REG - HarbourVest Global - Annual Financial Report
29/05/2025 07:00
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RNS Number : 5020K HarbourVest Global Priv. Equity Ltd 29 May 2025
29 May 2025
HARBOURVEST GLOBAL PRIVATE EQUITY LIMITED
("HVPE" or the "Company")
RESULTS FOR THE 12 MONTHS ENDED 31 JANUARY 2025
Resilient performance against challenging backdrop
Introduction of ambitious initiatives to maximise returns
HarbourVest Global Private Equity Limited ("HVPE" or the "Company"), a FTSE
250 investment company with global exposure to private companies, managed by
HarbourVest Partners, today announces its audited results for the 12 months
ended 31 January 2025.
Highlights
Resilient performance
· Net Assets of $4.0bn (2024: $3.9bn)
· Share Price Return (£) +19.2% (2024: +4.8%)
· Discount to NAV (£) reduced from 42% to 35%
· NAV per Share Return ($) +7.3% (2024: +4.0%)
· Weighted Average Uplift to Pre‑Transaction Carrying Value 37% (2024:
24%)
Three new initiatives to maximise returns and address discount to NAV
· Distribution Pool allocations doubled from 15% to 30% - the Board
believes that buybacks at the current discount to NAV are accretive and
represent an efficient use of shareholder capital
· Simplified investment structure - will benefit shareholders via
increased control and flexibility around investment pacing and portfolio
liquidity, and reduced look‑through gearing
· Introduction of Continuation Vote at 2026 AGM - ensures shareholders
have a platform to express their views and decide on the future of the Company
Engaged Board
· $106 million (£84 million) utilised to buy back 3,414,837 shares.
Equivalent to 2.7% of opening NAV and boosted NAV per share by 1.9%
· Since the Board commenced share buybacks in September 2022, a total of
$197 million has been bought back, adding 4.4% to NAV per share
· Largest share buyback program by value among any of HVPE's direct fund
of fund peers
· Benefits of overhauled communications function paying off
o 120 individual meetings with wealth managers, family offices, and
institutional investors
o 300% increase in retail and professional events
o Expanded online presence
o Retail investor engagement strengthened
· Annual perception study carried out by an independent third party
· Capital Markets Day scheduled for 12 June 2025, if you would like to
register you can do so here
(https://pages.harbourvest.com/EV_2025_Q2_Capital_Markets_Day_Registration.html)
Reasons for optimism despite current market turbulence
· During the 12 months ended 31 January 2025, there were a total of 496
known M&A transactions and IPOs, an uptick on the 362 total transactions
reported in the 12 months to 31 January 2024
· 2025's early signs of recovery were expected to act as catalysts for
unlocking greater value in the sector
· Greater clarity and a more measured tone around global trade policy
could support a gradual return to stability in the coming months
· The Board and Manager believe as confidence resettles, the pick-up in
transaction volumes will resume
· HVPE's high quality, diversified global portfolio ensures it is very
well placed to capitalise on private market opportunities
Ed Warner, Chair of HVPE, commented:
"Despite the economic uncertainty impacting market confidence, the Board is
encouraged by HVPE's long-term achievements and has implemented three
ambitious measures to address the discount to NAV: increasing the allocation
to HVPE's share buybacks, simplifying HVPE's investment structure, and
introducing a Continuation Vote at the 2026 AGM.
"Over the past year, HVPE's share price has risen by 19%, bolstered by share
buybacks and decisive actions by the Board and Investment Manager, positioning
HVPE as a strong performer in the sector.
"I would like to thank our shareholders for their feedback and continued
support, and we look forward to HVPE's high quality portfolio continuing to
outperform public market benchmarks over the longer term".
Annual Report and Accounts
To view the Company's Annual Report and Accounts please visit HVPE's website:
https://www.hvpe.com/literature-and-reports/reports-presentations/reports/
(https://www.hvpe.com/literature-and-reports/reports-presentations/reports/) .
Page number references in this
announcement refer to pages in this report. The Annual Report and Accounts
will also shortly be
available on the National Storage Mechanism, which is situated at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
The HVPE team is here to discuss any questions you may have, so please do not
hesitate to contact Richard Hickman or Stephanie Hocking using the contact
details below.
- ENDS -
LEI: 213800NBWV6WWV8TOL46
Enquiries:
Shareholders
HarbourVest Partners
Richard Hickman Tel: +44 (0)20 7399 9847 rhickman@harbourvest.com (mailto:rhickman@harbourvest.com)
Stephanie Hocking Tel: +44 (0)20 7399 9834 shocking@harbourvest.com (mailto:shocking@harbourvest.com)
Peel Hunt (Joint Broker)
Luke Simpson / Tel: +44 (0)20 7418 8900 luke.simpson@peelhunt.com (mailto:shocking@harbourvest.com)
Huw Jeremy (Investment Banking) huw.jeremy@peelhunt.com (mailto:huw.jeremy@peelhunt.com)
Alex Howe / alex.howe@peelhunt.com (mailto:alex.howe@peelhunt.com)
Ed Welsby (Sales) ed.welsby@peelhunt.com (mailto:ed.welsby@peelhunt.com)
Winterflood Investment Trusts (Joint Broker)
Neil Morgan / Tel: +44 (0) 20 3100 0000 neil.morgan@winterflood.com (mailto:neil.morgan@winterflood.com)
Joe Winkley (Corporate Finance) joe.winkley@winterflood.com (mailto:joe.winkley@winterflood.com)
Hugh Middleton hugh.middleton@winterflood.com (mailto:hugh.middleton@winterflood.com)
Darren Willis (Sales) darren.willis@winterflood.com (mailto:darren.willis@winterflood.com)
Media HVPE@camarco.co.uk (mailto:HVPE@camarco.co.uk)
Camarco
Billy Clegg
Jennifer Renwick
Amrith Uppuluri
HarbourVest Partners media@harbourvest.com (mailto:media@harbourvest.com)
Notes to Editors:
About HarbourVest Global Private Equity Limited:
HarbourVest Global Private Equity Limited ("HVPE" or the "Company") is a
Guernsey incorporated, closed-end investment company which is listed on the
Main Market of the London Stock Exchange and is a constituent of the FTSE 250
index. HVPE is designed to offer shareholders long-term capital appreciation
by investing in a private equity portfolio diversified by geography, stage of
investment, vintage year, and industry. The Company invests in and alongside
HarbourVest-managed funds which focus on primary fund commitments, secondary
investments and direct co-investments in operating companies. HVPE's
investment manager is HarbourVest Advisers L.P., an affiliate of HarbourVest
Partners, LLC, an independent, global private markets asset manager with over
42 years of experience.
About HarbourVest Partners, LLC:
HarbourVest is an independent, global private markets firm with over 42 years
of experience and more than $143 billion of assets under management as of
December 31, 2024. Our interwoven platform provides clients access to global
primary funds, secondary transactions, direct co-investments, real assets and
infrastructure, and private credit. Our strengths extend across strategies,
enabled by our team of more than 1,200 employees, including more than 235
investment professionals across Asia, Europe, and the Americas. Across our
private markets platform, our team has committed more than $62 billion to
newly-formed funds, completed over $62 billion in secondary purchases, and
invested over $45 billion in direct operating companies. We partner
strategically and plan our offerings innovatively to provide our clients with
access, insight, and global opportunities.
This announcement is for information purposes only and does not constitute or
form part of any offer to issue or sell, or the solicitation of an offer to
acquire, purchase or subscribe for, any securities in any jurisdiction and
should not be relied upon in connection with any decision to subscribe for or
acquire any Shares. In particular, this announcement does not constitute or
form part of any offer to issue or sell, or the solicitation of an offer to
acquire, purchase or subscribe for, any securities in the United States or to
US Persons (as defined in Regulation S under the US Securities Act of 1933, as
amended ("US Persons")). Neither this announcement nor any copy of it may be
taken, released, published or distributed, directly or indirectly to US
Persons or in or into the United States (including its territories and
possessions), Canada, Australia or Japan, or any jurisdiction where such
action would be unlawful. Accordingly, recipients represent that they are able
to receive this announcement without contravention of any applicable legal or
regulatory restrictions in the jurisdiction in which they reside or conduct
business. No recipient may distribute, or make available, this announcement
(directly or indirectly) to any other person. Recipients of this announcement
should inform themselves about and observe any applicable legal requirements
in their jurisdictions.
The Shares have not been and will not be registered under the US Securities
Act of 1933, as amended (the "Securities Act") or with any securities
regulatory authority of any state or other jurisdiction of the United States
and, accordingly, may not be offered, sold, resold, transferred, delivered or
distributed, directly or indirectly, within the United States or to US
Persons. In addition, the Company is not registered under the US Investment
Company Act of 1940, as amended (the "Investment Company Act") and
shareholders of the Company will not have the protections of that act. There
will be no public offer of the Shares in the United States or to US Persons.
This announcement has been prepared by the Company and its investment manager,
HarbourVest Advisers L.P. (the "Investment Manager"). No liability whatsoever
(whether in negligence or otherwise) arising directly or indirectly from the
use of this announcement is accepted and no representation, warranty or
undertaking, express or implied, is or will be made by the Company, the
Investment Manager or any of their respective directors, officers, employees,
advisers, representatives or other agents ("Agents") for any information or
any of the opinions contained herein or for any errors, omissions or
misstatements. None of the Investment Manager nor any of their respective
Agents makes or has been authorised to make any representation or warranties
(express or implied) in relation to the Company or as to the truth, accuracy
or completeness of this announcement, or any other written or oral statement
provided. In particular, no representation or warranty is given as to the
achievement or reasonableness of, and no reliance should be placed on any
projections, targets, estimates or forecasts contained in this announcement
and nothing in this announcement is or should be relied on as a promise or
representation as to the future.
Other than as required by applicable laws, the Company gives no undertaking to
update this announcement or any additional information, or to correct any
inaccuracies in it which may become apparent and the distribution of this
announcement. The information contained in this announcement is given at the
date of its publication and is subject to updating, revision and amendment.
The contents of this announcement have not been approved by any competent
regulatory or supervisory authority.
This announcement includes statements that are, or may be deemed to be,
"forward looking statements". These forward looking statements can be
identified by the use of forward looking terminology, including the terms
"believes", "projects", "estimates", "anticipates", "expects", "intends",
"plans", "goal", "target", "aim", "may", "will", "would", "could", "should" or
"continue" or, in each case, their negative or other variations or comparable
terminology. These forward looking statements include all matters that are not
historical facts and include statements regarding the intentions, beliefs or
current expectations of the Company. By their nature, forward looking
statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future and may be
beyond the Company's ability to control or predict. Forward looking statements
are not guarantees of future performance. More detailed information on the
potential factors which could affect the financial results of the Company is
contained in the Company's public filings and reports.
All investments are subject to risk. Past performance is no guarantee of
future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any investment
decision. The value of investments may fluctuate. Results achieved in the past
are no guarantee of future results.
This announcement is issued by the Company, whose registered address is BNP
Paribas House, St Julian's Avenue, St Peter Port, Guernsey, GY1 1WA
© 2025 HarbourVest Global Private Equity Limited. All rights reserved.
chair's statement
As I write this statement, we find ourselves in a markedly different
environment from this time last year. Some developments offer grounds for
optimism. In particular, interest rates have started to fall around the world,
triggering a pick-up in corporate activity that is unshackling private
capital. However, since early April 2025, the economic picture has shifted
once again. The announcement of the Liberation Day tariffs by President Trump,
along with subsequent developments, has introduced fresh volatility into the
markets. While there has been a pause on the most severe measures and some
early signs of a willingness to negotiate, a lack of clarity around the path
forward has once again heightened economic uncertainty with a knock-on impact
on market confidence.
Investors can be reassured that despite the backdrop, the Board remains
confident in our strategic approach to effectively navigate this short-term
volatility in the global markets, and we remain encouraged by HVPE's long term
success.
The Board is fully aware that the Company's share price is still trading at a
meaningful discount to NAV and shares your frustrations on this matter. This
is why we introduced three ambitious measures on 30 January 2025 to help
address the discount: doubling the allocation to HVPE's share buybacks to 30%
of gross cash realisations, simplifying HVPE's investment structure, and
introducing a Continuation Vote at the 2026 Annual General Meeting ("AGM").
By its very nature, HVPE is a long-term value creation vehicle, designed to
generate sustainable growth over extended periods. Over the past ten years, we
have delivered a NAV per share total return of 242% in dollar terms. In
sterling terms, for the same period, HVPE's share price return of 227% has
outperformed the FTSE 250 Index (returned +69%), and the FTSE All World Total
Return Index (returned +221%).
Over the past year, HVPE's share price has increased by 19% to £27.60,
supported by the value accretion from $106 million of share buybacks.
Additionally, the decisive actions taken by the Board and the Investment
Manager have contributed to the discount to NAV reducing from 42% to 35%. This
increase in HVPE's share price positioned the Company as the second-best
performer in the Listed Private Equity Fund of Funds sector.
We remain optimistic as we navigate 2025. Greater clarity and a more measured
tone around global trade policy could support a gradual return to stability in
the coming months, supporting the much-needed recovery in the IPO and M&A
markets, and we would expect this to be accompanied by a stronger alignment of
buyer and seller expectations - a key catalyst for unlocking value in the
sector. Your Investment Manager also shares this positive outlook and is
encouraged by potential IPOs in the venture space, which bodes well for HVPE
given its exposure to this segment.
Narrowing the Discount to NAV
The Board's responsibilities to its shareholders include the ongoing
evaluation of HVPE's performance to ensure that its shareholders are being
best served by both its strategy and its Investment Manager. As part of this,
we recognise the importance of open dialogue with our investors and during the
course of the year met with a large number of investors and key stakeholders,
and commissioned a follow-up perception study undertaken by an independent
agency. The results of the Board's engagement with shareholders revealed broad
support for the Company's strategy. We are reassured that shareholders share
the Board's view that HVPE plays a critical role in providing all investors of
any size with access to a wide range of private equity investments, offering
exposure to emerging, high-growth companies in the form of a liquid and freely
traded share.
The feedback we received helped inform the Board's decision-making regarding
the introduction of the three new initiatives announced at the end of the
financial year.
Increased Allocation to Share Buybacks
As outlined in our update on narrowing the discount on 30 January 2025, the
Board believes that share buybacks at the current discount to NAV are a driver
of shareholder value and therefore an efficient use of capital. This is why we
announced the doubling of the Distribution Pool(1(APM)) from 15% to 30%. We
expect this move to generate significant NAV accretion should HVPE's shares
continue to trade at a material discount to NAV.
Simplified Structure
This month, we finalised the details of the new investment structure that will
see HVPE's capital deployed through a dedicated vehicle investing in
third-party primary funds, secondaries, and direct co-investments. This
Separately Managed Account (SMA) will simplify HVPE's investment framework
over time and benefit shareholders with increased control and flexibility
around investment pacing and portfolio liquidity, and reduced look‑through
gearing.
Best in Class Corporate Governance
Finally, as further confirmation of the Board's continued commitment to
best-in-class corporate governance, we announced in January 2025 that we will
introduce a Continuation Vote at HVPE's AGM in July 2026. This will give
shareholders the opportunity to express their views and decide on the
Company's future. The Board considers this an important step in strengthening
shareholder democracy, with HVPE being the first listed PE fund of funds
investment company to adopt such a measure. Shareholders will be asked to
decide by a simple majority vote on the Company's continuation. It is, of
course, our hope that you will take this opportunity next year to endorse
HVPE's strategy and its future.
Buybacks
The Board has been active in buying back shares in the last financial year,
investing $106 million (£84 million) to buy back 3,414,837 shares at an
average price of £24.48 in the year. This was equivalent to 2.7% of opening
NAV and boosted NAV per share by 1.9%. HVPE undertook the largest share
buyback programme in the Listed Private Equity Fund of Funds peer group by
volume and the second largest as a percentage of NAV.
Portfolio Cash Flows, Commitments and Balance Sheet
HVPE was a net investor by $61 million during the financial year, with $443
million invested and $382 million realised. There were also $415 million of
new fund commitments in the year. The Board and Investment Manager negotiated
a new credit facility, which was increased from $800 million to $1.2 billion
in June 2024. The cash balance for HVPE at 31 January 2025 was $123 million
(down from $140 million on 31 January 2024), with a net debt position of $357
million at 31 January 2025 (up from $135 million on 31 January 2024) due to
net investment into the portfolio, share buybacks and operating expenses.
Dedication to Best Practice
Your Board is dedicated to observing the best standards of corporate
governance within the investment company sector. Over the past few years, we
have undertaken transformative efforts to enhance the Board's independence and
ensure our structure serves the best interests of our shareholders. Key
initiatives include the introduction of a strict nine-year tenure policy for
Directors, and, critically, the establishment of a fully independent Board.
The independent shareholder perception studies that we have undertaken are a
demonstration of our commitment to listen to HVPE's shareholders. We have not
hesitated to act decisively to address any concerns, and will continue putting
shareholder interests at the heart of all we do.
Increased Engagement
We made a strategic decision to invest in strengthening our marketing efforts
to improve our connection with existing and potential investors in 2024,
building a comprehensive programme from the ground up. We have started to see
the benefits of this initiative, holding 120 individual meetings with wealth
managers, family offices, and institutional investors - an increase of over
20% from the previous year. This year also saw the launch of a dedicated
LinkedIn page to expand our online presence, an advertising campaign in the
second half of 2024 that reached 59,000 households, and a trebling of the
number of retail and professional events held compared to the previous year -
with a particular focus on the UK and Switzerland. The latter has been
particularly impactful, resulting in an increase in demand from Swiss
investors.
In addition, we have started producing a series of educational videos and
expanded our thought leadership work to engage investors in a more accessible
and informative way. Our Investor Meet Company events have also proved highly
effective in strengthening investor engagement, attracting almost 600
investors across the four meetings held so far. In the coming months, we have
several key engagements scheduled - with the Capital Markets Day on 12 June
2025 at the centre of this activity, where I hope to see many of you. The
Company's AGM with be held in Guernsey at 1.00PM BST on 16 July 2025. Formal
notice will be sent to registered shareholders shortly and we encourage all
registered shareholders to exercise their votes by proxy.
Outlook
The turbulence in markets in recent weeks, as investors attempt to separate
noise from signal in the pronouncements from the US administration, has had
the immediate effect of dampening activity in private markets. Early signs are
that this will prove merely a postponement of transactions and that, as
confidence resettles, the pick-up in volumes evident across the turn of the
year will resume. While the effect on HVPE may be a lower overall quantum of
distributions from our investments in 2025 than originally anticipated before
the tariffs shock, we remain confident that HVPE's high quality, diversified
global portfolio ensures it is very well placed to capitalise on the many
exciting opportunities that the improving conditions in private markets will
present. On behalf of the Board, I would like to thank all shareholders for
your continued support.
