

Equity

To be ‘equitable’

is to level the playing

field for all

Diversity

We look for a breadth

of diversity across

many characteristics

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Anthony Tutrone

Global Head of NB Alternatives, Managing Director

34 years of industry experience

Joana Rocha Scaff

Head of Europe Private Equity, Managing Director

23 years of industry experience

Manager – people & culture continued

The Investment Committee

Full biographies available online

www

David Stonberg

Deputy Head of NB Alternatives and the Global Co-Head of

Private Equity Co-Investments, Managing Director

31 years of industry experience

Peter von Lehe, JD

Head of Investment Solutions and Strategy, Managing Director

28 years of industry experience

Paul Daggett, CFA

Managing Director

23 years of industry experience

The Investment Committee has an average of over

30years of professional experience and worked

together for an average of more than 18 years.

Patricia Miller Zollar

Managing Director

35 years of industry experience

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Manager – people & culture continued

Jonathan Shofet

Global Head of Private Equity Investment Portfolios,

Managing Director

25 years of industry experience

Elizabeth Traxler

Managing Director

20 years of industry experience

Jacquelyn Wang

Managing Director

20 years of industry experience

Full biographies available online

www

The Investment Committee continued

David Morse

Global Co-Head of Private Equity Co-Investments, Managing Director

36 years of industry experience

Brien Smith

Chief Operating Officer of the Neuberger Berman

Private Equity Division, Managing Director

40 years of industry experience

John Massey

Chairman, of Private Investment Portfolios &

Co-Investment Investment Committee

55 years of industry experience

Michael Kramer

Managing Director

26 years of industry experience

Kent Chen, CFA

Head of Asia Private Equity, Managing Director

29 years of industry experience

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Stakeholder engagement

How the Board engages with stakeholders

Stakeholder How the Board engages Key topics in the year Examples of considering stakeholder interests

Shareholders

The support of the Company’s current and

future shareholders is critical to the continued

success of the business and the achievement of

our objective.

In addition to performance, we believe

shareholders also place a great emphasis on

other factors such as regulations, market

convention and ESG. We aim to conduct

the Company’s business taking these factors

into account.

The Board welcome the views of shareholders and places great

importance on communication with its shareholders.

The Board maintains awareness of shareholder views by means

of regular updates from the Manager and advisers and meetings

with shareholders.

Key channels that the Board and the Manager communicate with

shareholders include:

Shareholder engagement: The Manager holds regular meetings

with analysts and new and potential shareholders and presents

at industry conferences. Feedback from these meetings is shared

with the Board.

Publications: In addition to the Annual Report, the Company

publishes interim accounts, quarterly statements and factsheets,

and investor presentations to provide regular financial updates

throughout the year.

Capital Markets Days and AGM: The Directors are available

to meet shareholders directly through NBPE’s annual Capital

Markets Day (or virtual equivalent) or via the AGM.

Website: To provide significant transparency and help inform

investors, all the Company’s publications are available on

the website.

Shareholder concerns: Shareholders may also contact the

Chairman, Senior Independent Director and other Directors

through the Company Secretary.

– Portfolio performance,

including the impact of

COVID-19

– Information on and new

investments and realisations

– Market environment

– Information on the

Company’s Responsible

and Sustainable

Investment Policy

– Balance sheet management,

including ZDP maturities

– Shareholder

communications

– Share price performance

and discount

The Board appointed a new Non-Executive

Director and the Manager representative

stepped down from the Board at the 2021

AGM. The Board is now fully independent.

The Board approved the design of a new

website to help inform stakeholders about

NBPE, responsible investment and the

broader listed private equity opportunity.

The Board agreed that the Annual

Report format will be updated and will

be optimised for digital use, enhancing

usability and helping shareholders to

more easily understand NBPE’s strategy,

business model and results.

The Board agreed that the Capital Markets

Day would be held virtually given ongoing

uncertainty around travel restrictions at

the time. Shareholders were able to ask

questions, via a Q&A facility. A replay was

made available on the website for any

shareholders unable to attend.

Stakeholder engagement

As set out in the AIC Code of Corporate

Governance, under Section 172 of the

UK Companies Act 2006, Directors

are required to act in good faith and

in a way most likely to promote the

success of the Company. In doing so,

the Directors must also have regard to

the long-term consequences of their

decisions, the interests of the Company’s

various stakeholders, the impact of the

Company’s activities on the community

and the environment, and maintaining a

reputation for high standards of business

conduct and fair treatment between

members of the Company. As a Guernsey

company that legislation does not directly

apply to NBPE, but the Board recognises

the importance of these issues and holds

itself to these standards.

The Board provides appropriate training

to all new Directors, which includes

training on their duties, including those

under Section 172, and provides refresher

courses. More details on Director

induction and Board evaluation can be

found on page 56.

Below we set out our key stakeholder

groups and how we engage with them,

in addition to examples of key topics of

relevance to the stakeholder groups and

how their interests have been considered

in decision making. As an investment

company, the Company does not have

any employees.

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Stakeholder How the Board engages Key topics in the year Examples of considering stakeholder interests

Our Investment Manager

The Company leverages the strength of

Neuberger Berman’s private equity platform

to seek the most attractive direct investment

opportunities. As such it is important that the

Board maintains a strong relationship with

the Manager.

The Manager prepares detailed financial reports

to the Board on the portfolio, performance,

cash flow modeling and other financial data

to help guide discussions and decisions.

The Board has developed relationships with key members of

the Investment Manager’s investment team, as well as other

functions including finance and legal.

The Manager also interacts with other service providers as

necessary for the day-to-day management of the Company.

The Directors review financial reports prepared by the Investment

Manager ahead of each quarterly Board meeting. Annually, the

Audit Committee reviews detailed reports from financial models

prepared to support the Company’s Viability Statement. In

conjunction with the Manager, the Audit Committee reviews and

monitors the Company’s investment level and investment pacing

forecasts contained within the support of the Viability Statement.

– Portfolio performance,

including the impact of

COVID-19

– Information on and new

investments and realisations

– Market environment

– Information on the

Company’s Responsible and

Sustainable Investment Policy

– Balance sheet management

– Share price performance

and discount

– Investment level and

cash flow forecasts

– Debt maturities

The Manager and the Company are fully

aligned with one another.

Both share a mutual interest in the

success of the investments as well as the

Company’s perception and reputation in

the marketplace.

Both the Manager and the Board strive to

maintain a strong working relationship to

achieve these goals.

Our investee entities

The Manager is responsible for executing

the Company’s overall investment policy and

objective, as approved by the Board, as such

day-to-day engagement with investees is

undertaken by the Manager.

The Board receives updates at each scheduled Board meeting

from the Manager on the investment portfolio, including regular

valuation reports and detailed portfolio and returns analyses.

The Manager maintains

a wide-range of private

equity networks and close

relationships with leading

private equity managers

globally. The Manager

regularly conducts private

equity discussion with various

managers of key private

equity topics, including

deal sourcing, market

environment, fundraising,

team composition, investment

performance and monitoring,

ESG and other factors.

The Manager strives to be a solutions

provider and strategic partner to underlying

private equity managers, which ultimately,

over time, strengthens and cultivates

the relationship.

Our lenders

The Company’s co-investment model means

that the fund can be nimble and capital efficient.

It means that NBPE does not need to take

off-balance sheet risk in the form of unfunded

commitments to achieve a target investment level.

In order to achieve this, the Company’s lenders

provide the Company with debt and debt-like

financing with maturity dates, fixed capital

entitlements which bear interest and fees at

various interest and fee rates.

At the overall direction of the Board, members of the Manager’s

finance and investment teams maintain dialogue with the

Company’s bank and lender counterparties.

Feedback on these discussions is shared with the Board at the

quarterly Board meetings, or ad hoc as required.

The lenders are focused on

asset coverage, valuation of

assets and key financial ratios

on the Company’s liquidity

and financial position.

The Manager keeps the Company’s

lenders aware of portfolio developments

throughout the year through both public

disclosures and private investment

monitoring reports.

In addition, the Company provided detailed

compliance reports to the Company’s credit

facility lender and the Board, showing asset

coverage, ratios and covenant tests.

Stakeholder engagement continued

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Stakeholder How the Board engages Key topics in the year Examples of considering stakeholder interests

Other service providers

Effective relations with service providers help

the Company to operate in a compliant and

efficient manner.

The Company’s service providers work with the

Manager, Company Secretary and Board

to achieve the Company’s objectives.

Other service providers include fund

administrators, accountants, auditors, brokers,

advisors, counsel, consultants, marketing and

advisory services, external research, media

relations and other service providers.

The Board maintains regular contact with its key external

providers and receives regular reporting from them, both

through the Board and committee meetings, as well as outside

of the regular Board meeting cycle.

The Management

Engagement Committee

formally assesses performance,

fees and continuing

appointment annually to

ensure that the key service

providers continue to function

at an acceptable level and are

appropriately remunerated

to deliver the expected level

of service.

The Management

Engagement Committee

reviews and evaluates the

financial reporting control

environments in place at

each service provider.

The Company’s other service providers’

advice, as well as their needs and views

are routinely taken into account.

The community and the environment

NBPE believes investing responsibly and the

incorporation of material ESG considerations

can help inform the assessment of overall

investment risk and opportunities.

To reflect the Company’s ongoing commitment

to ESG, the Company published a Responsible

and Sustainable Investment Policy in 2020.

ESG issues are a standard part of the Company’s investment

process, and increasingly integral to the Board’s thinking.

The Manager integrates ESG considerations throughout the

investment process by helping to identify both material risks

and opportunities to drive value and the Board receives regular

updates on the Manager’s ESG practice. The Board reviews the

Company’s compliance with its Responsible and Sustainable

Investment Policy.

In addition to the regular

updates from the Manager’s

ESG team, the Board receives

and discusses detailed

analysis of the sustainability

impact of the portfolio on

an annual basis which

includes details on material

ESG risks of underlying

portfolio companies.

ESG considerations and the impact of

the Company on the community and

environment are regular topics at

Board meetings.

Stakeholder engagement continued

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Investment

Committee

Valuation

Committee

Investment

Risk Committee

Operational

Risk Committee

Risk management

framework

The Board considers external risk

investment and strategic risk, financial

risk, and operational risk to be the

principal risks and uncertainties of

the Company. Within each of the five

principal risks and uncertainties on pages

47 and 48, the Directors have identified a

number of key underlying risks. While it is

not possible to identify and manage every

risk to the Company, the Directors seek

to identify the key underlying risks within

each category where possible.

Each identified key underlying risk

includes information on the Board level

controls and controls relied upon by

the Board, the responsible provider,

the potential impact to the Company,

the current state of the risk and the

outlook. Judgement is applied to

determine these assessments and the

Board regularly considers any changes

to the assessments of the key underlying

risks on a quarterly basis. Not all risks can

be eliminated; therefore, there is only

a reasonable assurance against fraud,

misstatements or losses to the Company.

The Board is ultimately responsible for

the identification and assessment of

risk as well as monitoring the key risks

to the Company on an ongoing basis.

In order to identify and assess key risks to

the Company, the Directors rely on a risk

matrix prepared and maintained by the

Investment Manager and reviewed by

the Board on a quarterly basis. The risk

matrix identifies risks categorised by the

principal risks and uncertainties.

The principal risks identified by the Board

are set out on pages 47-48.

The Board also monitors future risks

that may arise. The Board identified

risks related to sovereign and political

factors and general market and

environmental factors as emerging risks

at 31 December 2021.

Risk management framework

NBPE Board of Directors

NBPE Audit Committee

Investment Manager: NB Private Markets

– Independent assurance – Internal audit

Independent control units

that collaborate

– Infrastructure

Technology

– Business

Technology

– Operations

– Finance

– Legal

– Compliance

– Asset

Management

Guideline

Oversight

– Investment

Risk

– Operational

Risk

Independent teams

which collaborate

to identify and

mitigate risk

* NB Private Markets is a general description of the business of the Investment Manager, NB Alternatives Advisers

LLC; there has been no change to the Investment Manager of NBPE

** Highlights represent committees of the Investment Manager; other committees presented above are resources

of the parent company, Neuberger Berman, of the Investment Manager

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Principal risks and uncertainties

Key risks Potential Impact Key Controls Assessment

Investment risk

Investment decisions – Selecting investments to generate the

best risk adjusted returns

Performance – Achieving underwriting case and meeting

long-term objectives

Valuations – Misstatements to Net Asset Value

Sub-optimal risk-return investment decisions could lead

the Company to higher risk investments to generate a

desired level of return.

Inconsistent investment performance would impact

the Company’s financial position.

The valuation of investments directly impacts the

Company’s financial position, key ratios/covenants

and performance.

– Highly experienced Manager with deep team

– Extensive due diligence process

– ESG-integrated investment process

– Thorough investment underwriting and due diligence

– Regular Board review of Manager performance,

operations and capabilities

– Robust, consistent valuation processes

– Monthly NAV updates

– Quarterly valuation review

– Annual Audit

Financial risk

Liquidity management – Inadequacy of cash balances for

short-term needs

Credit facility – Availability of borrowings and maintenance

of covenants

ZDP liabilities – Ability to repay at maturity

Foreign exchange – Fluctuations in GBP/USD exchange rate

for Sterling denominated liabilities

Managing liquidity, near-term cash requirements and credit

facility borrowings impacts the Company’s ability to make

new investments and carry out day-to-day operations.

ZDP liabilities have staggered maturities and fixed maturity

dates. Company’s creditworthiness would be materially

impacted by not meeting liabilities when they come due.

– Monitoring of cash balances

– Review of management reports and financials

– Monitoring of headroom and financial ratios

– Monthly calculations of liability

– Known final capital entitlement and maturity date

– Ability to fully or partially hedge currency risk through

forward currency contracts

The table below shows a summary of the key underlying risks within each of the four principal risks and uncertainties identified by the Board.

The status below shows whether the principal risks are increasing, decreasing or not changing compared to the previous year.

Principal risks and

uncertainties

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Principal risks and uncertainties continued

Key risks Potential Impact Key Controls Assessment

Strategic risk

Share price discount – Monitoring of share price discount to NAV

Meeting business objectives – Ability to meet business and

investment objectives in current environment

A failure within strategic risks could impact the Company’s

reputation and performance.

Over time, the Company has completed a number of

initiatives aimed at enhancing shareholder value and

narrowing the discount, from portfolio construction

to payment of a dividends and share buybacks.

– Monitoring discount and review market research

– Strategic investor relations programme

– Periodic review of appropriateness of investment

objective and policy

Operational risk

Legal/Compliance – Investment activity legal risks, including

investments within policies and compliance with regulations

Litigation – Legal action brought against the Company or Board

Business operations and continuity – Day-to-day operations and

management of the Company. Frameworks for business continuity

Internal policies and procedures – Policies and procedures of

Investment Manager and key service providers of the Company

Governance – Company governance and oversight by the Board

Key professionals – Retention of key staff

Legal and compliance risks and the potential of litigation

action creates significant risk and uncertainty if brought

about against the Company, Board or Manager.

Company operations are carried out by the Investment

Manager; a negative event could impact the Company’s

ability to operate day-to-day.

Policies and procedures at key service providers designed

to reduce or mitigate risks to the Company as a policy

violation could be impactful.

The Board oversees all aspects of the Company.

The Company itself has no operations or employees and

instead relies on that of key service providers. A loss of

key professionals could impact the ability of the Company

to operate.

– Reliance on in-house legal teams of the Manager and

external counsel

– Legal negotiations and procedures to ensure adherence

to investment guidelines

– Reliance on operational staff of the Manager

and fund administrator

– Reviews of service providers to ensure control

environments are adequate

– Business Continuity Plans of Manager and administrator

– Policies and procedures of the Manager and service

providers and internal controls designed to pick up

potential issues

– Assessment processes; review of best practices

– Resources of the Manager for attracting and

retaining talent

External risk

Sovereign/Political risks – Changes in economical and

political environment

General market/Investment environment – Changes in

market or regulatory environment

COVID-19 – Risks related to COVID-19 and government responses

External risks impact the Company’s investment portfolio

to varying degrees which could have an impact on the

Company’s performance.

External risks are inherently difficult to forecast and

impacts are uncertain.

Ongoing risks related to COVID-19 has the potential

to impact portfolio companies, as well as staff of the

Company’s key service providers.

– The Board and Manager are aware of the general

market environment and global risks generally

– Risk mitigation is difficult, other than during the

investment analysis phase prior to making a

new investment

– Investment Manager maintains discussions with

underlying general partners to assess and understand

potential exposure/degree of impact

– Consultation with other outside advisors

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Going concern Viability Statement

Going concern and Viability Statements

The Group’s principal activities and

investment objectives are described on

page 64 of the Report, and the Group’s

financial position is stated on page 79 of

the report. Note 11 of the Consolidated

Financial Statements describes the

Group’s risks with respect to market,

credit and liquidity risk. On page 91 of the

report, the Group’s liquidity and available

borrowing facilities are described.

The Group’s cash flows are provided on

page 83 of the report. Given the Group’s

cash flows and financial position,

the Directors believe the Group has the

financial resources to meet its financial

commitments as they fall due.

Therefore, having considered a 12-month

horizon from the date of authorisation of

this annual financial report, the Directors

have a reasonable expectation that

the Group has adequate resources to

continue to operate into the foreseeable

future and accordingly the Consolidated

Financial Statements have been prepared

on a going concern basis.

The Board has evaluated the

long-term prospects of the

Group, beyond the 12-month

time horizon assumption

within the going concern

framework. Further details of

the forecast and the process

for assessing long-term

prospects of the Group are

set forth here and the Board

believes this analysis provides

a reasonable basis to support

the viability of the Group.

The Directors have selected a

three-year window for evaluating the

potential impact to the Group on the

following basis:

– Investments are subject to overall

financial market and economic

conditions. Projecting long-term

financial and economic conditions is

inherently difficult, but a three-year

window is a reasonable time horizon

– Private equity funds typically deploy

capital over a three to five-year period

– Medium-term outlook of underlying

Company performance is typically

assessed for valuation purposes

The Directors note the Company has a

near-term maturity of the 2022 class

of ZDP shares in September 2022;

the remaining class of ZDP shares

will not mature until October 2024.

The Group’s ability to refinance or repay

these financings are a short and medium-

term risk as both classes of ZDPs mature

within a three-year forecast period.

Based on the 31 December 2021

GBP/USD exchange rate of $1.35,

the final capital entitlement of the

2022 ZDP shares is approximately

$85 million. To evaluate the Company’s

financial position in relationship to this

upcoming maturity and the longer-term

forecast period through December 2024,

the Directors reviewed a financial model

prepared by the Investment Manager.

The financial model includes detailed

forward projections of cash flows,

expenses, and liabilities as well as NAV

growth assumptions to evaluate loan

to value and coverage test ratios.

Going concern and

Viability Statements

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Going concern and Viability Statements continued

The Board believes the Company is in

a healthy financial position and able to

meet upcoming liabilities when they

mature. The Directors further note

the Company’s $300 million revolving

credit facility was fully undrawn as

of 31 December 2021. Further, the

borrowing availability period extends to

2029, beyond the maturity of both classes

of ZDP shares. For the near-term maturity,

the Board noted the credit facility could

be used in whole or in part (based on

availability) to repay the 2022 ZDP shares.

The Manager discussed the key financial

assumptions and findings of the model

with the Board. The model forecasts

returns and cash flows on an asset

by asset basis to evaluate cash and

investment pacing considerations and the

Manager selected two cases to evaluate

the viability of the Company over the

three-year window. Both cases included

expected realisations in 2022 from signed

but not yet closed transactions.

The base case made further assumptions

of NAV growth and additional

realisations, both of which were below

the long-term averages of the Company.

The model also assumed a certain pace

of re-investment, based on the level

of realisations from the portfolio.

The Manager views this as a reasonable

case to evaluate the prospects of

the Company even in the current

economic environment.

However, the Directors recognise the

Company is susceptible to overall market

conditions, which is a continued risk and

uncertainty facing the Company. In light

of this, the Manager prepared a second

forecast case which was a downside

case scenario. This case assumed a 10%

NAV decline in Q4 2022 and no growth

in 2023 and 2024. Further, this case only

assumed $106 million of realisations

during 2022, of which $88 million were

announced but not yet closed. 2023 and

2024 assumed only a limited amount of

realisations below historical averages and

new investments through NB-affiliated

investment programs.

The key findings from this analysis and

discussions with the Manager was that in

both cases, NBPE could continue to fund

its existing commitments, pay dividends

and ongoing expenses and have

borrowing capacity available to fully

repay the 2022 and 2024 ZDPs at

maturity. The downside case showed

a higher investment level in later periods

of the forecast (as a result of the decline

in valuations). Nevertheless, the higher

investment level was generally consistent

with the elevated period experienced

during the first half of 2020. Over the

forecast period of the downside case,

NBPE maintained ample liquidity and

LTV ratios; in addition, the 2024 ZDP’s

had a healthy coverage cushion, even

after repaying the 2022 ZDPs at their

maturity. In light of this analysis, the

Directors concluded the Company could

continue to operate over the three-year

viability window.

STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER NB Private Equity Partners Annual Report 2021

Governance

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Governance overview

Board structure and

committees

Board of directors

William Maltby

Chairman, Independent Director

Wilken von Hodenberg

Senior Independent Director

Trudi Clark

Independent Director

John Martyn Falla

Independent Director

Louisa Symington-Mills

Independent Director

Audit Committee

John Martyn Falla

Trudi Clark

William Maltby

Wilken von Hodenberg

Louisa Symington-Mills

Provides oversight and reassurance

to the Board, specifically with regard to

the integrity of the Company’s financial

reporting, audit arrangements, risk

management and internal control

processes and governance framework.

Management Engagement Committee

Trudi Clark

John Martyn Falla

William Maltby

Wilken von Hodenberg

Louisa Symington-Mills

Reviews annually the terms of the

Investment Management Agreement.

Additionally, the Committee reviews the

performance and terms of engagement

of any other key service providers to the

Company, as considered appropriate.

Nomination and Remuneration Committee

Trudi Clark

John Martyn Falla

William Maltby

Wilken von Hodenberg

Louisa Symington-Mills

Assists the Board in filling vacancies on the

Board and its committees and to review

and make recommendations regarding

Board structure, size and composition.

Additionally, the Committee reviews

the remuneration of the Chairman and

non-executive directors.

Good corporate governance

isfundamental to the way

NBPE conducts business.

Effective oversight of strategy and risk

is particularly important to promote the

long-term success of theCompany.

The Chairman is responsible for ensuring

that the Board upholds a high standard

of corporate governance and operates

effectively and efficiently, promoting a

culture of openess and debate.

The Board seeks to be responsive to both

the evolving regulatory environment

and changing expectations about the

role of business in society. In particular,

the Board seeks to ensure that both its

own culture and that of the Manager is

aligned with the Company’s purpose and

values, and that the Company has the

necessary financial and human resources

to deliver its strategy.

William Maltby

Chairman

Committee Chair

Gender

60% Male

40% Female

56››

67››

59››

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

The Board

The Board is responsible for

oversight of NBPE, and for

effective stewardship of the

Company’s affairs.

William Maltby

Chairman

Independent Director

Appointed 21 March 2019

William Maltby was vice

chairman of Investment

Banking at Deutsche Bank

where he worked for more

than 25 years. Mr. Maltby

spent a further six years

as a Senior Adviser to

the Investment Banking

Division of Deutsche Bank.

Mr. Maltby was a corporate

financier specialising in

financial sponsors and

leveraged finance, and was

head of Deutsche Bank’s

European Financial Sponsor

Coverage and Leveraged

Finance businesses. He

joined Morgan Grenfell in

1984 which was acquired by

Deutsche Bank in 1989.

Mr. Maltby was chairman of

Mithras Investment Trust Plc,

a private equity fund of funds

investment trust listed on

the London Stock Exchange

from 2012 to 2018, when

it completed a successful

realisation strategy.

Mr. Maltby is also chairman

of Ekins Guinness LLP and

a non-executive director of

Pension SuperFund Capital

GP II Limited. He qualified as

a Chartered Accountant with

Peat Marwick and has a law

degree from the University

of Cambridge.

Wilken von

Hodenberg

Senior Independent Director

Appointed 21 March 2019

Wilken von Hodenberg is

a businessperson with 39

years of experience in private

equity, investment banking

and senior management.

Mr. von Hodenberg has been

at the head of five different

entities and for some years

occupied the position of

chairman of German Private

Equity & Venture Capital

Association.

Mr. von Hodenberg was a

member of the Supervisory

Board for Deutsche

Beteiligungs AG since 2013

and left this position in

February 2020. He is also

a non-executive director

of Sloman Neptun AG

and ECapital AG; Mr. von

Hodenberg became vice chair

of Wepa SE in 8 April 2022.

From 2000-2013 Mr. von

Hodenberg was CEO of

Deutsche Beteiligungs AG.

Mr. von Hodenberg also

served as a managing director

of Merrill Lynch in Frankfurt

(1998-2000). Prior to this

Mr. von Hodenberg was

managing director at Baring

Brothers GmbH (1993-1997).

From 1990-1992 he was

CFO of Tengelmann Group,

a major German retailing

group. He started his career

at JPMorgan in New York and

Frankfurt (1983-1989).

Mr. von Hodenberg is a

lawyer in Hamburg and

holds a Law degree from the

University of Hamburg.

The Board

Matrix of skills and experience

Board member

Investment

Trusts

Private

Equity

Asset

Management

Investment

Banking

Finance/

Audit

William Maltby

Wilken von

Hodenberg

Trudi Clark

John Martyn

Falla

Louisa

Symington-

Mills

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

The Board continued

John Martyn Falla

Chairman of the Audit

Committee

Independent Director

Appointed 21 December 2015

John Falla, a resident of

Guernsey, is an Associate of

the Institute of Chartered

Accountants in England

and Wales. Mr. Falla has a

degree in Property Valuation

and Management from City

University London and is

a Fellow of the Chartered

Institute for Securities and

Investment, holding their

diploma. Mr. Falla qualified

as a chartered accountant

with Ernst and Young in

London, before transferring

to their Corporate Finance

Department, specialising in

the valuation of unquoted

shares and securities,

including private equity

holdings. On Mr. Falla’s return

to Guernsey in 1996 he

worked for an International

Bank before joining The

International Stock Exchange

(formerly Channel Islands

Stock Exchange) in 1998

on its launch as a member

of the Market Authority.

In 2000 Mr. Falla joined

the Edmond de Rothschild

Group. Although based

in Guernsey he provided

corporate finance advice to

international clients including

open and closed-ended

funds, and institutions with

significant property interests.

Mr. Falla was also a director

of a number of Edmond de

Rothschild operating and

investment entities. Mr. Falla

has been a non-executive

director of London listed

companies for a number of

years, and is now a full-time

non-executive director and

consultant. Other public

company directorships:

CIP Merchant Capital Limited

and Marble Point Loan

Financing Limited.

Louisa

Symington-Mills

Independent Director

Appointed 15 June 2021

Louisa Symington-Mills has

extensive experience of the

listed private equity sector.

