HarbourVest’s Dover X set to hold first close on at least $2.5bn – exclusive

HarbourVest Partners is eyeing a first close on its latest flagship secondaries fund, almost one year after Secondaries Investor reported the firm was gearing up to launch the vehicle.

Dover Street X is likely to hold an interim close on between $2.5 billion and $2.7 billion, according to two sources with knowledge of the matter. The fund is targeting as much as $6.5 billion including co-investment capital, Secondaries Investor reported in July.

Investors in the fund so far include New Hampshire Retirement System, which committed $50 million, and Vermont State Retirement System, which committed $100 million, according to PEI data.

Dover Street X has a 0.75 percent annual management fee and carried interest on invested profits of 12.5 percent, Secondaries Investor reported in April. The management fee is calculated over 14 years, assuming the general partner uses its four single-year extensions. The preferred return is 8 percent.

The Boston-headquartered firm offered an annual fee reduction of 5 basis points to LPs who irrevocably commit to the fund on or before 31 May.

Since its 2003-vintage Dover Street V, complex secondaries deals have accounted for between 60 percent and 70 percent of HarbourVest’s flagship funds, according to documents prepared for Ventura County Employees’ Retirement System.

The 2015-vintage Dover Street IX, which raised $4.77 billion against a target of $3.6 billion, was 80 percent committed as of 30 September. It had achieved a net internal rate of return of 54.9 percent and a net total value to paid-in multiple of 1.4x as of the same date.

Secondaries funds are targeting at least $84.9 billion in total as of April, according to Secondaries Investor data. At least 43 vehicles with known targets are in market seeking secondaries capital across private equity, real estate and infrastructure, as well as for preferred equity.

HarbourVest declined to comment.

– Adam Le contributed to this report.