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Annual Report and Accounts
12 Months to 31 January 2024
Purpose
Where to find us:
www.hvpe.com
This report will refer to the Investment Manager as “HarbourVest Partners” or
“HarbourVest”. The Investment Manager of HarbourVest Global Private Equity
Limited (“HVPE” or “the Company”) is HarbourVest Advisers L.P. which is an
affiliate of HarbourVest Partners, LLC.
HVPE exists to create value for
our shareholders by providing
easy access to a diversified global
portfolio of high-quality private
equity investments, managed
by HarbourVest Partners.
Strategic Report
02 Our year in numbers
04 Chair’s statement
08 At a glance
Investment Manager’s Review
12 Introduction
12 HVPE Investment Committee
15 Investment Manager’s report
19 Value creation cycle
20 Commitment phase
21 Investment phase
22 Growth phase
23 Mature phase
24 Recent events
26 KPIs and investment objective
28 Managing the balance sheet
32 Managing costs
36 Stakeholder engagement
40 Principal risks and uncertainties
44 Purposeful growth
(Environmental, Social, and Governance)
50 Manager spotlight
56 Top ten direct companies
Governance
64 Board of Directors
66 Directors’ report
74 Board structure and committees
77 Audit and Risk Committee
80 Nomination Committee and Management
Engagement and Service Provider
Committee
81 Remuneration Committee and Inside
Information Committee
82 Directors’ remuneration report
83 Statement of Compliance with the
AIC Code of Corporate Governance
Financial Statements
86 Independent Auditor’s Report
93 Consolidated Statements of Assets
and Liabilities
94 Consolidated Statements of Operations
95 Consolidated Statements of Changes in
Net Assets
96
Consolidated Statements of Cash Flows
97 Consolidated Schedule of Investments
101 Notes to Consolidated Financial
Statements
Other Information
110 Supplementary data
124 Glossary
126 Alternative Performance Measures
129 Disclosures
131 Key information
1Strategic Report
Governance Financial Statements Other Information
Net Asset Value (“NAV”) per Share ($)
$50.47
31 January 2023: $48.52
NAV per Share Return ($)
+4.0%
12 months to 31 January 2023: -1.2%
Share Price (£)
£23.15
31 January 2023: £22.10
Share Price Return (£)
+4.8%
12 months to 31 January 2023: -20%
Net Assets ($)
$3.9bn
31 January 2023: $3.8bn
Share Price Discount to Net Assets (£)
1
-42%
31 January 2023: -44%
Total New Commitments ($)
$295m
12 months to 31 January 2023: $940m
Net Portfolio Cash Flow ($)
2
$(283m)
12 months to 31 January 2023: $(56m)
Our year in numbers
12 months to, or at, 31 January 2024 unless otherwise stated.
NAV resilience amidst a challenging
macroeconomic backdrop.
1 The discount is calculated based on the NAV per share available to the market at the financial year end, that being the 31 December estimate, converted to sterling at the
prevailing GBP/USD foreign exchange (“FX”) rate, compared with the share prices on 31 January 2024 and 2023. Please refer to the Alternative Performance Measures
(“APMs”) on pages 126 to 128 for calculations.
2 Cash distributions from private equity investments ($310 million) minus cash contributions to private equity investments ($593 million). Please refer to the Consolidated
Statements of Cash Flows on page 96.
Metrics with this APM icon denote our Alternative Performance Measures (“APMs”). For more information on APMs, please turn to pages 126 to 128.
APM
APM
APM
APM
APM
HVPE Annual Report and Accounts 20242
NAV per Share Performance vs. Share Price (USD)
HVPE introduced an additional US dollar share price on 10 December 2018; from this date onwards, the actual US dollar share
price, as reported by the London Stock Exchange, has been used. Prior to this date, the US dollar share price had been converted
from the sterling share price at the prevailing exchange rate.
Key
NAV per share ($)
Share price ($, converted)*
FTSE AW TR ($)
Key
NAV per share ($)
Share price ($, converted)*
FTSE AW TR ($)
+300%
+250%
+200%
+150%
+100%
+50%
0%
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
Jan
2022
Jan
2023
Jan
2024
+251%
+171%
+138%
+300%
+250%
+200%
+150%
+100%
+50%
0%
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Jan
2018
Jan
2019
Jan
2020
Jan
2021
Jan
2022
Jan
2023
Jan
2024
3Strategic Report
Governance Financial Statements Other Information
Chair’s statement
HVPE Annual Report and Accounts 20244
Resilient financial performance
Against this backdrop, HVPE’s net asset value (NAV) per
share rose 4.0% to $50.47 over the year to 31 January 2024.
This compares with a 15.3% rise in the FTSE All-World
Total Return Index, led by a surge in US share prices as
market sentiment improved in late 2023. HVPE’s relative
underperformance is not surprising, and is consistent with
private equity investments being inherently less volatile than
listed markets, tending to outperform during public market
downturns and lagging as markets start to recover.
Importantly, the Company’s long-term performance remains
strong and is the basis of the Board’s belief in our strategy.
HVPE has realised its investment objective to deliver material
outperformance of the public markets throughout the cycle.
In the ten years to 31 January 2024, HVPE delivered growth in
NAV per share of 251%, while the FTSE All-World Total Return
Index returned 138% (all USD).
However, the full benefit of this outperformance is not reflected
in the Company’s share price, which has traded at a significant
discount to NAV for an extended period. HVPE’s share price
rose 4.8% in the year to 31 January 2024, and was trading at
a discount of 42% (slightly below the 44% discount at the end
of the previous year).
I appreciate it is cold comfort to HVPE shareholders that
most investment companies, regardless of their asset class
or investment strategy, have seen very wide discounts over
the past year. High interest rates have increased the appeal
of lower-risk cash and bond investments, and global investors
seeking capital growth have tended to look to the US in
preference to UK-listed equities. Additional unfavourable
influences have ensured that listed private equity companies
have seen discounts wider than most. Technical factors such
as persistent selling by UK-focused index tracker funds, affect
HVPE and some of its immediate peers, due to their inclusion
in the FTSE 250 and FTSE All-Share indices. There has also
been a degree of scepticism over reported NAVs for alternative
asset classes such as private equity in this higher interest
rate environment.
As a Board, we remain resolute in our conviction that HVPE’s
published NAV figure is robust, being the result of rigorous
valuation processes at each level in its structure, and reflects
the economic value of the Company’s underlying investments.
Further reassurance regarding HVPE’s NAV is provided by the
fact that, on average, our investments have continued to be
exited at a premium to carrying value.
My fellow Directors and I share investors’ frustration with
HVPE’s discount. We are all shareholders ourselves in HVPE
and believe the discount is unjustified given HVPE’s meticulous
valuation process and the quality of the funds and companies
in which it is invested.
New distribution policy
In response to this situation, over the past year we
have engaged with a large number of investors and other
stakeholders, to explore how shareholders can participate
more directly in HVPE’s NAV growth through the cycle,
while also supporting the share price and potentially
reducing the discount.
As a result of these discussions, the Board recently announced
a new policy, effective from 1 February 2024, which saw the
establishment of a Distribution Pool. This Pool is being funded
by a proportion of the cash realisations from the Company’s
portfolio going forward, with this proportion set initially at 15%.
This effectively ring-fences capital to be deployed for share
buybacks or special dividends, while taking into consideration
the importance of maintaining balance sheet strength and
liquidity. Several factors are weighed when determining
shareholder distributions, including the macroeconomic
environment, the discount, market sentiment, and any
alternative opportunities. At the current wide discount,
the policy favours share buybacks and we have been
active in this regard in the new financial year.
Full details of this policy are outlined on page 71.
Dear Shareholder
There was little respite for investors during much of 2023, as central banks
continued to raise interest rates through the first half of the year to quash
inflationary pressures. This aggressive monetary tightening made market
participants fearful of a global recession and cautious about committing to new
investments, including in private markets. Despite these challenges, our diversified
portfolio showed resilience and delivered growth. By early 2024, the mood had
started to brighten as inflation slowed and investors began to anticipate rate cuts.
In both private and public markets, there were early signs of increased M&A and
IPO activity and some optimism about a better year ahead.
5Strategic Report Governance Financial Statements Other Information
Buybacks
In the current unusual market conditions, repurchasing shares
represents an attractive and prudent investment, and makes
sense from a capital allocation perspective. In accordance
with our established framework for assessing buybacks, in
May 2023, the Board announced our intention to buy back $25
million of shares, with a further allocation to share repurchases
being announced in the Semi-Annual Report. In total, during
the 12 months ended 31 January 2024, our brokers bought
back 1,421,114 shares for cancellation at an average price
of £21.70 per share for a total value of £30.8 million ($38.5
million). This added $0.42 to NAV per share over the year.
Since the year-end, HVPE has continued buying back shares
with a further 714,154 shares repurchased for cancellation at
an average price of £23.67 per share for a total consideration
of £16.9 million ($21.5 million).
Since first buying back shares in September 2022, the
Company has therefore repurchased a total of 2,893,132
shares for consideration of £64.7 million ($78.7 million).
This is the equivalent of 3.6% of HVPE’s market capitalisation
as at 30 April 2024.
As mentioned above, in February HVPE announced the
introduction of a Distribution Pool, to be funded by 15% of cash
realisations from the portfolio. This is an evergreen capital
allocation policy, designed to be sustainable through the cycle,
and is not impacted by deductions such as capital calls, debt
repayments or fund expenses. Investors are able to track the
growth of the Distribution Pool on a monthly basis, while the
Investment Manager determines forward commitments based
on the remaining 85% of cash distributions.
During this first year of its operation, the Distribution Pool is
being additionally funded by a seed amount, currently expected
to total $75 million. This was reallocated from a postponed
commitment to a HarbourVest fund and is being contributed
in three equal tranches through the year. As of the date of
this report, the balance in the Distribution Pool is $52 million,
which the Board is pleased to confirm will be used for further
share buybacks.
Looking ahead, based on the detailed modelling carried out
by the Investment Manager, we expect that the total amount of
cash allocated to the Distribution Pool across the two calendar
years 2024 and 2025 will be between $150 million and $250
million, inclusive of the existing balance. We believe that
this will make a material difference to shareholders’ returns,
helping to ensure that they benefit more directly from the
strong value growth delivered by HVPE’s high quality portfolio.
The potential impact of the Distribution Pool on the share
price discount is difficult to gauge, but the Board expects that
its ongoing operation will have a supportive effect on total
shareholder returns over the long term.
Balance sheet, portfolio cash flows
and commitments
Over the financial year, HVPE was a net investor by $283
million. The portfolio reflected the trends seen across the
industry of resilient dealmaking combined with slower exit
activity. While these investments lay the groundwork for
continued strong portfolio performance over the long-term,
they do place a demand on HVPE’s cash reserves in the
short-term. As at 31 January 2024, HVPE had net debt of
$135 million. This was a change from the prior year position
when HVPE had net cash of $198 million. The facility is
currently drawn $365 million and HVPE has a cash balance
of $84 million giving a net debt position of $281 million.
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. The Board intends to refresh the credit facility and is
currently well advanced in this process.
Over the course of 2023, total commitments were reduced
considerably from the original plan, ending the year at $295
million, in response to the low level of portfolio exit activity
during the year. In November 2023, the Investment Manager
presented a plan for 2024 which was subsequently approved
by the Board. This plan was informed by the Investment
Manager’s extensive scenario planning, resulting in the
recommendation of a prudent level of new commitments with
a view to enhancing near-term cash flow. New commitments
will continue to be sized to preserve balance sheet strength
and liquidity which remains an important focus for the Board.
Focus on Environment, Social and
Governance (ESG)
The Board is committed to the highest standards of corporate
governance and to improving the social and environmental
impact of HVPE’s activities, in collaboration with HarbourVest
Partners. The Manager presents frequent updates to the Board
on how ESG factors are considered in its investment process,
its screening methods, and its reporting. This includes a steady
increase in the scope and nature of the information that it
can provide on HVPE’s own portfolio. In addition, ESG risk has
been integrated into the Board’s assessment of all the material
risks faced by the Company to ensure that it is embedded as
a part of HVPE’s overall strategy. The Board initiated a project
to calculate its own carbon footprint in 2021 and since that
time, has continued to offset its operational carbon emissions,
the majority of which result from travel. Full details of the
Investment Manager’s approach to ESG matters can be
found on pages 68 to 69.
Board and Investment Management Committee
In response to shareholder feedback, on 1 February 2024,
HVPE announced two refinements to its corporate governance
and investment decision-making structures. With effect from
the July 2024 Annual General Meeting (AGM), HVPE’s Board
will become fully independent of the Investment Manager
when HarbourVest Managing Director Carolina Espinal steps
down as a Director. On behalf of the Board, I would like to
thank Carolina for her valuable contribution to the work of
the Board over the past five years.
Chair’s statement continued
HVPE Annual Report and Accounts 20246
Carolina will remain involved with the investment decisions
made on behalf of the Company as both she and Richard
Hickman joined HVPE’s Investment Committee with effect
from 1 February 2024. In the Board’s view, Carolina’s and
Richard’s close knowledge of the Company and their private
market expertise will strengthen HVPE’s investment process,
enhancing its ability to deliver the best possible outcome for
shareholders over the long term.
Given the persistence of a wide discount, and conscious of
the impact this has on shareholders’ returns, the Board has
decided that there should be no increase in the fees paid to
Directors for the year ending 31 January 2025.
Marketing and shareholder engagement
The Board is committed to regular and effective engagement
with its stakeholders, to improve understanding of the
Company’s strategy and provide updates on investment
activity. As one key element of this process, as in previous
years, HVPE will hold a Capital Markets session for
shareholders on 6 June 2024, at Peel Hunt’s offices in London.
This event will be a well-timed opportunity for shareholders to
receive an update on HVPE’s results for the year to 31 January
2024, ask any questions they may have and hear views on
global markets and industry trends from both HarbourVest
Partners and external speakers. My fellow Directors and
I look forward to welcoming as many shareholders as possible
in person to this event and we encourage you to register.
Shareholders who are interested in attending should contact
the team at hvpe_events@harbourvest.com.
The Company’s AGM with be held in Guernsey at 1.00PM
BST on 17 July 2024. Formal notice will be sent to registered
shareholders shortly and we encourage all registered
shareholders to exercise their votes by proxy.
The Board also undertakes a series of other activities and
events which are outlined on pages 36 to 38. In addition,
my fellow Directors and I always welcome the opportunity
to engage with shareholders and answer any questions.
We can be reached via hvpecosec@bnpparibas.com.
Company prospects and outlook
In our view, the investment case for HVPE remains compelling.
The Company has outperformed public equity markets over the
past ten years, and we are optimistic that this will continue in
the long term. HarbourVest is a high quality manager investing
with leading private equity managers, giving it access to a
wealth of talent and high quality opportunities from around
the world. HVPE’s track record attests to the resilience of its
investment strategy during challenging periods and, in our view,
its diversified portfolio is well-positioned to continue to deliver
strong returns and outperformance in the years ahead.
HVPE’s near term prospects also appear favourable, as
we share the Manager’s view that private equity markets
will improve this year. IPOs and M&A transactions are both
rising, as demonstrated in our recent NAV updates, and there
are widespread expectations that activity will gain further
momentum as the year progresses. The recovery in public
markets is alleviating concerns about valuations, which
should help drive exit volumes. Modest declines in interest
rates should provide a further boost to the sector, as will any
improvement in exit premiums.
This may take time to play out, but we are confident HVPE
is heading in the right direction. The progress we have
made over the year, including actions we have taken to
optimise shareholder returns, will position us well for the
future. We are grateful to those patient shareholders who have
remained invested for the long-term, and to those who have
joined the share register more recently. We thank you for your
support and look forward to reporting back to you on HVPE’s
further progress.
Ed Warner
Chair
29 May 2024
7Strategic Report Governance Financial Statements Other Information
HVPE invests exclusively in funds
managed by HarbourVest Partners,
an independent global private
markets asset manager with
over 40 years’ experience.
At a glance
HarbourVest Partners by the numbers
1
40+
Years of market experience
25+
Average years of industry experience of MDs
13
Global offices
$125bn+
Assets under management
900+
Advisory board seats
230+
Investment professionals
1,100+
Employees globally
HVPE Annual Report and Accounts 20248
Our Investment
Manager, HarbourVest
Partners, is an
experienced and
trusted global private
markets asset
manager with more
than $125 billion
in assets under
management as at
31 December 2023.
1
Overview
HarbourVest focuses exclusively
on private markets. The firm’s
powerful global platform offers its
clients investment opportunities
through primary fund investments,
secondary investments, and direct
co-investments in commingled funds
or separately managed accounts. The
firm has over $125 billion in assets
under management across the US,
Europe, Asia Pacific, and emerging
markets. HarbourVest has deep
investment experience and dedicated
on-the-ground teams in key private
markets around the world.
Depth of Experience
The 78 HarbourVest Managing
Directors have average industry
experience of over 25 years.
HarbourVest believes the experience
and continuity of investment personnel
provides a valuable historical base of
knowledge. Additionally, many of the
most sought-after underlying fund
managers are often oversubscribed
when they raise new funds, making
these funds difficult to access for
many investors. The longevity and
stability of the HarbourVest team
has enabled the firm to cultivate
relationships with many of the top-
tier and exclusive fund managers,
positioning HarbourVest as both a
preferred prospective investor and
a favoured investment partner.
This gives HVPE the ability to provide
shareholders with access to these
top-tier managers which are otherwise
generally inaccessible to a majority
of investors.
HVPE provides
access to investments
in private companies
through funds
managed by
HarbourVest Partners.
As at 31 January 2024,
HVPE had net assets
of $3.9 billion and a
market capitalisation
of £1.8 billion.
Focus and Approach
Investment into private companies
requires experience, skill, and
expertise. HVPE’s focus is on building
a comprehensive global portfolio of
the highest-quality investments, in
a proactive yet measured way, with
the strength of our balance sheet
underpinning everything we do. Our
multi-layered investment approach
creates diversification, helping to
spread risk, and produces an attractive
portfolio that no individual investor
can replicate.
The Result
We connect the everyday investor
with a broad base of private markets
experts. The result is a distinct single
access point to HarbourVest Partners,
and a prudently managed global
private companies portfolio designed
to navigate economic cycles as
smoothly as possible whilst striving to
deliver outperformance of the public
markets over the long term.
1 All HarbourVest Partners figures and information on this page are as of December 31, 2023. AUM reflects committed capital from limited partners, inclusive of general
partner commitments for all active funds / accounts but excludes leverage and any funds / accounts that are in extension, liquidation, or fully liquidated.
HVPE
HarbourVest Partners
9Strategic Report
Governance Financial Statements Other Information
Investment
Manager’s
Review
HVPE Annual Report and Accounts 202410
12 Introduction
12 HVPE Investment Committee
15 Investment Manager’s report
19 Value creation cycle
20 Commitment phase
21 Investment phase
22 Growth phase
23 Mature phase
24 Recent events
26 KPIs and investment objective
28 Managing the balance sheet
32 Managing costs
36 Stakeholder engagement
40 Principal risks and uncertainties
44 Purposeful growth
(Environmental, Social, and Governance)
50 Manager spotlight
56 Top ten direct companies
“
Signs are pointing to
investors beginning to feel
more positive in 2024.
Inflation is declining in most
regions and lower rates are
forecast for later in the year,
though by when and by how
much continues to shift.
Despite potential risks on
the horizon, public markets
are up, and optimism is
starting to feel more
palpable in many markets.”
John Toomey Co-CEO, HarbourVest Partners
HVPE Investment Committee member
11Strategic Report
Governance Financial Statements Other Information
Introduction
In this section, Richard Hickman,
Managing Director, who is
responsible for the day-to-day
management of the Company and
a member of the HVPE Investment
Committee, reflects on the financial
year and shares his outlook. Richard
joined HarbourVest in 2014 and has
a total of 18 years’ experience in the
listed private equity sector.
The HVPE Investment Committee
HarbourVest has established the HVPE Investment Committee as a dedicated body to provide
investment recommendations to the HVPE Board.
The Committee meets regularly and is the key decision-making entity through which HarbourVest fulfils its obligations
to HVPE under the Investment Management Agreement. The Committee is responsible for monitoring and reviewing
the Company’s Strategic Asset Allocation targets and for recommending any changes, thereby seeking to optimise the
risk-adjusted performance of HVPE’s portfolio. On an annual basis, the Committee proposes a commitment plan for
consideration by the HVPE Board and, once approved, is responsible for executing against this plan. During the year,
the Committee also reviews and recommends specific investment opportunities to the HVPE Board as they arise.
The HVPE Investment Committee comprises four Managing Directors of HarbourVest Partners:
Carolina Espinal
Managing Director,
HarbourVest Partners
Richard Hickman
Managing Director,
HarbourVest Partners
Gregory Stento
Chief Investment Officer,
HarbourVest Partners
John Toomey
Co-Chief Executive Officer,
HarbourVest Partners
HVPE Annual Report and Accounts 202412
Introduction
The past year was another challenging one for investors. Rising
interest rates fuelled fears of a global recession, which sapped
investors’ confidence. Geopolitical uncertainties escalated as
the war in Ukraine reached a stalemate, tensions ignited in the
Middle East and relations between the US and China remained
fraught. For most of the year, global equity markets struggled
under the weight of these adverse influences, with the exception
of a few US tech stocks perceived to be the main beneficiaries
of the artificial intelligence (“AI”) revolution. However, market
sentiment began to improve considerably in the last quarter of
2023. Tight monetary policy began to take effect, driving down
inflationary pressures, without triggering recession in most major
economies, and equity indices were buoyed by the prospect of
interest rate cuts during 2024.
Private Markets Industry
In private markets, 2023 saw few IPOs, while mergers and
acquisition (M&A) activity was also limited. This constrained
private equity exit activity, which declined by 24% through to
September 2023,
1
to its lowest level in a decade, which in turn
limited investors’ ability and appetite to commit to new funds.
On the sell side, many private equity managers held on to
high-quality assets while they waited for greater clarity on
asset valuations. They also delayed fundraisings and final
closes in the face of investor reticence. Global private markets
fundraising declined 36% through to September 2023,
1
with
capital more concentrated in the hands of the larger scale,
strongly performing managers. Among developed markets, the
US and Canada held up best, thanks to the depth of their capital
markets, while European markets saw deals decline in value and
size. In the Asia-Pacific region, China’s disappointingly insipid
post-pandemic rebound and ongoing property market problems
saw focus shift to other regional markets. Although India was
the only market to see an increase in exits, Australia and New
Zealand saw some sizeable transactions in Q3 of 2023.
1
Valuations
These generally subdued market conditions had an inevitable
impact on valuations. The valuations of venture and growth
assets remained under pressure during the first nine months
of the calendar year, although tech-related asset values began
to improve in late 2023 in response to the strong gains in
some listed tech stocks. Overall, NAV held steady over the year,
although premiums to NAV on exit will have been compressed,
as managers felt some urgency to realise investments, even at
slightly lower than desired premiums. Regardless, exits are still
being realised at a healthy premium to carrying value of 24%,
2
which should provide confidence in the validity of our NAV.
However, despite this lacklustre backdrop, private equity
managers still found attractive new investments and managers
with strong track records succeeded in raising large funds. The
sector’s top managers continued to perform well - some of the
largest, most successful managers reported double-digit returns.
3
Conditions across the industry improved in Q4 of 2023 as
macroeconomic uncertainties began to abate and public markets
recovered accordingly. There were signs that IPOs and M&A
activity were beginning to recover and bid-ask spreads, which
are the differences between the highest price a buyer will pay and
the lowest price a seller will accept for an asset, have narrowed.
Strategic Asset Allocation review
Following the 2023 annual review of HVPE’s strategic asset
allocation targets, the Board approved the following changes
recommended by the HVPE Investment Committee:
• At the Stage level, an increase in the target allocation to
Mezzanine and Infrastructure and Real Assets (“InfRA”) from 10%
to 15%, reducing the target Buyout allocation from 60% to 55%.
At the end of January 2024, the actual allocation to Mezzanine
and InfRA stood at 8%, while the actual allocation to Buyout
stood at 61%. Reaching these new targets will therefore involve a
seven percentage point increase in allocations to Mezzanine and
InfRA and a six percentage point decline in exposure to Buyouts.
• At the geographical level, an increase in the target allocation to
Europe from 20% to 24%, reducing the target Asia allocation
from 20% to 16%. The actual allocation to Europe already stood
at 21% by end January 2024, while the actual allocation to Asia
was 14%.
The increase to Mezzanine and InfRA is intended to ensure
that HVPE benefits from increased exposure to the attractive
risk/reward profile on offer in real assets and yield-oriented
investments. HVPE’s infrastructure investments have performed
well through the rising rate environment of the last two years,
while the yields on offer in private credit now range from 10-12%
at the senior level to 14-18% for junior credit.
4
The increased target weighting to Europe reflects the fact that,
in our assessment, the private markets ecosystem in Europe
has developed markedly in recent years. The opportunity set has
grown, particularly in the venture and growth equity market, while
returns have been resilient across our European buyout exposure.
Meanwhile in Asia, the investing environment has seen a marked
change due to the scarcity of new investment opportunities in
China. While the country has historically been a single source of
strength for the region based on the exponential growth of the
consumer internet segment during the prior hype cycle, recent
changes have largely closed that market to North American and
European investors, with a 77% decline in fundraising year-over-
year through Q3 of 2023.
5
The region is undergoing dramatic
shifts that are creating near-term growth opportunities in other
markets like Japan, Korea, and India.
These new target allocation weightings are medium to long-term
goals, and we will endeavour to move the portfolio towards these
weightings over the next five years. The next review is scheduled
to take place in November 2024.
1 PitchBook, data is for global private equity and venture capital as of September 30, 2023.
2 These figures represent the weighted average percentage uplift to carrying value of 79 individual company M&A and IPO transactions during the year ended 31 January
2024. This analysis takes each company’s value (whether realised or unrealised) at 31 January 2024 and compares it to the carrying value prior to announcement of the
transaction. This analysis represents 83% of the total value of transactions in the year ended 31 January 2024 and does not represent the portfolio as a whole.
Additionally, it does not reflect management fees, carried interest, and other expenses of the HarbourVest funds or the underlying managers, which will reduce returns.
Past performance is not necessarily indicative of future returns.