She established a successful

career at Royal Bank of

Scotland and Jefferies as a

listed alternative investment

funds equity research

analyst, with a particular

focus on listed private equity

investment companies,

and has played a key role in

increasing awareness and

understanding of listed

private equity.

She subsequently became

chief operating officer

at LPEQ (now LPeC), an

international association

of listed private equity

companies, and is now an

award-winning entrepreneur.

Louisa began her career

at M&G Investment

Management in 2003 and

has an English Literature

degree from the University

of Durham.

Trudi Clark

Chairman of the Nomination

and Remuneration

Committee and Management

Engagement Committee,

IndependentDirector

Appointed 24 April 2017

Trudi Clark qualified as

a chartered accountant

with Robson Rhodes in

Birmingham, after graduating

in Business Studies. Moving

to Guernsey in 1987,

Ms. Clark joined KPMG

where she was responsible

for an audit portfolio

including some of the major

financial institutions in

Guernsey. After 10 years in

public practice, Ms. Clark

was recruited by the Bank

of Bermuda as Head of

European Internal Audit,

later moving into corporate

banking. In 1995 Ms. Clark

joined Schroders in the

Channel Islands as CFO.

Ms. Clark was promoted in

2000 to Banking Director and

Managing Director in 2003.

From 2006 to 2009, Ms. Clark

established a family office,

specialising in alternative

investments. From 2009 to

2018, Ms. Clark returned to

public practice specialising

in corporate restructuring

services. Ms. Clark has

several non-executive

director appointments

for companies both listed

and non-listed investing in

property, private equity and

other assets. Other public

company directorships:

BMO Commercial

Property Trust Limited,

River and Mercantile UK

MicroCap Investment

Company Limited, The

Schiehallion Fund Limited

and Taylor Maritime

Investments Ltd.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Governance

Corporate governance

The directors believe in strong corporate

governance and are committed to the

appropriate standards of corporate governance.

The Board of NBPE has considered the

Principles and Provisions of the AIC Code

of Corporate Governance (“AIC Code”).

The AIC Code addresses the Principles

and Provisions set out in the UK Corporate

Governance Code (the “UK Code”), as

well as setting out additional Provisions

on issues that are of specific relevance to

NBPE. The Board considers that reporting

against the Principles and Provisions of

the AIC Code, which has been endorsed

by the Guernsey Financial Services

Commission, provides more relevant

information to shareholders.

The Company has complied with the

Principles and Provisions of the AIC Code,

except as set out below.

– The role of the chief executive;

– Executive directors’ remuneration; and

– The need for an internal audit function.

The Board considered these provisions

are not relevant to the position of NBPE,

being an externally managed investment

company. In particular, all of the

Company’s day-to-day management and

administrative functions were outsourced

to third parties. As a result, the Company

has no executive directors, employees or

internal operations. The Company has

therefore not reported further in respect

of these provisions.

The AIC Code is available on the AIC

website (www.theaic.co.uk). It includes

an explanation of how the AIC Code

adapts the Principles and Provisions set

out in the UK Code to make them relevant

for investment companies.

The Company is also subject to

the Alternative Investment Fund

Managers Directive (“AIFMD”) and

has a management agreement

with NB Alternatives Advisers, LLC

(the “Investment Manager” or the

“Manager”) to act as its Alternative

Investment Fund Manager (“AIFM”).

The Bank of New York acts as its

depositary, in accordance with the

requirements of the AIFMD.

Composition and

independence

The Board is comprised of five directors,

all of whom are independent. Most

recently, the Board appointed Louisa

Symington-Mills as an independent

director and believes her appointment

will complement the Board’s existing

knowledge and expertise. The Company

does not have a chief executive officer

and day-to-day management of the

Company has been delegated to the

Investment Manager by the Board.

Role of Senior

Independent Director

The Senior Independent Director (“SID”)

works closely with the Chairman, ensures

each of the non-executive directors’

concerns are heard, and is available to

attend meetings with a range of major

shareholders to understand potential

concerns. Wilken von Hodenberg fills

this role. The following outlines the SID’s

responsibilities, in line with the SID Roles

and Responsibilities Policy. In common

with all non-executive directors, the SID

has the same general legal responsibilities

to the Company as any other director.

– Duties relating to the Chairman: work

closely with the Chairman, serving as a

sounding board and providing support

through acting as an intermediary for

other directors and shareholders by

identifying issues and trying to mediate

and build a consensus; hold annual

meetings with non-executive directors,

without the Chairman present, to

discuss the Chairman’s performance

and on such other occasions as are

deemed appropriate; and having

discussed the Chairman’s performance

with the non-executive directors,

provide feedback to the Chairman

on this matter.

– Duties relating to the Board: ensure

that the views of each non-executive

director are given due consideration

and make themselves available for

confidential discussions with non-

executive directors who may have

concerns, which they believe have not

been properly considered by the Board

as a whole; and have the authority to

call a meeting of the non-executive

directors if deemed necessary.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

– Duties relating to members: be available

to shareholders if they have reason for

concern when contact through normal

channels have failed to resolve the

concern, and attend meetings with a

range of major shareholders to listen

to their views in order to help develop

a balanced understanding of the issues

and concerns of major shareholders.

Induction and training

Directors are provided, on a regular basis,

with key information on the Company’s

policies, regulatory requirements and

its internal controls. Regulatory and

legislative changes affecting directors’

responsibilities are advised to the Board

as they arise, along with changes to

best practice by, amongst others, the

Company Secretary and the auditors.

Advisers to the Company also prepare

reports for the Board from time to time

on relevant topics and issues. In addition,

directors attend relevant seminars and

events to allow them to refresh their

skills and knowledge and keep up

with changes within the investment

company industry.

When a new director is appointed to the

Board, he/she is provided with relevant

information regarding the Company

and their duties and responsibilities as a

director. In addition, the new director also

spends time with representatives of the

Company Secretary and the Investment

Manager in order to learn more about

their processes and procedures. The

induction process covers a number of

key business areas and teams, including:

meetings with the Board and Chairman

to discuss all aspects of the Company’s

business, operations and governance;

meetings with the Company’s

investment advisor to look at all aspects

of the Company’s portfolio, investment

management and operations; meetings

with the Company’s administrator to

discuss legal and regulatory obligations

and requirements, processes and

governance generally; meetings with the

Company’s corporate brokers to discuss

investor perceptions, capital markets,

and the development of the Company’s

shareholder base; and meetings with the

Company’s auditors and PR advisors.

The Board provides appropriate training

to all new directors, which includes

training on their duties, including those

under Section 172 of the UK Companies

Act 2006, and provides refresher courses

from time to time. When a new director

joins the Board, they receive regular and

ongoing training, including details of all

regulatory and legal duties as a director

of a Guernsey domiciled investment

company listed on the Main Market of the

London Stock Exchange. Furthermore,

the Chairman reviews the training and

development needs of each director

during the annual Board evaluation

process to evaluate if additional training

is needed.

Performance evaluation

The directors complete evaluations of the

Board and Chairman on a yearly basis. The

goal of the evaluation of the Board is for

each director to assess the effectiveness

of the Board’s performance. This process

helps ensure that the Board’s operations

remain aligned with the culture, purpose

and values of the Company.

The evaluations are completed through

the form of questionnaires and discussion.

Following the last evaluation in June 2021,

it was concluded by the Board that the

performance of both the Board and the

Chairman was satisfactory. The Board

does not currently perform external

evaluations. However, subsequent to

this reporting period, on 11 March 2022,

FTSE Russell announced that NBPE will

be included in the FTSE 250 Index from

21 March 2022. The directors noted

that, as a FTSE 250 company, an external

evaluation is required every three years

and the Board plans to consider a new

policy with respect to external evaluations

in order to meet this requirement.

Directors’ time

commitments

At the time a new director is appointed to

the Company, consideration is given to his

or her time commitments and availability

in order to fulfill the role. A schedule of

each directors’ appointments is tabled

quarterly for each Board meeting. In

the year under review, all directors were

considered to have sufficient time to

commit to their respective roles on the

Board, taking account of their external

appointments.

Diversity and inclusion

The Board acknowledges the importance

of diversity of gender, ethnic background,

experience, and approach, for the

effective functioning of the Board and

commits to supporting diversity in the

Boardroom. It is the Board’s on-going

objective to have an appropriately

diversified representation.

With two female Directors out of a total

of five, the Board has met the gender

diversity targets set by the Hampton-

Alexander review. With regard to the

Parker Review, the Board supports

the recommendation to have ethnic

representation on the Board, and as

such considers this integral to the

Board’s succession planning.

Board diversity policy

The Board values diversity of business

skills and experience because the Board

believes directors with diverse skill sets,

capabilities and experience gained from

different geographical backgrounds

helps ascertain a wide range of

perspectives that provide value during

the collaboration process. It is the

Company’s policy to give careful

consideration to issues of the Board’s

balance and diversity when making new

appointments. When appointing Board

members, priority is based on merit,

but will be influenced by the desire to

enhance the Board’s diversity, including

gender and ethnic background.

The Board diversity policy sets out

the approach that will be adopted to

ensure that Board membership remains

appropriately balanced, and relevant

to the Company’s operations. In line

with this, the Board and Nomination

and Remuneration Committee (“NRC”)

commit to the implementation of the

measures set out on the next page,

which seek to promote responsible and

Governance continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

sustainable leadership of the Company,

through supporting and embracing an

inclusive Board culture.

The composition of the Board and its

committees will be subject to annual

review by the NRC and will include

monitoring the skills, knowledge,

experience, and diversity. Prior to any

new appointments, the NRC will review

the current composition and diversity of

the Board and identify any specific skills

or qualities which are required to ensure

the continued effective operation of

the Board. The desired selection criteria

will be set out to ensure a formal and

transparent appointment process.

Should the Board choose to use an

external adviser to facilitate the search,

the NRC will work with those deemed

to best provide a pool of diverse and

experienced candidates aligned to the

Board’s needs. Following the creation of

a shortlist of candidates, the Board and

its committees will operate in a respectful

and inclusive manner.

The decision-making process will be

based on merit, with due consideration of

the criteria identified and consideration

that the candidate’s appointment will

enhance the overall capability of the

Board. The Board and its committees

will monitor external views in relation

to diversity and ensure that these are

considered by the Board and the NRC

when succession planning or recruiting a

new director.

Tenure of non-executive

independent directors

Each non-executive director is appointed

by a letter of appointment on an ongoing

basis, and shareholders vote on whether

to elect/re-elect him or her at every AGM.

A non-executive director will only be

proposed for re-election at an AGM if the

Board is satisfied with the non-executive

director’s performance, independence

and ongoing time commitment.

The Board has adopted a policy on tenure

that is considered appropriate for an

investment company. The Board does not

believe that length of service, by itself,

leads to a closer relationship with the

Investment Manager or necessarily affects

a director’s independence. The Board’s

tenure and succession policy seeks to

ensure that the Board is well balanced and

will be refreshed from time to time by the

appointment of new directors with the

skills and experience necessary to replace

those lost by directors’ retirements.

Directors must be able to demonstrate

their commitment to the Company.

The Board seeks to encompass past

and current experience of various areas

relevant to the Company’s business.

The Company’s policy on Chair tenure

is that the Chair should normally serve

no longer than nine years as a director

and Chair, but when it is in the best

interests of the Company, shareholders

and stakeholders, the Chair may serve

for a limited time beyond that. In such

circumstances, the independence of the

other directors will ensure that the Board

as a whole remains independent.

Role of the Board

It is the responsibility of the Board to ensure that there is effective stewardship

of the Company’s affairs. Strategic issues are determined by the Board, a formal

schedule of operational matters reserved for the Board has been adopted in order to

enable it to discharge its responsibilities, and directors have full and timely access to

relevant information.

Board meetings and meeting attendance

The Board meets at least four times a year to discuss Company developments and

ongoing activities. This includes reviewing and evaluating the dividend, monitoring

and adapting, as necessary, the investment strategy, and reviewing the financial

and investment performance of the Company. The Investment Manager and the

Company’s Administrator furnish the directors with relevant materials, including

investment reports, risk analysis and other documents in a timely manner prior to

each Board meeting. In addition, an agenda is circulated to the directors prior to the

meeting and the directors may consider additional topics for discussion prior to each

Board meeting. Representatives from the Investment Manager attend the meetings

to report to the Board on relevant updates regarding investment performance and

investment activities. Other service providers to the Company are invited to speak at

Board meetings on relevant matters, as necessary. In addition to the four quarterly

Board meetings, there were other ad hoc Board meetings throughout the year to

approve various documentation, dividend payments, and other matters. The quorum

for any Board meeting is two directors but attendance by all directors at each meeting

is strongly encouraged.

Attendance by the directors at the quarterly Board meetings and other committee

meetings during 2021 was as follows:

Director Board Meeting

Audit

Committee MEC NRC

4 4 1 1

William Maltby 4 4 1 1

John Martyn Falla 4 4 1 1

Trudi Clark 4 4 1 1

Wilken von Hodenberg 4 4 1 1

Louisa Symington-Mills

(appointed on 15 June 2021) 2/2 1/1 1 N/A*

Peter von Lehe

(resigned on 15 September 2021) 2/2 N/A N/A N/A

* Meeting took place prior to appointment.

Governance continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

In the event that in the future any

directors are unable to attend Board

and Committee meetings, the relevant

directors will be contacted by the Chair

before and/or after the meeting to ensure

they were aware of the issues being

discussed and to obtain their input.

Company Secretary

The Directors also have access to the

advice and services of the Company

Secretary, Ocorian Administration

(Guernsey) Limited. Ocorian

Administration (Guernsey) Limited,

an affiliate of First Directors Limited

(the “Trustee”), provides certain

administrative functions relating

to certain corporate services and

Guernsey regulatory matters affecting

the Company.

Flow of information

The Company places a large emphasis

on the flow of information from the

Manager to the Board, ensuring that the

directors have relevant information to

make informed decisions for the benefit

of the shareholders. The Board holds

quarterly Board meetings throughout the

year to discuss relevant information, and

often meets on an ad hoc basis as needed

to discuss other Company matters, such

as dividend payments. The Manager

provides the Board with key information

regarding the underlying investments,

ideas for new initiatives that will help drive

shareholder value and continual feedback

from shareholders. This information

assists the Board’s evaluation of the

Company’s Key Performance Indicators,

found on page 29 of the Strategic Report.

The Investment Manager’s report to the

board included:

– Investment performance and portfolio

composition: the Board reviewed

detailed performance by investment

as well as detailed analysis on the

underlying portfolio composition

provided by the Investment Manager.

The Board evaluated the portfolio

composition to assist in decisions

regarding dividends paid by

the Company

– Company financial position and

net asset value (NAV): the Board

reviewed the Company’s financial

position and the performance of the

Company’s NAV

– Returns information: the Board

evaluated both the NAV per share

return and the NAV total return,

including the Company’s dividends.

The Board gives feedback on all relevant

items discussed to help achieve success

for the benefit of shareholders as a

whole. Furthermore, the Board has

access to the advice and services of the

Company Secretary if needed. The Board

recognises that much of the decision

making, particularly with respect to

underlying investments, is granted to

the Investment Manager as per the

Investment Management Agreement;

however, the Board regularly reviews

information to ensure decisions are in line

with the overall strategy set by the Board.

The Board also reviews service provider

contracts, including the Investment

Manager, annually to ensure terms of

the contract are executed and remain

in the best interest of shareholders. The

Manager has an excellent track record

and has the Company’s reputation and

benefit to shareholders at the forefront of

all decision making.

Director indemnity

To the extent permitted by the Companies

(Guernsey) Law, 2008 (as amended),

the Company’s Articles of Incorporation

indemnify the directors out of the

Company’s assets from and against all

liabilities in respect of which they may

be lawfully indemnified, except for any

liability (if any) as they shall incur or sustain

by or through their own willful act,

negligence or default.

During the year, the Company has

maintained insurance cover for its

directors and officers under a directors

and officers liability insurance policy.

Disclosures required

under LR 9.8.4R

The Financial Conduct Authority’s Listing

Rule 9.8.4R requires that the Company

includes certain information relating

to arrangements made between a

controlling shareholder and the Company,

waivers of directors’ fees, and long-term

incentive schemes in force. The directors

confirm that there are no disclosures to be

made in this regard.

Conflicts of interest

The Company has adopted a policy

requiring all directors to disclose other

positions and also any other matter

which may give rise to a conflict. Such

conflicts can then be considered by the

other directors and, if necessary, either

approved or not approved. Currently

there are no material conflicts in respect

of any director.

Anti-bribery and

corruption policy

The Manager has processes in place to

ensure that bribery and corruption do

not take place within the Manager or the

Company. These include formal policies

and regular training for all staff. The Board

has reviewed these processes and found

them adequate.

Environmental policy

Due to the Company’s premium listing

on the London Stock Exchange, the

Company is required to disclose its

environmental policy. Further information

on the social and environmental policies

of the Manager can be found in the

Environmental, Social and Governance

section on pages 31 to 38 and in the

Manager’s ESG report, which can be

found on the Company’s website

www.nbprivateequitypartners.com.

Governance continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Whistleblowing policy

and arrangements

The Board and the Audit Committee have

been made aware of the processes the

Manager has in place to ensure that staff

of the Manager may in confidence raise

concerns about possible improprieties

in matters of financial reporting or other

matters and ensure that arrangements

are in place for the proportionate and

independent investigation of such matters

and follow-up action. The Manager has

established and implemented processes.

These include formal policies and regular

training for all staff. The Board was

satisfied that the processes in place

are appropriate.

Board committees

The terms of reference for all committees

described below are available on the

Company’s website.

Management Engagement

Committee

The Management Engagement

Committee (“MEC”) is comprised of

Ms. Clark as Chairman, Mr. Falla,

Mr. von Hodenberg, Mr. Maltby and

Ms. Symington-Mills. The principal

function of the MEC is to review annually

the terms of the Investment Management

Agreement between the Company and

the Investment Manager. The MEC also

reviews annually the performance and

terms of engagement of key service

providers. The MEC meets at least once

a year and at other times as required by

the Board.

The Company has a number of

agreements with service providers;

the below agreements are considered

significant:

– NB Alternatives Advisers LLC, as

Investment Manager, pursuant to an

Investment Management Agreement

– MUFG Capital Analytics LLC,

as Administrator

– Ocorian Administration (Guernsey)

Limited, as Company Secretary and

Guernsey Administrator

– Link Market Services, as the

Company’s registrar

– Jefferies and Stifel, as the Company’s

joint corporate brokers.

During 2021, the MEC conducted a

review of the key service providers,

including the Investment Manager.

The MEC invited each of the key

service providers to give the Board a

self-assessment review of their

performance during the year, through

a questionnaire. The directors reviewed

each of the questionnaires and a

detailed discussion ensued regarding the

performance of each of the Company’s

key service providers, level of service

and service contracts. Following this

discussion, the MEC was satisfied

with the level of service the Company

was receiving from each of the key

service providers.

Audit Committee

The Audit Committee is comprised

of Mr. Falla as Chairman, Ms. Clark,

Ms. Symington-Mills, Mr. Maltby and

Mr. von Hodenberg. The principal

function of the Audit Committee is to

provide oversight and reassurances to

the Board, particularly with respect

to financial reporting, audit and risk

management. The Audit Committee

ensures that a framework for solid

corporate governance and best practice

is in place, which is believed to be

suitable for an investment company,

and which enables the Company to

comply with the main requirements of

the Main Market and any other applicable

law or regulation. Full details of the

Audit Committee report can be found

beginning on page 67.

A full copy of the Audit Committee

terms of reference are available on

the Company’s website and from the

Company Secretary. Although the

Chairman is also a member of the Audit

Committee, the Board believes this

does not compromise the Chairman’s

independence or objectivity. All directors

on the committee bring relevant

experience and perspectives and are

an appropriate composition given the

Company’s size and strategy.

Nomination and

Remuneration Committee

The Nomination and Remuneration

Committee (“NRC”) is comprised of

Ms. Clark as Chairman, Mr. Maltby,

Mr. Falla, Mr. von Hodenberg and

Ms. Symington-Mills. The NRC

is responsible for identifying and

nominating, for approval by the Board,

suitable candidates to fill Board vacancies

as and when they arise. The NRC also

puts in place plans for the succession

of directors, in particular with respect

to the Chairman. The committee

helps formulate the policy and makes

recommendations to the Board for the

remuneration of the directors; they

review and consider any additional ad hoc

payments in relation to duties undertaken

over and above normal business.

Following the announcement made

in the 2020 Annual Financial Report

stating that Peter von Lehe would not

stand for re-election at the Company’s

2021 AGM, the NRC began the process

to search for a new director in 2021. After

the formation of a Selection Committee

and hiring of an external agency to

assist with searches for new director

candidates in 2020, the NRC completed

the director recruitment process in 2021

and identified Louisa Symington-Mills

as a suitable candidate for appointment

to the Board of the Company. The NRC

recommended her appointment to the

Board as well as appointments to the

Audit Committee, MEC, and NRC with

effect from 15 June 2021.

Governance continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Internal controls

As explained in more detail in the Report

of the Audit Committee, the Board

as advised by the Audit Committee,

monitors the risks facing the Company

and the controls put in place to help

mitigate those risks. The Company itself

has no premises nor employees, and

operates by delegating functions to

service providers subject to the oversight

of the Board.

The Board assesses the internal controls

of the Company’s service providers

annually as part of the provider self-

assessment review. Service providers

are asked to provide the Board with

information, and relevant policies,

regarding effective internal controls,

appropriate disaster recovery/business

continuity arrangements, technology

to maintain information security and

client confidentiality, compliance with

anti-bribery and corruption laws, details

on the prevention of the facilitation of

tax evasion, and compliance with data

protection legislation. The Investment

Manager, which is delegated the day-to-

day management of the Company, is also

assessed as part of this review.

The Company does not have an internal

audit function, but the Board considers

the need for one at least annually.

The Board relies on the internal audit

functions of the underlying service

providers to carry out this function.

Culture

The Board recognises the importance

of ensuring that the Company’s culture

and that of the Manager are aligned.

The Board and Manager have a strong

culture, which has been firmly ingrained

since the inception of the Company.

The Company’s culture consists of

communication, respect and trust. This

culture is also an integral aspect of the

Manager’s identity, which enhances the

relationship that the Board has with the

Manager. The Board continues to monitor

the Group’s culture on an ongoing basis

via feedback from shareholders, the

Manager, or input from other advisers.

As part of this culture, the Board and

Manager both believe responsible

investing can help enhance society

and assess overall investment risk and

opportunities in this regard (see page 31).

The purpose and value of the Company’s

culture is that it bolsters the ability to

perform and assists in an accurate flow

of information from the Manager, to the

Board, and to shareholders.

Stakeholder engagement

NBPE’s Section 172 statement can be

found on pages 43 to 45.

Shareholder

communication

The Board welcomes shareholders’

views and places great importance on

communication with its shareholders.

Directors and representatives from the

Investment Manager are available to

discuss updates on the Company.

Both the Company’s annual report

and consolidated financial statements,

containing a detailed review of

performance and of changes to the

investment portfolio, and monthly

factsheets with details of the Company’s

strategy and performance, the financial

position of the Company and the

underlying diversification of the portfolio,

are made available to investors through

the Company’s website. A copy of the

latest Company presentation is available

on the Company’s website. The Company

also publishes interim and annual financial

reports which provide shareholders and

other stakeholders with more detail

on the portfolio and an update on the

performance of the Company.

A structured programme of shareholder

presentations by the Manager to

institutional shareholders takes place

following the publication of the Annual

Report and quarterly updates. In addition,

the Chairman and the Board members are

available to meet shareholders.

NBPE also holds an annual Capital

Markets Day Event Webinar. Last year’s

event was held virtually on 30 September

2021 to update shareholders and research

analysts on the Company’s performance

and investment activities during the year.

A replay of the event is available on the

Company’s website.

The Company also maintains a website

which contains comprehensive

information about the Company.

Detailed information is presented on

the Company’s investment strategy,

share information, the Investment

Manager’s platform and team, insights

from the Investment Manager’s team

of investment professionals, investment

performance, as well as an investor

centre, which has a library of all

publications and details of how to register

for Company notifications.

The Board receives regular updates

from the Company’s brokers and is kept

informed of all material discussions with

investors and analysts which helps the

directors develop their understanding of

shareholders’ views and expectations.

A detailed list of the Company’s

shareholders is reviewed at each

Board meeting.

William Maltby

Chairman

25 April 2022

Governance continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Directors’ report

The Directors’ report should be

read in conjunction with the

Strategic report (pages 2 to 51)

and the Remuneration report

(pages 65 to 66).

The directors present their annual

financial report and consolidated financial

statements of NB Private Equity Partners

Limited and its subsidiaries for the year

ended 31 December 2021.

Principal activity

NBPE is a closed-ended investment

company, which invests in direct private

equity backed companies, and is

registered in Guernsey. The Company’s

registered office is PO Box 26, Floor 2,

Trafalgar Court, Les Banques, St. Peter

Port, Guernsey GY1 4LY. The Company’s

Class A Ordinary Shares are listed and

admitted to trading on the Main Market

of the London Stock Exchange under

the symbol “NBPE” and “NBPU”,

corresponding to the Sterling and U.S.

Dollar quotes, respectively. NBPE has

2022 ZDP Shares and 2024 ZDP Shares

admitted to trading on the Specialist Fund

Segment under the symbol “NBPP” and

“NBPS”, respectively (see note 1 of the

consolidated financial statements).

Investment policy

The Company’s investment policy is set

out on page 64.

Directors

As of 31 December 2021, the Board

has five independent directors:

William Maltby, Wilken von Hodenberg,

Trudi Clark, John Falla and Louisa

Symington-Mills, who was appointed in

June 2021. Peter von Lehe stepped down

from the Board at the Company’s AGM

in September 2021. Nevertheless,

Mr. von Lehe continues to contribute

his significant experience and expertise

by his active role with NBPE in his

capacity as a managing director of

Neuberger Berman.

The directors review their independence

and offer themselves up for re-election

annually.

The biographical information also

includes a list of other public company

directorships for each of the directors.

In its consideration of any new or

additional directors, the Board will always

seek to make the most appropriate

appointments, taking into full account the

benefits of diversity including gender (see

the Board diversity policy on page 56).

Articles of Incorporation

Holders of the Company’s Class A

Ordinary Shares enjoy the rights set out in

the Company’s Articles of Incorporation

and The Companies (Guernsey) Law,

2008, as amended. Holders of the Class

A Ordinary Shares shall have the right to

receive notice of general meetings of the

Company and have the right to vote at

all general meetings; however, Class A

Ordinary Shareholders have no right to

vote on a 2022 or 2024 ZDP Liquidation

Resolution or a 2022 or 2024 ZDP

Reconstruction Resolution (as such terms

are defined in the Company’s Articles of

Incorporation). The Company’s Articles of

Incorporation may be amended by special

resolution in a general meeting.

Purchase of shares

The Company currently has shareholder

authority to buy back its own ordinary

shares in the market as permitted by

the Companies (Guernsey) Law, 2008.

