NB Private Markets Fund III (TE) LLC (the “Fund”) invests substantially all of its assets in NB Private Markets Fund III (Master) LLC (the “Company”). The percentage of the Company’s members’ equity owned by the Fund at December 31, 2023, was 42.79%. The Fund has included the Company’s schedule of investments as of December 31, 2023, below. The Company’s schedule of investments was also filed on Form NPORT-EX with the Securities and Exchange Commission on February 29, 2024.
NB Private Markets Fund III (Master) LLC
Schedule of Investments
December 31, 2023 (Unaudited)
| Portfolio Funds (A),(B),(D) | | Acquisition Type | | Acquisition Dates (C) | | Geographic Region (E) | | Cost | | | Fair Value | |
| Buyout/Growth (54.82%) | | | | | | | | | | | | | | |
| Advent International GPE VIII-B, L.P. | | Primary | | 09/2016 - 02/2022 | | North America | | $ | 4,323,793 | | | $ | 7,527,137 | |
| Apollo Investment Fund IV, L.P. | | Secondary | | 04/2014 | | North America | | | 77,631 | | | | 7,624 | |
| BV Investment Partners Fund VIII, L.P. | | Primary | | 08/2014 - 10/2022 | | North America | | | 995,483 | | | | 2,765,637 | |
| Charlesbank Equity Fund VIII, L.P. | | Primary | | 01/2015 - 06/2023 | | North America | | | 6,549,970 | | | | 8,596,623 | |
| Green Equity Investors VII, L.P. | | Primary | | 05/2017 - 08/2023 | | North America | | | 2,225,159 | | | | 4,237,782 | |
| Lone Star Fund IX (U.S.), L.P. | | Primary | | 03/2015 - 06/2018 | | North America | | | 943,189 | | | | 1,145,426 | |
| Platinum Equity Capital Partners III, L.P. | | Secondary | | 12/2013 - 09/2023 | | North America | | | 395,560 | | | | 1,384,829 | |
| Rhone Partners V, L.P. | | Primary | | 07/2015 - 08/2023 | | North America | | | 3,989,645 | | | | 9,282,514 | |
| | | | | | | | | | 19,500,430 | | | | 34,947,572 | |
| Special Situations (15.09%) | | | | | | | | | | | | | | |
| Clearlake Capital Partners IV, L.P. | | Primary | | 09/2015 - 01/2023 | | North America | | | 1,460,527 | | | | 2,484,492 | |
| Clearlake Opportunities Partners, L.P. | | Primary | | 09/2015 - 12/2023 | | North America | | | 1,413,373 | | | | 1,840,434 | |
| Lone Star Real Estate Fund III (U.S.), L.P. | | Primary | | 05/2014 - 04/2017 | | North America | | | 912,720 | | | | 15,376 | |
| OrbiMed Royalty Opportunities II, L.P. | | Primary | | 04/2015 - 03/2023 | | North America | | | 364,332 | | | | 187,421 | |
| Ridgewood Energy Oil & Gas Fund III, L.P. | | Primary | | 05/2015 - 09/2023 | | North America | | | 4,314,118 | | | | 4,300,000 | |
| Walton Street Real Estate Fund VII, L.P. | | Primary | | 03/2014 - 12/2022 | | North America | | | 1,248,854 | | | | 789,440 | |
| | | | | | | | | | 9,713,924 | | | | 9,617,163 | |
| Venture Capital (22.16%) | | | | | | | | | | | | | | |
| Lightspeed China Partners II, L.P. | | Primary | | 06/2014 - 11/2023 | | Asia | | | 1,177,826 | | | | 3,486,885 | |
| Lightspeed Venture Partners Select, L.P. | | Primary | | 03/2014 - 05/2019 | | North America | | | 634,989 | | | | 1,256,043 | |
| Lightspeed Venture Partners X, L.P. | | Primary | | 07/2014 - 11/2023 | | North America | | | 1,266,320 | | | | 6,255,938 | |
| Meritech Capital Partners V L.P. | | Primary | | 09/2014 - 11/2022 | | North America | | | 1,289,215 | | | | 3,129,665 | |
| | | | | | | | | | 4,368,350 | | | | 14,128,531 | |
| Short Term Investments | | Cost | | | Fair Value | |
| Money Market Fund (8.25%) | | | | | | | | |
| Morgan Stanley Institutional Liquidity Fund Government Portfolio | | | 5,259,122 | | | | 5,259,122 | |
| | | | 5,259,122 | | | | 5,259,122 | |
| | | | | | | | | |
| Total Investments (cost $38,841,826) (100.32%) | | | | | | | 63,952,388 | |
| Other Assets & Liabilities (Net) (-0.32%) | | | | | | | (205,479 | ) |
| Members' Equity - Net Assets (100.00%) | | | | | | $ | 63,746,909 | |
| (A) | Non-income producing securities, which are restricted as to public resale and illiquid. |
| (B) | Total cost of illiquid and restricted securities at December 31, 2023 aggregated $33,582,704. Total fair value of illiquid and restricted securities at December 31, 2023 was $58,693,266 or 92.07% 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. |
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 interests in the Portfolio Funds and other investments. In December 2020, the Securities and Exchange Commission ("SEC") adopted Rule 2a-5 under the Investment Company Act, which establishes requirements for determining fair value in good faith for purposes of the Investment Company Act, including related oversight and reporting requirements. Effective as of the compliance date of September 8, 2022, the Board approved changes to the Procedures to comply with Rule 2a-5 and designated NBIA as the Company’s valuation designee (as defined in the rule). The valuation designee, with assistance from NBAA, is responsible for determining fair value in good faith for any and all Fund investments, subject to oversight by the Board.
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.
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 December 31, 2023.
| | | Level 1 | | | Level 2 | | | Level 3 | | | Net Asset Value | | | Total | |
| Assets: | | | | | | | | | | | | | | | | | | | | |
| Buyout/Growth | | $ | - | | | $ | - | | | $ | - | | | $ | 34,947,572 | | | $ | 34,947,572 | |
| Special Situations | | | - | | | | - | | | | - | | | | 9,617,163 | | | | 9,617,163 | |
| Venture Capital | | | - | | | | - | | | | - | | | | 14,128,531 | | | | 14,128,531 | |
| Money Market Fund | | | 5,259,122 | | | | - | | | | - | | | | - | | | | 5,259,122 | |
| Totals | | $ | 5,259,122 | | | $ | - | | | $ | - | | | $ | 58,693,266 | | | $ | 63,952,388 | |
Significant Unobservable Inputs
As of December 31, 2023, the Company had investments valued at $63,952,388. The fair value of investments valued at $58,693,266 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 December 31, 2023 is one to three years, with the possibility of extensions by each of the Portfolio Funds.