3 Bain, data as of January 2024.
4 Refinitiv, data as of September 30, 2023.
5 HarbourVest, AVCJ, and APER, data as of September 30, 2023.
13Strategic Report Governance Financial Statements Other Information
Outlook
We expect 2024 to be a better year for private markets than last
year. The improvements in the investment environment seen
during Q4 of 2023 have continued in the early months of this
year. Equity indices, including the Nasdaq, have reached new
highs, and confidence in the AI revolution is growing. Crucially
for private markets, IPOs are re-starting. The expected listing
of Klarna, one of Europe’s largest fintech companies, could
provide a significant boost to both sentiment and activity. Shein,
an online fashion retailer, has filed for IPO this year, with
management evaluating a number of potential listing venues.
M&A activity is also picking up, as a stabilising macro
environment facilitates agreement on pricing, and scepticism
over NAVs appears to be abating. This paves the way for a
pick-up in exits in H2, which, if realised, will provide further,
much-needed validation of NAVs. Venture and growth could
also generate some real surprises in AI-related areas such as
machine learning and synthetic biology.
Listed private equity investment companies are still under
pressure from several quarters: outflows from open-ended UK
equity funds and ETFs continue, asset managers are striving
to reduce reported look-through costs; while discount volatility
and a reduced appetite for risk are still limiting demand for
investment companies more broadly. However, any discount
narrowing in the listed private equity sector would provide
further reassurance that the industry is on the road to recovery,
and this would have a favourable knock-on effect for HVPE.
While performance can fluctuate from year to year, whatever
the immediate future holds, private equity investment requires
a long-term perspective. On this basis, HVPE’s strategy has a
track record of outperforming listed global equities. Over the
10 years ended 31 January 2024, HVPE’s NAV per share returns
exceeded those of the FTSE All-World Total Return Index by an
annualised 4.3 percentage points.
We believe our strategy of operating a well diversified, quality
portfolio is working well and we are confident it will continue
to do so in the future, especially if the investment environment
continues to improve as we anticipate. Yet even capital-
constrained circumstances such as those we currently face,
create opportunities for those who have the ability to deploy
selectively, as there are high-quality, attractively priced deals
with strong growth tailwinds available. As always, we continue
to strive to create value for shareholders over the long term.
Richard Hickman
Managing Director
New commitments
HVPE made total commitments of $295 million across five
HarbourVest funds over the financial year to 31 January 2024
(12 months to 31 January 2023: $940 million). Total unfunded
commitments were $2.5 billion as at 31 January 2024,
representing a net decrease of approximately $300 million
from 31 January 2023 ($2.8 billion).
During the period, total commitments were reduced
considerably from the original plan in response to the
low level of portfolio exit activity. Post period-end, no
new commitments have been made to HarbourVest funds.
We would expect new commitments to return to more
normal levels once positive cash flow has been sustained
for a reasonable period of time.
This remains in line with the Company’s strategic asset
allocation targets described above, and reflects the Investment
Manager’s and Board’s current perspective on
the most appropriate portfolio composition required to
optimise long-term NAV growth for shareholders.
HVPE Annual Report and Accounts 202414
NAV per Share – 12 Months to 31 January 2024
HVPE’s NAV per share increased by 4.0% in the 12 months
to 31 January 2024, ending the financial year at $50.47.The
FTSE AW TR Index (in US dollars), increased by 15.3% in the
same period.
Over the long term, HVPE’s NAV per share return has been
strong. The 31 January 2024 figure of $50.47 is more than
double the NAV per share figure reported five years earlier
(31 January 2019: $24.09) and more than 3.5x the respective
figure ten years earlier (31 January 2014: $14.38). As a
reminder, these figures are net of all fees and costs.
HVPE remains well diversified by sector, which we believe is
key to achieving consistently strong returns from a private
markets portfolio. As at 31 January 2024, no single company
represented more than 2.1% of the Investment Portfolio value
(31 January 2023: 2.4%), helping to mitigate company-specific
risk. The top 100 companies in the portfolio represented 28%
of total value (31 January 2023: 29%), while the top 1,000
companies represented 81% (31 January 2023: 81%).
The Secondary portfolio was the best performing strategy in
percentage terms, delivering value growth of 8.2% over the
12 months. Geographically, Europe, North America and Rest
of World categories all saw growth at 9.5%, 6.6% and 6.2%,
respectively, while Asia saw a modest decline (-0.5%). Looking
at stages, the Buyout portfolio was the strongest performer,
growing 8.6% in the 12 months ended 31 January 2024.
Mezzanine and InfRA also grew, recording a 7.1% gain, along
with a modest increase of the Venture and Growth Equity stage
assets (+1.3%).
As at 31 January 2024, HVPE held investments in 63
HarbourVest funds and 16 secondary co-investments
1
(compared with 61 and 16 respectively at 31 January 2023).
Of these, the largest fund contributors to NAV per share
movement in absolute terms during the 12 months to 31
January 2024 are described below:
• Fund XII Buyout, a US-focused buyout fund of funds, was the
largest contributor to NAV per share, adding $0.34 over the
reporting period. With a vintage year of 2021, this fund is in
its investment phase. The increase came predominately from
unrealised gains.
• Fund XI Buyout, a US-focused buyout fund of funds, was the
second-largest contributor over the reporting period, adding
$0.27 to NAV per share. With a vintage year of 2018, this fund
is in its growth phase. The increase came predominately from
unrealised gains.
• Fund X Buyout, a US-focused buyout fund of funds, was
the third-largest contributor, adding $0.23 to NAV per share.
With a vintage year of 2015, this fund is in its growth phase.
The increase was evenly split between realised and
unrealised gains.
• Fund X Venture, a US-focused venture fund of funds, was
the largest negative contributor over the reporting period,
reducing NAV per share by $0.16. With a vintage year of
2015, this fund is in its growth phase. This decrease came
predominantly from unrealised losses.
• Dover Street XI, a global-focused secondary fund, was the
next largest contributor over the reporting period, adding to
NAV per share by $0.14. With a vintage year of 2022, this fund
is in its investment phase. The increase came predominately
from unrealised gains.
All of the remaining HarbourVest funds in the portfolio together
contributed to an aggregate $1.40 increase to HVPE’s NAV per
share over the period.
(0.25)
0.10
0.42
(0.24)
(0.30)
0.14
1.40
50.47
0.23
0.27
0.34
48.52
NAV per
Share at
31 Jan 2023
Fund
XII
Buyout
Fund
XI
Buyout
Fund
X
Buyout
Dover Street
XI
Fund
Other
HarbourVest
Funds
3
Management
Fees
4
Foreign
Currency
Share
Buybacks
NAV per
Share at
31 Jan 2024
Net Operating
Expenses
6
Gross Realised Gain/Value Change
Performance
Fees
5
(0.16)
Fund
X
Venture
NAV per Share Movement in the 12 Months to 31 January 2024
2
1
These include four Secondary Overflow III investments, 11 Secondary Overflow IV investments, and Conversus, referred to as “HVPE Charlotte Co-Investment L.P.” in the
Audited Consolidated Schedule of Investments.
2
Realised and unrealised gains are shown in USD, net of management fees, performance fees, and foreign currency in the Audited Consolidated Statements of Operations.
3
Realised gain/value changes from the balance of 58 other HarbourVest funds and 16 secondary co-investments in the Investment Portfolio.
4
Management fees include management fees from HarbourVest Funds and secondary co-investments as shown in the Audited Consolidated Statements of Operations ($117k).
5
Please refer to page 32 for more information on the performance fees.
6
Operating expenses exclude management fees ($117k) and are shown net of interest and other income ($8.8 million).
Investment Manager’s report
15Strategic Report Governance Financial Statements Other Information
Diversification at 31 January 2024
1
Geography
4
1
2
3
Stage
1
2
3
Strategy
3
1
2
North America 1 63% 60%
Europe 2 21% 24%
Asia Pacific 3 14% 16%
Rest of World 4 2% 0%
Actual Target
Buyout 1 61% 55%
Venture and
Growth Equity 2 31% 30%
Mezzanine and
infRA* 3 8% 15%
*infRA incorporates infrastructure and real assets
Actual Target
Primary 1 50% 50%
Secondary 2 30% 30%
Direct
Co-investment 3 20% 20%
Actual Target
Portfolio Cash Flows and Balance Sheet
In the 12 months to 31 January 2024, HVPE received cash
distributions of $310 million (12 months to 31 January 2023:
$532 million) while funding capital calls of $593 million for
new investments (12 months to 31 January 2023: $588
million). The result was net negative cash flow of $283
million over the reporting period.
Distributions were driven in large part by particularly strong
months in June and December 2023, during which combined
cash proceeds of $138 million were received, predominately
from the primary funds. This contributed over 44% of the total
distributions over the period.
A meaningful portion of the distributions received in the
12 months to 31 January 2024 came from the ongoing
redemption of the HarbourVest Infrastructure Income
Partnership (“HIIP”), the permanent capital vehicle resulting
from HVPE’s commitment to Adelaide. During the period HVPE
received $38 million in total distributions from the HIIP fund.
As mentioned in prior reports, HVPE has now completed the
50% redemption of the original commitment and will continue
to receive a share of ongoing management fee revenue due to
its remaining holding in the fund.
The largest HarbourVest fund capital calls and distributions
over the reporting period are set out in the tables below.
The top ten HarbourVest fund calls in aggregate accounted
for $436 million (74%) of the total calls and came from a
broad mix of funds. The majority of total calls by value (78%)
were into primary opportunities. The top ten HarbourVest
fund distributions totalled $155 million, or 50% of the total
proceeds received in the period. Distributions by value were
split between primary investments (64%) and secondary
investments (25%), with the remainder coming from direct
co-investments.
The HarbourVest fund-level borrowing as at 31 January 2024
is reported in Managing the Balance Sheet on page 28.
Top Five HarbourVest Fund Calls
HarbourVest
Fund Name
Vintage
Year Description
Called
amount
Fund XII Buyout 2021 US-focused buyout fund
of funds
$101.5m
HIPEP IX 2020 International multi-
strategy fund of funds
$58.2m
Co-Investment VI 2021 Global direct co-
investment fund
$56.3m
Dover Street XI 2022 Global multi-stage
secondary fund
$42.5m
Fund XI Buyout 2018 US-focused buyout fund
of funds
$39.2m
Investment Manager’s report continued
1
Diversification by stage, phase, strategy, currency, and geography is based on the estimated net asset value of partnership investments within HVPE’s fund of funds and
company investments within HVPE’s co-investment funds. Industry diversification is based on the reported value of the underlying company investments for both fund of
funds and co-investment funds.
HVPE Annual Report and Accounts 202416
1 Investment 42%
2 Growth 47%
3 Mature 11%
Phase
3
1
2
1 Tech & Software 32%
2 Consumer 14%
3 Medical & Biotech 13%
4 Financial 12%
5 Industrial & Transport 10%
6 Business Services & Other 10%
7 Energy & Cleantech 5%
8 Media & Telecom 4%
Industry
3
4
5
6
7
8
1
2
1 US dollar 82%
2 Euro 14%
3 Sterling 2%
4 Australian dollar 1%
5 Other 1%
Currency
3
1
2
4
5
Top Five HarbourVest Fund Distributions
HarbourVest
Fund Name
Vintage
Year Description
Distributed
amount
HIIP
2
2018 Global core / core+
infrastructure assets
$38.0m
HIPEP VII
Partnership
2014 International multi-
strategy fund of funds
$21.9m
HIPEP VII Europe 2014 Europe-focused
multi-strategy fund
$16.4m
HIPEP VI
Partnership
2008 International-focused
fund of funds
$14.8m
Fund VIII Buyout 2006 US-focused buyout fund
of funds
$12.9m
Portfolio Companies
During the period the ten largest individual company
realisations generated total distributions of $72 million,
accounting for approximately 23% 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 23.
• CarepathRx is a firm that partners with health systems,
hospitals, physicians, and pharmacies to provide
comprehensive pharmacy care in the United States.
CarepathRx was HVPE’s 23rd largest company at 31 January
2023, and generated proceeds of $8.6 million following the
sale of the company’s subsidiary BioPlus Specialty Pharmacy
as announced in November 2022.
• Groundworks (formerly JES Construction) is a firm that
provides structural engineering and construction services.
It was HVPE’s 48th largest company at 31 January 2023
and generated proceeds of $7.3 million following the
announcement of a strategic partnership with a global
private equity firm.
• Dynatrace provides software solutions for diagnosing
performance problems in J2EE and .Net applications.
The company was HVPE’s 98th largest company at 31
January 2023 and generated proceeds of $6.5 million.
• Virgin Pulse is a firm that provides employee wellness
software and was HVPE’s 50th largest company at 31
January 2023. It generated proceeds of $5.8 million
following its merger with HealthComp, as announced in
September 2023.
2
The distribution represents a partial redemption as a result of its planned
conversion from Adelaide into a permanent capital vehicle in July 2022
17Strategic Report Governance Financial Statements Other Information
M&A Transactions and IPOs
During the 12 months ended 31 January 2024, there were a
total of 362 known M&A transactions and IPOs, compared to
327 total transactions reported in the 12 months to 31 January
2023. Within HVPE’s portfolio, we are seeing some green
shoots in terms of IPO and M&A activity for the year ahead
and are hopeful we will see an improvement in exit activity.
Approximately 88% (318) of these transactions were M&A
(trade sales or sponsor-to-sponsor transactions), with the
remaining 12% (44) being IPOs. IPOs tend to represent a
relatively small proportion of exits for HVPE even in normal
circumstances, consistent with wider industry trends.
There was an approximately even split across buyout and
venture transactions where, of HVPE’s total 362 known M&A
transactions and IPOs, 163, or 45%, related to buyout-backed
companies. A further 176 or 49% related to venture-backed
companies, and the remaining 23 (6%) related to Other
companies. Over the period, the weighted average uplift to
pre-transaction carrying value for a large sample of
transactions was 24%.
1
The top five M&A transactions during the period (by
contribution to HVPE NAV per share) are listed below.
Top Five M&A transactions
(by contribution to HVPE NAV per share
2
)
Reward Gateway Other Information Technology +$0.04
GGW Holding Buyout Financials +$0.04
Groundworks (formerly
JES Construction) Buyout Industrials +$0.03
Undisclosed Buyout Financials +$0.03
Tuskerdirect Limited Buyout Consumer Discretionary +$0.03
Top Five IPOs
(by contribution to HVPE NAV per share
2
)
Tata Technologies Venture Industrials +$0.03
Mankind Pharma (Maize
Investments) Venture Health Care +$0.01
Zhengzhou
Guoquanshihui Network
Technology Co., Ltd. Venture Consumer Staples +$0.01
Hitachi Kokusai Electric
Inc. Buyout Information Technology +$0.01
Savers, Inc. Other Consumer Discretionary +$0.01
Breakdown of known M&A transactions and IPOs
(by quarter end)
Total
362
Q1
76
Q2
96
Q3
93
Q4
97
Breakdown of known M&A transactions and IPOs
(by count)
M&A
88%
IPO
12%
Buyout
IPO
2%
Buyout
M&A
42%
Venture
M&A
40%
Venture
IPO
9%
Other
1%
Other
6%
Investment Manager’s report continued
1
These figures represent the weighted average percentage uplift to carrying value of 79 individual company M&A and IPO transactions during the year ended 31 January
2024. This analysis takes each company’s value (whether realised or unrealised) at 31 January 2024 and compares it to the carrying value prior to announcement of the
transaction. This analysis represents 83% of the total value of transactions in the year ended 31 January 2024 and does not represent the portfolio as a whole. Additionally,
it does not reflect management fees, carried interest, and 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.
HVPE Annual Report and Accounts 202418
Investing in private markets
requires a considered,
long-term approach. HVPE
provides a complete solution
for public investors by
managing the portfolio
through four phases of
the cycle: Commitment,
Investment, Growth,
and Mature.
1 Commitment Phase
The first phase at which the
Investment Manager and the Board
consider making new commitments
to the portfolio.
2 Investment Phase
The second phase where the
HarbourVest funds invest HVPE’s
commitments over a period of
approximately four years.
3 Growth Phase
The third phase where most
HarbourVest funds are fully invested
during years five to nine, and managers
are actively driving growth. The majority
of value accretion typically takes place
during this phase.
4 Mature Phase
The fourth phase within approximately
seven to ten years of the HarbourVest
fund’s life, where underlying managers
are typically realising investments.
Value creation cycle
Commitment Phase
Investment Phase
Growth
Phase
Mature
Phase
Value
creation
cycle
1
2
34
For illustrative purposes only.
19Strategic Report
Governance Financial Statements Other Information
Commitments Made to HarbourVest Funds in the 12 Months to
31 January 2024
(in order of the size of the commitment)
HIPEP X Fund
(International multi-strategy fund of funds)
$125m
Continuation Solutions Fund
(Global multi-strategy fund of funds)
$35m
Infrastructure Opportunities III Fund
(Global infrastructure and real assets fund)
$75m
Dover Street XI Fund
(Global multi-strategy secondary fund)
$25m
Stewardship Fund
(Global direct co-investment fund)
$35m
Total
$295m
(12 Months to 31 January 2023: $940m)
In order to reflect the differences in expected drawdown
periods appropriately, the Company divides its Investment
Pipeline of unfunded commitments into two categories:
> “Allocated” – Unfunded commitments (Investment Pipeline)
which have been allocated by HarbourVest funds to
underlying partnerships.
> “Unallocated” – Unfunded commitments (Investment Pipeline)
which have yet to be allocated by HarbourVest funds to
underlying partnerships, and therefore cannot be drawn
down in the short term.
Note: All of the Company’s commitments to HarbourVest direct
co-investment and secondary funds are classified as “allocated”
commitments because their drawdown profiles are closer to
those of third-party funds.
The graph below details the projected timeline of the anticipated
capital calls from HarbourVest funds, taken from the base case
scenario. For more details on cash flows and modelling, please
refer to page 30. Of the $2.5 billion included in the investment
pipeline, we expect to fund $543 million in the next 12 months
(22% of the investment pipeline) and $1.5 billion over the next
three years (59% of the investment pipeline). We expect an
additional $673 million to be funded over time with $360 million
unlikely to be called (14% of the investment pipeline). For further
details on sources of liquidity and coverage, please see the
Medium-term Coverage Ratio on page 31.
Allocated and Unallocated Investment Pipeline Projected timeline for capital calls from total
Investment Pipeline
Allocated
(Years since
allocation made)
2 1-3 years 44%
3 4-6 years 17%
4 7-10 years 10%
5 >10 years 4%
Unallocated
1 25%
1
2
3
4
5
HIPEP X Fund
HIPEP X was HVPE’s largest fund
commitment in the 12 months to
31 January 2024.
HIPEP X is a fund seeking to
provide investors with access to
the core private equity markets
of Europe, Asia Pacific, and other
markets on an opportunistic
basis. The primary programme is
complemented by up to 35% of
secondary transactions and direct
co-investments that are intended
to enhance cash flow dynamics
and mitigate the J-curve effect.
$125m
committed
Commitment phase
Value creation cycle continued
Jan 25 Jan 26 Jan 27 Jan 28 Jan 29 Jan 30 Jan 31 Jan 32
0
200
100
400
300
500
600
543
506
418
352
239
66
14
2
Anticipated capital calls per financial year ($m)
1
1
This is intended to be an illustrative example of the pace at which capital may be called by a fund. Investors and prospective investors should bear in mind that the future
data presented is hypothetical and, as such, does not reflect actual timing or underlying investment performance and should not be construed as predicting the future.
These projections should be used solely as a guide and should not be relied upon to manage investments or make investment decisions.
HVPE Annual Report and Accounts 202420
Fund XII Buyout
Fund XII Buyout was HVPE’s
largest source of capital
calls in the 12 months to
31 January 2024.
Fund XII Buyout is a
2021-vintage fund, and
provides a comprehensive
solution for investors seeking
to invest in US-based buyout
investments. The fund intends
to create a diversified portfolio
of partnerships that focuses
on mature, stable companies,
high-growth enterprises, and
under-utilised assets. The fund
focuses on primary partnership
investments in US-based buyouts,
complemented by secondary
investments and direct co-
investments (up to a limit of
35% of the fund).
$102m
call
In the 12 months to 31 January 2024, HVPE invested
$593 million into HarbourVest funds (see Consolidated
Statements of Cash Flows on page 96). The majority of
investments were into primary funds at 78%, followed by
secondaries at 12%, and direct co-investments at 10%.
The most active Primary managers were in North America
and had a buyout focus, as highlighted in the table below.
Investment phase
Top Ten Primary Managers by Amount Invested (£m)
$10.6m Buyout United States
United States
United States
United States
United States
Europe
United States
United States
Europe
Europe
Buyout
Venture/Growth
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
Buyout
GeographyStrategy
SK Capital Partners1
$7.8mIncline Equity Management2
$6.9mThoma Bravo
3 $7.0mSymphony Technology Group
4
$5.6mGenstar Capital Partners5
$5.2m
Sentinel Capital Partners
6
$5.0m
Permira Advisers Limited
7
$4.7mTSG Consumer Partners8
Index Ventures $4.7m9
$4.5mAdvent International Corp.10
21Strategic Report
Governance Financial Statements Other Information
Growth by Stage
Buyouts – the largest part of the portfolio
by stage (61%) – increased over the
reporting period driven by all sub-sectors
of large buyouts (+8.8%), medium buyouts
(+8.3%), and small/micro buyouts (+8.7%).
The Venture and Growth Equity stage
– 31% of Investment Portfolio NAV –
increased slightly over the reporting
period. Within the Venture and Growth
Equity stage, Early Venture (-4.1%)
underperformed Balanced Venture
(+1.4%) and Growth Equity (+5.3%).
Mezzanine, Infrastructure & Real Assets –
the smallest stage at 8% of Investment
Portfolio NAV – increased over the
reporting period with all significant
sub-sectors within this category
reporting increases.
Growth by Geography
North America – the largest weighting
in the portfolio by geography (63%)
increased by 6.6% over the reporting
period, driven by US large buyout
(+10.5%), US growth equity (+8.5%),
and US mezzanine (+8.3%).
Europe – 21% of Investment Portfolio
NAV, saw the largest increase by
geography, gaining 9.5%. This was
largely driven by European small and
medium buyout (+19.5% and +11.0%,
respectively), as well as European
growth equity (+15.0%), partially offset
by a decline in European balanced
venture (-6.3%).
Asia – 14% of Investment Portfolio
NAV – was the only geography which
reported a small decrease over the
12-month period. This was driven
by a decrease in Asia early venture
and growth equity (-3.1% and -3.6%,
respectively), offset by gains from Asia
medium and large buyout (+7.1% and
+4.7% respectively).
Growth by Strategy
The Primary strategy – 50% of
Investment Portfolio NAV – increased
by 4.5% over the 12 months to 31
January 2024, driven by US and
European investments (+5.1% and
+6.9%, respectively), and buyout stage
investments (+9.6%).
The Secondary strategy – 30% of
Investment Portfolio NAV – was the
strongest performer by Strategy,
increasing by 8.2%. This was largely
driven by US and European investments
(+9.3% respectively for each), along
with all subcategories by stage
reporting increases.
The Direct Co-investment strategy
– 20% of Investment Portfolio NAV –
increase by 7.3%, driven by European
investments (+14.8%), partially offset
by Asia investments (-4.6%). All
subcategories by stage also
contributed increases.
In the 12 months to 31 January 2024, the Investment
Portfolio increased by $140 million (see Audited
Consolidated Statements of Operations on page 94).
Movements by stage, geography, and strategy are outlined
below (percentage change over the 12 months adjusted
for new investments over the period) with corresponding
commentary. The size of the circles represents the relative
weighting of each category in the portfolio diversification.
Value creation cycle continued
Growth phase
1
1
Note that the net gain of $140 million is at the fund level and net of all management fees and carry charged by underlying GPs and HarbourVest, while the percentage gains
are at the underlying partnership level and are net of GP fees and carry, gross of HarbourVest fees and carry.
2
Gross of management fees, carried interest and other expenses related to the fund.
4%
2%
0%
6%
8%
10%
4%
2%
0%
6%
8%
Buyout +8.6%
Venture &
Growth Equity +1.3%
Mezzanine,
Infrastructure
& Real Assets
+7.1%
10%
5%
-0%
-5%
15%
North America
+6.6%
Europe +9.5%
Asia -0.5%
Primary
+4.5%
Secondary
+8.2%
Direct
Co-investment
+7.3%
Rest of World
+6.2%
4%
2%
0%
6%
8%
10%
4%
2%
0%
6%
8%
Buyout +8.6%
Venture &
Growth Equity +1.3%
Mezzanine,
Infrastructure
& Real Assets
+7.1%
10%
5%
-0%
-5%
15%
North America
+6.6%
Europe +9.5%
Asia -0.5%
Primary
+4.5%
Secondary
+8.2%
Direct
Co-investment
+7.3%
Rest of World
+6.2%
4%
2%
0%
6%
8%
10%
4%
2%
0%
6%
8%
Buyout +8.6%
Venture &
Growth Equity +1.3%
Mezzanine,
Infrastructure
& Real Assets
+7.1%
10%
5%
-0%
-5%
15%
North America
+6.6%
Europe +9.5%
Asia -0.5%
Primary
+4.5%
Secondary
+8.2%
Direct
Co-investment
+7.3%
Rest of World
+6.2%
Fund XII Buyout –
Largest gain
2
Fund XII Buyout was HVPE’s
largest fund gain in the 12 months
to 31 January 2024.
$26m
gain
HVPE Annual Report and Accounts 202422
HarbourVest
Infrastructure
Income Partnership
(“HIIP”)
HIIP was HVPE’s largest fund
distribution
2
in the 12 months to
31 January 2024.
HIIP is a fund that invests
in a portfolio of high-quality,
stable infrastructure assets
through structured liquidity
solutions including whole-fund
restructurings and single asset
secondaries. HIIP primarily targets
OECD markets, with a focus on
North America, Western Europe
and Australia.
$38m
distribution
In the 12 months to 31 January 2024, HVPE received
proceeds of $310 million from HarbourVest funds (see
Audited Consolidated Statements of Cash Flows on page
96). The top ten company distributions are outlined below.
