UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22816
NB Private Markets Fund III (Master) LLC
(Exact name of registrant as specified in charter)
325 North Saint Paul Street
49th Floor
Dallas, TX 75201
(Address of principal executive offices) (Zip code)
Patrick Deaton, Chief Operating Officer
Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, NY 10104
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-212-476-8800
Date of fiscal year end: March 31
Date of reporting period: March 31, 2024
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
(a)
NB Private Markets Fund III (Master) LLC
Annual Report
For the year ended March 31, 2024
NB Private Markets Fund III (Master) LLC
(Unaudited)
Private Equity Market Update
In 2023 and through the first quarter of 2024, the U.S. economy averted a recession and continued to grow steadily despite many predictions to the contrary. Real GDP growth was reported at 2.5% in 2023 vs. 1.9% in 2022,1 while the unemployment rate remained impressively low at 3.6% in 2023 (flat vs. 2022), which we believe reflected the strength of the labor market and the U.S. economy as a whole.2 This was particularly remarkable in light of the U.S. Federal Reserve’s continued efforts to combat inflation through a series of interest rate hikes that started in 2022 and continued with four additional quarter-point rate hikes to the federal funds rate in 2023. As a result, inflation moderated in the U.S., despite some uncertain data points in the first quarter of 2024.
During the first half of 2023, the U.S. private equity market saw a continuation of the cautious yet strategic investment activity that characterized the latter part of 2022. Total deal volumes declined considerably compared to the prior year, with deal count down 18% and deal volume down 31%.3 While 2023 exit volumes fell 8% and exit count fell 14% vs. the prior year, exit activity saw a gradual improvement in the latter half of 2023, as market conditions began to stabilize with Q4 2023 exit volumes and exit count up 36% and 3%, respectively.3 However, fundraising activity in 2023 remained remarkably steadfast, with total capital raised surpassing $300 billion for the first time, but the number of funds raised fell 15% vs. 2022, reverting in line with pre-pandemic levels and reflecting limited partner ("LP") selectiveness and preference for more scaled and proven managers in a more discerning fundraising environment.4
Looking ahead, we expect several pivotal shifts in the U.S. private equity landscape. The quality of deals has remained high so far in 2024 and is expected to grow as general partners ("GPs") are highly focused on monetizing mature, proven assets that have the potential to generate attractive returns for LPs in the near term. While we anticipate buyers will remain highly selective given the changing macro-economic landscape, GPs may explore many of the other avenues for generating liquidity, including debt refinancings, minority equity sales/recapitalizations, preferred stock, and secondaries. We believe more attractive financing packages, moderated valuations and continued high-quality assets in the market should translate into more meaningful private equity investment during 2024. At the same time, we continue to expect headwinds for fundraising for much of the year, but as distributions from exit activity start to arrive with LPs, we may see a rebound of fundraising later in the year.
Private Equity Investment Activity
In 2023, $405 billion was invested in the U.S. private equity market, marking a continuation of the decline from the $588 billion invested in 2022 and the $726 billion in 2021 and a reversion to a more “normalized” year of capital deployment compared to historical levels closer to ~$400 billion of annual investment activity.5 Deal activity further decreased as GPs faced heightened scrutiny from lenders amidst rising interest rates and a tightening credit market. This led to a shift towards smaller transaction sizes with less leverage and an increased reliance on alternative financing sources beyond traditional bank loans. Middle market deals with enterprise values equal to or less than $1 billion grew from 50% to 55% of total deal volumes compared to the prior year while deals with enterprise values north of $1 billion decreased from 40% to 35% of total deal volumes compared to the prior year. The number of leveraged buyout and add-on transactions declined more than 25% versus the prior year, while growth equity remained more resilient with deal count outpacing leveraged buyout deals for the first time.3
While public to private transactions remained a notable aspect in terms of deal count in 2023 (nearly flat vs. 2022), public to private deal values declined 45% vs. 2022.5 Take private transaction values significantly declined as GPs targeted smaller public companies due to more attractive public valuations and digestible equity check sizes in a debt-constrained environment. Corporate carveout investment activity accelerated in the latter half of the year driven by large corporations looking to optimize their business segments as economic conditions stabilized and GPs pursued attractive valuations. By Q4 2023, corporate carveouts had recovered to 10.7% of leveraged buyouts from a deal count perspective, above the recent Q4 2021 low of 5.8% and the 2017-2019 average of 10.1%.3
1 Bureau of Economic Analysis, as of April 9, 2024.
2 Bureau of Labor Statistics, as of April 9, 2024.
3 PitchBook 2023 Annual US PE Breakdown.
4 Preqin, as of April 4, 2024.
5 PitchBook, as of April 4, 2024.
NB Private Markets Fund III (Master) LLC
(Unaudited)
Private Equity Outlook for 2024
We believe the current environment offers significant opportunity for investors who have capital to invest in this capital-constrained market, and we have seen attractive investment opportunities up and down the capital stack and at various points in the ownership cycle. Looking ahead to the rest of 2024, we expect several pivotal shifts in the private equity landscape, given the focus by GPs on monetizing mature, in demand assets. This has meaningfully increased the number of companies GPs have in market and/or plan to take to market. We anticipate that buyers will continue to prefer high-quality assets with clear opportunities for growth, particularly given the uncertainty surrounding upcoming elections, stickier inflation, and higher interest rates. The market is evolving in terms of exit paths that GPs can pursue for their companies, and full sales are not the only option. In particular, we have seen preferred equity, mid-life co-investments, and GP-led secondary transactions increase in popularity as a means for sellers to get at least partial liquidity to LPs, and we expect those transactions to remain popular for the duration of 2024.
Fund Overview
NB Private Markets Fund III (Master) LLC (the “Fund”) aims to provide investors attractive risk-adjusted returns. The Fund seeks to achieve its objective by investing in private equity funds and other collective investment vehicles or accounts (the “Portfolio Funds”). The Fund is fully committed to a diversified set of Portfolio Funds allocated across investment strategy, geographic focus and vintage year, and at this point in the Fund’s term, the Portfolio Funds’ private equity sponsors are continuing to focus on value maximization and liquidity events. As of March 31, 2024, the Fund was invested across 18 Portfolio Funds investments, including 17 primary investments and 1 secondary investment.
The Fund generated a 0.02% total return on a net asset value (“NAV”) basis for the fiscal year ended March 31, 2024. The Fund generated mixed performance across its Portfolio Funds investments. On the negative performing side, the Fund’s venture and growth equity investments continued to detract from performance in a continuation from the prior fiscal year. On the other hand, the Fund generated positive performance from its position in a European middle market fund. At this point in the Fund’s life, we remain focused on continued value creation in the portfolio and generating distributions for investors.
The portfolio composition, industries and holdings of the Fund are subject to change without notice. The opinions are as of the date of this report and are subject to change without notice.
NB Private Markets Fund III (Master) LLC
(Unaudited)
Fund Performance – Average Annual Total Return Ended 3/31/2024
| 1 Year | 5 Year | 10 Year | Since Inception | |||||||||||||
| NB Private Markets Fund III (Master) LLC1 | 0.02 | % | 14.37 | % | 14.32 | % | 15.27 | % | ||||||||
| MSCI World Index (Net)2 | 25.11 | % | 12.07 | % | 9.39 | % | 9.49 | % | ||||||||
The performance data quoted represent past performance and does not predict future performance. Current performance may be lower or higher than the performance data quoted.
The results shown in the table reflect the reinvestment of distributions, if any. The results do not reflect the effect of taxes a Fund investor (“Investor”) would pay on Fund distributions or on the sale of the Fund’s limited liability company interests (the “Interests”).
Unlike open-ended funds, the Fund’s Interests are not continually offered. The Fund offered its Interests only to persons or entities that are both “accredited investors” as defined in Section 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), and “qualified clients” as defined in Rule 205-3 under the Investment Advisers Act of 1940, as amended, in private placement transactions that do not involve any “public offering” within the meaning of Section 4(a)(2) of, and/or Regulation D under, the Securities Act.
| (1) | The Fund commenced operations on October 25, 2013. |
| (2) | The MSCI World Index captures large and mid-cap representation across 23 Developed Markets countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country. The Developed Markets countries include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK and the US. The MSCI World Index (Net) calculates reinvested dividends net of withholding taxes. The index is unmanaged and does not include fees. Investors may not invest in the index directly. |
NB Private Markets Fund III (Master) LLC
(Unaudited)
Growth of a $50,000 Investment
This graph shows the change in value of a hypothetical $50,000 investment in the Fund over the past 10 fiscal years. The results shown in the graph reflect the reinvestment of Fund distributions, in any. The results do not reflect the effect of taxes and Investor would pay on Fund distributions. The result is compared with a broad-based market index. The market index has not been reduced to reflect any of the fees and costs of investing. The required minimum initial capital commitment by an Investor in the Fund was $50,000. Consistent with Securities and Exchange Commission reporting requirement, the line graph above assumes that an Investor’s $50,000 capital commitment was fully called and invested at the commencement of the Fund’s operations; however, as disclosed to potential investors, their initial capital commitments to the Fund would not be full called and immediately invested. Rather, Investors’ capital commitments are called and drawn down by the Fund as investment opportunities are identified by the Fund’s Investment Adviser over the term of the Fund. As such, the investment growth shown in the line graph above may not reflect the actual performance experience of an Investor invested in the Fund over this time period.
Impact of the Fund’s Distribution Policy
The Fund does not have a policy or practice of maintaining a specified level of distributions to investors. From time to time, the Fund pays distributions at the discretion of the Board of Managers as distributions are received from underlying fund investments due to liquidity events. In general, this practice does not affect the Fund’s investment strategy and may reduce the Fund’s net asset value. Over time, a portion of an Investor’s distribution will be a return of its capital given the Fund has a limited term and will seek to return it available assets to investors. The tax characteristics of an Investor’s distributions will be reflected on its annual Schedule K-1 form.
NB Private Markets Fund III (Master) LLC
For the year ended March 31, 2024
| Index | Page No. |
NB Private Markets Fund III (Master) LLC
Statement of Assets, Liabilities and Members’ Equity – Net Assets
As of March 31, 2024
| Assets | ||||
| Investments, at fair value (cost $37,158,977) | $ | 61,386,527 | ||
| Interest receivable | 14,340 | |||
| Prepaid insurance | 3,341 | |||
| Total Assets | $ | 61,404,208 | ||
| Liabilities | ||||
| Advisory fees payable | $ | 158,931 | ||
| Legal fees payable | 60,465 | |||
| Administration service fees payable | 21,799 | |||
| Audit fees payable | 19,555 | |||
| Due to Affiliate | 202 | |||
| Other payables | 601 | |||
| Total Liabilities | $ | 261,553 | ||
| Commitments and contingencies (Note 5) | ||||
| Members’ Equity - Net Assets | $ | 61,142,655 | ||
| Units of Membership Interests outstanding (unlimited units authorized) | 25,265.58 | |||
| Net Asset Value Per Unit | $ | 2,420.00 |
The accompanying notes are an integral part of these financial statements.
