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
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/. 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
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:
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 share2)
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 share2)
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.
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 20251
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 distributions ($0.62bn)3
$1.5bn
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 Conversus1 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 January 2025
12 months to 31 January 2024
Operating expenses1
1.33%
0.72%
HarbourVest fund operating expenses2
0.22%
0.22%
Management fees3
0.62%
0.60%
Operating expense ratio
2.17%
1.54%
Interest income4
(0.15%)
(0.23%)
Net operating expense ratio
2.02%
1.31%
Performance fees5
0.44%
0.48%
Total net expense ratio6
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
$189
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 risk posed by the Company's dependence on its Investment Manager
The Company is dependent on its Investment Manager and on the performance of HarbourVest's investment professionals. The vast majority of the Company's assets are invested in HarbourVest funds and significant reliance is placed by the Company on HarbourVest's control environment. Any inability by HarbourVest to maintain its investment performance, whether in absolute or relative terms, could result in a significant deterioration in net asset value for the Company and its shareholders.
HarbourVest has a strong long-term track record of managing private equity investments. It maintains good relationships with key managers and has a consistent and repeatable investment process with low turnover of senior investment professionals. There is a high level of diversification by geography, strategy and vintage which mitigates the risk. HVPE has a dedicated Investment Committee within HarbourVest. The Board monitors HarbourVest's performance through the MESPC, and its controls environment is assessed by the Audit and Risk Committee.
Increased risk HVPE has maintained its record of long-term outperformance in NAV growth despite challenging market conditions in the short-term, which have persisted longer than expected. The wider private equity industry is under pressure as exit processes have been postponed and consequent distributions have been at lower levels than usual. An improvement in distribution levels will be an 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 The risk of a decline in global public markets or a deterioration in the economic environment
Equity market volatility increases overall levels of uncertainty for HVPE and its investments. Increasing geopolitical risks influence how markets trade, reversing the potential positive effects of developing improvements in economic indicators. Overall declines in public markets impact HVPE's NAV per share by directly reducing the value of public securities in HVPE's portfolio and indirectly influencing private market valuations. They are also likely to have a direct impact on HVPE's share price.
The Company's exposure to individual public markets is partially mitigated by the geographical and sectoral diversification within the portfolio. In previous downturns, private market valuations have not been impacted as much as public markets. The Board regularly reviews scenario analyses prepared by the Investment Manager which incorporate the effects of significant public market downturns.
Increased risk The portfolio has proved itself to be resilient despite challenging market conditions over the past year and the increased political risk that has affected markets. The potential for a global trade war triggered by the new US administration, and consequent impacts on inflation, interest rates and growth, has weighed heavily on the markets.
Principal Risk
Description and Potential Impact
Mitigation and Management
Commentary
Valuation Risk The risk that market instability leads to continuing uncertainty about private asset valuations based on comparisons with listed companies, together with general market scepticism about the likely movement in valuations.
Uncertainty and distrust in relation to the valuation of private equity investments may lead investors to make their own judgements based on incomplete information, which could result in a lack of confidence in the reliability of HVPE's published NAV. The low level of exits and liquidity events that has been seen recently reduces the ability to present public substantiation of valuation levels.
Both the Investment Manager and the GPs of underlying funds value investments in accordance with industry standards and accounting regulations. All the valuations are audited annually. When the Company reports its monthly NAV, it discloses the date of the underlying valuations to provide transparency to shareholders. The Audit and Risk Committee receives reports on the Investment Manager's control environment, including the processes relating to valuations.
Stable This risk was increased in the 2023 Annual Report and Accounts and remains at this heightened level as investors wait for a return to a consistent flow of exits at a premium to carrying value. The Board believes that this risk will remain a focus until there is an increase in the level of exit activity and therefore of external validation of valuation levels.
Balance Sheet Risks Risks to the Company's balance sheet resulting from its overcommitment strategy, borrowing arrangements and policy for the use of leverage.
The Company's balance sheet strategy and its policy for the use of leverage are described on page 28. The Company continues to maintain an overcommitment strategy and may draw on its credit facility to bridge periods of negative cash flow when capital calls on investments are greater than distributions received. The level of potential borrowing available under the credit facility could be negatively affected by declining NAV. In a stressed environment characterised by declining NAVs, reduced realisations, and rapid substantial capital calls, the Company's net leverage ratio could increase beyond an appropriate level, resulting in a need to sell assets. A reduction in the availability or use of borrowing at the HarbourVest fund level, or accelerated repayment thereof, could result in an increase in capital calls to a level in excess of the modelled scenarios.
The size and term of the Company's credit facility mitigates this risk. The Board has put a monitoring programme in place, supported by sophisticated and comprehensive cash flow modelling, which underpins the commitment strategy and limits the likelihood of unexpected shocks. This programme mitigates the requirement to sell assets at a discount during any but the most extreme periods of negative cash flow. The monitoring programme also considers the level of borrowing at HarbourVest fund level. Both the Board and the Investment Manager will continue to monitor these metrics actively and will take appropriate action as required, such as pausing further commitments, to attempt to mitigate these risks. Please also see the Going Concern and Viability Statement on page 66 for information on the scenarios that are considered by the Board.
Stable The Distribution Pool is being funded by a proportion of the cash realisations from the Company's portfolio. This has resulted in adjustments being made to the financial models relating to the Company's future commitments. In previous years, strong NAV gains and distributions strengthened the balance sheet. The levels of distributions received during the year under review remained low in comparison with previous years and with the modelled 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 there were positive signs of a recovery in the level of distributions. 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 The risk that investor sentiment towards the listed private equity sector as a whole may deteriorate.