Mature phase
Company Description
Distributed
Value
1
1 Undisclosed Q2 2023 M&A transaction - proceeds received from
partial realisation
$13.5m
2 CarepathRx Q1 2023 M&A transaction - proceeds received from
partial realisation
$8.6m
3 Coinbase, Inc. Q1 2021 IPO - proceeds received from
partial realisation
$7.7m
4 Groundworks
(formerly JES
Construction)
Q1 2023 M&A transaction - proceeds received from
partial realisation
$7.3m
5 VMware, Inc. Q4 2023 M&A transaction - proceeds received from
full realisation
$7.2m
6 DynaTrace, Inc. Q2 2020 M&A transaction - proceeds received from
partial realisation
$6.5m
7 Virgin Pulse Q4 2023 M&A transaction - proceeds received from
partial realisation
$5.8m
8 Reward
Gateway
Q2 2023 M&A transaction - proceeds received from
full realisation
$5.5m
9 Works Human
Intelligence
Q2 2023 M&A transaction - proceeds received from
partial realisation
$5.2m
10 Prolacta
Bioscience, Inc.
Q4 2023 M&A transaction - proceeds received from
full realisation
$4.9m
Top Ten Company Distributions
1 February 2023 to 31 January 2024
1
This amount represents HVPE’s share of the distributed value from primary, secondary, and direct co-investment realisations received during the financial period. It does
not represent the net distribution received by HVPE from the HarbourVest funds. Past performance is not necessarily indicative of future returns.
2
This distribution represents a partial redemption as a result of its planned conversion from Adelaide into a permanent capital vehicle in July 2022. More details available on
page 16.
23Strategic Report
Governance Financial Statements Other Information
Recent events
HVPE Estimated NAV as at 30 April 2024
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 20 May 2024, HVPE published an estimated NAV per share
at 30 April 2024 of $50.47 (£40.40), is unchanged since the
final 31 January 2024 NAV (US Generally Accepted Accounting
Principles (“GAAP”)) figure of $50.47. This latest NAV per share
is based on a valuation breakdown of: 6% as at 30 April 2024
(reflecting the public company in the portfolio), 3% actual 31
March 2024 and 91% actual 31 December 2023. Consistent
with previous estimated NAV reports, valuations are also
adjusted for foreign exchange movements, cash flows, and
any known material events to 30 April 2024.
The Investment Pipeline of unfunded commitments decreased
from $2.5 billion at 31 January 2024 to $2.3 billion at 30 April
2024, based on capital funded and taking foreign exchange
movements into account.
HVPE’s cash and cash equivalents also decreased from $140
million at 31 January 2024 to $60 million at 30 April 2024.
HVPE’s look-through exposure to borrowing at the HarbourVest
fund level had decreased by $19 million, from $508 million at
31 January 2024 to $489 million at 30 April 2024. The latest
balance sheet ratios can be found in the factsheet on the
HVPE website: www.hvpe.com.
HVPE Annual Report and Accounts 202424
Distribution Policy and Share Buybacks
In February 2024, the Board introduced a new distribution
policy which established a Distribution Pool to be used either
to fund future share buybacks or return capital to shareholders
by means of special dividends. The aim is to free up materially
more cash for shareholders to bolster their returns through the
cycle. The Distribution Pool is being funded by a proportion of
the cash realisations from the Company’s portfolio, with this
proportion set initially at 15%. For further information, see the
Director’s Report on page 71.
Post period-end, HVPE has been in the market for 12 days
buying back shares. During this time, 714,154 ordinary shares
have been repurchased for cancellation at an average price
of £23.67 per share for a total consideration of £16.9 million
($21.5 million). The total number of shares in issue is
now 76,969,354.
Currently, the Distribution Pool balance is $52 million.
Credit Facility
Post period-end, HVPE has initiated draws on the Facility,
which together have totalled $90 million. As at 24 May 2024,
a total of $365 million is currently drawn on the $800 million
Facility. More details regarding the Facility are available on
page 29.
Share Price since 31 January 2024
The closing price of £22.85 on 24 May 2024 represents a fall
of 1.3% since period-end. This compares to the FTSE AW TR
index’s increase of 9.1% in US dollars over the same period.
The market capitalisation of the Company as at 24 May 2024
was £1.8 billion and, as of the same date, HVPE was ranked
75th in the FTSE 250 (19 May 2023: 77th).
25Strategic Report
Governance Financial Statements Other Information
The Company’s investment objective is to generate superior shareholder returns through long-term
capital appreciation by investing primarily in a diversified portfolio of private markets investments.
Total Shareholder
Return (1 year and
10 years)
The key measure of HVPE’s
performance is the total return
experienced by its shareholders.
While NAV per share is the major
driver, the level of any premium or
discount to NAV at which HVPE’s
shares trade is also relevant.
A significant majority of HVPE’s
shareholders are UK based, and
most of the trading volume is
in sterling.
a. Absolute performance (sterling)
1 year to 31 January:
10 years to 31 January:
+251%
10 years to 31 January 2023: +296%
NAV per Share Return
(1 year and 10 years)
HVPE seeks to achieve growth in
NAV per share materially ahead
of public markets over the long
term, as defined by the FTSE All
World Total Return (“FTSE AW
TR”) Index in US dollars. The FTSE
AW TR is a global equity index
with geographical weightings
comparable to HVPE’s portfolio.
Please refer to the Alternative
Performance Measures on
pages 126 to 127 for details of
performance calculations.
a. Absolute performance (US dollar)
1 year to 31 January:
10-years to 31 January 2024
(total return):
+251%
10 years to 31 January 2023: +289%
b. Relative performance vs. FTSE AW TR
2
1 year to 31 January:
10-year relative outperformance
(annualised) to 31 January 2024:
+4.3%
10-year relative outperformance (annualised) to
31 January 2023: +5.7%
KPIs and investment objective
Key Performance Indicators (“KPIs”)
1
1 Please note some of these KPIs are also Alternative Performance Measures (“APMs”). Please see pages 126 to 127 for our APMs.
2 Note “%” here refers to percentage points outperformance.
2024
2023
2022
2021
£23.15
£22.10
£27.75
£18.70
+4.8%
-20.4%
+48.4%
+1.9%
APM
2024
2023
2022
2021
$50.47
$49.11
$48.52
$35.97
-1.2%
+4.0%
+36.5%
+30.4%
2024
2023
2022
2021
+22.8%
-11.3%
+6.1%
+13.0%
APM APM
HVPE Annual Report and Accounts 202426
Balance Sheet Strength
The Board and the Investment
Manager actively monitor HVPE’s
balance sheet by means of a set
of key ratios, with a view to
maintaining a robust financial
position under all plausible
forecast scenarios.
Please see Managing the Balance
Sheet on page 28 for more details
on the ratios and page 31 of the
Investment Manager’s report for
more detail on the net portfolio
cash flow.
a. Total Commitment Ratio b. Net portfolio cash flow
3
Liquidity in the Shares
(Daily Trading Volume)
Current and prospective
shareholders place a high value on
liquidity as it provides reassurance
that there is a ready market in the
shares should they wish to manage
their position. The Board and the
Investment Manager monitor
liquidity on a regular basis using
the daily mean.
Daily liquidity, measured by mean
daily trading volume, declined over
the period. This largely reflects the
lower levels of trading activity from
market participants on the back of
wider macro concerns.
a. Change in mean daily tradingvolume
4
2024
2023
2022
2021
108,438
116,939
153,887
109,778
-7.3%
-24.0%
+40.2%
+55.9%
2024
2023
2022
2021
155%
155%
167%
167%
2024
2023
2022
2021
$320m
$(283m)
$(56m)
$(141m)
3 Cash distributions from private equity investments ($310 million) minus cash contributions to private equity investments ($593 million). Please refer to the Consolidated
Statements of Cash Flows on page 96.
4 Includes trading volume for both tickers, HVPE and HVPD. Historic years have been trued up to this effect.
APM APM
27Strategic Report Governance Financial Statements Other Information
2020 2021201920182017201620152014201320122011201020092008
Net Position ($m)
(97)
(128)
83
(74)
52
(141)
257
(211)
363
251
(324)
(396)
308
(431)
(515)
(588) (593)
290
835
532
310
307
48
137
(251)
181
(199)
204
(163) (162)
356
(270)
(313)
405
Distributions ($m)
Calls ($m)
Net Asset Value ($m)
2023 20242022
2,203 2,873 3,838 3,9213,9221,9241,7141,4751,3371,2661,1671,030944850718631862
Calls and distributions since inception, annual to 31 January ($m)
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 maintains a large pipeline of unfunded commitments
(the “Investment Pipeline”), which is the amount of capital committed to
an underlying HarbourVest fund, 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.
HVPE Annual Report and Accounts 202428
The Importance of the Credit Facility
HVPE makes commitments to HarbourVest funds, 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 funds 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.
At 31 January 2024, HVPE had a $800 million multi-currency
credit facility (the “Facility”), with Credit Suisse AG London
Branch (“Credit Suisse”) providing $400 million, Mitsubishi UFJ
Trust Banking Corporation (“Mitsubishi”) acting through its
New York Branch providing $300 million, and The Guardians
of New Zealand Superannuation, a Crown entity established
to manage the New Zealand Superannuation Fund, providing
$100 million.
From January 2019, the Facility featured an evergreen term,
with lenders bound by a rolling minimum notice period of
five years. As announced on 20 January 2023, following the
formal receipt of notices, the Facility reverted to a conventional
fixed-term arrangement. The $400 million commitment from
main lender Credit Suisse, and the $300 million commitment
from Mitsubishi, acting through its New York Branch, will both
expire on 12 January 2028. The remaining $100 million from
The Guardians of New Zealand Superannuation will expire on
15 August 2027.
During the course of 2023, HVPE drew a total of $275 million
on the Facility as a prudent measure to help manage portfolio
cash flow and to fund share buybacks. As at 31 January
2024, HVPE had $525 million available on the Facility.
Post period-end, as at 24 May 2024, the Company had
$435 million available.
The Board and Investment Manager are confident that this
Facility provides sufficient headroom for HVPE’s existing
and planned commitments over the period. 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.
The Board intends to refresh the facility and is currently well
advanced in this process.
Further detail on how we stress test the balance sheet can be
found overleaf.
Understanding HVPE’s Investment Pipeline
(Unfunded Commitments)
At 31 January 2024, 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 64% of
commitments are to primary funds, which have a longer
drawdown profile, whilst secondary and direct co-investment
funds represent approximately 26% and 10%, respectively.
Further detail on this, including the age breakdown of the
allocated pipeline, is provided on page 20.
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 this pattern 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,
as noted above, 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 large
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.
29Strategic Report Governance Financial Statements Other Information
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 now
has a 16-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 72.
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 a pro
rata share of borrowing carried on the balance sheets of some
of the HarbourVest funds in which HVPE is a Limited Partner
(“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 HarbourVest 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 105 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 2024, HVPE’s share of HVP fund-level
borrowing on a look-through basis was $508 million, a net
decrease of $9 million from the $517 million reported at 31
January 2023. Expressed as a percentage of NAV, this figure
was unchanged over the period, remaining at 13%. This can be
attributed directly to fewer new commitments being made, and
borrowings on older funds being paid down during the period.
Post period-end, as at 30 April 2024, the fund-level borrowing
decreased by $19 million and stood at $489 million.
HVPE’s year end total exposure of $508 million includes $466
million (92%) 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 $42 million
(8%) 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 2024, an investor should take the
total fund-level borrowing figure of $508 million and factor
in HVPE’s net cash/debt position at the Company level (i.e.
add the Company’s net debt of $135 million). The resulting
net total borrowing figure of $643 million would translate to
an approximate level of look-through gearing of 16% 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 105 of the Audited Consolidated
Financial Statements.
Managing the balance sheet continued
HVPE Annual Report and Accounts 202430
1 These are considered as Alternative Performance Measures. More detail can be found on pages 126 to 128.
2 The peer group refers to the UK listed private equity fund of funds: Patria Private Equity Trust, CT Private Equity Trust, ICG Enterprise Trust and Pantheon
International Plc.
3 Estimated distributions and estimated investments taken from base case scenario. For further details on cash flows and modelling, please see page 30.
APM
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 remained
unchanged year over year.
APM
2. Commitment Coverage Ratio
The nature of HVPE’s structure, whereby it commits to
HarbourVest funds, 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 decreased over the
financial year due to a decline in available liquidity.
APM
3. Medium-term Coverage Ratio (“MCR”)
HVPE’s Investment Manager 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 decreased over the financial year due
to a combination of lower available liquidity and refreshed
cash flow projections. This includes a reduced outlook for
distributions in the current market environment.
Total Commitment Ratio
(Total exposure to private markets investments as
apercentage of NAV.)
Investment Portfolio + Investment Pipeline $6.5bn
Divided by the NAV $3.9bn
167% (167% at 31 January 2023)
Commitment Coverage Ratio
(Short-term liquidity as a percentage of total
InvestmentPipeline.)
Cash + available credit facility $0.7bn
Divided by the Investment Pipeline $2.5bn
27% (36% at 31 January 2023)
Medium-term Coverage Ratio
(A measure of medium-term commitment coverage based on
current commitments.)
Cash + available credit facility (total $0.7bn) + next
12 months’ estimated distributions ($0.6bn)
3
$1.3bn
Divided by the next 36 months’ estimated
investments
3
$1.5bn
88% (104% at 31 January 2023)
Balance Sheet Ratios
1
Commitment Ratios
The Board and the Investment Manager refer to three ratios when assessing the Company’s commitment levels:
The most recent published ratios, as at 30 April 2024, can be found within HVPE’s latest monthly factsheet on its website:
www.hvpe.com.
31Strategic Report Governance Financial Statements Other Information
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 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 0.72% of average NAV in the 12 months
to 31 January 2024 (12 months to 31 January 2023: 0.36%),
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 2024 (12 months to
31 January 2023: 0.25%).
Third, HVPE pays management fees to HarbourVest with
respect to the funds in which it invests, and also for the
secondary co-investment in Conversus
1
made alongside
the HarbourVest funds. The total of all management fees in
the 12 months to 31 January 2024 was equivalent to 0.60%
of average NAV (12 months to 31 January 2023: 0.59%).
Finally, performance fees are charged on secondary
investments and direct co-investments (not on primary
investments which make up 50% of HVPE’s portfolio). In total,
these accounted for 0.48% of average NAV in the 12 months
to 31 January 2024 (12 months to 31 January 2023: 0.08%).
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 (0.23%), of 1.79% for the 12 months to 31
January 2024. 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 2024 of 1.79% was 0.61 percentage points higher
than the same period in the prior year, predominantly owing
to a significant increase in performance fees and the credit
facility costs.
The calculation above excludes the fees charged by the
underlying partnerships held by the HarbourVest funds.
An estimate of HVPE’s full look-through TER is included in
the Company’s Key Information Document, available on the
website. It is important to note that all performance data we
report to shareholders is, and always has been, net of all fees
and expenses.
1 “HVPE Charlotte Co-Investment L.P.” in the Audited Consolidated Schedule of Investments.
2010
0
1
2
3
4
5
2011 2012 2013 2014 2015 2016 2017 2018 2021 2022 2023 202420202019
Attributable Performance Fees
Attributable Management Fee (Funds)
Attributable Management Fee (Co-investment)
Fund Level Operating Expenses
HVPE Net Recurring Operating Expenses
HVPE Total Expense Ratio
HVPE Total Expense Ratio as a % of Average NAV
Managing costs
HVPE Annual Report and Accounts 202432
12 Months
to 31 January
2024
12 Months
to 31 January
2023
Operating expenses
2
0.72% 0.36%
HarbourVest fund operating expenses
3
0.22% 0.25%
Management fees
4
0.60% 0.59%
Operating expense ratio 1.54% 1.20%
Interest income
5
(0.23)% (0.10)%
Net operating expense ratio 1.31% 1.10%
Performance fees
6
0.48% 0.08%
Total net expense ratio
7
1.79% 1.18%
2 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.
3 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.
4 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.
5 This is shown as interest from cash and equivalents on the face of the Audited Consolidated Statements of Operations.
6 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.
7 TERs are calculated using the average NAV over the respective periods ($3.9 billion at 31 January 2024 and $3.8 billion at 31 January 2023).
Total Net Expense Ratio Breakdown
33Strategic Report Governance Financial Statements Other Information
Summary of net assets
31 January
2024
(millions*)
31 January
2023
(millions*)
Investment Portfolio $4,058 $3,616
Cash and equivalents $140 $198
Drawings on the HVPE credit facility $(275) $0
Net other assets/liabilities $(2) $24
NAV $3,921 $3,838
NAV per share ($) $50.47 $48.52
FX rate 1.2673 1.2320
NAV per share (£) £39.82 £39.38
Cash + equivalents + available credit facility $665 $998
The Private Equity Cycle
12 Months
ended
31 January
2024
(millions*)
12 Months
ended
31 January
2023
(millions*)
1. Commitments
New commitments to HarbourVest funds $295 $940
Investment Pipeline
Allocated $1,870 $1,872
Unallocated $631 $932
Total Investment Pipeline $2,501 $2,804
2. Cash Invested
Invested in HarbourVest funds $593 $588
% of average Investment Pipeline 22%
1
22%
2
3. Growth
Investment Portfolio (beginning) $3,616 $3,633
Cash invested $593 $588
Investment Portfolio growth $140 $(55)
Distributions received $(310) $(532)
Accrued distribution
3
$18 $(18)
Investment Portfolio (end) $4,058 $3,616
4. Distributions Received
Cash received from HarbourVest funds $310 $532
% of average Investment Portfolio 8%
4
15%
5
* Unless otherwise stated
Note: Totals and subtotals may not recalculate due to rounding.
1 This represents the percentage for the amount invested divided by the average of the Investment Pipelines at 31 January 2023 and 31 January 2024.
2 This represents the percentage for the amount invested divided by the average of the Investment Pipelines at 31 January 2022 and 31 January 2023.
3 The accrued distribution of approximately $18 million represents a reporting timing difference, whereby shares in HarbourVest Infrastructure Income Partnership (“HIIP”)
were redeemed effective October 1, 2022 but the cash distribution was not received until February 2023. As of January 31, 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.
4 This represents the percentage for the cash received divided by the average of the Investment Portfolios at 31 January 2023 and 31 January 2024.
5 This represents the percentage for the cash received divided by the average of the Investment Portfolios at 31 January 2022 and 31 January 2023.
HVPE Annual Report and Accounts 202434
35Strategic Report
Governance Financial Statements Other Information
Stakeholder How the Board Engages
Shareholders and
Prospective Investors
Shareholders and prospective investors are
today’s and tomorrow’s owners of the
Company and their interests are at the core of
every decision made by the Board. The
creation of long-term value for its shareholders
is central to the Company’s purpose. Support
from this group of stakeholders is critical to the
success of HVPE and to the delivery of its
investment objective
> The Board communicates with shareholders through the Company’s regular financial reporting
and monthly NAV updates which are published on HVPE’s website. It meets shareholders in person
at HVPE’s annual Capital Markets Session and other ad-hoc shareholder meetings, and results
presentations from these events are made available to all shareholders on the Company’s website.
The Board takes the opportunity presented by occasions such as the Capital Markets Session to
address investors’ concerns directly. The Board welcomes the views of shareholders who may
contact any Board member directly, including the Chair, the Senior Independent Director and the Chair
of the Audit and Risk Committee, through the Company Secretary in writing to the registered office
or by email to hvpecosec@bnpparibas.com.
> The Chair has held meetings with shareholders throughout the year at both HVPE’s and investors’
instigation, and the Chair has offered meetings to many other investors. He has also responded to
shareholder questions via letter and email. The content of these interactions is shared with other
Board members and with the Investment Manager as part of the Board’s priority to ensure that
shareholder views are considered in HVPE’s decision making.
> The Board engages regularly with the corporate brokers, receiving weekly market and trading
updates, and formal reports at each Board meeting. A major component of these reports involves
conveying the views of investors as expressed to the brokers.
> The Investment Manager communicates directly with shareholders and a summary of all investor
meetings held with the Investment Manager is delivered to the Board by the Investment Manager
as a standing item on the Board agenda. Investor relations forms a central item on the agenda at
every quarterly Board meeting, with a comprehensive report delivered twice a year.
> Every two years the Board commissions a third party to meet investors to listen to their perceptions
of HVPE and to understand what they need and expect from the Company.
> HVPE incorporates the results of all this shareholder engagement activity into Board discussions,
its reflections on strategy, and the decisions that it makes.
HarbourVest Partners
(theInvestment
Manager)
It is essential that the Board maintains a strong
relationship with its Investment Manager. As
set out in the Strategic Report, HarbourVest is
fundamental to HVPE’s business and to its
ability to achieve its strategic objectives.
HVPE invests in HarbourVest-managed funds
in order to achieve its purpose of providing
easy access to a diversified global portfolio of
high-quality private investments. It is heavily
reliant on HarbourVest’s expertise, its access
to investment opportunities and its
sophisticated and highly developed investment
processes.
> Whether individually or collectively, Board members maintain a continuous dialogue with the
Investment Manager and with different members of its dedicated HVPE team. This includes calls,
correspondence, and meetings which take place regularly on both a formal and an informal basis.
The nature of this open two-way interaction allows for clear communication, robust and constructive
challenge, and a strong partnership with a clear focus on promoting the success of HVPE for the
benefit of all its stakeholders.
> The Board requests and receives detailed monitoring reports from HarbourVest on the investments
and investment processes on a regular basis and in response to specific events. The Investment
Manager also proactively communicates with the Board on any matters which it believes are
pertinent to it. The emphasis is on detailed and informative dialogue.
> The Board undertakes strategic planning with the Investment Manager to assist the Company in
achieving its investment objective. Directors visit the Investment Manager’s offices, meet members
of its global team in a wide range of investment and operational functions, request information and
receive presentations from relevant members of those teams and have the opportunity to attend the
Investment Manager’s annual investment conference.
> The Board works with the Investment Manager to ensure that Board reports are continually evolving
to remain current and to provide the most useful and relevant information on which the Board can
base its decisions.
Directors’ Responsibilities and Stakeholder Engagement
The Board of Directors seeks to ensure high standards in corporate governance by adhering to the principles of the 2019 AIC
Code of Corporate Governance (the “AIC Code”) which states that all companies, regardless of their domicile, should report on
the matters set out in Section 172 of the UK Companies Act 2006. Accordingly, the Board has prepared the following summary
of some of the ways in which it builds and maintains its relationships with its stakeholders while also integrating consideration
of the Company’s impact on the environment and wider society. The Board believes that the success of the Company relies to
a great extent upon its stakeholders and that the interests of the Company and its stakeholders are fostered by a culture of mutual
honesty, transparency, and accountability.
The Directors engage with key stakeholders through a combination of face-to-face meetings, formal and informal reporting, and
regular monitoring. This is designed to provide sufficient understanding of the needs and priorities of stakeholders for them to be
factored into the Board’s decision-making process, and to maintain and enhance the Company’s long-term viability. Throughout
these interactions the Board encourages open and constructive two-way debate – the same approach that it adopts within its
own deliberations.
The following section identifies key stakeholders, explains their significance, and outlines how the Company engages with them.
The outcomes of that engagement are reflected in the key decisions made by the Board during the year with stakeholder interests
being considered at every Board meeting.
Stakeholder engagement
HVPE Annual Report and Accounts 202436
Stakeholder How the Board Engages
Community and Environment
The impact of the Company on the community and the environment in which it
operates, the positions adopted by its service providers, and, most importantly,
the consideration that the Investment Manager gives to ESG matters, both in
its own business and in its investment processes, are important topics at
Board meetings.
More details on our approach to ESG can be found on pages 68 and 69.
A description of the Investment Manager’s ESG practices, including
engagement with General Partners, can be found on pages 44 to 48.
> The Board receives training and formal updates on HarbourVest’s
ESG initiatives and processes at least twice a year and the HVPE
Board’s engagement with ESG matters helps to drive the ESG agenda
at HarbourVest.
> The Board monitors the development of the Investment Manager’s
ESG processes as they relate to the investments held by HVPE and
has developed reporting metrics to assist it in identifying progress
made in the content and scope of those processes.
> The Board maintains an open dialogue on governance matters with
all stakeholders. It also examines each of its material identified risks
to identify the impact that ESG considerations has on them.
> Questions about ESG policies and initiatives are incorporated as
part of the annual Management Engagement and Service Provider
Committee (“MESPC”) review and where appropriate, the Board
engages with service providers about their responses.
BNP Paribas
(the Company Secretary and
Administrator)
BNP Paribas S.A., Guernsey Branch fulfils the essential functions of Company
Secretary and Administrator. These are regulated roles which include oversight
of the NAV process, the issuing of regulated news announcements to the
market, and the key company secretarial role of facilitating the functioning of
the Board according to the policies and procedures of the Company and best
corporate governance practice.
> The Board holds regular meetings which ensures clear
communication between BNP Paribas, the Company, and its
Directors. The dedicated HVPE team at the Investment Manager
is also in frequent and regular communication with BNP Paribas.
> All Directors have open access to any member of the relevant BNP
Paribas team.
> Regular oversight of the full range of BNP Paribas’ functions is
conducted through Board and Committee reporting, and formal
MESPC review.
> The Board provides and encourages regular and timely
two-way feedback.
Credit Facility Providers
The credit facility is a key component of the Company’s balance sheet
management as it pursues an over-commitment strategy in order to remain as
fully invested as possible. It is therefore essential for the Company to have
funding available as it is needed.
> The Board regularly reviews the adequacy of the credit facility with
reference to its costs, the growth of the Company’s NAV and the likely
future size of the Company.
> The Board receives regular updates from the Investment Manager
on the status of the credit facility. These have become more frequent
following the change in status of the credit facility from evergreen
to fixed term. 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. The Board intends to refresh the credit facility and is currently
well advanced in this process.
> The Board ensures that the Investment Manager is in regular dialogue
with the Company’s lenders.
Regulators
Regulators are key stakeholders for HVPE in ensuring the maintenance of the
Company’s listing and an adequate and transparent level of disclosure in its
communications. This enables its shareholders to trade in its shares and to
receive clear, current, and meaningful information about the Company. Key
among them is the FCA in its capacity as the UK Listing Authority, the FRC in
its oversight of UK accounting and governance issues, and the Guernsey
Financial Services Commission. Membership of the AIC and compliance with
the AIC Code forms a central element of the Board’s efforts to maintain
compliance with relevant regulation and guidance.
