- Vanguard and HarbourVest recently announced that they signed a strategic partnership, enabling qualified investors to have access to private equity
Vanguard and HarbourVest recently announced that they signed a strategic partnership, which will enable qualified investors to have access to private equity thus increasing diversification and potentially providing higher returns.
“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 in a statement. “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.”
This new strategy will initially be provided by Vanguard Institutional Advisory Services to pensions, endowments, and foundations as part of an effort to expand the suite of products. And in keeping with its enterprise-wide focus on advice, Vanguard 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,” added Christopher 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.”
As the capital markets evolved significantly over the past decade, Vanguard is seeing 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,” explained John Toomey, Managing Director at 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.”
Having access to strong general partners is critical to investing in private markets as there is a wide disparity in manager performance and leading general parters are typically oversubscribed or closed to new investors. And HarbourVest’s longstanding relationships with general partners along with its industry expertise have enabled the firm to secure access to these investment opportunities.
“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,” commented 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.”