1
NB Private Markets Fund III (Master) LLC
As of March 31, 2024
| Portfolio Funds (A),(B),(D) | Acquisition Type | Acquisition Dates (C) | Geographic Region (E) | Cost | Fair Value | |||||||||
| Buyout/Growth (55.22)% | ||||||||||||||
| Advent International GPE VIII-B, L.P. | Primary | 09/2016 - 02/2022 | North America | $ | 4,067,284 | $ | 6,776,457 | |||||||
| Apollo Investment Fund IV, L.P. | Secondary | 04/2014 | North America | 77,631 | 7,277 | |||||||||
| BV Investment Partners Fund VIII, L.P. | Primary | 08/2014 - 10/2022 | North America | 1,058,566 | 2,488,582 | |||||||||
| Charlesbank Equity Fund VIII, L.P. | Primary | 01/2015 - 02/2024 | North America | 6,047,004 | 7,943,473 | |||||||||
| Green Equity Investors VII, L.P. | Primary | 05/2017 - 08/2023 | North America | 2,116,906 | 4,646,059 | |||||||||
| Lone Star Fund IX (U.S.), L.P. | Primary | 03/2015 - 06/2018 | North America | 943,189 | 1,188,399 | |||||||||
| Platinum Equity Capital Partners III, L.P. | Secondary | 12/2013 - 09/2023 | North America | 376,143 | 959,327 | |||||||||
| Rhone Partners V, L.P. | Primary | 07/2015 - 08/2023 | North America | 4,171,021 | 9,752,991 | |||||||||
| 18,857,744 | 33,762,565 | |||||||||||||
| Special Situations (15.52)% | ||||||||||||||
| Clearlake Capital Partners IV, L.P. | Primary | 09/2015 - 01/2023 | North America | 1,460,527 | 2,701,031 | |||||||||
| Clearlake Opportunities Partners, L.P. | Primary | 09/2015 - 12/2023 | North America | 1,388,994 | 1,898,534 | |||||||||
| Lone Star Real Estate Fund III (U.S.), L.P. | Primary | 05/2014 - 04/2017 | North America | 912,720 | 15,354 | |||||||||
| OrbiMed Royalty Opportunities II, L.P. | Primary | 04/2015 - 03/2023 | North America | 385,008 | 176,563 | |||||||||
| Ridgewood Energy Oil & Gas Fund III, L.P. | Primary | 05/2015 - 09/2023 | North America | 4,312,415 | 3,953,069 | |||||||||
| Walton Street Real Estate Fund VII, L.P. | Primary | 03/2014 - 12/2022 | North America | 1,253,868 | 742,907 | |||||||||
| 9,713,532 | 9,487,458 | |||||||||||||
| Venture Capital (22.28)% | ||||||||||||||
| Lightspeed China Partners II, L.P. | Primary | 06/2014 - 11/2023 | Asia | 1,057,822 | 3,544,909 | |||||||||
| Lightspeed Venture Partners Select, L.P. | Primary | 03/2014 - 05/2019 | North America | 636,540 | 1,258,778 | |||||||||
| Lightspeed Venture Partners X, L.P. | Primary | 07/2014 - 11/2023 | North America | 1,266,320 | 6,167,431 | |||||||||
| Meritech Capital Partners V L.P. | Primary | 09/2014 - 11/2022 | North America | 1,113,720 | 2,652,087 | |||||||||
| 4,074,402 | 13,623,205 | |||||||||||||
| Short Term Investments | Cost | Fair Value | ||||||
| Money Market Fund (7.38)% | ||||||||
| Morgan Stanley Institutional Liquidity Fund Government Portfolio (F) | 4,513,299 | 4,513,299 | ||||||
| 4,513,299 | 4,513,299 | |||||||
| Total Investments (cost $37,158,977) (100.40)% | 61,386,527 | |||||||
| Other Assets & Liabilities (Net) (-0.40)% | (243,872 | ) | ||||||
| Members' Equity - Net Assets (100.00)% | $ | 61,142,655 | ||||||
| (A) | Non-income producing securities, which are restricted as to public resale and illiquid. |
| (B) | Total cost of illiquid and restricted securities at March 31, 2024 aggregated $32,645,678. Total fair value of illiquid and restricted securities at March 31, 2024 was $56,873,228 or 93.02% of net assets. |
| (C) | Acquisition Dates cover from original investment date to the last acquisition date and is required disclosure for restricted securities only. |
| (D) | All percentages are calculated as fair value divided by the Company's Members' Equity - Net Assets. |
| (E) | Geographic Region is based on where a Portfolio Fund is headquartered and may be different from where the Portfolio Fund invests. |
| (F) | The rate is 5.09%, the annualized seven-day yield as of March 31, 2024. |
The accompanying notes are an integral part of these financial statements.
2
NB Private Markets Fund III (Master) LLC
For the year ended March 31, 2024
| Investment Income: | ||||
| Interest income | $ | 241,917 | ||
| Total Investment Income | 241,917 | |||
| Operating Expenses: | ||||
| Advisory fees | 691,952 | |||
| Independent Managers' fees | 198,698 | |||
| Professional fees | 106,495 | |||
| Administration service fees | 85,997 | |||
| Insurance expense | 10,536 | |||
| Other expenses | 10,912 | |||
| Total Operating Expenses | 1,104,590 | |||
| Net Investment Loss | (862,673 | ) | ||
| Net Realized and Change in Unrealized Gain on Investments (Note 2) | ||||
| Net realized gain on investments | 8,078,786 | |||
| Net change in unrealized appreciation on investments | (7,250,799 | ) | ||
| Net Realized and Change in Unrealized Gain on Investments | 827,987 | |||
| Net Decrease in Members’ Equity – Net Assets Resulting from Operations | $ | (34,686 | ) |
The accompanying notes are an integral part of these financial statements.
3
NB Private Markets Fund III (Master) LLC
Statements of Changes in Members’ Equity – Net Assets
For the year ended March 31, 2023
| Total Members | ||||
| Members' committed capital | $ | 87,888,888 | ||
| Members' equity at April 1, 2022 | $ | 86,933,666 | ||
| Capital distributions | (7,945,363 | ) | ||
| Net investment loss | (1,069,005 | ) | ||
| Net realized gain on investments | 5,229,520 | |||
| Net change in unrealized appreciation on investments | (12,289,909 | ) | ||
| Members' equity at March 31, 2023 | $ | 70,858,909 | ||
For the year ended March 31, 2024
| Total Members | ||||
| Members' committed capital | $ | 87,888,888 | ||
| Members' equity at April 1, 2023 | $ | 70,858,909 | ||
| Capital distributions | (9,681,568 | ) | ||
| Net investment loss | (862,673 | ) | ||
| Net realized gain on investments | 8,078,786 | |||
| Net change in unrealized appreciation on investments | (7,250,799 | ) | ||
| Members' equity at March 31, 2024 | $ | 61,142,655 | ||
The accompanying notes are an integral part of these financial statements.
4
NB Private Markets Fund III (Master) LLC
For the year ended March 31, 2024
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net Change in Members’ Equity – Net Assets resulting from operations | $ | (34,686 | ) | |
| Adjustments to reconcile net change in Members’ Equity – Net Assets resulting from operations to net cash provided by operating activities: | ||||
| Contributions to investments in Portfolio Funds | (1,930,538 | ) | ||
| Proceeds received from investments in Portfolio Funds | 13,975,903 | |||
| Net purchases and sales of short term investments | (1,454,373 | ) | ||
| Net realized gain on investments | (8,078,786 | ) | ||
| Net change in unrealized (appreciation) depreciation on investments | 7,250,799 | |||
| Changes in assets and liabilities related to operations | ||||
| (Increase) decrease in interest receivable | (3,132 | ) | ||
| (Increase) decrease in prepaid insurance fees | 1,545 | |||
| Increase (decrease) in advisory fees payable | (17,386 | ) | ||
| Increase (decrease) in legal fees payable | (2,029 | ) | ||
| Increase (decrease) in audit fee payable | (24,345 | ) | ||
| Increase (decrease) in administration service fees payable | (1,552 | ) | ||
| Increase (decrease) in due to Affiliate | 202 | |||
| Increase (decrease) in other payables | (54 | ) | ||
| Net cash provided by (used in) operating activities | 9,681,568 | |||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Distributions to Members | (9,681,568 | ) | ||
| Net cash provided by (used in) financing activities | (9,681,568 | ) | ||
| Net change in cash and cash equivalents | - | |||
| Cash and cash equivalents at beginning of the year | - | |||
| Cash and cash equivalents at end of the year | $ | - | ||
| Noncash activities | ||||
| Receipt of in-kind distributions of securities from Portfolio Funds, at fair value on the date of distribution | $ | 772,113 | ||
| Distributions totaling $13,790 were made to the TE Fund for taxes paid and/or accrued on behalf of the TE Fund. |
The accompanying notes are an integral part of these financial statements.