Ed Warner
Chair
28 May 2025
1 (APM) Metrics with this APM icon denote our Alternative
Performance Measures ("APMs"). For more information on APMs, please turn to
pages 109 to 110.
Investment Manager's Report
Introduction
After more than two years of challenging global macro conditions, the recovery
in public markets that began in Q4 2023 gained traction and accelerated
through 2024. Central banks in several key Western economies started reducing
interest rates, albeit gradually, and market confidence returned. As
inflationary pressures began to abate, the European Central Bank and the
Federal Reserve made interest rate cuts of 1.0% and 0.75% respectively during
the year. Whilst inflationary risk remained, and an uncertain geopolitical
backdrop continued to present its own challenges, investor sentiment improved
as the year progressed. Most major equity indices posted double-digit gains,
with the S&P 500, Nasdaq and FTSE All-World finishing at, or close to, new
record highs.
Following the year-end, the Liberation Day US trade tariff announcements
introduced new macroeconomic and geopolitical risks into the investment
environment, causing markets to drop sharply initially. While there has been
some recovery in equity indices and market sentiment since then, an elevated
level of uncertainty persists, which is likely to continue affecting both
public and private equity markets throughout the remainder of 2025.
Private Markets Industry
The improvement in public equity market confidence during 2024 was also
reflected in private market dealmaking. After a tepid start, global private
equity ("PE") investment activity accelerated as the year progressed, as
M&A activity started coming back to life. In 2024, global M&A markets
were up 19% by value and 13% by volume compared with 2023, with private
equity's share rising as 2024 progressed(1). Evidence of a narrowing valuation
gap between the price expectations of buyers and sellers was also evident.
PE exit activity strengthened in the second half of 2024, but this was still
not sufficient to ease the liquidity pressures that have been faced by Limited
Partners ("LPs") since 2022. Although estimated PE exit volume of $871 billion
during 2024 was comfortably ahead of the $759 billion recorded for the same
period in 2023, it remained substantially below 2021's peak, which saw $1.7
trillion of private equity(2) exits globally, and below the average of $1.0
trillion seen over the prior five years(2). Whilst IPOs tend to make up a
small percentage of exit activity, it is worth noting that IPO markets did not
make the meaningful return in 2024 that many had hoped for, with the number of
IPOs globally falling 10% to 1,215(3), significantly below the peak of 2,388
seen in 2021(4) and the annual average of 1,639 seen over the last five
years(5).
1 Source: PitchBook, Q1 2025 Global M&A Report, 28 April 2025.
2 Source: PitchBook, Q1 2025 Global PE First Look, 1 April 2025.
3 Source: EY Global IPO Trends 2024.
4 Source: EY Global IPO Trends 2021.
5 Source: EY Global IPO Trends 2024 & 2021, Baker McKenzie IPO
Report 2020.
With activity in the traditional exit channels for private markets remaining
low by historical standards, the secondaries market has been increasingly
accessed by both GPs and LPs as they seek to generate liquidity from
portfolios. LPs are becoming more tactical in managing their PE programmes and
are using secondaries to fine-tune their exposures, with LP-led deals
accounting for around 54% of market volume in 2024(1). Meanwhile, GPs also see
the secondary market as an increasingly useful mechanism for creating
liquidity from their top performing companies and are embracing continuation
solutions to maintain partial exposure to their future growth potential. These
trends helped drive global secondary volume in 2024 to record levels, with
$162 billion of transaction volume, against a prior record of $132 billion in
2021(2). Despite this growth, private equity asset turnover on the secondary
market remains a relatively small proportion of the overall market (at around
2%)(3), meaning that there is still significant scope for this market to grow
in the future.
Trends by region
The recovery in private market deal activity was not spread equally by region.
At $391 billion, US PE exit activity for 2024 was significantly ahead of the
2023 exit value ($287 billion)(4). This upturn was supported by a competitive
debt financing backdrop as banks returned to the syndicated loan market. US
venture capital is taking somewhat longer to recover, with new deal and exit
activity remaining muted in 2024. However, the strong performance of some of
the venture capital-backed IPOs that did occur in 2024 (such as Reddit and
Astera Labs), indicates that there is investor appetite for companies at the
forefront of innovation in sectors such as artificial intelligence, climate
tech, cybersecurity, and health tech. This is echoed by private market fund
raising transactions such as OpenAI's $6.6 billion round, valuing the company
at $157 billion(5) and Databricks' $10 billion round, valuing the company at
$62 billion(6).
Europe saw a healthy uptick in PE investment activity with buyout deal values
and volumes growing by 39% and 8% respectively(7). Unlike other regions,
European fundraising was strong, with GPs raising a record €133 billion
during 2024, which was above the previous record of €126 billion raised in
2021 and the €124 billion raised in 2023(8). Despite these healthy market
indications, a significant rebound in Europe's PE exits did not materialise in
2024, with total exit value of €281 billion, which was only 5% above the
total for 2023 (€269 billion) and significantly below the record of €414
billion seen in 2021(9). The region's economic recovery still faces
challenges, including geopolitical conflict and a growing need to innovate as
industrial companies shift towards new business models that incorporate
digital technologies. Despite these obstacles, we believe that managers with
the skills and resources to capitalise on these opportunities will be able to
generate strong returns for investors in growth sectors such as AI and
automation as well as from trends such as the reshoring of supply chains.
Private equity and venture capital transactions across Asia-Pacific ("APAC")
totalled $101 billion in 2024, roughly in line with the 2023 total ($102
billion), supported by buyout deals in Japan, Korea, and India and several
large transactions in China(10). Overall exit volume increased 18%
year-on-year to $60 billion, with India representing the largest exit market
for the region(11). India's IPO market was exceptionally strong, with over 300
IPOs being launched by Indian companies, taking advantage of strong investor
confidence and a burgeoning pool of domestic investors participating in equity
markets(12). With total disposable incomes across the region projected to
double in real terms from 2021 to 2040(13), the growth in spending power is
fuelling deal opportunities in areas such as healthcare, financial services,
and consumer services. Asia is also seeing the emergence of the first wave of
generative-AI related investments, with companies such as DeepSeek rising as
new challengers to more established names in the space and offering the
potential to disrupt and transform traditional business models in the years to
come.
1 Source: Jefferies Global Secondary Market Review January 2025.
2 Source: Jefferies Global Secondary Market Review January 2025.
3 Source: Global secondary volume as proportion of private equity
NAV per Preqin October 2024.
4 Source: Pitchbook Q1 2025 US PE Breakdown.
5 Source: https://openai.com/index/scale-the-benefits-of-ai/.
6 Source: Databricks website.
7 Source: Pitchbook Q1 2025 European PE First Look, 1 April 2025.
8 Source: Pitchbook Q1 2025 European PE Breakdown, 9 April 2025.
9 Source: Pitchbook Q1 2025 European PE First Look, 1 April 2025.
10 Source: AVCJ, APER, supplemented by HarbourVest analysis of other
activity in the market, as of 31 December 2024.
11 Source: AVCJ, APER, supplemented by HarbourVest analysis of other
activity in the market, as of 31 December 2024.
12 Source: EY Global IPO Trends 2024.
13 Source:
https://www.euromonitor.com/income-and-expenditure-in-asia-pacific/report.
A Summary of HVPE's Year
Move to SMA structure
HarbourVest Partners recently agreed the final heads of terms on a revised
structural arrangement with the Board for the deployment of capital into new
private markets investment opportunities. Going forward, capital will be
deployed via a dedicated HVPE SMA vehicle directly into third-party GP funds,
secondary opportunities and co-investments. This arrangement, referred to as a
SMA, will simplify HVPE's investment structure over time. HarbourVest is an
experienced partner of choice for bespoke private market solutions across
investment strategies, geographies and stages, managing over 150 SMAs globally
with a combined assets under management ("AUM") of over $57 billion(1).
The SMA structure will allow a greater degree of flexibility in both the
deployment of capital into new opportunities and the management of liquidity
within the portfolio. This increased flexibility comes with no expected
material change in the future diversification of the portfolio and no expected
increase in the level of HarbourVest Partners' fees, despite the more tailored
nature of the new structure. The management fee on HVPE's SMA, at 60 basis
points on NAV, is no greater than the current effective management fee rate
incurred on HVPE's existing portfolio of HarbourVest funds.
The SMA structure will mean that committed capital is allocated to underlying
investments in annual tranches, as opposed to in a commingled fund where
commitments are allocated to underlying investments over a multi-year period.
Committed capital will therefore be invested more quickly than in the
commingled structure, so there will be no requirement to maintain such a large
pipeline of unfunded commitments. The SMA structure will also mean that HVPE's
overall exposure to debt will reduce, with borrowing at the HarbourVest fund
level declining materially in the years ahead as the funds in its existing
commingled portfolio mature and pay down debt. Furthermore, the Company's
pipeline of unfunded commitments to HarbourVest funds will also decline,
leading to more predictable cash flows and a reduced need for borrowing at the
HVPE level.
It is important to note that the new SMA represents a more refined way of
managing the HVPE portfolio moving forward. It does not represent a change in
the overall purpose of HVPE, which continues to be to provide shareholders
with easy access to a diversified global portfolio of high-quality private
equity investments. Additionally, HVPE will continue to be offered the
opportunity to invest in every new fund raised by HarbourVest Partners,
retaining the option to invest if the circumstances appear particularly
attractive.
Distributions
During the year to January 2025, HVPE's portfolio demonstrated a realisation
pattern that broadly mirrored that seen in the global PE market. After a slow
start to the first half of the year, which saw $136 million distributed, the
pace of distributions picked up in the second half with $246 million being
received. The $382 million realised for the full year represented a 23%
increase on the prior year, although it remained well below the $835 million
peak seen in the year ended 31 January 2022 and the five-year average of $455
million. Realisations during the year included the sale of tail-end positions
within the secondary portfolio as HarbourVest looked to proactively generate
additional liquidity to counteract the continued weakness seen across the
wider PE exit market.
New commitments
HVPE made total commitments of $415 million across seven HarbourVest funds
over the financial year to 31 January 2025 (12 months to 31 January 2024: $295
million). Total unfunded commitments were $2.5 billion as at 31 January 2025,
which was in line with the prior year figure.
New commitments made during the year were lower than historical averages due
to the continued depressed level of portfolio exit activity. Post year-end, no
new commitments have been made to HarbourVest funds, given the Company's move
to its new SMA approach as announced on 30 January 2025. We expect to increase
the level of new commitments once positive cash flow has been sustained for an
extended period.
Our medium-term focus continues to be on moving the portfolio gradually
towards the revised target allocations set out in last year's Investment
Manager's report following our strategic asset review.
1 Source: HarbourVest Partners, as at 30 June 2024.
Outlook
The US administration's evolving tariff policy has temporarily dampened
private market deal activity as buyers and sellers pause to assess the full
impact. Both the heightened economic uncertainty and trading disruption faced
by companies could lead potential buyers to pull back from the market or apply
higher risk premiums when pricing assets. This may result in a widening of the
bid-ask spread and a reduction in private market exit activity.
While we wait for this uncertainty to abate, we remain optimistic that the
resilience and long-term horizon of private capital will continue to deliver
more advantageous returns than public markets. In fact, the current market
dislocation presents buying opportunities for secondary managers, such as
HarbourVest, when private market investors seek to free up capital or
rebalance their portfolio exposures.
Market indicators show there is some cause for cautious optimism. Venture
capital rounds in the US and Europe appear to have bottomed out(1) and there
has been a healthy flow of new venture deals, particularly in the AI space,
indicating there is still a selective demand for high-quality assets in
specific attractive sub-sectors. Falling interest rates and the recovery of
broadly syndicated loans as a viable source of debt have resulted in credit
spreads tightening for senior private credit, which should help facilitate a
broader range of new buyout deals.
Additionally, there is evidence that the prolonged period of reduced
transaction volume in the buyout market has helped converge buyers' and
sellers' pricing expectations. GPs also have access to a significant amount of
uninvested capital, which they are under increasing pressure to deploy. Prior
commitments from LPs are continuing to age, with approximately 26% of buyout
funds' available invested capital now being four or more years old(2). These
dynamics could drive a renewed upturn in deal activity, which would bode well
for liquidity in HVPE's portfolio if the uncertainty around tariffs were to
subside.
Turning to the listed private equity market, a resumption of the upward
trajectory for exit activity seen in Q1 would provide increased liquidity for
share buybacks while enabling a greater level of new investment in attractive
opportunities. This process of reinvestment while maintaining a balanced
vintage exposure is vital to the sector being able to create long-term value
for investors. Furthermore, given the healthy uplifts to GP valuation marks at
which private market exits are typically completed, this activity will likely
help allay the valuation scepticism which has been a key factor in the
persistently wide discounts observed in the listed PE sector in recent years.
The nature of private market investing means the most valid measure of success
is long-term performance. HVPE continues to demonstrate a track record of
outperforming listed global equities. Over the 10 years ended 31 January 2025,
HVPE's NAV per share return exceeded that of the FTSE All-World Total Return
Index by an annualised 2.7 percentage points.
HarbourVest Partners is a highly experienced private markets investment
manager, and we continue to have strong conviction that our strategy of
operating a globally diversified portfolio of high-quality private market
assets will deliver long-term investor value. Our new and more flexible
investment approach will allow us to manage the portfolio in a more agile
fashion, helping to ensure that we capture the best value creation
opportunities through the cycle while managing portfolio liquidity more
actively. Combining our highly disciplined investment approach with
market-leading corporate governance will help ensure that we maximise
long-term value for our shareholders.
Richard Hickman
Managing Director
1 Source:
https://nvca.org/document/q1-2025-pitchbook-nvca-venture-monitor/
(https://nvca.org/document/q1-2025-pitchbook-nvca-venture-monitor/) .
NAV per Share - 12 Months to 31 January 2025
HVPE's NAV per share increased by 7.3% (or $3.70) in the 12 months to 31
January 2025, ending the financial year at $54.17. The FTSE All-World TR Index
(in US dollars), increased by 21.0% in the same period. It is worth noting
that the performance of the FTSE All-World was significantly inflated by the
"Magnificent 7" stocks, which posted a 45% return over the period(1).
Over the long term, HVPE's NAV per share return has been strong. The 31
January 2025 figure of $54.17 is almost double the NAV per share figure
reported five years earlier (31 January 2020: $27.58) and over three times the
respective figure ten years earlier (31 January 2015: $15.86). As a reminder,
these figures are net of all fees and costs.
HVPE remains well diversified by sector, which we believe is key to achieving
consistently strong returns from a private markets portfolio. As at 31 January
2025, no single company represented more than 2.2% of the Investment Portfolio
value (31 January 2024: 2.1%), helping to mitigate company-specific risk. The
top 100 companies in the portfolio represented 29% of total value (31 January
2024: 28%), while the top 1,000 companies represented 81% (31 January 2024:
81%).
The direct portfolio was the best performing strategy in percentage terms,
delivering value growth of 10.1% over the 12 months. This compared with growth
of 6.7% for secondaries and 5.0% for primaries. Geographically, North America,
Europe and Asia categories all saw growth at 7.5%, 6.9% and 3.7% respectively,
while the Rest of the World saw a decline (-5.3%). Looking at stages, the
Mezzanine and InfRA portfolio was the strongest performer, growing 9.7% in the
12 months ended 31 January 2025. Buyout and Venture & Growth Equity stage
assets also grew, recording gains of 6.4% and 6.0% respectively.
As at 31 January 2025, HVPE held investments in 61 HarbourVest funds and 16
secondary co-investments(2) (compared with 63 and 16 respectively at 31
January 2024). Of these, the largest fund contributors to NAV per share
movement in absolute terms during the 12 months to 31 January 2025 are
described below:
- Fund XI Buyout, a US-focused buyout fund of funds, was the largest
contributor to NAV per share, adding $0.42 over the reporting period. With a
vintage year of 2018, this fund is in its growth phase. The increase came
predominately from unrealised gains.
- Asia Pacific 5, an Asia-pacific focused multi-strategy fund of funds,
was the second-largest contributor over the reporting period, adding $0.36 to
NAV per share. With a vintage year of 2021, this fund is in its investment
phase. The increase came predominately from unrealised gains.
- Fund XII Buyout, a US-focused buyout fund of funds, was the
third-largest contributor, adding $0.33 to NAV per share. With a vintage year
of 2021, this fund is in its investment phase. The increase came predominantly
from unrealised gains.
- Co-Investment VI, a global direct co-investment fund, was the
fourth-largest contributor over the reporting period, adding $0.32 to NAV per
share. With a vintage year of 2021, this fund is in its investment phase. This
increase came predominantly from unrealised gains.
- Co-Investment V, a global direct co-investment fund, was the next
largest contributor over the reporting period, adding $0.21 to NAV per share.
With a vintage year of 2018, this fund is in its growth phase. This increase
came predominantly from realised gains.
All of the remaining HarbourVest funds in the portfolio together contributed
to an aggregate $2.73 increase to HVPE's NAV per share over the year.
1 Source: S&P CapitalIQ, weighted by opening market cap.
2 These include four Secondary Overflow III investments, 11
Secondary Overflow IV investments, and Conversus, referred to as "HVPE
Charlotte Co-Investment L.P." in the Audited Consolidated Schedule of
Investments.
Portfolio Cash Flows and Balance Sheet
In the 12 months to 31 January 2025, HVPE received cash distributions of $382
million (12 months to 31 January 2024: $310 million) while funding capital
calls of $443 million for new investments (12 months to 31 January 2024: $593
million). The result was net negative cash flow of $61 million over the
reporting period (12 months to 31 January 2024: negative $283 million). The
impact of the negative portfolio cash flow on the balance sheet and the
resultant use of the credit facility is provided on page 29.
Distributions were weighted towards the second half of the year as exit
activity accelerated, with $246 million being received compared with $136
million in the first half.
The largest HarbourVest fund capital calls and distributions over the
reporting period are set out in the tables below.
The top ten HarbourVest fund calls in aggregate accounted for $376 million
(85%) of the total calls and came from a broad mix of funds. The majority of
total calls by value (84%) were into primary opportunities.
The top ten HarbourVest fund distributions totalled $169 million, or 44% of
the total proceeds received in the period. Distributions by value were split
between primary investments (66%) and secondary investments (19%), with the
remainder coming from direct co-investments.
The HarbourVest fund-level borrowing as at 31 January 2025 is reported in
Managing the Balance Sheet on page 30.