The authority limits the repurchase to

a maximum of 14.99% of the Class A

Shares in issue at the time the authority

was granted (excluding Class A Shares

held in treasury) and also sets minimum

and maximum prices. The authority

expires on the date which is 15 months

from the date of the passing of the

resolution or, if earlier, at the end of the

Company’s Annual General Meeting

to be held in 2022. The authority will

only be exercised if the directors believe

doing so would be in the best interest

of shareholders. Any shares purchased

under this authority would be at a

discount to net asset value (NAV) per

share and therefore accretive to the NAV

per share for the remaining shareholders.

Directors’ report

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Investment Manager

The Company is managed by the NB

Alternatives Advisers, LLC pursuant to an

Investment Management Agreement,

dated 2 May 2017. Subject to the Board’s

overall strategic direction and instructions,

the Investment Manager makes all of

the Company’s investment decisions.

The Manager has been appointed since

2007, and remains appointed, unless

terminated by the Company with 30 days

prior written notice and approved by an

ordinary resolution or with immediate

effect under certain conditions. The

Manager is responsible for the day-to-day

management of the Company, sourcing,

evaluating and making investment

decisions related to the Company.

The Manager makes the decisions

regarding individual investments in

line with the investment strategy set

by the Board. The Manager’s team

of professionals are also responsible

for managing the Company’s assets

including monitoring the Company’s

investment portfolio and assigning

valuations to the Company’s investments

based on the Company’s valuation

methodology, which can be found on

page 104. The directors believe the

Manager’s experience, track record,

team and platform is advantageous

to the Company and the Manager’s

continued appointment is in the best

interest of shareholders.

Dividend policy

The Company instituted a long-term

policy of paying sustainable dividends

to shareholders in 2013. The Company

targets an annualised dividend yield of

3.0% or greater on NAV, with the goal

to maintain or progressively increase the

level of dividends over time.

Historically, a dividend has been paid

semi-annually in line with NBPE’s

dividend target. Prior to each dividend

announcement, the Board reviews the

appropriateness of the dividend payment

in light of macro-economic activity and

the financial position of the Company.

In times of extraordinary circumstances,

the Board does not guarantee a dividend,

but rather evaluates the suitability

of a dividend payment based on the

magnitude of the situation.

Dividends are declared in US dollars and

normally paid in pounds Sterling, but the

Company also offers both a Currency

Election for shareholders wishing to be

paid in US dollars and a dividend re-

investment plan for shareholders who

wish to reinvest their dividends to grow

their shareholding. Please reference pages

91 and 92 for the credit facility and ZDP

terms regarding dividends.

Results and dividends

The financial results for the year

ended 31 December 2021 are

included in the consolidated financial

statements, beginning on page 79.

As of 31 December 2021, the NAV

attributable to the Class A Shares was

$1,480.2 million, which represents

an increase of $428.5 million relative to

the NAV attributable to the Class A Shares

of $1,051.7 million as of 31 December

2020. On 28 January 2021, the Company

declared the first semi-annual dividend

of the year of $0.31 per share and on

22 July 2021 declared an interim dividend

of $0.41 per share. Both dividends were

approved in line with NBPE’s dividend

policy and resulted in total dividends of

$0.72 per share ($33.7 million) paid during

2021. Including the dividend payments,

the NAV total return for the year was

44.8%, assuming the re-investment of

dividends on the ex-dividend date.

Fee analysis

NBPE’s rate of ongoing charges, as

defined by the Association of Investment

Companies (“AIC”) ratio, was 1.96%

for the year ended 31 December 2021.

The ongoing charges were calculated in

accordance with the AIC methodology

and exclude interest and financing

costs and other items not deemed to be

ongoing in nature and therefore may

differ from the total expense ratio found

in note 12 of the consolidated financial

statements on page 98, which was

prepared in conformity with U.S. GAAP.

The complete methodology can be found

on the AIC’s website.

Total ongoing expenses in 2021 were

$26.8 million, or 1.96%, based on the

average 2021 NAV. Note that percentages

of ongoing charges are based on the

average 2021 NAV and may differ from

contractual rates which is based on

2021 private equity fair value. Other

ongoing charges consisted of fees and

other expenses to third-party providers

for ongoing services to the Company. In

accordance with the AIC methodology,

the performance fee payable to the

Investment Manager is excluded from

the calculation.

Directors’ report continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Ongoing Charge Value ($ in m)

% Ongoing

Charge

Management Fee $22.5m 1.65%

Fund Administration

Fee $1.5m 0.11%

Other Expenses $2.8m 0.21%

Total Ongoing

Charges $26.8m 1.96%

The Company’s direct equity investments

are included in the portfolio generally

with no management fee and no carried

interest due to underlying sponsors.

Approximately 97% of the direct

investment portfolio (measured on

31 December 2021 fair value) is on a

no management fee, no carried interest

basis at the underlying sponsor level.

At the Company level, NBPE’s

management fee is 1.5% of private

equity fair value (payable quarterly) and

a 7.5% performance fee after a 7.5%

hurdle rate. The directors believe these

fees are favourable relative to other listed

direct funds, which often carry higher

overall fee levels and listed fund of funds,

which typically have a double layer of

fees (charged at the vehicle level and

underlying fund level).

The directors believe the fee efficiency

from the Company’s co-investment

strategy provides investors private equity

access at a lower total cost than most

other listed private equity vehicles.

Share capital

As at 31 December 2021, 46,761,030

Class A shares were issued and

outstanding; 3,150,408 shares had

been bought back into treasury.

3,150,408 Treasury Shares, representing

6.3% of the Company’s issued share

capital, were held as at 22 April 2022,

being the latest practical date before

publication of this document.

Major shareholders

As of 31 December 2021, insofar as is

known to NBPE, the shareholders below

held, either directly or indirectly, greater

than 5.0% of the Class A Shares in

issue (excluding Class A Shares held

in treasury). Note that the amounts

below have subsequently fluctuated

after 31 December 2021:

Shareholder Shares Held

% Ownership

of Class A

Quilter Cheviot 6,9 0 0,112 14.8%

Tilney Smith &

Williamson 4,487,546 9.6%

US Depositary

Receipts 3,385,500 7. 2%

City of London

Investment

Management 3,154,338 6.7%

Cazenove 2,378,533 5.1%

Re-appointment

of auditor

For the year ended 31 December 2021,

KPMG were appointed as auditors

to the Company. Resolutions for the

re-appointment of KPMG as the auditor

of the Company and to authorise the

directors to determine its remuneration

are to be proposed at the next AGM.

Annual General Meeting

The Company’s AGM will be held in

Guernsey at Floor 2, Trafalgar Court,

Les Banques, St Peter Port, GY1 4LY,

Guernsey at 1.45pm on 14 June 2022.

Formal notice will be sent to registered

shareholders in advance.

By order of the Board:

William Maltby

Chairman

25 April 2022

Directors’ report continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Investment Objective and Policy

Investment objective

The Company’s investment objective

is to produce attractive returns by

investing mainly in the direct equity of

private equity-backed companies while

managing investment risk through

diversification across asset class, vintage

year, geography, industry and sponsor.

The vast majority of direct investments

are made with no management fee/no

carried interest payable to third-party

private equity sponsors, offering greater

fee efficiency than other listed private

equity companies. NBPE seeks capital

appreciation through growth in net asset

value (NAV) over time while returning

capital by paying a semi-annual dividend.

Investment policy

In order to achieve its investment

objective, the Company intends to

maintain a diversified portfolio of private

equity related assets composed of any or

all of the following: (i) direct private equity

investments; (ii) private debt investments;

and (iii) private equity fund investments.

In addition, the Company may make other

opportunistic investments from time to

time, provided that such investments will

account for (at the time the opportunistic

investment is made) no more than 10%.

of the Company’s gross assets without

approval from a majority of the Board

and, in any event, no more than 20% of

the Company’s gross assets.

The Company’s investments are made

across different levels of the capital

structure of investee entities. There

are no restrictions on the type or form

of investments or securities which the

Company may hold. The Company

may make its investments in primary or

secondary markets and either directly or

indirectly through intermediary holding

vehicles or collective investment vehicles

(including private funds, fund of funds,

co-investment funds, income-oriented

funds and other funds) managed by either

an affiliate of the Investment Manager or

third-party managers.

Over-commitment strategy

The Company may, when appropriate,

pursue an “over-commitment” strategy,

in order to optimise the amount of the

Company’s capital that is invested at

any given time. In following this over-

commitment strategy, the aggregate

amount of the Company’s unfunded

private equity commitments at a given

time may exceed the aggregate amount

of cash that the Company has available

for immediate investment.

Diversification and investment

guidelines

The Company intends to maintain

portfolio diversification across some or

all of the following metrics: private equity

asset class, investment type, vintage year,

geography, industry and sponsor.

Diversification is dynamic and varies

according to where the most attractive

opportunities arise. However, no investee

entity (or in the case of a fund investment,

underlying investee entity) will account

for more than 20% of the Company’s

gross assets (as at the time of making

such investment).

Cash and short-term

investments

In addition to the investments referred

to above, the Company may also hold

cash and may temporarily invest such

cash in cash equivalents, money market

instruments, government securities,

asset-backed securities and other

investment grade securities, pending

investment in private equity related

assets or opportunistic investments.

The Company may also utilise (either

directly or via investment in a collective

investment vehicle) the services of an

affiliate of the Investment Manager

or a third party to manage this excess

cash. If a third party or an affiliate of the

Investment Manager is so appointed,

the Company may pay a market rate for

those services.

Investment Objective

and Policy

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Remuneration report

The Board has established a Nomination

and Remuneration Committee (“NRC”)

to assist the Board with Remuneration

duties. The NRC is responsible for

recommending and monitoring the

remuneration of the Company’s

Chairman and the non-executive

directors whilst ensuring that no director

is involved in any decisions regarding

their own remuneration. Details on the

NRC’s activities during the year can be

found on page 59. During a remuneration

review, the NRC takes into account the

time commitments and responsibilities

of the Directors and other factors

which it deems necessary, including the

recommendations of the AIC Code and

any relevant legal requirements. The NRC

also takes into consideration relevant

remuneration data collated in respect

of comparable companies. The NRC

meets once per year and reports to the

Board on all matters within its duties and

responsibilities. The Company does not

have a separate remuneration policy, but

plans to seek shareholder approval for the

Company’s remuneration policy at the

forthcoming AGM.

Components of

annual remuneration

The Company pays a fee to the

independent directors for their work

related to the Company’s business.

The fees for the Directors are determined

within the limit set out in the Company’s

Articles of Incorporation. The present

limit is an aggregate of £400,000 per

annum. This total limit cannot be changed

without seeking shareholder approval

at a general meeting.

The fees, which are subject to an annual

increase based on the rise in the Guernsey

retail price index, subject to a 1% per

annum minimum, are paid quarterly in

arrears. Directors are not entitled to any

bonus, long term incentive plans or

other benefits.

The below table reflects actual fees paid for

2020 and 2021 and the expected fees for

2022 (using the Guernsey Retail Price Index

rate of 4.4% as at 31 December 2021):

2022 2021 2020

Chairman £75,690 £70,625 £70,000

Chairman

of the Audit

Committee £64,728 £60,500 £60,000

Senior

Independent

Director £57,420 £51,750 £50,000

Non-executive

directors £54,288 £50,500 £50,000

Newly

Appointed

non-executive

director £54,288 £27,583 n/a

Subsidiary

Appointments

(Pro-rata from

1 June 2021) £10,440 £5,000 n/a

In October 2021 the basic directors fee

was increased by £2,000 per annum and

an additional £5,000 per annum was

agreed to be paid to the SID.

During the year ended 31 December

2021, the Company paid a pro-rated fee

of £27,583 to Louisa Symington-Mills

who joined the Board as an independent

director in June 2021. After not seeking

re-election at the 2021 AGM, Mr. von

Lehe is no longer a member of the

Board as of 15 September 2021 and

did not receive any director fees in respect

of 2021.

Directors’ appointment

The Company’s Memorandum and

Articles of Incorporation provides the

requirements of the company regarding

the appointment and removal of

directors, a copy of which is available for

inspection from the Registered Office of

the Company. No director has a service

contract with the Company.

Notice period

There is no director resignation notice

period stipulated within the Company’s

Articles of Incorporation, any director may

resign in writing to the Board at any time

Statement of

consideration of

conditions elsewhere

in the Company

The Company does not have any

operations and therefore no employees.

As a result, the Board does not consider

pay and employment conditions of

any employees.

Remuneration report

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Statement of

consideration of

shareholder views

The Board welcomes feedback and

places a significant importance on

communication with shareholders.

The Board noted that 99.98% of

shareholders voted in favour of the

directors’ remuneration at the AGMs

held in 2020 and 2021.

Directors’ remuneration

and aggregate

shareholder distributions

The tables to the right compare the

total directors’ remuneration paid with

total distributions to shareholders for

the years ended 31 December 2021 and

2020. While this disclosure is a statutory

requirement, the directors view this as not

a meaningful comparison as the Company

has no operations, and therefore, no

employees and the Company’s objective

is long-term NAV growth over time, of

which dividends form only a portion of a

shareholder’s overall return.

2021 2020

Directors’

Remuneration $361,516 $294,374

2021 2020

Dividends Paid $33,675,142 $27,13 8,465

Share Buybacks – $534,072

Total

Shareholder

Distributions $33,675,142 $27,672,537

Remuneration by

director and year

2021 2020

Trudi Clark $72,414 $6 4,170

John Falla $86,084 $76,983

Wilken von

Hodenberg $69,081 $63,388

William Maltby $96,572 $89,834

Louisa

Symington-

Mills

$37,365 –

* Louisa Symington-Mills was appointed to the

Board on 21 June 2021.

The two Guernsey resident directors

also act as directors for the Guernsey

subsidiaries for which they receive an

annual fee of £5,000 per year payable

quarterly from 1st June 2021.

Shareholdings of

the directors

The shareholdings of the directors as of

the date of this report, 31 December 2021

and 31 December 2020 are as follows:

2021 2020

Trudi Clark 6,433 6,433

John Falla 10,000 6,000

Wilken von

Hodenberg

89,316 89,316

William

Maltby

23,298 9,500

Louisa

Symington-

Mills – –

* Total includes a closely associated person related

to Wilken von Hodenberg who holds 44,658

shares of the Company.

** Total includes a closely associated person related

to William Maltby who acquired 5,465 shares of

the Company during 2021.

Resolution to approve

directors’ remuneration

policy and directors’

remuneration

Whilst Guernsey-registered companies

are not obliged to prepare and publish

a Directors’ Remuneration Report, an

ordinary resolution will be put to the

shareholders seeking approval of the

Remuneration Report within the Annual

Report and Accounts; this vote will be

advisory only, but the Directors of the

Company will take the outcome of the

vote into consideration when reviewing

and setting the Directors remuneration.

In addition, a resolution to approve a

Directors Remuneration Policy will be

put forth at the Company’s upcoming

Annual General Meeting.

On behalf of the Board:

Trudi Clark

Chair

25 April 2022

Remuneration report continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Report of the Audit Committee

Introduction

During 2021, the Audit Committee

met four times to discuss a number

of important topics including detailed

discussions surrounding portfolio

valuation, reviewing and approving

the 2021 semi-annual financial

statements, audit planning and

discussing key audit matters related

to the 2021 annual accounts.

The Audit Committee was involved with

monitoring valuations and evaluating

the Company’s capital position and key

financial ratios. In addition, the Audit

Committee reviewed detailed analysis

prepared by the Investment Manager

which detailed future cash flow forecasts

to evaluate the impact on the Company’s

capital position. The Audit Committee

reviewed and discussed valuation

analysis prepared by the Investment

Manager quarterly which detailed the

significant increase in valuations and the

strong year-to-date performance of the

Company, and discussions ensued around

investments with the largest increases

in value and the key drivers at the

underlying investments which were

driving the valuations.

The Audit Committee also conducted a

detailed review of auditor independence,

effectiveness, and reviewed and planned

the year-end audit with the Manager and

KPMG. In addition, the Audit Committee

reviewed and held detailed discussions

on the annual report and consolidated

financial statements including a robust

assessment of the principal risks as well

as reviewing and challenging the viability

analysis before its approval.

Areas of focus also included the control

environment and how risks are mitigated,

and the monitoring of compliance with

the AIC Code of Corporate Governance.

Audit Committee

The function of the Audit Committee is

to provide oversight and reassurances

to the Board, specifically with regard to

the integrity of the Company’s financial

reporting, audit arrangements, risk

management and internal control

processes and governance framework.

Committee meetings

The Audit Committee meets at least three

times a year and met four times in 2021.

Only members and the secretary of the

Audit Committee have the right to attend

Audit Committee meetings. However,

other directors and representatives

of the Investment Manager and the

Administrator are invited to attend Audit

Committee meetings on a regular basis,

and other non-members may be invited

to attend all or part of the meeting as

and when appropriate and necessary.

The Company’s external auditor, who

is currently KPMG, is also invited on a

regular basis. The Audit Committee

determines, in conjunction with the

external auditor, when to meet with

the Auditor.

The Audit Committee meets with the

Auditor without the Manager and

Administrator present to seek their views

on the quality of the control environment

and the processes around the preparation

of the financial statements.

Financial statements and

reporting matters

The Audit Committee assisted the

Board in carrying out its responsibilities

in relation to the financial reporting

requirements, risk identification and

management, and the assessment of

internal controls. It also managed the

Company’s relationship with KPMG.

Meetings of the Audit Committee

generally take place prior to the Company

Board meeting. The Audit Committee

reported to the Board as part of a

separate agenda item, on the activities

of the Audit Committee and matters of

particular relevance to the Board in the

conduct of their work.

Report of the

Audit Committee

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Report of the Audit Committee continued

In relation to financial reporting, the

primary role of the Audit Committee is

to review with the Investment Manager,

MUFG Capital Analytics and KPMG,

the appropriateness of the semi-annual

and annual financial statements.

The Committee focuses on, amongst

other matters:

– the quality and acceptability of

accounting policies and practices;

– the clarity of the disclosures and

compliance with financial reporting

standards and relevant financial

governance reporting requirements;

– material areas in which significant

judgments have been applied or there

has been discussion with KPMG;

whether the annual financial report

and consolidated financial statements,

taken as a whole, are fair, balanced

and understandable and provide the

information necessary for shareholders

to assess the Company’s performance,

business model and strategy; and

– any correspondence from regulators in

relation to financial reporting.

To aid its review, the Audit Committee

considered reports from the Investment

Manager, Fund Administrator, the

Company Secretary, and also reports from

the external auditor on the outcomes of

their half-year review and annual audit.

In early 2021, the Audit Committee

reviewed the risk matrix prepared by the

Investment Manager, noting that, while

the COVID-19 pandemic was still a factor,

the portfolio was performing well, and

in many cases, much of the uncertainty

surrounding a number of the key risks

had been reduced as, generally speaking,

underlying companies had adapted

to the new operating environment.

As a result, rather than viewing the

potential COVID-19 impact on each

of the underlying key risks, the Audit

Committee noted the general risk posed

by the pandemic and included it as an

overall external risk. The Audit Committee

also considered the impact of climate

change both on the investment risk

environment, but also on the emerging

regulatory requirements for disclosures by

investing entities on such matters. More

recently, the Audit Committee noted the

heightened external risks associated with

the conflict in Ukraine and enforcement

of economic sanctions against Russia

which occurred subsequent to this

reporting period in the first quarter

of 2022. Finally, the Audit Committee

also reviewed the viability statement

and undertook a robust assessment of

the principal risks and the assumptions

supporting the viability statement.

During the year under review and in

the course of preparing this Annual

Financial Report, the Audit Committee

has continued to focus on the principal

and emerging risks facing the Company,

its performance, liquidity and how these

feed into the model prepared by the

Investment Manager underlying the

viability statement. Following their review,

the Audit Committee confirmed that they

were satisfied with the key underlying

assumptions of the viability statement

and the resulting forecast prepared.

The Audit Committee viewed the

valuation of private equity investments

as the key issue arising in the preparation

of the 2021 Annual Financial Report

and Consolidated Financial Statements.

With the portfolio consisting of 91%

direct equity investments in 2021

versus 87% relative to the prior year,

the Audit Committee focused particularly

on the valuation methodologies and

the assumptions used in the review

of the valuation of these direct

equity investments.

The Audit Committee noted that the

Manager’s valuation methodology for

direct equity investments begins with

the most recently available financial

information obtained from the underlying

companies or sponsors. The Manager

noted to the Audit Committee that the

valuation process used by the Investment

Manager was consistent with the prior

year. For investments where the Manager

was invested in the same security at the

same underlying cost basis as the lead

private equity sponsor, the Manager

utilised the practical expedient valuation

methodology. Generally, this approach

relied on using the best information from

the private equity sponsor, including

but not limited to: audited financial

statements, co-investment holding

vehicle financial statements or capital

accounts, or other financial information

deemed reliable by the Investment

Manager. The external auditor reviewed

the supporting financial information for

investments valued under the practical

expedient methodology.

In cases where the Investment Manager

was not invested at the same cost basis

as the underlying sponsor, or where the

practical expedient methodology could

otherwise not be utilised, the Manager

utilised valuation models to analyse the

company’s enterprise value, a method

consistent with prior years. In these

instances, the Manager evaluated the

company’s enterprise value based on

chosen valuation multiples, which are

dependent upon many factors including

historical financial performance, business

and industry characteristics, as well as

public and private market comparables.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Report of the Audit Committee continued

The external auditor reviewed the

Manager’s valuation models and

assumptions used.

The Audit Committee noted that the

two principal risks in relation to the

income investments had remained

materially unchanged during the year;

however, the Audit Committee further

noted that the composition of the income

investment portfolio had reduced in

value considerably as a result of portfolio

realisations. As of 31 December 2021,

the two largest positions consisted

of NBPE’s investment in the NB Credit

Opportunities and NB Specialty Finance

Programs. Nevertheless, the two primary

risks related to these investments were

unchanged relative to the prior year and

consisted of credit risk and market risk.

The Audit Committee noted they had

designed forward looking procedures

to cover both types of risk. To analyse

credit risk, the Audit Committee noted

that the Manager prepared valuation

models to analyse the enterprise and

equity values to ensure there was

sufficient enterprise value to support

all of the debt of a company and that

the company was creditworthy. The

Audit Committee considered that

market risk was related to yield and

this was compared to other observable

yields in the market. Further, the Audit

Committee noted that this approach and

methodology applied by the Manager

was reasonable and appropriate.

Similar to prior years, the auditors

noted they had utilised their in-house

valuation experts to assist with the audit

of valuations and used a number of

techniques to evaluate the valuation of

selected income investments.

The auditors did not report any significant

differences between the valuations

used by the Company and the work

performed during their testing process.

Based on their above review and analysis,

the Audit Committee confirmed that

they were satisfied with the valuations

of investments.

The Audit Committee also discussed

with the Auditor their work around

the verification of the ownership

of investments.

Following this discussion, the Audit

Committee reviewed both the annual

financial report and the consolidated

financial statements and discussed the

contents with the Investment Manager

and KPMG.

Based on their review and information

received from the Investment Manager,

the Audit Committee advised the

Board that it was satisfied that the

annual financial report and the

consolidated financial statements,

taken as a whole, were fair, balanced

and understandable and provided the

information necessary for shareholders

to assess the Company’s performance,

business model and strategy.

Internal control and

risk assessment

The Audit Committee received reports

from the Investment Manager on the

Company’s risk evaluation process and

reviewed any changes to significant risks.

The Board has undertaken a full review

of the Company’s business risks which

have been analysed and recorded in the

principal risks and uncertainties. Each

quarter the Board receives a formal risk

report from the Investment Manager

which provides a summary of the elevated

residual risks to the Company, and

annually, the Audit Committee reviews

a detailed risk matrix of each of the key

underlying risks to the Company. In both

of these cases, the Audit Committee

monitors the key areas of elevated risk

including those that are not directly the

responsibility of the Investment Manager.

The Investment Manager has established

an internal control framework to provide

reasonable but not absolute assurance

on the effectiveness of internal controls

operated on behalf of its clients.

The effectiveness of the internal controls

is assessed by the Investment Manager’s

compliance and risk department on an

ongoing basis.

By means of the procedures set out

above, the Audit Committee confirms

that it reviewed the effectiveness of the

Company’s system of internal controls

for the year ended 31 December 2021

and through to the approval date of this

Annual Financial Report and that no

issues were noted.

Internal audit

The Company itself does not have an

internal audit function, but instead

relies on the internal audit functions

and departments of the Investment

Manager and other service providers. The

Audit Committee was satisfied that this

function provides sufficient control to

help mitigate risks to the Company.

Terms of engagement

The Audit Committee reviewed the

audit scope and fee proposal through

engagement letters and Audit Committee

reports issued by KPMG to the directors.

The Committee approved the fees for

audit services for 2021 after a review

of the level and nature of work to be

performed. The Board was satisfied that

the fees were appropriate for the scope

of the work required.

The external auditors were remunerated

$210,000 in relation to the 2021 annual

audit (2020 fee: $170,000). They received

a fee of $30,000 in relation to their review

of the interim financial statements, which

was unchanged from the prior year.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Report of the Audit Committee continued

Auditor effectiveness

The Audit Committee received a detailed

audit plan from the auditors, identifying

their assessment of the key risks. For

the 2021 financial year the significant

risk identified was the valuation of

investments. This risk is tracked through

the year and the Audit Committee

challenged the work done by the auditors

to test management’s assumptions.

The Audit Committee assessed the

effectiveness of the audit process in

addressing these matters through the

reporting received from the auditors at

both the half-year and year-end meetings.

In addition, the Audit Committee sought

feedback from the Investment Manager

and MUFG Capital Analytics on the

effectiveness of the audit process.

For the 2021 financial year, the Audit

Committee was satisfied that there had

been appropriate focus and challenge

on the primary areas of audit risk and

assessed the quality of the audit process

to be appropriate.

External Audit

KPMG is NBPE’s External Auditor. KPMG

performed an audit of the Company’s

consolidated financial statements in

accordance with applicable law and

International Standards on Auditing (UK).

Prior to beginning the audit, the Audit

Committee received a report from the

external auditors and reviewed the scope

of the audit, identified significant audit

risk and areas of audit focus as well as the

terms of the audit engagement.

Auditor independence

and appointment

The Audit Committee understands the

importance of auditor independence

and during 2021, the Audit Committee

reviewed the independence and

objectivity of KPMG. The Audit

Committee received a report from KPMG

describing its independence, controls

and current practices to safeguard and

maintain auditor independence.

The Audit Committee also focused on

the non-audit services, which requires

the consent of the Audit Committee. The

only non-audit services performed during

2021 consisted of the interim financial

statement review by KPMG. KPMG noted

that they did not perform any work with

respect to the preparation of financial

statements or valuations, the taking of

management decisions, or the provision

of investment advice.

There was no other non-audit work

performed by the KPMG during the

year other than those services described

above. The Audit Committee was satisfied

that the level of non-audit services

did not conflict with their statutory

audit responsibilities.

The Audit Committee believes that the

performance of the external auditor

remains satisfactory. KPMG were

reappointed after an open tender

process completed in 2019.

