Nest appoints HarbourVest to invest in private equity

Nest has today confirmed the appointment of HarbourVest Partners to help the pension scheme invest in private equity.

HarbourVest Partners’ fund will invest in co-investment opportunities on Nest’s behalf through a bespoke fund-of-one, tailored to Nest’s needs and objectives. This fund will receive a pro-rata allocation of suitable co-investment opportunities alongside HarbourVest Partners’ other co-investment accounts.

The new private equity mandate will play an important role in helping Nest invest at least £1.5bn in the asset class by early 2025, and the longer-term target of having around 5% of Nest’s portfolio invested in private equity.

This is the second private equity mandate awarded by Nest after a procurement process initiated in 2021 and concludes all private equity mandates Nest will award following that process.

Statement from Stephen O’Neill, Nest’s Head of Private Markets:

“During the procurement process HarbourVest Partners impressed with their ability to unlock private equity deals around the world. They have an impressive scale to help provide a reliable and regular deal flow, allowing them to be highly selective in the deals they choose.

“They are also keen to exercise their governance rights to help manage long-term risks and encourage sustainable business activities. They understand the importance of responsible investing and represent an excellent partner for Nest to work with.

“With two managers now in place, we’re ready to integrate this important asset class into our investment strategy, allowing our members to benefit from the superior returns private equity typically achieves relative to other types of investments.”

Statement from Craig MacDonald, Managing Director, HarbourVest:

“We are delighted to be partnering with Nest on this new chapter in its evolution as it opens up private equity to its pension savers. We worked hand-in-hand with the Nest team to develop a flexible and tailored solution that aligns with Nest’s needs and ambitions for its members. Together, we believe we are filling a much-needed gap in the market, providing access to the asset class for a broader base of UK pension savers.”

The focus of HarbourVest Partner’s mandate will be on growth and middle market deals. It expects to start the deployment of capital into new deals in the coming months.

The addition of private equity completes Nest’s core allocation to private market assets which also include property, private credit and infrastructure. Although, Nest may consider further private market strategies in the future.

Ends.

Notes to editors

Nest launched the private equity procurement in August 2021. In total 14 fund managers applied.

Nest’s private equity investments will be folded within its existing default ‘Retirement Date’ funds and members will benefit from them within the existing charge structure. 

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Any media queries for Nest can be directed to Ben Ward: Ben.Ward@nestcorporation.org.uk, 07881 511845

Any media queries for HarbourVest Partners can be directed to LCabianca@harbourvest.com.
 

About Nest

Nest was set up by the government to ensure every UK employer could offer a workplace pension to their employees. Since then, it’s grown to become the largest workplace pension scheme in the country with more than 10 million members. One in three of the UK working population currently have a retirement fund with Nest.

As a profit for members pension scheme, Nest doesn't answer to shareholders. Nest doesn't answer to shareholders. It’s set up to serve its customers’ interests and aims to help millions of people enjoy a better retirement. Nest’s members benefit from an award-winning investment strategy and one of the most diversified DC portfolios in the UK.

The pension scheme currently manages more than £24bn on behalf of its members, taking in more than £400m a month in new contributions. By the end of the next decade Nest is expected to have around £100bn assets under management.

About HarbourVest Partners

HarbourVest is an independent, global private markets firm with 40 years of experience and globally more than $98 billion of assets under management as of March 31, 2022. We have had a deep presence in the UK market for over 30 years, stewarding close to £13bn in capital for over 100 UK clients since 1983. Our interwoven platform provides clients access to global primary funds, secondary transactions, direct co-investments, real assets and infrastructure, and private credit.

Our strengths extend across strategies, enabled by our team of more than 850 employees, including more than 180 investment professionals across Asia, Europe, and the Americas. Across our private markets platform, our team has committed more than $51 billion to newly-formed funds, completed over $41 billion in secondary purchases, and invested over $28 billion in directly operating companies. We partner strategically and plan our offerings innovatively to provide our clients with access, insight, and global opportunities.