Responding to what he called market 'rumours', HarbourVest senior managing director Brooks Zug said it was 'absolutely untrue' that his firm is, or ever has, held talks with Merrill Lynch about a potential acquisition of the Boston-based fund of funds firm.
A number of market sources said recently that Merrill Lynch and HarbourVest are in “serious discussions” regarding a possible merger.
A Merrill Lynch spokesperson said the firm does not comment on 'market rumours.'
A separate market source said the firms 'are not' in talks, but declined to comment further.
The private equity fund of funds market has been consolidating in recent years. In 2000, New York-based Pomona Capital was partly acquired by Dutch bank ING Group; in 2001, Amvescap acquired Denver’s Sovereign Financial Services, merging it with Invesco Private Capital; last year, Lehman Brothers bought Dallas fund of funds manager Crossroads Group while Russell Investment Group bought Pantheon Ventures.
Last year HarbourVest had roughly $16 billion in assets under discretionary management. According to a source at a separate money manager who has analysed recent fund of hedge fund acquisitions, HarbourVest likely is being valued at between six and eight percent of assets under management, or between roughly $960 million and $1.28 billion (€781 million and €1.04 billion).
HarbourVest was founded in 1997 to take over the activities of Hancock Venture Partners. The firm, led by Zug and Edward Kane and in Boston, now has more than 100 employees and additional offices in London and Hong Kong.
According to the firm’s web site, HarbourVest is 100 percent owned by members of the investment team.