McKinsey Hands Over Its $20 Billion Investment Arm to Neuberger

McKinsey & Co. agreed to hand control of its $20 billion investment arm to Neuberger Berman, after decades of managing the fortunes of the consulting firm’s current and former partners in sophisticated hedge fund and alternative strategies.

The deal marks a significant expansion for Neuberger and a new chapter for the consulting giant best known for advising blue-chip companies and governments. McKinsey had been reviewing options for the fund manager, known as MIO Partners, for about a year.

As part of the transaction, which is subject to regulatory approval, MIO’s financial advisory business and about 280 employees are ...