Episode summary
S4 | Episode 5: From Standardized Chassis to a Customized Private Capital Platform with HarbourVe...
Capital Decanted
· · 58 min · Guests: John Toomey
Summary
John Toomey argues that HarbourVest’s business had to evolve from a narrow, four-product menu into a more customized private capital platform because clients now expect flexible portfolios, not standardized fund formats. He says the firm’s purpose is to “enrich lives through the power of private markets,” and that achieving that requires serving institutions, wealth investors, and ultimately beneficiaries with different vehicles, including open-ended evergreen structures and customized solutions.
He traces HarbourVest’s transformation to the growth of secondaries, co-investments, and a broader data advantage built from decades of company-level information across 700 GP relationships and 1,300 LPs. Toomey expects the secondary market to keep expanding as investors shift from picking individual funds to managing portfolios and exposures more deliberately. He also argues that the firm’s multi-manager approach is increasingly aligned with LPs that want to consolidate relationships while still preserving diversification and access.
A major theme is access. Toomey says individual investors should not be excluded from private markets, but access has to be designed carefully, with education, transparency, and structures that match investor needs. He is supportive of wealth channels, 401(k) potential, and evergreen vehicles, but insists that “liquidity labels do not change liquidity realities,” and that the industry must stay investment-driven rather than flow-driven.
Key takeaways
- Toomey says HarbourVest evolved from a four-product closed-end model into a customized platform because clients now demand flexibility and tailored servicing.
- He expects the secondary market to become much larger as investors move from fund selection toward portfolio construction and exposure management.
- HarbourVest says it has 168 billion in assets, with about 30 to 35% in primary, 40 to 45% in secondaries, and the balance in co-investments.
- Toomey argues that wealth and retirement investors should get access to private markets, but only through structures built with transparency, education, and fiduciary care.
- He says HarbourVest’s advantage comes from being multi-manager, which helps it source broadly, diversify better, and avoid being flow-driven.
Notable quotes
“You have to meet your clients where they are and you have to deliver something of value or they will not invest with you at its core”
“The mission of our business, the purpose why we exist is to enrich lives through the power of private markets”
“we really benefit hugely in a no ego low ego culture”
“liquidity labels do not change liquidity realities”
“Now is the moment to put fiduciary responsibility above asset gathering and long-term outcomes ahead of short-term growth”
How the episode opens
I think I sensed and it wasn't just me I think my partners of my generation we sensed that the markets were changing and look it's continued to change today but the original business of Harborvest the first 25 years I describe it as a restaurant with four items on the menu and if you wanted to work with us it's just you got to pick one of these four ways to invest two of them were fund of funds a secondary fund and a direct equity co-investment fund and that was really it and like everything else around us we entered the era of customization and the ability to customize. And so we needed to almost take the original business and the chassis that existed serving only those four formats, closedend funds by the way, and really create something that was much more nimble in the world, both in how we accept client capital from a customized portfolio, from customized servicing, and then as we roll forward to today, the introduction of open-ended evergreen vehicles and wealth investors. And so there's this great foundation around how we can serve our clients as them because the markets are not static.
And so for me, I think I saw that the founders were never obstructionist. They didn't necessarily preclude us from doing anything we wanted to do. But boy, it was slow and what can happen is people get conservative and maybe we shouldn't take that risk.
And I just have this strong belief to my core. You have to meet your clients where they are and you have to deliver something of value or they will not invest with you at its core. And so that's how we built the business in the last 15 years.
Welcome to Capital Decanted.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private capital strategy
- primary and secondary investing
- co-investments
- culture and leadership
- customer voice
Companies and tickers mentioned
- HarbourVest Partners
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Capital Decanted, this episode and its artwork belong to John Bowman. Octagon is not affiliated with the show; this page is an independent summary.