> Through the activities of the Audit and Risk Committee (“ARC”) and in
conjunction with the Administrator and the Investment Manager, the
Board has established systems of controls which collectively ensure
compliance with required regulation.
> The Board receives regular reports on the monitoring of those
controls, which is overseen by the ARC.
> The Board regularly considers how it meets regulatory and
statutory obligations.
> Directors undertake individual training to keep them updated with the
latest regulatory developments.
Other Service Providers
The Company depends on a number of service providers who are essential to
the maintenance of its listed status and the delivery of its purpose. These
include its brokers, legal advisers, PR advisers and the Registrar.
> The Board has access to all service providers, as do both the
Investment Manager and the Administrator.
> The brokers provide regular reports to the Board and attend Board
Meetings to respond to Directors’ questions.
> The performance of all service providers is formally assessed
by the MESPC on an annual basis together with the commercial
sustainability of the terms of their engagement, for all
relevant parties.
> The MESPC has continued to develop its annual review of service
providers to ensure that service providers remain productively
engaged with the process and offer fresh perspectives on their
relationship with the Company through open two-way dialogue.
37Strategic Report Governance Financial Statements Other Information
Set out below are examples of the Board’s discussions and principal decisions made during the year under review. These have
been selected to illustrate how the Board incorporated stakeholder considerations into some of the key decisions that it made and
how these decisions have enabled the Company to make progress towards achieving its purpose.
Decision Impact on Long-term Success Stakeholder Consideration
Announcements of up to $25m of share
repurchases in May 2023 and of a further
$25m of share repurchases in October 2023.
The Board continued to consider the options
of share repurchase programmes as a
capital allocation decision to be measured
against other investment opportunities
available at the time and to be seen in the
context of the long term nature of the
Company’s investments.
The potential benefits to
shareholders of any buybacks of
shares are examined with reference
to the structured framework
established by the Board to ensure
that the effect on NAV per share is
likely to be positive in the long term,
and therefore of benefit to the
Company’s shareholders.
The Board commissioned an external
independent report to identify how the Company
and its Board were perceived by its major
external shareholders and potential
shareholders.
The existence of this feedback permits the
Board to respond to investor sentiment
expressed candidly to a professional third
party and thereby to identify and address
any concerns expressed.
The report acted as a source
of independent opinion on the
Company’s performance and
provided indications of where
communication could be improved,
or other actions taken.
The Board carried out a consultation exercise
with a variety of stakeholders to establish if
there was any appetite for a change in the
Company’s distribution policy.
The evolution of the share register has
increased the number of wealth managers
and retail investors who are holders of
HVPE’s shares. The Board responded to that
change to remain informed on the range of
its shareholders’ priorities.
The exercise was established
to ensure that the Board
remained aware of shareholder
considerations, that it responded
appropriately to them and was not
overly influenced by the opinions of
a single group.
The Board established a Distribution Pool as
part of its updating of the Company’s Capital
Allocation Policy. The Distribution Pool will, at
the Board’s discretion, fund capital returns to
shareholders in the form of buybacks and
special dividends. 15% of cash distributions
received from HVPE’s investments will be
dedicated to the Distribution Pool.
The establishment of the Distribution Pool
makes funds available to be deployed by the
Board in a flexible manner for the direct
benefit of shareholders. The Board’s aim is
to optimise the long-term total return for
shareholders through the cycle while
preserving the strength of the balance sheet.
The Board engaged actively with
shareholders in establishing this
Distribution Pool which includes
the potential to pay dividends. It is
designed to permit shareholders to
share more directly in the returns
created from HVPE’s portfolio.
Governance Changes resulting in a fully
independent Board with effect from the
2024 AGM.
Underpins the long-term success of the
Company in demonstrating that it is
operated in accordance with best
governance practice.
Change made in response to
concerns expressed by some
stakeholders and accomplished
through open dialogue between
a range of stakeholders including
shareholders, the Investment
Manager, and the Directors.
HVPE Annual Report and Accounts 202438
39Strategic Report
Governance Financial Statements Other Information
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 77 to 79.
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.
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.
Stable
HVPE has maintained its record of long-term
outperformance in NAV growth despite challenging
market conditions. It continues to enhance its investment
processes and the quantitative inputs to its investment
decision making and maintains its access to new
investment opportunities. No significant matters of concern
regarding the HarbourVest control environment arose
during the year.
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.
Stable
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 level
of this risk was increased in the previous financial year and
has been maintained at this heightened level.
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 identified as a Principal Risk during the
financial year under review and was disclosed as such
in the 2023 Annual Report and Accounts. Given that the
risk level was elevated at that stage, it has not been further
increased since then. 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.
Principal risks and uncertainties
HVPE Annual Report and Accounts 202440
Risk Management
As recommended by the Audit and Risk Committee (see the
report on the activities of that Committee on pages 77 to 79),
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 identified 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.
During the year under review, the Board has adapted its
approach to ESG risk which it now considers as a distinct
aspect of all the individual risks faced by the Company.
As a result, ESG risk has been integrated into the Board’s
assessment of all the material risks faced by the Company,
and while ESG regulatory risk is still considered as a risk in its
own right, broader ESG risk is no longer separately identified
as a principal risk.
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.
Stable
HVPE has maintained its record of long-term
outperformance in NAV growth despite challenging
market conditions. It continues to enhance its investment
processes and the quantitative inputs to its investment
decision making and maintains its access to new
investment opportunities. No significant matters of concern
regarding the HarbourVest control environment arose
during the year.
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.
Stable
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 level
of this risk was increased in the previous financial year and
has been maintained at this heightened level.
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 identified as a Principal Risk during the
financial year under review and was disclosed as such
in the 2023 Annual Report and Accounts. Given that the
risk level was elevated at that stage, it has not been further
increased since then. 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.
41Strategic Report Governance Financial Statements Other Information
Principal risks and uncertainties continued
Principal Risk Description and Potential Impact Mitigation and Management Commentary
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 29. 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 72 for information on the scenarios that are considered
by the Board.
Increased risk
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 fell significantly 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. The Board
intends to renew the credit facility well ahead of the earliest
expiry date.
Since the year end, there have been signs that the rate
of distributions may return to more usual levels but until
this has been established as an ongoing trend, 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 significantly.
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.
Stable
While discounts within the sector remain wide, they have
stabilised during the year and the market commentary on
the sector has become more balanced. 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 certain
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
Despite the substantive efforts made to communicate the
Board’s strategy and the NAV performance that has been
achieved, HVPE’s discount remains at the more extreme
end of the discount range. A long-term improvement has
not yet been seen and any positive response to the Board’s
efforts has not yet been convincingly reflected in the
share price performance despite the continued positive
investment performance and increase in NAV per share.
HVPE Annual Report and Accounts 202442
Principal Risk Description and Potential Impact Mitigation and Management Commentary
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 29. 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 72 for information on the scenarios that are considered
by the Board.
Increased risk
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 fell significantly 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. The Board
intends to renew the credit facility well ahead of the earliest
expiry date.
Since the year end, there have been signs that the rate
of distributions may return to more usual levels but until
this has been established as an ongoing trend, 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 significantly.
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.
Stable
While discounts within the sector remain wide, they have
stabilised during the year and the market commentary on
the sector has become more balanced. 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 certain
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
Despite the substantive efforts made to communicate the
Board’s strategy and the NAV performance that has been
achieved, HVPE’s discount remains at the more extreme
end of the discount range. A long-term improvement has
not yet been seen and any positive response to the Board’s
efforts has not yet been convincingly reflected in the
share price performance despite the continued positive
investment performance and increase in NAV per share.
43Strategic Report Governance Financial Statements Other Information
Purposeful growth (Environmental, Social, and Governance)
HVPE’s Approach to ESG
HVPE’s exposure to companies is through HarbourVest-
managed funds which invest indirectly in companies through
various structures including co-investments, secondary
transactions, or other funds managed by experienced
General Partners.
HVPE delegates the responsibility for ESG at the investment
level to HarbourVest, but oversees this activity through
regular engagement with the Investment Manager to stay
fully abreast of its activities. HarbourVest outlines how it
takes ESG matters into consideration overleaf.
HVPE Annual Report and Accounts 202444
Purposeful growth (Environmental, Social, and Governance)
From our Investment Manager, HarbourVest Partners:
HarbourVest’s commitment to ESG is founded on a tenet that
has served us well for over 40 years: better information drives
better results. In support of this belief, we centre our approach
to responsible investing on three areas of focus: performance,
transparency, and alignment.
Performance
• Invest with a broader lens to make well-informed decisions
• Manage portfolio risk and support value creation
Transparency
• Report to stakeholders and support industry standards
• Anticipate and comply with ESG-related regulation
Alignment
• Add value to our partnerships and clients
• Strive to be a responsible corporate citizen
HarbourVest has built a robust oversight structure to support
our ongoing ESG implementation efforts. Our Executive
Management Committee (“EMC”) is ultimately responsible for
our ESG Policy and objectives, with critical inputs from both
our ESG Council and ESG team, the latter of which reports
into our Head of Investments and works closely with our
ESG investment team leads to integrate ESG factors into our
investment processes. ESG investment processes are the
responsibility of each investment team member, and we place
a high priority on regular staff training relating to our ESG
objectives, process, and developments in our approach.
Throughout 2023, we continued to invest in our ESG program
to expand our resourcing, refine our governance and policies,
and integrate ESG data into our systems and processes, all in
an effort to help us uncover better information and deliver better
results for our clients. We also firmly believe that we have a role
to play in seeking solutions to ESG-related challenges for private
markets investors, and we selectively participate in initiatives
and produce research that aligns with our priorities.
At the end of 2023, we launched the HarbourVest ESG Forum,
a consortium of HarbourVest professionals responsible for
representing their respective functions at quarterly meetings to
learn about key updates from our ESG team and report back to
their respective teams. As HarbourVest continues to grow, the
ESG Forum will bring colleagues across our global functions
together to provide an effective channel for both disseminating
updates on our ESG program and offering feedback.
Human rights
https://www.harbourvest.com/insights-news/insights/harbourvest-esg-report-2023-human-rights/
Natural capital
https://www.harbourvest.com/insights-news/insights/harbourvest-esg-report-2023-natural-capital/
TCFD report
https://www.harbourvest.com/insights-news/insights/harbourvest-esg-report-2023-tcfd-report/
Read more about our progress and current initiatives, including updates on human rights,
natural capital, and our third TCFD Report, in our most recent Annual ESG Report
https://www.harbourvest.com/insights-news/insights/harbourvest-esg-report-2023/
45Strategic Report
Governance Financial Statements Other Information
HarbourVest has instituted robust ESG due diligence
procedures within each of our investment strategies to support
sound investment decision-making and create compelling, risk-
adjusted returns for our investors. ESG review is incorporated
as standard in investment committee materials across all
strategies and typically includes our ESG Manager Scorecard
and RepRisk information.
ESG Manager Scorecard
Our proprietary ESG Manager Scorecard is used to evaluate
a GP’s ESG integration approach and maturity. Evaluation
criteria are aligned with industry standards and the resulting
assessment is generated by proprietary weightings, taking
into account the GP’s policy, processes, and resources to
manage financial ESG-related risks and opportunities in their
investments, and their commitment to transparent and regular
portfolio reporting. The ESG Scorecard ranking methodology
runs from 0.0 (lowest) to 4.0 (highest). A 4.0 ranking
represents a level of best practice that is not market standard;
we set a deliberately high bar to give the more advanced
managers room to improve.
We believe a GP’s ESG policies, processes, and resources can
be an indicator for fund excellence and should be considered
alongside other investment indicators accordingly. Our
proprietary ESG Manager Scorecard provides an overall ESG
rating for GPs based on an assessment formed by evaluating
three key scorecard indicators:
Partnership management
• Quality of ESG policy and ability to execute on
commitments
• Commitments to areas such as climate change, and
diversity, equity and inclusion (DEI)
Investment process
• Sophistication and mechanics behind processes for
considering ESG factors in investment decision-making
and portfolio engagement
Reporting and transparency
• Quality of reporting and incident monitoring
• Commitment to proactively and transparently engage with
LPs on ESG activities
Summarizing the data and metrics
We compile our ESG Scorecard data annually to assess
GP rankings and identify trends. This year’s analysis
draws from a dataset of 270 GPs as of November
2023. From our most recent benchmarking analysis, we
generally found improvements across assessed metrics,
albeit at a moderate scale. This gradual improvement
is consistent with our expectations, as thoughtful ESG
programs take time and investment to build. High level
observations regarding 2023’s scores include:
ESG Data Insights
Purposeful growth (Environmental, Social, and Governance) continued
ESG overall
A tighter concentration of scores in the upper ranges
indicates that most GPs have established ESG process,
policy, and resourcing. We continue to generally observe
the most sophisticated practices from European GPs
and those that are focused on the buyout market.
2023
ESG process, policy, and resourcing
82% have an ESG policy
31% are PRI signatories
30% have dedicated ESG resourcing
Reporting and transparency
27% track ESG KPIs
27% have ESG on their LPAC agenda as standard
34% produce an annual ESG report
< 1.0
2.0-2.9
1.0-1.9
3.0-4.0
Overall ESG score: Derived from
Scorecard rankings on partnership
management, investment process,
and reporting and transparency.
HVPE Annual Report and Accounts 202446
RepRisk is a global database that provides reputational
risk ratings for GPs and operating companies based on
an assessment of reported ESG incidents associated with
that company, which are subsequently weighted according
to severity, frequency, and source. Risk categories include
reporting on fraud, misleading communication, child labor,
occupational health and safety, and pollution or waste.
In 2023, we screened 255 incidents through RepRisk and
selectively engaged with GPs on 36 reports which we
considered to be potentially material. These engagements
demonstrate the quality of our partnerships with GPs and
allow us to better understand their ESG risk management
and incident response capabilities.
Climate change
While we noted an uptick in the proportion of GPs that
have developed a climate change strategy in 2023, most
GPs still have much work to do on climate risk analysis,
emissions data collection, and target-setting. Due to the
nascency of climate change methodology and guidance
in private equity, this is unsurprising, and we expect that
industry progress will support GPs in moving forward on
developing their approach to climate change.
2023
29% have developed and 33% are committed to developing a
climate change strategy
6% make TCFD-aligned disclosures
16% have conducted climate risk mapping of the portfolio
20% conduct carbon footprint analysis of portfolios
DEI
Of the three main outputs of our Scorecard, we generally
saw the most progress from GPs on DEI. This included
improvements in monitoring workplace diversity and more
robust initiatives to drive diversity.
2023
60% have a DEI/anti-harassment policy
71% monitor workplace diversity
24% conduct anti-bias/conscious inclusion training
71% have recruitment initiatives in place to drive DEI
28% have thoughtful policies in place to improve retention
17% have mentorship programs
< 1.0
2.0-2.9
1.0-1.9
3.0-4.0
< 1.0
2.0-2.9
1.0-1.9
3.0-4.0
Active companies
tracked by HarbourVest
14,500
GPs
tracked by HarbourVest
700+
Incidents
screened by HarbourVest
255
Direct engagements* linked to
RepRisk data
36
RepRisk by the numbers (in 2023)
* Direct engagements reflect only the number of completed
engagements as of 31 December 2023 and do not include
engagements that were initiated in 2023 but are still ongoing as of
calendar year-end.
Climate change score: Derived
from Scorecard indicators on
a manager’s commitment to
developing a climate change
strategy and implementation of
a strategy in alignment with the
Recommendations of the Taskforce
on Climate-related Financial
disclosures (TCFD).
DEI score: Derived from Scorecard
indicators on a manager’s senior
investment team diversity, their
approach to improving diverse
recruitment and retention, advocacy,
and their strategy with respect to
diversity in the portfolios.
47Strategic Report Governance Financial Statements Other Information
ESG Data Convergence Initiative
In the second half of 2023, we reached out to GPs that
we actively invest with that are members of the ESG Data
Convergence Initiative (EDCI), an LP-GP collaboration that
seeks to standardise ESG metrics and provide a means of
comparative reporting and benchmarking on ESG for private
companies. We requested company-level ESG data aligned to
the EDCI metrics where available, and we were pleased with
the results of this first-time exercise which gave us ESG KPI
coverage for 15% of HarbourVest’s portfolio by current value.
As more GPs support the EDCI and implement the process
into their engagements with portfolio companies, HarbourVest
will increasingly build a more complete dataset of ESG metrics
of the companies in which we invest.
Initiative Climat International (iCI)
As global chair of the initiative Climat International (iCI), our
ESG team lead, Natasha Buckley, invested significant time in
coordinating this global practitioner network to develop useful
resources that will support standardised practices on climate
risk measurement, target-setting, and disclosure in private
markets. We are pleased that Natasha’s individual efforts with
the iCI have been recognized through her inclusion on PEI’s
New Private Markets’ 2024 list of 50 influencers in sustainable
private markets.
1
Private Equity CEO Taskforce of the Sustainable
Markets Initiative (PESMIT)
HarbourVest’s co-CEO Peter Wilson continued to serve as
an active member of the Private Equity CEO Taskforce of the
Sustainable Markets Initiative (PESMIT), collaborating with
other action-oriented private equity leaders. The Task Force
released key guidance in 2023 on valuing carbon, biodiversity
and ESG metrics in private equity.
Private Markets Decarbonisation Roadmap
Through our leadership roles with the iCI and PESMIT,
HarbourVest co-led the development of the Private Markets
Decarbonisation Roadmap (PMDR) in 2023, which provides a
common language for GPs to assess and communicate where
their assets are on their decarbonisation journey. By gathering
industry traction behind a common framework, the objective
is to gain insight on portfolio alignment with the low carbon
transition and to support effective progress.
Industry Stewardship
Purposeful growth (Environmental, Social, and Governance) continued
1
https://www.newprivatemarkets.com/influencers-in-sustainable-private-markets-sustainability-professionals/
HVPE Annual Report and Accounts 202448
More ESG in practice
Carbon emissions strategy
HarbourVest continues to annually measure, reduce, and
compensate for our firm’s operational emissions through
the purchase of carbon offsets. In 2023, we partnered
with ClimeCo to offset our 2022 operational emissions
resulting primarily from purchased electricity, waste, and
business travel. Through ClimeCo, we provided funding
to an independently verified project operating local to our
headquarters in Massachusetts: the Greater New Bedford
LFG Utilization Project. HVPE has also invested in this
project through the purchase of carbon offsets.
The second-largest driver of global warming is methane,
a greenhouse gas 28 times more potent than carbon dioxide.
Landfills are a major source of methane, which is created
when organic material decomposes underground. The Greater
New Bedford project is a landfill gas-to-energy plant that has
an electric power production capacity of approximately 3.3
megawatts. The captured landfill gas fuels four reciprocating
internal combustion engine-generators, producing power for
the region’s electric grid while reducing the amount of methane
released into the atmosphere by destroying it in the engines.
49Strategic Report
Governance Financial Statements Other Information
Top ten managers across all
strategies at 31 January 2024 held
within HVPE’s underlying portfolio.
Manager spotlight
1
Primary Investments
> Commitments to newly-formed funds being
raised by experienced managers
> Access to leading private equity funds
> Comprehensive foundation of a private
equity programme
> Potential driver of long-term performance
Secondary Investments
> Purchases of private equity assets in
existing funds or portfolios of direct
investments
> Attractive pricing opportunities
> Diversification across prior vintage years
> Potential for J-curve mitigation (positive
returns may be achieved more rapidly)
1
The strategy shown within this section in bold denotes the dominant strategy exposure for each manager. The ‘lightbulb’ boxes above, and on page 56, are explanations of
the respective strategies.
HVPE Annual Report and Accounts 202450
1
IDG Capital Partners (IDG-Accel
China Capital Associates)
Primary, Secondary
Stage: Venture & Growth Equity
Venture investment into companies located in China, with a
focus on technology-enabled consumer, enterprise solutions,
and artificial intelligence sectors. The manager has a strong and
consistent investment track record, evidenced by its funding
of Pinduoduo and Yuanfudao.
% of Investment Portfolio
at 31 January 2024
3.4%
Investment value
at 31 January 2024
$139.2m
2
Insight Venture Management,
LLC
Primary, Secondary
Stage: Venture & Growth Equity
Growth stage investments primarily in the US, with a focus on the
software, software-enabled services, and internet sectors. The
manager leverages its deep in-house sourcing and operating
resources to execute on its growth strategy, which has resulted
in consistent strong performance across fund cycles.
% of Investment Portfolio
at 31 January 2024
3.1%
Investment value
at 31 January 2024
$126.5m
51Strategic Report
Governance Financial Statements Other Information
4
Thoma Bravo
Primary, Secondary
Stage: Buyout
Primarily buyout investment in mid-market companies located
in the US, with a focus on the software and technology sectors.
The manager has a demonstrated capability in unlocking value
through various transaction types with deep expertise from its
focused sector approach.
% of Investment Portfolio
at 31 January 2024
2.2%
Investment value
at 31 January 2024
$91.2m
Manager spotlight continued
3
Index Ventures
Primary
Stage: Venture & Growth Equity
Venture and growth equity investment primarily in Europe and the
US, with a focus on disruptive technology and innovative business
models in the fintech, enterprise software, online marketplaces,
and gaming/entertainment sectors. The manager has a strong
investment track record; its portfolio companies include Adyen,
Datadog, Roblox, Robinhood, Farfetch, and Revolut.
% of Investment Portfolio
at 31 January 2024
2.3%
Investment value
at 31 January 2024
$93.0m
HVPE Annual Report and Accounts 202452
5
Hellman & Friedman
Primary, Secondary
Stage: Buyout
Buyout stage and large-scale investments primarily across North
America and Europe. The manager invests across a broad range
of industries, including software, financial services, business
services, healthcare, internet & media, industrials, and consumer.
% of Investment Portfolio
at 31 January 2024
1.7%
Investment value
at 31 January 2024
$68.0m
6
SK Capital Partners
Primary
Stage: Buyout
Buyout and growth equity stage investments in US businesses
operating within the specialty chemicals and materials sectors, as
well as in certain related segments of the healthcare industry.
% of Investment Portfolio
at 31 January 2024
1.4%
Investment value
at 31 January 2024
$55.0m
53Strategic Report
Governance Financial Statements Other Information
Manager spotlight continued
8
Andreessen Horowitz
Primary
Stage: Venture & Growth Equity
Early and later stage high-growth investments primarily in
US-based technology companies in the consumer, enterprise,
and fintech sectors. The manager leverages its extensive
operating resources to drive accelerated growth at portfolio
companies and actively develop its strategic networks.
% of Investment Portfolio
at 31 January 2024
1.3%
Investment value
at 31 January 2024
$52.7m
7
Battery Ventures
Primary
Stage: Venture & Growth Equity
Multi-stage investments into technology businesses based in the
US (and to a lesser extent in Europe and Israel) with an emphasis
on application software, IT infrastructure, consumer internet/
mobile, and tech-enabled services. The manager’s portfolio is
diversified by stage, investing in seed, early, growth, and buyout
opportunities.
% of Investment Portfolio
at 31 January 2024
1.3%
Investment value
at 31 January 2024
$54.0m
HVPE Annual Report and Accounts 202454
10
Berkshire Partners LLC
Secondary, Primary
Stage: Buyout
Middle market buyout investments based in North America
focused on five core sectors: consumer, communications &
digital infrastructure, healthcare, technology, and services &
industrials. The manager takes a long-term, active approach
to help enterprises build management and operating systems
to enable scalable, profitable growth.
% of Investment Portfolio
at 31 January 2024
1.2%
Investment value
at 31 January 2024
$47.4m
9
Corsair Capital
Infrastructure Partners
Secondary
Stage: Infrastructure & Real Assets
Infrastructure investment across key infrastructure sub-sectors,
with a focus on high-quality transportation and logistics assets.
The manager’s current portfolio includes a Spanish toll road
platform, Australian ports business, and a North American airport
developer and operator.
% of Investment Portfolio
at 31 January 2024
1.2%
Investment value
at 31 January 2024
$48.5m
55Strategic Report
Governance Financial Statements Other Information
Top ten disclosable
1
companies at
31 January 2024 held within HVPE’s
direct co-investment portfolio.
Top ten direct companies
1 Some direct holdings cannot be disclosed due to confidentiality agreements in place.
Direct Co-investments
> Direct exposure to private equity-backed
companies
> Lower cost than obtaining the equivalent
interest in a private company through a
traditional direct manager via a primary fund
HVPE Annual Report and Accounts 202456
1
Action Nederland BV
Stage: Buyout I Location: Netherlands
European discount general merchandise retailer
HarbourVest invested in European discount retailer Action Nederland
alongside 3i. The company operates more than 2,200 stores across ten
European countries, offering approximately 6,000 unique items across
a range of general merchandise categories including household items,
decoration, DIY, personal care, toys, and food and drink. The company
uses everyday low prices and a constantly rotating assortment of
merchandise to drive recurring customer traffic and create a “treasure
hunt” dynamic. The Investment Manager believes this is a compelling
opportunity to invest in a consistently well-performing, calibrated asset
which has good whitespace potential.
% of Investment Portfolio
at 31 January 2024
0.7%
Investment value
at 31 January 2024
$28.8m
2
Preston Hollow Capital
Stage: Buyout I Location: United States
Speciality municipal finance company
Preston Hollow Capital is a specialty municipal finance merchant bank
focused on niche underwriting and opportunistic investing. HarbourVest
co-invested with Stone Point Capital, a finance-focused GP with deep
experience in the credit underwriting arena. Since the initial investment,
Preston Hollow Capital has demonstrated strong performance, having
significantly grown its investment book and generated distributable
proceeds. The Investment Manager likes the investment as the company
has an impressive management team track record and operates within
a large municipal bond market which presents various
business opportunities.
% of Investment Portfolio
at 31 January 2024
0.7%
Investment value
at 31 January 2024
$27.9m
57Strategic Report
Governance Financial Statements Other Information
3
Howden Group Holdings
Stage: Buyout I Location: United Kingdom
UK-based insurance distributor, providing B2B insurance through
its core activities of retail insurance broking, specialty and
reinsurance broking and managed agency underwriting
Howden is a UK-based specialty commercial insurance broker and
underwriting agency. The company serves an international client base
and has a differentiated position as one of the top brokers internationally
and within the Lloyd’s of London market. Founded in 1994, Howden is
the largest European headquartered insurance intermediary, operating
across more than 250 offices in 45 countries managing approximately
$30 billion of gross written premiums. The Investment Manager likes the
investment as Howden is a calibrated asset with a demonstrated track
record of organic growth and strong competitive positioning in a resilient
sector. Furthermore, Howden is well positioned to benefit from continued
consolidation in the insurance brokerage market, having demonstrated a
strong track record of M&A.
