Harvard Management Company has offloaded a portfolio of fund stakes in a quarter where the LP-led market rebounded with a vengeance.
The manager of the US’s largest university endowment sold around $1 billion of private equity stakes, according to three sources familiar with the matter. Ardian acquired a $750 million portfolio, with the remainder going to a second buyer.
Interested buyers were given two weeks to bid and no information was shared by the seller, according to one of the sources. The identity of the second buyer is not clear.
The process was run by Jefferies, Secondaries Investor understands.
Harvard has spent a number of years ramping up its exposure to private equity and venture capital. The $41.9 billion endowment was 34 percent allocated to PE at the end of the fiscal year on 30 June, compared with 23 percent the year before, according to its annual report.
The endowment returned 34 percent in the 2021 fiscal year, driven by top-performer private equity, which returned 77 percent. It is understood that this prompted it to sell down illiquid assets in order to de-risk and take cash off the table at the top of the market.
This situation is being replicated across many pensions and endowments, which have achieved outstanding PE returns in recent quarters. Harvard’s was one of at least three $1 billion-plus portfolios to close on 30 September, Secondaries Investor understands.
The LP market has been relatively muted since the onset of the pandemic, with buyers pivoting to more concentrated, easier-to-value GP-led deals. In the first half of 2021, GP-led volumes accounted for an unprecedented 60 percent of transaction volumes, a situation that could be going into reverse.
“The deluge is happening now,” said Jake Stuiver, head of LP secondaries with adviser M2O, on a recent podcast with Secondaries Investor. “I think we’re going to be back to over 50 percent LP volume by the end of the year.”
Ardian, Harvard and Jefferies did not wish to comment on the deal.