REG - HarbourVest Global - HVPE Transition to Simplified Investment Structure

Harbourvest Global Private EquityAnnouncement

22/05/2025 07:00

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RNS Number : 6633J  HarbourVest Global Priv. Equity Ltd  22 May 2025

 

 22 May 2025

 

HVPE's Transition to a Simplified Investment Structure

 

HarbourVest Global Private Equity Limited ("HVPE" or the "Company"), a FTSE
250 investment company with global exposure to private companies, managed by
HarbourVest Advisers L.P., an affiliate of HarbourVest Partners, LLC, (the
"Manager" or "HarbourVest Partners"), is pleased to announce that it has
agreed the final heads of terms of its strategic transition to a new,
simplified investment model with HarbourVest Partners. This was announced on
30 January 2025 as part of the Board's three initiatives aiming to maximise
returns for shareholders and narrow the discount to Net Asset Value ("NAV").

 

The mechanics of the Separately Managed Account

 

Under the new investment model HVPE will adopt a Separately Managed Account
("SMA") structure and will move away from investing through HarbourVest
Partners' co-mingled funds. Going forward, capital will be deployed by the
Manager via a dedicated HVPE SMA vehicle directly into third party General
Partner funds, secondary opportunities and co-investments.

 

The transition to the new structure will, by necessity, be gradual. New
commitments will be directed to the SMA, while the existing portfolio of
HarbourVest funds will continue to operate as before.

 

Commitments to the SMA will be made by HVPE in annual tranches, which are
expected to be invested more quickly than under the existing structure, which
the Manager expects should no longer mean a requirement to maintain such a
large pipeline of unfunded commitments. The Manager and the Board will ensure
that commitments for each year are sized accordingly in response to this
change.

 

 

Benefits of the Simplified Structure

 

The Board believes the simplified structure will deliver the following key
benefits:

 

·    Improved Flexibility: HVPE will have increased influence on the
timing and mechanics of liquidity events in the portfolio. As the sole
investor in the dedicated HVPE SMA vehicle, the Company may, for example, ask
the Manager to explore a sale of underlying assets via the secondary market
should the Board believe this to be in the best interests of shareholders as a
whole.

 

·    Reduced Overall Debt: the Company's overall exposure to debt will
reduce, with borrowing at the HarbourVest fund level expected to decline
materially over time as the funds in HVPE's existing portfolio mature and pay
down debt. Furthermore, the Company's pipeline of unfunded commitments to
HarbourVest funds is also expected to decline, leading to more predictable
cash flows and a reduced need for borrowing at the HVPE level.

 

·    Competitive Management Fee: the Board has successfully negotiated
that there will be no expected increase in the level of HarbourVest Partners'
fees, despite the more tailored nature of the new structure. The proposed
management fee on HVPE's SMA, at 60 basis points on NAV, is no greater than
the current effective blended management fee rate incurred on HVPE's existing
portfolio of HarbourVest funds (equivalent to 62 basis points in the year
ending 31 January 2025).  HarbourVest will charge carried interest on the SMA
at the same level as it does on comparable co-mingled funds, with more detail
to follow in HVPE's upcoming annual report. 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.

 

·    Exclusive Access: HVPE will continue to benefit from first-in-line
allocation to high-quality investment opportunities within the Manager's
stable. As a result, HVPE will continue to provide public market investors
with access to a broad range of attractive private markets opportunities
through HarbourVest Partners.

 

 

Ed Warner, Chair of HVPE, said:

 

"The Board has listened to feedback from shareholders, and as a result
announced three new initiatives earlier this year: doubling the allocation to
share buybacks, putting in place a continuation vote for July 2026 and
implementing a simplified investment structure for HVPE going forward, which I
am pleased to announce has been agreed with the Manager subject to signing the
Limited Partnership Agreement. We believe the SMA will offer considerable
benefit for shareholders, most notably increased Board control and flexibility
around investment pacing and portfolio liquidity, and reduced look-through
gearing. The Board has moved swiftly to agree the terms and framework of the
new structure with the Manager, whilst maintaining access to the best
opportunities for HVPE's investors from across the HarbourVest Partners
stable.

 

With time, we believe this structure should help to reduce the discount to
NAV."

 

For more details on how the SMA works versus the former structure, please
visit https://www.hvpe.com/portfolio/structure-of-hvpe/
(https://www.hvpe.com/portfolio/structure-of-hvpe/)

 

The adoption of the SMA and associated management fee is considered to be a
relevant related party transaction under UKLR 11.5.4R(1) and (2) and this
announcement is being made in accordance with UKLR 8.2.1R(4). The Board, which
has been so advised by Peel Hunt LLP, considers that the terms of the proposed
management fee are fair and reasonable as far as shareholders of HVPE are
concerned. In giving its advice, Peel Hunt LLP has taken into account the
Board's commercial assessment of the management fee.

 

For the purposes of Chapter 8 of the UK Listing Rules, the aggregate of total
fees payable to HarbourVest Partners will be capped at 4.99% of the Company's
average net asset value per annum. This cap is a technical requirement under
the UK Listing Rules and the Board expects the aggregate fees to be
substantially lower than the cap.

 

- 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)

 Media

 Camarco
 Billy Clegg           Tel: +44 (0)20 3757 4980    HVPE@camarco.co.uk

 Jennifer Renwick      Tel: +44 (0)20 3757 4980

 Amrith Uppuluri       Tel: +44 7763 083 058

 Media
 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.

 

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, Peel Hunt LLP 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, Peel Hunt LLP 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.

 

Peel Hunt LLP, which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting exclusively as sponsor for the Company
and for no one else in relation to the arrangements referred to in this
announcement. Peel Hunt LLP will not regard any other person (whether or not a
recipient of this announcement) as its client in relation to the arrangements
referred to in this announcement and will not be responsible to anyone other
than the Company for providing the protections afforded to its clients or for
providing any advice in relation to the contents of this announcement or any
transaction or arrangement referred to in this announcement.

 

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.

 

 

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