HarbourVest raises $2bn for Dover Street VIII

HarbourVest Partners’ latest secondaries vehicle is offering an average annual management fee of 0.81%, according to University of Houston documents.

HarbourVest Partners has raised at least $2 billion for its latest Dover Street fund, according to a source with knowledge of the fundraising. 

The firm is targeting $3 billion for Dover Street VIII, according to University of Houston documents. The fund may hold a final close next year, the source said. 

HarbourVest declined to comment on this story.

The firm’s Dover Street funds have traditionally targeted investments in existing limited partnership agreements as well as portfolios of direct investments – known as direct secondaries, according to University of Houston documents.

“Direct secondaries have become an increasingly important portion of the Dover Street portfolios and the team expects such investments to comprise 40 [to] 50 [percent] of the DS VIII portfolio, which is consistent with DS VII,” according to University of Houston. “In the current environment, the team views direct secondaries as less competitive than traditional LP interest deals.”

The University of Houston documents also indicate that Dover Street VIII will offer an average annual management fee of 0.81 percent and a 7 percent preferred return. The fund’s carry rate is 12.5 percent.

The University committed $4 million to Dover Street VIII. The Nebraska Investment Council, the Montana Board of Investments and the Vermont State Retirement System have also committed to the fund, according to data provider Private Equity Connect.

HarbourVest was founded in 1978. The firm has offices in Boston, London, Hong Kong, Tokyo, Bogotá and Beijing.

In addition to Dover Street VIII, the firm is also in the process of marketing a direct co-investing vehicle, HarbourVest Partners 2012 Direct Fund, according to documents filed with the SEC. That fund had raised at least $205 million as of June.