5
NB Private Markets Fund III (Master) LLC
| For the year ended March 31, 2024 | For the year ended March 31, 2023 | For the year ended March 31, 2022 | For the year ended March 31, 2021 | For the year ended March 31, 2020 | ||||||||||||||||
| Per Unit Operating Performance (1) | ||||||||||||||||||||
| NET ASSET VALUE, BEGINNING OF YEAR | $ | 2,804.56 | $ | 3,440.79 | $ | 4,183.05 | $ | 2,534.38 | $ | 2,512.79 | ||||||||||
| INCOME FROM INVESTMENT OPERATIONS: | ||||||||||||||||||||
| Net investment loss | (34.14 | ) | (42.31 | ) | (58.30 | ) | (46.18 | ) | (44.42 | ) | ||||||||||
| Net realized and unrealized gain (loss) on investments | 32.77 | (279.45 | ) | 752.35 | 1,906.03 | 215.25 | ||||||||||||||
| Net increase (decrease) in net assets resulting from operations | (1.37 | ) | (321.76 | ) | 694.05 | 1,859.85 | 170.83 | |||||||||||||
| DISTRIBUTIONS TO MEMBERS: | ||||||||||||||||||||
| Net change in Members’ Equity - Net Assets due to distributions to Members | (383.19 | ) | (314.47 | ) | (1,436.31 | ) | (211.18 | ) | (149.24 | ) | ||||||||||
| NET ASSET VALUE, END OF YEAR | $ | 2,420.00 | $ | 2,804.56 | $ | 3,440.79 | $ | 4,183.05 | $ | 2,534.38 | ||||||||||
| TOTAL NET ASSET VALUE RETURN (1), (2), (3) | 0.02 | % | (9.44 | )% | 16.59 | % | 74.23 | % | 6.79 | % | ||||||||||
| RATIOS AND SUPPLEMENTAL DATA: | ||||||||||||||||||||
| Members' Equity - Net Assets, end of year in thousands (000's) | $ | 61,143 | $ | 70,859 | $ | 86,934 | $ | 105,687 | $ | 64,033 | ||||||||||
| Ratios to Average Members' Equity - Net Assets: (4) | ||||||||||||||||||||
| Expenses | 1.64 | % | 1.53 | % | 1.48 | % | 1.52 | % | 1.74 | % | ||||||||||
| Net investment loss | (1.28 | )% | (1.41 | )% | (1.48 | )% | (1.51 | )% | (1.65 | )% | ||||||||||
| Portfolio Turnover Rate (5) | 3.04 | % | 3.50 | % | 3.60 | % | 6.36 | % | 12.54 | % | ||||||||||
| INTERNAL RATES OF RETURN: | ||||||||||||||||||||
| Internal Rate of Return (6) | 17.80 | % | 19.07 | % | 21.90 | % | 22.15 | % | 14.00 | % | ||||||||||
| (1) | Selected data for a unit of Membership Interest outstanding throughout each year. |
| (2) | Total investment return, based on per unit net asset value, reflects the changes in net asset value based on the effects of organizational costs, the performance of the Company during the year and assumes distributions, if any, were reinvested. The Company's units are not traded in any market; therefore, the market value total investment return is not calculated. |
| (3) | Total return and the ratios to average members' equity - net assets is calculated for the Company taken as a whole. |
| (4) | Ratios do not reflect the Company's proportional share of the net investment income (loss) and expenses, including any performance-based fees, of the Portfolio Funds. |
| (5) | Proceeds received from investments are included in the portfolio turnover rate. |
| (6) | The Internal Rate of Return is computed based on the actual dates of the cash inflows and outflows since inception and the ending net assets at the end of the year as of each measurement date. |
The accompanying notes are an integral part of these financial statements.
6
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
1. Organization
NB Private Markets Fund III (Master) LLC (the “Company”) is a non-diversified, closed-end management investment company registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The Company was organized as a Delaware limited liability company on March 18, 2013. The Company commenced operations on October 25, 2013. The duration of the Company is ten years from the final subscription closing date (the “Final Closing”), which occurred on October 25, 2014, subject to two two-year extensions which may be approved by the Board of Managers of the Company (the “Board” or the “Board of Managers”). Thereafter, the term of the Company may be extended by consent of a majority-in-interest of its Members as defined in the Company’s limited liability company agreements (the “LLC Agreement”).
The Company’s investment objective is to provide attractive long-term returns. The Company seeks to achieve its objective by investing in private equity funds and other collective investment vehicles or accounts pursuing investment strategies in buyout/growth, venture capital, and special situations (distressed debt, mezzanine, natural resources, opportunistic, real estate, royalties, and other private equity strategies perceived to be attractive by the Registered Investment Adviser) (collectively, the “Portfolio Funds”). Neither the Company nor the Registered Investment Adviser (as defined below) guarantees any level of return or risk on investments and there can be no assurance that the Company will achieve its investment objective. The Portfolio Funds are not registered as investment companies under the Investment Company Act.
NB Private Markets Fund III (TI) LLC (the “TI Fund”) and NB Private Markets Fund III (TE) LLC (the “TE Fund”), each a Delaware limited liability company that is registered under the Investment Company Act as a non-diversified, closed-end management investment company, and NB Private Markets Fund III (Offshore) LDC, a Cayman Islands limited duration company (the “Offshore Fund”, and together with the TI Fund and the TE Fund, the “Feeder Funds”), pursue their investment objectives by investing substantially all of their assets in the Company. The percentage of the Offshore Fund’s shareholders’ capital owned by the TE Fund is 100%. The financial position and results of operations of the Offshore Fund have been consolidated within the TE Fund’s consolidated financial statements. The Feeder Funds have the same investment objective and substantially the same investment policies as the Company (except that the Feeder Funds pursue their investment objectives by investing in the Company).
The Board has overall responsibility to manage and supervise the operations of the Company. The Board exercises the same powers, authority and responsibilities on behalf of the Company as are customarily exercised by directors of a typical investment company registered under the Investment Company Act. The Board has engaged Neuberger Berman Investment Advisers LLC (“NBIA” or “Registered Investment Adviser”) and NB Alternatives Advisers LLC (“NBAA” or “Sub-Adviser” and together with NBIA, the “Adviser”) to provide investment advice regarding the selection of the Portfolio Funds and to manage the day-to-day operations of the Company.
7
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
The Company operates as a vehicle for the investment of substantially all of the assets of the Feeder Funds as members of the Company (“Members”). As of March 31, 2024, the TI Fund’s and the TE Fund’s ownership of the Company’s Members’ contributed capital was 57.21% and 42.79%, respectively.
2. Significant Accounting Policies
The Company meets the definition of an investment company and follows the accounting and reporting guidance as issued through Accounting Standards Codification (“ASC”) 946, Financial Services – Investment Companies. The following is a summary of significant accounting policies followed by the Company in the preparation of its financial statements.
A. Basis of Accounting
The Company’s policy is to prepare its financial statements on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Consequently, income and the related assets are recognized when earned, and expenses and the related liabilities are recognized when incurred. The books and records of the Company are maintained in U.S. dollars.
B. Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates and the differences could be material.
C. Valuation of Investments
The Company computes its net asset value (“NAV”) as of the last business day of each fiscal quarter and at such other times as deemed appropriate by the Adviser in accordance with valuation principles set forth below, or as may be determined from time to time, pursuant to the valuation procedures (the “Procedures”) established by the Board.
The Board has approved the Procedures pursuant to which the Company values its investments. In accordance with Rule 2a-5 under the Investment Company Act, the Board has designated NBIA as its Valuation Designee (the “Valuation Designee”). The Valuation Designee, with assistance from NBAA, is responsible for determining fair value in good faith for the Company’s investments without readily available market quotations, subject to oversight by the Board.
8
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
It is expected that most of the Portfolio Funds in which the Company invests will meet the criteria set forth under the Financial Accounting Standards Board (“FASB”) ASC Topic 820: Fair Value Measurement (“ASC 820”) permitting the use of the practical expedient to determine the fair value of the Portfolio Fund 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 ASC 820 is applicable to a Portfolio Fund, the Adviser generally will value the Company’s investment in the Portfolio Fund based primarily upon the value reported to the Company by the Portfolio Fund as of each quarter-end, determined by the Portfolio Fund in accordance with its own valuation policies.
FASB ASC 820-10 Fair Value Measurements establishes a fair value hierarchy that prioritizes 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). FASB ASC 820 provides three levels of the fair value hierarchy as follows:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access; | |
| Level 2 | Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates, and similar data; | |
| Level 3 | Unobservable inputs for the asset or liability to the extent that relevant observable inputs are not available, representing the Company’s own assumptions about the assumptions that a market participant would use in valuing the asset or liability, and that would be based on the best information available. |
Most Portfolio Funds are structured as closed-end, commitment-based private investment funds to which the Company commits a specified amount of capital upon inception of the Portfolio Fund (i.e., committed capital) which is then drawn down over a specified period of the Portfolio Fund's life. Such Portfolio Funds generally do not provide redemption options for investors and, subsequent to final closing, do not permit subscriptions by new or existing investors. Accordingly, the Company generally holds interests in Portfolio Funds for which there is no active market, although, in some situations, a transaction may occur in the “secondary market” where an investor purchases a limited partner’s existing interest and remaining commitment.
Assumptions used by the Adviser due to the lack of observable inputs may significantly impact the resulting fair value and therefore the Company’s results of operations and financial condition.
9
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
The following table presents the investments carried on the Statement of Assets, Liabilities and Members’ Equity – Net Assets by level within the valuation hierarchy as of March 31, 2024.
| Level 1 | Level 2 | Level 3 | Net Asset Value | Total | ||||||||||||||||
| Assets: | ||||||||||||||||||||
| Buyout/Growth | $ | - | $ | - | $ | - | $ | 33,762,565 | $ | 33,762,565 | ||||||||||
| Special Situations | - | - | - | 9,487,458 | 9,487,458 | |||||||||||||||
| Venture Capital | - | - | - | 13,623,205 | 13,623,205 | |||||||||||||||
| Money Market Fund | 4,513,299 | - | - | - | 4,513,299 | |||||||||||||||
| Totals | $ | 4,513,299 | $ | - | $ | - | $ | 56,873,228 | $ | 61,386,527 | ||||||||||
Significant Unobservable Inputs
As of March 31, 2024, the Company had investments valued at $61,386,527. The fair value of investments valued at $56,873,228 in the Company’s Schedule of Investments have been valued at the unadjusted NAV reported by the managers of the investments.
The estimated remaining life of the Company’s Portfolio Funds as of March 31, 2024 is one to two years, with the possibility of extensions by each of the Portfolio Funds.
D. Cash and Cash Equivalents
Cash and cash equivalents consist primarily of cash and short term investments which are readily convertible into cash and have an original maturity of three months or less. UMB Bank N.A. serves as the Company’s custodian.
Cash and cash equivalents can include deposits in money market accounts, which are classified as Level 1 assets. As of March 31, 2024, the Company held $4,513,299 in an overnight sweep that is deposited into a money market account.
Cash and cash equivalents are subject to credit risk to the extent those balances exceed applicable Securities Investor Protection Corporations (“SIPC”) or Federal Deposit Insurance Corporation (“FDIC”) limitations.
E. Investment Gains and Losses
The Company records distributions of cash or in-kind securities from the Portfolio Funds based on the information from distribution notices when distributions are received. The Company recognizes within the Statement of Operations its share of realized gains or (losses), the Company’s change in net unrealized appreciation/(depreciation) and the Company’s share of net investment income or (loss) based upon information received regarding distributions from managers of the Portfolio Funds. The Company may also recognize realized losses based upon information received from the Portfolio Fund managers for write-offs taken in the underlying portfolio. Change in unrealized appreciation/(depreciation) on investments within the Statement of Operations includes the Company’s share of interest and dividends, realized (but undistributed) and unrealized gains and losses on security transactions, and expenses of each Portfolio Fund.