Top Five HarbourVest Fund Calls
HarbourVest Fund Name Vintage Year Description Called Amount
Asia Pacific 5 2021 Asia-pacific focused multi-strategy fund of funds $85.5m
Fund XII Buyout 2021 US-focused buyout fund of funds $79.2m
HIPEP IX Partnership 2020 International multi-strategy fund of funds $67.9m
Fund XI Buyout 2018 US-focused buyout fund of funds $28.0m
Fund XII Venture 2021 US-focused venture fund of funds $25.7m
Top Five HarbourVest Fund Distributions
HarbourVest Fund Name Vintage Year Description Distributed Amount
Co-Investment V 2018 Global direct co-investment fund $25.0m
HIPEP VIII Partnership 2017 International multi-strategy fund of funds $20.2m
HIPEP VII Partnership 2014 International multi-strategy fund of funds $18.6m
Fund IX Buyout 2011 US-focused buyout fund of funds $17.3m
Fund IX Venture 2011 US-focused venture fund of funds $16.4m
Portfolio Companies
During the year, the ten largest individual company realisations generated
total distributions of $118 million, accounting for approximately 31% of all
proceeds received. Of these ten companies, four were disclosed in HVPE's top
100 portfolio companies as at the end of the prior financial year.
Further details are provided on these four below (ordered by size of
distribution). The top ten distributions by value are listed on page 25.
- CrownRock develops oil and gas properties in the Permian Basin and Rocky
Mountain regions of the United States. CrownRock was HVPE's 2nd largest
company at 31 January 2024, and generated proceeds of $30.0 million following
a sale to Occidental (NTSE: OXY), which was announced in August 2024.
- Olink Proteomics is a platform for high-throughput protein biomarker
discovery. Olink Proteomics was HVPE's 12th largest company at 31 January
2024, and generated proceeds of $16.6 million following a sale to American
life science company, Thermo Fisher Scientific (NYSE: TMO) in July 2024.
- SRS Distribution is a distributor of commercial and residential roofing
products. SRS Distribution as HVPE's 92nd largest company at 31 January 2024,
and generated proceeds of $13.1 million following a sale to The Home Depot, a
home improvement retailer, in March 2024
- Action Nederland is a leading European discount general merchandise
retailer. Action Nederland was HVPE's 5th largest company at 31 January 2024
and continues to be so at 31 January 2025 following a partial realisation
during the year, which generated proceeds of $6.1 million.
M&A Transactions and IPOs
During the 12 months ended 31 January 2025, there were a total of 496 known
M&A transactions and IPOs, an uptick on the 362 total transactions
reported in the 12 months to 31 January 2024. Additionally, within HVPE's
portfolio, we have seen positive news flow in recent months that companies
such as Revolut and Klarna are considering IPOs, which is an encouraging sign
that we could see further improvement in exit activity in 2025 and beyond.
Of these 496 known transactions, 90% (446) were M&A (trade sales or
sponsor-to-sponsor transactions), with the remaining 10% (50) being IPOs. IPOs
tend to represent a relatively small proportion of exits for HVPE, consistent
with wider industry trends.
There was a relatively even split across buyout and venture transactions
where, of HVPE's total 496 known M&A transactions and IPOs, 255, or 51%,
related to buyout-backed companies with the other 241, or 49%, relating to
venture-backed companies. Over the period, the weighted average uplift to
pre‑transaction carrying value for a large sample of transactions was
37%(1).
The top five M&A and IPO transactions during the period (by contribution
to HVPE NAV per share) are listed below.
Top Five M&A transactions in the 12 months ended 31 January 2025
(by contribution to HVPE NAV per share(2))
CrownRock, L.P. Other Energy +$0.21
Revolut Venture Financials +$0.18
AuditBoard, Inc. Venture Information Technology +$0.11
SRS Distribution Inc. (The Home Depot) Buyout Industrials +$0.10
Olink Proteomics Holding AB (Thermo Fisher Scientific) Buyout Health Care +$0.08
Top Five IPOs in the 12 months ended 31 January 2025
(by contribution to HVPE NAV per share(2))
Rubrik, Inc. Venture Information Technology +$0.05
ServiceTitan, Inc. Venture Industrials +$0.02
Galderma Buyout Health Care +$0.02
Swiggy Venture Consumer Staples +$0.01
Emcure Pharmaceuticals, Ltd. Buyout Health Care +$0.00
1 These figures represent the weighted average percentage uplift to
carrying value of 134 individual company M&A and IPO transactions during
the year ended 31 January 2025. This analysis takes each company's value
(whether realised or unrealised) at 31 January 2025 and compares it to the
carrying value prior to announcement of the transaction. This analysis
represents 87% of the total value of transactions in the year ended 31 January
2025 and does not represent the portfolio as a whole. Additionally, it does
not reflect management fees, carried interest or other expenses of the
HarbourVest funds or the underlying managers, which will reduce returns. Past
performance is not necessarily indicative of future returns.
2 As measured since the announcement of the transaction or IPO filing.
Recent Events
HVPE Estimated NAV as at 30 April 2025
HVPE releases an estimated NAV on a monthly basis. These reports are available
on the Company's website, generally within 20 calendar days of the month-end.
On 23 May 2025, HVPE published an estimated NAV per share at 30 April 2025 of
$55.54 (£41.67), an increase of $1.37 (+2.5%) since the final 31 January 2025
NAV (US Generally Accepted Accounting Principles ("GAAP")) figure of $54.17.
This latest NAV per share is based on a valuation breakdown of: 4% actual 30
April 2025 (reflecting the public company in the portfolio), 5% actual 31
March 2025 and 91% actual 31 December 2024. Consistent with previous estimated
NAV reports, valuations are also adjusted for foreign exchange movements, cash
flows, and any known material events to 30 April 2025.
The Investment Pipeline of unfunded commitments decreased from $2.5 billion at
31 January 2025 to $2.4 billion at 30 April 2025, based on capital funded and
taking foreign exchange movements into account.
HVPE's cash and cash equivalents decreased from $123 million at 31 January
2025 to $111 million at 30 April 2025. The undrawn facility balance decreased
from $720 million at 31 January 2025 to $685 million at 30 April 2025.
HVPE's look-through exposure to borrowing at the HarbourVest fund level
increased by $30 million, from $539 million at 31 January 2025 to $569 million
at 30 April 2025. The latest balance sheet ratios can be found in the
factsheet on the HVPE website: www.hvpe.com (http://www.hvpe.com) .
Buybacks
Post year-end, HVPE has been in the market for 52 days buying back shares.
During this time, 1,010,373 Ordinary Shares have been repurchased for
cancellation at an average price of £25.92 per share for a total
consideration of £26 million ($34 million). The total number of shares in
issue is now 73,258,298.
As at 23 May 2025, the Distribution Pool balance was $23 million.
Transition to SMA structure
On 22 May 2025 HVPE announced that it had agreed the final heads of terms of
its strategic transition to a new, simplified investment model with
HarbourVest Partners, as announced on 30 January 2025.
Credit Facility
Post year-end, HVPE initiated a $35 million draw on the Facility. As at 23 May
2025, a total of $515 million is currently drawn on the $1.2 Billion Facility.
More details regarding the Facility are available on page 28.
Share Price since 31 January 2025
The closing price of £24.35 on 23 May 2025 represents a fall of 11.8% since
the year-end. This compares to the FTSE AW TR Index's decrease of 6.2% in
sterling terms over the same period. The market capitalisation of the Company
as at 23 May 2025 was £1.8 billion and, as of the same date, HVPE was ranked
65th in the FTSE 250.
Managing the balance sheet
Effective and prudent balance sheet management is critical when running a
closed-ended vehicle investing into a portfolio of private market funds with
varying cash flow profiles. This is particularly true for a company such as
HVPE which has historically maintained a large pipeline of unfunded
commitments (the "Investment Pipeline"), which is the amount of capital
committed to underlying HarbourVest funds, but not yet drawn down for
investments.
This section aims to outline HVPE's approach to managing its balance sheet and
explain the steps it takes to ensure that the Company is sufficiently
resourced in preparation for periods of significant market stress.
The chart below shows the gross and net cash flows in US dollar terms since
inception. This reflects the cash flow cycles that our balance sheet
management is designed to accommodate.
Move to the SMA Structure
The narrative below covers the year ended 31 January 2025. During this time
all commitments were made through HarbourVest commingled funds. Going forward,
commitments will be made under the SMA structure, as detailed on page 13.
The Importance of the Credit Facility
HVPE makes commitments to HarbourVest-managed vehicles, which typically call
capital over a period of several years. This long- duration cash flow profile
necessitates a large pipeline of unfunded commitments in order to ensure that
the Company remains approximately fully invested over time - this is known as
an over-commitment strategy and is critical to optimising long-term NAV per
share growth. In most years, the capital called from HVPE by the
HarbourVest-managed vehicles is taken from the cash distributions flowing from
liquidity events within the portfolio. At times, however, capital calls will
exceed distributions, potentially by a meaningful amount, and it may be
necessary to draw on the credit facility to fund the difference.
A subsequent year may see the reverse situation, with net positive cash flow
used to repay the borrowing. In this way, the credit facility acts as a
working capital buffer and enables HVPE to manage its commitments to the level
required in order to optimise returns through the cycle.
The Board is conscious of the need to ensure that the credit facility is
always of a size and duration appropriate to HVPE's needs. In June 2024, HVPE
secured a new larger credit line to provide an enhanced level of support for
its balance sheet, reflecting the strong growth in HVPE's net assets to $4.0
billion at the time the agreement was finalised. This restored the credit
facility to a size equivalent to approximately 30% of NAV, comparable to
2015-2019 levels. This new $1.2 billion multi-currency credit facility
(increased from $800 million), added Ares Management Credit funds and
Apollo-managed funds as new syndicate members to join the two existing
lenders, Mitsubishi UFJ Trust and Banking Corporation ("MUTB") and The
Guardians of New Zealand Superannuation, with the new syndicate demonstrating
their confidence in HVPE's portfolio and business model. The facility has a
five-year term, expiring in June 2029. In November 2024 MUTB, which has
supported HVPE as a major lender since 2019, syndicated $100 million of HVPE's
Credit Facility to Nomura Corporate Funding Americas, LLC. The Board and
Investment Manager are confident that this revised facility provides
sufficient headroom for HVPE's existing and planned commitments over the
period.
In the 12 months to 31 January 2025, HVPE received cash distributions of $382
million while funding capital calls of $443 million for new investments. The
result was net negative portfolio cash flow of $61 million over the reporting
period. Additionally, there were non-portfolio net cash outflows of $150
million, primarily related to buybacks ($106 million) and operating expenses
($53 million). Therefore, to ensure that HVPE had sufficient liquid resources
to meet its near-term obligations, and to satisfy the requirement to draw a
minimum of 40% of the new facility, HVPE initiated a further net draw of $205
million on its credit facility during the period, increasing the credit
facility drawn balance to $480 million. This left HVPE with $720 million
remaining of its credit facility as at 31 January 2025, and 9% geared. The
cash balance at 31 January 2025 was $123 million, down from $140 million as at
31 January 2024. This resulted in a net debt position of $357 million at 31
January 2025, up from $135 million as at 31 January 2024.
Further detail on how we stress test the balance sheet can be found later on
in this section.
Understanding HVPE's Investment Pipeline (Unfunded Commitments)
At 31 January 2025, HVPE's total pipeline of unfunded commitments -
commitments to HarbourVest funds which have yet to be called - stood at $2.5
billion. This total pipeline comprised "allocated" investments of $1.9 billion
and "unallocated" investments of $0.6 billion. "Allocated" refers to the
portion of commitments which have been allocated by HarbourVest funds to
underlying partnerships. "Unallocated" commitments are those which have yet to
be allocated by HarbourVest funds to underlying partnerships, and therefore
cannot be drawn down in the short term. It is important to note that, of the
allocated pipeline, approximately 63% of commitments are to primary funds,
which have a longer drawdown profile, whilst secondary and direct
co-investment funds represent approximately 25% and 12%, respectively. Further
detail on this, including the age breakdown of the allocated pipeline, is
provided on page 22.
Since July 2022, HVPE's portfolio cash flow has been negative, as capital
calls have exceeded distributions. Initially, the shortfall was met from the
cash surplus accumulated through 2021 and early 2022. In the first half of
2023, the cash balance fell below our approved agreed minimum level and we
subsequently drew on our credit facility. Periods of negative cash flow do
occur from time to time and are factored into our cash flow projections. Prior
periods of negative cash flow have been relatively brief, but nevertheless we
do plan for extended periods of weak distributions combined with normal or
elevated capital calls.
We cannot be sure that previous patterns will be repeated and must consider
the possibility that capital calls could remain elevated even during a period
of suppressed distribution activity. A large credit facility committed for an
extended period, provides reassurance that the Company would be able to remain
operational under such conditions, with the additional flexibility to continue
to take advantage of attractive investment opportunities as they arise. HVPE's
credit facility enabled it to be a net investor through the period 2008 to
2011, which has helped the Company to deliver very attractive long-term
returns for shareholders. We continue to assess the credit facility to
ensure that its size and cost remain proportionate to the benefits that it
brings to HVPE.
Cash Flows, Modelling and Stress Testing the Balance Sheet
Cash flows from individual private equity investments can be irregular and
unpredictable, and as a result, monitoring these is a complex and
time-consuming task for investors in multiple funds such as HVPE. When
managing a closed-ended vehicle that makes significant, irrevocable
commitments to underlying funds, effective cash flow modelling is essential,
first to ensure that the Company has sufficient capital available to honour
its existing commitments, and second to inform the decisions it makes around
future commitment levels.
The Investment Manager builds a bottom-up forecast based on an aggregation of
individual HarbourVest fund models and then applies a sensitised top-down
analysis informed by historic actual calls and distributions. Short-term
broader market trends and systemic factors are also considered.
Finally, a range of scenario tests are conducted. HVPE has a 17-year track
record in monitoring and interpreting cash flows arising from activity in the
underlying portfolio. This detailed modelling is typically updated on an
annual basis and reviewed quarterly for any changes to key assumptions. The
scenarios under which Directors consider the Company to be a Going Concern can
be found on page 66.
HarbourVest Fund-level Borrowing
HarbourVest funds employ credit lines for two main purposes: bridging capital
calls and distributions, and financing specific investment projects where the
use of debt may be advantageous. The majority of this fund-level borrowing
represents delayed capital calls, where a proportion of the unfunded
commitments has been invested through the use of subscription credit lines at
the HarbourVest fund level, but the capital has not yet been called from HVPE.
HVPE has indirect exposure, on a look-through basis, to its pro rata share of
borrowing carried on the balance sheets of some of the HarbourVest funds in
which HVPE is a LP (referred to as HarbourVest Partners ("HVP") fund-level
borrowing). This borrowing does not represent an additional liability above
and beyond the commitments that HVPE has made to the HarbourVest funds.
The HVPE team monitors the HVP fund-level borrowing in absolute terms, and as
a percentage of NAV. This borrowing is also considered when evaluating balance
sheet ratios: the Total Commitment Ratio within the Investment Pipeline, and
the Medium-Term Coverage Ratio within the three-year capital call projections.
HarbourVest fund-level borrowing is also included when assessing the credit
facility's loan-to-value ratios, as mentioned in Note 6, "Debt Facility" on
page 96 of the Financial Statements. Possible changes in this borrowing (and
hence the timing of capital calls payable by HVPE) are also incorporated into
the balance sheet scenario tests conducted as part of the annual commitment
planning exercise.
As at 31 January 2025, HVPE's share of HVP fund-level borrowing on a
look-through basis was $539 million, a net increase of $31 million from the
$508 million reported at 31 January 2024. Expressed as a percentage of NAV,
this figure was 13%, which was unchanged from the figure as at 31 January
2024. The increase of $31 million can be attributed to new commitments made
during the period, as well as underlying realisations continuing to be at
depressed levels. Post year-end, as at 30 April 2025, the HVP fund-level
borrowing increased by $30 million and stood at $569 million.
HVPE's year-end total exposure of $539 million includes $509 million (94%) of
bridging finance (also known as subscription line finance), which is used to
delay and smooth the pacing of capital calls to investors in the funds,
including HVPE. Typically, these bridging facilities are committed by the
lenders for a minimum of 12 months. The remaining $30 million (6%) is project
debt, held in the most part by the HarbourVest secondary funds to finance
specific projects. The bridging finance, should it be repaid in full or in
part, will result in capital calls to investors in the HarbourVest funds,
including HVPE, as this type of borrowing represents a portion of HVPE's
existing unfunded commitment (Investment Pipeline) figure. Furthermore, during
the period in which the debt is outstanding, there is a gearing effect on
HVPE's NAV, as the investments have already been made while HVPE's share of
the capital has not yet been called. Project finance has only a very limited
impact on prospective cash flow but does contribute to the gearing effect.
In order to estimate the total potential gearing effect on HVPE as at 31
January 2025, an investor should take the HVP fund-level borrowing figure of
$539 million and add the Company's net debt of $357 million. The resulting net
total borrowing figure of $896 million would translate to an approximate level
of look-through gearing of 22% of NAV at the financial year end. Further
detail on the credit facility and the criteria upon which it can be drawn can
be found under Note 6, "Debt Facility" on page 96 of the Audited Consolidated
Financial Statements.
Expected Future Impact of the SMA on the Balance Sheet
As described in more detail on page 13, HVPE will make future commitments
via an SMA structure rather than through commingled funds. Amounts committed
to the SMA are allocated to underlying investments annually. This differs from
a commingled structure where it normally takes several years to allocate
committed capital to underlying investments. The impact of moving to the SMA
will be a reduction in HVPE's unfunded commitments balance going forward, as
the revised structure will require lower unallocated commitments.
HVPE's look-through exposure to borrowing at the HarbourVest fund level will
decline materially in the years ahead as the funds in its existing portfolio
mature and pay down debt. Additionally, the Company's pipeline of unfunded
commitments to HarbourVest funds will also decline, leading to more
predictable cash flows and a reduced need for borrowing at the HVPE level.
Both these factors will reduce HVPE's overall debt exposure in the years
ahead.
The transition period to the new structure will, by necessity, be gradual. New
commitments made going forward will be into the SMA, while the existing
portfolio of HarbourVest funds will continue to operate as before.
As the SMA was put in place after the year-end, there was no impact on the
commitment or gearing levels during the year ended 31 January 2025.
Balance Sheet Ratios at 31 January 2025(1)
Commitment Ratios
The Board and the Investment Manager refer to three key ratios when assessing
the Company's commitment levels:
1. Total Commitment Ratio ("TCR")
The level of the TCR is a key determinant of the Company's total commitment
capacity for new HarbourVest funds and co-investments within a given time
period. The TCR increased slightly during the year.