% of Investment Portfolio
at 31 January 2024
0.4%
Investment value
at 31 January 2024
$17.9m
4
Olink Proteomics Holding AB
Stage: Venture & Growth Equity I Location: Sweden
Protein biomarker discovery
Founded in 2016, Olink is a biotechnology company focused on products
and services for human protein biomarker discovery, verification, and
validation through its internally developed technology. The Investment
Manager believes Olink is a compelling investment as the company’s
products and services play a role in decoding the biology of almost all
disease areas and are used most frequently in immunology, oncology,
neurology, cardiovascular, and metabolic diseases. Since its inception,
Olink has served a customer base of more than 900 customer accounts
in over 40 countries worldwide. Olink supports 75% of the world’s largest
50 biopharmaceutical companies (by 2021 research and development
spending) including 19 of the largest 20, as well as many top
academic institutions.
% of Investment Portfolio
at 31 January 2024
0.4%
Investment value
at 31 January 2024
$16.3m
Top ten direct companies continued
HVPE Annual Report and Accounts 202458
5
Knowlton Development Corporation
Stage: Buyout I Location: Canada
Personal beauty formulator and manufacturer
Knowlton Development Corporation (KDC) is a contract manufacturer of
personal care and beauty products providing both custom formulation
as well as packaging solutions and services. HarbourVest co-invested
alongside Cornell Capital, a private investment firm focused on the
consumer, industrial, and financial services sectors. Since the initial
investment, KDC has completed several acquisitions, including HCT
Group, Zobele, and Aerofil, reinforcing its position as a critical and
innovative partner with an end-to-end offering, and increasing its global
coverage and scale. The Investment Manager finds the investment
compelling as KDC has strong market positioning relative to competitors,
a large and diversified customer base, an attractive financial profile, and
multiple upside levers to create value.
% of Investment Portfolio
at 31 January 2024
0.4%
Investment value
at 31 January 2024
$15.0m
6
AssuredPartners, LLC
Stage: Buyout I Location: United States
Insurance brokerage
AssuredPartners is a middle market insurance brokerage that distributes
property, casualty, and employee benefits and wholesale insurance
across the US. The transaction represents an opportunity to support a
large and diversified platform that is positioned to continue consolidating
a highly fragmented insurance brokerage market. The company grew
during 2022 and expects to sustain its organic growth as it continues to
benefit from a favourable insurance rate environment. The Investment
Manager likes the AssuredPartners investment given its recession-
resiliency, recurring revenue with strong customer retention, strong f
ree cash flow generation, and fragmented industry landscape.
% of Investment Portfolio
at 31 January 2024
0.3%
Investment value
at 31 January 2024
$14.2m
59Strategic Report
Governance Financial Statements Other Information
7
Staples, Inc.
Stage: Buyout I Location: United States
Office supply retailer
Staples (SPLS) is a publicly-traded US retailer and distributor of office
supplies founded in 1985 that currently has over 75,000 employees.
HarbourVest invested in the public-to-private acquisition of Staples
alongside Sycamore Partners. Staples currently operates in two business
segments: North American Delivery (“NAD”), a B2B provider of office
and other supplies that represents approximately 60% of revenue; and
North American Retail, which operates over 1,500 branded Staples stores
across North America and represents approximately 40% of revenue.
The Investment Manager believes this investment is enticing as
separating the company into three distinct businesses will enable the
management teams of each to plan and execute targeted value creation
strategies and unburden the healthy and growing NAD and Canada Retail
businesses from the declining, but market leading, US Retail business.
% of Investment Portfolio
at 31 January 2024
0.3%
Investment value
at 31 January 2024
$13.7m
8
Lytx
Stage: Buyout I Location: United States
Driver risk management software
Lytx is a provider of telematics software and services to fleets that
improve driver behaviour and reduce collision-related expenses by
delivering event-based video and driver analytics. HarbourVest originally
invested in the company in 2018 alongside Clearlake Capital Group and
subsequently participated in the Permira-led 2020 recapitalisation of
the company to become its second largest shareholder. The Investment
Manager believes that the investment represents the opportunity to
invest in a highly calibrated asset with the company amassing more
driver data than its competitors, representing a meaningful competitive
moat and a highly strategic asset.
% of Investment Portfolio
at 31 January 2024
0.3%
Investment value
at 31 January 2024
$13.7m
Top ten direct companies continued
HVPE Annual Report and Accounts 202460
10
Community Brands
(formerly Ministry Brands)
Stage: Venture & Growth Equity I Location: United States
Software provider for faith-based organisations
Community Brands is a provider of software to more than 55,000
faith-based and member-based organisations in the US. HarbourVest
co-invested with Insight Venture Partners, an investor with a significant
understanding of the software-related and internet sectors. The
Investment Manager likes Community Brands as the company has
a market-leading position with scale that allows for further competitive
advantages. It also has a unique acquisition platform and operates
within a large and growing market.
% of Investment Portfolio
at 31 January 2024
0.3%
Investment value
at 31 January 2024
$11.5m
9
IVC Evidensia
Stage: Buyout I Location: United Kingdom
Veterinary clinic platform
Independent Vet Care (“IVC”) is a pan-European operator of veterinary
clinics with over 1,200 locations and approximately 16,000 employees.
IVC acquires individual or groups of clinics to integrate them into its
European platform. The company typically partners with the veterinarians
of the clinics and manages the central accounting and administrative
functions while also helping clinics in their digitalization, modernization,
and optimization of administrative processes, membership, and client
management. The Investment Manager finds the investment compelling
as IVC has the ability to capture the untapped consolidation potential in
additional European countries to become the leading pan-European vet
clinics platform with a strong digital offering. The company’s track record
illustrates that it is a high-quality business with leading market positions
across the UK and the Nordics in an attractive industry with strong growth
dynamics and proven downturn resilience.
% of Investment Portfolio
at 31 January 2024
0.3%
Investment value
at 31 January 2024
$12.4m
61Strategic Report
Governance Financial Statements Other Information
Governance
HVPE Annual Report and Accounts 202462
64 Board of Directors
66 Directors’ report
74 Board structure and committees
77 Audit and Risk Committee
80 Nomination Committee and
Management Engagement and Service
Provider Committee
81 Remuneration Committee and Inside
Information Committee
82 Directors’ remuneration report
83 Statement of Compliance with the
AIC Code of Corporate Governance
“
The Company’s long-term
performance remains
strong and is the basis
of the Board’s belief
in our strategy.”
Ed Warner Chair, HVPE
63 Governance
Strategic Report Financial Statements Other Information
Elizabeth (“Libby”) Burne
Independent
Non-Executive Director,
appointed March 2021
Key relevant skills:
> Chartered certified accountant
> Extensive audit and risk management experience
> Over 20 years’ experience of working with Guernsey regulated, listed,
and closed-ended investment structures
Libby Burne has spent her career working within the financial services
sector. She is a Non-Executive Director of Bluefield Solar Income Fund
Limited (FTSE 250) as well as a number of unlisted venture capital,
private equity, real estate and insurance structures. Prior to becoming
a Non-Executive Director, Libby was an audit director at PwC in the
Channel Islands and, previously, PwC Australia. Libby is a Fellow of the
Association of Chartered Certified Accountants, holds a degree in Applied
Accounting, and is a Guernsey resident, as such bringing recent and
relevant financial and sector experience.
Committees:
Chair of the Management Engagement and Service Provider Committee,
and Member of the Audit and Risk, Nomination, and Remuneration
Committees.
Anulika Ajufo
Independent Non-Executive
Director, appointed
May 2022
Key relevant skills:
> Extensive private equity investment experience
> Experience in investment strategy development and execution
> Strong background in ESG
Anulika manages a portfolio of investments across EMEA and is the
Founder of the Sequoia Platform, a leading educational not for profit
focused on social mobility in the United Kingdom. She recently stood
down as Chair of the Board of Governors at University of East London.
Anulika has extensive investment experience and believes in investing
for good. Having worked at some of the leading financial institutions,
Lehman Brothers and Goldman Sachs in investment banking, and
in private equity with The Carlyle Group and Soros Fund, Anulika has
developed an impressive investment track record. She has led the
development of greenfield impact investment structures in emerging
markets and developed inclusive investment strategies for development
finance institutions (DFIs), corporations, and foundations.
Committees:
Member of the Audit and Risk, Management Engagement and Service
Provider, Nomination, and Remuneration Committees.
Francesca Barnes
Senior Independent
Non-Executive Director,
appointed April 2017
Key relevant skills:
> Extensive private equity investment experience
> Ten years’ governance experience on public and private company
boards
> Risk management experience
Francesca Barnes is a Non-Executive Director of NatWest Holdings
Limited, and a number of NatWest Group’s other ring-fenced bank
boards, as well as Capvis private equity. She was on the board of Coutts
& Co, and chair of the Audit and Risk committees until 2021. She is a
member of the University of Southampton council and has been Chair of
Trustees for Penny Brohn UK and Chair of Governors for two secondary
schools. Francesca spent 16 years at UBS AG. For the latter seven of
these she served as Global Head of Private Equity, following on from
senior positions in restructuring and loan portfolio management. Prior
to this, she spent 11 years with Chase Manhattan UK and US, in roles
spanning commodity finance, financial institutions, and private equity.
Committees:
Chair of the Remuneration Committee, and Member of the Audit and
Risk, Management Engagement and Service Provider, and Nomination
Committees.
Edmond (“Ed”) Warner
Chair, Independent
Non-Executive Director,
appointed August 2019
Key relevant skills:
> Leadership skills
> Investment strategist
> Extensive financial services experience
Ed Warner has extensive financial services experience from years spent
in senior positions at several investment banks and financial institutions,
including IFX Group, Old Mutual Plc, NatWest Markets, and Dresdner
Kleinwort Benson. He has considerable Plc experience and has chaired
the boards at a range of prominent organisations. He is also currently
independent chair of the online derivatives exchange LMAX, and of JLEN,
a listed environmental infrastructure investment fund.
Prior chair roles include Air Partner Plc, the BlackRock Energy and
Resources Income Trust, Grant Thornton UK LLP, Standard Life Private
Equity Trust, and Panmure Gordon & Co.
Committees:
Chair of the Inside Information, and Nomination Committees and
Member of the Management Engagement and Service Provider, and
Remuneration Committees.
Board of Directors
HVPE Annual Report and Accounts 202464
Carolina Espinal
Non-Executive Director,
appointed July 2019
Key relevant skills:
> 19 years’ private equity investment experience
> Responsibility for strategy and business development of European and
global primary businesses
Carolina Espinal joined HarbourVest in 2004 to focus on partnership
investments in Europe and other emerging markets and became a
Managing Director in 2015. Carolina focuses on managing European
venture capital and buyout partnership investments and has collaborated
with the secondary and co-investment groups on several investment
opportunities. As a HarbourVest executive she currently serves on
the advisory boards of funds managed by Synova, Inflexion, and
Advent International.
Her previous experience includes two years as a financial analyst with
the Merrill Lynch Energy and Power M&A team in Houston.
Carolina graduated from Rice University with a BA in Managerial Studies,
Policy Studies, and Economics in 2000. She received an MSc in Finance
from the London Business School in 2003.
Committees:
None (as a HarbourVest executive)
Steven Wilderspin
Independent
Non-Executive Director,
appointed May 2018
Key relevant skills:
> Chartered accountant, qualified in audit
> Extensive governance experience on public and private company
boards
Steven Wilderspin has more than 15 years’ experience as a Non-
Executive Director on the boards of private structures and listed
investment companies.
Steven, a qualified Chartered Accountant, has provided independent
directorship services since 2007. He has served on a number of
private equity, property, and hedge fund boards as well as commercial
companies. Steven currently serves as the Chair of Blackstone Loan
Financing Limited, Chairman of the audit and risk committee of GCP
Infrastructure Investments Limited, and non-executive director of
Phoenix Spree Deutschland Ltd. Steven previously served on the
Board of 3i Infrastructure Plc, where he was Chairman of the audit and
risk committee. From 2001 until 2007, Steven was a Director of fund
administrator Maples Finance Jersey Limited, where he was responsible
for fund and securitisation structures. He originally qualified with PwC in
London. Steven has recent and relevant financial and sector experience.
Committees:
Chair of the Audit and Risk Committee, and Member of the Inside
Information, Nomination, Remuneration, and Management
Engagement and Service Provider Committees.
65Strategic Report Governance Financial Statements Other Information
Directors’ report
Annual Report and Audited Consolidated
Financial Statements
The Directors present their report and the Audited
Consolidated Financial Statements (the “Financial Statements”
or “Accounts”) for the year ended 31 January 2024.
The Strategic Report starts with the Chair’s Statement on
pages 4 to 7, and describes HVPE’s principal activities, its
principal risks and uncertainties, the important events that
occurred during the financial year and those that happened
after the year-end. The Strategic Report also sets out how
HVPE’s performance, as shown in the Financial Statements,
was influenced by HVPE’s activities and the year’s events,
as well as indicating HVPE’s likely future development.
Corporate Summary
The Company is a closed-ended investment company
incorporated in Guernsey on 18 October 2007 with an
unlimited life. The Company currently has one class of shares
(the “Ordinary Shares”), and these shares are admitted to
trading on the Main Market of the London Stock Exchange.
With effect from 10 December 2018, the Company introduced
an additional US dollar market quotation which operates
alongside the Company’s existing sterling quotation, allowing
shares to be traded in either currency.
Investment Objective and Investment Policy
The Company’s investment objective is to generate superior
shareholder returns through long-term capital appreciation
by investing primarily in a diversified portfolio of private equity
investments. The Company may also make investments
in private market assets other than private equity where it
identifies attractive opportunities.
The Company seeks to achieve its investment objective
primarily by investing in investment funds managed by
HarbourVest, which invests in or alongside third-party
managed investment funds (“HarbourVest Funds”).
HarbourVest Funds are broadly of three types: (i)
“Primary HarbourVest Funds”, which make limited partner
commitments to underlying private market funds prior to
final closing; (ii) “Secondary HarbourVest Funds”, which make
purchases of private market assets by acquiring positions
in existing private market funds or by acquiring portfolios
of investments made by such private market funds; and
(iii) “Direct HarbourVest Funds”, which invest into operating
companies, projects, or assets alongside other investors.
In addition, the Company may, on an opportunistic basis,
make investments (generally at the same time and on
substantially the same terms) alongside HarbourVest Funds
(“Co-investments”) and in closed-ended listed private equity
funds not managed by HarbourVest (“Third-Party Funds”).
Co-investments made by the Company may, inter alia, include
investments in transactions structured by other HarbourVest
vehicles including, but not limited to, commitments to
private market funds or operating companies in which other
HarbourVest funds have invested.
Cash at any time not held in such longer-term investments will,
pending such investment, be held in cash, cash equivalents,
money market instruments, government securities, asset-
backed securities, and other investment-grade securities and
interests in any private equity vehicle that is listed or traded on
any securities exchange (“Temporary Investments”).
The Company uses an over-commitment strategy in order
to remain as fully invested as possible. To achieve this
objective, the Company has undrawn capital commitments
to HarbourVest Funds and Co-investments which exceed
its liquid funding resources but uses its best endeavours to
maintain capital resources which, together with anticipated
cash flows, will be sufficient to enable the Company to satisfy
such commitments as they are called.
Diversification and Investment Guidelines
The Company will, by investing in a range of HarbourVest
Funds, Co-investments, and Third-Party Funds, seek to achieve
portfolio diversification in terms of:
> geography: providing exposure to assets in the US, Europe,
Asia, and other markets;
> stage of investment: providing exposure to investments
at different stages of development such as early stage,
balanced and late stage venture capital, small and
middle-market businesses or projects, large capitalisation
investments, mezzanine investments, and special situations
such as restructuring of funds or distressed debt;
> strategy: providing exposure to primary, secondary,
and direct co-investment strategies;
> vintage year: providing exposure to investments made
across many years; and
> industry: with investments exposed, directly or indirectly,
to a large number of different companies across a broad
array of industries.
In addition, the Company will observe the following
investment restrictions:
> With the exception, at any time, of not more than one
HarbourVest Fund or Co-investment to which up to 40%
of the Company’s Gross Assets (see page 124 for the
definition) may be committed or in which up to 40% of the
Company’s Gross Assets may be invested, no more than
20% of the Company’s Gross Assets will be invested in or
committed at any time to a single HarbourVest Fund or
Co-investment.
> No more than 10% of the Company’s Gross Assets will be
invested (in aggregate) in Third-Party Funds.
HVPE Annual Report and Accounts 202466
> The Investment Manager will use its reasonable endeavours
to ensure that no more than 20% of the Company’s Gross
Assets, at the time of making the commitment, will be
committed to or invested in, directly or indirectly, whether
by way of a Co-investment or through a HarbourVest Fund,
(a) any single ultimate underlying investment, or (b) one or
more collective investment undertakings which may each
invest more than 20% of the Company’s Gross Assets in
other collective investment undertakings (ignoring, for
these purposes, appreciations, and depreciations in the
value of assets, fluctuations in exchange rates, and other
circumstances affecting every holder of the relevant asset).
> Any commitment to a single Co-investment which exceeds
5% of the Company’s NAV (calculated at the time of making
such commitment) shall require prior Board approval,
provided however that no commitment shall be made to
any single Co-investment which, at the time of making such
commitment, represents more than 10% (or, in the case of
a Co-investment that is an investment into an entity which
is not itself a collective investment undertaking (a “Direct
Investment”), 5% of the aggregate of: (a) the Company’s NAV
at the time of the commitment; and (b) undrawn amounts
available to the Company under any credit facilities.
> The Company will not, without the prior approval of the
Board, acquire any interest in any HarbourVest Fund from
a third party in a secondary transaction for a purchase
price that:
(i) exceeds 5% of the Company’s NAV; or
(ii) is greater than 105% of the most recently reported NAV
of such interest (adjusted for contributions made to and
distributions made by such HarbourVest Fund since
such date).
Save for cash awaiting investment which may be invested
in Temporary Investments, the Company will invest only in
HarbourVest Funds (either by subscribing for an interest during
the initial offering period of the relevant fund or by acquiring
such an interest in a secondary transaction), in Co-investments
or in Third-Party Funds.
Company’s Right to Invest in HarbourVest Funds
Pursuant to contractual arrangements with HarbourVest, the
Company has the right to invest in each new HarbourVest
Fund, subject to the following conditions:
> Unless the Board agrees otherwise, no capital commitment
to any HarbourVest Fund may, at the time of making
the commitment, represent more than 35% or less than
5% of the aggregate total capital commitments to such
HarbourVest Fund from all its investors.
> Unless HarbourVest agrees otherwise, the Company shall
not have a right to make an investment in, or a commitment
to, any HarbourVest Fund to which ten or fewer investors
(investors who are associates being treated as one investor
for these purposes) make commitments.
Leverage
The Company does not intend to have on its balance sheet
aggregate leverage outstanding at Company level for
investment purposes at any time in excess of 20% of the
Company’s NAV. The Company may use additional borrowings
for cash management purposes, or in the event of a material
downturn. These borrowings could be for extended periods
of time depending on market conditions.
Principal Risks and Uncertainties
The principal risks the Board has identified are disclosed on
pages 40 to 43 of the Strategic Report.
Results and Dividend
The results for the financial year ended 31 January 2024 are
set out in the Consolidated Statements of Operations within
the Financial Statements on page 94. The Directors did not
declare any dividends during the year under review and the
Directors do not recommend the payment of dividends as
at the date of this report.
67Strategic Report Governance Financial Statements Other Information
Directors
The Directors as shown on pages 64 and 65 all held office
throughout the entire reporting period. All Directors listed
were in place at the date of signature of this Annual Report.
Ms Espinal is a Managing Director of HarbourVest Partners
(UK) Limited, a subsidiary of HarbourVest Partners, LLC.
All Directors, other than Ms Espinal, are considered to be
independent. Ms Barnes is the Senior Independent Director
(‘SID’). Further details of the Board composition can be found
on pages 75 and 76.
As announced on 1 February 2024, Ms Espinal has decided
not to stand for re-election at HVPE’s Annual General Meeting.
After careful consideration, including discussion with the HVPE
Board, HarbourVest Partners has decided not to appoint a
replacement non-independent director. Therefore, after the
Annual General Meeting on 17 July 2024, the Board will be
wholly independent.
Save as disclosed in this Annual Report, the Company is not
aware of any other potential conflicts of interest between any
duty owed to it by any of the Directors and their respective
private interests.
Directors’ Interests in Shares
31 January
2024
31 January
2023
Anulika Ajufo 958 -
1
Francesca Barnes 5,300 4,200
Libby Burne 786 786
Carolina Espinal 5,732
2
4,732
Ed Warner 13,000 8,000
Steven Wilderspin 1,300 1,300
1 Ms Ajufo was appointed as a Director with effect from 19 May 2022.
2 Of the total shares held, 3,732 shares were split equally (1,244 each) between Ms
Espinal’s three children, with Ms Espinal holding 2,000 shares.
Post period-end, and as announced on 27 February 2024, Ed
Warner bought 2,000 shares at an average price of £22.70
per share, bringing his total holding to 15,000 shares.
Substantial Shareholders
The table that follows shows the interests of major
shareholders based on the best available information provided
by analysis of the Company’s share register, also incorporating
any disclosures provided to the Company in accordance with
Disclosure Guidance and Transparency Rule 5 in the period
under review and up to 30 April 2024.
% of Voting
Rights
31 January 2024
% of Voting
Rights
30 April 2024
M&G Investment Management 6.68 6.75
Evelyn Partners
1
5.39 <5.00
1
Total 12.07 6.75
1 Please note that at 30 April 2024, Evelyn Partners was below the 5% of voting
rights threshold to be classified as a substantial shareholder, and has therefore
not been included in the total.
Corporate Governance
The Board recognises that sound corporate governance is
key to the success of HVPE and follows best practice wherever
possible. HVPE complies with the AIC Code published in
February 2019, which is endorsed by the Financial Reporting
Council (“FRC”). A Statement of Compliance with the AIC
Code is provided on page 83 and further details about how
our Corporate Governance framework operates can be found
throughout this Governance Report.
Corporate Responsibility
HVPE’s long-term viability is enhanced by the Board
considering the ongoing interests of all the Company’s
stakeholders within a decision making process that operates
in a sound corporate governance framework. The Board seeks
open and regular dialogue with the Company’s shareholders
and other stakeholders (as described on pages 36 to 38)
and it applies its principles of mutual honesty, transparency
and accountability in all such engagements. The Board
receives regular updates outlining regulatory and statutory
developments and responds as appropriate.
Approach to ESG
The Board recognises the critical importance of ESG
considerations to many investors. It acknowledges that ESG
issues can present both opportunities and threats to long-term
investment performance. The Board also believes that HVPE
will benefit from the continued evolution of HarbourVest’s ESG
practices and standards.
The Board is aware that, as an investment company, its
approach to ESG matters is materially informed by the strategy
of the Investment Manager and accordingly the Board is
committed to ensuring that it has appointed an Investment
Manager that is incorporating high standards of ESG
practice, and has the skill and vision to respond to ongoing
developments. It is confident that in HarbourVest it has such
an Investment Manager.
The Board is reliant on the Investment Manager’s screening
processes, controls, and priorities to address ESG matters
within the investment portfolio in both the selection and
oversight of investments. The Board believes that engagement
with management of investee companies and funds is an
effective way of driving meaningful change and takes comfort
from the extent of the Investment Manager’s activity in this
area, which is described on pages 46 to 47.
The Board receives regular updates from the Investment
Manager on the development and implementation of its
ESG policies and processes, and the Board has established
a framework for monitoring its continuing progress. Updates
include information on the levels of engagement with investee
companies and ESG issues in respect of their monitoring
and selection of holdings in the Company’s portfolio. This
provides a valuable opportunity for the Board to challenge the
Investment Manager to demonstrate that it is applying
high standards of ESG practice within its investments
and operations.
Directors’ report continued
HVPE Annual Report and Accounts 202468
As an investment company with no direct employees, the core
of the Company’s ESG initiatives is derived from its oversight
of its service providers, most importantly the Investment
Manager. However, the Board also considers the application
of ESG standards to its own activities as an Investment
Company, including the following:
> Carbon Footprint: The Board initiated a project to calculate
its own carbon footprint in 2021 and since that time, has
continued to offset its operational carbon emissions,
the majority of which result from travel. The offsetting
programme compensates for emissions by delivering
finance to emission reduction projects, which are
independently reviewed to assure emissions reductions
are occurring.
> Relations with Stakeholders: The Board has extended its
interaction with its shareholders and other stakeholders
to include a consideration of ESG matters.
> Position on Modern Slavery: The Board recognises the
importance of the issues which the UK Modern Slavery Act
2015 is designed to address. It has expanded its oversight of
outsourced providers, including the Investment Manager, to
include questions relating to their policies to combat Modern
Slavery. As Chair, Ed Warner assumes direct oversight of
the Company’s statements and its response to the issue of
modern slavery. A description of the Board’s approach to this
subject is set out on the Company’s website.
Significant Votes Against Policy
The Directors have adopted a policy whereby, should 20% or
more of votes be cast against a recommendation made by the
Board for a resolution, the Company shall:
> explain, when announcing voting results, what actions
it intends to take to consult shareholders in order to
understand the reasons behind the result;
> no later than six months after the shareholder meeting
publish an update on the views received from shareholders
and actions taken; and
> provide a final summary in the Annual Report and, if
applicable, in the explanatory notes to resolutions at the next
shareholder meeting stating what impact the feedback has
had on the decisions the Board has taken and any actions or
resolutions proposed.
No significant votes were received against any Board-
recommended resolution at the 2023 AGM.
Anti-bribery Policy
The Directors have undertaken to operate the business in
an honest and ethical manner, and accordingly take a zero-
tolerance approach to bribery and corruption, including the
facilitation of corporate tax evasion. The key components of
this approach are implemented as follows:
> The Board is committed to acting professionally, fairly, and
with integrity in all its business dealings and relationships.
> The Company implements and enforces effective
procedures to counter bribery.
> The Company requires all its service providers and advisers
to adopt equivalent or similar principles.
