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Why choose Vanguard for private equity?
For over four decades, we've sought out and identified exceptional investment opportunities and talent. By joining forces with one of the world's most experienced and accomplished private equity managers, we've developed a custom solution that provides turnkey access to diversification across private equity strategies, company stages, and geographies. Since its launch, our private equity offer has grown to more than $1.9 billion in client commitments.1
Paid non-client endorsement.
What is a private equity fund?
A private equity fund invests in companies that aren't listed on a public stock exchange. Its performance depends greatly on the quality of the firm and the fund team's skills. Private equity funds typically play an active role in the companies they invest in to create value. Private equity is characteristically illiquid and more complex than investing in public markets, but it has distinct market dynamics that may enable you to earn excess returns over the long term while increasing the diversification of your equity allocation.
Who's eligible to invest in private equity?
Clients must have $5 million in Vanguard assets, in addition to meeting qualified purchaser and accredited investor regulatory standards.2
What is a private equity fund?
A private equity fund invests in companies that aren't listed on a public stock exchange. Its performance depends greatly on the quality of the firm and the fund team's skills. Private equity funds typically play an active role in the companies they invest in to create value. Private equity is characteristically illiquid and more complex than investing in public markets, but it has distinct market dynamics that may enable you to earn excess returns over the long term while increasing the diversification of your equity allocation.
Who's eligible to invest in private equity?
Clients must have $5 million in Vanguard assets, in addition to meeting qualified purchaser and accredited investor regulatory standards.2
Private equity insights
Learn more from Vanguard experts about what you should consider before investing in private equity.
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Frequently asked questions
U.S. private equity funds are usually structured as limited partnerships. Investors in the funds are limited partners and have to meet certain requirements. The general partner of a fund usually serves as its investment manager.
Historically, private equity returns have surpassed public equity returns.3 These excess returns "reward" an investor for taking on the risk of making a large, long-term capital commitment and receiving uncertain cash flows. But private equity returns can vary drastically by fund, which is why it's important to choose a reputable private equity firm with skilled fund managers.
Although several factors influence a private equity fund's investment returns, the investment manager's skill in creating value through operational, governance, and financial strategies is one of the most important factors in the success of a fund over the long term.
The fees for investing in a private equity fund are generally higher and more complex than public equity fee structures. It's important to review the fund's partnership agreement carefully before investing.
When you invest in a private equity fund, you make a capital commitment. Committed capital is money an investor has agreed to contribute to an investment fund. The fund manager generally makes calls for capital from fund investors during the early years of a fund. If an investor fails to meet a capital call, it may be considered an event of default, which could negatively impact the private equity fund and its returns. During the next several years, you may begin receiving distributions from the fund, consisting of return of capital plus premium. The timing of calls for capital and fund distributions are unpredictable over the lifespan of the fund, which is generally up to 14 or more years.
Vanguard partners with HarbourVest, a world-class global private equity firm with a long history of innovation and success, to offer you a unique opportunity to access a distinct and growing segment of global equities.
HarbourVest offers global expertise and demonstrated performance across all investment strategies. Like Vanguard, HarbourVest values long-term relationships, uses quantitative analysis, and relies on deep market expertise, which have helped it deliver consistently strong investment results.
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To learn more about investing in private equity, contact your relationship team.
Schedule an appointment with your advisor
Schedule an appointment with your relationship manager
To learn more about investing in private equity, contact your relationship team.
Schedule an appointment with your advisor
Schedule an appointment with your relationship manager
1Source: Vanguard, as of March 31, 2024.
2Clients must meet the qualified purchaser and accredited investor standards under federal law, typically showing that their net worth is over $1 million or their annual income has been more than $200,000 in the last two years.
3Source: Bain & Company Global Private Equity Report 2023, which shows that private market returns have outpaced public market returns over every time horizon.
Vanguard has introduced you to HarbourVest in connection with a prospective investment in one or more Vanguard HarbourVest Fund(s) (“VGHV Funds”). In connection with this introduction, please note the following:
- Although Vanguard is an investor in certain VGHV Funds, Vanguard is providing you information about the VGHV Funds in its role as a promoter of the funds and not as a client of, or investor in, any private fund managed by HarbourVest.
- The VGHV Funds are the only private equity funds that are made available by Vanguard to its clients.
- Vanguard will be compensated by its clients in connection with their investments in the VGHV Funds as described below:
- Vanguard Personal Investor clients, which include self-directed and Vanguard Personal Advisor Wealth Management, will pay Vanguard an annual Vanguard Servicing Fee ("Servicing Fee"), applicable to each VGHV vintage to which they are subscribed, of 0.30% on capital commitments equal to or greater than $500,000 but less than $2 million, 0.20% on capital commitments equal to or greater than $2 million but less than $10 million, or 0.10% on capital commitments equal to or greater than $10 million.
- In addition to the Servicing Fee noted above, advised clients of Personal Advisor Wealth Management will also be assessed advisory fees on their investments in the VGHV Funds that are included as part of their advised portfolio in Personal Advisor Wealth Management.
Consequently, Vanguard has a financial incentive to make available to self-directed clients and recommend to advised clients the VGHV Funds.
All investing is subject to risk, including the possible loss of the money you invest.
Diversification does not ensure a profit or protect against a loss.
Private investments involve a high degree of risk and, therefore, should be undertaken only by prospective investors capable of evaluating and bearing the risks such an investment represents. Investors in private equity generally must meet certain minimum financial qualifications that may make it unsuitable for specific market participants.
This communication does not constitute an offer to sell or the solicitation of an offer to buy any specific investment product sponsored by, or investment services provided by The Vanguard Group, Inc., Vanguard Marketing Corporation, Vanguard National Trust Company or their affiliates. HarbourVest partners, LLC is a registered investment adviser under the Investment Advisers Act of 1940. The communication is for informational purposes only and does not constitute an offer or solicitation to purchase any investments solutions or a recommendation to buy or sell a security nor is it to be construed as legal, tax or investment advice. Unless otherwise indicated, any information available through this communication is as of the date indicated therein and may not be updated or otherwise revised to reflect information that subsequently becomes available. HarbourVest is under no obligation to update the information contained in this communication. Additionally, the information in this communication does not constitute a representation that the solutions described therein are suitable or appropriate for any person and HarbourVest does not accept any liability with respect to the information.