10
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
The Portfolio Funds may make in-kind distributions to the Company and, particularly in the event of a dissolution of a Portfolio Fund, such distributions may contain securities that are not marketable. While the general policy of the Company will be to liquidate such investment and distribute proceeds to Members, under certain circumstances when deemed appropriate by the Board, a Member may receive in-kind distributions from the Company.
F. Income Taxes
The Company is a limited liability company that is treated as a partnership for tax reporting. Tax basis income and losses are passed through to Members and, accordingly, there is no provision for income taxes reflected in these financial statements. The Company has a tax year end of December 31.
Differences arise in the computation of Members’ equity for financial reporting in accordance with GAAP and Members’ equity for federal and state income tax reporting. These differences are primarily due to the fact that unrealized gains and losses are allocated for financial reporting purposes and are not allocated for federal and state income tax reporting purposes.
The cost of the Portfolio Funds for federal income tax purposes is based on amounts reported to the Company on Schedule K-1 from the Portfolio Funds. As of March 31, 2024, the Company had not received information to determine the tax cost of the Portfolio Funds. Based on the amounts reported to the Company on Schedule K-1 as of December 31, 2022, and after adjustment for purchases and sales between December 31, 2022 and March 31, 2024, the estimated cost of the Portfolio Funds at March 31, 2024, for federal income tax purposes aggregated $27,726,398. The net unrealized appreciation for federal income tax purposes was estimated to be $29,146,830. The net unrealized appreciation consisted of gross unrealized appreciation and gross unrealized depreciation of $30,816,013 and $1,669,183, respectively.
The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. federal, state, local and foreign jurisdictions, where applicable. As of December 31, 2022, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2020 forward (with limited exceptions). FASB ASC 740-10 Income Taxes requires the Adviser to determine whether a tax position of the Company is more likely than not to be sustained upon examination by taxing authorities, based on the technical merits of the position. For tax positions meeting the more likely than not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant taxing authority. The Adviser has reviewed the Company’s tax positions for the current tax year and has concluded that no provision for taxes is required in the Company’s financial statements for the year ended March 31, 2024. The Company recognizes interest and penalties, if any, related to unrecognized tax liabilities as income tax expense in the Statement of Operations. During the year ended March 31, 2024, the Company did not incur any interest or penalties.
11
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
G. Restrictions on Transfers
Interests of the Company (“Interests”) are generally not transferable. No Member may assign, sell, transfer, pledge, hypothecate or otherwise dispose of any of its Interests without the prior written consent of the Board which may be granted or withheld in the Board’s sole discretion, and in compliance with applicable securities and tax laws.
H. Fees of the Portfolio Funds
Each Portfolio Fund will charge its investors (including the Company) expenses, including asset-based management fees and performance-based fees, which are referred to as an allocation of profits. In addition to the Company level expenses shown on the Company’s Statement of Operations, Members of the Company will indirectly bear the fees and expenses charged by the Portfolio Funds. These fees are reflected in the valuations of the Portfolio Funds and are not reflected in the ratios to average net assets in the Company’s Financial Highlights.
I. Company Expenses
The Company bears all expenses incurred in the course of business on an accrual basis, including, but not limited to, the following: Advisory Fees (as defined herein); investment related expenses; legal fees; administration; auditing; tax preparation fees; custodial fees; costs of insurance; registration expenses; Managers’ fees (as defined herein); and expenses of meetings of the Board.
J. Foreign Currency Translation
The Company has foreign investments which require the Company to translate these investments into U.S. dollars. For foreign investments for which the functional currency is not the U.S. dollar, the fair values of the investments are translated into the U.S. dollar equivalent using period end exchange rates. The resulting translation adjustments are recorded as unrealized appreciation or depreciation on investments.
Contributed capital to and distributions received from these foreign Portfolio Funds are translated into the U.S. dollar equivalent using exchange rates on the date of the transaction.
Conversion gains and losses resulting from changes in foreign exchange rates during the reporting period and gains and losses realized upon settlement of foreign currency transactions are reported in the Statement of Operations. The Company does not isolate the portion of the results of operations arising as a result of changes in foreign exchange rates on investment transactions from the fluctuations arising from changes in the fair value of these investments.
3. Advisory Fees, Administration Service Fee and Related Party Transactions
The Registered Investment Adviser provides investment advisory services to the Company and incurs research, travel and other expenses related to the selection and monitoring of Portfolio Funds. Further, the Registered Investment Adviser provides certain management and administrative services to the TI Fund and the TE Fund, including providing office space and other support services, maintaining files and records, and preparing and filing various regulatory materials. In consideration for such services, the Company pays the Registered Investment Adviser an investment advisory fee (the “Advisory Fees”) quarterly in arrears at the annual rate of 1.0% as follows: (i) during the period from the initial closing until the fifth anniversary of the Final Closing, based on the total capital commitments (the “Underlying Commitments”) entered into by the Company with respect to investments in the Portfolio Funds (during this time, the Advisory Fees will not exceed 1.0% of total commitments from Members); and (ii) beginning on the fifth anniversary of the Final Closing and thereafter, based on the net asset value of the Company. For the year ended March 31, 2024, the Company incurred Advisory Fees totaling $691,952.
12
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
Pursuant to an Administrative and Accounting Services Agreement, the Company retains UMB Fund Services, Inc. (the “Administrator”), a subsidiary of UMB Financial Corporation, to provide administration, custodial, accounting, tax preparation and investor services to the Company. In consideration for these services, the Company pays the Administrator a tiered fee between 0.01% and 0.02%, based on the first day of each calendar quarter’s net assets, subject to a minimum quarterly fee. In accordance with the service level agreement additional fees may be charged for out of scope services and quarterly filings made on behalf of the Company. For the year ended March 31, 2024, the Company incurred administration service fees totaling $85,997.
Effective March 11, 2024, the Board consists of six managers (the “Managers”), of which five are not an “interested person” of the Company as defined by Section 2(a)(19) of the Investment Company Act. Compensation to the Board is paid and expensed by the Company on a quarterly basis. The Managers are also reimbursed for out of pocket expenses in connection with providing their services to the Company. For the year ended March 31, 2024, the Company incurred $198,698 in Managers’ fees.
4. Capital Commitments from Members
At March 31, 2024 and 2023, capital commitments from Members totaled $87,888,888. Capital contributions received by the Company with regard to satisfying Member commitments totaled $40,428,888, which represents approximately 46% of committed capital at March 31, 2024 and 2023.
Capital contributions are credited to Members’ equity accounts and units will be issued when paid. Capital contributions are determined based on a percentage of commitments. During the years ended March 31, 2024 and 2023, the Company did not issue any units.
The net profits or net losses of the Company are allocated to Members in a manner that takes into account the amount of cash that would be distributed based upon a hypothetical liquidation, such that it would follow the distributions outlined below.
Distributions are made of available cash or other net investment proceeds to Members at such times and in such amounts as determined by the Board in its sole discretion and in accordance with Members’ respective percentage interests, as defined in the LLC Agreement. As of March 31, 2024, the Company had distributed $67,631,853 to the Feeder Funds.
13
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
5. Capital Commitments of the Company to Portfolio Funds
As of March 31, 2024, the Company had total capital commitments of $82,623,765 to the Portfolio Funds with remaining unfunded commitments to the Portfolio Funds totaling $11,906,672 as listed below:
| Assets: | Unfunded Commitment | |||
| Buyout/Growth | $ | 6,276,258 | ||
| Special Situations | $ | 5,460,413 | ||
| Venture Capital | $ | 170,000 | ||
| Total | $ | 11,906,672 | ||
6. Description of the Portfolio Funds
Due to the nature of the Portfolio Funds, the Company generally cannot liquidate its positions in the Portfolio Funds except through distributions from the Portfolio Funds, which are made at the discretion of the Portfolio Funds. The Company has no right to demand repayment of its investment in the Portfolio Funds.
The following Portfolio Funds represent 5% or more of Members’ Equity – Net Assets of the Company. Thus, the Portfolio Funds’ investment objectives are disclosed below.
Rhone Partners V, L.P. represents 15.95% of Members’ Equity – Net Assets of the Company. The objective of Rhone Partners V, L.P. is to make portfolio investments consisting of controlling and noncontrolling equity and equity-related interests in operating businesses.
Charlesbank Equity Fund VIII, L.P. represents 12.99% of Members’ Equity – Net Assets of the Company. The objective of Charlesbank Equity Fund VIII, L.P. is to make investments in equity, debt, convertible securities and other interests in business organizations, to provide capital for acquisition and expansion of growing companies.
Advent International GPE VIII-B, L.P. represents 11.08% of Members’ Equity – Net Assets of the Company. The objective of Advent International GPE VIII-B L.P. is to make investments in businesses in the development stage and other small to medium sized companies based primarily in Europe and North America.
Lightspeed Venture Partners X, L.P. represents 10.09% of Members’ Equity – Net Assets of the Company. Lightspeed Venture Partners X, L.P. invests in securities (whether debt, equity, or any combination thereof) issued primarily in start-ups, early-stage, development, and expansion-stage companies engaged in business in the technology area.
14
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
Green Equity Investors VII, L.P. represents 7.60% of Members’ Equity – Net Assets of the Company. Green Equity Investors VII, L.P. seeks to make control-oriented equity investments in lower middle market companies in the information and business services and communications sectors.
Ridgewood Energy Oil & Gas Fund III, L.P. represents 6.47% of Members’ Equity – Net Assets of the Company. Ridgewood Energy Oil & Gas Fund III, L.P. was organized to own, manage, supervise and dispose of investments, primarily in oil and gas exploration, development and production properties located in the United States offshore waters in the Gulf of Mexico.
Lightspeed China Partners II, L.P. represents 5.80% of Members’ Equity – Net Assets of the Company. The objective of Lightspeed China Partners II, L.P. is to make investments that are primarily in early stages or growth stage companies, which will typically be headquartered in, have operations in, sell products to, or have some other nexus to, China.
7. Indemnifications
In the normal course of business, the Company enters into contracts that provide general indemnifications. The Company’s maximum exposure under these agreements is dependent on future claims that may be made against the Company, and therefore cannot be established; however, based on the Registered Investment Adviser’s experience, the risk of loss from such claims is considered remote.
Many of the Portfolio Funds’ partnership agreements contain provisions that allow them to recycle or recall distributions made to the Company. Accordingly, the unfunded commitments disclosed under Note 5 reflect both amounts undrawn to satisfy commitments and distributions that are recallable, as applicable.
