HarbourVest Partners has raised $375 million for its debut mezzanine co-investment fund, beating its $250 million target. Also, the firm closed its third real assets fund at $366 million, sweeping past its $300 million target. The limited partners for both funds include pension funds, insurance companies, endowments and family offices across the U.S., Canada, Latin America, Asia and Europe.
Boston, MA – April 6, 2017 – HarbourVest Partners, a global private markets asset manager, today announced the final closes of its first mezzanine-focused co-investment fund at $375 million and its third real assets fund at $366 million.
“Specialized programs such as our mezzanine and real assets funds demonstrate our continued emphasis on offering solutions that help our clients invest in niche strategies and markets that are difficult to access,” said John Toomey, Managing Director, HarbourVest. “HarbourVest’s growth in real assets and expansion into private credit further broadens the reach of our solutions and our ability to meet and anticipate client needs. We are particularly proud that half of the Limited Partners in these funds are new to HarbourVest, demonstrating that these offerings are consistent with our strategic plan to grow our client base.”
Mezzanine Co-Investment Fund
Mezzanine Income Fund I was oversubscribed and closed above its $250 million target at its hard cap of $375 million.
“HarbourVest has been investing in mezzanine since 2003, and over the last decade we’ve seen consistent growth in the demand from private equity sponsors for mezzanine debt partners to help complete transactions,” said Peter Lipson, Managing Director, HarbourVest. “Our dedicated mezzanine debt solution will continue to differentiate HarbourVest as a preferred partner to GPs, while being highly complementary to our direct co-investment equity business—particularly in terms of accessing and evaluating deals.”
HarbourVest’s approach to the mezzanine market enables investors to access companies primarily in the U.S. lower middle market—and across some of the very best managers who invest in this area. This access is achieved via a differentiated mezzanine-equity strategy.
“What differentiates HarbourVest is our strong equity orientation, which brings with it a unique way of looking at mezzanine and engaging with GPs. Our roots in equity allow us to be more agile in terms of how we structure deals. It also better aligns us with the sponsor and makes us a more valued mezzanine partner,” said Lipson.
Real Assets Secondary Fund
Real Assets Fund III is HarbourVest’s first commingled real assets fund and closed above its $300 million target at $366 million. The strategy of the Fund is to leverage our Dover Street secondary investment approach and apply it to the less competitive but fast-growing real assets market with the objective to invest opportunistically across the energy, power, infrastructure, and natural resources sectors.
“The real assets market has gone from a niche component of the broader secondary market to reach a level of maturity where it is now sizable enough to be viewed as a segment standing on its own. The dynamics of this early stage maturity is comparable to the early days of the PE secondary market itself, where the growth in the demand for liquidity continues to lag the availability of capital to provide it. In addition, as the market continues to mature we are seeing more GP spinout and GP-led transactions trickle into the space,” said Kevin Warn-Schindel, Managing Director, HarbourVest. “Complex transactions are fairly new to the real assets market and GPs are looking for two main traits in a partner—a long pedigree of executing on these types of deals, and a thorough understanding of the underlying businesses in which they’re investing. We check both boxes with confidence.”
Limited Partners in both funds, more than half of which are new to HarbourVest, consist of pension funds, insurance companies, endowments and family offices across the U.S., Canada, Latin America, Asia and Europe.
HarbourVest is an independent, global private markets investment specialist with more than 30 years of experience and more than $40 billion in assets under management. 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 400 employees, including more than 100 investment professionals across Asia, Europe, and the Americas. This global team has committed more than $31 billion to newly-formed funds, completed over $15 billion in secondary purchases, and invested over $6 billion directly in operating companies. Partnering with HarbourVest, clients have access to customized solutions, longstanding relationships, actionable insights, and proven results.