Vanguard is again considering jumping into the private-equity realm, an alternative investment generally considered only for the very wealthy.

Vanguard has been in talks with HarbourVest Partners in Boston and Pantheon Ventures in London, plus at least one other firm, to give private market strategies to clients of its advisory services, reports the Wall Street Journal.

It could mark a huge departure for the low-cost index fund giant, which now manages $5.6 trillion in assets for investors globally.

"We continuously evaluate our products and services, but have no immediate plans to offer a private-equity fund," said Vanguard spokeswoman Emily Farrell.

Typically, the private-equity funds charge 2% of assets as a management fee and up to 20% of the returns as the performance fee. Minimum investments are generally $500,000 and higher.

In 2001 Vanguard struck a deal with Hamilton Lane Advisors, a Bala Cynwyd, Pa., private-equity adviser, to put together a fund-of-private-equity-funds to offer to its high net-worth clients, such as those in its Flagship program, plus institutions.

Claiming that well-selected funds would outperform index funds, Vanguard in 2001 said it would charge a fee of 0.85%, then hand 0.50% over to Hamilton Lane while keeping the other 0.35%.

Investors, however, would not only pay this fee to Vanguard, but would also be paying the underlying 1% to 3% annual fees for each private-equity fund the portfolio invested in, plus the 20% to 30% of profits, or so, that typically goes to the private-equity fund's advisers.

The plan never happened.

In 2013 the specter of offering private-equity or hedge-fund options through 401(k) plans and target-date funds was floated in a story in Business Week. Vanguard flatly denied having any interest in the idea.

Apparently, though, the idea has been reborn under chairman Tim Buckley, who has been keen on remaking the investment giant.

"Whether Vanguard can come up with a better and more attractive offering this go-round remains to be seen," said Daniel Wiener, who follows Vanguard for clients. "If they go ahead, I expect their marketing will emphasize both the purported market-beating potential of a portfolio of private-equity funds as well as their lack of correlation with public market securities. I don't think Vanguard will be able to … leverage its reputation as a low-cost leader when it comes to a notoriously high-cost, and typically market-lagging investment enterprise."

Erin Arvedlund writes for the Philadelphia Inquirer.