8. Concentrations of Market, Credit, Liquidity, Industry, Currency and Capital Call Risk
Due to the inherent uncertainty of valuations, estimated values may differ significantly from the values that would have been used had a ready market for the securities existed, and the difference could be material. The Company’s investments are subject, directly or indirectly, to various risk factors including market, credit, industry, currency and capital call risk. Certain investments are made internationally, which may subject the investments to additional risks resulting from political or economic conditions in such countries or regions and the possible imposition of adverse governmental laws or currency exchange restrictions affecting such countries or regions. Market risk represents the potential loss in value of financial instruments caused by movements in market variables, such as interest and foreign exchange rates and equity prices. The Company may have a concentration of investments, as permitted by its registration statement, in a particular industry or sector. Investment performance of the sector may have a significant impact on the performance of the Company. The Company’s investments are also subject to the risk associated with investing in private equity securities. The investments in private equity securities are illiquid, can be subject to various restrictions on resale, and there can be no assurance that the Company will be able to realize the value of such investments in a timely manner if at all.
15
NB Private Markets Fund III (Master) LLC
Notes to the Financial Statements
March 31, 2024
The Company believes that its liquidity and capital resources are adequate to satisfy its operational needs as well as the continuation of its investment program.
This portfolio strategy presents a high degree of business and financial risk due to the nature of underlying companies in which the Portfolio Funds invest, which may include entities with little operating history, minimal capitalization, operations in new or developing industries, and concentration of investments in one industry or geographical area.
If the Company defaults on its commitment or fails to satisfy capital calls, it will be subject to significant penalties, including the complete forfeiture of the Company’s investment in the Portfolio Fund. This may impair the ability of the Company to pursue its investment program, force the Company to borrow or otherwise impair the value of the Company’s investments (including the complete devaluation of the Company). In addition, defaults by Members on their commitments to the Company, may cause the Company to, in turn, default on its commitment to a Portfolio Fund. In this case, the Company, and especially the non-defaulting Members, will bear the penalties of such default as outlined above. While the Registered Investment Adviser has taken steps to mitigate this risk, there is no guarantee that such measures will be sufficient or successful.
9. Subsequent Events
The Company has evaluated all events subsequent to March 31, 2024, through the date these financial statements were available to be issued and has determined that there were no subsequent events that require disclosure
16
KPMG LLP
Two Financial Center
60 South Street
Boston, MA 02111
Report of Independent Registered Public Accounting Firm
To the Members and Board of Managers
NB Private Markets Fund III (Master) LLC:
Opinion on the Financial Statements
We have audited the accompanying statement of assets, liabilities and members’ equity - net assets of NB Private Markets Fund III (Master) LLC (the Company), including the schedule of investments, as of March 31, 2024, the related statements of operations and cash flows for the year then ended, the statements of changes in members’ equity - net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Company as of March 31, 2024, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of March 31, 2024, by correspondence with underlying fund managers and portfolio companies or by other appropriate auditing procedures where replies from underlying fund managers and portfolio companies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor for one or more NB Private Markets/NB Crossroads Private Markets investment companies since 2016.
Boston, Massachusetts
May 30, 2024
| KPMG LLP, a Delaware limited liability partnership and a member firm of | ||
| the KPMG global organization of independent member firms affiliated with | ||
| KPMG International Limited, a private English company limited by guarantee. |
17
NB Private Markets Fund III (Master) LLC
Investment Program (Unaudited)
March 31, 2024
INVESTMENT PROGRAM (UNAUDITED)
Investment Objective and Process
The investment objective of NB Private Markets Fund III (Master) LLC (the "Master Fund") is to provide attractive long-term returns to investors. The Master Fund seeks to achieve this objective through investments in a diversified portfolio of professionally managed private equity underlying funds ("Portfolio Funds") and select direct investments in portfolio companies. The Master Fund primarily invests in newly formed private equity Portfolio Funds. The Master Fund may also invest, on an opportunistic basis, in secondary investments in private equity Portfolio Funds acquired from investors in such funds.
Each of NB Private Markets Fund III (TI) LLC and NB Private Markets Fund III (TE) LLC (each, a "Feeder Fund") invests substantially all of its assets in the Master Fund. The Master Fund has the same investment objective and substantially the same investment policies and restrictions as those of the Feeder Funds. This form of investment structure is commonly known as a "master/feeder" structure.
Neuberger Berman Investment Advisers LLC (the "Investment Adviser") serves as investment adviser of the Master Fund and provides management services to the Feeder Funds. The Investment Adviser has engaged NB Alternatives Advisers LLC (the "Sub-Adviser" and, together with the Investment Adviser, the "Adviser") to make investment decisions on behalf of the Master Fund. The Investment Adviser and the Sub-Adviser are indirect wholly-owned subsidiaries of Neuberger Berman Group LLC. None of the Master Fund, the Feeder Funds or the Adviser guarantees any level of return or risk on investments and there can be no assurance that the Master Fund's investment objective will be achieved.
Principal Risk Factors
Information on the risk factors associated with investments in the Master Fund is incorporated herein by reference from the section entitled "Investment Program – Principal Risk Factors" in NB Private Markets Fund III (TI) LLC's annual report to shareholders for the fiscal year ended March 31, 2024, as filed with the Securities and Exchange Commission (File No. 811-22814) (the "TI Feeder Annual Report").
18
NB Private Markets Fund III (Master) LLC
Supplemental Information (Unaudited)
March 31, 2024
Proxy Voting and Portfolio Holdings
A description of the Company’s policies and procedures used to determine how to vote proxies relating to the Company’s portfolio securities, as well as information regarding proxy votes cast by the Company (if any) during the most recent twelve month period ended June 30, is available without charge, upon request, by calling the Company at 212-476-8800 or on the website of the Securities and Exchange Commission (the “SEC”) at http://www.sec.gov. The Company did not receive any proxy solicitations during the year ended March 31, 2024.
The Company files a complete schedule of portfolio holdings on Form N-PORT with the SEC for the first and third quarters of each fiscal year. The Company’s N-PORT filings are available in the EDGAR database on the SEC’s website at www.sec.gov or by calling Neuberger Berman at 212-476-8800.
19
NB Private Markets Fund III (Master) LLC
Board of Managers of the Company (Unaudited)
March 31, 2024
Information pertaining to the Board of Managers of the Company is set forth below.
| Name, Position(s) Held, Address, and Year of Birth |
Term of Office and Length of Time Served |
Principal Occupation During Past 5 Years |
Number of Funds in Fund Complex* Overseen by Manager |
Other Directorships Held by Manager During Past 5 Years |
| Disinterested Managers | ||||
|
Virginia G. Breen, Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since Inception | Private investor and board member of certain entities (as listed herein) | 18 | Trustee/Director of UBS Registered Fund Complex (41 funds); Director of Calamos Fund Complex (37 funds); Director of Paylocity Holding Corp.; Former Director of JLL Income Property Trust, Inc. (2004 - 06/23); Former Director of Tech and Energy Transition Corporation (2021 - 03/23). |
|
Alan Brott, Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since Inception | Consultant (1991-2018) | 18 | Director of Grosvenor Registered Multi- Strategy Funds (3 funds); Director of Hedge Fund Guided Portfolio Solution (part of the Grosvenor complex); Former Director of Stone Harbor Investment Funds (8 funds) (2007-2022); Manager of Man FRM Alternative Multi-Strategy Fund LLC (8/09 to 8/21). |
|
Victor F. Imbimbo, Jr., Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since Inception | President and CEO of Caring Today, LLC, an information and support resource for the family caregiver market (since 2008). | 18 | Former Manager of Man FRM Alternative Multi-Strategy Fund LLC (10/00 to 8/21). |
|
Thomas F. McDevitt, Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since Inception | Managing Partner of Edgewood Capital Partners and President of Edgewood Capital Advisors (since 2002). | 18 | Former Director of Jones Lang LaSalle Property Trust, Inc. (12/04 to 06/15). |
|
Thomas G. Yellin, Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since Inception | President of The Documentary Group (since 2006). | 18 | Director of Grosvenor Registered Multi-Strategy Funds (3 funds); Director of Hedge Fund Guided Portfolio Solution (part of the Grosvenor complex); Former Manager of Man FRM Alternative Multi-Strategy Fund LLC (8/09 to 8/21). |
| Interested Manager | ||||
|
James D. Bowden**, Director
1290 Avenue of the Americas New York, NY 10104 |
Term Indefinite – Since April 2023 | Managing Director, NBAA (2015 - 2023) | 18 | None. |
* The ‘‘Fund Complex’’ consists of NB Private Markets Fund III (Master) LLC, NB Private Markets Fund III (TI) LLC, NB Private Markets Fund III (TE) LLC, NB Crossroads Private Markets Fund IV (TI) – Client LLC, NB Crossroads Private Markets Fund IV (TE) – Client LLC, NB Crossroads Private Markets Fund IV Holdings LLC, NB Crossroads Private Markets Fund V Holdings LP, NB Crossroads Private Markets Fund V (TE) LP, NB Crossroads Private Markets Fund V (TE) Advisory LP, NB Crossroads Private Markets Fund V (TI) LP, NB Crossroads Private Markets Fund V (TI) Advisory LP, NB Crossroads Private Markets Fund VI Holdings LP, NB Crossroads Private Markets Fund VI LP, NB Crossroads Private Markets Fund VI Advisory LP, NB Crossroads Private Markets Fund VII Holdings LP, NB Crossroads Private Markets Fund VII LP, NB Crossroads Private Markets Fund VII Advisory LP and NB Private Markets Access Fund LLC.
** Mr. Bowden is deemed to be an “interested person” (as defined in the Investment Company Act) of the Company because of his prior position at NBAA. Mr. Bowden does not serve on the Board’s Audit or Nominating Committees.