Disclosures Required Under LR 9.8.4R
The Financial Conduct Authority’s Listing Rule 9.8.4R requires
that the Company includes certain information relating to
arrangements made between a controlling shareholder and the
Company, waivers of Directors’ fees, and long-term incentive
schemes in force. The Directors confirm that there are no
disclosures to be made in this regard.
Investment Manager
A description of how the Company has invested its assets,
including a quantitative analysis, may be found on pages 2
to 61, with further information disclosed in the Notes to the
Financial Statements on pages 101 to 107. The Board has
considered the appointment of the Investment Manager and,
in the opinion of the Directors, the continuing appointment of
the Investment Manager on the terms agreed is in the interests
of its shareholders as a whole.
In considering this appointment, the Board has reviewed the
past performance of the Investment Manager, the engagement
of the Investment Manager with shareholders and the Board,
and the strategic plan presented to the Board by
the Investment Manager.
The Investment Manager is HarbourVest Advisers L.P., and
its principal duties as stated in the Investment Management
Agreement are as follows:
> to manage the assets of the Company in accordance with
the investment policy of the Company (subject always to the
overall supervision and direction of the Board, and subject to
any restrictions contained in any prospectuses published by
the Company);
> to assist the Company with shareholder liaison; and
> to monitor compliance with the Investment Policy on a
regular basis.
69Strategic Report Governance Financial Statements Other Information
The Investment Manager is entitled to nominate up to two
Board representatives for election by shareholders at the
Company’s AGM. It has chosen not to exercise this right,
as explained above on page 68. The IMA, which was amended
and restated on 30 July 2019, and again on 31 January 2023,
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, the
Company would be required to pay a contribution, which would
have been $1.5 million at 31 January 2024 and $1.3 million
as at 30 April 2024, as reimbursement of the Investment
Manager’s remaining unamortised IPO costs. In addition, the
Company would be required to pay a fee to the Investment
Manager 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.
The Investment Manager is not entitled to any direct
remuneration from the Company in respect of any asset of the
Company, instead deriving its revenue from the management
fees and carried interest payable by the Company on its
investments in underlying HarbourVest Funds. However, the
Investment Manager is entitled to reimbursement of expenses
occurred in the performance of its duties. With effect from
1 February 2022, rather than the direct reimbursement of all its
expenses, the Investment Manager has charged the Company
a fixed fee (the “Fixed Fee”) for the services of the employees
substantially dedicated to the Company’s affairs and for
assistance provided by other employees of the Investment
Manager with respect to certain administrative functions
relating to the Company. The Fixed Fee will be increased each
financial year on the basis of the average percentage change in
the Investment Manager’s firm-wide compensation budget for
the succeeding year. The Fixed Fee arrangement was reviewed
in February 2024.
The Fixed Fee payable to the Investment Manager for the
reimbursement of expenses in respect of the year ended 31
January 2024 was $2.5 million (the year ended 31 January
2023 was $2.0 million). Further details are given in Note 3 to
the Financial Statements.
Delegation of Responsibilities
Under the IMA, the Board has delegated to the Investment
Manager substantial authority for carrying out the day-to-
day management and operations of the Company, including
making specific investment decisions, subject at all times
to the control of, and review by, the Board. In particular, the
IMA provides that the Board and the Investment Manager
shall agree a strategy mandate which sets out a rolling five-
year plan for the Company. The Board is responsible for the
overall leadership of the Company and for setting its values
and standards. This includes determining the investment and
business strategy, and the ongoing review of the Company’s
investment objective and investment policy. Matters reserved
for the Board include Board and Committee membership,
including the review and authorisation of any consequential
conflicts of interest, the raising of new capital, major financing
facilities, and contracts that are not in the ordinary course
of business, together with any governance and regulatory
requirements. Any changes in relation to the capital structure
of the Company, including the allotment and issuance of
shares, are the responsibility of the Board. The Board has
reserved the determination of the Company’s ESG Policy
and the approval of ESG-related statements and disclosures
made on behalf of the Company to itself. The Board has also
reserved to itself the determination of the Company’s capital
allocation policy, including the implementation of buybacks,
dividends, or other distributions to shareholders.
Share Repurchase Programme
At the 2023 AGM, held on 19 July 2023, the Directors sought
and were granted authority to repurchase 11,755,016 Ordinary
Shares (being equal to 14.99% of the aggregate number
of Ordinary Shares in issue at the date of the AGM) for
cancellation, or to be held as treasury shares. This authority
will expire at the forthcoming AGM. The Directors intend to
seek annual renewal of this authority from shareholders.
During the financial year ended 31 January 2024, HVPE
repurchased 1,421,114 Ordinary Shares at an average price of
£21.70 per Share, for a gross consideration of £30.8 million.
The Company paid its brokers, Peel Hunt and Jefferies,
commission totalling £30,831.
Following the year-end, the Company repurchased 714,154
Shares at an average price of £23.67 per Share, for a gross
consideration of £16.9 million. The Company paid its broker,
Peel Hunt, commission totalling £16,902.
Directors’ report continued
HVPE Annual Report and Accounts 202470
Distribution Pool
As announced on 1 February 2024, the Board has established
a Distribution Pool to fund buybacks or to return capital to
shareholders by means of special dividends. The Distribution
Pool will be funded by a proportion of the cash realisations
from the Company’s portfolio going forward, with this
proportion set initially at 15%. The Distribution Pool will
accumulate on a rolling basis, up to a maximum balance set
by the Board. The Distribution Pool will be deployed for share
buybacks and/or special dividends at the sole discretion of the
Independent HVPE Board Directors (the “Distribution Group”).
When determining the timing, amount and nature of a
shareholder distribution, the Distribution Group will consider
the macroeconomic environment, the discount to NAV at
which HVPE’s shares are trading (both in absolute terms and
relative to peers), market sentiment, and the relative merits of
distributing capital against the potential benefit of committing
to new investment opportunities.
By way of illustration, at times when the discount is deemed
especially wide, the Distribution Group may elect to distribute
the cash in the form of share buybacks. Alternatively, a special
dividend may be the preferred option. Equally, the Distribution
Group may choose to retain the Distribution Pool for an
extended period to preserve capacity ahead of a future
downturn, or allocate some of the cash for reinvestment.
If the balance in the Distribution Pool reaches the maximum,
the ongoing 15% allocation from portfolio distributions will be
diverted to new investment until such time as the balance falls
below the maximum, at which point the 15% allocation will
once again be used to replenish the Distribution Pool. In
establishing this new distribution policy, the Board’s intention is
to optimise the long-term total return for shareholders through
the cycle while preserving the strength of the balance sheet.
Introduction to the Going Concern and
Viability Statement
Since the inception of HVPE, the Directors have relied
upon model scenarios to manage the Company’s liquidity
requirements and balance sheet risk more generally. This
modelling allows the Directors to evaluate whether the Company
is a going concern and provides evidence to support the
Directors’ viability statement in the Company’s Annual Report
and Accounts. While the modelling process has been refined
over the years, it has provided a consistent approach through
which the Directors have been able to provide a firm assessment,
as demonstrated through the Global Financial Crisis and
COVID-19 pandemic.
Historically the Directors have assessed four scenarios:
Optimistic, Base, Low and Extreme Downside presented by
the Investment Manager. This allows the Directors flexibility in
choosing the most appropriate scenario for the current market
environment and actual activity recorded since the end of the
reporting period. As more fully explained in the Investment
Manager’s Report above, during the period under review and
subsequent to the period-end, the challenging macroeconomic
and geopolitical environment has resulted in increasing inflation,
increasing interest rates, volatility in public markets and subdued
activity in private markets. The Company’s cash flows have been
tracking closer to the Low scenario considered at the start of
the year.
In considering Going Concern for the required one-year period
for these 2024 Annual Report and Accounts, the Directors
therefore primarily focused on two model scenarios: the Low
and the Extreme Downside. These have been used to form
the basis of the Going Concern and Viability statements as
provided below. The credit facility provides an additional source
of capital to HVPE which helps to underpin the existing and
future commitments of the Company. The Company maintains
a credit facility of $800 million which extends out to early 2028
to align with the ongoing growth strategy and risk management
practices of the Company. Along with the model scenarios
discussed above, the available credit facility provides further
support in the Board’s assessment of going concern and viability.
71Strategic Report Governance Financial Statements Other Information
Going Concern Statement
In accordance with the AIC Code of Corporate Governance
and US GAAP, the Board has performed a robust assessment
of principal risks (refer to page 40 for an update on the
Principal Risks of the Company) along with the assessment
of whether the Company will remain a going concern through
the period ending 30 June 2025 (which covers the twelve
months from the signing of the financial statements) and
whether it believes that the principal risks of the Company
will remain as identified on page 40 of this report over the
going concern assessment period.
The Board considered model scenarios assuming varying
degrees of impact on the portfolio over the period ending 30
June 2025. The Board primarily focused on the Low Case
and the Extreme Downside Case as noted above. The Low
Case was considered a plausible scenario given the current
economic environment, as the Investment Manager included
reasonable portfolio growth and distribution levels for the
current environment in the assumptions of the Low Case for
2024. While the Low Case was the primary focus of the Board
in assessing the going concern of the Company, the Extreme
Downside Case was also considered and was designed to
specifically stress the balance sheet with multiple worst case
scenarios all playing out to 30 June 2025; 1) a credit crisis
resulting in all of the fund-level bridging leverage being called
at once as the underlying HarbourVest fund credit facilities
could not be renewed ($414.8 million in unexpected capital
called), 2) despite this credit crisis capital calls are still being
received at levels experienced over the last five years (i.e. no
material decline in the level of capital calls as seen during the
GFC), 3) material asset value declines similar to what was
experienced during the GFC, and 4) distribution levels falling to
levels equivalent to what was experienced during the GFC. The
Board does not believe the Extreme Downside Case is a likely
scenario, but factors this into the going concern assessment.
The results of these model scenarios showed that the
Company would have sufficient resources to withstand the
impact of all scenarios except the Extreme Downside scenario
occurring to 30 June 2025. Under this scenario the Board
would likely need to take some action to raise additional
capital, the most likely of which would be to increase the
current size of the credit facility. Based on this assessment,
and the strategic options that the Directors have at their
disposal to address liquidity shortfalls, the Directors conclude
that the working capital of the Company is sufficient for its
current requirements and the Company will be able to continue
in operation at least through 30 June 2025, which covers
the next twelve-month period from the signing of the Annual
Report and Accounts, and substantial doubts do not exist as
to HVPE’s ability to continue in operation over this period.
Viability Statement
Pursuant to the UK Corporate Governance Code 2018 and the
AIC Code, the Board has assessed the viability of the Company
over the period from 31 January 2024 to 31 December 2028,
which aligns with the timing of the Investment Manager’s
current five-year model scenarios. Whilst the Board has no
reason to believe that the Company will not be viable over
a longer period, it has chosen this period as this aligns with
the Board’s strategic horizon and within the expiration of the
majority of the Company’s credit facility which is used to
support the over commitment strategy ($100 million provided
by NZ Super expires on 15 August 2027, and the remaining
$700 million expires on 12 January 2028). 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.
The Board intends to refresh the credit facility and is currently
well advanced in this process.
The Company’s investment objective is to generate superior
shareholder returns through long-term capital appreciation by
investing primarily in a diversified portfolio of private equity
investments. The majority of the Company’s investments are
in HarbourVest-managed private equity fund-of-funds, which
have fund lives of 10-14 years.
While the Company’s investment lifecycle spans a time
period of ten years or more, the Board currently focuses on
a time period extending through to 31 December 2028 when
considering the strategic planning of the Company. The
strategic planning focuses on building a portfolio of long-term
assets through capital allocation into a set of rolling five-
year calendar year-end portfolio construction targets defined
by investment stage, geography, and strategy. This rolling
five-year process allows the Board a medium-term view of
potential portfolio growth, projected cash flow and potential
future commitments under various economic scenarios.
As part of its strategic planning, the Board considered
model scenarios assuming varying degrees of impact on
the portfolio. The Board primarily focused on two scenarios,
the Low and Extreme Downside, the latter of which is a
worst-case scenario that assumes large NAV declines and
a material reduction in realisations from the underlying
investment portfolio. Based on a review of the existing liquidity
resources of the Company and the model scenarios noted
above, the Board concluded that the Company’s cash balance
and available credit facility would be sufficient to cover the
Company’s liquidity requirements under all scenarios except
the Extreme Downside scenario. HVPE would likely need to
take some action to manage liquidity under this scenario. This
could include the renewal or replacement of the existing credit
facility, raising additional capital or selling assets. Considering
the options available to raise additional capital, and the results
of this modelling, the Directors believe that the Company
would be viable in the face of these scenarios occurring over
the period ending 31 December 2028.
Directors’ report continued
HVPE Annual Report and Accounts 202472
Statement of Directors’ Responsibilities in
Respect of the Financial Statements
The Directors are required to prepare Financial Statements
for each financial year which give a true and fair view of
the assets, liabilities, financial position, and profit or loss
of the Company in accordance with US GAAP at the end
of the financial year, and of the gain or loss for that period.
In preparing those Financial Statements, the Directors are
required to:
> select suitable accounting policies and apply
them consistently;
> make judgements and estimates that are reasonable
and prudent;
> state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the Financial Statements; and
> prepare the Financial Statements on the going concern basis
unless, it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any
time the financial position of the Company and enable them
to ensure that the Financial Statements have been properly
prepared in accordance with The Companies (Guernsey) Law,
2008. They are also responsible for safeguarding the assets of
the Company, and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual
Report and Financial Statements include the information
required by the Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority (together
“the Rules”). They are also responsible for ensuring that the
Company complies with the provisions of the Rules which,
with regard to corporate governance, require the Company to
disclose how it has applied the principles, and complied with
the provisions, of the corporate governance code applicable
to the Company.
Disclosure of Information to the Auditor
So far as each of the Directors is aware, there is no relevant
audit information of which the Company’s auditor is unaware,
and each has taken all the steps they ought to have taken as
a Director to make themselves aware of any relevant audit
information and to establish that the Company’s auditor is
aware of that information.
Responsibility Statement
The Board of Directors, as identified on pages 64 and 65, jointly
and severally confirm that, to the best of their knowledge:
> the Financial Statements, prepared in accordance with
US GAAP, give a true and fair view of the assets, liabilities,
financial position, and profits of the Company and its
undertakings;
> this report includes a fair review of the development and
performance of the business and the position of the
Company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
> the Annual Report and Financial Statements taken as a
whole are fair, balanced, and understandable, and provide
the information necessary for shareholders to assess the
Company and its undertakings’ position, performance,
business model, and strategy.
Signed on behalf of the Board by:
Ed Warner
Chair
29 May 2024
73Strategic Report Governance Financial Statements Other Information
The activities of the Company are overseen by the Board, which comprises a majority of independent Directors. The Board meets
at least four times a year, and between these scheduled meetings there is regular contact between Directors, the Investment
Manager, the Administrator, and the Company Secretary, including a formal strategy meeting and Board update calls.
The Board aims to run the Company in a manner which is consistent with its belief in honesty, transparency, and accountability.
This is reflected in the way in which Board meetings are conducted, during which the Chair promotes and facilitates a culture
of open and constructive debate on each topic, encouraging input from all Directors and advisors to ensure a wide exchange of
well-informed views. The Directors believe that good governance means effective management of the affairs of the Company
and meaningful engagement with investors. The Board is committed to maintaining high standards of financial reporting,
transparency, and business integrity.
Board structure and committees
Audit and Risk
Committee
Inside
Information
Committee
Management
Engagement
and Service
Provider
Committee
Nomination
Committee
Remuneration
Committee
Role
To ensure that the
Company maintains
high standards of risk
management, integrity,
financial reporting, and
internal controls.
Role
To consider whether any
developments which
may constitute price
sensitive information.
Role
To review the quality
and value of the service
provided by the
Company’s service
providers, including the
Investment Manager.
Role
To oversee the process
for the selection and
recruitment of new
Directors and to
nominate candidates for
approval by the Board.
Role
To determine the policy
for Directors’
remuneration, to set the
Chair’s remuneration,
and to make
recommendations to
the Board for Directors’
remuneration levels.
Members
Chaired by:
Steven Wilderspin
Anulika Ajufo
Francesca Barnes
Libby Burne
Members
Chaired by:
Ed Warner
Steven Wilderspin
Members
Chaired by:
Libby Burne
Anulika Ajufo
Francesca Barnes
Ed Warner
Steven Wilderspin
Members
Chaired by:
Ed Warner
Anulika Ajufo
Francesca Barnes
Libby Burne
Steven Wilderspin
Members
Chaired by:
Francesca Barnes
Anulika Ajufo
Libby Burne
Ed Warner
Steven Wilderspin
Board of Directors
HVPE Annual Report and Accounts 202474
Board and Committee Meetings and Attendance Record
The table below sets out the Directors’ attendance at the Board and Committee meetings held during the financial year ended 31
January 2024:
Director
Scheduled
Board
Meetings
Audit and Risk
Committee
Meetings
Inside
Information
Committee
Meetings
2
Management Engagement
and Service Provider
Committee Meetings
Nomination
Committee
Meetings
Remuneration
Committee
Meeting
Anulika Ajufo 9 of 9 7 n/a 2 1 1
Francesca Barnes 9 of 9 7 n/a 2 1 1
Libby Burne 9 of 9 7 n/a 2 1 1
Carolina Espinal 9 of 9 n/a n/a n/a n/a n/a
Ed Warner 9 of 9 n/a n/a 2 1 1
Steven Wilderspin 9 of 9 7 n/a 2 1 1
Peter Wilson
1
3 of 4 n/a n/a n/a n/a n/a
1 Peter Wilson retired from the Board at the 2023 AGM and was only eligible to attend four meetings of the Board.
2 No meetings of the Inside Information Committee were held in the Financial Year.
The Directors are kept fully informed of investment and financial
controls and other matters that are relevant to the business
of the Company. Such information is brought to the attention
of the Board by the Investment Manager, the Administrator,
and the Company Secretary in their regular reports to the
Board. The Directors also have access, where necessary in the
furtherance of their duties, to professional advice at the expense
of the Company. Further details of the Board Committees is
set out below and their terms of reference are available on the
Company’s website:
https://www.hvpe.com/shareholders/corporate-governance/
All Directors received notice of the meetings, the agenda, and
supporting documents and were able to comment on the matters
to be raised at the proposed meeting. During each meeting, the
Chair promoted and facilitated open, constructive debate on
each topic, encouraging input from all Directors. As well as the
scheduled Board and strategy meetings, the Board also received
detailed information from the Investment Manager via update
calls, with particular reference to the impact on the Company of
external developments. In addition to the above meetings, ad-hoc
Board and Committee meetings can be convened at short notice
and, as they only require a quorum of two Directors, there is a
possibility of lower attendance than for the scheduled meetings.
If any Director is unable to attend a meeting, they receive the
papers and have the opportunity to discuss them with the Chair.
During the financial year, there were two ad-hoc Board meetings
with a quorum at each.
At each scheduled Board meeting, amongst other items, the
Directors review and discuss the Investment Manager’s report,
HVPE’s financial position, drivers of performance, how HVPE
has performed, the commitment plan, the corporate broking
report (which includes an update on the Company’s peer group)
as well as wider issues relating to the market and HVPE’s
share price performance. Marketing and investor relations are
covered in detail at two Board meetings, and at a higher level at
the remaining meetings. Each meeting ends with a discussion
between the Independent Directors, at which no representative of
the Investment Manager is present.
Responsibilities
The Board has adopted formal responsibilities for the Chair
and the Senior Independent Director, as well as a schedule
of matters reserved for the Board. All of these documents
are available on the Company’s website:
www.hvpe.com/shareholders/corporate-governance.
Board Composition
Together, the members of the Board possess a balance of skills,
experience, and length of service which the Directors believe is
appropriate. Succession planning remains an ongoing process,
designed to bring effective and smooth transition between
Director appointments and to avoid undue disruption. This
ensures that the Board is well-balanced through the appointment
of new Directors with the necessary skills and experience.
All continuing Directors are subject to annual re-election by
shareholders. When a new Director is appointed to the Board,
they participate in a structured induction process comprising
of a series of meetings with the Chair of the Board and Chair
of the Audit and Risk Committee, key individuals within the
Investment Manager, and other service providers. Directors
must be able to demonstrate commitment to the Company and
ensure that they have sufficient time to fulfil their roles effectively.
Therefore, in accordance with the Board’s established protocol
on the management of potential conflicts, if a Director wishes to
undertake additional external appointments, approval is sought
from the Chair in order to confirm that the Director will be able to
continue to dedicate sufficient time to carry out their duties as a
Director of the Company, in addition to assessing any potential
conflicts of interest and independence issues. In the case of any
potential appointment for the Chair, the relevant assessment is
conducted by the Senior Independent Director.
75Strategic Report Governance Financial Statements Other Information
Tenure Policy
When considering its composition, the Board is strongly
committed to striking the correct balance between the
benefits of continuity, experience, and knowledge, and those
that come from the introduction of Directors with diversity of
perspectives and skills. The Board has adopted a Tenure Policy
confirming its intention that each independent Director will
retire at the AGM immediately following the completion of their
ninth year on the Board.
It is acknowledged that there could be unusual circumstances
in which a short extension of that time period could be
appropriate. In that event, a comprehensive explanation of the
circumstances would be provided to stakeholders.
As a representative of the Investment Manager, Carolina
Espinal, who was appointed to the Board in July 2019, is
outside the scope of this policy. The independent Directors
believe her contributions to the Board have offered
considerable value to shareholders. However, Ms Espinal
will not be standing for re-election at HVPE’s Annual General
Meeting on 17 July 2024, after which the Tenure Policy will
apply to the whole Board.
Board and Committees Evaluation
The Board undertakes a formal annual evaluation of
its performance and of the performance of each of its
Committees. This includes the Chair carrying out an individual
review with each Director of their respective performance and
contribution, and the Senior Independent Director leading an
annual evaluation by the rest of the Board of the performance
of the Chair.
An externally facilitated Board evaluation occurs every three
years and the last such evaluation was conducted in 2022
by Board Alpha.
Each Committee of the Board considers its performance
annually, including whether it should undertake any
additional activities.
Policy on Diversity and Inclusion
The Board has adopted a Policy on Diversity and Inclusion
to ensure that the benefits of diversity are a significant
consideration in recruitment.
The Board and Nomination Committee actively consider
the diversity of the Board when contemplating future
appointments. The Board currently consists of four women
and two men and as such exceeds the Hampton-Alexander
Review target for 40% female representation on FTSE 350
company boards. Of three senior Board positions, the Chair is
male, the Senior Independent Director is female, and the Chair
of the Audit and Risk Committee is male. The Company has
no employees. The Board has also achieved the level of ethnic
diversity targeted by the Parker Review, with one of the five
Directors seeking re-election at the AGM being from an ethnic
minority background.
The Board recognises that diversity includes racial, socio-
economic, and other factors such as physical ability, and that
different backgrounds and experiences can bring real value to
the Company in terms of decision-making. The Board does not
have any specific diversity targets in mind, given the range of
factors that this term necessarily covers, and its main priority
will always be to appoint the most appropriate candidate for
any role.
The Company has met the targets on board diversity set out
in the Financial Conduct Authority’s Listing Rule 9.8.6R (9) as
demonstrated in the tables set out below. The Company has
collected the data for the following two tables by making due
enquiry of the Directors.
Number
of board
members
Percentage
of the board
Number of senior
positions on the
board (CEO, CFO,
SID and chair)
1
Men 2 33% 2
Women 4 67% 1
Not specified/prefer
not to say
0 0% 0
Number
of board
members
Percentage
of the board
Number of senior
positions on the
board (CEO, CFO,
SID and chair)
1
White British or other
White (including
minority white groups)
4 66% 3
Mixed/Multiple Ethnic
Groups
0 0 0
Asian/Asian British 0 0 0
Black/African/
Caribbean/Black British
1 17% 0
Other ethnic group,
including Arab
1 17% 0
Not specified/prefer
not to say
0 0 0
Board structure and committees continued
1 Tables reflect data as at 29 May 2024. As an investment company, HVPE does not have a CEO. These roles defined by the guidance are not specifically
tailored for investment companies. In this table we have interpreted “CFO” as “Chair of the Audit and Risk Committee”.
HVPE Annual Report and Accounts 202476
Audit and Risk Committee
About the Committee
The Audit and Risk Committee members are outlined on
page 74. Ms Barnes and Ms Ajufo each held senior banking
and finance roles for a number of years as described in their
biographies. Ms Burne is a former auditor with 20 years’
experience. Mr Wilderspin is a qualified Chartered Accountant
and has over 15 years’ experience as an executive and non-
executive director on a number of private and listed fund
boards as well as commercial companies. Members of the
Committee are deemed by the Board to have recent and
relevant financial and sector experience.
The Audit and Risk Committee is responsible for the review
of the Company’s accounting policies, periodic Financial
Statements and auditor engagement. The Committee is also
responsible for making appropriate recommendations to
the Board, including that the Financial Statements are fair,
balanced, and understandable, and ensuring that the Company
complies to the best of its ability with applicable laws and
regulations and adheres to the tenet of generally accepted
codes of conduct. The Committee is also responsible for
overseeing the Company’s risk management framework and
regulatory compliance.
All of the Company’s management and administration
functions are delegated to independent third parties or the
Investment Manager and it is therefore felt that it would not
be practical or cost effective for the Company to have its
own internal audit facility. This matter is reviewed annually.
The Audit and Risk Committee does have the power to
commission third-party assurance work as it sees fit, but
did not do so in the year under review.
Activities of the Committee
Audit and Risk Committee Meetings
In the financial year ended 31 January 2024, the Audit and
Risk Committee met seven times. A summary of Director
attendance is included in the “Board and Committee Meetings
and Attendance Record” section on page 75. In these
meetings, the Committee considered the following matters:
Auditor Tenure
The Audit and Risk Committee reviewed the effectiveness
of the external audit process during the year, including
audit quality, objectivity (level of challenge and professional
scepticism), and independence, using a detailed questionnaire
developed internally from guidance issued by the main
accounting firms and the FRC. This included discussions
with the Company’s auditor (Ernst & Young LLP), Investment
Manager and Company Secretary to review how well the
previous year’s audit had gone. The main conclusion from this
review was that the audit has been of high quality and robust
in nature. The Committee concluded that Ernst & Young LLP’s
appointment as the Company’s auditor should be continued.
