Latest developments in the private equity sector this week
Harvard University Sells $1 Billion in Private Equity Fund Stakes in Response to Financial Pressures
Harvard University is selling approximately $1 billion of its private equity fund stakes in a move aimed at increasing liquidity. The sale, dubbed a "fire sale," is taking place at about 80 cents on the dollar, according to reports.
The decision to sell comes as the university grapples with new financial pressures, including increased taxes and reduced federal funding. The sale is part of a strategy to manage liquidity needs while adapting to a more challenging financial environment, particularly due to changes in international student revenue.
The sale will see the university's endowment portfolio shift towards a better balance of liquid and illiquid assets, with a target of a 60/40 split between these asset types.
Potential buyers for these stakes are likely to be institutional investors, secondary market buyers, or specialized private equity secondary funds that buy large portfolios of such stakes. The sale is being conducted on the secondary market, where experienced professional investors are looking to acquire private equity fund interests at a discount.
The transaction is expected to close by the end of 2025, subject to regulatory approvals.
In a separate development, Nomura, a Japanese investment bank, has announced a $1.8 billion all-cash acquisition of Macquarie's US and European public asset management units. This acquisition adds approximately $180 billion in assets under management to Nomura's portfolio, making it the bank's largest international deal since the 2008 purchase of Lehman Brothers' Asian and European operations.
Meanwhile, 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. The firm will offer tax, accounting, technology consulting, and M&A advisory services.
It's worth noting that Unity Advisory will not offer audit services to avoid regulatory complexities. The firm was not involved in the Harvard University transaction, which is being advised by Jefferies Financial Group.
Lexington Partners, a potential buyer in the Harvard University transaction, was not affected by the Nomura acquisition. The terms of the Harvard University transaction are still under negotiation.
This move by Harvard University reflects a broader trend among elite university endowments adjusting to an evolving regulatory and economic landscape that pressures their long-term investment strategies. The sale does not involve the sale of Harvard University's private equity fund stakes, and the deal will not grow Nomura's investment management platform to $770 billion, as previously reported.
- Harvard University is selling $1 billion of private equity fund stakes to increase liquidity, a move aimed at dealing with new financial pressures.
- The sale, taking place on the secondary market, is being conducted at around 80 cents on the dollar.
- The university's endowment portfolio will shift towards a better balance of liquid and illiquid assets, with a target of a 60/40 split.
- Potential buyers for these stakes include institutional investors, secondary market buyers, or specialized private equity secondary funds.
- The transaction is expected to close by the end of 2025, subject to regulatory approvals.
- In a separate development, Nomura, a Japanese investment bank, is making an all-cash acquisition of Macquarie's US and European public asset management units, adding $180 billion in assets under management to its portfolio.
- Unity Advisory, a new UK-based consulting firm, is set to launch with up to $300 million in backing, offering services like tax consulting, technology consulting, and M&A advisory, but not audit services to avoid regulatory complexities.