20
NB Private Markets Fund III (Master) LLC
Officers of the Company (Unaudited)
March 31, 2024
Information pertaining to the officers of the Company is set forth below.
| Name, Address* and Age | Position(s) Held with the Company |
Term of Office and Length of Time Served |
Principal Occupation During Past 5 Years |
| Officers who are not Managers | |||
| Peter von Lehe (1968) |
President | Term — Indefinite; Length — since 2023 | Head of Investments Solutions and Strategy, Managing Director, NBAA, since 2006. |
| Mark Bonner (1977) |
Treasurer | Term — Indefinite; Length — since inception | Managing Director, Neuberger Berman LLC, since 2024, and Director of Private Equity Finance, since 2015. Formerly, Senior Vice President, Bank of America; Merrill Lynch Alternative Investments LLC (2006-2015). |
| Claudia A. Brandon (1956) |
Executive Vice President and Secretary | Term — Indefinite; Length — since inception | Senior Vice President, Neuberger Berman LLC, since 2007. |
| Patrick Deaton (1978) |
Chief Operating Officer | Term — Indefinite; Length — since 2023 | Managing Director, Neuberger Berman LLC, since 2018, Chief Operating Officer, NBAA, since 2023. Formerly, Chief Administrative Officer, NBAA (2021-2023), Chief Operating Officer and Head of Operational Due Diligence – NBAIM (2010-2021). |
| Sarah Doane (1989) |
Assistant Treasurer | Term — Indefinite; Length — since 2020 | Senior Vice President, Neuberger Berman LLC, since 2024, and Vice President of Private Equity Finance, since 2016. |
| Savonne Ferguson (1973) |
Chief Compliance Officer | Term — Indefinite; Length — since 2018 | Senior Vice President, Neuberger Berman LLC, Chief Compliance Officer (Mutual Funds) and Associate General Counsel, NBIA, since November 2018. |
21
NB Private Markets Fund III (Master) LLC
Officers of the Company (Unaudited)
March 31, 2024
Information pertaining to the officers of the Company is set forth below.
| Name, Address* and Age | Position(s) Held with the Company |
Term of Office and Length of Time Served |
Principal Occupation During Past 5 Years |
| Officers who are not Managers | |||
| Corey A. Issing (1978) |
Chief Legal Officer (only for purposes of sections 307 and 406 of the Sarbanes-Oxley Act of 2002) | Term — Indefinite; Length — since inception | General Counsel and Head of Compliance – Mutual Funds since 2016 and Managing Director, NBIA, since 2017. |
| Sheila James (1965) |
Assistant Secretary | Term — Indefinite; Length — since inception | Senior Vice President, Neuberger Berman LLC, since 2023. Formerly, Vice President, Neuberger Berman LLC (2008-2023). |
| Maura Reilly Kennedy (1978) |
Vice President | Term — Indefinite; Length — since 2023 | Managing Director, NBAA, since 2018. Formerly Principal, NBAA (2014-2018). |
| Brian Kerrane (1969) |
Vice President | Term — Indefinite; Length — since inception | Managing Director, Neuberger Berman LLC, since 2013; Chief Operating Officer – Mutual Funds and Managing Director, NBIA, since 2015. |
| Josephine Marone (1963) |
Assistant Secretary | Term — Indefinite; Length — since inception | Senior Paralegal, Neuberger Berman LLC, since 2007. |
| Michael Smith (1984) |
Vice President | Term — Indefinite; Length — since 2023 | Managing Director, NBAA, since 2022. Formerly Principal, NBAA (2018-2022). |
* The business address of each listed person is 1290 Avenue of the Americas, New York, NY 10104, except for Mark Bonner, Sarah Doane and Michael Smith, whose business address is 53 State Street, 13th Floor, Boston, MA 02109.
All officers of the Company are employees and/or officers of the Registered Investment Adviser. Officers of the Company are elected by the Managers and hold office until they resign, are removed or are otherwise disqualified to serve.
Alternative investments are sold to qualified investors only by a Confidential Offering Memorandum. An investment in an alternative investment fund is speculative and should not constitute a complete investment program. The information presented in this report is current as of the date noted, is for information purposes only and does not constitute an offer to sell or a solicitation of an offer to buy interests in the Company. This is not, and under no circumstances is to be construed as, an offer to sell or a solicitation to buy any of the securities or investments referenced, nor does this information constitute investment advice or recommendations with respect to any of the securities or investments used. Past performance is no guarantee of future results. Additional information is available upon request.
22
| FACTS WHAT DOES NEUBERGER BERMAN DO WITH YOUR PERSONAL INFORMATION? Why? Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully to understand what we do. What? The types of personal information we collect and share depend on the product or service you have with us. This information can include: Social Security numbers, dates of birth and other numerical identifiers Names and addresses Driver’s licenses, passports and other identification documents Usernames and passwords Internet protocol addresses and other network activity information Income, credit history, credit scores, assets, transaction history and other financial information When you are no longer our customer, we continue to share your information as described in this notice. How? All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Neuberger Berman chooses to share; and whether you can limit this sharing. Reasons we can share your personal information Does Neuberger Berman share? Can you limit this sharing? For our everyday business purposes— such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus Yes No For our marketing purposes— to offer our products and services to you Yes No For joint marketing with other financial companies No We don’t share For our affiliates’ everyday business purposes— information about your transactions and experiences Yes No For our affiliates’ everyday business purposes— information about your creditworthiness No We don’t share For nonaffiliates to market to you No We don’t share Questions? Call 646.497.4003 or 866.483.1046 (toll-free) Email NBPrivacyOfficer@nb.com Rev 01/20 24-16696-4 C1.1 P31 |
| Page 2 Who we are Who is providing this notice? Entities within the Neuberger Berman family of companies, mutual funds, and private investment funds. What we do How does Neuberger Berman protect my personal information? To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include physical, electronic and procedural safeguards, including secured files and buildings. We restrict access to customer information to those employees who need to know such information in order to perform their job responsibilities. How does Neuberger Berman collect my personal information? We collect your personal information directly from you or your representatives, for example, when you seek advice about your investments give us your contact or income information provide account information or open an account direct us to buy or sell securities, or complete other transactions visit one of our websites, portals or other online locations We may also collect your personal information from others, such as credit bureaus, affiliates, or other companies. Why can’t I limit all sharing? Federal law gives you the right to limit only sharing for affiliates’ everyday business purposes—information about your creditworthiness affiliates from using your information to market to you sharing for nonaffiliates to market to you State laws and individual companies may give you additional rights to limit sharing. Definitions Affiliates Companies related by common ownership or control. They can be financial and nonfinancial companies. Our affiliates include companies with a Neuberger Berman name; financial companies, such as investment advisers or broker dealers; mutual funds, and private investment funds. Nonaffiliates Companies not related by common ownership or control. They can be financial and nonfinancial companies. Nonaffiliates we share with can include companies that perform administrative services on our behalf (such as vendors that provide data processing, transaction processing, and printing services) or other companies such as brokers, dealers, or counterparties in connection with servicing your account. Joint marketing A formal agreement between nonaffiliated financial companies that together market financial products or services to you. Neuberger Berman doesn’t jointly market. 24-16696-4 C1.1 P32 |
(b) Not applicable to the Registrant.
Item 2. Code of Ethics.
The Registrant (or the “Fund”) has adopted a code of ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. During the period covered by this report, there were no substantive amendments to or waivers from the code of ethics. A copy of the Code of Ethics is filed herewith as an exhibit pursuant to Item 13 (a)(1). The Code of Ethics is also available, without charge, by calling 1-800-877-9700 (toll-free).
Item 3. Audit Committee Financial Expert.
The Board of Managers (the “Board”) of the Registrant has determined that Alan Brott possesses the technical attributes to qualify as the audit committee's financial expert and is an "independent" Manager pursuant to paragraph (a)(2) of Item 3 on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
KPMG, LLP serves as independent registered public accounting firm to the Registrant.
(a) Audit Fees
The aggregate fees, billed for professional services rendered by the Registrant's principal accountant for the audit of the Registrant's annual financial statements and security counts required under Rule 17f-2 of the Investment Company Act of 1940 (the "1940 Act") for the fiscal years ended March 31, 2023 and March 31, 2024 were $43,900 and $45,900, respectively.
(b) Audit-Related Fees
There were no audit-related services provided by the principal accountant to the Registrant for the last fiscal year.
(c) Tax Fees
The principal accountant for the audit of the Registrant's annual financial statements billed no fees for tax compliance, tax advice or tax planning services to the Registrant during the last fiscal year.
(d) All Other Fees
The principal accountant billed no other fees to the Registrant during the last fiscal year.
(e) (1) During its regularly scheduled periodic meetings, the Registrant's audit committee will pre-approve all audit, audit-related, tax and other services to be provided by the principal accountants of the Registrant. The audit committee has delegated pre-approval authority to its Chairman for any subsequent new engagements that arise between regularly scheduled meeting dates provided that any such pre-approved fees are presented to the audit committee at its next regularly scheduled meeting.
(e) (2) None of the services described in paragraphs (b)-(d) above were approved by the Registrant’s audit committee pursuant to the “de minimis exception” in paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The amount of non-audit fees that were billed by the Registrant's accountant for services rendered to:
(i) the Registrant, and (ii) the Registrant's investment adviser and any control person of the adviser that provides ongoing services to the Registrant for the fiscal years ended March 31, 2023 and ended March 31, 2024, were $0 and $0, respectively.
(ii) The amount of non-audit fees that were billed by the Registrant's accountant for services rendered to: (i) the Registrant, and (ii) the Registrant's investment adviser and any control person of the adviser that provides ongoing services to the Registrant for the fiscal years ended March 31, 2023 and ended March 31, 2024, were $0 and $0, respectively.
(h) The Registrant's audit committee has considered whether the provision of non-audit services that may be rendered to the Registrant's investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. No such services were rendered.
(i) Not applicable.
(j) Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments.
(a) The Schedule of Investments is included as part of the report to members filed under Item 1 of this form.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Subject to the Board’s oversight, the Registrant has delegated responsibility to vote proxies related to the securities held in the Fund’s portfolio to its Investment Adviser, Neuberger Berman Investment Advisers LLC (“NBIA”). Under this authority, NBIA is required by the Board to vote proxies related to portfolio securities in the best interests of the Registrant and its partners. The Board permits NBIA to contract with a third party to obtain proxy voting and related services, including research of current issues.
NBIA has implemented written Proxy Voting Policies and Procedures (“Proxy Voting Policy”) that are designed to reasonably ensure that NBIA votes proxies prudently and in the best interest of its advisory clients for whom NBIA has voting authority, including the Registrant. The Proxy Voting Policy also describes how NBIA addresses any conflicts that may arise between its interests and those of its clients with respect to proxy voting.
NBIA’s Governance and Proxy Committee (“Proxy Committee”) is responsible for developing, authorizing, implementing and updating the Proxy Voting Policy, administering and overseeing the proxy voting process and engaging and overseeing any independent third-party vendors as voting delegates to review, monitor and/or vote proxies. In order to apply the Proxy Voting Policy noted above in a timely and consistent manner, NBIA utilizes Glass, Lewis & Co. (“Glass Lewis”) to vote proxies in accordance with NBIA’s voting guidelines. In instances where a material conflict has been determined to exist, NBIA will generally instruct that such shares be voted in the same proportion as other shares are voted with respect to a proposal, subject to applicable legal, regulatory and operational requirements.
