Weekly roundup of private equity sector's latest updates
Harvard University to Sell $1 Billion in Private Equity Fund Stakes
Harvard University has announced plans to sell approximately $1 billion worth of private equity fund stakes through a secondary market transaction. This move is part of a broader strategy to reduce the university's private equity exposure and increase liquidity.
The sale is expected to be structured as a secondaries sale and is being advised by Jefferies Financial Group. While the potential buyer in the deal has not been disclosed, Lexington Partners is rumoured to be a contender.
The decision to sell comes amidst pressures on Harvard’s endowment fund from new U.S. administration policies that could reduce its value significantly by 2040 due to payout requirements and inflation. These pressures are prompting Harvard to rebalance its portfolio from private and hedge fund investments towards more liquid public equities and cash.
This strategic shift is consistent with trends in endowment management, where institutions like Yale and CalPERS are also engaging in large secondary sales amid challenging private markets.
Meanwhile, in a separate development, Nomura, the Japanese investment bank, has announced a $1.8 billion all-cash acquisition of Macquarie's US and European public asset management units. The acquisition will add approximately $180 billion in assets under management, making it Nomura's largest international deal since the 2008 purchase of Lehman Brothers' Asian and European operations.
Unity Advisory, a UK-based boutique accounting and consulting firm founded by former EY and PwC senior leaders, is set to launch by June with up to $300 million in backing from Warburg Pincus. The growth of Nomura's investment management platform will reach $770 billion after the deal.
The closing of both the Nomura acquisition and Harvard's secondary sale is subject to regulatory approvals and is expected to take place by the end of 2025.
- The Harvard University private equity fund stakes sale worth about $1 billion is a secondary market transaction, part of a broader strategy to decrease private equity exposure and enhance liquidity.
- The secondary market sale, being advised by Jefferies Financial Group, may involve Lexington Partners as the potential buyer, though this hasn't been confirmed yet.
- The sale stems from pressures on Harvard’s endowment fund from new U.S. administration policies, which could reduce the fund's value significantly by 2040 due to payout requirements and inflation.
- As a result, Harvard is rebalancing its portfolio, moving away from private and hedge fund investments to more liquid public equities and cash, a trend being followed by institutions like Yale and CalPERS.
- In a separate development, Nomura, the Japanese investment bank, is set to acquire Macquarie's US and European public asset management units for $1.8 billion in an all-cash deal.
- When the deal is completed, Nomura's investment management platform will manage approximately $770 billion in assets, making it their largest international deal since the 2008 purchase of Lehman Brothers' Asian and European operations.
- Unity Advisory, a UK-based accounting and consulting firm, is expected to launch by June with up to $300 million in backing from Warburg Pincus, coinciding with the closing of both the Nomura acquisition and Harvard's secondary sale, subject to regulatory approvals and expected to take place by the end of 2025.