Total exposure to private markets investments as a percentage of NAV
Investment Portfolio + Investment Pipeline $6.8bn
Divided by the NAV $4.0bn
170% (167% at 31 January 2024)
2. Commitment Coverage Ratio
The nature of HVPE's structure, whereby it commits to HarbourVest-managed
vehicles, which in turn invest in private equity managers, means that it
typically takes longer for commitments to be drawn down compared with other
listed private equity funds. As a result, to remain fully invested, it has to
maintain a larger pipeline of unfunded commitments. This means that HVPE's
Commitment Coverage Ratio may appear relatively low in comparison with other
firms within its peer group.(2) This ratio has increased over the financial
year due to the increase in facility size.
Short-term liquidity as a percentage of total Investment Pipeline
Cash + available credit facility $0.8bn
Divided by the Investment Pipeline $2.5bn
34% (27% at 31 January 2024)
3. Medium-term Coverage Ratio ("MCR")
HVPE uses this third specific metric to provide greater insight into the
Company's balance sheet position and a more relevant comparison with the
Company's peer group.(2) This ratio increased over the financial year due to
higher available liquidity.
A measure of medium-term commitment coverage based on current commitments
Cash + available credit facility (total $0.84bn) + next 12 months' estimated $1.5bn
distributions ($0.62bn)(3)
Divided by the next 36 months' estimated investments $1.4bn
104% (88% at 31 January 2024)
The most recent published ratios, as at 30 April 2025, can be found within
HVPE's latest monthly factsheet on its website.
1 These metrics are considered Alternative Performance Measures. More
detail can be found on pages 109 to 110.
2 The peer group refers to the UK listed private equity fund of
funds: CT Private Equity Trust, ICG Enterprise Trust, Pantheon International
Plc and Patria Private Equity Trust.
3 Estimated distributions and estimated investments taken from base
case scenario. For further details on cash flows and modelling, please see
page 29.
Managing costs
Total Expense Ratio ("TER")
HVPE's TER reflects the total cost incurred by the Company in assembling and
maintaining its portfolio of HarbourVest funds and co-investments. The figure
is broken down into four distinct categories of expense.
First, there is the direct cost of running the Company in its own right,
encompassing items such as the maintenance and use of the credit facility,
Board fees and expenses, professional fees, marketing, financial reporting,
the services of a dedicated team from the Investment Manager, and compliance
costs. These costs, totalling 1.33% of average NAV in the 12 months to 31
January 2025 (12 months to 31 January 2024: 0.72%), are categorised as
recurring operating expenses as shown in the first line of the table below.
The increase in operating expenses is due to the greater utilisation of the
credit facility during the year.
Second, operating costs borne by the HarbourVest funds amounted to a further
0.22% of average NAV in the 12-month period to 31 January 2025 (12 months to
31 January 2024: 0.22%).
Third, HVPE pays management fees to HarbourVest with respect to the funds in
which it invests, and also for the secondary co-investment in Conversus(1)
made alongside the HarbourVest funds. The total of all management fees in the
12 months to 31 January 2025 was equivalent to 0.62% of average NAV (12 months
to 31 January 2024: 0.60%).
Finally, performance fees are charged on secondary investments and direct
co-investments (not on primary investments which make up 49% of HVPE's
portfolio). In total, these accounted for 0.44% of average NAV in the 12
months to 31 January 2025 (12 months to 31 January 2024: 0.48%). The
performance fee figure varies from period to period and is driven by the
performance achieved by the relevant HarbourVest funds.
Together, these four cost components give a TER, net of interest income
(0.15%), of 2.46% for the 12 months to 31 January 2025. It is important to
note that, while the operating expenses and the management fees do not vary
greatly from one year to the next, the performance fee figure will vary
significantly depending on the returns delivered by the relevant underlying
HarbourVest funds. The TER for the 12 months to 31 January 2025 of 2.46% was
67 percentage points higher than the same period in the prior year,
predominantly owing to an increase in credit facility costs.
The calculation above excludes the fees charged by the underlying partnerships
held by the HarbourVest funds. It is important to note that all performance
data we report to shareholders is, and always has been, net of all fees and
expenses.
Future costs associated with the SMA structure (from 1 February 2025)
HarbourVest will charge carried interest on the secondary and direct
co-investment portfolios held within the SMA, at rates of 12.5% and 13.25%
respectively, subject to a hurdle of 8% IRR. Investments in each annual SMA
tranche are pooled together for the purposes of calculating carried interest,
effectively treating each tranche like an individual "fund". No HarbourVest
carried interest will be charged on primary investments. HVPE will retain its
existing stakes in the HarbourVest funds, so the SMA fee and carried interest
will be combined with the fees on the funds in HVPE's reporting from the
current financial year onwards. Since the terms are substantially similar to
the existing arrangements, we do not expect the introduction of the SMA to
give rise to a material change in HVPE's cost structure.
Total Net Expense Ratio Breakdown
12 months to 31 12 months to 31
January 2025 January 2024
Operating expenses(1) 1.33% 0.72%
HarbourVest fund operating expenses(2) 0.22% 0.22%
Management fees(3) 0.62% 0.60%
Operating expense ratio 2.17% 1.54%
Interest income(4) (0.15%) (0.23%)
Net operating expense ratio 2.02% 1.31%
Performance fees(5) 0.44% 0.48%
Total net expense ratio(6) 2.46% 1.79%
Summary of Net Assets
31 January 2025 (millions*) 31 January 2024 (millions*)
Investment Portfolio $4,375 $4,058
Cash and cash equivalents $123 $140
Drawings on the HVPE credit facility $(480) $(275)
Net other assets/liabilities $5 $(2)
NAV $4,023 $3,921
NAV per share ($) $54.17 $50.47
FX rate 1.2395 1.2673
NAV per share (£) £43.70 £39.82
Cash + cash equivalents + available credit facility $843 $665
The Private Equity Cycle
12 months ended 31 January 2025 (millions*) 12 months ended 31 January 2024 (millions*)
1. Commitments
New commitments to HarbourVest funds $415 $295
Investment Pipeline
Allocated $1,867 $1,870
Unallocated $585 $631
Total Investment Pipeline $2,452 $2,501
2. Cash Invested
Invested in HarbourVest funds $443 $593
% of average Investment Pipeline 18%(7) 22%(8)
3. Growth
Investment Portfolio (beginning) $4,058 $3,616
Cash invested $443 $593
Investment Portfolio growth $256 $140
Distributions received $(382) $(310)
Accrued distribution $0 $18(9)
Investment Portfolio (end) $4,375 $4,058
4. Distributions Received
Cash received from HarbourVest funds $382 $310
% of average Investment Portfolio 9%(10) 8%(11)
1 Operating expenses includes total expenses shown in the Audited
Consolidated Statements of Operations, excluding management fees from the
secondary co-investments which are included in the management fees in this
table.
2 HVPE's share of fund-level operating expenses (professional fees
and organisational costs) which are included in realised and unrealised gains
(losses) on investments in the Audited Consolidated Statements of Operations.
3 This includes fund-level management fees payable to HarbourVest
which are included in realised and unrealised gains (losses) on investments in
the Audited Consolidated Statements of Operations, together with the
management fees relating to secondary co-investments noted in 2 above.
4 This is shown as interest from cash and cash equivalents on the
face of the Audited Consolidated Statements of Operations.
5 This includes fund-level performance fees payable to HarbourVest
which are included in realised and unrealised gains (losses) on investments in
the Audited Consolidated Statements of Operations.
6 TERs are calculated using the average NAV over the respective
periods ($4.0 billion at 31 January 2025 and $3.9 billion at 31 January 2024).
* Unless otherwise stated.
7 This represents the percentage for the amount invested divided by
the average of the Investment Pipelines at 31 January 2024 and 31 January
2025.
8 This represents the percentage for the amount invested divided by
the average of the Investment Pipelines at 31 January 2023 and 31 January
2024.
9 The accrued distribution of approximately $18 million represents a
reporting timing difference, whereby shares in HarbourVest Infrastructure
Income Partnership ("HIIP") were redeemed effective 1 October 2022 but the
cash distribution was not received until February 2023. As of 31 January 2023,
the distribution was recorded on the balance sheet as an accrued
distribution/accounts receivable, and was subsequently reversed upon receipt
of the cash distribution in February 2023.
10 This represents the percentage for the cash received divided by the
average of the Investment Portfolios at 31 January 2024 and 31 January 2025.
11 This represents the percentage for the cash received divided by the
average of the Investment Portfolios at 31 January 2023 and 31 January 2024.
Principal risks and uncertainties
Risk Factors and Internal Controls
The Board is responsible for the Company's risk management and internal
control systems and actively monitors the risks faced by the Company, taking
steps to mitigate and minimise these where possible. Further details on the
Board's governance and oversight can be found on pages 63 to 69.
Risk Appetite
The Board's investment risk appetite is to follow an over-commitment policy
that optimises investment returns and associated distributions, allows
balanced, regular investment through economic and investment cycles, and
ensures that it has access to sufficient funding for any potential negative
cash flow situations, including under an Extreme Downside scenario. At the
same time, the funding available to the Company by way of cash balances and
lending facilities is managed to ensure that its cost, by way of interest,
facility fees or cash drag, is reasonable. When considering other risks, the
Board's risk appetite is to balance the potential impact and likelihood of
each risk with its ability and desire to control and mitigate the risk to an
acceptable level. In doing so, as a baseline, the Board will seek to follow
best practice and remain compliant with all applicable laws, rules, and
regulations.
Risk Management
As recommended by the Audit and Risk Committee (see the report on the
activities of that Committee on pages 70 to 71), the Directors have adopted a
risk management framework which governs how the Board identifies and measures
risks, determines risk appetite, assesses mitigation and controls, and reports
on risks.
The Board reviews risks at least twice a year and receives in-depth reports on
specific risks as recommended by the Audit and Risk Committee. The Board
divides identified risks into those which have a higher probability and a
significant potential impact and those which are less material and are
monitored on a watch list. The Board also conducts an annual exercise to
identify new or emerging risks.
In considering material risks, the Board identifies those which should be
categorised as principal risks, which are those where the combination of
probability and impact is assessed as being most significant and which the
Board therefore considers could seriously affect the performance, future
prospects, or reputation of the Company.
Principal Risk Description and Potential Impact Mitigation and Management Commentary
Performance of HarbourVest The Company is dependent on its Investment Manager and on the performance of HarbourVest has a strong long-term track record of managing private equity Increased risk
HarbourVest's investment professionals. The vast majority of the Company's investments. It maintains good relationships with key managers and has a
The risk posed by the Company's dependence on its Investment Manager assets are invested in HarbourVest funds and significant reliance is placed by consistent and repeatable investment process with low turnover of senior HVPE has maintained its record of long-term outperformance in NAV growth
the Company on HarbourVest's control environment. Any inability by HarbourVest investment professionals. There is a high level of diversification by despite challenging market conditions in the short-term, which have persisted
to maintain its investment performance, whether in absolute or relative terms, geography, strategy and vintage which mitigates the risk. HVPE has a dedicated longer than expected. The wider private equity industry is under pressure as
could result in a significant deterioration in net asset value for the Company Investment Committee within HarbourVest. The Board monitors HarbourVest's exit processes have been postponed and consequent distributions have been at
and its shareholders. performance through the MESPC, and its controls environment is assessed by the lower levels than usual. An improvement in distribution levels will be an
Audit and Risk Committee. important precursor to the re-rating of the Company's shares.
No significant matters of concern regarding the HarbourVest control
environment arose during the year. There will be some operational risk as the
announced structural change to investment via an SMA is implemented, and the
Investment Manager and Board adjust to managing a different investment and
cash flow profile.
Public Market Risks Equity market volatility increases overall levels of uncertainty for HVPE and The Company's exposure to individual public markets is partially mitigated by Increased risk
its investments. Increasing geopolitical risks influence how markets trade, the geographical and sectoral
The risk of a decline in global public markets or a deterioration in the reversing the potential positive effects of developing improvements in
The portfolio has proved itself to be resilient despite challenging market
economic environment economic indicators. Overall declines in public markets impact HVPE's NAV per diversification within the portfolio. In previous downturns, private market conditions over the past year and the increased political risk that has
share by directly reducing the value of public securities in HVPE's portfolio valuations have not been impacted as much as public markets. The Board affected markets. The potential for a global trade war triggered by the new US
and indirectly influencing private market valuations. They are also likely to regularly reviews scenario analyses prepared by the Investment Manager which administration, and consequent impacts on inflation, interest rates and
have a direct impact on HVPE's share price. incorporate the effects of significant public market downturns. growth, has weighed heavily on the markets.
Principal Risk Description and Potential Impact Mitigation and Management Commentary
Valuation Risk Uncertainty and distrust in relation to the valuation of private equity Both the Investment Manager and the GPs of underlying funds value investments Stable
investments may lead investors to make their own judgements based on in accordance with industry standards and accounting regulations. All the
The risk that market instability leads to continuing uncertainty about private incomplete information, which could result in a lack of confidence in the valuations are audited annually. When the Company reports its monthly NAV, it This risk was increased in the 2023 Annual Report and Accounts and remains at
asset valuations based on comparisons with listed companies, together with reliability of HVPE's published NAV. The low level of exits and liquidity discloses the date of the underlying valuations to provide transparency to this heightened level as investors wait for a return to a consistent flow of
general market scepticism about the likely movement in valuations. events that has been seen recently reduces the ability to present public shareholders. exits at a premium to carrying value. The Board believes that this risk will
substantiation of valuation levels.
remain a focus until there is an increase in the level of exit activity and
therefore of external validation of valuation levels.
The Audit and Risk Committee receives reports on the Investment Manager's
control environment, including the processes relating to valuations.
Balance Sheet Risks The Company's balance sheet strategy and its policy for the use of leverage The size and term of the Company's credit facility mitigates this risk. The Stable
are described on page 28. The Company continues to maintain an overcommitment Board has put a monitoring programme in place, supported by sophisticated and
Risks to the Company's balance sheet resulting from its overcommitment strategy and may draw on its credit facility to bridge periods of negative comprehensive cash flow modelling, which underpins the commitment strategy and The Distribution Pool is being funded by a proportion of the cash realisations
strategy, borrowing arrangements and policy for the use of leverage. cash flow when capital calls on investments are greater than distributions limits the likelihood of unexpected shocks. This programme mitigates the from the Company's portfolio. This has resulted in adjustments being made to
received. The level of potential borrowing available under the credit facility requirement to sell assets at a discount during any but the most extreme the financial models relating to the Company's future commitments.
could be negatively affected by declining NAV. In a stressed environment periods of negative cash flow. The monitoring programme also considers the
characterised by declining NAVs, reduced realisations, and rapid substantial level of borrowing at HarbourVest fund level. Both the Board and the
capital calls, the Company's net leverage ratio could increase beyond an Investment Manager will continue to monitor these metrics actively and will
appropriate level, resulting in a need to sell assets. A reduction in the take appropriate action as required, such as pausing further commitments, to In previous years, strong NAV gains and distributions strengthened the balance
availability or use of borrowing at the HarbourVest fund level, or accelerated attempt to mitigate these risks. sheet. The levels of distributions received during the year under review
repayment thereof, could result in an increase in capital calls to a level in
remained low in comparison with previous years and with the modelled
excess of the modelled scenarios. scenarios. As a result, cash flow was negatively affected and there was
increased use of the credit facility. However, towards the end of the year
Please also see the Going Concern and Viability Statement on page 66 for there were positive signs of a recovery in the level of distributions.
information on the scenarios that are considered by the Board.
This risk was elevated in the 2024 Annual Report and Accounts and the Board
continues to consider this as a heightened risk for the Company.
Popularity of the Listed Private Equity Sector Investor sentiment towards the Listed Private Equity sector may deteriorate, Private equity has performed strongly as an asset class over the years and the Increased risk
resulting in a widening of the Company's share price discount relative to its Company has demonstrated the value of investing through the investment cycle
The risk that investor sentiment towards the listed private equity sector as a NAV per share. This may be because of perceptions of the position of the and gaining exposure to a diverse range of markets. HVPE, together with its Discounts within the sector remain wide and the market commentary on the
whole may deteriorate. market peers, continues to advocate for the sector, to increase investors' sector has focused on the level of exit activity. The Board believes that
familiarity with private equity and to describe the advantages of the market sentiment towards the sector should turn more positive once there is an
in the private equity cycle, perceptions about the cost of private equity investment trust structure to provide access to illiquid assets through a increase in realisation events which validate valuations and support
investing, or due to investors making their own judgements regarding current liquid share. cash flow.
valuations. HVPE's discount is currently wider than its historical average and
has remained so for a sustained period.
Trading Liquidity and Price HVPE's relatively wide discount risks undermining investor confidence and The Board has made robust efforts to enhance its communications, to describe Increased risk
could erode levels of shareholder satisfaction. Despite the substantive its strategy, to engage with its shareholders, and to listen and respond to
The risk that the number of shares traded in the Company is insufficient to efforts made by the Board to address this issue through its establishment of the views expressed. The Distribution Pool has been established to address HVPE's discount remains high and persistent. The Board has continued to focus
maintain interest in the stock, or that the discount of the share price to the the Distribution Pool and active engagement with shareholders, some investors issues raised and there is regular and extensive consideration of potential on measures to improve the rating of the shares and in January 2025 it
NAV per share fails to narrow. may remain unconvinced by its proposals. options to close the discount, including enhanced disclosure and transparency announced an increase in the allocation to the Distribution Pool, a simplified
for shareholders. The Board continues to stress the long-term nature of HVPE, investment structure going forward and a continuation vote in 2026. The share
the consistent performance and the benefits of its diversification strategy as price initially reacted positively to the measures, although the discount has
it remains determined to satisfy its investment objective and purpose. subsequently widened again due to the uncertainty created by the US's tariff
policy. An increase in exits and distributions could help a recovery in the
share price in the future.
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF HARBOURVEST GLOBAL PRIVATE
EQUITY LIMITED
Opinion
We have audited the Consolidated Financial Statements of HVPE (the "Company")
and its subsidiaries (the "Group") for the year ended 31 January 2025 which
comprise the Consolidated Statements of Assets and Liabilities, the
Consolidated Statements of Operations, the Consolidated Statements of Changes
in Net Assets, the Consolidated Statements of Cash Flows, the Consolidated
Schedule of Investments, and the related notes 1 to 11, including a summary of
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and United States
Generally Accepted Accounting Principles ("US GAAP").
