HarbourVest more than doubles co-invest appetite – exclusive

The investment firm is seeking $2.5bn for HarbourVest Partners Co-investment V, exceeding the $1bn it targeted for Fund IV, Private Equity International has learned.

HarbourVest Partners has launched its fifth co-investment fund with a target more than twice the size of its predecessor, Private Equity International has learned.

The Boston-headquartered investment firm is seeking $2.5 billion for HarbourVest Partners Co-investment V, exceeding the $1 billion targeted for Fund IV, a source with knowledge of the fund told PEI. Fund V is expected to hold a first close in the third quarter of this year, the source added.

HarbourVest declined to comment.

HarbourVest Partners Co-Investment IV was initially given a $1.5 billion hard-cap and closed on $1.75 billion in July with commitments from more than 100 investors across Europe, Asia and the US, according to the firm’s website. Limited partners included Michigan Department of Treasury, Firefighters’ Retirement System of Louisiana and Ventura County Employees Retirement Association, PEI data show.

Fund IV was approximately 30 percent invested across 11 co-investments as of 12 July, according to the firm’s website. HarbourVest’s direct co-investment team had invested $7 billion across 350 companies as of September.

The increase in targeted fund size comes amid growing LP demand for co-investments, with 42 percent expecting to deploy more capital via the strategy in the next 12 months, according to a September report from advisory firm Rede Partners.

Aberdeen Standard is among investment firms increasing their focus on co-investments, with up to 25 percent of its $14 billion private equity portfolio available for the strategy. Malaysia’s Employees Provident Fund, the sixth-largest pension fund in Asia by assets, is also pursuing co-investments to maximise returns and build up its private equity team’s capability, as PEI reported in October.