The Audit Committee has a policy to

conduct a tender process at least every

10 years and to rotate auditors at least

every 20 years, as recommended by the

UK Statutory Auditors and Third Country

Auditors Regulations 2016.

The Audit Committee conducted a

self appraisal of its performance and

concluded that it was satisfactory and in

accordance with its terms of reference.

Conclusion

As Audit Committee Chairman, I was

pleased with the work performed during

the year. In addition, I was satisfied

with the level of work performed by

the Manager and KPMG in relation

to the preparation of the Company’s

consolidated financial statements and

the year-end audit process.

John Martyn Falla

Audit Committee Chairman

25 April 2022

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Statement of directors’ responsibilities

Annual financial report

and consolidated

financial statements

The directors are responsible for

preparing the annual financial report

and consolidated financial statements

in accordance with applicable law

and regulations.

Company law requires the directors

to prepare consolidated financial

statements for each financial year.

Under the law they have chosen to

prepare the consolidated financial

statements in conformity with U.S.

generally accepted accounting principles

(“US GAAP”) and applicable law.

Under company law the directors must

not approve the consolidated financial

statements unless they are satisfied that

they give a true and fair view of the state

of affairs of the Group and of its profit or

loss for that period. In preparing these

financial statements, the directors are

required to:

– select suitable accounting policies and

then apply them consistently;

– make judgments and estimates that are

reasonable, relevant and reliable;

– state whether applicable accounting

standards have been followed,

subject to any material departures

disclosed and explained in the

financial statements;

– assess the Group’s ability to continue

as a going concern, disclosing, as

applicable, matters related to going

concern; and

– use the going concern basis

of accounting unless liquidation

is imminent.

The directors are responsible for keeping

proper accounting records that are

sufficient to show and explain the

Company’s transactions and disclose

with reasonable accuracy at any time the

financial position of the Company and

enable them to ensure that the financial

statements comply with the Companies

(Guernsey) Law, 2008 (as amended). They

are responsible for such internal controls

as they determine is necessary to enable

the preparation of financial statements

that are free from material misstatement,

whether due to fraud or error, and have

general responsibility for taking such

steps as are reasonably open to them

to safeguard the assets of the Company

and to prevent and detect fraud and

other irregularities.

Disclosure of information

to auditor

The directors confirmed that, so far

as they were each aware, there is no

relevant audit information of which

the Company’s auditor was unaware;

and each director took all the steps

that he/she ought to have taken as a

director to make himself/herself aware

of any relevant audit information and to

establish that the Company’s auditor is

aware of that information.

Statement of

directors’ responsibilities

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Statement of directors’ responsibilities continued

Responsibility statement

of the directors in

respect of the Annual

Financial Report

The directors confirmed that, to the best

of their knowledge:

– The consolidated financial statements,

prepared in conformity with U.S.

GAAP, give a true and fair view of the

assets, liabilities, financial position

and profit or loss of the Company

and the undertakings included in the

consolidation taken as a whole as

required by the Disclosure Guidance

and Transparency Rules (“DTR”)

4.1.12R and are in compliance with the

requirements set out in the Companies

(Guernsey) Law, 2008; and

– The annual financial report includes a

fair review of the information required

by DTR 4.1.8R and DTR 4.1.11R of the

Disclosure Guidance and Transparency

Rules, which provides an indication of

important events that have occurred

since the end of the financial year and

the likely future development of the

Company and a description of principal

risks and uncertainties during the year.

We consider that the annual financial

report and consolidated financial

statements, taken as a whole, are fair,

balanced and understandable and

provide the information necessary for

shareholders to assess the Company’s

position and performance, business

model and strategy.

The directors are responsible for the

maintenance and integrity of the

corporate and financial information

included on the Company’s website, and

for the preparation and dissemination

of financial statements. Legislation in

Guernsey governing the preparation

and dissemination of financial

statements may differ from legislation

in other jurisdictions.

By order of the Board

William Maltby

Director

John Martyn Falla

Director

Date: 25 April 2022

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Financials

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Auditor’s report

Independent Auditor’s report

to the members of NB Private Equity Partners Limited

Our opinion is unmodified

We have audited the consolidated

financial statements of NB Private Equity

Partners Limited (the “Company”) and

its subsidiaries (together, the “Group”),

which comprise the consolidated balance

sheet and the consolidated condensed

schedule of private equity investments as

at 31 December 2021, the consolidated

statements of operations and changes

in net assets and cash flows for the year

then ended, and notes, comprising

significant accounting policies and

other explanatory information.

In our opinion, the accompanying

consolidated financial statements:

– give a true and fair view of the

financial position of the Group as at

31 December 2021, and of the Group’s

financial performance and cash flows

for the year then ended;

– are prepared in conformity with

U.S. generally accepted accounting

principles (“US GAAP”); and

– comply with the Companies

(Guernsey) Law, 2008.

Basis for opinion

We conducted our audit in accordance

with International Standards on Auditing

(UK) (“ISAs (UK)”) and applicable law. Our

responsibilities are described below. We

have fulfilled our ethical responsibilities

under, and are independent of the

Company and Group in accordance

with, UK ethical requirements including

the FRC Ethical Standard as required by

the Crown Dependencies’ Audit Rules

and Guidance. We believe that the audit

evidence we have obtained is a sufficient

and appropriate basis for our opinion.

Key audit matters: our

assessment of the risks of

material misstatement

Key audit matters are those matters

that, in our professional judgment, were

of most significance in the audit of the

consolidated financial statements and

include the most significant assessed risks

of material misstatement (whether or not

due to fraud) identified by us, including

those which had the greatest effect on:

the overall audit strategy; the allocation of

resources in the audit; and directing the

efforts of the engagement team. These

matters were addressed in the context

of our audit of the consolidated financial

statements as a whole, and in forming our

opinion thereon, and we do not provide

a separate opinion on these matters.

In arriving at our audit opinion above,

the key audit matter was as follows

(unchanged from 2020):

Valuation of private equity investments The risk Our response

$1,569,276,895;

(2020: $1,254,644,523)

Refer to pages 68 to 69 of

the Report of the Audit

Committee, pages 80 to 81 of

the consolidated condensed

schedule of private equity

investments, note 2 accounting

policy and note 3 disclosures

Basis:

The Group’s private equity

investments portfolio represents

the most significant balance

on the consolidated balance

sheet and is the principal driver

of the Group’s net asset value

(2021: 105.9%; 2020: 119.1%).

The private equity investments

portfolio is comprised of direct

equity and fund investments

(“Direct Equity Investments”) and

Income Investments (together the

“Investments”).

Direct Equity Investments,

representing 84% of the fair

value of Investments, are valued

using the net asset value as

practical expedient in conformity

with U.S. GAAP to determine

the fair value of the underlying

Direct Equity Investments,

adjusted if considered necessary

by the Investment Manager.

The remaining Direct Equity

Investments, representing 8% of

the fair value of Investments, are

valued using comparable company

multiples, third party valuation or

listed prices, as applicable.

Income Investments, representing

8% of the fair value of Investments,

are valued based on valuation

models that take into account the

factors relevant to each investment

and use relevant third party market

data where available (“Model

Valuations”). Any remaining

Income Investments are valued

using third party data sources.

Our audit procedures included:

Controls evaluation:

We tested the design and

implementation of the Investment

Manager’s review control in relation

to the valuation of Investments.

Challenging management’s

assumptions and inputs including

use of KPMG valuation specialist:

For all Investments we assessed the

appropriateness of the valuation

technique used to estimate fair value.

For a selection of Direct Equity

Investments, chosen on the basis of

their fair value:

– We confirmed their fair values

to supporting information,

including audited information

where available, such as: financial

statements, limited partner capital

account statements, lead sponsor

or co-investor information or

other information provided by the

underlying funds’ general partners,

investee managers or similar.

– For investments using a revenue

multiple approach, we obtained

the valuation provided by the

sponsor and assessed assumptions

based on observable market data.

We assessed the reliability of

information obtained.

– For unaudited information we

either obtained the information

directly or assessed the Investment

Manager’s process for obtaining

this information and conducted

retrospective testing to confirm

its reliability.

– For audited information, we

assessed the appropriateness of

the accounting framework utilized

and whether the audit opinion

was modified.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Auditor’s report continued

Our application of materiality and an

overview of the scope of our audit

Materiality for the consolidated financial

statements as a whole was set at

$26,837,000, determined with reference

to a benchmark of group net assets of

$1,482,233,417, of which it represents

approximately 2.0% (2020: 2.0%).

In line with our audit methodology,

our procedures on individual account

balances and disclosures were performed

to a lower threshold, performance

materiality, so as to reduce to an

acceptable level the risk that individually

immaterial misstatements in individual

account balances add up to a material

amount across the financial statements

as a whole. Performance materiality

for the Group was set at 75.0%

(2020: 75.0%) of materiality for the

financial statements as a whole, which

equates to $20,127,000. We applied

this percentage in our determination

of performance materiality because we

did not identify any factors indicating an

elevated level of risk.

We reported to the Audit Committee

any corrected or uncorrected identified

misstatements exceeding $1,341,000,

in addition to other identified

misstatements that warranted reporting

on qualitative grounds.

Our audit of the Group was undertaken

to the materiality level specified above,

which has informed our identification

of significant risks of material

misstatement and the associated audit

procedures performed in those areas

as detailed above.

The group team performed the audit of

the Group as if it was a single aggregated

set of financial information. The audit

was performed using the materiality level

set out above and covered 100% of total

group revenue, total group profit before

tax, and total group assets and liabilities.

Going concern

The directors have prepared the

consolidated financial statements on the

going concern basis as they do not intend

to liquidate the Group or the Company

or to cease their operations, and as they

have concluded that the Group and the

Company’s financial position means that

this is realistic. They have also concluded

that there are no material uncertainties

that could have cast significant doubt

over their ability to continue as a going

concern for at least a year from the date

of approval of the consolidated financial

statements (the “going concern period”).

Valuation of private equity investments The risk Our response

Risk:

The valuation of the Group’s

Investments is considered a

significant area of our audit, given

that it represents the majority of

the net assets of the Group. The

valuation risk incorporates both

a risk of fraud and error given

the significance of estimates and

judgments that may be involved

in the determination of fair value.

– For listed Direct Equity Investments

we independently priced these to a

third party source.

For a selection of Income

Investments, chosen on the basis of

their fair value, where market quotes

were available, we used our KPMG

valuation specialist to independently

value them based on prices obtained

from third party pricing vendors.

For the remaining population of

Income Investments, we made

a selection of Model Valuations,

chosen on the basis of their fair value.

We corroborated key inputs in the

Model Valuations to supporting

documentation such as management

accounts. With the support of our

KPMG valuation specialist, we

challenged the key assumptions

used, such as comparable multiples

and market yields.

Assessing transparency:

We also considered the Group’s

disclosures (see Note 3) in relation

to the use of estimates and

judgments regarding the fair value

of investments and the Group’s

investment valuation policies

adopted and the fair value disclosures

in note 2 and note 3 for conformity

with U.S. GAAP.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Auditor’s report continued

Going concern (continued)

In our evaluation of the directors’

conclusions, we considered the inherent

risks to the Group and the Company’s

business model and analysed how

those risks might affect the Group and

the Company’s financial resources or

ability to continue operations over the

going concern period. The risks that we

considered most likely to affect the Group

and the Company’s financial resources

or ability to continue operations over this

period were:

– Availability of capital to meet operating

costs and other financial commitments;

– The ability of the Group to comply with

debt covenants; and

– The ability of the Company to repay the

outstanding Zero Dividend Preference

shares upon their maturity

We considered whether these risks could

plausibly affect the liquidity in the going

concern period by comparing severe,

but plausible downside scenarios that

could arise from these risks individually

and collectively against the level of

available financial resources indicated

by the Group’s financial forecasts.

We considered whether the going

concern disclosure in note 2 to the

financial statements gives a full and

accurate description of the directors’

assessment of going concern.

Our conclusions based on this work:

– we consider that the directors’ use of

the going concern basis of accounting

in the preparation of the consolidated

financial statements is appropriate;

– we have not identified, and concur with

the directors’ assessment that there is

not, a material uncertainty related to

events or conditions that, individually or

collectively, may cast significant doubt

on the Group and the Company’s ability

to continue as a going concern for the

going concern period; and

– we have nothing material to add

or draw attention to in relation

to the directors’ statement in the

notes to the consolidated financial

statements on the use of the going

concern basis of accounting with no

material uncertainties that may cast

significant doubt over the Group and

the Company’s use of that basis for

the going concern period, and that

statement is materially consistent with

the consolidated financial statements

and our audit knowledge.

However, as we cannot predict all future

events or conditions and as subsequent

events may result in outcomes that are

inconsistent with judgements that were

reasonable at the time they were made,

the above conclusions are not a guarantee

that the Group and the Company will

continue in operation.

Fraud and breaches of laws and

regulations – ability to detect

Identifying and responding to risks of

material misstatement due to fraud

To identify risks of material misstatement

due to fraud (“fraud risks”) we assessed

events or conditions that could indicate an

incentive or pressure to commit fraud or

provide an opportunity to commit fraud.

Our risk assessment procedures included:

– enquiring of management as to the

Group’s policies and procedures to

prevent and detect fraud as well as

enquiring whether management have

knowledge of any actual, suspected

or alleged fraud;

– reading minutes of meetings of those

charged with governance; and

– using analytical procedures

to identify any unusual or

unexpected relationships.

As required by auditing standards, and

taking into account possible incentives

or pressures to misstate performance

and our overall knowledge of the control

environment, we perform procedures

to address the risk of management

override of controls, in particular the risk

that management may be in a position

to make inappropriate accounting

entries, and the risk of bias in accounting

estimates such as valuation of unquoted

investments. On this audit we do not

believe there is a fraud risk related to

revenue recognition because the Group’s

revenue streams are simple in nature

with respect to accounting policy choice,

and are easily verifiable to external

data sources or agreements with little

or no requirement for estimation from

management. We did not identify any

additional fraud risks.

We performed procedures including:

– identifying journal entries and other

adjustments to test based on risk

criteria and comparing any identified

entries to supporting documentation;

– incorporating an element of

unpredictability in our audit

procedures; and

– assessing significant accounting

estimates for bias

Further detail in respect of valuation of

unquoted investments is set out in the

key audit matter section of in this report.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Auditor’s report continued

Identifying and responding to

risks of material misstatement

due to non-compliance with laws

and regulations

We identified areas of laws and

regulations that could reasonably

be expected to have a material effect

on the consolidated financial statements

from our sector experience and

through discussion with management

(as required by auditing standards),

and from inspection of the Group’s

regulatory and legal correspondence,

if any, and discussed with management

the policies and procedures regarding

compliance with laws and regulations.

As the Group is regulated, our assessment

of risks involved gaining an understanding

of the control environment including the

entity’s procedures for complying with

regulatory requirements.

The Group is subject to laws and

regulations that directly affect the

consolidated financial statements

including financial reporting legislation

and taxation legislation and we assessed

the extent of compliance with these laws

and regulations as part of our procedures

on the related financial statement items.

The Group is subject to other laws and

regulations where the consequences of

non-compliance could have a material

effect on amounts or disclosures in the

consolidated financial statements, for

instance through the imposition of fines

or litigation or impacts on the Group and

the Company’s ability to operate. We

identified financial services regulation as

being the area most likely to have such

an effect, recognising the regulated

nature of the Group’s activities and its

legal form. Auditing standards limit the

required audit procedures to identify

non-compliance with these laws and

regulations to enquiry of management

and inspection of regulatory and legal

correspondence, if any. Therefore if a

breach of operational regulations is not

disclosed to us or evident from relevant

correspondence, an audit will not detect

that breach.

Context of the ability of the audit

to detect fraud or breaches of law

or regulation

Owing to the inherent limitations of an

audit, there is an unavoidable risk that

we may not have detected some material

misstatements in the consolidated

financial statements, even though we

have properly planned and performed

our audit in accordance with auditing

standards. For example, the further

removed non-compliance with laws

and regulations is from the events and

transactions reflected in the consolidated

financial statements, the less likely the

inherently limited procedures required

by auditing standards would identify it.

In addition, as with any audit, there

remains a higher risk of non-detection

of fraud, as this may involve collusion,

forgery, intentional omissions,

misrepresentations, or the override of

internal controls. Our audit procedures

are designed to detect material

misstatement. We are not responsible

for preventing non-compliance or fraud

and cannot be expected to detect non-

compliance with all laws and regulations.

Other information

The directors are responsible for the

other information. The other information

comprises the information included in

the annual financial report but does

not include the consolidated financial

statements and our auditor’s report

thereon. Our opinion on the consolidated

financial statements does not cover the

other information and we do not express

an audit opinion or any form of assurance

conclusion thereon.

In connection with our audit of the

consolidated financial statements,

our responsibility is to read the other

information and, in doing so, consider

whether the other information is

materially inconsistent with the

consolidated financial statements or

our knowledge obtained in the audit,

or otherwise appears to be materially

misstated. If, based on the work we have

performed, we conclude that there is

a material misstatement of this other

information, we are required to report

that fact. We have nothing to report in

this regard.

Disclosures of emerging and principal

risks and longer term viability

We are required to perform procedures

to identify whether there is a material

inconsistency between the directors’

disclosures in respect of emerging and

principal risks and the viability statement,

and the consolidated financial statements

and our audit knowledge. We have

nothing material to add or draw attention

to in relation to:

– the directors’ confirmation within

the viability statement (pages 49

and 50) that they have carried out a

robust assessment of the emerging

and principal risks facing the Group,

including those that would threaten its

business model, future performance,

solvency or liquidity;

– the emerging and principal risks

disclosures describing these risks

and explaining how they are being

managed or mitigated;

– the directors’ explanation in the viability

statement (pages 49 and 50) as to how

they have assessed the prospects of

the Group, over what period they have

done so and why they consider that

period to be appropriate, and their

statement as to whether they have a

reasonable expectation that the Group

will be able to continue in operation

and meet its liabilities as they fall due

over the period of their assessment,

including any related disclosures

drawing attention to any necessary

qualifications or assumptions.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Auditor’s report continued

Disclosures of emerging and

principal risks and longer term

viability (continued)

We are also required to review the viability

statement, set out on pages 49 and 50

under the Listing Rules. Based on the

above procedures, we have concluded

that the above disclosures are materially

consistent with the consolidated financial

statements and our audit knowledge.

Corporate governance disclosures

We are required to perform procedures

to identify whether there is a material

inconsistency between the directors’

corporate governance disclosures and

the consolidated financial statements

and our audit knowledge.

Based on those procedures, we have

concluded that each of the following

is materially consistent with the

consolidated financial statements and

our audit knowledge:

– the directors’ statement that they

consider that the annual financial

report and consolidated financial

statements taken as a whole is fair,

balanced and understandable, and

provides the information necessary

for shareholders to assess the Group’s

position and performance, business

model and strategy;

– the section of the annual financial

report describing the work of the

Audit Committee, including the

significant issues that the audit

committee considered in relation to

the financial statements, and how

these issues were addressed; and

– the section of the annual financial

report that describes the review

of the effectiveness of the Group’s

risk management and internal

control systems.

We are required to review the part

of Corporate Governance Statement

relating to the Group’s compliance with

the provisions of the UK Corporate

Governance Code specified by the Listing

Rules for our review. We have nothing

to report in this respect.

We have nothing to report on other

matters on which we are required

to report by exception

We have nothing to report in respect

of the following matters where the

Companies (Guernsey) Law, 2008

requires us to report to you if,

in our opinion:

– the Company has not kept proper

accounting records; or

– the consolidated financial statements

are not in agreement with the

accounting records; or

– we have not received all the

information and explanations,

which to the best of our knowledge

and belief are necessary for the

purpose of our audit.

Respective responsibilities

Directors’ responsibilities:

As explained more fully in their statement

set out on page 72, the directors are

responsible for: the preparation of

the consolidated financial statements

including being satisfied that they give a

true and fair view; such internal controls

as they determine are necessary to

enable the preparation of consolidated

financial statements that are free from

material misstatement, whether due to

fraud or error; assessing the Group and

Company’s ability to continue as a going

concern, disclosing, as applicable, matters

related to going concern; and using the

going concern basis of accounting unless

liquidation is imminent.

Auditor’s responsibilities:

Our objectives are to obtain reasonable

assurance about whether the

consolidated financial statements

as a whole are free from material

misstatement, whether due to fraud

or error, and to issue our opinion in

an auditor’s report. Reasonable assurance

is a high level of assurance, but does

not guarantee that an audit conducted

in accordance with ISAs (UK) will always

detect a material misstatement when

it exists. Misstatements can arise from

fraud or error and are considered material

if, individually or in aggregate, they

could reasonably be expected to

influence the economic decisions of users

taken on the basis of the consolidated

financial statements.

A fuller description of our responsibilities

is provided on the FRC’s website at

www.frc.org.uk/auditorsresponsibilities.

The purpose of this report and

restrictions on its use by persons

other than the Company’s members

as a body

This report is made solely to the

Company’s members, as a body, in

accordance with section 262 of the

Companies (Guernsey) Law, 2008 and,

in respect of any further matters on

which we have agreed to report, on

terms we have agreed with the Company.

Our audit work has been undertaken so

that we might state to the Company’s

members those matters we are required

to state to them in an auditor’s report

and for no other purpose. To the fullest

extent permitted by law, we do not accept

or assume responsibility to anyone other

than the Company and the Company’s

members, as a body, for our audit work,

for this report, or for the opinions we

have formed.

Neale Jehan

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants and Recognised Auditors

Guernsey

25 April 2022

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Consolidated financial statements

Consolidated Balance Sheets

For the years ended 31 December 2021 and 31 December 2020

2021 2020

Assets

Private equity investments

Cost of $870,294,049 at 31 December 2021 and $878,840,550 at 31 December 2020 $1,569,276,895 $1,254,644,523

Cash and cash equivalents 116,486,687 3,044,990

Other assets 3,524,339 9,106,692

Distributions and sales proceeds receivable from investments 280,977 627,801

Total assets $1,689,568,898 $1,267,424,006

Liabilities and share capital

Liabilities:

ZDP Share liability $161,985,696 $157,014,827

Credit facility loan – 35,000,000

Carried interest payable to Special Limited Partner 37,341,460 15,181,843

Payables to Investment Manager and affiliates 5,801,910 4,616,314

Accrued expenses and other liabilities 2,206,415 2,434,531

Total liabilities $207,335,481 $214,247,515

Share capital:

Class A Shares, $0.01 par value, 500,000,000 shares authorised, 49,911,438 shares issued and 46,761,030 shares outstanding $499,115 $499,115

Class B Shares, $0.01 par value, 100,000 shares authorised, 10,000 shares issued and outstanding 100 100

Additional paid-in capital 496,559,065 496,559,065

Retained earnings 992,368,962 563,841,429

Less cost of treasury stock purchased (3,150,408 shares) (9,248,460) (9,248,460)

Total net assets of the controlling interest 1,480,178,782 1,051,651,249

Net assets of the noncontrolling interest 2,054,635 1,525,242

Total net assets $1,482,233,417 $1,053,176,491

Total liabilities and net assets $1,689,568,898 $1,267,424,006

Net asset value per share for Class A Shares and Class B Shares $31.65 $22.49

Net asset value per share for Class A Shares and Class B Shares (GBP) £23.37 £16.45

Net asset value per 2022 ZDP Share (Pence) 123.08 118.35

Net asset value per 2024 ZDP Share (Pence) 116.11 111.38

The consolidated financial statements were approved by the Board of directors on 25 April 2022 and signed on its behalf by

William Maltby John Martyn Falla

The accompanying notes are an integral part of the consolidated financial statements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Consolidated financial statements continued

Consolidated Condensed schedules of private equity investments

31 December 2021 and 31 December 2020

Private equity investments Cost Fair Value

Unfunded

Commitment

Private Equity

(1)

Exposure

2021

Direct equity investments

NB Alternatives Direct Co-investment Program A $46,142,215 $45,903,484 $18,274,463 $64,117,947

NB Alternatives Direct Co-investment Program B

83,646,928 192,329,730 21,476,452 213,806,182

NB Renaissance Programs 9,677,956 20,844,892 14,059,072 34,903,964

NB Healthcare Credit Investment Program (Equity) 2,545,471 1,256,065 4,146,718 5,402,783

Marquee Brands 26,015,569 32,688,590 3,410,816 36,099,406

Direct equity investments

(2)

568,497,871 1,137,186,554 31,455,857 1,168,642,411

Total direct equity investments $736,526,010 $1,430,209,315 $92,823,378 $1,523,032,693

Income Investments

NB Credit Opportunities Program 33,911,457 49,004,673 11,981,976 60,986,649

NB Specialty Finance Program 39,064,395 38,882,486 15,000,000 53,882,486

Income investments 45,607,166 37,226,870 – 37,226,870

Total income investments $118,583,018 $125,114,029 $26,981,976 $152,096,005

Fund investments 15,185,021 13,953,551 9,537,154 23,490,705

Total investments $870,294,049 $1,569,276,895 $129,342,508 $1,698,619,403

2020

Direct equity investments

NB Alternatives Direct Co-investment Program A

$59,117,340 $45,124,705 $18,817,937 $63,942,642

NB Alternatives Direct Co-investment Program B

102,702,561 160,075,296 22,386,300 182,461,596

NB Renaissance Programs 16,909,909 18,304,758 18,804,650 37,109,408

NB Healthcare Credit Investment Program (Equity) 2,576,084 2,579,932 4,146,718 6,726,650

Marquee Brands 25,464,414 29,927,308 4,024,452 33,951,760

Direct equity investments

(2)

485,200,798 835,576,537 4,245,021 839,821,558

Total direct equity investments $710,052,635 $1,091,588,536 $72,425,078 $1,164,013,614

Income Investments

NB Credit Opportunities Program 40,333,271 47,418,066 6,745,403 54,163,469

NB Specialty Finance Program 22,847,195 22,815,420 28,500,000 51,315,420

Income investments 78,350,466 70,286,055 – 70,286,055

Total income investments $141,530,932 $140,519,541 $35,245,403 $175,764,944

Fund investments 27,256,983 22,536,446 21,671,287 44,207,733

Total investments $878,840,550 $1,254,644,523 $129,341,768 $1,383,986,291

* These investments are above 5% of net asset value. See note 3.

(1) Private equity exposure is the sum of fair value and unfunded commitment.

(2) Includes direct equity investments into companies and co-investment vehicles.

The accompanying notes are an integral part of the consolidated financial statements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Consolidated financial statements continued

Consolidated Condensed schedules of private equity investments

31 December 2021 and 31 December 2020

Geographic diversity of private equity investments

(1)

Fair Value

2021

Fair Value

2020

North America $1,135,687,289 $973,088,498

Europe 376,021,623 234,882,061

Asia/rest of world 57,567,983 46,673,964

$1,569,276,895 $1,254,644,523

Industry diversity of private equity investments

(2)

2021 2020

Technology/IT 18.2% 18.1%

Healthcare 9.7% 14.5%

Industrials 18.2% 14.3%

Consumer 19.5% 18.9%

Financial services 9.8% 11.1%

Business services 13.8% 10.9%

Energy 0.9% 0.8%

Communications/media 2.7% 5.0%

Diversified/undisclosed/other 6.2% 5.0%

Transportation 1.0% 1.4%

100.0% 100.0%

Asset class diversification of private equity investments

(3)

2021 2020

Direct Equity Investments

Mid-cap buyout 49.0% 43.0%

Large-cap buyout 30.0% 31.0%

Special situation 8.0% 9.0%

Growth equity 4.0% 5.0%

Income investments 8.0% 11.0%

Growth/venture funds 1.0% 1.0%

100.0% 100.0%

(1) Geography is determined by location of the headquarters of the underlying portfolio companies in funds and direct co-investments. A portion of our fund investments may relate to cash or other assets or liabilities that they

hold and for which we do not have adequate information to assign a geographic location.

