HarbourVest Partners, a subsidiary of John Hancock Insurance, has announced the final closes of its first mezzanine-focused co-investment fund at US$375 million and its third real assets fund at US$366 million.

Mezzanine Income Fund I was oversubscribed and closed above its US$250 million target at its hard cap of US$375 million.

Peter Lipson, Managing Director, HarbourVest; said:

“HarbourVest has been investing in mezzanine since 2003, and over the last decade we’ve seen consistent growth in the demand from private equity sponsors for mezzanine debt partners to help complete transactions. Our dedicated mezzanine debt solution will continue to differentiate HarbourVest as a preferred partner to GPs, while being highly complementary to our direct co-investment equity business—particularly in terms of accessing and evaluating deals.”

HarbourVest’s approach to the mezzanine market enables investors to access companies primarily in the U.S. lower middle market—and across some of the very best managers who invest in this area. This access is achieved via a differentiated mezzanine-equity strategy.

Real Assets Fund III is HarbourVest’s first commingled real assets fund and closed above its US$300 million target at US$366 million. The strategy of the fund is to leverage its Dover Street secondary investment approach and apply it to the less competitive but fast-growing real assets market with the objective to invest opportunistically across the energy, power, infrastructure, and natural resources sectors.

Kevin Warn-Schindel, Managing Director, HarbourVest, said:

“The real assets market has gone from a niche component of the broader secondary market to reach a level of maturity where it is now sizable enough to be viewed as a segment standing on its own. The dynamics of this early stage maturity is comparable to the early days of the PE secondary market itself, where the growth in the demand for liquidity continues to lag the availability of capital to provide it. In addition, as the market continues to mature we are seeing more GP spinout and GP-led transactions trickle into the space. Complex transactions are fairly new to the real assets market and GPs are looking for two main traits in a partner—a long pedigree of executing on these types of deals, and a thorough understanding of the underlying businesses in which they’re investing. We check both boxes with confidence.”

Limited Partners in both funds, more than half of which are new to HarbourVest, consist of pension funds, insurance companies, endowments and family offices across the U.S., Canada, Latin America, Asia and Europe.