Secondary brokers may be wary of HarbourVest Partners after the firm backed out of a signed deal, but investors aren’t. The firm has surpassed its fundraising target on Dover Street VII, a vehicle designed to invest in LP stakes of private equity funds, according to sources familiar with the effort.
HarbourVest began raising the fund in May with a $2 billion target, peHUB reported. The firm has secured commitments greater than $2 billion but has not set a final closing date for the fund.
The firm has dry powder to invest in a market that has been flooded with LP interests in the last month, as the denominator effect causes pension funds to tighten their belts. Prices dropped as a result of the saturation, causing HarbourVest to walk away from a recent deal to buy a large LP stake. The firm cited a MAC clause as the reason. The move may turn off sellers, but it does not indicate the firm is on the sidelines. HarbourVest continues to actively seek secondary buys for its Dover funds and also its main funds of funds HarbourVest Partners VIII closed in 2006 with $3.5 billion in commitments.
Dover Street VI, the firm’s most recent secondary fund, was raised in 2005 and had a target of $750 million in commitments. The actual amount raised was not clear.