(2) Industry diversity is based on underlying portfolio companies and direct co-investments which may be held through either co-investments or NB-managed vehicles.

(3) Asset class diversification is based on the net asset value of underlying fund investments and co-investments.

The accompanying notes are an integral part of the consolidated financial statements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Consolidated financial statements continued

Consolidated Statements of operations and changes in net assets

For the years ended 31 December 2021 and 31 December 2020

2021 2020

Interest and dividend income $5,725,688 $9,454,166

Expenses

Investment management and services 22,483,005 16,659,208

Carried interest 37,232,789 15,181,843

Finance costs

Credit facility 4,084,128 6,331,701

ZDP Shares 6,942,354 6,396,999

Administration and professional fees 4,324,409 3,451,058

75,066,685 48,020,809

Net investment income (loss) $(69,340,997) $(38,566,643)

Realised and unrealised gains (losses)

Net realised gain (loss) on investments and forward foreign exchange contracts, net of tax expense (benefit) of $756,098 for 2021 and $1,867,420 for 2020 $212,372,218 $90,221,599

Net change in unrealised gain (loss) on investments and forward foreign exchange contracts, net of tax expense (benefit) of $0 for 2021 and $0 for 2020 319,700,846 133,280,131

Net realised and unrealised gain (loss) 532,073,064 223,501,730

Net increase (decrease) in net assets resulting from operations $462,732,067 $184,935,087

Less net (increase) decrease in net assets resulting from operations attributable to the noncontrolling interest (529,393) (378,852)

Net increase (decrease) in net assets resulting from operations attributable to the controlling interest $462,202,674 $184,556,235

Net assets at beginning of period attributable to the controlling interest 1,051,651,249 894,767,554

Less dividend payment (33,675,141) (27,138,468)

Less cost of stock repurchased and cancelled (0 shares for 2021 and 38,854 shares for 2020) – (534,072)

Net assets at end of period attributable to the controlling interest $1,480,178,782 $1,051,651,249

Earnings (loss) per share for Class A Shares and Class B Shares of the controlling interest $9.88 $3.95

Earnings (loss) per share for Class A Shares and Class B Shares of the controlling interest (GBP) £7.18 £3.08

The accompanying notes are an integral part of the consolidated financial statements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Consolidated financial statements continued

Consolidated Statements of cash flows

For the years ended 31 December 2021 and 31 December 2020

2021 2020

Cash flows from operating activities:

Net increase (decrease) in net assets resulting from operations attributable to the controlling interest $462,202,674 $184,556,235

Net increase (decrease) in net assets resulting from operations attributable to the noncontrolling interest 529,393 378,852

Adjustments to reconcile net increase (decrease) in net assets resulting from operations to net cash provided by (used in) operating activities:

Net realised (gain) loss on investments and forward foreign exchange contracts, net of tax expense (212,372,218) (90,221,599)

Net change in unrealised (gain) loss on investments and forward foreign exchange contracts, net of tax expense (319,700,846) (133,280,131)

Contributions to private equity investments (19,918,366) (53,713,300)

Purchases of private equity investments (147,086,034) (72,657,471)

Distributions from private equity investments 105,532,235 73,261,751

Proceeds from sale of private equity investments 281,199,375 117,224,388

In-kind payment of interest income (4,361,301) (4,676,480)

Amortisation of finance costs 719,878 691,869

Amortisation of purchase premium/discount (OID), net (311,331) (405,423)

Change in other assets 1,042,713 (603,760)

Change in payables to Investment Manager and affiliates 23,345,213 8,977,962

Change in accrued expenses and other liabilities 5,502,828 4,557,339

Net cash provided by (used in) operating activities 176,324,213 34,090,232

Cash flows from financing activities:

Dividend payment (33,675,141) (27,138,468)

Stock repurchased and cancelled – (534,072)

Borrowings from credit facility 15,000,000 228,000,000

Payments to credit facility (50,000,000) (240,000,000)

Settlement of the forward foreign exchange contract and ongoing hedging activity 5,792,625 (909,270)

Net cash provided by (used in) financing activities (62,882,516) (40,581,810)

Net increase (decrease) in cash and cash equivalents 113,441,697 (6,491,578)

Cash and cash equivalents at beginning of period 3,044,990 9,536,568

Cash and cash equivalents at end of period $116,486,687 $3,044,990

Supplemental cash flow information

Interest paid $3,658,042 $5,924,412

Net taxes paid (refunded) $1,268,764 $924,590

The accompanying notes are an integral part of the consolidated financial statements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements

Note 1 – Description of the Group

The Group is a closed-ended investment company registered in Guernsey.

The registered office is Floor 2, Trafalgar Court, St Peter Port, Guernsey, GY1 4LY.

The principal activity of the Group is to invest in direct private equity investments by

co-investing alongside leading private equity sponsors in their core areas of expertise.

From time to time, the Group also invests in income-oriented investments, primarily

the debt of private equity backed companies. The Group’s fund investments are legacy

assets, non-core to the current strategy and are in realisation mode. The Group may also

make other opportunistic investments, as appropriate. The Company’s Class A Shares

are listed and admitted to trading on the Premium Segment of the Main Market of

the London Stock Exchange (“Main Market”) under the symbols “NBPE” and “NBPU”

corresponding to Sterling and U.S. dollar quotes, respectively. NBPE has two classes of

Zero Dividend Preference (“ZDP”) Shares maturing in 2022 and 2024 (see note 5) which

are listed and admitted to trading on the Specialist Fund Segment of the Main Market

of the London Stock Exchange (“Specialist Fund Segment”) under the symbols “NBPP”

and “NBPS”, respectively.

The Group is managed by NB Alternatives Advisers LLC, a subsidiary of Neuberger

Berman Group LLC (“NBG”), pursuant to an Investment Management Agreement.

The Investment Manager serves as the registered investment adviser under the

Investment Advisers Act of 1940.

Note 2 – Summary of Significant Accounting Policies

Basis of Presentation

These consolidated financial statements present a true and fair view of the financial

position, profit or loss and cash flows, and have been prepared in conformity with

accounting principles generally accepted in the United States of America (“U.S. GAAP”)

and are in compliance with the Companies (Guernsey) Law, 2008. All adjustments

considered necessary for the fair presentation of the consolidated financial statements

for the periods presented have been included. These consolidated financial statements

are presented in U.S. dollars.

The Group is an investment company and follows the accounting and reporting

guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards

Codification Topic (“ASC”) 946. Accordingly, the Group reflects its investments on the

consolidated balance sheets at their estimated fair values, with unrealised gains and

losses resulting from changes in fair value reflected in net change in unrealised gain (loss)

on investments and forward foreign exchange contracts in the consolidated statements

of operations and changes in net assets. The Group does not consolidate majority-

owned or controlled portfolio companies. The Group does not provide any financial

support to any of its investments beyond the investment amount to which it committed.

The directors considered that it is appropriate to adopt a going concern basis of

accounting in preparing the consolidated financial statements. In reaching this

assessment, the directors have considered a wide range of information relating

to present and future conditions including the balance sheets, future projections,

cash flows and the longer-term strategy of the business.

Principles of Consolidation

The consolidated financial statements include accounts of the Company consolidated

with the accounts of all its subsidiaries in which it holds a controlling financial interest

as of the financial statement date. All inter-group balances have been eliminated.

The Company’s partially owned subsidiary, NB PEP Investments, LP (incorporated) is

incorporated in Guernsey.

The Company’s wholly-owned subsidiaries, NB PEP Holdings Limited, NB PEP

Investments I, LP, NB PEP Investments LP Limited and NB PEP Investments Limited are

incorporated in Guernsey.

The Company’s wholly-owned subsidiary, NB PEP Investments DE, LP is incorporated in

Delaware and operating in the United States.

Use of Estimates and Judgements

The preparation of the consolidated financial statements in conformity with U.S. GAAP

requires the directors to make estimates and judgements that affect the reported

amounts of certain assets and liabilities and disclosure of contingent assets and liabilities

at the date of the consolidated financial statements and the reported amounts of

revenues and expenses during the reporting period. Actual results could differ from

those estimates.

The following estimates and assumptions were used at 31 December 2021 and

31 December 2020 to estimate the fair value of each class of financial instruments:

– Cash and cash equivalents – The carrying value reasonably approximates fair value

due to the short-term nature of these instruments.

– Forward currency contracts are revalued using the forward exchange rate prevailing

at the consolidated balance sheet date.

– Other assets (excluding forward currency contracts) – The carrying value reasonably

approximates fair value.

– Distributions and sales proceeds receivable from investments – The carrying value

reasonably approximates fair value.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 2 – Summary of Significant Accounting Policies

continued

Use of Estimates and Judgements continued

– ZDP Share liability – The carrying value reasonably approximates fair value.

– Credit Facility Loan – The carrying value reasonably approximates fair value.

– Carried interest payable to Special Limited Partner – The carrying value reasonably

approximates fair value.

– Payables to Investment Manager and affiliates – The carrying value reasonably

approximates fair value.

– Accrued expenses and other liabilities – The carrying value reasonably approximates

fair value.

– Private equity investments – Further information on valuation is provided in the

Fair value measurements section below.

Fair Value Measurements

It is expected that most of the investments in which the Group invests will meet

the criteria set forth under FASB ASC 820 Fair Value Measurement and Disclosures

(“ASC 820”) permitting the use of the practical expedient to determine the fair value

of the investments. ASC 820 provides that, in valuing alternative investments that do

not have quoted market prices but calculate net asset value (“NAV”) per share or

equivalent, an investor may determine fair value by using the NAV reported to the

investor by the underlying investment. To the extent ASC 820 is applicable to an

investment, the Investment Manager will value the Group’s investment based primarily

on the value reported to the Group by the investment or by the lead investor/sponsor

of a direct co-investment as of each quarter-end, as determined by the investments in

accordance with its own valuation policies.

ASC 820-10 Fair Value Measurements and Disclosure establishes a fair value hierarchy

that prioritises the inputs to valuation techniques used to measure fair value. The

hierarchy gives the highest priority to unadjusted quoted prices in active markets

for identical assets or liabilities (Level 1 measurements) and the lowest priority to

unobservable inputs (Level 3 measurements). ASC 820-10-35-39 to 55 provides

three levels of the fair value hierarchy as follows:

Level 1: Quoted prices are available in active markets for identical investments as of the

reporting date.

Level 2: Pricing inputs are other than quoted prices in active markets, which are either

directly or indirectly observable as of the reporting date, and fair value is determined

through the use of models or other valuation methodologies.

Level 3: Pricing inputs are unobservable for the investment and include situations

where there is little, if any, market activity for the investment. The inputs used in

the determination of the fair value require significant management judgement

or estimation.

Observable inputs refer broadly to the assumptions that market participants would

use in pricing the asset or liability, including assumptions about risk, based on market

data obtained from sources independent of the Group. Unobservable inputs reflect

the Group’s own assumptions about the assumptions that market participants would

use in pricing the asset or liability based on the information available. The inputs or

methodology used for valuing assets or liabilities may not be an indication of the risks

associated with investing in those assets or liabilities. The Group generally uses the NAV

reported by the investments as a primary input in its valuation utilising the practical

expedient method of determining fair value; however, adjustments to the reported

NAV may be made based on various factors, including, but not limited to, the attributes

of the interest held, including the rights and obligations, any restrictions or illiquidity

on such interest, any potential clawbacks by the investments and the fair value of the

investments’ portfolio or other assets and liabilities. Investments that are measured

at fair value using the NAV per share (or its equivalent) practical expedient are not

categorised in the fair value hierarchy.

Realised Gains and Losses on Investments

Realised gains and losses from sales of investments are determined on a specific

identification basis. For investments in private equity investments, the Group records its

share of realised gains and losses incurred when the Investment Manager knows that

the private equity investment has realised its interest in a portfolio company and the

Investment Manager has sufficient information to quantify the amount. For all other

investments, realised gains and losses are recognised in the consolidated statements

of operations and changes in net assets in the year in which they arise.

Net Change in Unrealised Gains and Losses on Investments

Gains and losses arising from changes in value are recorded as an increase or

decrease in the unrealised gains or losses of investments based on the methodology

described above.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 2 – Summary of Significant Accounting Policies

continued

Foreign Currency

Assets and liabilities denominated in foreign currencies are translated into U.S. dollar

amounts at the reporting date. Transactions denominated in foreign currencies,

including purchases and sales of investments, and income and expenses, are translated

into U.S. dollar amounts on the date of such transactions. Adjustments arising from

foreign currency transactions are reflected in the net realised gain (loss) on investments

and forward foreign exchange contracts and the net change in unrealised gain (loss) on

investments and forward foreign exchange contracts on the consolidated statements of

operations and changes in net assets.

The Group’s investments of which capital is denominated in foreign currency are

translated into U.S. dollars based on rates of exchange at the reporting date. The

cumulative effect of translation to U.S. dollars has decreased the fair value of the

Group’s foreign investments by $27,126,075 for the year ended 31 December 2021.

The cumulative effect of translation to U.S. dollars increased the fair value of the

Group’s foreign investments by $11,943,593 for the year ended 31 December 2020.

Other than the ZDP Shares denominated in Sterling (see note 5 and note 6), the Group

has unfunded commitments denominated in currencies other than U.S. dollars.

At 31 December 2021, the unfunded commitments that are in Euros and Sterling

amounted to €13,033,970 and £34,225 respectively (31 December 2020: €15,990,363

and nil). They have been included in the consolidated condensed schedules of private

equity investments at the U.S. dollar exchange rates in effect at 31 December 2021

and 31 December 2020. The effect on the unfunded commitment of the change

in the exchange rates between Euros and U.S. dollars was a decrease in the U.S.

dollar obligations of $1,196,119 for 31 December 2021 and an increase in the U.S.

dollar obligations of $1,519,710 for 31 December 2020. The effect on the unfunded

commitment of the change in the exchange rates between Sterling and U.S. dollars

was an increase in the U.S. dollar obligations of $2,124 for 31 December 2021 and

nil for 31 December 2020.

Investment Transactions and Investment Income

Investment transactions are accounted for on a trade date basis. Investments are

recognised when the Group incurs an obligation to acquire a financial instrument and

assume the risk of any gain or loss or incurs an obligation to sell a financial instrument

and forego the risk of any gain or loss. Investment transactions that have not yet settled

are reported as receivable from investment or payable to investment.

The Group earns interest and dividends from direct investments and from cash and cash

equivalents. The Group records dividends on the ex-dividend date, net of withholding

tax, if any, and interest, on an accrual basis when earned, provided the Investment

Manager knows the information or is able to reliably estimate it. Otherwise, the Group

records the investment income when it is reported by the private equity investments.

Discounts received or premiums paid in connection with the acquisition of loans are

amortised into interest income using the effective interest method over the contractual

life of the related loan. Payment-in-kind (“PIK”) interest is computed at the contractual

rate specified in the loan agreement for any portion of the interest which may be

added to the principal balance of a loan rather than paid in cash by the obligator on

the scheduled interest payment date. PIK interest is added to the principal balance of

the loan and recorded as interest income. Prepayment premiums include fee income

from securities settled prior to maturity date, and are recorded as interest income in the

consolidated statements of operations and changes in net assets.

For the year ended 31 December 2021, total interest and dividend income was

$5,725,688, of which $406,544 was dividends, and $5,319,144 was interest income.

For the year ended 31 December 2020, total interest and dividend income was

$9,454,166, of which $92,718 was dividends, $9,344,607 was interest income, and

$16,841 was other forms of income. Realised gains and losses from sales of investments

are determined on a specific identification basis.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in accounts at banks and liquid

investments with original maturities of three months or less. Cash equivalents are

carried at cost plus accrued interest, which approximates fair value. At 31 December

2021 and 31 December 2020, cash and cash equivalents consisted of $116,486,687

and $3,044,990 of cash, respectively, primarily held in operating accounts with

Bank of America Merrill Lynch. Cash equivalents are held for the purpose of meeting

short-term liquidity requirements, rather than for investment purposes. As of

31 December 2021 and 31 December 2020, there were no cash equivalents.

Cash and cash equivalents are subject to credit risk to the extent those balances

exceed applicable Federal Deposit Insurance Corporation (“FDIC”) or Securities

Investor Protection Corporation (“SIPC”) limitations.

Income Taxes

The Company is registered in Guernsey as an exempt company. The States of Guernsey

Income Tax Authority has granted the Group an exemption from Guernsey income

tax under the provision of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989

and the Group has been charged an annual exemption fee of £1,200 (2020: £1,200).

Generally, income that the Group derives from the investments may be subject to taxes

imposed by the U.S. or other countries and will impact the Group’s effective tax rate.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 2 – Summary of Significant Accounting Policies

continued

In accordance with FASB ASC 740-10, Income Taxes, the Group is required to determine

whether its tax positions are more likely than not to be sustained upon examination

by the applicable taxing authority based on the technical merits of the position.

Tax positions not deemed to meet a more-likely-than-not threshold would be

recorded as a tax expense in the current year.

The Group files tax returns as prescribed by the tax laws of the jurisdictions in which

it operates. In the normal course of business, the Group is subject to examination by

U.S. federal, state, local and foreign jurisdictions, where applicable. The Group’s U.S.

federal income tax returns are open under the normal three-year statute of limitations

and therefore subject to examination. The Investment Manager does not expect that

the total amount of unrecognised tax benefits will materially change over the next

12 months.

Investments made in entities that generate U.S. source investment income may

subject the Group to certain U.S. federal and state income tax consequences. A U.S.

withholding tax at the rate of 30% may be applied on the Group’s distributive share

of any U.S. sourced dividends and interest (subject to certain exemptions) and certain

other income that the Group receives directly or through one or more entities treated

as either partnerships or disregarded entities for U.S. federal income tax purposes.

Investments made in entities that generate business income that is effectively connected

with a U.S. trade or business may subject the Group to certain U.S. federal and state

income tax consequences. Generally, the U.S. imposes withholding tax on effectively

connected income at the highest U.S. rate (generally 21%). In addition, the Group may

also be subject to a branch profits tax which can be imposed at a rate of up to 23.7% of

the after-tax profits treated as effectively connected income associated with a U.S. trade

or business. As such, the aggregate U.S. tax liability on effectively connected income

may approximate 44.7% given the two levels of tax.

The Group recognises a tax benefit in the consolidated financial statements only when

it is more likely than not that the position will be sustained upon examination by the

relevant taxing authority based on the technical merits of the position. To date, the

Group has not provided any reserves for taxes as all related tax benefits have been fully

recognised. Although the Investment Manager believes uncertain tax positions have

been adequately assessed, the Investment Manager acknowledges that these matters

require significant judgement and no assurance can be given that the final tax outcome

of these matters will not be different.

Deferred taxes are recorded to reflect the tax benefit and consequences of future years’

differences between the tax basis of assets and liabilities and their financial reporting

basis. The Group records a valuation allowance to reduce deferred tax assets if it is more

likely than not that some portion or all of the deferred tax assets will not be realised.

Management subsequently adjusts the valuation allowance as the expected realisability

of the deferred tax assets changes such that the valuation allowance is sufficient to cover

the portion of the asset that will not be realised. The Group records the tax associated

with any transactions with U.S. or other tax consequences when the Group recognises

the related income.

Shareholders in certain jurisdictions may have individual income tax consequences

from ownership of the Group’s shares. The Group has not accounted for any such tax

consequences in these consolidated financial statements. For example, the Investment

Manager expects the Group and certain of its non-U.S. corporate subsidiaries to be

treated as passive foreign investment corporations (“PFICs”) under U.S. tax rules.

For this purpose, the PFIC regime should not give rise to additional tax at the level of

the Group or its subsidiaries. Instead, certain U.S. investors in the Group may need

to make tax elections and comply with certain U.S. reporting requirements related

to their investments in the PFICs in order to potentially manage the adverse U.S. tax

consequences associated with the regime.

Forward Foreign Exchange Contracts

Forward foreign exchange contracts are reported on the balance sheets at fair value

and included either in other assets or accrued expenses and other liabilities, depending

on each contract’s unrealised position (appreciated/depreciated) relative to its notional

value as of the end of the reporting periods. See note 6.

Forward foreign exchange contracts involve elements of market risk in excess of the

amounts reflected on the consolidated financial statements. The Group bears the risk

of an unfavourable change in the foreign exchange rate underlying the forward foreign

exchange contract as well as risks from the potential inability of the counterparties to

meet the terms of their contracts.

Dividends to Shareholders

The Group pays dividends semi-annually to shareholders from net investment income

and net realised gains on investments upon approval by the Board of directors subject to

the passing of the ZDP Cover Test (see note 5) and the solvency test under Guernsey law.

Liabilities for dividends to shareholders are recorded on the ex-dividend date.

Operating Expenses

Operating expenses are recognised when incurred. Operating expenses include

amounts directly incurred by the Group as part of its operations, and do not include

amounts incurred from the operations of the Group’s investments.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 2 – Summary of Significant Accounting Policies continued

Carried Interest

Carried interest amounts due to the Special Limited Partner (an affiliate of the Investment Manager, see note 10) are computed and accrued at each period end based on

period-to-date results in accordance with the terms of the Third Amended and Restated Limited Partnership Agreement of NB PEP Investments LP (Incorporated). For the

purposes of calculating the incentive allocation payable to the Special Limited Partner, the value of any fund investments made by the Group in other Neuberger Berman Funds

(“NB Funds”) in respect of which the Investment Manager or an affiliate receives a fee or other remuneration shall be excluded from the calculation.

Note 3 – Investments

The Group invests in a diversified portfolio of direct private equity companies (see note 2). As required by ASC 820, financial assets and liabilities are classified in their entirety based

on the lowest level of input that is significant to the fair value measurement. The Group has assessed these positions and concluded that all private equity companies not valued

using the practical expedient, with the exception of marketable securities, are classified as either Level 2 or Level 3 due to significant unobservable inputs. Marketable securities

distributed from a private equity company are classified as Level 1. There were two marketable securities held by the Group as of 31 December 2021 and 31 December 2020.

The following table details the Group’s financial assets and liabilities that were accounted for at fair value as of 31 December 2021 and 31 December 2020 by level and fair value

hierarchy.

As of 31 December 2021

Assets (Liabilities) Accounted for at Fair Value

Level 1 Level 2 Level 3

Investments

measured at

net asset value

Total

Common stock $11,685,316 $27,192,165 $– $– $38,877,481

Private equity companies – – 207,680,425 1,322,718,989 1,530,399,414

Forward foreign exchange contract – – – – –

Totals $11,685,316 $27,192,165 $207,680,425 $1,322,718,989 $1,569,276,895

As of 31 December 2020

Assets (Liabilities) Accounted for at Fair Value

Level 1 Level 2 Level 3

Investments

measured at

net asset value

Total

Common stock $483,337 $6,195,161 $– $– $6,678,498

Private equity companies – 947,397 216,675,547 1,030,343,081 1,247,966,025

Forward foreign exchange contract – 4,994,199 – – 4,994,199

Totals $483,337 $12,136,757 $216,675,547 $1,030,343,081 $1,259,638,722

(1) Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been categorised in the fair value hierarchy. The fair value amounts presented in this table are intended

to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated condensed schedules of private equity investments.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 3 – Investments continued

Significant investments:

At 31 December 2021, the Group’s share of the following underlying private equity investments exceeded 5% of net asset value. At 31 December 2020, there were no underlying

private equity investments which exceeded 5% of net asset value.

Company Industry Country Fair Value

Fair Value as a

Percentage of

net asset value

Constellation Automotive

(1)

(LP Interest) Business Services United Kingdom $87,293,710 5.90%

AutoStore

(1)

(LP Interest) Industrials Norway 97,393,384 6.58%

(1) The Company is held by NB Alternatives Direct Co-investment Program B and through a direct equity co-investment vehicle.

The following table summarises the changes in the fair value of the Group’s Level 3 private equity investments for the year ended 31 December 2021.

(dollars in thousands)

For the year ended 31 December 2021

Large-cap Buyout Mid-cap Buyout Special Situations Growth/Venture Income Investments

Total Private

Equity Investments

Balance, 31 December 2020 $25,249 $80,020 $22,725 $19,348 $69,334 $216,676

Purchases of investments and/or contributions to investments 12,200 15,656 – 729 – 28,585

Realised gain (loss) on investments – (3,488) – (4,414) 5,540 (2,362)

Changes in unrealised gain (loss) of investments still held at the reporting date 1,900 26,126 (223) 1,904 (1,076) 28,631

Changes in unrealised gain (loss) of investments sold during the period – 3,343 – 3,122 1,293 7,758

Distributions from investments (3,080) (1,072) (666) (1,410) (37,865) (44,093)

Transfers into level 3 – – – – – –

Transfers out of level 3 – (27,515) – – – (27,515)

Balance, 31 December 2021 $36,269 $93,070 $21,836 $19,279 $37,226 $207,680

There were no transfers into Level 3. Investments were transferred out of Level 3 into Level 2 and Investments Measured at Net Asset Value.

The following table summarises changes in the fair value of the Company’s Level 3 private equity investments for the year ended 31 December 2020.

(dollars in thousands)

For the year ended 31 December 2020

Large-cap Buyout Mid-cap Buyout Special Situations Growth/Venture Income Investments

Total Private

Equity Investments

Balance, 31 December 2019 $23,559 $100,593 $20,150 $16,237 $78,950 $239,489

Purchases of investments and/or contributions to investments – 291 744 590 – 1,625

Realised gain (loss) on investments – 264 1,343 – (1,241) 366

Changes in unrealised gain (loss) of investments still held at the reporting date 7,980 14,951 4,081 3,364 (35) 30,341

Changes in unrealised gain (loss) of investments sold during the period – – (1,404) – 3,801 2,397

Distributions from investments (6,290) (264) (2,189) – (12,141) (20,884)

Transfers into level 3 – – – – – –

Transfers out of level 3 – (35,815) – (843) – (36,658)

Balance, 31 December 2020 $25,249 $80,020 $22,725 $19,348 $69,334 $216,676

There were no transfers into Level 3. Investments were transferred out of Level 3 into Investments Measured at Net Asset Value.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 3 – Investments continued

The following table summarises the valuation methodologies and inputs used for private equity investments categorised in Level 3 as of 31 December 2021.