In our opinion, the Consolidated Financial Statements:
- give a true and fair view of the state of the Group's affairs as at 31
January 2025 and of its profit for the year then ended;
- have been properly prepared in accordance with US GAAP; and
- have been properly prepared in accordance with the requirements of the
(Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
Independence
We are independent of the Group and Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements,
including the FRC's Ethical Standard as applied to listed public interest
entities, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group or the Company and we remain independent of the Group
and the Company in conducting the audit.
Conclusions relating to going concern
In auditing the Consolidated financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the preparation of
the Consolidated Financial Statements is appropriate. Our evaluation of the
Directors' assessment of the Group's and Company's ability to continue to
adopt the going concern basis of accounting included:
- Evaluating the going concern assessment prepared by the Investment
Manager and approved by the Directors for the period up until 30 June 2026
from the date of approval of the Consolidated Financial Statements;
- Obtaining the models used to forecast cash flows under differing
scenarios and challenged the sensitivities and assumptions used in the
forecasts. We assessed whether the commitments made to underlying investments
cast significant doubt over the going concern status of the Group and compared
the historical calls made by underlying investments as a percentage of the
total commitments made, including a discussion with the Investment Manager
regarding the possibility for uncalled commitments to be called. We considered
the accuracy of Investment Managers forecast by comparing actual performance
to historical forecasts;
- Testing the arithmetical accuracy of relevant aspects of the models
supporting the going concern basis, plausible downside analysis and extreme
downside scenarios;
- Confirming the available credit facility balances to understand the
potential impact of the leverage in the underlying funds. We recalculated the
forecast debt covenants under the different scenarios to validate compliance
within the going concern period; and
- Evaluated the disclosures made in the Annual Report and Consolidated
Financial Statements regarding going concern to ascertain that they are in
accordance with US GAAP and have complied with, or explained reasons for
non-compliance, with all the AIC Code of Corporate Governance provisions.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group and Company's ability to
continue as a going concern over a period from the date of approval of the
Financial Statements to 30 June 2026.
In relation to the Group's reporting on how they have applied the UK Corporate
Governance Code, we have nothing material to add or draw attention to in
relation to the Directors' statement in the financial statements about whether
the Directors considered it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the Directors with respect to
going concern are described in the relevant sections of this report. However,
because not all future events or conditions can be predicted, this statement
is not a guarantee as to the Group and Company's ability to continue as a
going concern.
Overview of our audit approach
Key audit matters Risk of misstatement or manipulation of the valuation of the Group's
investments in the underlying Primary or Secondary HarbourVest funds, together
the "HarbourVest investment funds".
Materiality Overall Group materiality of £80.4 million which represents 2% of Net Assets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation
of performance materiality determine our audit scope for each company within
the Group. Taken together, this enables us to form an opinion on the
Consolidated Financial Statements. We take into account size, risk profile,
the organisation of the group and effectiveness of group-wide controls,
changes in the business environment and other factors such as the potential
impact of climate change when assessing the level of work to be performed.
The audit was led from Guernsey and utilised audit team members from the
Boston office of Ernst & Young LLP in the US. We operated as an integrated
audit team across the two jurisdictions, and we performed audit procedures and
responded to the risk identified as described below.
The Group comprises the Company and its five wholly owned subsidiaries as
explained in Note 2 to the Group Financial Statements. The Company, each
subsidiary and the consolidation are subject to full scope audit procedures.
Other than the investments which the Company holds directly, the subsidiaries
own the investments, which are set out in the Consolidated Schedule
of Investments, and on which we performed our work on valuation.
Climate change
Stakeholders are increasingly interested in how climate change will impact
HVPE. The Group has determined that the most significant future impacts from
climate change on their operations will be from the investments made by the
underlying partnerships in which they are invested. These are explained on
page 64 in the Directors' Report (Approach to Environmental, Social and
Governance matters). All of these disclosures form part of the "Other
information," rather than the audited Consolidated Financial Statements. Our
procedures on these unaudited disclosures therefore consisted solely of
considering whether they are materially inconsistent with the Consolidated
Financial Statements or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line with our responsibilities
on "Other information".
In planning and performing our audit we assessed the potential impacts of
climate change on the Company's business and any consequential material impact
on its financial statements.
The Group has explained in Note 2 its articulation of the impact of climate
change in the financial statements. There are no significant judgements or
estimates relating to climate change in the notes to the financial statements
as the Board has concluded specifically that climate change including physical
and transition risks, does not have a material impact on the Group's financial
statements in Note 2.
Our audit effort in considering the impact of climate change on the financial
statements was focused on the adequacy of the Group's disclosures in the
financial statements as set out in note 2 and the conclusions that there was
no material impact on the recognition and separate measurement considerations
of the assets and liabilities of the Group as at 31 January 2025. As part of
this evaluation, we performed our own risk assessment to determine the risks
of material misstatement in the financial statements from climate change which
needed to be considered in our audit.
Based on our work we have not identified the impact of climate change on the
financial statements to be a key audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the Consolidated Financial Statements of
the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall audit strategy,
the allocation of resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in the context of our audit of
the financial statements as a whole, and in our opinion thereon, and we do not
provide a separate opinion on these matters.
Risk Our response to the risk Key observations communicated to the Audit Committee
Misstatement or manipulation of the valuation of the Group's investments in Our response comprised the performance of the following procedures: We reported to the Audit and Risk Committee that we did not identify any
the underlying Primary or Secondary HarbourVest funds, together the
instances of the use of inappropriate methodologies and that the valuation of
"HarbourVest investment funds" ($4,375 million; 2024 $4,058 million). Confirmed and documented our understanding of the Group's processes, controls the Group's investments in the HarbourVest investment funds were not
and methodologies for valuing investments held by the Group in the HarbourVest materially misstated.
Refer to the Accounting policies and Note 4 of the Consolidated Financial investment funds, including the use of the practical expedient as set out in
Statements. Accounting Standard Codification (ASC) Topic 820 Fair Value Measurement ("ASC
820") by performing our walkthrough processes and evaluating the
There is a risk that the valuation of the Group's investments at 31 January implementation and design effectiveness of controls;
2025, which comprise 108.7% (2024: 103.5%) of net assets is materially
misstated. We also utilised the System and Organisation Controls 1 Report for Private
Equity Fund Administration Report on Controls Placed in Operation and Tests of
The valuation of the investments is the principal driver of the Group's net Operating Effectiveness ("SOC 1 report") of HarbourVest Partner LLC to confirm
asset value and hence incorrect valuations would have a significant impact on our understanding of the production on the NAVs of the HarbourVest investment
the net asset value and performance of the Group. funds;
Agreed 100% by value of the individual net asset values of each HarbourVest
investment fund to its underlying audited Net Asset Value (NAV) as at 31
December 2024 which, prior to adjustments, formed the basis for the Group's
carrying amount as at 31 January 2025;
We obtained a schedule of all adjustments made to those audited NAVs between 1
January 2025 and 31 January 2025, and:
- Verified all contributions and distributions made to/from the
HarbourVest investment funds to supporting bank statements;
- Recalculated a sample of accrued management fees in the HarbourVest
investment funds based on the terms of the signed management agreements and
agreed terms to relevant supporting documents;
- Verified foreign exchange rate changes to independent third-party
sources, and their application to any HarbourVest investment funds denominated
in foreign currencies;
- Considered whether there were changes in market conditions during the
period from 1 January 2025 to 31 January 2025 that could have had a material
impact to the valuations of the direct investments and marketable securities
of the HarbourVest investment funds;
- Independently sourced third-party prices and verified fair value changes
on publicly traded securities held in the HarbourVest investment funds; and
- Through enquiry determined that there were no post-closing adjustments
since 31 December 2024 or other material changes to the NAV subsequent to the
HarbourVest investment funds' finalised financial reporting process.
We assessed the fairness, accuracy and completeness of the disclosures in the
Consolidated Financial Statements.
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in
evaluating the effect of identified misstatements on the audit and in forming
our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the
aggregate, could reasonably be expected to influence the economic decisions of
the users of the financial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be $80.4 million (2024: $78.4
million), which is 2% (2024: 2%) of net assets. We believe that net assets
provides us with a basis for determining the nature, timing and extent of risk
assessment procedures, identifying and assessing the risk of material
misstatement and determining the nature, timing and extent of further audit
procedures. We used the net assets as a basis for determining planning
materiality because the Group's primary performance measures for internal and
external reporting are based on net assets as we consider it is the measure
most relevant to the stakeholders of the Group.
During the course of our audit, we reassessed initial materiality from the
planning stage based on 31 January 2025 net assets.
Performance materiality
The application of materiality at the individual account or balance level. It
is set at an amount to reduce to an appropriately low level the probability
that the aggregate of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our assessment of the
Group's overall control environment, our judgement was that performance
materiality was 75% (2024: 75%) of our planning materiality, namely
$60.3 million (2024: $58.8 million). We have set performance materiality
at this percentage given that there is no history of material misstatements,
the likelihood of misstatement in the future is deemed low, we have a strong
understanding of the control environment, there were no changes in
circumstances (such as a change in accounting personnel or events out of the
normal course of business) and it is not a close monitored audit, and hence we
consider 75% to be reasonable.
Reporting threshold
An amount below which identified misstatements are considered as being clearly
trivial.
We agreed with the Audit Committee that we would report to them all
uncorrected audit differences in excess of $4.0 million (2024:
$3.9 million), which is set at 5% of planning materiality, as well as
differences below that threshold that, in our view, warranted reporting
on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative
measures of materiality discussed above and in light of other relevant
qualitative considerations in forming our opinion.
Other information
The other information comprises the information included in the annual report
other than the Consolidated Financial Statements and our auditor's report
thereon. The directors are responsible for the other information contained
within the annual report.
Our opinion on the Consolidated Financial Statements does not cover the other
information and, except to the extent otherwise explicitly stated in this
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the Consolidated
Financial Statements or our knowledge obtained in the course of the audit or
otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the
Consolidated Financial Statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of the other
information, we are required to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters in relation to
which The Companies (Guernsey) Law, 2008 requires us to report to you if, in
our opinion:
- proper accounting records have not been kept by the Company; or
- the Financial Statements are not in agreement with the Company's
accounting records and returns; or
- we have not received all the information and explanations we require for
our audit.
Corporate Governance Statement
We have reviewed the directors' statement in relation to going concern,
longer-term viability and that part of the Corporate Governance Statement
relating to the group and company's compliance with the provisions of the UK
Corporate Governance Code specified for our review by the Listing Rules.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
- Directors' statement with regards to the appropriateness of adopting the
going concern basis of accounting and any material uncertainties identified
set out on pages 66 to 67;
- Directors' explanation as to its assessment of the company's prospects,
the period this assessment covers and why the period is appropriate set out on
pages 66 to 67;
- Director's statement on whether it has a reasonable expectation that the
group will be able to continue in operation and meets its liabilities set out
on pages 66 to 67;
- Directors' statement on fair, balanced and understandable set out on
page 67;
- Board's confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on pages 39 to 40;
- The section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out on pages
70 to 71; and;
- The section describing the work of the audit committee set out on pages
70 to 71
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out
on page 67, the Directors are responsible for the preparation of the
Consolidated Financial Statements and for being satisfied that they give a
true and fair view, and for such internal control as the Directors determine
is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the Consolidated Financial Statements, the Directors are
responsible for assessing the Group and Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the Directors either intend
to liquidate the Group or the Company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the
Consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK)
will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The risk of not detecting a
material misstatement due to fraud is higher than the risk of not detecting
one resulting from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through collusion. The
extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
However, the primary responsibility for the prevention and detection of fraud
rests with both those charged with governance of the company and management.
- We obtained an understanding of the legal and regulatory frameworks that
are applicable to the Group and determined that the most significant are:
• Financial Conduct Authority ("FCA") Listing Rules;
• Disclosure Guidance and Transparency Rules ("DTR") of the FCA;
• The 2018 UK Corporate Governance Code;
• The 2019 AIC Code of Corporate Governance; and
• The Companies (Guernsey) Law, 2008, as amended.
- We understood how the Group is complying with those frameworks by:
• Discussing the processes and procedures used by the Directors, the
Investment Manager, the Company Secretary and Administrator to ensure
compliance with the relevant frameworks;
• Inspecting the Group's relevant documented policies, processes and
procedures; and
• Reviewing internal reports that evidence compliance testing.
- We assessed the susceptibility of the Group's Consolidated Financial
Statements to material misstatement, including how fraud might occur by:
• Identifying misstatement or manipulation of the valuation of the
Group's investments in the HarbourVest funds and undertaking the audit
procedures set out in the Key Audit Matters section above;
• Obtaining an understanding of entity-level controls and considering
the influence of the control environment;
• Obtaining management's assessment of fraud risks including an
understanding of the nature, extent and frequency of such assessment
documented in the HVPE Risk Review;
• Making inquiries with those charged with governance as to how they
exercise oversight of management's processes for identifying and responding to
fraud risks and the controls established by management to mitigate
specifically those risks the entity has identified, or that otherwise help to
prevent, deter and detect fraud;
• Making inquiries with management and those charged with governance
regarding how they identify related parties including circumstances related to
the existence of a related party with dominant influence; and
• Making inquiries with management and those charged with governance
regarding their knowledge of any actual or suspected fraud or allegations of
fraudulent financial reporting affecting the Group.
- Based on this understanding we designed our audit procedures to identify
non-compliance with such laws and regulations. Our procedures involved:
• Having discussions with those charged with governance, the
Investment Manager, the Company Secretary and Administrator to obtain an
understanding of how instances of non‑compliance with relevant laws and
regulations are identified;
• Reviewing Board minutes and internal compliance reporting;
• Inspecting correspondence with regulators;
• Reviewing the Consolidated Financial Statements to check that they
comply with the reporting requirements of the Group;
• Obtaining relevant written representations from the Board of
Directors; and
• Performing journal entry testing.
- Our understanding of the company's current activities, the scope of its
authorisation and the effectiveness of its control environment are as follows:
• The activities of the Company are overseen by the Board, who meet
regularly throughout the year;
• We have reviewed the SOC-1 reports and bridging letters of Company's
key service providers for the year audited and are not aware of any matters of
concern relating to the control environment.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at
https://www.frc.org.uk/auditorsresponsibilities. This description forms part
of our auditor's report.
Other matters we are required to address
- Following the recommendation from the audit committee we were appointed
by the Company on 2 November 2007 to audit the financial statements for the
year ending 31 January 2008 and subsequent financial periods.
- The period of total uninterrupted engagement including previous renewals
and reappointments is 18 years, covering the years ending 31 January 2008 to
31 January 2025.
- The audit opinion is consistent with the additional report to the audit
and risk committee.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Section 262 of The Companies (Guernsey) law 2008. Our audit work has been
undertaken so that we might state to the Company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Richard Geoffrey Le Tissier
For and on behalf of Ernst & Young LLP
Guernsey
28 May 2025
Report of the Independent Auditors
To the Directors of HarbourVest Global Private Equity Limited
Opinion
We have audited the consolidated financial statements of HarbourVest Global
Private Equity Limited (the "Company") and its subsidiaries ("the Group"),
which comprise the consolidated statements of assets and liabilities,
including the consolidated schedule of investments, as of 31 January 2025 and
2024, and the related consolidated statements of operations, changes in net
assets and cash flows for the year then ended, and the related notes 1 to
11(collectively referred to as the "financial statements").
In our opinion, the accompanying financial statements present fairly, in all
material respects, the financial position of the Group at 31 January 2025 and
2024, and the results of its operations, changes in its net assets and its
cash flows for the year then ended in accordance with accounting principles
generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America (GAAS). Our responsibilities under
those standards are further described in the Auditor's Responsibilities for
the Audit of the Financial Statements section of our report. We are required
to be independent of the Group and to meet our other ethical responsibilities
in accordance with the relevant ethical requirements relating to our audit. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presentation of the
financial statements in accordance with accounting principles generally
accepted in the United States of America, and for the design, implementation,
and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free of material misstatement,
whether due to fraud or error.
In preparing the financial statements, management is required to evaluate
whether there are conditions or events, considered in the aggregate, that
raise substantial doubt about the Group's ability to continue as a going
concern for one year after the date that the financial statements are
available to be issued.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free of material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted in
accordance with GAAS will always detect a material misstatement when it
exists. The risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a
substantial likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the financial
statements.
In performing an audit in accordance with GAAS, we:
- Exercise professional judgment and maintain professional scepticism
throughout the audit.
- Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, and design and perform audit
procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding the amounts and disclosures in the financial
statements.
- Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Group's internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well
as evaluate the overall presentation of the financial statements.
- Conclude whether, in our judgment, there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Group's
ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit, significant
audit findings, and certain internal control-related matters that we
identified during the audit.
Other Information
Management is responsible for the other information. The other information
comprises the Strategic Report, Governance, and Other Information included in
the annual report but does not include the financial statements and our
auditor's report thereon. Our opinion on the financial statements does not
cover the other information, and we do not express an opinion or any form of
assurance thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and consider whether a material inconsistency
exists between the other information and the financial statements, or the
other information otherwise appears to be materially misstated. If, based on
the work performed, we conclude that an uncorrected material misstatement of
the other information exists, we are required to describe it in our report.
Guernsey, Channel Islands
28 May 2025
Consolidated Statements of Assets and Liabilities
AT 31 JANUARY 2025 AND 2024
In US Dollars 2025 2024
(in thousands*) (in thousands*)
Assets
Investments (Note 4) 4,374,601 4,057,606
Cash and equivalents 122,990 140,156
Other assets 19,566 5,329
Accounts receivable from HarbourVest Advisers L.P. (Note 9) 244 -
Total assets 4,517,401 4,203,091
Liabilities
Amounts due under the credit facility (Note 6) 480,000 275,000
Accounts payable and accrued expenses 14,444 7,479
Accounts payable to HarbourVest Advisers L.P. (Note 9) - 40
Total liabilities 494,444 282,519
Net assets $4,022,957 $3,920,572
Net assets consist of
Shares, unlimited shares authorised, 74,268,671 and 77,683,508 shares issued 4,022,957 3,920,572
and outstanding at 31 January 2025 and 31 January 2024 respectively, no par
value
Net assets $4,022,957 $3,920,572
Net asset value per share $54.17 $50.47
* Except net asset value per share
The accompanying notes are an integral part of the Financial Statements.
