As Vanguard pushes into private equity, some fans get queasy

As Vanguard pushes into private equity, some fans get queasyVanguard built its reputation on democratizing investing, bringing institutional products to the masses and doing so cheaply. Its retail-investor-friendly moves – index funds and low fees — have endeared it to millions of investors.

But the asset manager’s recent push into private-equity markets is giving some fans pause.

The $7 trillion asset manager began providing institutional clients – pension funds, endowments and the like – access to private-equity investments in 2020 through HarbourVest Partners, an $85 billion, independent global private markets investment firm. It expanded into wealthier individuals earlier this year.

Vanguard wouldn’t disclose how many clients have invested in its first offering for individuals, the Vanguard HarbourVest 2021 Private Equity Fund, or the dollar amounts, but Fran Kinniry, global head of private investments for Vanguard, said the fund giant has exceed its goals “by quite a far margin.”

Private equity is a very different than the stock market — notoriously expensive and opaque, with little regulatory oversight and often requiring individuals to lock up money for a decade or more.

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