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Wellington eyes late-stage growth opportunities with new USD 2.6bn fund

  • Ero Partsakoulaki
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Boston-headquartered asset manager Wellington Management is aiming to build a diverse portfolio with exposure to multiple sectors with its latest late-stage growth fund Wellington Hadley Harbor IV, co-head of private investments Michael Carmen told Unquote.

The firm held a USD 2.6bn final close for the fund in June 2023, securing more than USD 200m in co-invest capacity to deploy alongside the fund, according to an announcement. Commitments exceeded its USD 2.5bn target and brought total capital raised to invest in late-stage private companies to more than USD 6.6bn since the strategy’s launch in 2014.

“Our exit discipline in 2021 and close partnership with portfolio companies resonated well with clients and led to an oversubscribed fundraise of USD 2.6bn,” said Carmen, noting that when Hadley Harbor IV launched in 2022, it was “a very different period.” The downturn in the capital markets and other major market events at the time was slowing investment in private equity funds, he added.

The fund is 40% larger than its predecessor, Hadley Harbor III, and will continue to invest in late-stage companies that need capital to sustain growth and move to their next phase of development prior to a potential IPO or sale.

These are typically late-stage growth businesses, around one to four years away from a potential liquidity event, either through IPO or through acquisition, “with established business plans, real products, and existing clients,” he added.

The fund’s global investor base includes public and private pension plans, insurance companies, corporations, a sovereign wealth fund and family offices.

With companies staying private for longer, the firm is generally looking for the next generation of public companies that are seeking private capital to move to the next phase of growth. “These companies are not necessarily looking for early-stage venture capital-type help,” he said. “Instead, most often, they are looking to add expertise around the capital markets and get a better view of the competitive landscape in advance of a potential exit; areas Wellington is well versed in.”

The fund’s investment team is supported by Wellington’s portfolio support resources including an ESG team who helps evaluate private companies’ ESG readiness for public markets, said the announcement.

Wellington anticipates building a diverse portfolio with exposure to multiple sectors across finance, healthcare (excluding biotechnology), consumer and technology, said Carmen. “Historically, technology has been the largest category but we have no set allocations,” he added. From a geographic perspective, the GP invests globally.

Hadley Harbor IV has made six investments thus far, according to the statement.

Most recently, other funds across Wellington Private Investing platform participated in a Series A round led by Maveron and GV for Caraway, a New York City-based digital healthcare company; led a USD 150m equity financing round for Australia-headquartered medical device company Saluda Medical; and participated in a USD 200m Seried B financing for US-based biotech company Upstream Bio.

The firm has previously invested in UK-based payments platform PPRO, as well as New York City-based sport and concert tickets platform SeatGeek.

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Wellington Management − Michael Carmen (co-head of private investments), Matt Witheiler (consumer/technology sector lead).

 

[Editor's note: The second-to-last paragraph has been amended post-publication to clarify that other funds across Wellington Private Investing platform participated in a Series A round for Caraway.]

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