NBIA retains final authority and fiduciary responsibility for proxy voting. NBIA believes that this process is reasonably designed to address material conflicts of interest that may arise between NBIA and a client as to how proxies are voted.
In the event that an investment professional at NBIA believes that it is in the best interests of a client or clients to vote proxies in a manner inconsistent with NBIA’s proxy voting guidelines, the Proxy Committee will review information submitted by the investment professional to determine that there is no material conflict of interest between NBIA and the client with respect to the voting of the proxy in that manner. In the event that the Proxy Committee determines that such vote will not present a material conflict, the Proxy Committee will make a determination whether to vote such proxy as recommended by the NB investment professional.
If the Proxy Committee determines that the voting of a proxy as recommended by the investment professional would not be appropriate, the Proxy Committee shall: (i) take no further action, in which case Glass Lewis shall vote such proxy in accordance with the voting guidelines; (ii) disclose such conflict to the client or clients and obtain written direction from the client as to how to vote the proxy; (iii) suggest that the client or clients engage another party to determine how to vote the proxy; (iv) instruct that such shares be voted in the same proportion as other shares are voted with respect to a proposal, subject to applicable legal, regulatory and operational requirements; or (v) engage another independent third party to determine how to vote the proxy.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) Identification of Portfolio Manager(s) or Management Team Members and Description of Role of Portfolio Manager(s) or Management Team Member - As of March 31, 2024:
Neuberger Berman Private Equity’s investment team is responsible for the day-to-day management of the Fund and, along with other members of NB Private Equity, serves as the day-to-day interface with the members of the Investment Committee, which serve as the Fund’s Portfolio Fund Managers. The Investment Committee and other senior private equity investment personnel also have responsibility for managing private equity investments made on behalf of third-party investors, sourcing new investment opportunities, performing due diligence on all new investment opportunities and monitoring existing investments.
The Investment Committee is responsible for the development, selection, and ongoing monitoring and realization of investments:
Kent Chen, CFA, is a Managing Director of Neuberger Berman and leader of the firm’s private equity efforts in the Asia Pacific region. He is a member of the Private Investment Portfolios and Co-Investment Investment Committee. Mr. Chen joined Neuberger Berman in May 2015 from the Hong Kong Monetary Authority (HKMA) after 17 years of central banking career in various positions including Deputy Chief Representative of the HKMA’s New York Office and Advisor to the Executive Director for China at the International Monetary Fund in Washington D.C. From 2008, Mr. Chen helped to establish the HKMA’s private equity program, comprising of global buyout, Asia private equity and global energy investments. Before joining the HKMA in 1998, Mr. Chen was Head of China Research at Daiwa Securities in Hong Kong covering the Chinese stocks market with a focus on infrastructure, energy and power equipment stocks. Mr. Chen has been awarded the Chartered Financial Analyst designation and earned a MPA from Columbia University, MBA from University of Hull and BS in Economics from University of London.
Paul Daggett, CFA is a Managing Director of Neuberger Berman and a senior member of the firm's Private Investment Portfolios and Co-Investments team. He is a member of the Private Investment Portfolios and Co-Investment Investment Committee. Prior to joining Neuberger Berman in 2004, Mr. Daggett worked in the European Equity Derivatives Group at JPMorgan Chase & Co. He holds an MBA from the Cox School of Business at Southern Methodist University and a BEng, with honors, in Aeronautical Engineering from the University of Bristol. Mr. Daggett is a Fellow of the Institute of Chartered Accountants in England and Wales (FCA) and holds the Chartered Financial Analyst designation.
Michael Kramer is a Managing Director of Neuberger Berman. He is a member of the Private Investment Portfolios and Co-Investment, Credit Opportunities, and Marquee Brands Investment Committees as well as a member of the Board of Directors for Marquee Brands. Before joining Neuberger Berman in 2006, Mr. Kramer was a vice president at The Cypress Group, a private equity firm with $3.5 billion under management. Prior thereto, he worked as an analyst at PaineWebber Incorporated. Mr. Kramer holds an MBA from Harvard Business School and a BA, cum laude, from Harvard College.
David Morse is a Managing Director of Neuberger Berman and is the Global Co-Head of Private Equity Co-Investments. He is also a member of the Private Investment Portfolios and Co-Investment Investment Committee and Private Debt Investment Committee. Mr. Morse joined Lehman Brothers in 2003 as a Managing Director and principal in the Merchant Banking Group where he helped raise and invest Lehman Brothers Merchant Banking Partners III L.P. Prior to joining Lehman Brothers, Mr. Morse was a founding Partner of Hampshire Equity Partners (and its predecessor entities). Founded in 1993, Hampshire is a middle-market private equity and corporate restructuring firm with $825 million of committed capital over three private equity funds. Prior to Hampshire, Mr. Morse worked in GE Capital’s Corporate Finance Group providing one-stop financings to middle-market buyouts. Mr. Morse began his career in 1984 in Chemical Bank’s middle-market lending group. Mr. Morse holds an MBA from the Tuck School of Business at Dartmouth College and a BA in Economics from Hamilton College. Mr. Morse is a former member of the MBA Advisory Board of the Tuck School and of the Alumni Council of Hamilton College, and is a current member of the Board of Trustees of the Berkshire School.
Joana Rocha Scaff is a Managing Director of Neuberger Berman, Head of Europe Private Equity and a member of the Private Investment Portfolio and Co-Investment and Strategic Capital Investment Committees. She is also a member of Neuberger Berman’s ESG Advisory Committee. Ms. Rocha Scaff has over 20 years of experience in financial markets, the majority of which in private equity investing and prior to that in investment banking. She has been with the firm since 2005. Prior to NB Private Equity, Ms. Rocha Scaff worked in the investment banking division of Lehman Brothers, and prior to that at Citigroup Global Markets and Espirito Santo Investment Bank. She advised on corporate transactions including M&A, financial restructurings and public equity and debt offerings in the United States, Europe and Brazil. Ms. Rocha Scaff received her M.B.A. from Columbia Business School and her B.A. in Business Management and Administration from the Universidade Catolica of Lisbon. Ms. Rocha Scaff is the current Chair of the LP Committee of the BVCA – British Private Equity Association and a member of the Limited Partner Advisory Committee of multiple European private equity funds.
Jonathan D. Shofet is the Global Head of the firm’s Private Investment Portfolios and Co-Investments group and is a Managing Director of Neuberger Berman. He is a member of the Private Investment Portfolios and Co-Investment Investment Committee. Prior to joining Neuberger Berman in 2005, Mr. Shofet was a member of the Lehman Brothers Private Equity division, focusing on mid-through late-stage equity investments primarily in the technology, communications and media sectors. Prior to that, Mr. Shofet was a member of the Lehman Brothers Investment Banking division, where he focused on public and private financings, as well as strategic advisory in the real estate, technology and utility sectors. Mr. Shofet has been, or currently sits, on the Limited Partner Advisory Boards of a number of funds including those managed by Amulet Capital, Beacon Capital Partners, Castlelake, Cerberus Institutional Partners, Clearlake Capital, ComVest Investment Partners, DFW Capital, Oak Hill Capital Partners, Platinum Equity, Thomas H. Lee Partners and Vector Capital Partners. He has also been a Board Observer for several private companies. Mr. Shofet holds a B.A. from Binghamton University, where he graduated summa cum laude, Phi Beta Kappa.
Brien Smith is a Managing Director of Neuberger Berman and Senior Advisor of the Neuberger Berman Private Equity Division. He is a member of the Private Investment Portfolios and Co-Investment Investment Committee, as well as the Private Debt Investment Committee. Brien is also a member of Neuberger Berman’s Operating Committee, the firm’s Investment Risk and Operational Risk Committees and was also formerly Chief Operating Officer of the Neuberger Berman Private Equity Division. Prior to joining Neuberger Berman in 2001, he worked in the middle market private equity firm Mason Best Company, L.P., and its affiliates. He began his career at Arthur Andersen & Co. Brien is a life member of the Red McCombs School of Business Advisory Council at the University of Texas at Austin. He also currently serves on the board of the Texas Exes Alumni Association and chairs its Investment Committee. He serves and has served on a number of other boards of directors. He received a Master’s in Professional Accounting and a BBA from the University of Texas at Austin.
David Stonberg is a Managing Director of Neuberger Berman and the Global Co-Head of Private Equity Co-Investments. He is also a member of the Private Investment Portfolios and Co-Investment Investment Committee, as well as the Renaissance, Secondary, Real Estate Secondary and Strategic Capital Investment Committees. Before joining Neuberger Berman in 2002, Mr. Stonberg held several positions within Lehman Brothers’ Investment Banking Division including providing traditional corporate and advisory services to clients as well as leading internal strategic and organizational initiatives for Lehman Brothers. Mr. Stonberg began his career in the Mergers and Acquisitions Group at Lazard Frères. Mr. Stonberg holds an MBA from the Stern School of New York University and a BSE. from the Wharton School of the University of Pennsylvania.
Elizabeth Traxler is a Managing Director of Neuberger Berman and a senior member of the private equity investment team. She is a member of the Private Investment Portfolios and Co-Investment Investment Committee, as well as the Secondary Investment Committee. Prior to joining Neuberger Berman in 2008, Ms. Traxler was at Wachovia Capital Partners (now known as Pamlico Capital), where she focused on making direct growth equity and buyout investments across a broad range of industries. Ms. Traxler also worked at Wachovia Securities in the Leveraged Capital Group, which provided senior and mezzanine debt for private equity-backed transactions. She is currently a Board Observer for several private companies and Advisory Board member for a number of private equity funds. Ms. Traxler received an MBA from the Kellogg School of Management at Northwestern University and a BA, cum laude, in Economics from Vanderbilt University.
Anthony Tutrone is the Global Head of NB Alternatives and a Managing Director of Neuberger Berman. He is a member of all Neuberger Berman Private Equity’s Investment Committees. Anthony is also a member of Neuberger Berman's Partnership, Operating, and Asset Allocation Committees. Prior to Neuberger Berman, from 1994 to 2001, Anthony was a Managing Director and founding member of The Cypress Group, a private equity firm focused on middle market buyouts that managed approximately $3.5 billion of commitments. Anthony began his career at Lehman Brothers in 1986, starting in Investment Banking and in 1987 becoming one of the original members of the firm’s Merchant Banking Group. This group managed a $1.2 billion private equity fund focused on middle market buyouts. He has been a member of the board of directors of several public and private companies and has sat on the advisory boards of several private equity funds. Anthony earned an MBA from Harvard Business School and a BA in Economics from Columbia University.
