Asian digital wealth platform Endowus has partnered with HarbourVest Partners, an investment firm based in Boston, Massachusetts, to expand client access to private markets.
Through the partnership, HarbourVest’s evergreen solution is being offered for the first time in Hong Kong and Singapore. This open-ended private equity structure with an evergreen investment strategy is designed to provide investors with majority secondary and direct co-investments exposure through a single, compounding investment.
The partnership will enable individual and family-office clients of Endowus Private Wealth (EPW) to access private markets with lower entry requirements. Endowus has launched EPW in Hong Kong to deliver its technology-driven capabilities, supported by the human expertise of its investment office and dedicated client advisers, and provide personalized advisory services.
HarbourVest, with 14 offices globally, has a track record of more than 40 years in private markets and one of the largest and longest-standing investment teams in secondary and direct co-investments.
The solution provides access to a pure-play private equity strategy, providing investors immediate access to a robust deal flow as HarbourVest can deploy more than HK$100 billion (US$12.8 billion) a year across private equity direct co-investments and secondaries. It leverages HarbourVest’s open architecture and multi-manager approach, with diversified access to quality deals from leading private equity managers.
Diversification, greater transparency
Secondaries provide diversification across managers and companies along with a lower blind pool risk and dispersion of returns. As a result, secondaries can have an attractive risk-return profile.
On the other hand, co-investments provide investors with more targeted exposure to attractive companies, along with greater transparency and control. Co-investments are also often offered at much lower fees than traditional buyout or venture funds.
In a rapidly changing private markets landscape, an increasing number of investors are considering alternatives to traditional closed-end funds.
The solution has the potential to deliver attractive benefits to these investors, and addresses some of the limitations presented by closed-end funds. It is intended to provide ease of access to private equity, through lower entry minimums than may have been traditionally offered – with no ramp-up period and without the administrative burden of managing capital calls.
Endowus co-founder and chief executive officer Gregory Van says: “Offering investors immediate, diversified private equity exposure through an open-end vehicle provides more flexibility than closed-end funds because they have some liquidity with terms allowing investors to periodically redeem units, and generally have lower investment minimums, making it easier for more investors to allocate to private markets – with the added benefit of mitigating a potential J-curve effect on return outcomes.”
Simon Jennings, HarbourVest’s managing director and head of private client group in EMEA and Asia-Pacific, adds: “Private equity offers the opportunity to deliver attractive returns as it has historically outperformed public markets, which is particularly important at a time when private wealth clients, family offices and institutional investors are looking for diversification and liquidity."
