VALLEY FORGE, Pa. and BOSTON, Feb. 5, 2020 /PRNewswire/ -- Vanguard and HarbourVest today announced a strategic partnership to provide qualified investors with access to private equity and the potential to earn higher returns and achieve increased diversification.
"We are entering the private equity market the Vanguard way—partnering with a world-class advisor to provide a high-quality offer," said Vanguard CEO Tim Buckley. "Private equity will complement our leading index and actively-managed funds, as we seek to broaden access to this asset class and improve client outcomes. While this strategy will be initially available to institutional advised clients, we aim to expand access to investors in additional channels over time. For individual investors in particular, this partnership will present an incredible opportunity—access and terms they could not get on their own."
Initially available to pensions, endowments, and foundations
The new private equity strategy will initially be provided by Vanguard Institutional Advisory Services to pensions, endowments, and foundations, as part of an ongoing effort to further expand the suite of products for these clients. In keeping with its enterprise-wide focus on advice, Vanguard has invested considerably in its advisory services for a broad range of investors, including outsourced chief investment officer (OCIO) capabilities.
"Many institutional clients seek alpha sources not readily available in the public markets," said Chris Philips, Head of Vanguard Institutional Advisory Services. "While these organizations may want exposure to the opportunities available in the private markets, it can be challenging to access leading private equity managers and invest with discipline and skill. Through this partnership, Vanguard's portfolio construction and investment committee governance capabilities will be complemented with HarbourVest's private market expertise, to the ultimate benefit of our clients."
Private equity and the capital markets
The capital markets have evolved significantly over the past decade and Vanguard sees an opportunity in private equity for investors who can take on the long-term commitment required of these investments.
"Vanguard is a world class asset manager with a commitment to providing their clients with access to private equity," said John Toomey, Managing Director, HarbourVest Partners. "This partnership is a natural extension of our business and combines our private markets expertise with a firm focused on improving client outcomes. We look forward to expanding access to private equity to help strengthen returns for qualified investors."
Identifying and accessing strong general partners (GPs) is critical to investing in private markets, as there is a wide disparity in manager performance and leading GPs are typically oversubscribed or closed to new investors. HarbourVest's deep, longstanding relationships with GPs, along with its industry expertise, have historically enabled the firm to secure access to these investment opportunities.
"Our longstanding commitment to putting our clients at the center of everything we do aligns with Vanguard's investor-centric philosophy and approach to their business," said Pete Wilson, Managing Director, HarbourVest Partners. "Both firms focus on relationships, quantitative analysis, and deep market expertise, which are critical to investing in public and private markets."
"For nearly 45 years, Vanguard has improved client outcomes by securing top-tier talent—both internal and external—and taking a long-term, disciplined approach to investing," said Fran Kinniry, Head of Private Investments at Vanguard. "It takes time, scale, and expertise to construct a broadly diversified, global private equity portfolio. This partnership with HarbourVest provides qualified clients with access to one of the industry's leading private equity managers and diversification across strategy, geography, and company stage."
Vanguard is one of the world's largest investment management companies. As of December 31, 2019, Vanguard managed $6.2 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 424 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
About Vanguard Institutional Advisory Services
Vanguard's Institutional Advisory Services (VIAS) is one the world's largest outsourced chief investment officer (OCIO) providers. As of December 31, 2019, VIAS manages over $50 billion dollars across nonprofit organizations, pension sponsors and other institutional investors.
HarbourVest is an independent, global private markets investment specialist with over 35 years of experience and more than $68 billion in assets under management, as of December 31, 2019. The firm's powerful global platform offers clients investment opportunities through primary fund investments, secondary investments, and direct co-investments in commingled funds or separately managed accounts. HarbourVest has more than 600 employees, including more than 125 investment professionals across Asia, Europe, and the Americas. This global team has committed more than $40 billion to newly-formed funds, completed over $24 billion in secondary purchases, and invested over $17 billion directly in operating companies. Partnering with HarbourVest, clients have access to customized solutions, longstanding relationships, and actionable insights.
Asset figures as of December 31, 2019 unless otherwise noted.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any specific investment product sponsored by, or investment services provided by Vanguard Advisers Inc. or its affiliates, or HarbourVest Partners L.P. or its affiliates. Any such offer may be made only to qualified investors by means of delivery of a confidential Private Placement Memorandum or similar materials that contain a description of the material terms of such investment. No sale will be made in any jurisdiction in which the offer, solicitation, or sale is not authorized or to any person to whom it is unlawful to make the offer, solicitation or sale. Private investments involve a high degree of risk and therefore, should be undertaken only by prospective investors capable of evaluating and bearing the risks such an investment represents. Advice services offered through Vanguard Institutional Advisory Services are provided by Vanguard Advisers, Inc., a registered investment advisor.
For additional legal and regulatory information please refer to www.harbourvest.com/important-legal-disclosures.