Investor sentiment towards the Listed Private Equity sector may deteriorate, resulting in a widening of the Company's share price discount relative to its NAV per share. This may be because of perceptions of the position of the market in the private equity cycle, perceptions about the cost of private equity investing, or due to investors making their own judgements regarding current valuations. HVPE's discount is currently wider than its historical average and has remained so for a sustained period.
Private equity has performed strongly as an asset class over the years and the Company has demonstrated the value of investing through the investment cycle and gaining exposure to a diverse range of markets. HVPE, together with its peers, continues to advocate for the sector, to increase investors' familiarity with private equity and to describe the advantages of the investment trust structure to provide access to illiquid assets through a liquid share.
Increased risk Discounts within the sector remain wide and the market commentary on the sector has focused on the level of exit activity. The Board believes that market sentiment towards the sector should turn more positive once there is an increase in realisation events which validate valuations and support cash flow.
Trading Liquidity and Price The risk that the number of shares traded in the Company is insufficient to maintain interest in the stock, or that the discount of the share price to the NAV per share fails to narrow.
HVPE's relatively wide discount risks undermining investor confidence and could erode levels of shareholder satisfaction. Despite the substantive efforts made by the Board to address this issue through its establishment of the Distribution Pool and active engagement with shareholders, some investors may remain unconvinced by its proposals.
The Board has made robust efforts to enhance its communications, to describe its strategy, to engage with its shareholders, and to listen and respond to the views expressed. The Distribution Pool has been established to address issues raised and there is regular and extensive consideration of potential options to close the discount, including enhanced disclosure and transparency for shareholders. The Board continues to stress the long-term nature of HVPE, the consistent performance and the benefits of its diversification strategy as it remains determined to satisfy its investment objective and purpose.
Increased risk HVPE's discount remains high and persistent. The Board has continued to focus on measures to improve the rating of the shares and in January 2025 it announced an increase in the allocation to the Distribution Pool, a simplified investment structure going forward and a continuation vote in 2026. The share price initially reacted positively to the measures, although the discount has 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 the underlying Primary or Secondary HarbourVest funds, together the "HarbourVest investment funds" ($4,375 million; 2024 $4,058 million). Refer to the Accounting policies and Note 4 of the Consolidated Financial Statements. There is a risk that the valuation of the Group's investments at 31 January 2025, which comprise 108.7% (2024: 103.5%) of net assets is materially misstated. The valuation of the investments is the principal driver of the Group's net asset value and hence incorrect valuations would have a significant impact on the net asset value and performance of the Group.
Our response comprised the performance of the following procedures: Confirmed and documented our understanding of the Group's processes, controls and methodologies for valuing investments held by the Group in the HarbourVest investment funds, including the use of the practical expedient as set out in Accounting Standard Codification (ASC) Topic 820 Fair Value Measurement ("ASC 820") by performing our walkthrough processes and evaluating the implementation and design effectiveness of controls; We also utilised the System and Organisation Controls 1 Report for Private Equity Fund Administration Report on Controls Placed in Operation and Tests of Operating Effectiveness ("SOC 1 report") of HarbourVest Partner LLC to confirm our understanding of the production on the NAVs of the HarbourVest investment 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.
We reported to the Audit and Risk Committee that we did not identify any instances of the use of inappropriate methodologies and that the valuation of the Group's investments in the HarbourVest investment funds were not materially misstated.
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 (in thousands*)
2024 (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 and outstanding at 31 January 2025 and 31 January 2024 respectively, no par value
4,022,957
3,920,572
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 (in thousands)
2024 (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 (in thousands)
2024 (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 (in thousands)
2024 (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 Commitment (in thousands)
Amount Invested* (in thousands)
Distributions Received (in thousands)
Fair Value (in thousands)
Fair Value as a % of 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 Commitment (in thousands)
Amount Invested* (in thousands)
Distributions Received (in thousands)
Fair Value (in thousands)
Fair Value as a % of 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 Commitment (in thousands)
Amount Invested* (in thousands)
Distributions Received (in thousands)
Fair Value (in thousands)
Fair Value as a % of 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 Commitment (in thousands)
Amount Invested* (in thousands)
Distributions Received (in thousands)
Fair Value Fair Value (in thousands)
as a % of Net Assets
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 (in thousands)
2024 (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
$877.5
Elapsed time (years)
10.0
FTSE AW TR CAGR
10.3%
Annualised outperformance of FTSE AW TR Index Over the Last 10 Years calculation
2.72%
13.1% minus 10.3%
2.72 percentage points ("pp")1
1 Due to rounding, this figure does not cast correctly on the page from the respective figures above it (2.7pp displayed vs. 2.8pp if subtracting the numbers on this page). No number has been re-rounded up nor down to ensure it casts correctly on the page, thus preserving each component's true accuracy given its impact on various other parts of the report.
Distribution Pool
(The Distribution Pool is used to fund HVPE share buybacks or return capital to shareholders by means of special dividends. The pool is funded by a proportion of the gross distributions from the Company's portfolio.)
Movement to 31 January 2025 ($m)
Balance at 31 January 2024
$0
Rolled from prior buyback programme
$12
Seed allocation1
$75
Share of Portfolio distributions2
$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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