HarbourVest, a US investment firm that set up a base in Dublin ahead of Brexit, has scope to increase its staff in Ireland by 75 per cent to 72 after moving to new offices this year, senior executives have said.
The company, which invests in private market assets such as private equity funds and loans, initially planned to have eight employees in Dublin to set up a so-called Alternative Investment Fund Manager (AIFM) to oversee funds eligible to be marketed across the EU.
However, it has since set up an intercompany business servicing other parts of the HarbourVest group, where the majority of its 41 staff in the State are employed. The Irish unit is run by Scotsman Craig MacDonald.
Private market assets have become an increasingly important part of pension and long-term investment portfolios in recent decades as they move away from a strategy, developed by Nobel Prize-winning economists Harry Markowitz and William Sharp in the 1950s, which allocates roughly 60 per cent of assets to shares and 40 per cent to bonds.
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This has been accelerated as the number of private equity-owned companies has surged and publicly-quoted businesses have declined.
“There’s been a long-term source of durable excess returns in private equities relative to public equities,” HarbourVest chief executive John Toomey told The Irish Times in Dublin this week at the official opening of its new office in Dublin 4.
Private equity allocations by state pensions in the US produced a 11 per cent net-of-fee annualised return over 23 years to 2023, exceeding the 6.2 per cent of international public markets, according to an analysis by the Chartered Alternative Investment Analyst Association in the US.
Two new Irish sovereign wealth funds set up in the middle of last year – known collectively as Future Ireland Funds – are expected to commit some of their investments to private markets assets, also including infrastructure and real estate. The funds are on track to have more than €16 billion of assets by the end of this year, mainly invested in low-risk bonds, pending the completion of a long-term investment strategy. The plan is with the Government for consultation.
Mr Toomey said HarvourVest would be keen to secure a private markets investment mandate from the two new funds. “I think we would be well positioned to serve [the funds] in a strong capacity,” he said. “We have sovereign wealth fund investors all around the world. The multi-manager way in which we invest offers diversification, too.”
HarbourVest is best known in Ireland as having been a one-time investor in the Mater Private Hospital and Valeo Foods, whose brands include Jacobs, Odlums and Batchelors, through a fund managed by London-based CapVest. The hospital and food companies were sold in 2018 and 2021, respectively.
