Nest appoints HarbourVest as second private equity manager

The manager will allocate to co-investment opportunities on Nest’s behalf through a bespoke fund of one tailored to Nest’s needs and objectives. 

Nest told Pensions Expert’s sister title MandateWire that it has initially committed around £750mn to the manager to invest over the coming three years, although actual deployment levels will depend on the right deals being available.

This is the second private equity mandate awarded by Nest after a procurement process initiated in 2021, and concludes the awarding of any private equity mandates as part of that process. Schroders Capital was the first manager to be appointed in May.

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, along with its longer-term target of having around 5 per cent of its portfolio invested in private equity.

Stephen O’Neill, head of private markets at Nest, said HarbourVest Partners has an “impressive scale to help provide a reliable and regular deal flow, allowing them to be highly selective in the deals they choose”.

Additionally, he said the manager is “keen to exercise their governance rights to help manage long-term risks and encourage sustainable business activities”, and understands the importance of responsible investing”.

O’Neill concluded: “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.”

The focus of HarbourVest Partners’ 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. However, Nest may consider further private market strategies in the future.

This article originally appeared on MandateWire.com