(dollars in thousands)

Private Equity Investments Fair Value 31 December 2021 Valuation Methodologies Unobservable Inputs

Ranges

(Weighted Average)

Impact to Valuation from

an Increase in Input

Direct equity investments

Large-cap buyout $36,269

Market Approach LTM EBITDA 12.0x Increase

Mid-cap buyout 93,070

Escrow Value Escrow 1.0x Increase

Market Approach LTM EBITDA 8.8x-15.3x (12.6x) Increase

Market Approach Production multiple ($Boed) $24,811 Increase

Market Approach Implied transaction production

multiple ($Boed)

$18,343 Increase

Special situations 21,836

Market Approach LTM EBITDA 7.7x-8.6x (8.5x) Increase

Market Approach LTM Net Revenue 3.5x Increase

Growth/venture 19,279

Market Approach LTM Net Revenue 3.0x-6.5x (5.6x) Increase

Escrow Value Escrow 1.0x Increase

Income investments 37,226

Market comparable companies LTM EBITDA 9.6x Increase

Market Approach LTM EBITDA 17.8x Increase

Total $207,680

(1) LTM means Last Twelve Months, EBITDA means Earnings Before Interest Taxes Depreciation and Amortisation.

(2) Inputs weighted based on fair value of investments in range.

(3) Unless otherwise noted, this column represents the directional change in the fair value of Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input

would have the opposite effect. Significant increases and decreases in these inputs in isolation could result in significantly higher or lower fair value measurements.

The following table summarises the valuation methodologies and inputs used for private equity investments categorised in Level 3 as of 31 December 2020.

(dollars in thousands)

Private Equity Investments Fair Value 31 December 2020 Valuation Methodologies Unobservable Inputs

Ranges

(Weighted Average)

Impact to Valuation from

an Increase in Input

Direct equity investments

Large-cap buyout $25,249

Market Approach LTM EBITDA 11.6x Increase

Mid-cap buyout 80,020

Escrow Value Escrow 1x Increase

Market Approach LTM EBITDA 6.8x-15.3x (11.3x) Increase

Market Approach LTM Net Revenue 3.6x-8.4x (5.3x) Increase

Special situations 22,725

Market Approach LTM EBITDA 8.3x-9.5x (8.5x) Increase

Market Approach LTM Net Revenue 3.1x Increase

Growth/venture 19,348

Market Approach LTM Net Revenue 3.0x-44.1x (12.9x) Increase

Income investments 69,334

Expected sales proceeds N/A N/A Increase

Market comparable companies LTM EBITDA 9.6x-14.6x (10.4x) Increase

Market Approach LTM EBITDA 9.8x-18.2x (15.5x) Increase

Total $216,676

(1) LTM means Last Twelve Months, EBITDA means Earnings Before Interest Taxes Depreciation and Amortisation.

(2) Inputs weighted based on fair value of investments in range.

would have the opposite effect. Significant increases and decreases in these inputs in isolation could result in significantly higher or lower fair value measurements.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 3 – Investments continued

Since 31 December 2020, there have been no changes in valuation methodologies

within Level 2 and Level 3 that have had a material impact on the valuation of private

equity investments.

In the case of direct equity investments and income investments, the Investment

Manager does not control the timing of all exits but at the time of investment, typically

expects investment durations to be meaningfully shorter than fund investments.

Therefore, although some fund and direct investments may take 10-15 years to reach

final realisation, the Investment Manager expects the majority of the Group’s invested

capital in the current portfolio to be returned in much shorter timeframes. Generally,

fund investments have a defined term and no right to withdraw. In the case of fund

investments, fund lives are typically 10 years; however, a series of extensions often

mean the lives can extend significantly beyond this. It should be noted that the

Group’s fund investments are legacy assets, non-core to the current strategy and

are in realisation mode.

Note 4 – Credit Facility

As of 31 December 2021, a subsidiary of the Company had an active secured revolving

credit facility with Massachusetts Mutual Life Insurance Company (“MassMutual”).

The MassMutual Facility’s availability was initially up to $200.0 million plus a

$50.0 million accordion subject to certain restrictions with a 10-year borrowing

availability period unless terminated earlier. On 20 March 2020, the accordion feature

was exercised increasing the MassMutual Facility to $250.0 million. On 1 May 2020,

the MassMutual Facility was amended to increase the availability up to $300.0 million.

The 10-year borrowing availability period of the MassMutual Facility expires on

23 December 2029, while the MassMutual Facility matures on 23 December 2031.

The outstanding balances of the MassMutual Facility were nil at 31 December 2021

and $35.0 million at 31 December 2020.

Under the MassMutual Facility, the Group is required to meet certain portfolio

concentration tests and certain loan-to-value ratios not to exceed 45% through its

8th anniversary with step-downs each year thereafter until reaching 0% on its 10th

anniversary and through maturity. In addition, the MassMutual Facility limits the

incurrence of loan-to-value ratios above 45%, additional indebtedness, asset sales,

acquisitions, mergers, liens, portfolio asset assignments, or other matters customarily

restricted in such agreements. The MassMutual Facility defines change in control as a

change in the Company’s ownership structure of certain of its subsidiaries or the event

in which the Group is no longer managed by the Investment Manager or an affiliate.

A change in control would trigger an event of default under the MassMutual Facility.

At 31 December 2021, the Group met all requirements under the MassMutual Facility.

The MassMutual Facility is secured by a security interest in the cash flows from the

underlying investments of the Group.

Under the MassMutual Facility, the interest rate was calculated as the greater of either

LIBOR or 1% plus 2.875% (2.75% prior to 1 May 2020) per annum. The Group is

required to pay a commitment fee calculated as 0.55% per annum on the average daily

balance of the unused facility amount. The Group is subject to a minimum utilisation

of 30% of the facility size, or $90.0 million, beginning 18 months after the closing date

or 23 June 2021. If the minimum utilisation is not met, the Group is required to pay the

amount of interest that would have been accrued on the minimum usage amount, less

any outstanding advances.

The following table summarises the Group’s finance costs incurred and expensed under

the MassMutual Facility for the years ended 31 December 2021 and 2020.

31 December 2021 31 December 2020

Interest expense $548,958 $5,044,555

Undrawn commitment fees 1,335,583 835,328

Servicing fees and breakage costs 75,020 204,066

Amortisation of capitalised debt issuance costs 264,567 247,752

Minimum utilisation fees 1,860,000 –

Total Credit Facility Finance Costs $4,084,128 $6,331,701

As of 31 December 2021 and 31 December 2020, unamortised capitalised debt

issuance costs (included in Other assets on the consolidated balance sheets) were

$2,641,336 and $2,905,903, respectively. Capitalised amounts are being amortised

on a straight-line basis over the terms of the applicable credit facility.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 5 – Zero Dividend Preference Shares (“ZDP Shares”)

As of 31 December 2021, there were 50,000,000 ZDP Shares (the “2022 ZDP Shares”)

outstanding which were issued at a Gross Redemption Yield of 4.00%. The holders

of the 2022 ZDP Shares will have a final capital entitlement of 126.74 pence on the

repayment date of 30 September 2022.

As of 31 December 2021, there were 50,000,000 ZDP Shares (the “2024 ZDP Shares”)

outstanding at a Gross Redemption Yield of 4.25%. The 2024 ZDP Shares were issued

pursuant to the Initial Placing and Offer for Subscription at a price per 2024 ZDP Share

of 100 pence. The holders of the 2024 ZDP Shares will have a final capital entitlement

of 130.63 pence on the repayment date of 30 October 2024.

The 2022 ZDP Shares and 2024 ZDP Shares rank prior to the Class A and Class B Shares

in respect of repayment of the final entitlement. However, they rank behind any

borrowings that remain outstanding. They carry no entitlement to income and their

entire return takes the form of capital. The 2022 ZDP Shares and 2024 ZDP Shares

require the Company to satisfy their respective ZDP Cover Test (the “Test”) prior to

taking certain actions. In summary, the Test requires that, for the 2022 ZDPs, the Gross

Assets divided by liabilities adjusting for the final 2022 ZDP liability should be greater

than 2.75, and that, for the 2024 ZDPs, the Gross Assets divided by the liabilities

adjusting for the final 2022 and 2024 ZDP liabilities should be greater than 2.75.

The details of the restrictions and the Tests are set out in the ZDP Prospectuses.

Unless the Test is satisfied, the Company is not permitted to pay any dividend or

other distribution out of capital reserves. A voluntary liquidation or winding-up of

the Company would require ZDP Shareholder approval where such winding-up is

to take effect prior to the relevant ZDP repayment date.

The following table reconciles the liability for ZDP Shares, which approximates fair value,

for the year ended 31 December 2021 and the year ended 31 December 2020.

ZDP Shares Pounds Sterling U.S. Dollars

Liability, 31 December 2019 £110,310,029 $146,133,209

Net change in accrued interest on 2022 ZDP Shares 2,280,319 2,980,085

Net change in accrued interest on 2024 ZDP Shares 2,274,737 2,972,797

Currency conversion – 4,928,736

Liability, 31 December 2020 £114,865,085 $157,014,827

Net change in accrued interest on 2022 ZDP Shares 2,365,106 3,243,593

Net change in accrued interest on 2024 ZDP Shares 2,364,992 3,243,449

Currency conversion – (1,516,173)

Liability, 31 December 2021 £119,595,183 $161,985,696

The total liability related to the 2022 ZDP Shares was £61,539,442 (equivalent of

$83,352,098) and £59,174,336 (equivalent of $80,888,358) as of 31 December 2021

and 31 December 2020, respectively. The total liability balance related to the 2024 ZDP

Shares was £58,055,741 (equivalent of $78,633,598) and £55,690,749 (equivalent of

$76,126,469) as of 31 December 2021 and 31 December 2020, respectively.

As of 31 December 2021, the 2022 ZDP Shares and the 2024 ZDP Shares were the only

outstanding ZDP Share classes.

ZDP Shares are measured at amortised cost. Capitalised offering costs are being

amortised using the effective interest rate method. The unamortised balance of

capitalised offering costs of the 2022 and 2024 ZDP Shares at 31 December 2021 was

$638,981 and the unamortised balance of capitalised offering costs of the 2022 and

2024 ZDP Shares at 31 December 2020 was $1,094,292.

Note 6 – Forward Foreign Exchange Contracts

The Group utilises rolling forward foreign currency contracts to economically hedge, in

part, the risk associated with the Sterling contractual liability for the issued ZDP Shares

(see note 5).

As of 31 December 2021, the Group does not hold any active forward foreign currency

contracts. The below table presents the Group’s forward foreign currency contracts

held and their effect on the consolidated statements of operations and changes in net

assets during the year ended 31 December 2021.

For the year ended 31 December 2021

Currency

Purchased

Currency

Sold Counterparty Settlement Date

Unrealised

gain (loss)

Realised

gain (loss)

£75,000,000 $97,585,125 Westpac

Banking

Corporation

14 April 2021 $(4,994,199) $5,792,625

Total $(4,994,199) $5,792,625

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 6 – Forward Foreign Exchange Contracts continued

The below table presents the Group’s forward foreign currency contracts held and their

effect on the consolidated statements of operations and changes in net assets during

the year ended 31 December 2020.

For the year ended 31 December 2020

Currency

Purchased

Currency

Sold Counterparty Settlement Date

Unrealised

gain (loss)

Realised

gain (loss)

£65,000,000 $85,898,020 Westpac

Banking

Corporation

7 May 2020 $(496,923) $(5,057,520)

£75,000,000 $93,340,500 Westpac

Banking

Corporation

21 October

2020

– 4,148,250

£75,000,000 $97,585,125 Westpac

Banking

Corporation

14 April 2021 $4,994,199 –

Total $4,497,276 $(909,270)

Note 7 – Income Taxes

The Group is exempt from Guernsey tax on income derived from non-Guernsey sources.

However, certain of its underlying investments generate income that is subject to tax in

other jurisdictions, principally the United States (“U.S.”). The Group has recorded the

following amounts related to such taxes:

31 December 2021 31 December 2020

Current tax expense $756,098 $1,867,420

Deferred tax expense (benefit) – –

Total tax expense (benefit) $756,098 $1,867,420

31 December 2021 31 December 2020

Gross deferred tax assets $11,685,030 $8,730,532

Valuation allowance (9,690,782) (8,726,226)

Net deferred tax assets 1,994,248 4,306

Gross deferred tax liabilities (1,994,248) (4,306)

Net deferred tax assets (liabilities) – –

Current tax expense (benefit) is reflected in Net realised gain/(loss) and deferred tax

expense (benefit) is reflected in Net change in unrealised gain/(loss) on the Consolidated

Statements of Operations and Changes in Net Assets. Net deferred tax liabilities are

related to net unrealised gains and gross deferred tax assets, offset by a valuation

allowance, are related to unrealised losses on investments held in entities that file

separate tax returns.

The Group has no gross unrecognised tax benefits. The Group is subject to examination

by tax regulators under the three-year statute of limitations.

Note 8 – Earnings (Loss) per Share

The computations for earnings (loss) per share for the years ended 31 December 2021

and 2020 are as follows:

2021 2020

Net increase (decrease) in net assets resulting from

operations attributable to the controlling interest $462,202,674 $184,556,235

Divided by weighted average shares outstanding for

Class A Shares and Class B Shares of the controlling interest 46,771,030 46,777,829

Earnings (loss) per share for Class A Shares and

Class B Shares of the controlling interest $9.88 $3.95

In accordance with Article 104(2) of the Commission Delegated Regulation (EU)

No 231/2013 (and the UK version of this regulation which is part of UK law by virtue of

the European Union (Withdrawal) Act 2018), the Group is required to disclose additional

information on the classification of the balances presented within the net realised

gain (loss) on investments and forward foreign exchange contracts, and net change in

unrealised gain (loss) on investments and forward foreign exchange contracts presented

on the consolidated statements of operations and changes in net assets. For the years

ended 31 December 2021 and 2020, the balances include the following:

Classification of Realised Gain (Loss) and Unrealised Gain (Loss)

(1)

31 December 2021 31 December 2020

Realised gain on investments and forward

foreign exchange contracts $245,140,677 $105,698,197

Realised loss on investments and forward

foreign exchange contracts (32,012,361) (13,609,178)

Net realised gain (loss) on investments and forward

foreign exchange contracts $213,128,316 $92,089,019

Unrealised gain on investments and forward

foreign exchange contracts $407,844,305 $233,160,582

Unrealised loss on investments and forward

foreign exchange contracts

(2)

(88,143,459) (99,880,451)

Net unrealised gain (loss) on investments and forward

foreign exchange contracts $319,700,846 $133,280,131

(1) Above amounts are presented gross and, as such, exclude the tax expense (benefit) reported on the

consolidated statements of operations and changes in net assets.

(2) Includes unrealised gain reversal of $68,324,306 and $52,984,908 for the periods ended 31 December

2021 and 2020, respectively, as a result of realised investment transactions.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 9 – Share Capital, Including Treasury Stock

Class A Shareholders have the right to vote on all resolutions proposed at general

meetings of the Company, including resolutions relating to the appointment, election,

re-election and removal of directors. The Company’s Class B Shares, which were

issued at the time of the initial public offering to a Guernsey charitable trust, whose

trustee is First Directors Limited (“Trustee”), usually carry no voting rights at general

meetings of the Company. However, in the event the level of ownership of Class A

Shares by U.S. residents (excluding any Class A Shares held in treasury) exceeds 35%

on any date determined by the directors (based on an analysis of share ownership

information available to the Company), the Class B Shares will carry voting rights in

relation to “Director Resolutions” (as such term is defined in the Company’s articles of

incorporation). In this event, Class B Shares will automatically carry such voting rights to

dilute the voting power of the Class A Shareholders with respect to Director Resolutions

to the extent necessary to reduce the percentage of votes exercisable by U.S. residents

in relation to the Director Resolutions to not more than 35%. Each Class A Share and

Class B Share participates equally in profits and losses. There have been no changes

to the legal form or nature of the Class A Shares nor to the reporting currency of the

Company’s consolidated financial statements (which will remain in U.S. dollars) as a

result of the Main Market quote being in Sterling as well as U.S. dollars.

The following table summarises the Company’s shares at 31 December 2021 and 2020.

31 December 2021 31 December 2020

Class A Shares outstanding 46,761,030 46,761,030

Class B Shares outstanding 10,000 10,000

46,771,030 46,771,030

Class A Shares held in treasury – number of shares 3,150,408 3,150,408

Class A Shares held in treasury – cost $9,248,460 $9,248,460

The Company currently has shareholder authority to repurchase shares in the market,

the aggregate value of which may be up to 14.99% of the Class A Shares in issue

(excluding Class A Shares held in treasury) at the time the authority is granted; such

authority will expire on the date which is 15 months from the date of passing of this

resolution or, if earlier, at the end of the Annual General Meeting (“AGM”) of the

Company to be held in 2022. The maximum price which may be paid for a Class A Share

is an amount equal to the higher of (i) the price of the last independent trade and (ii) the

highest current independent bid, in each case, with respect to the Class A Shares on the

relevant exchange (being the Main Market).

During 2020, the Company purchased and cancelled a total of 38,854 shares of its Class

A stock (0.08% of the issued and outstanding shares as of 31 December 2019) pursuant

to general authority granted by shareholders of the Company and the share buy-back

agreement with Jefferies International Limited. The Company has not purchased any of

its shares during the year ended 31 December 2021.

Note 10 – Management of the Group and Other Related

Party Transactions

Management and Guernsey Administration

The Group is managed by the Investment Manager for a management fee calculated at

the end of each calendar quarter equal to 37.5 basis points (150 basis points per annum)

of the fair value of the private equity and opportunistic investments. For purposes of this

computation, the fair value is reduced by the fair value of any investment for which the

Investment Manager is separately compensated for investment management services.

The Investment Manager is not entitled to a management fee on: (i) the value of any

fund investments held by the Company in NB Funds in respect of which the Investment

Manager or an affiliate receives a fee or other remuneration; or (ii) the value of any

holdings in cash and short-term investments (the definition of which shall be determined

in good faith by the Investment Manager, and shall include holdings in money market

funds (whether managed by the Investment Manager, an affiliate of the Investment

Manager or a third-party manager)). For the years ended 31 December 2021 and 2020,

the management fee expenses were $22,483,005 and $16,659,208, respectively, and

are included in Investment management and services on the consolidated statement

of operations and changes in net assets. If the Company terminates the Investment

Management Agreement without cause, the Company shall pay a termination fee equal

to: seven years of management fees, plus an amount equal to seven times the mean

average incentive allocation of the three performance periods immediately preceding

the termination, plus all underwriting, placement and other expenses borne by the

Manager or affiliates in connection with the Company’s Initial Public Offering.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 10 – Management of the Group and Other Related

Party Transactions continued

The Group pays to Ocorian Administration (Guernsey) Limited (“Ocorian”), an affiliate

of the Trustee, a fee for providing certain administrative functions relating to certain

corporate services and Guernsey regulatory matters affecting the Group. Fees for

these services are paid as invoiced by Ocorian. The Group paid Ocorian $330,096 and

$158,046 for the years ended 31 December 2021 and 2020, respectively, for such

services. The Group also paid MUFG Capital Analytics LLC, an independent third-party

fund administrator, $1,519,263 and $1,140,272 for the years ended 31 December 2021

and 2020, respectively, for administrative and accounting services. The Group paid a

fee of 10 basis points of private equity and opportunistic investments net asset value

to MUFG Capital Analytics. These fees are included in Administration and professional

fees on the consolidated statements of operations and changes in net assets.

Directors’ fees are denominated and paid in Sterling and they are based on each

director’s position on the Company’s board. Effective on 1 October 2021, directors’

fees were increased to account for an inflation adjustment. As of 31 December 2021,

directors’ fees were as follows: Chairman receives £72,500 annually (£18,125 quarterly),

Audit Chairman receives £62,000 annually (£15,500 quarterly), Senior Independent

Director receives £57,000 annually (£14,250 quarterly), and non-executive independent

directors each receive £52,000 annually (£13,000 quarterly). Beginning on 1 July

2021, an additional fee was assessed in the amount of £10,000 annually and payable

to two directors (£5,000 each) for serving as directors on the board of the Guernsey

Subsidiaries of the Company.

For the years ended 31 December 2021 and 2020, the Group paid the independent

directors a total of $361,516 (of which $6,822 related to services provided to the

Guernsey Subsidiaries of the Company) and $294,374 (of which $nil related to services

provided to the Guernsey Subsidiaries of the Company), respectively. On 15 June 2021

the Company appointed an additional independent, non-executive director, to whom

fees paid during the year ended 31 December 2021 were $37,365.

Expenses related to the Investment Manager are included in Investment management

and services on the consolidated statements of operations and changes in net assets.

Administration and professional fees include fees for directors, independent third-party

accounting and administrative services, audit, tax, and assurance services, trustee, legal,

listing and other items.

As of 31 December 2021 and 2020, Investment Management fees payable to the

Investment Manager and its affiliates were $5,801,910 and $4,616,314, respectively.

Special Limited Partner’s Noncontrolling Interest in Subsidiary

An affiliate of the Investment Manager is a Special Limited Partner in a consolidated

partnership subsidiary. At 31 December 2021 and 2020, the noncontrolling interest

of $2,054,635 and $1,525,242, respectively, represented the Special Limited Partner’s

capital contribution to the partnership subsidiary and income allocation.

The following table reconciles the carrying amount of net assets, net assets attributable

to the controlling interest and net assets attributable to the noncontrolling interest at

31 December 2021 and 2020.

Controlling Interest

Noncontrolling

Interest Total

Net assets balance,

31 December 2019 $894,767,554 $1,146,390 $895,913,944

Net increase (decrease) in net assets

resulting from operations 184,556,235 378,852 184,935,087

Dividend payment (27,138,468) – (27,138,468)

Cost of stock repurchased and cancelled

(38,854 shares) (534,072) – (534,072)

Net assets balance,

31 December 2020 $1,051,651,249 $1,525,242 $1,053,176,491

Net increase (decrease) in net assets

resulting from operations 462,202,674 529,393 462,732,067

Dividend payment (33,675,141) – (33,675,141)

Net assets balance,

31 December 2021 $1,480,178,782 $2,054,635 $1,482,233,417

Carried Interest

The Special Limited Partner is entitled to a carried interest in an amount that is, in

general, equal to 7.5% of the Group’s consolidated net increase in net assets resulting

from operations, adjusted by withdrawals, distributions and capital contributions, for a

fiscal year in the event that the Group’s internal rate of return for such period, based on

the NAV, exceeds 7.5%. For the purposes of this computation, the value of any private

equity fund investment in NB Funds in respect of which the Investment Manager or an

affiliate receives a fee or other remuneration shall be excluded from the calculation of

the incentive allocation payable to the Special Limited Partner. If losses are incurred for

a period, no carried interest is earned and such loss amounts are carried forward to be

included in the changes in net assets calculations for future periods. Carried interest

is also accrued and paid on any economic gain that the Group realises on treasury

stock transactions (see note 9). Carried interest is accrued periodically and paid in the

subsequent year. As of 31 December 2021 and 31 December 2020, carried interest of

$37,232,789 and $15,181,843 was accrued, respectively.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 10 – Management of the Group and Other Related Party Transactions continued

Private Equity Investments with NBG Subsidiaries

The Group holds limited partner interests in private equity fund investments and direct investment programs that are managed by subsidiaries of NBG (“NB-Affiliated Investments”).

NB-Affiliated Investments will not result in any duplicative NBG investment management fees and carry charged to the Group. Below is a summary of the Group’s positions in

NB-Affiliated Investments.

NB-Affiliated Investments (dollars in millions) Fair Value Committed Funded Unfunded

2021

NB-Affiliated Programs

NB Alternatives Direct Co-investment Programs $238.2 $275.0 $235.2 $39.8

NB Renaissance Programs 20.8 40.0 25.9 14.1

Marquee Brands 32.7 30.0 26.6 3.4

NB Healthcare Credit Investment Program 1.3 50.0 45.9 4.1

NB Credit Opportunities Program 49.0 50.0 38.0 12.0

NB Specialty Finance Program 38.9 50.0 35.0 15.0

Total NB-Affiliated Investments $380.9 $495.0 $406.6 $88.4

2020

NB-Affiliated Programs

NB Alternatives Direct Co-investment Programs $205.2 $275.0 $233.8 $41.2

NB Renaissance Programs 18.3 40.0 21.2 18.8

Marquee Brands 29.9 30.0 26.0 4.0

NB Healthcare Credit Investment Program 2.6 50.0 45.9 4.1

NB Credit Opportunities Program 47.4 50.0 43.3 6.7

NB Specialty Finance Program 22.8 50.0 21.5 28.5

Total investments in NB-Affiliated Programs $326.2 $495.0 $391.7 $103.3

NB-Affiliated Funds

NB Fund of Funds Secondary 2009 $– $10.4 $10.4 $–

NB Crossroads Fund XVIII 2.7 75.0 63.1 11.9

Total investments in NB-Affiliated Funds $2.7 $85.4 $73.5 $11.9

Total NB-Affiliated Investments $328.9 $580.4 $465.2 $115.2

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Notes to consolidated financial statements continued

Note 11 – Risks and Contingencies

Market Risk

The Group’s exposure to financial risks is both direct (through its holdings of assets and

liabilities directly subject to these risks) and indirect (through the impact of these risks

on the overall valuation of its private equity companies). The Group’s private equity

companies are generally not traded in an active market, but are indirectly exposed to

market price risk arising from uncertainties about future values of the investments held.

The fund investments of the Group each hold a portfolio of investments in underlying

companies. These portfolio company investments vary as to type of security held by

the underlying partnership (debt or equity, publicly traded or privately held), stage of

operations, industry, geographic location and geographic distribution of operations and

size, all of which may impact the susceptibility of their valuation to market price risk.

Market conditions for publicly traded and privately held investments in portfolio

companies held by the partnerships may affect their value in a manner similar to

the potential impact on direct co-investments made by the Group in privately held

securities. The fund investments of the Group may also hold financial instruments

(including debt and derivative instruments) in addition to their investments in portfolio

companies that are susceptible to market price risk and therefore may also affect the

value of the Group’s investment in the partnerships. As with any individual investment,

market prices may vary from composite index movements.

Credit Risk

Credit risk is the risk of losses due to the failure of a counterparty to perform according

to the terms of a contract. The Group may invest in a range of debt securities directly or

in funds which do so. Until such investments are sold or are paid in full at maturity, the

Group is exposed to credit risk relating to whether the issuer will meet its obligations

when the securities come due. Distressed debt securities by nature are securities in

companies which are in default or are heading into default and will expose the Group

to a higher than normal amount of credit risk.

The cash and other liquid securities held can subject the Group to a concentration of

credit risk. The Investment Manager attempts to mitigate the credit risk that exists with

cash deposits and other liquid securities by regularly monitoring the credit ratings of

such financial institutions and evaluating from time to time whether to hold some of the

Group’s cash and cash equivalents in U.S. Treasuries or other highly liquid securities.

Liquidity Risk

Liquidity risk is the risk that the Group will not be able to meet its obligations as they fall

due. The Investment Manager mitigates this risk by monitoring the sufficiency of cash

balances and availability under the Credit Facility (see note 4) to meet expected liquidity

requirements for investment funding and operating expenses.