The Financial Statements on pages 83 to 97 were approved by the Board on 28
May 2025 and were signed on its behalf by:
Ed Warner
Steven Wilderspin
Chair
Chair of the Audit and Risk Committee
Consolidated Statements of Operations
FOR THE YEARS ENDED 31 JANUARY 2025 AND 2024
In US Dollars 2025 2024
(in thousands) (in thousands)
Realised and unrealised gains on investments
Net realised gain on investments 150,618 90,514
Net change in unrealised appreciation on investments 105,227 49,893
Net gain on investments 255,845 140,407
Investment income
Interest and dividends from cash and equivalents 5,762 8,621
Other income 228 186
Expenses
Interest expense (Note 6) 36,353 14,465
Commitment fees (Note 6) 6,901 6,127
Financing expenses 3,720 2,374
Investment services (Note 3) 2,884 2,475
Professional fees 1,056 1,118
Marketing expenses 761 356
Directors' fees and expenses (Note 9) 492 474
Management fees (Note 3) 110 117
Tax expenses 37 47
Other expenses 1,010 513
Total expenses 53,324 28,066
Net investment loss (47,334) (19,259)
Net increase in net assets resulting from operations $208,511 $121,148
The accompanying notes are an integral part of the Financial Statements.
Consolidated Statements of Changes in Net Assets
FOR THE YEARS ENDED 31 JANUARY 2025 AND 2024
In US Dollars 2025 2024
(in thousands) (in thousands)
Increase in net assets from operations
Net realised gain on investments 150,618 90,514
Net change in unrealised appreciation on investments 105,227 49,893
Net investment loss (47,334) (19,259)
Net increase in net assets resulting from operations 208,511 121,148
Capital Share Transactions
Share repurchase (106,126) (38,502)
Net decrease in net assets from capital share transactions (106,126) (38,502)
Total increase in net assets 102,385 82,646
Net assets at beginning of year 3,920,572 3,837,926
Net assets at end of year $4,022,957 $3,920,572
The accompanying notes are an integral part of the Financial Statements.
Consolidated Statements of Cash Flows
FOR THE YEARS ENDED 31 JANUARY 2025 AND 2024
In US Dollars 2025 2024
(in thousands) (in thousands)
Cash flows from operating activities
Net increase in net assets resulting from operations 208,511 121,148
Adjustments to reconcile net increase in net assets resulting from operations
to net cash used in operating activities:
Net realised gain on investments (150,618) (90,514)
Net change in unrealised appreciation on investments (105,227) (49,893)
Contributions to private equity investments (443,568) (592,792)
Distributions from private equity investments 382,418 310,296
Other (7,556) 7,890
Net cash used in operating activities (116,040) (293,865)
Cash flows from financing activities
Proceeds from borrowing on the credit facility 570,000 275,000
Repayments in respect of the credit facility (365,000) -
Share repurchase (106,126) (38,502)
Net cash provided by financing activities 98,874 236,498
Net change in cash and equivalents (17,166) (57,367)
Cash and equivalents at beginning of year 140,156 197,523
Cash and equivalents at end of year $122,990 $140,156
Supplemental disclosure:
Interest paid during the year $36,396 $8,258
The accompanying notes are an integral part of the Financial Statements.
Consolidated Schedule of Investments
AT 31 JANUARY 2025
In US Dollars
US Funds Unfunded Amount Distributions Fair Value Fair Value
Commitment Invested* Received (in thousands) as a % of
(in thousands) (in thousands) (in thousands) Net Assets
HarbourVest Partners VI-Direct Fund L.P. 1,313 46,722 41,081 2,508 0.1
HarbourVest Partners VII-Venture Partnership Fund L.P.(†) 2,319 135,290 205,308 1,558 0.0
HarbourVest Partners VIII-Cayman Mezzanine and Distressed Debt Fund L.P. 2,000 48,202 62,811 679 0.0
HarbourVest Partners VIII-Cayman Buyout Fund L.P. 7,500 245,259 420,282 1,517 0.0
HarbourVest Partners VIII-Cayman Venture Fund L.P. 1,000 49,192 92,447 17,035 0.4
HarbourVest Partners IX-Cayman Buyout Fund L.P. 8,520 62,761 109,735 24,230 0.6
HarbourVest Partners IX-Cayman Credit Opportunities Fund L.P. 1,438 11,111 14,141 3,061 0.1
HarbourVest Partners IX-Cayman Venture Fund L.P. 3,500 66,826 148,455 71,624 1.8
HarbourVest Partners 2013 Cayman Direct Fund L.P. 3,229 97,131 166,055 29,717 0.7
HarbourVest Partners Cayman Cleantech Fund II L.P. 900 19,156 21,404 17,014 0.4
HarbourVest Partners X Buyout Feeder Fund L.P. 34,650 217,378 178,034 222,685 5.5
HarbourVest Partners X Venture Feeder Fund L.P. 6,290 141,764 113,071 254,014 6.3
HarbourVest Partners Mezzanine Income Fund L.P. 8,155 42,067 74,761 10,344 0.3
HarbourVest Partners XI Buyout Feeder Fund L.P. 62,300 287,700 82,498 382,424 9.5
HarbourVest Partners XI Micro Buyout Feeder Fund L.P. 5,655 59,345 21,957 76,178 1.9
HarbourVest Partners XI Venture Feeder Fund L.P. 13,300 176,736 46,989 244,019 6.1
HarbourVest Partners XII Buyout Feeder Fund L.P. 277,200 217,800 5,403 263,894 6.6
HarbourVest Partners XII Micro Buyout Feeder Fund L.P. 44,400 35,600 579 39,655 1.0
HarbourVest Partners XII Venture Feeder Fund L.P. 74,588 60,413 1,061 72,977 1.8
HarbourVest Partners XII Venture AIF SCSp 77,625 37,450 378 46,597 1.2
HarbourVest Infrastructure Income Delaware Parallel Partnership - 117,233 39,846 113,833 2.8
HarbourVest Partners XIII Buyout Feeder Fund L.P. 70,000 - - 133 0.0
HarbourVest Partners XIII Small Cap Feeder Fund L.P. 20,000 - - 18 0.0
HarbourVest Partners XIII Venture Feeder Fund L.P. 40,000 - - 120 0.0
Total US Funds 765,880 2,175,135 1,846,300 1,895,836 47.1
In US Dollars
International/Global Funds Unfunded Amount Distributions Fair Value Fair Value
Commitment Invested* Received (in thousands) as a % of
(in thousands) (in thousands) (in thousands) Net Assets
Dover Street VII Cayman L.P. 4,250 83,504 118,312 108 0.0
HIPEP VI-Cayman Partnership Fund L.P.** 5,181 117,845 192,120 39,810 1.0
HIPEP VI-Cayman Asia Pacific Fund L.P. 2,500 47,687 64,495 12,245 0.3
HIPEP VI-Cayman Emerging Markets Fund L.P. - 30,059 21,678 14,333 0.4
Dover Street VIII Cayman L.P. 14,400 165,724 265,014 8,797 0.2
HVPE Charlotte Co-Investment L.P. - 93,894 162,267 839 0.0
HarbourVest Global Annual Private Equity Fund L.P. 9,000 91,001 152,834 63,634 1.6
HIPEP VII Partnership Feeder Fund L.P. 9,688 115,313 134,970 116,259 2.9
HIPEP VII Asia Pacific Feeder Fund L.P. 1,200 28,800 24,500 25,343 0.6
HIPEP VII Emerging Markets Feeder Fund L.P. 2,600 17,400 9,747 21,113 0.5
HIPEP VII Europe Feeder Fund L.P.(††) 6,528 64,329 90,515 64,428 1.6
HarbourVest Canada Parallel Growth Fund L.P.(‡‡) 2,709 21,298 18,565 24,335 0.6
HarbourVest 2015 Global Fund L.P. 7,000 93,017 128,444 62,336 1.5
HarbourVest 2016 Global AIF L.P. 15,000 85,026 99,040 65,823 1.6
HarbourVest Partners Co-Investment IV AIF L.P. 7,000 93,000 96,234 75,665 1.9
Dover Street IX Cayman L.P. 9,000 91,000 105,650 46,149 1.1
HarbourVest Real Assets III Feeder L.P. 3,750 46,250 26,469 37,774 0.9
HarbourVest 2017 Global AIF L.P. 18,000 82,021 74,805 79,505 2.0
HIPEP VIII Partnership AIF L.P. 15,725 154,275 56,301 174,526 4.3
Secondary Overflow Fund III L.P. 22,354 62,804 73,594 46,842 1.2
HarbourVest Asia Pacific VIII AIF Fund L.P. 3,375 46,631 14,544 46,272 1.2
HarbourVest 2018 Global Feeder Fund L.P. 10,150 59,850 30,212 72,899 1.8
HarbourVest Partners Co-Investment V Feeder Fund L.P. 22,500 77,548 44,752 112,143 2.8
HarbourVest Real Assets IV Feeder L.P. 8,500 41,500 16,912 41,390 1.0
HarbourVest 2019 Global Feeder Fund L.P. 26,000 74,007 18,410 104,468 2.6
HarbourVest Credit Opportunities Fund II L.P. 1,500 48,500 20,383 43,293 1.1
Dover Street X Feeder Fund L.P. 30,000 120,018 46,853 134,688 3.3
Secondary Overflow Fund IV L.P. 45,290 84,116 30,870 94,977 2.4
HIPEP IX Feeder Fund L.P. 261,900 223,108 21,284 243,790 6.1
HarbourVest 2020 Global Feeder Fund L.P. 7,750 42,251 4,633 50,263 1.2
HarbourVest Partners Co-Investment VI Feeder Fund L.P. 18,750 106,256 1,917 131,532 3.3
HarbourVest Asia Pacific 5 Feeder Fund L.P. 169,500 130,500 1,163 145,251 3.6
HarbourVest 2021 Global Feeder Fund L.P. 58,122 111,930 5,359 126,324 3.1
HarbourVest 2022 Global Feeder Fund L.P. 57,500 42,500 1,185 56,597 1.4
Dover Street XI Feeder Fund L.P. 187,500 62,500 5,432 80,512 2.0
HarbourVest Credit Opportunities III Feeder Fund L.P. 125,000 - - 1,143 0.0
HIPEP X Feeder Fund L.P. 320,000 - - 2,901 0.1
HarbourVest Infrastructure Opportunities III Feeder Fund L.P. 100,000 - - 2,740 0.1
Secondary Overflow Fund V L.P. - - - (97) 0.0
HarbourVest Partners Stewardship Feeder Fund L.P. 27,388 7,666 - 8,078 0.2
HarbourVest Private Equity Continuation Solutions Feeder Fund L.P 50,000 - - (262) 0.0
Total International/Global Funds 1,686,608 2,863,130 2,179,464 2,478,766 61.6
Total Investments 2,452,488 5,038,265 4,025,764 4,374,601 108.7
* Includes purchase of limited partner interests for shares and cash
at the time of HVPE's IPO.
† Includes ownership interests in HarbourVest Partners VII-Cayman
Partnership entities.
** Fund denominated in euros. Commitment amount is €100,000,000.
†† Fund denominated in euros. Commitment amount is €63,000,000.
‡‡ Fund denominated in Canadian dollars. Commitment amount is
C$32,000,000.
As of 31 January 2025, the cost basis of partnership investments is
$2,907,922,000.
Totals and subtotals may not recalculate due to rounding.
The accompanying notes are an integral part of the Financial Statements.
In US Dollars
US Funds Unfunded Amount Distributions Fair Value Fair Value
Commitment Invested* Received (in thousands) as a % of
(in thousands) (in thousands) (in thousands) Net Assets
HarbourVest Partners V-Partnership Fund L.P. 2,220 46,709 45,924 802 0.0
HarbourVest Partners VI-Direct Fund L.P. 1,313 46,722 41,081 1,796 0.0
HarbourVest Partners VI-Partnership Fund L.P. 5,175 204,623 237,227 464 0.0
HarbourVest Partners VII-Venture Partnership Fund L.P.(†) 2,319 135,290 204,327 2,127 0.1
HarbourVest Partners VIII-Cayman Mezzanine and Distressed Debt Fund L.P. 2,000 48,202 62,811 699 0.0
HarbourVest Partners VIII-Cayman Buyout Fund L.P. 7,500 245,259 417,067 4,931 0.1
HarbourVest Partners VIII-Cayman Venture Fund L.P. 1,000 49,192 91,307 13,875 0.4
HarbourVest Partners 2007 Cayman Direct Fund L.P. 2,250 97,877 165,442 288 0.0
HarbourVest Partners IX-Cayman Buyout Fund L.P. 8,520 62,761 92,387 43,194 1.1
HarbourVest Partners IX-Cayman Credit Opportunities Fund L.P. 1,438 11,111 12,034 6,029 0.2
HarbourVest Partners IX-Cayman Venture Fund L.P. 3,500 66,826 132,015 84,464 2.2
HarbourVest Partners 2013 Cayman Direct Fund L.P. 3,229 97,131 159,293 36,077 0.9
HarbourVest Partners Cayman Cleantech Fund II L.P. 900 19,156 18,730 17,466 0.4
HarbourVest Partners X Buyout Feeder Fund L.P. 34,650 217,378 165,062 233,547 6.0
HarbourVest Partners X Venture Feeder Fund L.P. 6,290 141,764 99,019 258,319 6.6
HarbourVest Partners Mezzanine Income Fund L.P. 8,155 42,067 63,788 20,675 0.5
HarbourVest Partners XI Buyout Feeder Fund L.P. 90,300 259,700 82,013 324,967 8.3
HarbourVest Partners XI Micro Buyout Feeder Fund L.P. 5,655 59,345 19,811 73,692 1.9
HarbourVest Partners XI Venture Feeder Fund L.P. 13,300 176,736 42,421 236,782 6.0
HarbourVest Adelaide Feeder L.P. 6,000 144,000 176,644 1,455 0.0
HarbourVest Partners XII Buyout Feeder Fund L.P. 356,400 138,600 3,268 164,565 4.2
HarbourVest Partners XII Micro Buyout Feeder Fund L.P. 58,000 22,000 - 24,486 0.6
HarbourVest Partners XII Venture Feeder Fund L.P. 100,238 34,763 240 39,087 1.0
HarbourVest Partners XII Venture AIF SCSp 95,450 19,625 - 23,431 0.6
HarbourVest Infrastructure Income Delaware Parallel Partnership - 117,233 37,964 104,241 2.7
Total US Funds 815,802 2,504,070 2,369,876 1,717,458 43.8
In US Dollars
International/Global Funds Unfunded Amount Distributions Fair Value as a % of
Commitment Invested* Received Fair Value Net Assets
(in thousands) (in thousands) (in thousands) (in thousands)
HarbourVest International Private Equity Partners III-Partnership Fund L.P. 3,450 147,729 148,440 402 0.0
Dover Street VII Cayman L.P. 4,250 83,504 118,312 122 0.0
HIPEP VI-Cayman Partnership Fund L.P.** 5,409 117,845 177,872 56,878 1.5
HIPEP VI-Cayman Asia Pacific Fund L.P. 2,500 47,687 59,275 19,589 0.5
HIPEP VI-Cayman Emerging Markets Fund L.P. - 30,059 15,319 22,461 0.6
Dover Street VIII Cayman L.P. 14,400 165,724 262,515 13,083 0.3
HVPE Charlotte Co-Investment L.P. - 93,894 162,267 831 0.0
HarbourVest Global Annual Private Equity Fund L.P. 9,000 91,001 137,497 74,761 1.9
HIPEP VII Partnership Feeder Fund L.P. 10,625 114,375 116,405 127,623 3.3
HIPEP VII Asia Pacific Feeder Fund L.P. 1,500 28,500 21,232 29,525 0.8
HIPEP VII Emerging Markets Feeder Fund L.P. 2,600 17,400 8,267 22,389 0.6
HIPEP VII Europe Feeder Fund L.P.(††) 6,815 64,329 79,077 68,485 1.7
HarbourVest Canada Parallel Growth Fund L.P.(‡‡) 4,369 19,872 13,707 26,735 0.7
HarbourVest 2015 Global Fund L.P. 7,000 93,017 114,791 74,638 1.9
HarbourVest 2016 Global AIF L.P. 16,000 84,026 85,450 77,026 2.0
HarbourVest Partners Co-Investment IV AIF L.P. 7,000 93,000 92,953 84,382 2.2
Dover Street IX Cayman L.P. 12,000 88,000 91,612 60,234 1.5
HarbourVest Real Assets III Feeder L.P. 3,750 46,250 13,607 47,312 1.2
HarbourVest 2017 Global AIF L.P. 19,500 80,521 62,587 87,239 2.2
HIPEP VIII Partnership AIF L.P. 28,475 141,525 36,116 175,297 4.5
Secondary Overflow Fund III L.P. 22,841 62,316 59,234 62,341 1.6
HarbourVest Asia Pacific VIII AIF Fund L.P. 3,375 46,631 11,092 50,461 1.3
HarbourVest 2018 Global Feeder Fund L.P. 13,300 56,700 21,628 75,861 1.9
HarbourVest Partners Co-Investment V Feeder Fund L.P. 22,500 77,548 19,777 124,512 3.2
HarbourVest Real Assets IV Feeder L.P. 13,500 36,500 11,664 39,390 1.0
HarbourVest 2019 Global Feeder Fund L.P. 26,000 74,007 15,885 99,459 2.5
HarbourVest Credit Opportunities Fund II L.P. 1,500 48,500 8,939 49,891 1.3
Dover Street X Feeder Fund L.P. 44,250 105,768 37,683 125,128 3.2
Secondary Overflow Fund IV L.P. 49,931 79,475 26,807 87,813 2.2
HIPEP IX Feeder Fund L.P. 329,800 155,208 11,752 177,838 4.5
HarbourVest 2020 Global Feeder Fund L.P. 10,750 39,251 4,147 43,755 1.1
HarbourVest Partners Co-Investment VI Feeder Fund L.P. 37,500 87,506 378 95,003 2.4
HarbourVest Asia Pacific 5 Feeder Fund L.P. 255,000 45,000 - 37,406 1.0
HarbourVest 2021 Global Feeder Fund L.P. 76,822 93,230 2,790 103,962 2.7
HarbourVest 2022 Global Feeder Fund L.P. 71,000 29,000 1,185 36,161 0.9
Dover Street XI Feeder Fund L.P. 207,500 42,500 - 57,126 1.5
HarbourVest Credit Opportunities III Feeder Fund L.P. 75,000 - - (63) 0.0
HIPEP X Feeder Fund L.P. 125,000 - - 964 0.0
HarbourVest Infrastructure Opportunities III Feeder Fund L.P. 75,000 - - 268 0.0
Secondary Overflow Fund V L.P. - - - (75) 0.0
HarbourVest Partners Stewardship Feeder Fund L.P. 30,888 4,166 - 3,938 0.1
HarbourVest Private Equity Continuation Solutions Feeder Fund L.P 35,000 - - - 0.0
Total International/Global Funds 1,685,100 2,731,565 2,050,263 2,340,149 59.8
Total Investments 2,500,899 5,235,635 4,420,139 4,057,606 103.5
* Includes purchase of limited partner interests for shares and cash
at the time of HVPE's IPO.
