Hartford Funds Launches Its First Private-Equity-Focused Fund
Hartford Funds announced today the public launch of the Hartford Schroders Private Opportunities Fund, an actively managed closed-end tender offer fund for accredited investors that primarily invests in private equity strategies.
The Fund is designed to provide broad exposure to a wide range of primarily small- and medium-sized buyout and growth companies with enterprise values that range from $50 million to $1 billion, which are typically not accessible to investors through public equity markets. In implementing the strategy, the investment team allocates to private equity strategies globally, investing across an array of regions, sectors, and industries in privately held companies that are seeking to actively build, grow, transform, or innovate.
The Fund seeks opportunities within high-quality direct and co-investments as well as primary and secondary private equity funds located in the U.S., Europe, and Asia, and will generally focus on the following five sectors: healthcare, technology, consumer (discretionary and staples), services, and industrials.
"Over the course of this market cycle, we have witnessed meaningful change to traditional investment practices, including the increased democratization of alternative markets for retail investors. At the same time, the number of privately owned companies far exceeds the number of publicly owned companies, creating an expansive opportunity set with the potential for higher growth and attractive returns," said Vernon Meyer, Chief Investment Officer at Hartford Funds. "We believe that, by offering the Hartford Schroders Private Opportunities Fund in a tender offer fund structure, we are helping expand investor access to private equity investments through lower investment minimums, periodic opportunities for liquidity, and familiar 1099 tax reporting, as compared to traditional private equity funds."
The actively managed tender offer fund is sub-advised by Schroder Investment Management North America Inc. ("Schroders"), a key strategic partner and sub-adviser of Hartford Funds for over seven years. Schroders Capital Management (US), Inc. ("Schroders Capital") will serve as the Fund's sub-sub-adviser. Benjamin Alt, Head of Global Private Equity Portfolios and Head of Private Equity Consumer Investments at Schroders Capital, and Ethan Vogelhut, Head of Buyout Investments Americas at Schroders Capital, will serve as portfolio managers of the Fund.
For more information about the Hartford Schroders Private Opportunities Fund, please visit hartfordfunds.com.
About Hartford Funds
Founded in 1996, Hartford Funds is a leading asset manager, which provides mutual funds, ETFs, and 529 college savings plans. Using its human-centric investing approach, Hartford Funds creates strategies and tools designed to address the needs and wants of investors. Leveraging partnerships with leading experts, Hartford Funds delivers insight into the latest demographic trends and investor behavior.
The firm's product line-up includes more than 50 mutual funds and ETFs in a variety of styles and asset classes. Its mutual funds (with the exception of certain fund of funds) are sub-advised by Wellington Management or Schroder Investment Management North America Inc. The strategic beta ETFs offered by Hartford Funds are designed to help address investors' evolving needs by leveraging a unique risk-optimized approach, which identifies risks within each asset class and then deliberately and systematically re-allocates capital toward risks more likely to enhance return potential. Excluding affiliated funds of funds, as of June 30, 2023, Hartford Funds' investment advisory business had approximately $129.9 billion in discretionary and non-discretionary assets under management. For more information about our investment family, visit http://www.hartfordfunds.com.
Founded in 1804, Schroders is a global investment management firm with £726.1 billion (€846.1 billion; $923.1 billion) assets under management, as of 30 June 2023. Schroders continues to deliver strong financial results in ever challenging market conditions, with a market capitalisation of circa £7 billion and over 6,100 employees across 38 locations. The founding famiy remains a core shareholder, holding approximately 44% of Schroders' shares.
Schroders has benefited from a diverse business model by geography, asset class and client type. It offers innovative products and solutions across four core growing business areas; asset management, solutions, Schroders Capital (private assets) and wealth management. Clients include insurance companies, pension schemes, sovereign wealth funds, high net worth individuals and foundations. Schroders also manages assets for end clients as part of its relationships with distributors, financial advisers and online platforms.
Schroders aims to provide excellent investment performance to clients through active management. It also channels capital into sustainable and durable businesses to accelerate positive change in the world. Schroders' business philosophy is based on the belief that if we deliver for clients, we will deliver for our shareholders and other stakeholders.
Schroders Capital provides investors with access to a broad range of private asset investment opportunities, portfolio building blocks and customised private asset strategies. Its team focuses on delivering best-in-class, risk-adjusted returns and executing investments through a combination of direct investment capabilities and broader solutions in all private market asset classes, through comingled funds and customised private asset mandates.
The team aims to achieve sustainable returns through a rigorous approach and in alignment with a culture characterised by performance, collaboration and integrity.
With $86.7 billion (£68.2 billion; €79.5 billion)* assets under management, Schroders Capital offers a diversified range of investment strategies, including real estate, private equity, secondaries, venture capital, infrastructure, securitised products and asset-based finance, private debt, insurance-linked securities and BlueOrchard (Impact Specialists).
Schroders Capital is the private markets investment division of Schroders plc. Schroders Capital Management (US) Inc. ('Schroders Capital US') is registered as an investment adviser with the US Securities and Exchange (SEC). It provides asset management products and services to clients in the United States and Canada.