Contingencies

In the normal course of business, the Group enters into contracts that contain a variety

of representations and warranties which provide general indemnifications. The Group’s

maximum exposure under these arrangements is unknown, as this would involve future

claims that may be made against the Group that have not yet occurred. The Investment

Manager expects the risk of loss to be remote and does not expect these to have a

material adverse effect on the consolidated financial statements of the Group.

Other Matters

The outbreak of COVID-19 in many countries has, among other things, disrupted

global travel and supply chains, and adversely impacted global commercial activity,

the transportation industry and commodity prices in the energy sector. The impact of

this virus has negatively affected and may continue to affect the economies of many

nations, individual companies and the global securities and commodities markets,

including liquidity and volatility. The development and fluidity of this situation precludes

any prediction as to its ultimate impact, which may have a continued adverse effect

on global economic and market conditions. Such conditions (which may be across

industries, sectors or geographies) have impacted and may continue to impact certain

issuers of the securities held by the Company and in turn, may impact the financial

performance of the Company. In addition, the impact of the COVID-19 pandemic

may lead to adverse impacts on valuations and other financial analyses for current and

future periods.

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Note 12 – Financial Highlights

The following ratios with respect to the Class A Shares and Class B Shares have been

computed for the years ended 31 December 2021 and 2020:

Per share operating performance

(based on average shares outstanding during the year)

For the year ended

31 December 2021

For the year ended

31 December 2020

Beginning net asset value $22.49 $19.11

Net increase in net assets resulting from operations:

Net investment income (loss) (1.48) (0.83)

Net realised and unrealised gain (loss) 11.36 4.79

Dividend payment (0.72) (0.58)

Ending net asset value $31.65 $22.49

Total return (based on change in net asset value per share)

For the year ended

31 December 2021

For the year ended

31 December 2020

Total return before carried interest 47.47% 22.40%

Carried interest (3.54%) (1.67%)

Total return after carried interest 43.93% 20.73%

Net investment income (loss) and expense ratios

(based on weighted average net assets)

For the year ended

31 December 2021

For the year ended

31 December 2020

Net investment income (loss), excluding carried interest (2.55%) (2.71%)

Expense ratios:

Expenses before interest and carried interest 2.44% 2.52%

Interest expense 0.55% 1.27%

Carried interest 2.95% 1.75%

Expense ratios total 5.94% 5.54%

Net investment income (loss) is interest income earned net of expenses, including

management fees and other expenses consistent with the presentation within the

consolidated statements of operations and changes in net assets. Expenses do not

include the expenses of the underlying private equity investment partnerships.

Individual shareholder returns may differ from the ratios presented based on differing

entry dates into the Group.

Note 13 – Subsequent Events

On 28 February 2022, the Group paid a dividend of $0.47 per Ordinary Share to

shareholders of record on 21 January 2022.

The recent conflict between Russia and Ukraine could have a negative impact on

the economy and business activity globally and therefore could adversely affect the

performance of the Group’s investments. The rise in energy prices, especially oil and gas,

raw materials, and other commodity prices due to this conflict may fuel further inflation,

which could have a negative effect on the margins and therefore on the valuation of

some of the companies in the portfolio.

The Investment Manager and the Board of directors have evaluated events through

to 25 April 2022, the date the financial statements are available to be issued, and have

determined there were no other subsequent events that require adjustment to,

or disclosure in the financial statements.

Notes to consolidated financial statements continued

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

AIFMD Disclosures

1. 1. CHANGES TO ARTICLE 23(1) AIFMD DISCLOSURES

Directive 2011/61/EU on Alternative Investment Fund Managers (“AIFMD”) requires

certain information to be made available to investors in alternative investment funds

(“AIFs”) before they invest and requires that material changes to this information be

disclosed in the annual report of each AIF.

There have been no material changes (other than those reflected in these financial

statements) to this information requiring disclosure.

2. LEVERAGE

For the purposes of this disclosure, leverage is any method by which an AIF’s exposure

is increased, whether through borrowing of cash or securities, or leverage embedded

in foreign exchange forward contracts or by any other means.

The AIFMD requires that each leverage ratio be expressed as the ratio between an AIF’s

exposure and its net asset value (“NAV”), and prescribes two required methodologies,

the gross methodology and the commitment methodology, for calculating such

exposure. Using the methodologies prescribed under the AIFMD, the leverage of the

Fund as at 30 September 2021 is disclosed below:

Leverage calculated pursuant to the gross methodology: 1.11

Leverage calculated pursuant to the commitment methodology: 1.14

3. LIQUIDITY AND RISK MANAGEMENT SYSTEMS

Current risk profile risk management systems

The portfolio managers and risk management professionals of NB Alternative

Advisers LLC (the “AIFM”) regularly review the investment performance and the

portfolio composition of the Fund in the light of the Fund’s investment objective,

policy and strategy; the principal risks and investment or economic uncertainties that

have been identified as relevant to the Fund; internal risk measures and the interests

and profile of investors.

The AIFM assesses the Fund’s current and prospective need for liquidity on an

on-going basis and ensures that liquidity is available when required. The risk profile

of the Fund as assessed as at 30 September 2021 was as follows:

3.1 Market Risk Profile

The market risk indicators contained in the Annex IV regulatory reporting template were

not applicable to the Fund.

3.2 Counterparty Risk Profile

As at 30 September 2021, the counterparties to which the Fund had the greatest

mark-to-market net counterparty credit exposure, measured as a % of the NAV of

the Fund are listed in the table below:

Ranking Name of Counterparty

NAV percentage of

the total exposure

value of the

counterparty

First counterparty exposure Bank of America Merrill Lynch 2.61

Second counterparty exposure Other 0.31

As at 30 September 2021, the counterparty risk indicators contained in the Annex IV

regulatory reporting template in respect of mark-to- market credit exposure to the

Fund were not applicable.

3.3 Liquidity Profile

3.3.1 Portfolio Liquidity Profile

100 percent of the portfolio is incapable of being liquidated within 365 days.

The Fund had USD 42,356,178 unencumbered cash available to it.

3.3.2 Investor Liquidity Profile

100 percent of investor equity is incapable of being redeemed within 365 days.

Investors do not have any withdrawal or redemption rights in the ordinary course.

However, shares are freely traded on the London Stock Exchange.

Additional Disclosures Required by the

Alternative Investment Fund Managers Directive (Unaudited)

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

3.3.3 Investor Redemption

Does the Fund provide investors with withdrawal / redemption rights in the

ordinary course? No

4. REPORT ON REMUNERATION

The Neuberger Berman Compensation Committee is responsible for the compensation

practices within the Neuberger Berman group, and Neuberger Berman also operates a

structure throughout the group to ensure appropriate involvement and oversight of

the compensation process, so that compensation within the group rewards success

whilst reflecting appropriate behaviours.

Neuberger Berman recognises the need to ensure that compensation arrangements

do not give rise to conflicts of interest, and this is achieved through the compensation

policies as well as through the operation of specific policies governing conflicts

of interests.

Neuberger Berman’s compensation philosophy is one that focuses on rewarding

performance and incentivising employees. Employees at Neuberger Berman may receive

compensation in the form of base salary, discretionary bonuses and/or production

compensation. Investment professionals receive a fixed salary and are eligible for an

annual bonus. The annual bonus for an individual investment professional is paid from

a “bonus pool” made available to the portfolio management team with which the

investment professional is associated. Once the final size of the available bonus pool is

determined, individual bonuses are determined based on a number of factors including

the aggregate investment performance of all strategies managed by the individual

(including the three-year track record in order to emphasize long-term performance),

effective risk management, leadership and team building, and overall contribution to

the success of Neuberger Berman.

Neuberger Berman considers a variety of factors in determining fixed and variable

compensation for employees, including firm performance, individual performance,

overall contribution to the team, collaboration with colleagues across the firm, effective

partnering with clients to achieve goals, risk management and the overall investment

performance. Neuberger Berman strives to create a compensation process that is fair,

transparent, and competitive with the market.

A portion of bonuses may be awarded in the form of contingent or deferred cash

compensation, including under the “Contingent Compensation Plan”, which serves

as a means to further align the interests of employees with the interest of clients,

as well as rewarding continued employment. Under the Contingent Compensation

Plan a percentage of a participant’s compensation is awarded in deferred contingent

form. Contingent amounts take the form of a notional investment based on a portfolio

of Neuberger Berman investment strategies and/or a contingent equity award, and

Neuberger Berman believes that this gives each participant further incentive to operate

as a prudent risk manager and to collaborate with colleagues to maximise performance

across all business areas. The programs specify vesting and forfeiture terms, including

that vesting is normally dependent on continued employment and contingent amounts

can be forfeited in cases including misconduct or the participants participating in

detrimental activity.

The proportion of the total remuneration of the staff of the AIFM attributable to

the Fund, calculated with reference to the proportion of the value of the assets of

the Fund managed by the AIFM to the value of all assets managed by the AIFM,

was USD 2,956,274, representing USD 666,566 of fixed compensation and

USD 2,289,708 of variable compensation. There were 266 of staff of the AIFM

who shared in the remuneration paid by the AIFM.

Compensation by the AIFM to senior management and staff whose actions had a

material impact on the risk profile on the Fund in respect of 2021 was USD 123,885,021

in relation to senior management and USD 1,401,393 in respect of ‘risk takers’. The

compensation figure for senior management has not been apportioned, while the

compensation figure for risk takers has been apportioned by reference to the number

of AIFs whose risk profile was materially impacted by each individual staff member.

Carried interest accrued to the Special Limited Partner for the years ended 31 December

2021 and 31 December 2020 was USD 37,232,789 and USD 15,181,843, respectively.

Carried interest is paid in the year subsequent to the year in which it was accrued.

5. EUROPEAN TAXONOMY REGULATION

Regulation (EU) (2020/852) (the “Taxonomy Regulation”) requires fund managers such

as the AIFM to disclose the extent of their alignment to the Taxonomy Regulation in the

annual report for each fund they manage. As the Fund is not classified as an Article 8 or

Article 9 fund under Regulation (EU) 2019/2088 (“SFDR”), the following statement must

be disclosed in the annual report for the Partnership:

The investments underlying this financial product do not take into account the EU

criteria for environmentally sustainable economic activities

April 2022

AIFMD Disclosures continued

100

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Schedule of investments

Investments Principal Geography Investment Date Description

Fair Value

$ M

AutoStore (OB.AUTO) Europe Jul-19 Leading provider of automation technology 97.4

Constellation Automotive U.K. Nov-19 Provider of vehicle remarketing services 87.3

Agiliti (NYSE: AGTI) U.S. Jan-19 Medical equipment management and services 57.9

Action Europe Jan-20 European discount retailer 51.8

NB Alternatives Credit Opportunities Program Global Sep-16 Diversified credit portfolio 49.0

Material Handling Systems U.S./Europe Apr-17 Systems and solutions utilised in distribution centres 44.7

GFL (NYSE: GFL) U.S /Canada Jul-18 Waste management services 43.6

USI U.S. Jun-17 Insurance brokerage and consulting services 42.0

Kroll Global Mar-20 Multi-national financial consultancy firm 41.0

NB Specialty Finance Program Global Oct-18 Small balance loan portfolio 38.9

Petsmart / Chewy (NYSE: CHWY) U.S. Jun-15 Online and offline pet supplies retailer 36.6

Renaissance Learning U.S. Jun-18 K-12 educational software & learning solutions 33.5

Excelitas U.S. Nov-17 Sensing, optics and illumination technology 32.7

Marquee Brands Global Dec-14 Portfolio of consumer branded IP assets, licensed to third parties 32.7

Cotiviti U.S. Aug-18 Payment accuracy and solutions for the healthcare industry 31.6

Business Services Company

U.S. Oct-17 Business services company 31.6

Advisor Group U.S. Jul-19 Independent broker dealer 31.4

Stamps.com U.S. Oct-21 E-commerce shipping software provider 30.0

BeyondTrust U.S. Jun-18 Cyber security and secure access solutions 27.9

Branded Toy Company

U.S. Jul-17 Specialty toy company 26.5

Stubhub U.S. Feb-20 Ticket exchange and resale company 26.4

Engineering Europe Jul-20 Italy-based provider of systems integration, consulting and outsourcing services 22.6

Staples U.S. Sep-17 Provider of office supplies through a business-to-business platform and retail 21.8

Chemical Guys U.S. Sep-21 Direct to consumer automotive products brand 21.1

Holley (NYSE: HLLY) U.S. Oct-18 Automotive performance company 20.1

Solenis Global Sep-21 Specialty chemicals and services provider 19.5

Telxius Europe Oct-17 Telecommunications infrastructure including fibre-optic cables and telecom towers 19.0

Omega U.S. Feb-17 Leading distributor and assembler of climate control components 18.6

Branded Cities Network U.S. Nov-17 North American advertising media company 18.3

Addison Group U.S. Dec-21 Professional services provider specialising in staffing and consulting services 18.1

Qpark Europe Oct-17 European parking services operator 16.4

FV Hospital Vietnam Jun-17 Leading hospital provider in Vietnam 15.7

Bylight U.S. Aug-17 Provider of IT and technology infrastructure cyber solutions 15.7

Accedian U.S. Apr-17 Network testing equipment and software 15.3

Schedule of investments (unaudited)

101

NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Schedule of investments continued

Investments Principal Geography Investment Date Description

Fair Value

$ M

Monroe Engineering U.S. Dec-21 Industrial products distributor 15.2

Leaseplan Europe Apr-16 Fleet management services 15.1

Solace Systems U.S./Canada Apr-16 Enterprise messaging solutions 15.1

Peraton U.S. May-21 Provider of enterprise IT services serving the US government 15.0

Nextlevel U.S. Aug-18 Designer and supplier of fashion-basic apparel 14.2

Tendam Spain Oct-17 Spanish apparel retailer 13.8

Viant U.S. Jun-18 Outsourced medical device manufacturer 12.6

ZPG U.K. Jul-18 Digital property data and software company 12.5

CH Guenther U.S. May-18 Supplier of mixes, snacks and meals and other value-added food products for consumers 12.4

Lasko Products U.S. Nov-16 Manufacturer of portable fans and ceramic heaters 12.4

Real Page U.S. Apr-21 Provides software solutions to the rental housing industry 12.2

Digital River (Equity) U.S. Feb-15 Digital e-commerce, payments and marketing solutions 12.1

IronSource (NYSE: IS) U.S. Jun-21 Business platform for app developers 11.6

Italian Mid-Market Buyout Portfolio Europe Jun-18 Italian mid-market buyout portfolio 11.3

Exact Netherlands Aug-19 Accounting and ERP software for small to medium-sized businesses 11.2

Plaskolite U.S. Dec-18 Largest manufacturer of thermoplastic sheets in North America 10.1

Hub Global Mar-19 Leading global insurance brokerage 10.0

Verifone Global Aug-18 Electronic payment technology 9.7

Clearent U.S. Jun-18 Credit card payment processing 9.5

MHS U.S. Mar-17 Provider of repair, maintenance and fleet management services 9.4

Centro U.S. Jun-15 Provider of digital advertising management solutions 9.2

Concord Bio India Jun-16 Active pharmaceutical ingredients manufacturer 9.1

Wind River Environmental U.S. Apr-17 Waste management services provider 7.4

Vertiv (NYSE: VRT) U.S. Nov-16 Provider of data centre infrastructure 7.4

Healthcare Services Company NA Feb-18 Healthcare services company 6.9

Edelman U.S. Aug-18 Independent financial planning firm 6.7

ProAmpac U.S. Dec-20 Leading global supplier of flexible packaging 6.3

Healthcare Company – In-home Devices U.S. Jun-18 Provider of pump medications and in-home intravenous infusion 6.2

BackOffice U.S. Dec-17 Data management solutions provider 6.0

Saguaro North America Jul-13 E&P company pursuing unconventional light oil/liquids-rich gas properties 5.8

Milani U.S. Jun-18 Cosmetics and beauty products 5.7

SafeFleet U.S. May-18 Safety and productivity solutions for fleet vehicles 5.6

Carestream U.S. Apr-16 Utilises digital imaging equipment and captures two billion images annually 5.6

Destination Restaurants U.S. Nov-19 U.S. restaurant chain 5.4

Brightview (NYSE: BV) U.S. Dec-13 Commercial landscape and turf maintenance 5.4

BK China U.S. Nov-18 Franchise of over 800 Burger King locations in mainland China 5.2

SolarWinds (NYSE: SWI) U.S. Feb-16 Provider of enterprise-class IT and infrastructure management software 5.1

Vitru (NASDAQ: VTRU) Brazil Jun-18 Post secondary education company 5.0

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Investments Principal Geography Investment Date Description

Fair Value

$ M

Snagajob U.S. Jun-16 Job search and human capital management provider 4.9

Looking Glass U.S. Feb-15 Cyber security technology company 4.7

Mills Fleet Farms U.S. Feb-16 Value-based retailer with 35 stores in the Midwest US 4.3

Husky Injection Molding U.S. Sep-18 Designs and manufacturers injection moulding equipment 4.3

Uber (NYSE: UBER) Global Jul-18 Provides mobility as a service through a technology platform 4.2

Rino Mastrotto Group Europe Apr-20 Leading producer of premium leather 3.9

N-Able (NYSE: NABL) U.S. Jul-21 IT management solutions 3.8

CrownRock Minerals U.S. Aug-18 Minerals acquisition platform 3.7

Catalyst Fund III North America Mar-11 Legacy fund investment targeting North American companies 3.7

Inflection Energy U.S. Oct-14 Dry gas exploration company in the Marcellus Shale 3.6

DBAG Expansion Capital Fund Europe Jan-12 Legacy fund investment targeting investments in Germany 3.6

Innovacare U.S. Apr-20 Operates leading Medicare Advantage plan and Medicaid plan 3.1

CSC Service Works U.S. Mar-15 Provider of outsourced services to laundry & air vending markets 2.9

SICIT Europe Aug-21 Producer of high value-added products such as biostimulants for agriculture 2.4

Undisclosed Financial Services Company* North America May-21 Undisclosed fintech company 2.4

Fiserv (NYSE: FISV) Global Sep-07 Electronic commerce and payments 2.3

Corona Industrials South America Jun-14 Building materials company 2.3

Hydro Europe Apr-20 Largest European manufacturer of hydraulic components 2.2

Stratus Technologies U.S. Apr-14 Technology solutions that prevent downtime of critical applications 1.9

NG Capital Partners I , L.P. Peru May-11 Legacy fund investment targeting investments in Peru 1.9

Aster / DM Healthcare (NSEI: ASTERDM) Middle East Jun-14 Operator of hospitals, clinics and pharmacies 1.8

Taylor Precision Products U.S. Jul-12 Consumer & food service measurement products 1.8

West Marine U.S. Sep-17 Specialty retailer of boating supplies 1.8

Syniverse Technologies U.S. Feb-11 Global telecommunications technology solutions 1.8

Bertram Growth Capital I U.S. Sep-07 Legacy fund investment targeting lower middle-market companies 1.7

Boa Vista (BVMF: BOAS3) South America Nov-12 Second largest credit bureau in Brazil 1.7

Kyobo Life Insurance Co. S. Korea Dec-07 Life insurance in Korea 1.7

Into University Partnerships U.K. Apr-13 Collegiate recruitment, placement and education 1.5

Progenity (NASDAQ: PROG) U.S. Jun-13 Genetic testing company 1.3

Catalina – Equity U.S. Mar-19 Intelligence and personalised digital marketing media provider 1.0

Bertram Growth Capital II U.S. Sep-10 Legacy fund investment targeting lower middle-market companies 0.7

Total Investments 1,579.1

Other Direct Equity Investments (12.1)

Other Debt Investments –

Other Fund Investments 2.3

Total Portfolio 1,569.3

Schedule of investments continued

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Appendix

Equity

It is expected that most of the investments in which the Fund invests will meet the

criteria set forth under FASB ASC 820 Fair Value Measurement (“ASC 820”) permitting

the use of the practical expedient to determine the fair value of the investments.

ASC 820 provides that, in valuing alternative investments that do not have quoted

market prices, but calculate NAV per share or equivalent, an investor may determine fair

value by using the NAV reported to the investor by the underlying investment. To the

extent practical expedient is applicable to an investment, the Manager will value the

Fund’s investment based primarily on the value reported to the Fund by the investment

or by the lead investor of a direct co-investment as of each quarter-end, as determined

by the investments in accordance with its own valuation policies. The Fund generally

uses the NAV reported by the investments as a primary input in its valuation; however,

adjustments to the reported NAV may be made based on various factors, including, but

not limited to, the attributes of the interest held, including the rights and obligations,

any restrictions or illiquidity on such interest, any potential clawbacks by the investments

and the fair value of the investments’ investment portfolio or other assets and liabilities.

The valuation process for investments categorised in Level 3 of the fair value hierarchy

is completed on a quarterly basis and is designed to subject the valuation of Level 3

investments to an appropriate level of consistency, oversight and review. The Manager

has responsibility for the valuation process and the preparation of the fair value of

investments reported in the financial statements. The Manager performs initial and

ongoing investment monitoring and valuation assessments. In determining the fair

value of investments, the Manager reviews periodic investor reports and interim and

annual audited financial statements received from the investments, reviews material

quarter-over-quarter changes in valuation, and assess the impact of macro-market

factors on the performance of the investments.

Debt

Debt investments made on a primary basis are generally carried at cost plus accrued

interest, if any. Investments made through the secondary market are generally marked

based on market quotations, to the extent available, and the Manager will take into

account current pricing and liquidity of the security.

For primary issuance debt investments, the Manager estimates the enterprise value

of each portfolio company and compares such amount to the total amount of the

company’s debt as well as the level of debt senior to the Company’s interest. Estimates

of enterprise value are based on a specific measure (such as EBITDA, free cash flow,

net income, book value or NAV) believed to be most relevant for the given company

and compares this metric in relation to comparable company valuations (market trading

and transactions) based on the same metric. In determining the enterprise value, the

Manager will further consider the companies’ acquisition price, credit metrics, historical

and projected operational and performance, liquidity as well as industry trends, general

economic conditions, scale and competitive advantages along with other factors

deemed relevant. Valuation adjustments are made if estimated enterprise value does

not support the value of the debt security the Company is invested in and securities

senior to the Company’s position.

If the principal repayment of debt and any accrued interest is supported by the

enterprise value analysis described above, the Manager will next consider current

market conditions including pricing quotations for the same security and yields for

similar investments.

For investments made on a secondary basis, to the extent market quotations for the

security are available, the Manager will take into account current pricing and liquidity.

Liquidity may be estimated by the spread between bid and offer prices and other

available measures of market liquidity, including number and size of recent trades and

liquidity scores. If the Manager believes market yields for similar investments have

changed substantially since the pricing of the security, the Manager will perform a

discounted cash flow analysis, based on the expected future cash flows of the debt

securities and current market rates. The Manager will also consider the maturity of the

investment, compliance with covenants and ability to pay cash interest when estimating

the fair value of debt investments.

Valuation methodology

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Appendix continued

This report contains certain forward-looking statements. Forward-looking statements

speak only as of the date of the document in which they are made and relate to

expectations, beliefs, projections (including anticipated economic performance and

financial condition), future plans and strategies, anticipated events or trends and similar

expressions concerning matters that are not historical facts, and are subject to risks

and uncertainties including, but not limited to, statements as to:

– future operating results;

– business prospects and the prospects of the Company’s investments;

– the impact of investments the Company expects to make;

– the dependence of future success on the general economy and its impact on the

industries in which the Company invests;

– the ability of the investments to achieve their objectives;

– differences between the investment objective and the investment objectives of the

private equity funds in which the Company invests;

– the rate at which capital is deployed in private equity investments, co-investments

and opportunistic investments;

– expected financings and investments;

– the continuation of the Investment Manager as the service provider and the continued

affiliation with the Investment Manager of its key investment professionals;

– the adequacy of the Company’s cash resources and working capital; and

– the timing of cash flows, if any, from the operations of the underlying private equity

funds and the underlying portfolio companies.

In some cases, forward-looking statements may be identified by terms such as

“anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,“

“potential,” “should,” “will,” and “would,” or the negative of those terms or

other comparable terminology.

The forward-looking statements are based on the beliefs, assumptions and

expectations of the future performance, taking into account all information currently

available to the Manager. These beliefs, assumptions and expectations are subject to

risks and uncertainties and can change as a result of many possible events or factors,

not all of which are known to the Manager or are within the Manager’s control. If a

change occurs, the business, financial condition, liquidity and results of operations

may vary materially from those expressed in the forward-looking statements. Factors

and events that could cause the business, financial condition, liquidity and results of

operations to vary materially include, among other things, general economic conditions,

securities market conditions, private equity market conditions, the level and volatility

of interest rates and equity prices, competitive conditions, liquidity of global markets,

international and regional political conditions, macro-economic factors (including but

not limited to war, civil unrest, natural disasters, pandemics, or epidemics) regulatory

and legislative developments, monetary and fiscal policy, investor sentiment, availability

and cost of capital, technological changes and events, outcome of legal proceedings,

changes in currency values, inflation, credit ratings and the size, volume and timing of

transactions, as well as other risks described elsewhere in this report and the prospectus

relating to the Company’s IPO and the Company’s prospectus relating to the ZDP Shares.

The foregoing is not a comprehensive list of the risks and uncertainties to which the

Company is subject. Except as required by applicable law, the Manager undertakes no

obligation to update or revise any forward-looking statements to reflect any change in

The Manager’s expectations, or any changes in events, conditions or circumstances on

which the forward-looking statement is based. In light of these risks, uncertainties and

assumptions, the events described by the Company’s forward-looking statements might

not occur. The Manager qualifies any and all of the forward-looking statements by these

cautionary factors.

Forward-looking statements

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Appendix continued

Alternative Performance Measures (“APMs”) is a term defined by the European Securities and Markets Authority as “financial measures of historical or future performance, financial

position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework”.

APMs are used in this report if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company and for

comparing the performance of the Company to its peers, taking into account industry practice.