† Includes ownership interests in HarbourVest Partners VII-Cayman
Partnership entities.
** Fund denominated in euros. Commitment amount is €100,000,000.
†† Fund denominated in euros. Commitment amount is €63,000,000.
‡‡ Fund denominated in Canadian dollars. Commitment amount is
C$32,000,000.
As of 31 January 2024, the cost basis of partnership investments is
$2,696,155,000.
Totals and subtotals may not recalculate due to rounding.
The accompanying notes are an integral part of the Financial Statements.
Notes to the Consolidated Financial Statements
Note 1 Company Organisation and Investment Objective
HarbourVest Global Private Equity Limited (the "Company" or "HVPE") is a
closed-ended investment company registered with the Registrar of Companies in
Guernsey under The Companies (Guernsey) Law, 2008. The Company's registered
office is BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey GY1
1WA.
The Company was incorporated and registered in Guernsey on 18 October 2007.
HVPE is designed to offer shareholders long-term capital appreciation by
investing in a diversified portfolio of private equity investments. The
Company invests in private equity through private equity funds and may make
co-investments or other opportunistic investments. The Company is managed by
HarbourVest Advisers L.P. (the "Investment Manager"), an affiliate of
HarbourVest Partners, LLC ("HarbourVest"), a private equity fund-of-funds
manager. The Company intends to invest in and alongside existing and
newly-formed HarbourVest funds. HarbourVest is a global private equity fund of
funds manager and typically invests capital in primary partnerships, secondary
investments, and direct investments across vintage years, geographies,
industries, and strategies.
Operations of the Company commenced on 6 December 2007, following the initial
global offering of the Class A Ordinary Shares.
Share Capital
At 31 January 2025, the Company's 74,268,671 shares were listed on the London
Stock Exchange under the symbol "HVPE". The shares are entitled to the income
and increases and decreases in the net asset value ("NAV") of the Company, and
to any dividends declared and paid, and have full voting rights. Dividends may
be declared by the Board of Directors and paid from available assets subject
to the Directors being satisfied that the Company will, immediately after
payment of the dividend, satisfy the statutory solvency test prescribed by The
Companies (Guernsey) Law, 2008. The company repurchased 3,414,837 and
1,421,114 shares during the years ended 31 January 2025 and 31 January 2024,
respectively.
Dividends would be paid to shareholders pro rata to their shareholdings.
The shareholders must approve any amendment to the Memorandum and Articles of
Incorporation. The approval of 75% of the shares is required in respect of any
changes that are administrative in nature, any material change from the
investment strategy and/or investment objective of the Company, or any
material change to the terms of the Investment Management Agreement.
There is no minimum statutory capital requirement under Guernsey law.
Investment Manager, Company Secretary, and Administrator
The Directors have delegated certain day-to-day operations of the Company to
the Investment Manager and the Company Secretary and Administrator, under
advice of the Directors, pursuant to service agreements with those parties,
within the context of the strategy set by the Board. The Investment Manager is
responsible for, among other things, selecting, acquiring, and disposing of
the Company's investments, carrying out financing, cash management, and risk
management activities, providing investment advisory services, including with
respect to HVPE's investment policies and procedures, and arranging for
personnel and support staff of the Investment Manager to assist in the
administrative and executive functions of the Company.
Directors
The Directors are responsible for the determination of the investment policy
of the Company on the advice of the Investment Manager and have overall
responsibility for the Company's activities. This includes the periodic review
of the Investment Manager's compliance with the Company's investment policies
and procedures, and the approval of certain investments. A majority of
Directors must be independent Directors and not affiliated with HarbourVest or
any affiliate of HarbourVest.
Note 2 Summary of Significant Accounting Policies
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Company's
consolidated financial statements ("Financial Statements").
Basis of Preparation
The Company maintains an overcommitment strategy in an attempt to remain fully
invested over time (refer to Note 5 on page 96 for further details on unfunded
commitments). HarbourVest prepares forecasts and predictions to provide
assurance that the Company has sufficient resources to meet its ongoing
requirements.
As part of this process the Investment Manager has created four revised model
scenarios with varying degrees of decline in investment value and investment
distributions, with the worst being an Extreme Downside scenario representing
an impact to the portfolio that is worse than that experienced during the GFC.
All four models verified that the Company has enough resources to meet the
Company's upcoming financial obligations. However, in all circumstances HVPE
can take steps to limit or mitigate the impact on the Consolidated Statements
of Assets and Liabilities, namely drawing on the credit facility, pausing new
commitments, raising additional credit or capital, and selling assets to
increase liquidity and reduce outstanding commitments. As a result, the
Company's Financial Statements have been prepared on a going concern basis.
Basis of Presentation
The Financial Statements include the accounts of HarbourVest Global Private
Equity Limited and its four wholly owned subsidiaries: HVGPE - Domestic A
L.P., HVGPE - Domestic B L.P., HVGPE - Domestic C L.P. and HVGPE -
International A L.P. (together "the undertakings"). Each of the subsidiaries
is a Cayman Islands limited partnership formed to facilitate the purchase of
certain investments. All intercompany accounts and transactions have been
eliminated in consolidation.
Method of Accounting
The Financial Statements are prepared in conformity with US Generally Accepted
Accounting Principles ("US GAAP"), The Companies (Guernsey) Law, 2008, and the
Principal Documents. Under applicable rules of Guernsey law implementing the
EU Transparency Directive, the Company is allowed to prepare its Financial
Statements in accordance with US GAAP instead of International Financial
Reporting Standards ("IFRS").
The Company is an investment company following the accounting and reporting
guidance of the Financial Accounting Standards Boards ("FASB") Accounting
Standards Codification ("ASC") Topic 946 - Financial Services - Investment
Companies.
Estimates
The preparation of the Financial Statements in conformity with US GAAP
requires management to make estimates and assumptions that affect the amounts
reported in the Financial Statements and accompanying notes. Actual results
could differ from those estimates.
Investments
Investments are stated at fair value in accordance with the Company's
investment valuation policy. The Board has concluded specifically that climate
change, including physical and transition risks, does not have a material
impact on the recognition and separate measurement considerations of the
assets and liabilities of the Group in the Financial Statements as of 31
January 2025, but recognises that climate change may have an effect on the
investments held in the underlying partnerships. The inputs used to determine
fair value include financial statements provided by the investment
partnerships which typically include fair market value capital account
balances. In reviewing the underlying financial statements and capital account
balances, the Company considers compliance with ASC Topic 820 - Fair Value
Measurement, the currency in which the investment is denominated, and other
information deemed appropriate.
The fair value of the Company's investments is primarily based on the most
recently reported NAV provided by the underlying Investment Manager as a
practical expedient under ASC Topic 820. This fair value is then adjusted for
known investment operating expenses and subsequent transactions, including
investments, realisations, changes in foreign currency exchange rates, and
changes in value of private and public securities. This valuation does not
necessarily reflect amounts that might ultimately be realised from the
investment and the difference can be material.
Securities for which a public market does exist are valued by the Company at
quoted market prices at the year-end date. Generally, the partnership
investments have a defined term and cannot be transferred without the consent
of the GP of the limited partnership in which the investment has been made.
Foreign Currency Transactions
The currency in which the Company operates is US dollars, which is also the
presentation currency. Transactions denominated in foreign currencies are
recorded in the local currency at the exchange rate in effect at the
transaction dates. Foreign currency investments, investment commitments, cash
and equivalents, and other assets and liabilities are translated at the rates
in effect at the year-end date. Foreign currency translation gains and losses
are included in realised and unrealised gains (losses) on investments as
incurred. The Company does not segregate that portion of realised or
unrealised gains and losses attributable to foreign currency translation on
investments.
Cash and Equivalents
The Company considers all highly liquid investments with an original maturity
of three months or less to be cash equivalents. The carrying amount included
in the Consolidated Statements of Assets and Liabilities for cash and
equivalents approximates their fair value. The Company maintains bank accounts
denominated in US dollars, in euros, and in pounds sterling. The Company may
invest excess cash balances in highly liquid instruments such as certificates
of deposit, sovereign debt obligations of certain countries, and money market
funds that are highly rated by the credit rating agencies.
The associated credit risk of the cash and equivalents is monitored by the
Board and the Investment Manager on a regular basis. The Board has authorised
the Investment Manager to manage the cash balances on a daily basis according
to the terms set out in the treasury policies created by the Board.
Investment Income
Investment income includes interest from cash and equivalents, dividends, and
interest received from certain investments due to subsequent fund closings.
Dividends are recorded when they are declared, and interest is recorded when
earned. Interest and dividend income are presented net of withholding tax, if
any.
Operating Expenses
Operating expenses include amounts directly incurred by the Company as part of
its operations, and do not include amounts incurred from the operations of the
investment entities.
Net Realised Gains and Losses on Investments
For investments in private equity funds, the Company records its share of
realised gains and losses as reported by the Investment Manager including
fund-level related expenses and management fees, and is net of any carry
allocation. Realised gains and losses are calculated as the difference between
proceeds received and the related cost of the investment.
Net Change in Unrealised Appreciation and Depreciation on Investments
For investments in private equity funds, the Company records its share of
change in unrealised gains and losses as reported by the Investment Manager as
an increase or decrease in unrealised appreciation or depreciation of
investments and is net of any carry allocation. When an investment is
realised, the related unrealised appreciation or depreciation is recognised as
realised.
Income Taxes
The Company is registered in Guernsey as a tax exempt company. The States of
Guernsey Income Tax Authority has granted the Company exemption from Guernsey
income tax under the provision of the Income Tax (Exempt Bodies) (Guernsey)
Ordinance 1989 and the Company will be charged an annual exemption fee of
£1,600 included as other expenses in the Consolidated Statements of
Operations. Income may be subject to withholding taxes imposed by the US or
other countries, which will impact the Company's effective tax rate.
Investments made in entities that generate US source income may subject the
Company to certain US federal and state income tax consequences. A US
withholding tax at the rate of 30% may be applied on the distributive share of
any US source dividends and interest (subject to certain exemptions) and
certain other income that is received directly or through one or more entities
treated as either partnerships or disregarded entities for US federal income
tax purposes. Furthermore, investments made in entities that generate income
that is effectively connected with a US trade or business may also subject the
Company to certain US federal and state income tax consequences. The US
requires withholding on effectively connected income for corporate partners at
the rate of 21%. In addition, the Company may also be subject to a branch
profits tax which can be imposed at a rate of up to 30% of any after-tax,
effectively connected income associated with a US trade or business. However,
no amounts have been accrued.
The Company accounts for income taxes under the provisions of ASC Topic 740 -
Income Taxes. This standard establishes consistent thresholds as it relates to
accounting for income taxes. It defines the threshold for recognising the
benefits of tax-return positions in the Financial Statements as
"more-likely-than-not" to be sustained by the taxing authority and requires
measurement of a tax position meeting the more-likely-than-not criterion,
based on the largest benefit that is more than 50% likely to be realised. For
the year ended 31 January 2025, the Investment Manager has analysed the
Company's inventory of tax positions taken with respect to all applicable
income tax issues for all open tax years (in each respective jurisdiction),
and has concluded that no provision for income tax is required in the
Company's Financial Statements.
Shareholders in certain jurisdictions may have individual tax consequences
from ownership of the Company's shares. The Company has not included the
impact of these tax consequences on the shareholders in these Financial
Statements.
Market and Other Risk Factors
The Company's investments are subject to various risk factors including market
price, credit, interest rate, liquidity, and currency risk. Investments are
based primarily in the US, Europe, and Asia Pacific, and thus have
concentrations in such regions. The Company's investments are also subject to
the risks associated with investing in leveraged buyout and venture capital
transactions that are illiquid and non-publicly traded. Such investments are
inherently more sensitive to declines in revenues and to increases in expenses
that may occur due to general downward swings in the world economy or other
risk factors including increasingly intense competition, rapid changes in
technology, changes in federal, state and foreign regulations, and limited
capital investments.
The Company is subject to credit and liquidity risk to the extent any
financial institution with which it conducts business is unable to fulfil
contracted obligations on its behalf. Management monitors the financial
condition of those financial institutions and does not anticipate any losses
from these counterparties.
Note 3 Material Agreements and Related Fees
Administrative Agreement
The Company has retained BNP Paribas S.A., Guernsey Branch ("BNPP") as Company
Secretary and Administrator. Fees for these services are paid as invoiced by
BNP and include an administration fee of £50,000 per annum, a secretarial fee
of £60,000 per annum, a compliance services fee of £15,000 per annum, ad-hoc
service fees, and reimbursable expenses. During the years ended 31 January
2025 and 2024, fees of $184,000 and $158,000, respectively, were incurred to
BNP and are included as other expenses in the Consolidated Statements of
Operations.
Registrar
The Company has retained MUFG Pension & Market Services (formerly Link
Asset Services) as share registrar. Fees for this service include a base fee
of £16,000, plus other miscellaneous expenses. During the years ended 31
January 2025 and 2024, registrar fees of $22,000 and $19,000, respectively,
were incurred and are included as other expenses in the Consolidated
Statements of Operations.
Independent Auditor's Fees
For the years ended 31 January 2025 and 2024, auditor fees of $433,000 and
$453,000 were accrued, respectively, and are included in professional fees in
the Consolidated Statements of Operations. The 31 January 2025 figure includes
$319,000 relating to the 31 January 2025 annual audit fee and a $3,000 credit
relating to the prior financial year's audit fee. The 31 January 2024 figure
includes $326,000 relating to the 31 January 2024 annual audit fee and a
credit of $6,000 relating to the prior financial year's audit fee. In
addition, the 31 January 2025 and 2024 figures include fees of $117,000 and
$121,000, respectively, for audit-related services due to the Auditor, Ernst
& Young LLP, conducting a review of the Interim Financial Statements for
each period-end. There were no other non-audit fees paid to the Auditor by the
Company during the years ended 31 January 2025 and 31 January 2024.
Investment Management Agreement
The Company has retained HarbourVest Advisers L.P. as the Investment Manager.
The Investment Manager is reimbursed for costs and expenses incurred on behalf
of the Company in connection with the management and operation of the Company.
During the years ended 31 January 2025 and 2024, reimbursements for services
provided by the Investment Manager were $2,884,000 and $2,475,000,
respectively. As of 1 February 2022, the Investment Manager is reimbursed on a
fixed fee basis rather than an hourly basis. The Investment Manager does not
directly charge HVPE management fees or performance fees other than with
respect to parallel investments. However, as an investor in the HarbourVest
funds, HVPE is charged the same management fees and is subject to the same
performance allocations as other investors in such HarbourVest funds.
During the years ended 31 January 2025 and 2024, HVPE had one parallel
investment: HarbourVest Structured Solutions II, L.P. (via HVPE Charlotte
Co-Investment L.P.). Management fees paid for the parallel investment made by
the Company were consistent with the fees charged by the funds alongside which
the parallel investment was made during the years ended 31 January 2025 and
2024.
Management fees included in the Consolidated Statements of Operations are
shown in the table below:
2025 2024
(in thousands) (in thousands)
HVPE Charlotte Co-Investment L.P. $110 $117
For the years ended 31 January 2025 and 2024, management fees on the HVPE
Charlotte Co-Investment L.P. investment were calculated based on a weighted
average effective annual rate of 0.13% and 0.13% respectively, on capital
originally committed, net of management fee offsets to the parallel
investment.
Note 4 Investments
In accordance with the authoritative guidance on fair value measurements and
disclosures under generally accepted accounting principles in the US, the
Company discloses the fair value of its investments in a hierarchy that
prioritises the inputs to valuation techniques used to measure the fair value.
The hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (Level 1 measurements) and the
lowest priority to unobservable inputs (Level 3 measurements). The guidance
establishes three levels of the fair value hierarchy as follows:
Level 1 - Inputs that reflect unadjusted quoted prices in active markets for
identical assets or liabilities that the Company has the ability to access at
the measurement date;
Level 2 - Inputs other than quoted prices that are observable for the asset or
liability either directly or indirectly, including inputs in markets that are
not considered to be active; and
Level 3 - Inputs that are unobservable.
An investment's level within the fair value hierarchy is based on the lowest
level of any input that is significant to the fair value measurement.
Because of the inherent uncertainty of these valuations, the estimated fair
value may differ significantly from the value that would have been used had a
ready market for this security existed, and the difference could be material.
Investments include limited partnership interests in HarbourVest funds which
report under US generally accepted accounting principles. Inputs used to
determine fair value are primarily based on the most recently reported NAV
provided by the underlying investment manager as a practical expedient under
ASC Topic 820. The fair value is then adjusted for known investment operating
expenses and subsequent transactions, including investments, realisations,
changes in foreign currency exchange rates, and changes in value of private
and public securities. Investments for which fair value is measured using NAV
per share as a practical expedient have not been categorized within the fair
value hierarchy.
Income derived from investments in HarbourVest funds is recorded using the
equity pick-up method. Under the equity pick-up-method of accounting, the
Company's proportionate share of the net income (loss) and net realised gains
(losses), as reported by the HarbourVest funds, is reflected in the
Consolidated Statements of Operations as net realised gain (loss) on
investments. The Company's proportionate share of the aggregate increase or
decrease in unrealised appreciation or depreciation, as reported by the
HarbourVest funds, is reflected in the Consolidated Statements of Operations
as net change in unrealised appreciation on investments.
During the years ended 31 January 2025 and 2024, the Company made
contributions of $443,568,000 and $592,792,000, respectively, to investments
and received distributions of $382,418,000 and $310,296,000, respectively,
from investments. Please refer to Note 10 for further detail on the non-cash
activity during the prior year. As of 31 January 2025 and 2024, respectively,
$4,374,601,000 and $4,057,606,000 of the Company's investments are valued
using the practical expedient.
Note 5 Commitments
As of 31 January 2025, the Company had unfunded investment commitments to
other limited partnerships of $2,452,488,000 which are payable upon notice by
the partnerships to which the commitments have been made. As of 31 January
2024, the Company had unfunded investment commitments to other limited
partnerships of $2,500,899,000.