The Company’s auditor has been engaged by the Company
since 2007 and was re-engaged following a competitive tender
process in May 2017. The partner responsible for the audit,
Richard Le Tissier, commenced his role for the year ended
31 January 2022 audit. The Company’s auditor performed
the audit of the Company’s Financial Statements, prepared in
accordance with applicable law, US GAAP, and audited under
both relevant US Generally Accepted Auditing Standards (“US
GAAS”) and International Standards on Auditing (UK). The audit
approach remained substantially unchanged relative to the
prior year.
Auditor Independence
The Audit and Risk Committee understands the importance
of auditor independence, and, during the year, the Committee
reviewed the independence and objectivity of the Company’s
auditor. The Committee received a report from the external
auditor describing its independence, controls, and current
practices to safeguard and maintain auditor independence.
Other than fees paid for conducting a review of the Interim
Financial Statements, there were no other non-audit fees paid
to the auditor by the Company. The Committee has adopted
a non-audit services policy that complies with the Revised
Ethical Standard 2019 issued by the UK FRC, which determines
those services that the auditor is prohibited from providing to
the Company and those services that the auditor may conduct.
The policy includes a cap on the cost of any non-audit services
provided by the auditor at 70% of the average of the previous
three years’ audit fees.
In all cases the Committee reviews the potential engagement
of the auditor in advance to ensure that the auditor is the most
appropriate party to deliver the proposed services and to put in
place safeguards, where appropriate, to manage any threats to
auditor independence.
Terms of Engagement
The Audit and Risk Committee reviewed the audit scope
and fee proposal set out by the auditor in its audit planning.
The auditor requested an increase in fees for 2024 for a
number of reasons, including an increase in their cost base
in a competitive market for talent, an increase in regulatory
requirements, and growth in the number of underlying
funds that the Company invests in. This was discussed by
the Committee which also noted general audit market and
inflationary fee pressure. The Committee recommended to
the Board the total fee for audit and interim review work of
£353,830 for 2024, a 20% increase on the fees charged
for 2023.
77Strategic Report Governance Financial Statements Other Information
Internal Controls
The internal control systems (including those relating to cyber
security) are designed to meet the Company’s particular
needs and the risks to which it is exposed. Accordingly, the
internal control systems are designed to manage rather than
eliminate the risk of failure to achieve business objectives
and by their nature can only provide reasonable and not
absolute assurance against misstatement and loss. The
Company places reliance on the control environment of its
service providers, including its independent Administrator
and the Investment Manager. In order to satisfy itself that the
controls in place at the Investment Manager are adequate,
the Audit and Risk Committee has reviewed the Private Equity
Fund Administration Report on Controls Placed in Operation
and Tests of Operating Effectiveness (“Type II SOC I Report”)
for the period from 1 October 2022 to 30 September 2023
(a bridging letter covers the period 1 October 2023 to 31
January 2024), detailing the controls environment in place
at the Investment Manager. An ISAE 3402 Report on Fund
Administration, Global and Local Custody Services, Securities
Lending Services, and Listed Derivatives Clearing Services for
the period 1 October 2022 to 30 September 2023 detailing
the controls environment in place at the Administrator and
Company Secretary was also reviewed. In both of these
reports there were findings, but the Committee is satisfied that
the identified weaknesses were not material to the affairs of
the Company, and that the respective service providers had
taken action to improve controls in the identified areas. In
addition, during the year, the Management Engagement and
Service Provider Committee conducted a detailed review of the
performance of the Company’s service providers, including the
Investment Manager and Administrator.
The Investment Manager’s Type II SOC I Report describes the
internal controls in the HarbourVest Accounting group, which
is responsible for maintaining the Company’s accounting
records and the production of the Accounts contained in
the Company’s Financial Statements. The main features
of the controls are: clearly documented valuation policies;
detailed review of financial reporting from underlying limited
partnerships and investee companies; detailed reconciliation
of capital accounts in underlying limited partnerships; monthly
reconciliation of bank accounts, and; a multi-layered review
of financial reporting to ensure compliance with accounting
standards and other reporting obligations.
Risk Management
The Audit and Risk Committee reviewed the Company’s risk
management framework during the year, and confirmed
it was satisfied that it was appropriate for the Company’s
requirements. Further details of the principal risks and
uncertainties facing the Company are given on pages 40 to 42.
This is in accordance with relevant best practice as detailed in
the FRC’s guidance on Risk Management, Internal Control, and
Related Financial and Business Reporting.
The Audit and Risk Committee is responsible for the overall
risk framework, for mapping each risk through the framework,
and for conducting specific risk reviews; the Board is
responsible for setting risk appetite, identifying and
assessing risks in terms of potential impact and likelihood,
and considering emerging and topical risks.
Financial Risks
The Company is funded from equity balances, comprising
issued Ordinary Share capital, as detailed in Note 1 to the
Financial Statements, and retained earnings. The Company
has access to borrowings pursuant to the credit facility of
up to $800 million. As at 31 January 2024, the credit facility
was drawn by $275 million. Although the Company’s currency
exposure is currently not hedged, the Company’s stance on
hedging is kept under review by the Audit and Risk Committee.
The Investment Manager and the Directors ensure that all
investment activity is performed in accordance with the
investment guidelines. The Company’s investment activities
expose it to various types of risks that are associated with
the financial instruments and markets in which it invests.
Risk is inherent in the Company’s activities, and is managed
through a process of ongoing identification, measurement,
and monitoring. The financial risks to which the Company is
exposed include market risk, liquidity risk, and cash flow risk.
Regulatory Compliance
The Audit and Risk Committee has engaged with the
Administrator’s compliance team to ensure that the Company
fulfils its regulatory obligations. A Compliance Monitoring Plan
is in place and is regularly reviewed by the Committee.
Audit and Risk Committee continued
HVPE Annual Report and Accounts 202478
Audited Financial Statements, Significant Judgements
and Reporting Matters
As part of the 31 January 2024 year-end audit, the Audit
and Risk Committee reviewed and discussed the most
relevant issues for the Company, most notably the risk
of misstatement or manipulation of the valuation of its
investments in underlying HarbourVest funds, the ongoing
impact of geopolitical events and macroeconomic events,
specifically with regard to the Board’s statements on going
concern and viability.
The greatest element of judgement by the Investment
Manager in the valuation process is the roll forward of 31
December 2023 NAVs to the Company’s year-end of 31
January 2024. This is a focus for the auditor, as outlined on
page 88, and is specifically addressed in discussions with the
Committee prior to approval of the Financial Statements.
The Audit and Risk Committee remains satisfied that the
valuation techniques used are accurate and appropriate for
the Company’s investments and consistent with the
requirements of US GAAP. The Audit and Risk Committee
ensures that the Board is kept regularly informed of relevant
updates or changes to US GAAP that impact the Company,
including but not limited to valuation principles.
Fair, Balanced, and Understandable
As a result of the work performed, the Audit and Risk
Committee has concluded that the Audited Financial
Statements for the year ended 31 January 2024 are fair,
balanced and understandable, and provide the information
necessary for shareholders to assess the Company’s position
and performance, business model, and strategy. It has
reported on these findings to the Board.
Corporate Governance
The Audit and Risk Committee continues to monitor the
Board’s assessment of the Company’s compliance with the
AIC Code of Corporate Governance for Investment Companies
(the 2019 edition). The Committee has noted that the UK
Code of Corporate Governance was updated in January 2024
with changes due to take effect from 2025. It will respond to
any consequential updates made by the AIC to its Code of
Corporate Governance for Investment Companies once they
have been released.
Governance and Effectiveness
The Committee conducted a review of its activities against
its constitution and terms of reference in respect of the year
under review and concluded that all requisite activities had
been undertaken.
In presenting this report, I have set out for the Company’s
shareholders the key areas that the Audit and Risk Committee
focuses on. If any shareholders would like any further
information about how the Audit and Risk Committee operates
and its review process, I, or any of the other members of the
Audit and Risk Committee, would be pleased to meet them
to discuss this.
Steven Wilderspin
Chair of the Audit and Risk Committee
29 May 2024
79Strategic Report Governance Financial Statements Other Information
Nomination Committee
About the Committee
The Nomination Committee was established on 24 November
2015 and is chaired by Mr Warner, Chair of the Company.
Its members are all independent Directors, as outlined on
page 74.
There was one scheduled meeting held during the year, which
was attended by all members. The mandate of the Nomination
Committee is to consider issues related to the identification
and appointment of Directors to the Board.
Activities of the Committee
Changes to Board Composition
In accordance with the approach to succession planning
outlined below, no changes to the composition of the Board
were required.
Approach to Succession Planning
The Committee engages with third party recruitment
firms to appoint effective candidates to the Board who
will complement the skills already represented by existing
Directors. The Committee defines the requirements for each
appointment in such a way as to be inclusive and to encourage
and maintain diverse representation on the Board.
Governance and Effectiveness
During the year, the Nomination Committee conducted a
review of its activities against its constitution and terms
of reference in respect of the year under review and
concluded that it had satisfactorily complied with all of
its terms of reference.
Management Engagement and Service Provider
Committee
About the Committee
The MESPC was established on 24 November 2015 and
is chaired by Ms Burne. Its members are all independent
Directors, as outlined on page 74.
The MESPC held two meetings in the year under review and
all members of the Committee attended the meetings.
Activities of the Committee
In the course of the year under review, the MESPC conducted
a review of the Company’s service providers to ensure the
effective management and administration of the Company’s
business under terms which were competitive and reasonable
for the shareholders.
Investment Manager Review
The annual review of the Investment Manager was undertaken
in July 2023. As part of this review, the Board received
presentations from the HVPE Investment Committee,
as well as from various operational teams and the senior
management of the Investment Manager. Subjects covered
included investment strategy, ESG, manager selection
processes and other matters relating to the Company’s affairs.
Following this review, the Board discussed its conclusions with
the Investment Manager. The Board and MESPC are satisfied
with the performance of the Investment Manager with respect
to investment returns and the overall level of service provided
to the Company. The Board as a whole undertook visits to
the Investment Manager’s offices in London during the
financial year.
MESPC Review of other Service Providers
The MESPC met in November 2023 and conducted a detailed
review of the performance of the Company’s key service
providers for the year to January 2024. The Committee
reviewed service providers’ responses to a series of individual
questions relating to the full scope of the service being
provided to the Company. These covered reviews of key
personnel, results, fees and any errors as well as requiring a
description of each service provider’s key policies and internal
controls. Questions on ESG practices were embedded as an
integral part of the overall review conducted for each provider.
In addition, as part of this review, the Chair of the MESPC
held discussions with the Company’s most critical service
providers, in order to ensure open two-way communication
between the Board and the Company’s key service providers
and to strengthen the engagement between the Company
and its stakeholders.
Governance and Effectiveness
In November 2023, the MESPC conducted a review of its
activities against its constitution and terms of reference in
respect of the year under review and concluded that it had
satisfactorily complied with all of its terms of reference.
HVPE Annual Report and Accounts 202480
Remuneration Committee
About the Committee
The Remuneration Committee was established on 23 March
2021 and is chaired by the Senior Independent Director of
the Company, Ms Barnes. Its members are all independent
Directors, as outlined on page 74.
The Remuneration Committee has been delegated
responsibility for determining the policy for Directors’
remuneration and setting the remuneration of the Chair of
the Board. The Committee also makes recommendations
to the Board for the Directors’ remuneration levels which are
determined in accordance with the Company’s Articles of
Incorporation. Remuneration does not include performance-
related elements.
There was one scheduled meeting held during the year.
All members attended the meeting.
When reviewing the Directors’ fees for the coming year ending
31 January 2025, the Remuneration Committee was acutely
conscious of the impact of the persistently wide discount
on shareholder returns. As a result, the Committee decided
not to recommend any increase to the fees paid to the
independent Directors, the Chair or the Committee Chairs. The
recommendations were subsequently approved by the Board
and so the fees remain unchanged from those that took effect
from 1 February 2023. It was confirmed that non-Independent
Directors do not receive any remuneration.
Governance and Effectiveness
During the year, the Remuneration Committee conducted
a review of its activities against its constitution and terms
of reference in respect of the year under review and
concluded that it had satisfactorily complied with all
of its terms of reference.
Inside Information Committee
About the Committee
The Committee was formed on 12 July 2016 and is chaired
by Mr Warner. Any Director can form part of this Committee,
but its usual Member is Mr Wilderspin.
The purpose of the Committee is to assist and inform the
decisions of the Board concerning the identification of inside
information and to make recommendations as to how and
when any such information may need to be made public in
order for the Company to comply with its obligations under
the UK Market Abuse Regulation.
81Strategic Report Governance Financial Statements Other Information
An ordinary resolution for the approval of this Directors’ Remuneration Report will be put to shareholders at the forthcoming AGM
to be held on 17 July 2024.
There are no long-term incentive schemes provided by the Company and no performance fees are paid to Directors. Directors
affiliated to HarbourVest do not receive any fees.
No Director has a service contract with the Company. Each Director is appointed by a letter of appointment which sets out the
terms of the appointment.
Directors are remunerated in the form of fees, payable quarterly in arrears to the Director personally. The table below details the
fees paid to each Director of the Company for the years ended 31 January 2023 and 31 January 2024. The Company’s Articles
of Incorporation limit the aggregate fees payable to Directors to a maximum of £550,000 per annum.
As described in the report from the Remuneration Committee, it recommended that there should be no increase in any of the
fees paid to the independent Directors for the financial year ending 31 January 2025. The Board unanimously approved the
Committee’s recommendation.
Under the Company’s Articles of Incorporation, Directors are entitled to additional ad-hoc remuneration for project work outside
the scope of their ordinary duties. No such payments were made in the year ended 31 January 2024.
Director Role
Fees Paid for the 12
Months ended 31
January 2024
Fees Paid for the 12
Months Ended 31
January 2023
Anulika Ajufo Independent Director £57,913 £40,217
1
Francesca Barnes Senior Independent Director £60,913 £59,661
2
Libby Burne Chair of MESPC, Independent Director £60,913 £58,434
3
Carolina Espinal Director Nil Nil
Alan Hodson Independent Director Nil £27,75 6
4
Ed Warner Chair, Independent Director £108,827 £106,605
Steven Wilderspin Chair of ARC, Independent Director £69,870 £68,246
Peter Wilson Director Nil
5
Nil
1 Ms Ajufo was appointed with effect from 19 May 2022.
2 Ms Barnes was appointed Senior Independent Director with effect from 20 July 2022.
3 Ms Burne was appointed Chair of the MESPC with effect from 21 July 2022.
4 Mr Hodson retired from the Board and as Senior Independent Director at the AGM on 20 July 2022.
5 Mr Wilson retired from the Board at the AGM on 19 July 2023.
Role
Annual Fee from
1 February 2024
Annual Fee to 31
January 2024
Annual Fee to
31 January 2023
Chair of the Board £109,000 £109,000 £107,000
Non-Executive Director £58,000 £58,000 £57,000
Premium for Senior Independent Director £3,000 £3,000 £3,000
Premium for Chair of the Audit and Risk Committee £12,000 £12,000 £11,500
Premium for Chair of MESPC £3,000 £3,000 £3,000
Directors’ remuneration report
Ed Warner
Chair
29 May 2024
Steven Wilderspin
Chair of the Audit and Risk Committee
HVPE Annual Report and Accounts 202482
Statement of Compliance with the AIC Code of Corporate Governance
The Directors place a large degree of importance on ensuring that high standards of corporate governance are maintained and
aim to comply to the greatest extent possible with the provisions of the AIC Code, which was published in 2019.
The Board has considered the principles and provisions of the AIC Code. The AIC Code addresses all the principles and provisions
set out in the 2018 UK Corporate Governance Code (the “UK Code”), as well as setting out additional provisions on issues that
are of specific relevance to the Company. The AIC Code has been endorsed by the Financial Reporting Council and the Guernsey
Financial Services Commission (“GFSC”). By reporting against the AIC Code, the Company is meeting its obligations under the
UK Code, the GFSC Finance Sector Code of Corporate Governance, as amended in November 2021, and the associated disclosure
requirements set out under paragraph 9.8.6R of the Financial Conduct Authority’s Listing Rules. The Board considers that reporting
against the principles and provisions of the AIC Code provides more relevant information to stakeholders. The AIC Code is
available on the AIC website: www.theaic.co.uk.
The Company complied with all the principles and provisions of the AIC Code during the year ended 31 January 2024 except for
a difference relating to the duties of the Nomination Committee. Details of this difference, which constitutes an ongoing exception
to one of the principles of the AIC Code, are set out below:
The Duties of the Nomination Committee
As set out on page 80, the Board has established a Nomination Committee, but has chosen to limit its remit to focus purely on
the identification and nomination of Board candidates to fill Board vacancies as and when they arise. Other matters relating to
the structure, size, and composition of the Board, and plans in respect of tenure and succession for Independent Directors form
part of the matters reserved for the entire Board. By reserving those matters for the Board, the Company does not comply with
provision 7.2 22 of the AIC Code. The Directors believe that their deliberations in relation to these matters have benefitted from
the input from all the Directors, including those appointed by HarbourVest.
Set out below is where stakeholders can find further information within the Annual Report about how the Company has complied
with the various principles and provisions of the AIC Code.
1. Board Leadership and Purpose
Purpose On page 66
Strategy On pages 66 to 73
Values and culture On page 74
Shareholder engagement On pages 36 to 38
Stakeholder engagement On pages 36 to 38
2. Division of Responsibilities
Director independence On page 68
Board meetings On page 75
Relations with Investment Manager On page 69
Management Engagement Committee On page 80
3. Composition, Succession, and Evaluation
Nomination Committee On page 80
Director re-election On pages 75 and 76
Use of an external search agency Approach to Succession Planning on page 80
Board evaluation Board and Committees Evaluation on page 76
4. Audit, Risk, and Internal Control
Audit and Risk Committee On pages 77 to 79
Emerging and principal risks On pages 40 to 43
Risk management and internal control systems On page 78
Going concern statement On pages 71 to 72
Viability statement On page 72
5. Remuneration
Directors’ remuneration report On page 82
83Strategic Report Governance Financial Statements Other Information
Financial
Statements
HVPE Annual Report and Accounts 202484
86 Independent Auditor’s Report
93 Consolidated Statements of Assets
and Liabilities
94 Consolidated Statements of Operations
95 Consolidated Statements of Changes in
Net Assets
96
Consolidated Statements of Cash Flows
97 Consolidated Schedule of Investments
101 Notes to Consolidated Financial
Statements
“
Whether one is working
to drive better investment
results, develop new
insights through data or
deliver accurate information
more efficiently, our mission
is to unlock the power
of private markets;
understanding both
the opportunity and
responsibility embedded
in that mission.”
Peter Wilson Co-CEO, HarbourVest Partners
85 Financial Statements
Strategic Report Governance Other Information
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 2024 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 12, 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 Financial Statements:
> give a true and fair view of the state of the Group’s affairs as at 31
January 2024 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:
> We discussed with the Directors their assessment of going
concern, which included four scenario analysis models - ‘Base
Case’, ‘Low Case’, ‘Optimistic Case’ and ‘Extreme downside Case’
scenarios - the ‘Low Case’ being considered by the Directors to be
the most likely scenario;
> We ascertained that the going concern assessment covered a
period up until 30 June 2025 from the date of approval of the
Financial Statements;
> We reviewed the arithmetical accuracy of the ‘Low Case’ and
‘Extreme downside Case’ scenario models;
> For the ‘Low Case’ scenario we reviewed the working capital
documentation which supports the Directors’ assessment of going
concern;
> We considered the estimation uncertainty of the prior year’s most
likely scenario by comparing it to the Group’s actual performance
to date, discussed the material movements with the Board and
the Investment Manager, and obtained the required supporting
documentation;
> For the ‘Extreme downside Case’ scenario, we challenged the
sensitivities and assumptions used in the forecast through reverse
stress testing to understand how severe the downside scenario
would have to be to result in the elimination of liquidity headroom
or a covenant breach;
> We held discussions with the Audit Committee and Investment
Manager to determine whether, in their opinion, there is any
material uncertainty regarding the Group’s ability to pay liabilities
and commitments as they fall due. Through these discussions we
considered and challenged the options available to the Group if it
were in a stressed scenario. These options included but were not
limited to the use of credit facilities and sales in the secondary
market;
> 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 % of the total commitments made, including a
discussion with the Investment Manager regarding the possibility
for uncalled commitments to be called;
> We confirmed available credit facility balances to understand the
potential impact of the leverage in the underlying funds;
> We recalculated the forecast debt covenants on external loans to
validate compliance within the going concern period;
> We considered whether the Directors’ assessment of going concern
as included in the Annual Report is appropriate and consistent with
the disclosure in the viability statement; and
> We 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.
HVPE Annual Report and Accounts 202486
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 2025.
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 £78.4m 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 pages 44 to 49 in the
Purposeful Growth (Environmental, Social and Governance). 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 2024. 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.
87Strategic Report Governance Financial Statements Other Information
Independent Auditor’s Report continued
Risk Our Response to the Risk Key Observations
Communicated to the
Audit and Risk 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”
($4,058 million; 2023
$3,616 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 2024, which
comprise 103.5%
(2023: 94.3%) 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) in the
corresponding financial statements as at 31 December 2023 which, prior to
adjustments, formed the basis for the Group’s carrying amount as at 31 January
2024;
> We obtained a schedule of all adjustments made to those audited and unaudited
NAVs between 1 January 2024 and 31 January 2024, and:
– On a sample basis verified 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 2024 to 31 January 2024 that could have had a material impact
when applied to the key sensitive inputs to the valuations of the direct investments
of the HarbourVest investment funds;
– Considered whether there were changes in market conditions during the period
from 1 January 2024 to 31 January 2024 that could have had a material impact
when applied to the marketable securities held by 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 2023 or other material changes to the NAV subsequent to the
HarbourVest investment funds’ finalized 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.
HVPE Annual Report and Accounts 202488
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 $78.4 million (2023:
$76.8million), which is 2% (2023: 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 2024 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% (2023: 75%) of our planning
materiality, namely $58.8m (2023: $57.6m). 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 $3.9m (2023: $3.8m), 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.
89Strategic Report Governance Financial Statements Other Information
Independent Auditor’s Report continued
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 71 to 73;
> 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 71 to 73;
> 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 71 to 73;
> Directors’ statement on fair, balanced and understandable set out
on page 73;
> Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks set out on pages 40 to 43;
> The section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on page 78; and;
> The section describing the work of the audit committee set out on
pages 77 to 79.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement
set out on page 73, 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;
– The Companies (Guernsey) Law, 2008, as amended.
> We understood how 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.
HVPE Annual Report and Accounts 202490
> 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.
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 17 years, covering the years ending 31 January 2008 to 31
January 2024.
> 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
29 May 2024
Notes:
1. The maintenance and integrity of the Company’s website is the sole responsibility of the Directors; the work carried out by the auditors does not involve consideration
of these matters and, accordingly, the auditor accepts no responsibility for any changes that may have occurred to the Financial Statements since they were initially
presented on the website.
2. Legislation in Guernsey governing the preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
91Strategic Report Governance Financial Statements Other Information
Report of 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
(together the “Group”), which comprise the consolidated statements
of assets and liabilities, including the consolidated schedules of
investments, as of 31 January 2024 and 2023, and the related
consolidated statements of operations, changes in net assets, and
cash flows for the years then ended, and the related notes 1 to 12
(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 2024 and 2023, 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 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
29 May 2024
HVPE Annual Report and Accounts 202492
Consolidated Statements of Assets and Liabilities
At 31 January 2024 and 2023
In US Dollars
2024
(in thousands*)
2023
(in thousands*)
Assets
Investments (Note 4) 4,057,606 3,616,330
Cash and equivalents 140,156 197,523
Other assets 5,329 25,652
Total assets 4,203,091 3,839,505
Liabilities
Amounts due under the credit facility (Note 6) 275,000 -
Accounts payable and accrued expenses 7,479 1,441
Accounts payable to HarbourVest Advisers L.P. (Note 9) 40 138
Total liabilities 282,519 1,579
Commitments (Note 5)
Net assets $3,920,572 $3,837,926
Net assets consist of
Shares, unlimited shares authorised, 77,683,508 and 79,104,622 shares issued and outstanding at 31
January 2024 and 31 January 2023 respectively, no par value 3,920,572 3,837,926
Net assets $3,920,572 $3,837,926
Net asset value per share $50.47 $48.52
* Except net asset value per share
The accompanying notes are an integral part of the Financial Statements.
The Financial Statements on pages 93 to 100 were approved by the Board on 29 May 2024 and were signed on its behalf by:
Ed Warner
Chair
Steven Wilderspin
Chair of the Audit and Risk Committee
93Strategic Report Governance Financial Statements Other Information
Consolidated Statements ofOperations
For the Years Ended 31 January 2024 and 2023
In US Dollars
2024
(in thousands)
2023
(in thousands)
Realised and unrealised gains (losses) on investments
Net realised gain on investments 90,514 236,752
Net change in unrealised appreciation and depreciation on investments 49,893 (291,301)
Net gain (loss) on investments 140,407 (54,549)
Investment income
Interest and dividends from cash and equivalents 8,621 3,622
Other income 186 71
Expenses
Interest expense (Note 6) 14,465 -
Non-utilisation fees (Note 6) 6,127 7,078
Investment services (Note 3) 2,475 2,021
Financing expenses 2,374 2,455
Professional fees 1,118 975
Directors’ fees and expenses (Note 9) 474 526
Marketing expenses 356 288
Management fees (Note 3) 117 384
Tax expenses 47 7
Other expenses 513 633
Total expenses 28,066 14,367
Net investment loss (19,259) (10,674)
Net increase (decrease) in net assets resulting from operations $121,148 $(65,223)
The accompanying notes are an integral part of the Financial Statements.
HVPE Annual Report and Accounts 202494
Consolidated Statements of Changes in Net Assets
For the Years Ended 31 January 2024 and 2023
In US Dollars
2024
(in thousands)
2023
(in thousands)
Increase (decrease) in net assets from operations
Net realised gain on investments 90,514 236,752
Net change in unrealised appreciation and depreciation on investments 49,893 (291,301)
Net investment loss (19,259) (10,674)
Net increase (decrease) in net assets resulting from operations 121,148 (65,223)
Capital Share Transactions
Share Repurchase (38,502) (18,784)
Net decrease in net assets from capital share transactions (38,502) (18,784)
Total increase (decrease) in net assets 82,646 (84,007)
Net assets at beginning of year 3,837,926 3,921,933
Net assets at end of year $3,920,572 $3,837,926
The accompanying notes are an integral part of the Financial Statements.