*Assets under management as of 30 June 2023 (including non-fee earning dry powder and in-house cross holdings)
Some of the statements in this release may be considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We caution investors that these forward-looking statements are not guarantees of future performance, and actual results may differ materially. Investors should consider the important risks and uncertainties that may cause actual results to differ. These important risks and uncertainties include those discussed in The Hartford's Quarterly Reports on Form 10-Q, our 2022 Annual Report on Form 10-K and the other filings The Hartford makes with the Securities and Exchange Commission. We assume no obligation to update this release, which speaks as of the date issued.
From time to time, The Hartford may use its website to disseminate material company information. Financial and other important information regarding The Hartford is routinely accessible through and posted on our website at http://ir.thehartford.com. In addition, you may automatically receive email alerts and other information about The Hartford when you enroll your email address by visiting the "Email Alerts" section at http://ir.thehartford.com.
An investment in the Fund involves substantial investment risk with the potential for attractive returns. An investment in the Fund may be appropriate for investors with a long-term investment horizon who have the risk tolerance commensurate with an investment in the Fund and sufficiently understand the Fund's strategy, characteristics and risks, and have sufficient liquid assets to absorb potential losses and accept the lack of liquidity.
Alternative investments are complex, speculative investments and are not appropriate for all investors. All investors in the Fund must be "Accredited Investors," as defined in Regulation D under the Securities Act of 1933. Please note tax-exempt investors (such as retirement accounts) may be subject to unrelated business taxable income if invested in the Fund. Tax-exempt investors are urged to consult with their own tax professional prior to making an investment in the Fund.
An investment in the Fund is considered illiquid.
Unlisted Closed-End Fund Risks. The Fund is an unlisted closed-end fund. There is not expected to be any secondary trading market in the Fund Shares. The Fund differs from a mutual fund that offers daily redemption of fund shares at net asset value. Also, unlike many closed-end funds, the Shares are not listed on any securities exchange. To provide shareholders with limited liquidity, the Fund may repurchase Shares quarterly. If and when the Fund did repurchase shares, the Fund would repurchase Shares from shareholders quarterly in an amount up to 5% of the Fund's net asset value as of the prior calendar quarter end. The Fund does not anticipate conducting a tender offer for at least the first 12 months of operation. The Fund's Board of Trustees has complete discretion to determine whether the Fund will engage in any share repurchase. The Fund's distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to the Fund for investment. A return of capital to shareholders is a return of a portion of their original investment in the Fund, thereby reducing the tax basis of their investment. As a result of such reduction in tax basis, shareholders may be subject to tax in connection with the sale of Fund Shares, even if such Shares are sold at a loss relative to the shareholder's original investment.
Investment Strategy Risks. The Fund is a newly organized, non-diversified, closed-end management investment company with limited operating history that may be subject to additional risks. Security prices fluctuate in value depending on general market and economic conditions and the prospect of individual companies. ? Private equity investments involve a high degree of business and financial risk that can result in substantial losses. The valuation of private equity investments is complex and is typically based on fair value as determined in good faith by the Fund according to the Fund's valuation procedures. The Fund's net asset value could be adversely affected if the Fund's determination regarding the fair value of the Fund's investments were materially higher than the values that the Fund ultimately realizes upon disposal of such investment. ? Illiquid and restricted securities may be difficult to dispose of at a fair price at the times when the Fund believes it is desirable to do so. A particular investment may become illiquid, making it difficult for the Fund to sell that investment at an advantageous time or price. ? Foreign investments may be more volatile and less liquid than U.S. investments and are subject to the risk of currency fluctuations and adverse political, economic, and regulatory developments. ? Small-cap and Mid-cap securities can have greater risks and volatility than large-cap companies. ? Leverage can increase market exposure, magnify investment risks, and cause losses to be realized more quickly. ? Obligations of U.S. Government agencies are supported by varying degrees of credit but are generally not backed by the full faith and credit of the U.S. Government. ? Because the Fund is non-diversified, it may invest in a smaller number of issuers, and may be more exposed to risks and volatility than a more broadly diversified fund. ? To the extent the Fund focuses on one or more sectors, the Fund may be subject to increased volatility and risk of loss if adverse developments occur. ? Integration of environmental, social, and/or governance (ESG) factors into the investment process may not work as intended. ? The Fund's ESG restrictions will reduce the types and number of investment opportunities available to the Fund and, as a result, the Fund may underperform other funds that do not have similar restrictions.
Investors should carefully consider a fund's investment objectives, risks, charges and expenses. This and other important information is contained in the fund's prospectus and summary prospectus, which can be obtained by visiting hartfordfunds.com. Please read it carefully before investing.
The Hartford Schroders Private Opportunities Fund is distributed by Hartford Funds Distributors, LLC (HFD), Member FINRA. Advisory services are provided by Hartford Funds Management Company, LLC (HFMC). Schroder Investment Management North America Inc. (SIMNA) serves as the Fund's sub-adviser and Schroders Capital Management (US), Inc. (Schroders Capital) serves as the Fund's sub-sub adviser. HFMC, SIMNA, and Schroders Capital are all SEC registered investment advisers. Hartford Funds refers to HFD and HFMC, which are not affiliated with any sub-adviser.
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