The real estate team of Harvard University’s $37.1bn (€31.4bn) endowment fund is joining Bain Capital to form a new real estate investment business.
The team of 20 professionals will continue to manage Harvard’s $3.4bn real estate investments, but will become employees of a new entity, Bain Capital Real Estate.
Harvard Management Company, which manages the endowment’s investments, has been looking to reduce its in-house investment staff under its new chief executive NP Narvekar.
The agreement will enable Harvard to effectively outsource its real estate investments while providing Bain Capital with a means of entering real estate investment management.
Bain Capital said it already had experience in the asset class, through its investments in distressed and special situations, and through its private equity hospitality and retail portfolio.
But the $85bn private equity firm, co-founded by US politician Mitt Romney, has yet to move more substantially into real estate, unlike some of its rivals.
Dan Cummings, managing director and head of real estate at Harvard Management Company, will continue to lead the team and manage Harvard’s investments.
He said Bain Capital was “an ideal fit for out team”.
John Connaughton and Jonathan Lavine, co-managing partners of Bain Capital, said: “We believe this builds upon our existing experience, aligns with investment opportunities in several of our business units, and will be an attractive resource for our investment teams and limited partners.”
Narvekar said: “While we are sad to see Dan and his colleagues depart HMC, we are delighted that we will continue to be partners with them. Furthermore, we are excited that they will be a part of Bain Capital, an outstanding investment management firm.”