By Dan Primack
November 12, 2013

FORTUNE — Neuberger Berman yesterday announced that it has raised $2 billion for its third private equity secondaries fund, which mostly focuses on acquiring LP stakes in leveraged buyout, growth equity and special situations funds.

It is easily the group’s largest secondaries effort to date, in the midst of what is shaping up to be another banner year for secondaries fundraising and deal volume. For context, 2012 was the second-best year on record for PE secondaries fundraising (after 2009) with $20 billion in capital commitments, and effectively tied 2011 for the most-ever deal volume with around $25 billion in transactional value.

The idea of an ongoing bull market in PE secondaries is a bit confounding to me, given that so much of the 2011-2013 volume was driven by 4 factors:

  1. 1.Portfolio reallocations by LPs who didn’t want to risk another liquidity squeeze;
  2. 2. Hangover from the 2005-2008 mega-LBO fund environment;
  3. 3. Financial reform that caused certain financial and insurance groups to divest;
  4. 4. Certain endowments slowly moving away from the Yale model.

So I spent some time on the phone with Brian Talbot, head of PE secondaries at Neuberger Berman, to understand where his group plans to invest $2 billion.

Talbot primarily argued that many of my aforementioned factors are ongoing. For example, he says that while most U.S. financial and insurance institutions already unloaded their troublesome PE assets, there is still much more divestiture to go in Europe (thanks to Basel III, etc.). He also believes that while large U.S. pension funds first began engaging in secondary sales due to future liquidity crunch fears, they’ve now begun to use secondaries as a prudent rebalancing tool – something he believes is becoming part of business as usual.

Talbot adds that his firm is focused more on single-asset purchases or small portfolios of buyout funds that are 4-7 years into their lives (which is distinct from tail-end and/or zombie funds). As for pricing, he says that auction market – where NB prefers not to play – is seeing discounts move up to 85-90 dents on the dollar (compared to 80-85 cents last year), while he’s seeing some higher-quality funds getting sold at NAV.

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