In a move to cater to the high-net-worth market, the Vanguard Group today announced that it is opening a new private equity investment program with Hamilton Lane Advisors, a Bala Cynwyd, Pa.-based private equity advisor.
Hamilton Lane will provide fund-of-funds management for the program, which Vanguard will offer to qualified investors. "This new initiative is a logical step in Vanguards development as an investment management firm, bringing clients additional investment programs and services to complement our core mutual fund business," said John Brennan, CEO of Vanguard, in a statement. A Vanguard spokesman declined to offer further comment on the new program.
Hamilton Lane is a 10-year-old private equity manager that invests in private placements, leveraged buyouts and venture capital. It has initiated $21 billion of private equity investments and it holds nearly $7 billion in fund-of-funds and discretionary assets, according to the company. Its client list includes several state and city pension plans.
The program is a significant departure from anything Vanguard has offered in the past, said Daniel Wiener, editor of the monthly newsletter, The Independent Adviser for Vanguard Investors. "This is a completely different animal," he said. "Vanguard is going after the wealthy individual that wants to invest in venture capital and private placements."
This latest move coupled with Vanguards decision to offer term life insurance on its Web site moves the firm away from its core competency of offering low-cost mutual funds, Wiener said.