Vanguard says it is moving into private equity with HarbourVest.
The fund giant’s Institutional Advisory Services unit — an outsourced chief investment officer for some $50 billion — first will provide the private equity strategy to pensions, endowments and foundations, but the offering could be shared with more investors in the future.
“While this strategy will be initially available to institutional advised clients, we aim to expand access to investors in additional channels over time,” according to Vanguard CEO Tim Buckley. “For individual investors in particular, this partnership will present an incredible opportunity — access and terms they could not get on their own.”
While Vanguard works with some $6.2 trillion in assets, HarbourVest manages about $68 billion in assets held in primary fund investments, secondary investments and co-investments in separately managed accounts or commingled funds.
“Many institutional clients seek alpha sources not readily available in the public markets,” said Chris Philips, head of Vanguard Institutional Advisory Services, in a statement.
But these organizations often find it “challenging to access leading private equity managers and invest with discipline and skill,” Philips added. The tie-up combines Vanguard’s capabilities and “HarbourVest’s private market expertise, to the ultimate benefit of our clients.”