One-year NAV Total Return Calculation NAV per share (USD) Dividend

Dividend

Compounding

Factor

NAV per Ordinary Share at year end

as per Statement of Financial Position

in December 2020 (A) $22.49 –

Semi-annual dividend per Ordinary

Share declared in respect of year $22.18 $0.31 1.0140

Semi-annual dividend per Ordinary

Share declared in respect of year $28.24 $0.41 1.0145

NAV per Ordinary Share at end of

year as per Statement of Financial

Position In December 2021 (B) $31.65 –

2021 NAV total return per

Ordinary Share (B/A)*C – 1 44.8%

Product of

Dividend

Compounding (C) 1.0287

Total Realisation Calculation $ in millions

Proceeds from sale of private equity investments (A) $281

Distributions from private equity investments (B) $106

Interest and dividend income (C) $2

2021 Portfolio Realisations (A+B+C) $389

Multiple of Capital Calculation

Exit Proceeds from Full Exits Over the Last Five Years (A) $596.1

Invested Capital into Full Exits Over the Last Five Years (B) $208.1

Multiple on Invested Capital (A/B) 2.9x

Three-year NAV Total Return Calculation NAV per share (USD) Dividend (USD)

Dividend

Compounding

Factor

NAV per Ordinary Share at year end

as per Statement of Financial Position

in December 2018 (A) $17.87 –

2019 Semi-annual Dividend $17.79 $0.28 1.0157

2019 Semi-annual Dividend $18.83 $0.29 1.0154

2020 Semi-annual Dividend $18.82 $0.29 1.0154

2020 Semi-annual Dividend $17.99 $0.29 1.0161

2021 Semi-annual Dividend $22.18 $0.31 1.0140

2021 Semi-annual Dividend $28.24 $0.41 1.0145

NAV per Ordinary Share at end of

year as per Statement of Financial

Position in December 2021 (B) $31.65 –

NAV total return per Ordinary

Share (B/A)*C – 1 93.9%

Product of

Dividend

Compounding (C) 1.0947

Alternative performance calculations

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Appendix continued

Three-year Share Price

Total Return Calculation Share price (GBP) Dividend (GBP)

Dividend

Compounding

Factor

Share price at year end as per

the London Stock Exchange

on 31 December 2018 (A) £9.97

2019 Semi-annual Dividend £10.90 £0.21 1.0196

2019 Semi-annual Dividend £11.25 £0.23 1.0207

2020 Semi-annual Dividend £11.95 £0.22 1.0185

2020 Semi-annual Dividend £9.30 £0.23 1.0245

2021 Semi-annual Dividend £11.85 £0.23 1.0191

2021 Semi-annual Dividend £15.30 £0.30 1.0195

Share price at year end as per

the London Stock Exchange on

31 December 2021 (B) £18.50

Share price total return per

Ordinary Share (B/A)*C – 1 109.3%

Product of

Dividend

Compounding (C) 1.1281

Realisation Uplift Calculation

Percentage Uplift Relative to Carrying Value Three Quarters Prior 2,077%

Total Observations 47

Average Uplift 44.2%

Adjusted Commitment Coverage

Cash + Undrawn Committed Credit Facility (A) $417

Adjusted Unfunded Private Equity Exposure (B) $71

Adjusted

Commitment Coverage Ratio (A/B) – 1 584%

* Unfunded commitments are adjusted for amounts the Manager believes are unlikely to be called.

Share Price Yield

Annualised Dividend based on 2021 Dividends (GBP equivalent) (A) £0.53

Share Price on 31 December 2021 (B) £18.50

Adjusted Commitment Coverage Ratio (A/B) – 1 2.9%

One Year Shareholder

Total Return Calculation Share Price (GBP) Dividend

Dividend

Compounding

Factor

Share price at year end as per

the London Stock Exchange

on 31 December 2020 (A) £11.65 –

Semi-annual dividend per ordinary

share declared in respect of year £11.85 £0.23 1.0191

Semi-annual dividend per ordinary

share declared in respect of year £15.30 £0.30 1.0195

Share price at year end as per

the London Stock Exchange

on 31 December 2021 (B) £18.50 –

2021 Share Price Total Return per

Ordinary Share (B/A)*C – 1 65.0%

Product of

Dividend

Compounding (C) 1.0389

Realisation Uplift

Aggregate Valuation at 31 December 2020 $274.5

Aggregate Realisation Value at Sale/IPO $502.4

Average Uplift 83.0%

Multiple of Capital Calculation 2021 Realisations

Total Value from 2021 Exits (A) $528.2

Invested Capital into 2021 Exits (B) $158.3

Multiple on Invested Capital (A/B) 3.3x

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Glossary

Buyout is the purchase of a controlling interest

in a company.

Compound Annual Growth Rate (“CAGR”)

represents the annual growth rate of an investment

over a specified period of time longer than one year.

Carried interest is equivalent to a performance fee.

This represents a share of the profits that will accrue

to the underlying private equity managers, after

achievement of an agreed preferred return.

Co-investment is a direct investment in a company

alongside a private equity fund.

Debt Multiple Ratio of net debt to EBITDA.

Direct equity investments are investments in a

single underlying company.

Discount arises when the Company’s shares trade at a

discount to NAV. In this circumstance, the price that an

investor pays or receives for a share would be less than

the value attributable to it by reference to the underlying

assets. The discount is the difference between the share

price and the NAV, expressed as a percentage of the NAV.

For example, if the NAV was l00p and the share price was

90p, the discount would be 10%.

Dry powder Capital raised and available to invest but

not yet deployed

EBITDA stands for earnings before interest, tax,

depreciation and amortisation, which is a widely used

performance measure in the private equity industry.

Enterprise value is the aggregate value of a company’s

entire issued share capital and net debt.

Exit – Realisation of an investment usually through trade

sale, sale by public offering (including IPO), or sale to a

financial buyer.

FTSE AII-Share Index Total Return is the change in the

level of the FTSE AII-Share Index, assuming that dividends

are re-invested on the ex-dividend date.

Full realisations are exit events (e.g. trade sale, sale by

public offering, or sale to a financial buyer) following

which the residual exposure to an underlying company

is zero or immaterial.

Fund-of-funds Private equity fund that invests in a

portfolio of several private equity funds to achieve,

compared with a direct investment fund, a broader

diversification of risk, including individual private equity

manager risk.

General Partner (“GP”) is the entity managing a

private equity fund that has been established as a limited

partnership. This is commonly referred to as the Manager.

Initial Public Offering (“IPO”) is an offering by a

company of its share capital to the public with a view

to seeking an admission of its shares to a recognised

stock exchange.

Internal Rate of Return (“IRR”) is a measure of the rate

of return received by an investor in a fund. It is calculated

from cash drawn from and returned to the investor

together with the residual value of the investment.

Last Twelve Months (“LTM”) refers to the

timeframe of the immediately preceding 12 months

in reference to a financial metric used to evaluate the

Company’s performance.

Limited Partner (“LP”) is an institution or individual

who commits capital to a private equity fund established

as a limited partnership. These investors are generally

protected from legal actions and any losses beyond the

original investment.

Market capitalisation Share price multiplied by the

number of shares outstanding.

Multiple of cost or invested capital (“MOIC” or

cost multiple) A common measure of private equity

performance, MOIC is calculated by dividing the

fund’s cumulative distributions and residual value

by the paid-in capital.

Net asset value (“NAV”) Amount by which the value of

assets of a fund exceeds liabilities, reflecting the value of

an investor’s attributable holding.

Net asset value per share (“NAV per share”) is the

value of the Company’s net assets attributable to one

Ordinary Share. It is calculated by dividing ‘shareholders’

funds’ by the total number of Ordinary Shares in issue.

Shareholders’ funds are calculated by deducting current

and long-term liabilities, and any provision for liabilities

and charges, from the Company’s total assets.

Net asset value per share Total Return is the change

in the Company’s net asset value per share, assuming

that dividends are re-invested on the ex-dividend date.

Net debt is calculated as the total short-term and long-

term debt in a business, less cash and cash equivalents.

Premium occurs when the share price is higher than the

NAV and investors would therefore be paying more than

the value attributable to the shares by reference to the

underlying assets.

Public to private (“P2P”) or take private, is the

purchase of all of a listed company’s shares and the

subsequent delisting of the company, funded with a

mixture of debt and unquoted equity.

Quoted company is any company whose shares are

listed or traded on a recognised stock exchange.

Glossary (unaudited)

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Glossary continued

Realisation proceeds are amounts received by the

Company from the sale of a portfolio company, which

may be in the form of capital proceeds or income such

as interest or dividends.

Realisations – multiple to cost is the average return

from full and partial exits in the period.

Realisations – uplift to carrying value is the

aggregate uplift on full and partial exits

Share price Total Return is the change in the

Company’s share price, assuming that dividends are

re-invested on the day that they are paid.

Total Return is a performance measure that assumes

the notional re-investment of dividends. This is a measure

commonly used by the listed private equity sector and

listed companies in general.

Undrawn commitments are commitments to funds

that have not yet been drawn down.

Vintage is the year in which a private equity fund makes

its first investment.

Valuation multiples are earnings or revenue multiples

applied in valuing a business enterprise.

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Directors, Advisors and contact information

Board of Directors

William Maltby (Chairman)

Trudi Clark

John Falla

Wilken von Hodenberg

Louisa Symington-Mills

Registered Office

NB Private Equity Partners Limited

P.O. Box 286 Floor 2

Trafalgar Court, Les Banques

St. Peter Port, Guernsey GY1 4LY

Channel Islands

Tel: +44-(0)1481-742-742

Fax: +44-(0)1481-728-452

Investment Manager

NB Alternatives Advisers LLC

325 North St. Paul Street, Suite 4900

Dallas, TX 75201

United States of America

Tel: +1-214-647-9593

Fax: +1-214-647-9501

Email: IR_NBPE@nb.com

Guernsey Administrator

Ocorian Administration (Guernsey) Limited

Trafalgar Court, Les Banques

St. Peter Port, Guernsey GY1 4LY

Channel Islands

Tel: +44-(0)1481-742-742

Fax: +44-(0)1481-728-452

Fund Service and Recordkeeping Agent

MUFG Capital Analytics LLC

325 North St. Paul Street, Suite 4700

Dallas, TX 75201

United States of America

Independent Auditors

KPMG Channel Islands Limited

Glategny Court

Glategny Esplanade

St. Peter Port, Guernsey GY1 1WR

Tel: +44 (0) 1481 721000

Fax: +44 (0) 1481 722373

Depositary Bank

The Bank of New York

101 Barclay Street, 22nd Floor

New York, NY 10286

United States of America

Tel: +1-212-815-2715

Fax: +1-212-571-3050

Paying Agent

Jefferies International Limited

68 Upper Thames Street

London EC4V 3BJ

Tel: +44 (0) 20 7029 8766

Joint Corporate Brokers

Jefferies International Limited

68 Upper Thames Street

London EC4V 3BJ

Tel: +44 (0) 20 7029 8766

Stifel Nicolaus Europe Limited

150 Cheapside

London, EC2V 6ET

Tel: +44 (0) 20 7710 7600

Registrar

Link Market Services (Guernsey) Limited

Mont Crevelt House,

Bulwer Avenue

St Sampsons

GY2 4LH

Guernsey Channel Islands

Directors, Advisors and contact information

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Useful information

Financial calendar

Approximate Timing

Monthly NAV update

Generally 10-15 days after month-end

Annual Financial Report

April

Interim Report

September

Key Information Document Update

Annually, following release of the annual financial report.

All announcements can be viewed on the Company’s

website – www.nbprivateequitypartners.com.

Please register for news alerts on the Company’s

website – https://www.nbprivateequitypartners.com/

en/investors/news-and-alerts.

Events timing

Annual General Meeting

15 June 2022 at 1.45pm

Capital Markets Day

29 September 2022 at 2.00pm

Investor Update Calls

Typically quarterly

Dividends

Semi-annual, paid in February and August

Payment of dividends

Dividends are declared in US dollars and paid in

pounds Sterling, but the Company also offers both a

Currency Election for US shareholders and a dividend

re-investment plan for shareholders who wish to reinvest

their dividends to grow their shareholding. The foreign

exchange rate at which dividends declared will be

converted into pounds Sterling will be at the spot rate

prior to the payment of the dividend.

Dividend information

The dividend documents on the Company’s website

provide information to Shareholders regarding NBPE’s

Dividend Re-investment Plan and Sterling Dividend

Election for UK shareholders as well as election forms for

each of the options. Investors should read the dividend

documentation carefully prior to choosing an election.

If an election is not made, investors will receive cash

dividends in U.S. dollars. Shareholders are advised to

consult with a tax advisor concerning potential tax

consequences of an election.

Anyone acting for the account or benefit of a U.S.

person who elects to receive additional shares through

the dividend re-investment plan would need to sign a

Qualified Purchaser certification, which is available on

the website. The completed forms should be returned

to NBPE’s Investor Relations department by email at

IR_NBPE@nb.com or by the Investment Manager’s

mailing address (see page 110 for contact information).

For further information on the Dividend Re-investment

Plan and Sterling Currency Election, please contact

the Company’s registrar, Link Market Services at

enquiries@linkgroup.co.uk. Please see Link’s mailing

address below.

Registrar services

Communications with shareholders are mailed to the

address held on the share register. Any notifications and

enquiries relating to registered share holdings, including

a change of address or other amendment, should be

directed to Link Asset Services.

Address:

Link Asset Services

PXS 1

34 Beckenham Road

Beckenham BR3 4ZF

http://ips.linkassetservices.com/

Email: enquiries@linkgroup.co.uk

By phone:

UK: +44 (0) 333 300 1950

From overseas: +44 20 333 300 1950. Calls outside

the United Kingdom will be charged at the applicable

international rate. Link Asset Services are open between

9.00am and 5.30pm, Monday to Friday, excluding public

holidays in England and Wales.

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Useful information continued

E-communications for shareholders

NBPE would like to encourage shareholders to receive

shareholder documents electronically, via our website or

email notification instead of hard copy format. This is a

faster and more environmentally friendly way of receiving

shareholder documents.

The online Share Portal from our registrar, Link Asset

Services, provides all the information required regarding

your shares. Through the Share Portal, shareholders

can access details of their holdings in NBPE online.

You can also make changes to address details and

dividend payment preferences online.

Shareholders who wish to receive future communications

via electronic means can register this preference through

the Share Portal (https://www.signalshares.com/).

ISIN/SEDOL numbers

The ISIN, Sedol numbers and ticker for the Company’s

ordinary shares are as follows:

£ share class US$ share class

Ticker: NBPE NBPU

ISIN GG00B1ZBD492 GG00B1ZBD492

SEDOL B28ZZX8 BD9PCY4

Information about the 2022 and 2024 ZDP share classes

2022 2024

Capital entitlement 126.74p 130.63p

Maturity 30 Sept 22 20 Oct 24

GRY at issue 4.0% 4.25%

Ticker NBPP NBP5

ISIN GG00BD0FRW63 GG00BD96PR19

SEDOL BD0FRW6 BD96PR1

AIC

The Company is a member of the Association of

Investment Companies (https://www.theaic.co.uk/).

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How to invest

NBPE is listed on the London Stock Exchange and its

shares can be bought and sold just as those of any

other listed company.

A straightforward way for individuals to purchase and

hold shares in the Company is to contact a stockbroker,

savings plan provider or online investment platform.

NBPE’s shares may be purchased under the ticker

symbol NBPE.

To help people trying to choose a platform, the

Association of Investment Companies (“AIC”)

provide up-to-date information on the platforms

where investment companies are available,

and what you’ll pay to invest on each platform

(https://www.theaic.co.uk/availability-on-platforms).

If you’d prefer to use a financial adviser,

advice on how to find one can be found at

https://www.thepfs.org/yourmoney/find-an-adviser/.

ISA status

The Company’s shares are eligible for tax-efficient

wrappers such as Individual Savings Accounts (“ISAs”),

Junior ISAs, and Self Invested Personal Pensions (“SIPPs”).

Information about ISAs and SIPPs, as well as general

advice on saving and investing, can be found on

the government’s free and independent service at

www.moneyadviceservice.org.uk.

As with any investment into a company listed on the

stock market, you should remember that:

– the value of your investment and the income you get

from it can fall as well as rise, so you may not get back

the amount you invested; and

– past performance is no guarantee of

future performance.

This is a medium- to long-term investment so you

should be prepared to invest your money for at least

five years. If you are uncertain about any aspect of

your decision to invest, you should consider seeking

independent financial advice.

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Endnotes

Assumes re-investment of dividends at

the closing NAV or share price on the

ex-dividend date.

Realisations announced in 2021, not all of which

had closed. $389 million received during 2021;

additional $12 million received from announced

transactions during 2022.

Includes carrying value as of 31 December 2021

of realised and unrealised capital, except IPOs

where multiples are included based on the IPO

price. Returns are presented on a “gross” basis

(i.e. they do not reflect the management fees,

carried interest, transaction costs and other

expenses that may be paid by investors, which

may be significant and may lower returns).

The MSCI World Index captures large and

mid-cap representation across 23 Developed

Markets (DM) countries. With 1,540 constituents,

the index covers approximately 85% of the free

float-adjusted market capitalisation in each

country (MSCI World Factsheet, 31 March 2022,

the latest available). The benchmark performance

is presented for illustrative purposes only to show

general trends in the market for the relevant

periods shown. The investment objectives and

strategies in the benchmark may be different

than the investment objectives and strategies

of NBPE and may have different risk and reward

profiles. A variety of factors may cause this

comparison to be an inaccurate benchmark

for any particular fund and the benchmarks do

not necessarily represent the actual investment

strategy of a fund. It should not be assumed

that any correlations to the benchmark based

on historical returns would persist in the

future. Indexes are unmanaged and are not

available for direct investment. Investing entails

risks, including possible loss of principal. Past

performance is no guarantee of future results.

All performance figures assume re-investment

of dividends at NAV on the ex-dividend date and

reflect cumulative returns over the relevant time

periods shown and are not annualised returns.

Fair value as of 31 December 2021. Statistics

as of 31 December 2021; analysis excludes

public companies. Past performance is no

guarantee of future results. Analysis based on

63 private companies. Data represents 70%

of direct equity investment fair value within

the dataset and excludes public companies.

Seven companies which were new investments

during 2021 were excluded from revenue and

EBITDA growth metrics totalling $131 million of

value, due to anomalous percentage changes

or incomplete information. Portfolio company

operating metrics are based on the most recently

available (unaudited) financial information

for each company and based on as reported

by the lead private equity sponsor. Where

necessary, estimates were used, which include

pro forma adjusted EBITDA and other EBITDA

adjustments, pro forma revenue adjustments,

run-rate adjustments for acquisitions, annualised

quarterly operating metrics and all data is based

on LTM periods as of 31/12/21 and 31/12/20.

LTM Revenue and LTM EBITDA growth rates are

weighted by fair value.

The FTSE All-Share Index represents the

performance of all eligible companies listed

on the London Stock Exchange’s (LSE) main

market, which pass screening for size and

liquidity. The index captures 98% of the UK’s

market capitalisation (FTSE All Share Factsheet,

31 March 2022, the latest available). The

benchmark performance is presented for

illustrative purposes only to show general trends

in the market for the relevant periods shown.

The investment objectives and strategies in the

benchmark may be different than the investment

objectives and strategies of NBPE and may have

different risk and reward profiles. A variety of

factors may cause this comparison to be an

inaccurate benchmark for any particular fund and

the benchmarks do not necessarily represent the

actual investment strategy of a fund. It should

not be assumed that any correlations to the

benchmark based on historical returns would

persist in the future. Indexes are unmanaged

and are not available for direct investment.

Investing entails risks, including possible loss

of principal. Past performance is no guarantee

of future results.

The benchmark performance is presented

for illustrative purposes only to show general

trends in the market for the relevant periods

shown. The investment objectives and strategies

of the benchmarks may be different than

the investment objectives and strategies of a

particular private fund, and may have different

risk and reward profiles. A variety of factors

may cause this comparison to be an inaccurate

benchmark for any particular type of fund and

the benchmarks do not necessarily represent

the actual investment strategy of a fund. It

should not be assumed that any correlations

to the benchmark based on historical returns

would persist in the future. Past performance

is no guarantee of future results. Indexes are

unmanaged and are not available for direct

investment. Source: Private equity data from

Burgiss. Represents pooled horizon IRR and first

quartile return for Global Private Equity Buyout

as of September 30, 2021, which is the latest

data available. Public market data sourced from

Neuberger Berman.

Source: World Bank data from 2000 – 2019.

McKinsey article, “Reports of Corporates

Demise Have Been Greatly Exaggerated”,

for 2020 estimate. Please note the 2021 count

of companies is unavailable.

Includes full exits only over the last five years.

Excludes partial exits, recapitalisations and

IPOs until the stock is fully exited. Exit year for

public companies determined by the final sale

of public shares. Proceeds include funds that

are currently in escrow, but are expected to be

received. Returns are presented on a “gross”

basis (i.e. they do not reflect the management

fees, carried interest, transaction costs and other

expenses that may be paid by investors, which

may be significant and may lower returns).

Analysis includes direct equity investment exits

over the last five years. For investments which

completed an IPO, the value is based on the

closing share price on the IPO date; however

NBPE remains subject to customary IPO lockup

restrictions. Returns are presented on a “gross”

basis (i.e. they do not reflect the management

fees, carried interest, transaction costs and other

expenses that may be paid by investors, which

may be significant and may lower returns).

As of December 31, 2021. Represents aggregate

committed capital since inception in 1987,

including commitments in the process of

documentation or finalisation.

As of September 30, 2021.

Includes Limited Partner Advisory

Committee seats and observer seats for

PIPCO and Secondaries since inception as

of December 31, 2021.

Awarded by UN-supported Principles for

Responsible Investment. Principles for

Responsible Investment Scores. PRI grades

are based on information reported directly by

PRI signatories, of which investment managers

totalled 1,924 for 2020, 1,119 for 2019, 1,120

for 2018 and 935 for 2017. All signatories are

eligible to participate and must complete a

questionnaire to be included. The underlying

information submitted by signatories is not

audited by the PRI or any other party acting on

its behalf. Signatories report on their responsible

investment activities by responding to asset-

specific modules in the Reporting Framework.

Each module houses a variety of indicators that

address specific topics of responsible investment.

Signatories’ answers are then assessed and

results are compiled into an Assessment Report.

The Assessment Report includes indicator scores,

summarising the individual scores achieved and

comparing them to the median; section scores,

grouping similar indicator scores together into

categories (e.g. policy, assurance, governance)

and comparing them to the median; module

scores, aggregating all the indicator scores within

a module to assign one of six performance bands

(from E to A+). Awards and ratings referenced

do not reflect the experiences of any Neuberger

Berman client and readers should not view such

information as representative of any particular

client’s experience or assume that they will have

a similar investment experience as any previous

or existing client. Awards and ratings are not

indicative of the past or future performance

of any Neuberger Berman product or service.

Moreover, the underlying information has not

been audited by the PRI or any other party acting

on its behalf. While every effort has been made

to produce a fair representation of performance,

no representations or warranties are made as

to the accuracy of the information presented,

and no responsibility or liability can be accepted

for damage caused by use of or reliance on

the information contained within this report.

Information about PRI grades is sourced entirely

from PRI and Neuberger Berman makes no

representations, warranties or opinions based

on that information.

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NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

Endnotes continued

Reflects Private Investment Portfolios

and Co-investment (“PIPCO”) Managing

Directors only.

Includes estimated allocations of dry powder

for diversified portfolios consisting of primaries,

secondaries, and co-investments. Therefore,

amounts may vary depending on how mandates

are invested over time.

The Asset Management Awards are designed

to recognise outstanding achievement in the

UK/European institutional and retail asset

management spaces. The Asset Management

Awards’ judging is undertaken by a group of

judges with expertise across the UK/European

institutional and retail asset management spaces.

Each judge reviews submitted entry material and

then scores the entries out of a total of score of

10 providing their reasoning as to why they have

submitted that score. Two judges analyse each

category and the firm with the highest overall

score wins that category. Votes are verified by

Insurance Asset Management’s editorial team.

The award does not constitute an investment

recommendation. NB Private Equity did not pay a

fee to participate. Awards and ratings referenced

do not reflect the experiences of any Neuberger

Berman client and readers should not view such

information as representative of any particular

client’s experience or assume that they will have

a similar investment experience as any previous

or existing client. Awards and ratings are not

indicative of the past or future performance of

any Neuberger Berman product or service.

European Pensions, a leading publication for

pension funds across Europe, launched these

awards to give recognition to and honour the

investment firms, consultancies and pension

providers across Europe that have set the

professional standards in order to best service

European pension funds over the past year.

Judging is undertaken by a group of judges

with expertise across the European pension

fund space. Each judge reviews submitted entry

material and then scores the entries out of a

total of score of 10 providing their reasoning

as to why they have submitted that score.

Two judges analyse each category and the

firm with the highest overall score wins that

category. Votes are verified by the European

Pensions’ editorial team. The award does not

constitute an investment recommendation.

NB Private Equity did not pay a fee to participate.

Awards and ratings referenced do not reflect

the experiences of any Neuberger Berman client

and readers should not view such information

as representative of any particular client’s

experience or assume that they will have a similar

investment experience as any previous or existing

client. Awards and ratings are not indicative of

the past or future performance of any Neuberger

Berman product or service.

Private Equity Wire, a specialist industry

publication in Europe launched these awards

to showcase excellence among industry

participants. The publication partnered

with Bloomberg to create a clearly defined

methodology for selecting the award winners.

Shortlists were created by Bloomberg from

a fund manager universe including all funds

managed by European-domiciled GPs with a

minimum fund size of $100 million. Asset band

grouping thresholds were based on individual

fund sizes – not overall GP assets under

management in a category. Funds were grouped

according to category and vintages from 2013

to 2018 and ranked on the basis of their net IRR.

GPs with more than one fund ranked among

the top performers across multiple vintages

within any category were shortlisted. Winners

from each category were then decided by

majority vote from the publication’s readers.

The award does not constitute an investment

recommendation. NB Private Equity did not pay a

fee to participate. Awards and ratings referenced

do not reflect the experiences of any Neuberger

Berman client and readers should not view such

information as representative of any particular

client’s experience or assume that they will have

a similar investment experience as any previous

or existing client. Awards and ratings are not

indicative of the past or future performance of

any Neuberger Berman product or service.

Source: GFL 2019 Sustainability Report;

public news.

Note: The case study discussed does not

represent all past investments. It should not be

assumed that an investment in the case study

listed was or will be profitable. The information

supplied about the investment is intended to

show investment process and not performance.

Amounts may not add up to 100% due to

rounding. Based on direct investment portfolio

fair value as of 31 December 2021; analysis

excludes third-party funds (which are past their

investment period but which may call capital

for reserves or follow-ons) and funds that are

not deemed ESG integrated by the Manager.

In aggregate these exclusions represent

approximately 3.4% of fair value. Adverse

potential reflects investments made prior to

NBPE adopting its Responsible & Sustainable

Investment Policy in 2020.

Analysis based on 54 private companies which

are valued based on EV/EBITDA metrics. Data

represents 61% of direct equity investment

fair value and excludes public companies. Data

excludes pending 2022 realisations. Portfolio

company operating metrics are based on the

most recently available (unaudited) financial

information for each company and are as

reported by the lead private equity sponsor.

Companies not valued on multiples of trailing

EBITDA and companies which have announced

exits, but not yet closed are excluded from

valuation and leverage statistics.

Note: The case study discussed does not

represent all past investments. It should not be

assumed that an investment in the case study

listed was or will be profitable. The information

supplied about the investment is intended to

show investment process and not performance.

Shared firm resources. Subject to Neuberger

Berman’s policies and procedures, including

certain information barriers within Neuberger

Berman that are designed to prevent

the misuse by Neuberger Berman and its

personnel of material information regarding

issuers of securities that has not been

publicly disseminated.

Preqin.

Content has not been audited.

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NB Private Equity Partners Annual Report 2021STRATEGIC REPORT GOVERNANCE FINANCIALS OTHER

To learn more about NB Private Equity

Partners Limited, visit our website,

or contact your Neuberger Berman

Representative.

ir_nbpe@nb.com

US: +1 214 647 9593

UK: +44 (0) 20 3214 9000

nbprivateequitypartners.com Designed and produced by Friend

www.friendstudio.com

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