Vanguard to Broaden Private Equity Access to Qualified Individual Investors
19 May 2021
VALLEY FORGE, PA (May 19, 2021) — Vanguard today announced plans to broaden access to private equity. Vanguard entered the private equity market in 2020 with an initial focus on institutional advised clients, including pensions, endowments, and foundations. In continued partnership with HarbourVest, Vanguard will provide qualified individual investors with access to private equity this summer.
“Private equity has the potential to improve long-term investment outcomes of a broadly diversified portfolio,” said Vanguard CEO, Tim Buckley. “Over time we will expand access to this asset class, which has traditionally been reserved for the wealthiest investors, to the many qualified investors at Vanguard.”
Complementing its disciplined and robust product development process, Vanguard is taking a structured approach to opening private equity access to individual investors. Eligibility requirements include certification as a Qualified Purchaser1 and Accredited Investor.2 The strategy will initially be available to eligible non-advised Vanguard clients and is expected to be made available to eligible advised clients of Vanguard Personal Advisor Services in the near future.
“We look forward to providing our qualified individual investors access to our partnership with HarbourVest, one of the industry’s premier private equity providers,” said Matt Benchener, managing director of Vanguard Retail Investor Group. “Our extensive private equity research suggests that investors who can access high-quality, broadly diversified strategies with top private equity managers can potentially realize significant financial benefits over long time horizons.”
Vanguard’s private equity strategy builds upon the firm’s legacy of active investment management leadership. Global scale, a low-cost philosophy, rigorous oversight, and adherence to time-tested investment principles drive the firm’s decision-making to ensure the consistency and stability of its active lineup. Vanguard is continuously searching for and partnering with proven external managers to gain the diversity of thought, deep conviction, and accountability needed for successful outcomes.
Vanguard has a long and successful history of partnering with the world’s premier external advisory firms to help fulfill its mission of giving investors their best chance for investment success. This tradition continues through the firm’s strategic relationship with HarbourVest, one of the industry’s most experienced and successful private equity providers. With nearly 40 years of global experience investing in private markets, HarbourVest’s powerful network and long-standing relationships with general partners aid in securing ongoing access to top-tier private equity funds.
“HarbourVest has long supported democratizing private markets, and we are pleased to enter into this next phase with Vanguard by broadening access to qualified individual investors,” said John Toomey, Managing Director, HarbourVest Partners. “Our partnership with Vanguard combines HarbourVest’s industry expertise with Vanguard’s scale and deep client relationships, and highlights the strength in bringing together two client-centric cultures to deliver a diversified private markets solution.”
HarbourVest has a distinguished history of investing across private market strategies with local presences across North America, Latin America, Europe, Asia Pacific, and emerging markets through primary partnerships, secondary transactions, and direct co-investments. Through Vanguard’s private equity strategy, qualified investors are expected to benefit from HarbourVest’s relationships, access, scale, capabilities, and world-class expertise at terms they would not be able to access on their own.
Vanguard is one of the world’s largest investment management companies. As of March 31, 2021, Vanguard managed $7.5 trillion in global assets. The firm, headquartered in Valley Forge, Pennsylvania, offers 438 funds to its more than 30 million investors worldwide. For more information, visit vanguard.com.
HarbourVest is an independent, global private markets investment specialist with over 35 years of experience and more than $76 billion in assets under management, as of March 31, 2021. 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 700 employees, including more than 150 investment professionals across Asia, Europe, and the Americas. This global team has committed more than $46 billion to newly-formed funds, completed over $29 billion in secondary purchases, and invested over $21 billion directly in operating companies. Partnering with HarbourVest, clients have access to customized solutions, longstanding relationships, and actionable insights.
1 Qualified Purchaser: Includes, among others, natural persons owning not less than $5 million in investments; family offices owning not less than $5 million in investments; trusts not formed to acquire securities offered and each trustee and settlor is a qualified purchaser; and other entities not formed to acquire securities offered that own not less than $25 million in investments.
2 Accredited Investor: Includes, among others, natural persons holding the Series 7, 65, or 82 licenses in good standing, or with a net worth of not less than $1 million, or more than $200,000 in annual income ($300,000 joint annual income with spousal equivalent); family offices and family office clients; 501(c)(3)s, corporations, LLCs, and partnerships not formed to acquire securities offered and with total assets in excess of $5 million; trusts with assets greater than $5 million not formed to acquire securities offered and directed by a sophisticated person; any entity the equity owners of which are accredited investors.
All investing is subject to risk, including the possible loss of the money you invest.
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 The Vanguard Group, Inc., Vanguard Advisers Inc., Vanguard Marketing Corporation, Vanguard National Trust Company, HarbourVest Partners, LLC, HarbourVest Partners L.P. or any of their subsidiaries or affiliates. Investments in funds issued by HarbourVest are expected to be made available to the following Vanguard clients if qualified to invest:
- Self-directed clients of Vanguard’s Retail Investor Group can access HarbourVest funds through Vanguard Marketing Corporation. The decision to invest in the HarbourVest funds will be the sole responsibility of such self-directed clients, and no Vanguard entity will determine the suitability of investments in any HarbourVest fund or otherwise make investment recommendations to Vanguard’s self-directed clients.
- Advised clients of Vanguard’s Personal Advisor Services will be able to access HarbourVest funds through Vanguard National Trust Company. Vanguard National Trust Company will assess the suitability of any recommendations to PAS clients to invest in the HarbourVest funds.
- Advised clients of Vanguard Institutional Advisory Services can access HarbourVest funds through Vanguard Advisers, Inc. Vanguard Advisers, Inc. will assess the suitability of any recommendations to its advised clients to invest in the HarbourVest funds.
Any such offers may be made only to Vanguard clients who meet the definition of Accredited Investors and Qualified Purchasers under federal law and by means of delivery of a confidential Private Placement Memorandum or similar materials that contain a description of the material terms and risks 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. Investors in private equity generally must meet certain minimum financial qualifications that may make it unsuitable for specific market participants.
Vanguard Marketing Corporation, Distributor of the Vanguard Funds