The Investment Manager is not entitled to any direct remuneration (save
expenses incurred in the performance of its duties) from the Company, instead
deriving its fees from the management fees and carried interest payable by the
Company on its investments in underlying HarbourVest funds. The Investment
Management Agreement (the "IMA"), which was amended and restated on 30 July
2019 and again on 31 January 2025, may be terminated by either party by giving
12 months' notice. In the event of termination within ten years and three
months of the date of the listing on the Main Market on 9 September 2015, the
Company would be required to pay a contribution, which would have been
$735,000 at 31 January 2025 and $1,536,000 at 31 January 2024, as
reimbursement of the Investment Manager's remaining unamortised IPO costs. In
addition, the Company would be required to pay a fee equal to the aggregate of
the management fees for the underlying investments payable over the course of
the 12-month period preceding the effective date of such termination to the
Investment Manager.
Note 6 Debt Facility
The Company had an agreement with Mitsubishi UFJ Trust and Banking
Corporation, New York Branch, Credit Suisse AG, London Branch and The
Guardians of New Zealand Superannuation as manager and administrator of the
New Zealand Superannuation Fund for the provision of a multi-currency
revolving credit facility (the "2023 Facility") with a termination date no
earlier than January 2026, subject to usual covenants. During the year ended
31 January 2025, the Company terminated the 2023 Facility and entered into an
agreement with Apollo Management International LLP ("Apollo"), Ares Management
Limited ("Ares"), Mitsubishi UFJ Trust and Banking Corporation, London Branch
("MUFG"), and Guardians of New Zealand Superannuation as manager and
administrator of the New Zealand Superannuation Fund ("NZS") for the provision
of a multi-currency revolving credit facility (the "2024 Facility"), with a
termination date no earlier than June 2029, subject to usual covenants. The
Apollo commitment was $350 million, the Ares commitment was $350 million, the
MUFG commitment was $300 million and the NZS commitment was $200 million.
Collectively referred to as the Facilities.
Amounts borrowed against the Facilities accrue interest at an aggregate rate
of Term SOFR/SONIA/EURIBOR, a margin, and, under certain circumstances, a
mandatory minimum cost. The Facilities are secured by the private equity
investments and cash and equivalents of the Company, as defined in the
agreement and is subject to certain loan-to-value ratios (which factor in
borrowing on the Facilities and fund-level borrowing) and portfolio diversity
tests applied to the Investment Portfolio of the Company. At 31 January 2025
and 31 January 2024, there was $480,000,000 in debt outstanding against the
2024 Facility and $275,000,000 in debt outstanding against the 2023 Facility,
respectively. For the years ended 31 January 2025 and 2024, interest of
$36,353,000 and $14,465,000, respectively, was incurred. Included in other
assets at 31 January 2025 and 31 January 2024 are deferred financing costs of
$19,066,000 and $5,066,000, respectively, related to refinancing the
Facilities. The deferred financing costs are amortised on the terms of the
Facilities. For the 2023 Facility, the Company was required to pay a
non-utilisation fee of 100 basis points per annum for the Credit Suisse
commitment and 90 basis points per annum for the MUFG commitment and a
utilisation fee of 40 basis points per annum for the Credit Suisse commitment.
For the 2024 Facility, the Company is required to pay a non-utilisation fee of
100 basis points per annum for all commitments. Together, these are presented
as Commitment fees on the Consolidated Statement of Operations. For the years
ended 31 January 2025 and 2024, $6,901,000 and $6,127,000, respectively, in
commitment fees have been incurred.
Note 7 Financial Highlights
For the Years Ended 31 January 2025 and 2024
In US Dollars 2025 2024
Shares
Per share operating performance:
Net asset value, beginning of period $50.47 $48.52
Net realised and unrealised gains (losses) 3.36 1.79
Net investment loss (0.62) (0.26)
Total from investment operations 2.74 1.53
Net increase from repurchase of Class A shares 0.96 0.42
Net asset value, end of period $54.17 $50.47
Market value, end of period $34.15* $29.15*
Total return at net asset value 7.3% 4.0%
Total return at market value 17.2% 7.6%
Ratios to average net assets
Expenses(†) 1.34% 0.72%
Net investment loss (1.19)% (0.50)%
* Represents the US dollar-denominated share price.
† Does not include operating expenses of underlying investments.
Note 8 Publication and Calculation of Net Asset Value
The NAV of the Company is equal to the value of its total assets less its
total liabilities. The NAV per share is calculated by dividing the NAV by the
number of shares in issue on that day. The Company publishes the NAV per share
of the shares as calculated, monthly in arrears, at each month end, generally
within 20 days.
Note 9 Related Party Transactions
Other amounts receivable from HarbourVest Advisers L.P. of $244,000 represent
expenses of the Company incurred in the ordinary course of business, which
have been paid for and are reimbursable from the Investment Manager at 31
January 2025. Other amounts payable to HarbourVest Advisers L.P. of $40,000
represent expenses of the Company incurred in the ordinary course of business,
which have been paid by and are reimbursable to the Investment Manager at 31
January 2024.
Other income relates to income received from a revenue sharing agreement
entered into with the HarbourVest Infrastructure Income Delaware Parallel
Partnership ("HIIP") investment. Through such agreement, the Company is
entitled to 10% of the management fee revenue received by HarbourVest from
HIIP, provided that HarbourVest remains as HIIP's exclusive Investment
Manager.
Directors' fees and expenses, primarily compensation, of $492,000 and $474,000
were incurred during the years ended 31 January 2025 and 2024, respectively.
Note 10 Indemnifications
General Indemnifications
In the normal course of business, the Company may enter into contracts that
contain a variety of representations and warranties and which provide for
general indemnifications. The Company's maximum exposure under these
arrangements is unknown, as this would involve future claims that may be made
against the Company that have not yet occurred. Based on the prior experience
of the Investment Manager, the Company expects the risk of loss under these
indemnifications to be remote.
Investment Manager Indemnifications
Consistent with standard business practices in the normal course of business,
the Company has provided general indemnifications to the Investment Manager,
any affiliate of the Investment Manager and any person acting on behalf of the
Investment Manager or such affiliate when they act in good faith, in the best
interest of the Company. The Company is unable to develop an estimate of the
maximum potential amount of future payments that could potentially result from
any hypothetical future claim but expects the risk of having to make any
payments under these general business indemnifications to be remote.
Directors' and Officers' Indemnifications
The Company's Articles of Incorporation provide that the Directors, managers
or other officers of the Company shall be fully indemnified by the Company
from and against all actions, expenses, and liabilities which they may incur
by reason of any contract entered into or any act in or about the execution of
their offices, except such (if any) as they shall incur by or through their
own negligence, default, breach of duty, or breach of trust, respectively.
Note 11 Subsequent Events
In the preparation of the Financial Statements, the Company has evaluated the
effects, if any, of events occurring after 31 January 2025 to 28 May 2025, the
date that the Financial Statements were signed.
In this period, the Company made purchases of 1,010,373 of its ordinary shares
for cancellation, for total consideration of £26,215,000.
On 1 April 2025, the Company drew down on the 2024 Facility by $35,000,000.
There were no other events or material transactions subsequent to 31 January
2025 that required recognition or disclosure in the Consolidated Financial
Statements.
Alternative Performance Measures
Reconciliation of Share Price Discount to Net Asset Value per Share
The share price discount to NAV per share will vary depending on which NAV per
share figure is used. The discount referred to elsewhere in this report is
calculated using the live NAVs per share available in the market as at 31
January 2024 and 31 January 2025, those being the 31 December 2023 and 31
December 2024 estimates of $50.04 (sterling equivalent £39.31) and $52.38
(sterling equivalent £41.84), respectively, adjusted for GBP/USD foreign
exchange movement, against share prices of £23.15 at 31 January 2024 and
£27.60 at 31 January 2025.
The table below outlines the notional discounts to the share price at 31
January 2025, based on the NAVs per share published after this date (31
January 2025 estimate and final). Movements between the published NAVs per
share for the same calendar date largely arise as further underlying fund
valuations are received, and as adjustments are made for public markets,
foreign exchange and operating expenses.
Date of NAV (estimate and final) NAV per Share NAV Converted at 31 January 2025 GBP/USD Exchange Rate (1.2395) Share Price at 31 January 2025 Discount to NAV at 31 January 2025
Estimated NAV at 31 December 2024 (published 24 January 2025) $52.38 £42.26 £27.60 35%
Estimated NAV at 31 January 2025 (published 21 February 2025) $52.82 £42.61 £27.60 35%
Final NAV (US GAAP) at 31 January 2025 (published 29 May 2025) $54.17 £43.70 £27.60 37%
Annualised Outperformance of FTSE AW TR Index Over the Last 10 Years
NAV (US dollar) Compound Annual Growth Rate ("CAGR")
31 January 2015 $15.86
31 January 2025 $54.17
Elapsed time (years) 10.0
US dollar CAGR 13.1%
FTSE AW TR Index (US dollar) CAGR
31 January 2015 $327.9
31 January 2025 $877.5
Elapsed time (years) 10.0
FTSE AW TR CAGR 10.3%
Annualised outperformance of FTSE AW TR Index Over the Last 10 Years 2.72%
calculation
13.1% minus 10.3% 2.72 percentage points ("pp")(1)
(1) Due to rounding, this figure does not cast correctly on the page
from the respective figures above it (2.7pp displayed vs. 2.8pp if subtracting
the numbers on this page). No number has been re-rounded up nor down to ensure
it casts correctly on the page, thus preserving each component's true accuracy
given its impact on various other parts of the report.
Distribution Pool
(The Distribution Pool is used to fund HVPE share buybacks or return capital
to shareholders by means of special dividends. The pool is funded by a
proportion of the gross distributions from the Company's portfolio.)
Movement to 31 January 2025 ($m)
Balance at 31 January 2024 $0
Rolled from prior buyback programme $12
Seed allocation(1) $75
Share of Portfolio distributions(2) $57
Share buybacks ($106)
Balance at 31 January 2025 $38
(1) During the first year of its operation, the Distribution Pool was
additionally funded by a seed amount which was reallocated from a postponed
commitment to a HarbourVest fund.
(2) Allocation to Distribution Pool calculated as 15% of gross
distributions in the year ended 31 January 2025.
KPIs (page 27)
The KPI metrics show the movement between the NAV per share (in US dollars)
and the share price in sterling and translated into US dollars. Relative to
the FTSE AW TR Index, this is the difference in movement between the
year-on-year change of this index vs the particular HVPE KPI.
NAV per Share ($) and Relative Performance
Date NAV per Share Absolute Performance FTSE AW TR Index Movement Relative Performance vs FTSE AW TR
31 January 2018 $21.46 16.2% 28.2% -12.0pp
31 January 2019 $24.09 12.3% -7.1% +19.3pp
31 January 2020 $27.58 14.5% 16.7% -2.2pp
31 January 2021 $35.97 30.4% 17.4% +13.0pp
31 January 2022 $49.11 36.5% 13.8% +22.8pp
31 January 2023 $48.52 -1.2% -7.3% +6.1pp
31 January 2024 $50.47 4.0% 15.3% -11.3pp
31 January 2025 $54.17 7.3% 21.0% -13.7pp
10-year Outperformance of FTSE AW TR
NAV (US dollar)
31 January 2015 $15.86
31 January 2025 $54.17
US dollar total return 242%
FTSE AW TR (US dollar)
31 January 2015 $327.89
31 January 2025 $877.49
FTSE AW TR total return 168%
10-year outperformance of FTSE AW TR calculation 74%
242% minus 168% 74 percentage points ("pp")
Total Shareholder Return (£)
Date Share Price (£) Period-on-period Change
31 January 2018 £12.52 +4.8%
31 January 2019 £14.26 +13.9%
31 January 2020 £18.36 +28.8%
31 January 2021 £18.70 +1.9%
31 January 2022 £27.75 +48.4%
31 January 2023 £22.10 -20.4%
31 January 2024 £23.15 +4.8%
31 January 2025 £27.60 +19.2%
Total Commitment Ratio
(Total exposure to private markets investments as a percentage of NAV) 31 January 2025 ($m) 31 January 2024 ($m)
Investment Portfolio $4,375 $4,058
Investment Pipeline $2,452 $2,501
Total $6,827 $6,559
NAV $4,023 $3,921
Total Commitment Ratio 170% 167%
Net Portfolio Cash Flow
(The difference between calls and distributions over the reporting period) 31 January 2025 ($m) 31 January 2024 ($m)
Calls ($443) ($593)
Distributions $382 $310
Net Portfolio Cash Flow ($61) ($283)
Managing the Balance Sheet
Medium-term Coverage Ratio
(A measure of medium-term commitment coverage based on current commitments) 31 January 2025 ($m) 31 January 2024 ($m)
Cash $123 $140
Available credit facility $720 $525
Estimated distributions over the next 12 months $622 $627
Total sources $1,465 $1,292
Estimated investments over the next 36 months $1,411 $1,467
Medium-term Coverage Ratio 104% 88%
Commitment Coverage Ratio
(Short-term liquidity as a percentage of Total Investment Pipeline) 31 January 2025 ($m) 31 January 2024 ($m)
Cash $123 $140
Available credit facility $720 $525
Total sources $843 $665
Investment Pipeline $2,452 $2,501
Commitment Coverage Ratio 34% 27%
Disclosures
Investments
The companies represented within this report are provided for illustrative
purposes only, as example portfolio holdings. There are over 14,000 individual
companies in the HVPE portfolio, with no one company comprising more than 2.2%
of the entire portfolio.
The deal summaries, General Partners (managers), and/or companies shown within
the report are intended for illustrative purposes only. While they may
represent an actual investment or relationship in the HVPE portfolio, there is
no guarantee they will remain in the portfolio in the future.
Past performance is no guarantee of future returns.
Forward-looking Statements
This report contains certain forward-looking statements. Forward- looking
statements relate to expectations, beliefs, projections, future plans and
strategies, anticipated events or trends, and similar expressions concerning
matters that are not historical facts. In some cases, forward-looking
statements can be identified by terms such as "anticipate", "believe",
"could", "estimate", "expect", "intend", "may", "plan", "potential", "should",
"will", and "would", or the negative of those terms, or other comparable
terminology. The forward-looking statements are based on the Investment
Manager's and/or the Directors' beliefs, assumptions, and expectations of
future performance and market developments, taking into account all
information currently available. These beliefs, assumptions, and expectations
can change as a result of many possible events or factors, not all of which
are known or are within the Investment Manager's and/or the Directors'
control. If a change occurs, the Company's business, financial condition,
liquidity, and results of operations may vary materially from those expressed
in forward-looking statements.
By their nature, forward-looking statements involve known and unknown risks
and uncertainties because they relate to events, and depend on circumstances,
that may or may not occur in the future. Forward-looking statements are not
guarantees of future performance. Any forward-looking statements are only made
as at the date of this document, and the Investment Manager and/or the
Directors neither intends nor assumes any obligation to update forward-looking
statements set forth in this document whether as a result of new information,
future events, or otherwise, except as required by law or other applicable
regulation.
In light of these risks, uncertainties, and assumptions, the events described
by any such forward-looking statements might not occur. The Investment Manager
and/or the Directors qualifies any and all of its forward-looking statements
by these cautionary factors.
Please keep this cautionary note in mind while reading this report.
Some of the factors that could cause actual results to vary from those
expressed in forward-looking statements include, but are not limited to:
- the factors described in this report;
- the rate at which HVPE deploys its capital in investments and achieves
expected rates of return;
- HarbourVest's ability to execute its investment strategy, including
through the identification of a sufficient number of appropriate investments;
- the ability of third-party managers of funds in which the HarbourVest
funds are invested and of funds in which the Company may invest through
parallel investments to execute their own strategies and achieve intended
returns;
- the continuation of the Investment Manager as manager of the Company's
investments, the continued affiliation with HarbourVest of its key investment
professionals, and the continued willingness of HarbourVest to sponsor the
formation of and capital raising by, and to manage, new private equity funds;
- HVPE's financial condition and liquidity, including its ability to
access or obtain new sources of financing at attractive rates in order to fund
short-term liquidity needs in accordance with the investment strategy and
commitment policy;
- changes in the values of, or returns on, investments that the Company
makes;
- changes in financial markets, interest rates, or industry, general
economic, or political conditions; and
- the general volatility of the capital markets and the market price of
HVPE's shares.
Publication and Calculation of Net Asset Value
The NAV of the Company is equal to the value of its total assets less its
total liabilities. The NAV per share is calculated by dividing the NAV of the
Company by the number of shares in issue. The Company intends to publish the
estimated NAV per share as calculated, monthly in arrears, as at each
month-end, generally within 20 days.
Regulatory Information
HVPE is required to comply with the UK Listing Rules, Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority in the United Kingdom
(the "LDGT Rules"). It is also authorised by the Guernsey Financial Services
Commission as an authorised closed- end investment scheme under the Protection
of Investors (Bailiwick of Guernsey) Law, 2020, as amended (the "POI Law").
HVPE is subject to certain ongoing requirements under the LDGT Rules and the
POI Law and certain rules promulgated thereunder relating to the disclosure of
certain information to investors, including the publication of annual and
half-yearly financial reports.
Valuation Policy
Valuations Represent Fair Value Under US GAAP
HVPE's 31 January 2025 NAV is based on the 31 December 2024 NAV of each
HarbourVest fund and Conversus, adjusted for changes in the value of public
securities, foreign currency, known material events, cash flows, and operating
expenses during January 2025. The valuation of each HarbourVest fund is
presented on a fair value basis in accordance with US generally accepted
accounting principles ("US GAAP"). See Note 4 in the Notes to the Financial
Statements on page 96.
The Investment Manager typically obtains financial information from 90% or
more of the underlying investments for each of HVPE's HarbourVest funds to
calculate the NAV. For each fund, the accounting team reconciles investments,
distributions, and unrealised/realised gains and losses to the Financial
Statements.
The team also reviews underlying partnership valuation policies.
Management of Foreign Currency Exposure
The Investment Portfolio includes two euro-denominated HarbourVest funds and a
Canadian dollar-denominated fund.
- 14% of underlying partnership holdings are denominated in euros. The
euro-denominated Investment Pipeline is €11.3 million.
- 3% of underlying partnership holdings are denominated in sterling. There
is no sterling-denominated Investment Pipeline.
- 1% of underlying partnership holdings are denominated in Australian
dollars. There is no Australian dollar-denominated Investment Pipeline.
- 0.2% of underlying partnership holdings are denominated in Canadian
dollars. The Canadian dollar-denominated Investment Pipeline is C$3.9 million.
HVPE has exposure to foreign currency movement through foreign
currency-denominated assets within the Investment Portfolio and through its
Investment Pipeline of unfunded commitments, which are long term in nature.
The Company's most significant currency exposure is to euros. The Company does
not actively use derivatives or other products to hedge the currency exposure.
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