Peter von Lehe, JD, is the Head of Investment Solutions and Strategy and is a Managing Director of Neuberger Berman. He is also a member of the Private Investment Portfolios and Co-Investment Investment Committee, as well as the Athyrium, Marquee Brands and Renaissance Investment Committees. Mr. von Lehe sits on the Limited Partner Advisory Boards of a number of investment relationships globally on behalf of Neuberger Berman funds. Previously, Mr. von Lehe was a Managing Director and Deputy Head of the Private Equity Fund of Funds unit of Swiss Reinsurance Company. At Swiss Re, Mr. von Lehe was responsible for investment analysis and product structuring and worked in both New York and Zurich. Before that, he was an attorney with the law firm of Willkie Farr & Gallagher LLP in New York focusing on corporate finance and private equity transactions. He began his career as a financial analyst for a utility company, where he was responsible for econometric modeling. Mr. von Lehe received a BS with Honors in Economics from the University of Iowa and a JD with High Distinction, from the University of Iowa College of Law. He is a member of the New York Bar.
Jacquelyn Wang is a Managing Director of Neuberger Berman and a senior member of the private equity investment team. She is a member of the Private Investment Portfolios and Co-Investment Investment Committee. Ms. Wang joined Neuberger Berman in 2007, focusing on direct Co-investments, Primary Investments and Secondary Investments. Prior to joining Neuberger Berman, Ms. Wang worked in Corporate Development at Verizon Communications focused on corporate M&A. Previously, Ms. Wang worked at Spectrum Equity Investors, where she was responsible for sourcing, executing and evaluating buyout and growth equity investments in media, technology and telecom. Ms. Wang began her career in the investment banking division of Lehman Brothers advising on corporate transactions in the communications and media industries. Ms. Wang received an MBA from The Wharton School of the University of Pennsylvania and a BA with honors from The Johns Hopkins University.
Patricia Miller Zollar is a Managing Director of Neuberger Berman and a leader of the firm’s Private Investment Portfolios practice. She is a member of the Private Investment Portfolios and Co-Investment Investment Committee. Additionally, Ms. Zollar sits on the limited partner advisory boards of a number of funds. Before rejoining Neuberger Berman in 2004, Ms. Zollar was a vice president in the Asset Management Division of Goldman Sachs. Ms. Zollar began her career as a Certified Public Accountant in the Audit Division of Deloitte & Touche. She received her MBA from Harvard Business School and her BS, with highest distinction, from North Carolina A&T State University, where she is Chairperson Emeritus of the Board of Trustees and the recipient of an honorary Doctorate degree. Ms. Zollar is a member of the Executive Leadership Council, the Harvard Business School Alumni Board and was a former member of the executive board of the National Association of Investment Companies. She serves as Vice Chairman of The Apollo Theater and a member of the Investment Committee of the Robert Wood Johnson Foundation’s Board of Trustees.
(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member - As of March 31, 2024:
The following table lists the number and types of accounts, other than the Fund, managed by the Fund’s Portfolio Management Team and assets under management in those accounts, as of March 31, 2024. Please note that registered investment companies in a "master-feeder" structure are counted as one investment company for purposes for determining the number of accounts managed.
(a)(2) Other Accounts Managed by Portfolio Manager(s) or Management Team Member - As of March 31, 2024:
The following table lists the number and types of accounts, other than the Fund, managed by the Fund’s Portfolio Management Team and assets under management in those accounts, as of March 31, 2024. Please note that registered investment companies in a "master-feeder" structure are counted as one investment company for purposes for determining the number of accounts managed.
Kent Chen
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Paul Daggett
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Michael Kramer
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
David Morse
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Joana P. Rocha Scaff
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 35 | $ | 26,199,893,319 | 130 | $ | 52,640,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 35 | $ | 26,199,893,319 | 130 | $ | 52,640,192,542 | ||||||||
Jonathan D. Shofet
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Brien Smith
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
David S. Stonberg
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 39 | $ | 31,828,703,819 | 131 | $ | 52,715,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 39 | $ | 31,828,703,819 | 131 | $ | 52,715,192,542 | ||||||||
Elizabeth Traxler
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 35 | $ | 26,199,893,319 | 130 | $ | 52,640,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 35 | $ | 26,199,893,319 | 130 | $ | 52,640,192,542 | ||||||||
Anthony D. Tutrone
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 39 | $ | 31,828,703,819 | 131 | $ | 52,715,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 39 | $ | 31,828,703,819 | 131 | $ | 52,715,192,542 | ||||||||
Peter J. von Lehe
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Jacquelyn Wang
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Patricia Miller Zollar
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number | Total Assets | Number | Total Assets | Number | Total Assets | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
| Registered Investment Companies Managed |
Pooled Vehicles Managed | Other Accounts Managed | ||||||||||||||
| Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | Number with Performance- Based Fees | Total Assets with Performance-Based Fees | |||||||||||
| 5 | $ | 2,453,126,629 | 32 | $ | 19,233,958,219 | 128 | $ | 51,815,192,542 | ||||||||
Potential Conflicts of Interests
Real, potential or apparent conflicts of interest may arise should members of the Portfolio Management Team have day-to-day portfolio management responsibilities with respect to more than one fund. Portfolio Management Team members may manage other accounts with investment strategies similar to the Registrant, including other investment companies, pooled investment vehicles and separately managed accounts. Fees earned by the Investment Adviser may vary among these accounts and Portfolio Management Team members may personally invest in these accounts. These factors could create conflicts of interest because the Portfolio Management Team members may have incentives to favor certain accounts over others, that could result in other accounts outperforming the Registrant. A conflict may also exist if a Portfolio Management Team member identifies a limited investment opportunity that may be appropriate for more than one account, but the Registrant is not able to take full advantage of that opportunity due to the need to allocate that opportunity among multiple accounts. In addition, a Portfolio Management Team member may execute transactions for another account that may adversely impact the value of securities held by the Registrant. However, the Investment Adviser believes that these risks are mitigated by the fact that accounts with like investment strategies managed by the Portfolio Management Team members are generally managed in a similar fashion and the Investment Adviser has policies that seek to allocate opportunities on a fair and equitable basis, taking into consideration the investment objectives and strategies and any legal, tax or regulatory considerations.
(a)(3) Compensation Structure of Portfolio Manager(s) or Management Team Members - As of March 31, 2024:
Neuberger Berman's compensation philosophy is one that focuses on rewarding performance and incentivizing our employees. We are also focused on creating a compensation process that we believe is fair, transparent, and competitive with the market.
Compensation for the Fund’s Portfolio Management Team consists of a fixed base salary and annual discretionary, performance-based bonus, which is a variable portion of total compensation. Compensation is paid from a portfolio management team compensation pool made available to the portfolio management team with which the investment professional is associated. The size of the team compensation pool is determined based on a number of factors including the revenue that is generated by that particular portfolio management team, less certain adjustments. The percentage allocated to individual team participants is based on a variety of criteria, including investment performance (including the aggregate multi-year track record), utilization of central resources (including research, sales and operations/support), business building to further the longer term sustainable success of the investment team, effective team/people management, and overall contribution to the success of Neuberger Berman.
The terms of our long-term retention incentives are as follows:
| ● | Employee-Owned Equity. We offer a voluntary equity acquisition program which allows employees a direct opportunity to invest in Neuberger Berman. This program is open to senior employees who meet certain investment criteria. In addition, in prior years certain employees may have elected to have a portion of their compensation delivered in the form of equity. |
For confidentiality and privacy reasons, Neuberger Berman cannot disclose individual equity holdings or program participation.
| ● | Contingent Compensation. Certain employees may participate in the Neuberger Berman Group Contingent Compensation Plan (the “CCP”) to serve as a means to further align the interests of our employees with the success of the firm and the interests of our clients, and to reward continued employment. Under the CCP, up to 20% of a participant’s annual total compensation in excess of $500,000 is contingent and subject to vesting. Contingent amounts under the CCP are held in a notional account representing the Neuberger Berman Portfolio, which is a portfolio of the investment strategies we manage across the firm. For members of investment teams, a portion of the contingent amounts are held in a notional account representing the team’s strategies as determined by senior management, in addition to the Neuberger Berman Portfolio, which is a portfolio of select investment strategies that we manage across the firm. Subject to continued employment at the firm and other conditions, a participant’s contingent amounts vest in equal installments over three years. |
| ● | Restrictive Covenants. Most investment professionals, including Portfolio Fund Managers, are subject to notice periods and restrictive covenants which include employee and client non-solicit restrictions as well as restrictions on the use of confidential information. In addition, depending on participation levels, certain senior investment professionals may have non-compete restrictions. |
(a)(4) As of March 31, 2024, no Portfolio Management Team member owned any interest in the Registrant.
(b) Not applicable.
Item 9. Purchase of Equity Securities By Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which partners may recommend nominees to the Board.
Item 11. Controls and Procedures.
(a) The Registrant's Principal Executive Officer and Principal Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act were effective as of a date within 90 days prior to the filing date of this report, based on their evaluation of the effectiveness of the Registrant's disclosure controls and procedures, as required by Rule 30a-3(b) of the 1940 Act.
(b) There were no changes in the Registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
(a) The Fund did not engage in any securities lending activity during the fiscal year ended March 31, 2024.
(b) The Fund did not engage in any securities lending activity and did not engage a securities lending agent during the fiscal year ended March 31, 2024.
Item 13. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 14. Exhibits.
| (a)(1) | A copy of the Code of Ethics is incorporated by reference to NB Private Markets Fund III (Master) LLC’s Form N-CSR, Investment Company Act file number 811-22816 (filed June 09, 2023). |
| (a)(2) | Separate certifications for the Registrant's Principal Executive Officer and Principal Financial Officer, as required by Rule 30a-2(a) under the 1940 Act, are filed herewith. |
| (a)(3) | Not applicable. |
| (b) | Certification pursuant to Section 906 of the Sarbanes-Oxley Act is furnished herewith. |
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NB Private Markets Fund III (Master) LLC | ||
| By: | /s/ Patrick Deaton | |
| Patrick Deaton | ||
| Chief Operating Officer | ||
Date: June 7, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Patrick Deaton | |
| Patrick Deaton | ||
| Chief Operating Officer | ||
| (Principal Executive Officer) |
Date: June 7, 2024
| By: | /s/ Mark Bonner | |
| Mark Bonner | ||
| Treasurer | ||
| (Principal Financial Officer) |
Date: June 7, 2024