95Strategic Report Governance Financial Statements Other Information
Consolidated Statements of Cash Flows
For the Years Ended 31 January 2024 and 2023
In US Dollars
2024
(in thousands)
2023
(in thousands)
Cash flows from operating activities
Net increase (decrease) in net assets resulting from operations 121,148 (65,223)
Adjustments to reconcile net increase (decrease) in net assets resulting from operations
to net cash used in operating activities:
Net realised gain on investments (90,514) (236,752)
Net change in unrealised appreciation and depreciation on investments (49,893) 291,301
Contributions to private equity investments (592,792) (704,903)
Distributions from private equity investments 310,296 6 67,385
Other 7,890 (19,524)
Net cash used in operating activities (293,865) (67,716)
Cash flows from financing activities
Proceeds from borrowing on the credit facility 275,000 -
Share Repurchase (38,502) (18,784)
Net cash provided by (used in) financing activities 236,498 (18,784)
Net decrease in cash and equivalents (57,367) (86,500)
Cash and equivalents at beginning of year 197,523 284,023
Cash and equivalents at end of year $140,156 $197,523
Supplemental disclosure of non- cash activities
Distribution-in-kind from HarbourVest Adelaide Feeder L.P. (Note 10) - $117,233
Contribution-in-kind to HarbourVest Infrastructure Income Delaware Parallel Partnership L.P. (Note 10) - $(117,233)
The accompanying notes are an integral part of the Financial Statements.
HVPE Annual Report and Accounts 202496
Consolidated Schedule of Investments
At 31 January 2024
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. 5,175 204,623 237,2 27 464 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 97,87 7 165,442 288 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
97Strategic Report Governance Financial Statements Other Information
Consolidated Schedule of Investments continued
International/Global Funds
Unfunded
Commitment
(in thousands)
Amount
Invested*
(in thousands)
Distributions
Received
(in thousands)
Fair Value
(in thousands)
Fair Value
asa % of
NetAssets
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, 8 45 17 7, 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 17,4 00 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 7 7,026 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 7 7,54 8 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 11,752 177,8 3 8 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, 5 0 6 378 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. 207,5 0 0 42,500 – 5 7,126 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
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.
* 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 €47,450,000.
** 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.
HVPE Annual Report and Accounts 202498
Consolidated Schedule of Investments
At 31 January 2023
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 45,924 816 0.0
HarbourVest Partners VI-Direct Fund L.P. 1,313 46,722 40,882 260 0.0
HarbourVest Partners VI-Partnership Fund
L.P. 5,175 204,623 237,227 503 0.0
HarbourVest Partners VII-Venture
Partnership Fund L.P.
†
2,319 135,290 204,163 2,132 0.1
HarbourVest Partners VII-Buyout
Partnership Fund L.P.
†
3,850 74,417 103,486 187 0.0
HarbourVest Partners VIII-Cayman
Mezzanine and Distressed Debt Fund L.P. 2,000 48,202 61,472 2,466 0.1
HarbourVest Partners VIII-Cayman Buyout
Fund L .P. 7,5 0 0 245,259 404,137 21,860 0.6
HarbourVest Partners VIII-Cayman
Venture Fund L.P. 1,000 49,192 88,651 15,883 0.4
HarbourVest Partners 2007 Cayman
Direct Fund L.P. 2,250 97,877 160,808 4,946 0.1
HarbourVest Partners IX-Cayman Buyout
Fund L .P. 10,473 60,808 84,303 49,417 1.3
HarbourVest Partners IX-Cayman Credit
Opportunities Fund L.P. 1,875 10,674 11,337 6,807 0.2
HarbourVest Partners IX-Cayman Venture
Fund L .P. 3,500 66,826 124,117 94,932 2.5
HarbourVest Partners 2013 Cayman Direct
Fund L .P. 3,229 97,131 148,459 51,604 1.3
HarbourVest Partners Cayman Cleantech
Fund II L.P. 900 19,156 16,143 18,984 0.5
HarbourVest Partners X Buyout Feeder
Fund L .P. 42,840 209,188 154,487 219,696 5.7
HarbourVest Partners X Venture Feeder
Fund L .P. 6,290 141,764 91,859 278,980 7.3
HarbourVest Partners Mezzanine Income
Fund L .P. 8,155 42,067 62,671 18,132 0.5
HarbourVest Partners XI Buyout Feeder
Fund L .P. 129,500 220,500 70,642 27 7, 49 4 7.2
HarbourVest Partners XI Micro Buyout
Feeder Fund L.P. 19,955 45,045 18,490 55,692 1.5
HarbourVest Partners XI Venture Feeder
Fund L .P. 33,250 156,786 38,522 221,358 5.8
HarbourVest Adelaide Feeder L.P. 6,000 144,000 176,644 1,320 0.0
HarbourVest Partners XII Buyout Feeder
Fund L .P. 457,875 37,125 – 42,754 1.1
HarbourVest Partners XII Micro Buyout
Feeder Fund L.P. 78,400 1,600 – 1,102 0.0
HarbourVest Partners XII Venture Feeder
Fund L .P. 122,175 12,825 – 13,122 0.3
HarbourVest Partners XII Venture AIF
SCSp 102,350 12,725 – 13,463 0.4
Harbourvest Infrastructure Income
Delaware Parallel Partnership – 117, 233 18,373 119,638 3.1
Total US Funds 1,054,393 2,343,743 2,362,798 1,533,549 40.0
99Strategic Report Governance Financial Statements Other Information
Consolidated Schedule of Investments continued
International/Global Funds
Unfunded
Commitment
(in thousands)
Amount
Invested*
(in thousands)
Distributions
Received
(in thousands)
Fair Value
(in thousands)
Fair Value
asa % of
NetAssets
HarbourVest International Private Equity
Partners III-Partnership Fund L.P. 3,450 147,729 148,440 395 0.0
HIPEP V-2007 Cayman European Buyout
Companion Fund L.P.
§
1,546 63,880 84,434 665 0.0
Dover Street VII Cayman L.P. 4,250 83,504 117,756 775 0.0
HIPEP VI-Cayman Partnership Fund L.P.
**
5,432 117, 845 163,073 73,196 1.9
HIPEP VI-Cayman Asia Pacific Fund L.P. 2,500 47,687 55,840 26,154 0.7
HIPEP VI-Cayman Emerging Markets Fund L.P. - 30,059 12,151 24,542 0.6
Dover Street VIII Cayman L.P. 14,400 165,724 255,442 21,677 0.6
HVPE Charlotte Co-Investment L.P. - 93,894 161,228 1,979 0.1
HarbourVest Global Annual Private Equity Fund
L.P. 11,300 88,701 128,959 79,433 2.1
HIPEP VII Partnership Feeder Fund L.P. 14,688 110,313 94,516 137,579 3.6
HIPEP VII Asia Pacific Feeder Fund L.P. 1,950 28,050 18,269 34,051 0.9
HIPEP VII Emerging Markets Feeder Fund L.P. 2,600 17,4 00 7,385 21,462 0.6
HIPEP VII Europe Feeder Fund L.P.
††
9,411 61,749 62,637 75,215 2.0
HarbourVest Canada Parallel Growth Fund L.P.
‡‡
5,056 19,224 12,427 30,321 0.8
HarbourVest 2015 Global Fund L.P. 8,500 91,517 106,979 81,507 2.1
HarbourVest 2016 Global AIF L.P. 23,000 77,026 76,508 7 7,869 2.0
HarbourVest Partners Co-Investment IV AIF L.P. 7,000 93,000 85,330 86,145 2.2
Dover Street IX Cayman L.P. 13,000 87,000 88,613 63,361 1.7
HarbourVest Real Assets III Feeder L.P. 3,750 46,250 9,121 52,457 1.4
HarbourVest 2017 Global AIF L.P. 27,5 0 0 72,521 53,510 81,961 2.1
HIPEP VIII Partnership AIF L.P. 49,725 120,275 28,926 154,277 4.0
Secondary Overflow Fund III L.P. 24,214 68,876 66,304 68,707 1.8
HarbourVest Asia Pacific VIII AIF Fund L.P. 8,250 41,756 8,000 50,108 1.3
HarbourVest 2018 Global Feeder Fund L.P. 15,400 54,600 18,850 75,203 2.0
HarbourVest Partners Co-Investment V Feeder
Fund L .P. 22,500 7 7,54 8 15,940 123,382 3.2
HarbourVest Real Assets IV Feeder L.P. 22,000 28,000 4,167 35,278 0.9
HarbourVest 2019 Global Feeder Fund L.P. 36,000 64,007 13,621 87,4 89 2.3
HarbourVest Credit Opportunities Fund II L.P. 2,500 47,5 0 0 2,710 50,745 1.3
Dover Street X Feeder Fund L.P. 55,125 94,893 32,646 115,696 3.0
Secondary Overflow Fund IV L.P. 57,573 71,833 24,776 78,578 2.1
HIPEP IX Feeder Fund L.P. 388,000 97,0 08 7, 0 95 120,489 3.1
HarbourVest 2020 Global Feeder Fund L.P. 16,000 34,001 3,513 39,054 1.0
HarbourVest Partners Co-Investment VI Feeder
Fund L .P. 93,750 31,256 - 31,562 0.8
HarbourVest Asia Pacific 5 Feeder Fund L.P. 291,000 9,000 - 7,756 0.2
HarbourVest 2021 Global Feeder Fund L.P. 111,350 58,701 987 63,411 1.7
HarbourVest 2022 Global Feeder Fund L.P. 97,000 3,000 – 4,323 0.1
Dover Street XI Feeder Fund L.P. 225,000 – – 5,979 0.2
HarbourVest Credit Opportunities III Feeder
Fund L .P. 75,000 – – – –
Total International/Global Funds 1,749,720 2,445,329 1,970,152 2,082,782 54.3
Total Investments 2,804,113 4,789,072 4,332,950 3,616,330 94.3
As of 31 January 2023, the cost basis of partnership investments is $2,304,772,000.
Totals and subtotals may not recalculate due to rounding.
The accompanying notes are an integral part of the Financial Statements.
* 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 €47,450,000.
** 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.
HVPE Annual Report and Accounts 2024100
Notes to 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 2024, the Company’s 77,683,508 shares continued to
be 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 1,421,114 and 757,864 shares during the
years ended 31 January 2024 and 31 January 2023, 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,
balance sheet management, 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 105 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 expected during the Global Financial
Crisis (“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 five wholly owned subsidiaries:
HVGPE – Domestic A L.P., HVGPE – Domestic B L.P., HVGPE –
Domestic C L.P., HVGPE – International A L.P. and HVGPE –
International B 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.
101Strategic Report Governance Financial Statements Other Information
Notes to Consolidated Financial Statements continued
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 2024,
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.
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 onInvestments
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
andDepreciation 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.
HVPE Annual Report and Accounts 2024102
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 £1,200
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
2024, 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
(“BNP”) 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 2024
and 2023, fees of $158,000 and $157,000, respectively, were incurred
to BNP and are included as other expenses in the Consolidated
Statements of Operations.
Registrar
The Company has retained Link Asset Services (formerly ‘Capita’)
as share registrar. Fees for this service include a base fee of £15,500,
plus other miscellaneous expenses. During the years ended
31 January 2024 and 2023, registrar fees of $19,000 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 2024 and 2023, auditor fees of
$453,000 and $363,000 were accrued, respectively, and are included
in professional fees in the Consolidated Statements of Operations.
The 31 January 2024 figure includes $326,000 relating to the
31 January 2024 annual audit fee and $6,000 relating to the prior
financial year’s audit fee. The 31 January 2023 figure includes
$269,000 relating to the 31 January 2023 annual audit fee and a credit
of $17,000 relating to the prior financial year’s audit fee. In addition,
the 31 January 2024 and 2023 figures include fees of $121,000 and
$111,000, respectively, for audit-related services due to the Auditor,
Ernst & Young LLP, conducting a review of the Interim Financial
Statements for each period end.
103Strategic Report Governance Financial Statements Other Information
Notes to Consolidated Financial Statements continued
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 2024 and 2023, reimbursements for services
provided by the Investment Manager were $2,475,000 and
$2,021,000, 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 2024 and 2023, 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 2024 and 2023.
Management fees included in the Consolidated Statements of
Operations are shown in the table below:
2024
(in thousands)
2023
(in thousands)
HVPE Charlotte
Co-Investment L.P. $117 $384
For the years ended 31 January 2024 and 2023, 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
0.44% respectively, on capital originally committed (0.13% and 0.44%
respectively, on committed capital 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.
Level 3 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.
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 and depreciation on investments.
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.
During the years ended 31 January 2024 and 2023, the Company
made contributions of $592,792,000 and $704,903,000, respectively,
to Level 3 investments and received distributions of $310,296,000
and $649,012,000, respectively, from Level 3 investments.
Please refer to Note 10 for further detail on the non-cash activity
during the prior year. As of 31 January 2024, $4,057,606,000 of the
Company’s investments are classified as Level 3. As of 31 January
2023, $3,616,330,000 of the Company’s investments were classified
as Level 3.
HVPE Annual Report and Accounts 2024104
Note 5 Commitments
As of 31 January 2024, the Company had unfunded investment
commitments to other limited partnerships of $2,500,899,000
which are payable upon notice by the partnerships to which the
commitments have been made. As of 31 January 2023, the Company
had unfunded investment commitments to other limited partnerships
of $2,804,113,000.
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 2023, 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 $1.5 million at 31 January
2024 and $2.3 million at 31 January 2023, 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
As of 31 January 2024, the Company had an agreement with
Mitsubishi UFJ Trust and Banking Corporation, New York Branch
(“MUFG”), Credit Suisse AG, London Branch (“Credit Suisse”) and
The Guardians of New Zealand Superannuation as manager and
administrator of the New Zealand Superannuation Fund (“New
Zealand Super”) for the provision of a multi-currency revolving credit
facility (the “Facility”) with a termination date no earlier than August
2027, subject to usual covenants. The MUFG commitment was
$300 million. On 20 December 2021, the Credit Suisse commitment
was increased from $300 million to $400 million. On 15 August 2022,
the commitment was further increased by $100 million through New
Zealand Super as the lender.
Amounts borrowed against the Facility accrue interest at an
aggregate rate of Term SOFR/SONIA/EURIBOR, a margin, and,
under certain circumstances, a mandatory minimum cost.
The Facility is 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 Facility and fund-level borrowing) and portfolio diversity tests
applied to the Investment Portfolio of the Company. At 31 January
2024 and 31 January 2023, there was $275,000,000 and no debt
outstanding against the Facility, respectively. For the years ended
31 January 2024 and 2023, interest of $14,465,000 and $0,
respectively, was incurred. Included in other assets at 31 January
2024 and 31 January 2023 are deferred financing costs of
$5,066,000 and $6,950,000, respectively, related to refinancing the
Facility. The deferred financing costs are amortised on the terms of
the Facility. The Company is 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. For the years
ended 31 January 2024 and 2023, $6,127,000 and $7,078,000,
respectively, in non-utilisation fees have been incurred.
105Strategic Report Governance Financial Statements Other Information
Notes to Consolidated Financial Statements continued
Note 7 Financial Highlights
For the Years Ended 31 January 2024 and 2023
In US Dollars 2024 2023
Shares
Per share operating performance:
Net asset value, beginning of period $48.52 $ 49.11
Net realised and unrealised gains (losses) 1.79 (0.70)
Net investment loss (0.26) (0.13)
Total from investment operations 1.53 (0.83)
Net increase from repurchase of Class A shares 0.42 0.24
Net asset value, end of period $50.47 $48.52
Market value, end of period $29.15* $27.10 *
Total return at net asset value 4.0% (1.2)%
Total return at market value 7.6% (27.3)%
Ratios to average net assets
Expenses
†
0.72% 0.37%
Net investment loss (0.50)% (0.28)%
* Represents the US dollar-denominated share price.
† Does not include operating expenses of underlying investments.
HVPE Annual Report and Accounts 2024106
Note 8 Publication and Calculation ofNetAsset 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
net asset value 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 payable to HarbourVest Advisers L.P. of $40,000
and $138,000 represent expenses of the Company incurred in the
ordinary course of business, which have been paid by and are
reimbursable to HarbourVest Advisers L.P. at 31 January 2024
and 2023, respectively.
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 $474,000
and $526,000 were incurred during the years ended 31 January 2024
and 2023, respectively.
Note 10 Investment Transaction
On 1 July 2022, HarbourVest Infrastructure Income Delaware Parallel
Partnership L.P. and its related entities (“HIIP”) exercised their
contractual right to purchase the portfolio assets of HarbourVest
Adelaide L.P. (“Adelaide”) in accordance with the Adelaide limited
partnership agreement. As consideration for the portfolio assets,
partners of Adelaide and its feeder funds could elect between the
continuation option (which would result in them receiving ordinary
HIIP units) and the liquidity option (which would result in them
receiving partial cash consideration with the remainder of the
consideration in the form of HIIP liquidity units).
The Company elected to participate 50% in the continuation option
and 50% in the liquidity option. As such, as of 1 July 2022 the
Company received a cash distribution of $52,903,685, a distribution
in kind of $32,164,540 worth of HIIP liquidity units, and a distribution
in kind of $85,068,225 worth of ordinary HIIP units.
Note 11 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 12 Subsequent Events
In the preparation of the Financial Statements, the Company has
evaluated the effects, if any, of events occurring after 31 January
2024 to 30 May 2024, the date that the Financial Statements
were signed.
The Company made the following purchases of its ordinary shares for
cancellation:
Date Number of Shares Amount Purchased (£)
1 February 2024 79,979 1,856,262
2 February 2024 114,912 2,704,877
5 February 2024 100,000 2,398,300
6 February 2024 30,533 734,063
7 February 2024 58,000 1,408,958
7 March 2024 34,730 821,237
8 March 2024 50,000 1,185,000
11 March 2024 50,000 1,182,500
12 March 2024 50,000 1,182,500
13 March 2024 50,000 1,182,500
18 March 2024 50,000 1,175,000
20 March 2024 46,000 1,071,175
Total 714,154 16,902,372
On March 13, 2024, the Company initiated a draw of $50 million on
the credit facility. On May 17, 2024, the Company drew an additional
$40 million on the facility.
There were no other events or material transactions subsequent to
31 January 2024 that required recognition or disclosure in the
Consolidated Financial Statements.
107Strategic Report Governance Financial Statements Other Information
Other
Information
HVPE Annual Report and Accounts 2024108
110 Supplementary data
124 Glossary
126 Alternative Performance Measures
129 Disclosures
131 Key information
“
We believe our strategy
is working well and we
are confident it will continue
to do so in the future,
especially if the investment
environment continues to
improve as we anticipate.”
Richard Hickman Managing Director
HarbourVest Partners
109 Other Information
Strategic Report Governance Financial Statements
Supplementary data
HVPE’s HarbourVest Fund Investments at 31 January 2024
HVPE’s HarbourVest Fund investments and secondary co-investments are profiled below.
Financial information at 31 January 2024 for each fund is provided in the Audited Consolidated Financial Statements of the
Company’s Annual Report and Accounts on pages 97 to 98.
V = Venture B = Buyout O = Other P = Primary S = Secondary D = Direct Co-investment
HarbourVest Fund Phase Vintage Year Stage Geography Strategy
Investment Phase
HarbourVest Stewardship Fund Investment 2023 V,B Global D
HarbourVest Infrastructure Opportunities III Investment 2023 O Global S,D
HIPEP X Fund Investment 2023 V,B EUR, AP, RoW P,S,D
HarbourVest Private Equity Continuation Solutions Investment 2022 V,B Global S,D
Secondary Overflow Fund V Investment 2022 V,B Global S
Dover Street XI Investment 2022 V, B, O Global S
HarbourVest Credit Opportunities III Investment 2022 O US D
HarbourVest 2022 Global Investment 2022 V, B, O Global P, S, D
HarbourVest Infrastructure Income Partnership Investment 2022 O Global S, D
HarbourVest Partners XII Venture AIF Investment 2022 V US P, S, D
HarbourVest 2021 Global Fund Investment 2021 V, B, O Global P, S, D
HarbourVest Asia Pacific 5 Investment 2021 V, B AP P, S, D
HarbourVest Partners XII Venture Investment 2021 V US P, S, D
HarbourVest Partners XII Micro Buyout Investment 2021 B US P, S, D
HarbourVest Partners XII Buyout Investment 2021 B US P, S, D
HarbourVest Partners Co-Investment VI Investment 2021 V, B, O Global D
HIPEP IX Partnership Fund Investment 2020 V, B EUR, AP, RoW P, S, D
HarbourVest 2020 Global Fund Investment 2020 V, B, O Global P, S, D
Secondary Overflow Fund IV Investment 2020 V, B Global S
Growth Phase
HarbourVest Real Assets IV Growth 2019 O Global S
HarbourVest Credit Opportunities Fund II Growth 2019 O US D
Dover Street X Growth 2019 V, B Global S
HarbourVest 2019 Global Fund Growth 2019 V, B, O Global P, S, D
HarbourVest Partners Co-Investment V Growth 2018 V, B, O Global D
HarbourVest Adelaide Growth 2018 O Global S, D
HarbourVest 2018 Global Fund Growth 2018 V, B, O Global P, S, D
HarbourVest Partners XI Venture Growth 2018 V US P, S, D
HarbourVest Partners XI Micro Buyout Growth 2018 B US P, S, D
HarbourVest Partners XI Buyout Growth 2018 B US P, S, D
HIPEP VIII Asia Pacific Fund Growth 2017 V, B AP P, S, D
HarbourVest 2017 Global Fund Growth 2017 V, B, O Global P, S, D
HIPEP VIII Partnership Fund Growth 2017 V, B EUR, AP, RoW P, S, D
Secondary Overflow Fund III Growth 2016 V, B Global S
HarbourVest Partners Co-Investment IV Growth 2016 V, B Global D
HarbourVest Real Assets III Growth 2016 O Global S
HarbourVest 2016 Global Fund Growth 2016 V, B, O Global P, S, D
Dover Street IX Growth 2016 V, B Global S
HarbourVest 2015 Global Fund Growth 2015 V, B, O Global P, S, D
HarbourVest Canada Growth Fund Growth 2015 V US, CAN P, D
HarbourVest Mezzanine Income Fund Growth 2015 O US D
HarbourVest X Buyout Growth 2015 B US P, S, D
HarbourVest X Venture Growth 2015 V US P, S, D
HVPE Annual Report and Accounts 2024110
HarbourVest Fund Phase Vintage Year Stage Geography Strategy
Mature Phase
HarbourVest Global Annual Private Equity Fund Mature 2014 V, B, O Global P, S, D
HIPEP VII Asia Pacific Fund Mature 2014 V, B AP P, S, D
HIPEP VII Emerging Markets Fund Mature 2014 V, B RoW P, S, D
HIPEP VII Europe Fund Mature 2014 V, B EUR P, S, D
HIPEP VII Partnership Fund Mature 2014 V, B EUR, AP, RoW P, S, D
HarbourVest 2013 Direct Fund Mature 2013 V, B Global D
HarbourVest Cleantech Fund II Mature 2012 V Global P, S, D
Dover Street VIII Mature 2012 V, B Global S
Conversus Capital Mature 2011 V, B, O Global S
HarbourVest Partners IX Buyout Fund Mature 2011 B US P, S, D
HarbourVest Partners IX Credit Opportunities Fund Mature 2011 O US P, S, D
HarbourVest Partners IX Venture Fund Mature 2011 V US P, S, D
HIPEP VI Asia Pacific Fund Mature 2008 V, B AP P
HIPEP VI Emerging Markets Fund Mature 2008 V, B RoW P
HIPEP VI Partnership Fund Mature 2008 V, B EUR, AP, RoW P
Dover Street VII Mature 2007 V, B Global S
HarbourVest Partners 2007 Direct Fund Mature 2007 B Global D
HarbourVest VIII Buyout Fund Mature 2006 B US P, S, D
HarbourVest VIII Mezzanine and Distressed Debt Fund Mature 2006 O US P, S, D
HarbourVest VIII Venture Fund Mature 2006 V US P, S, D
HarbourVest VII Venture Fund Mature 2003 V US P, S
HarbourVest VI Direct Fund Mature 1999 V, B US D
HarbourVest VI Partnership Fund Mature 1999 V, B US P, S
HIPEP III Partnership Fund Mature 1997 V.B EUR, AP, RoW P,S
HarbourVest V Partnership Fund Mature 1997 V, B US P, S
Vintage year is year of first closing for investments made post 2023, and year of initial capital call for pre 2023. HarbourVest fund of
funds typically call capital over a multi-year period.
111Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Largest Underlying Companies at 31 January 2024
No single portfolio company represented more than 2.1% of the Investment Portfolio.
The five largest companies represented 5.2% of the Investment Portfolio.
The 25 largest companies represented 13.1% of the Investment Portfolio.
In total, the top 100 companies represented $1,149 million or 28.3% of the Investment Portfolio.
The 100 largest portfolio company investments based on Investment Portfolio value are listed by percentage of investment value.
Some companies below are held at least in part in HarbourVest direct funds (shown in bold). Some holdings cannot be disclosed
due to confidentiality agreements in place.
Company Stage % Amount (m) Location Status Description
SheIn Venture/Growth 2.1% $85.2 Singapore Private Developer of a global B2C e-commerce platform
designed to provide women’s fast fashion goods
CrownRock, L.P. Venture/Growth 0.8% $33.4 United States Private Develops oil and gas properties in the Permian Basin
and Rocky Mountain regions of the United States
Undisclosed Buyout 0.8% $31.8 United States Private Undisclosed
DP World Australia
Pty Ltd
Infrastructure 0.8% $30.8 Australia Private Operates marine terminals and provides cargo handling
services and container terminals throughout Australia
Action Nederland
BV
Buyout 0.7% $28.8 Netherlands Private Leading European discount general merchandise
retailer
Preston Hollow
Capital, LLC
Buyout 0.7% $27.9 United States Private Specialty municipal finance company
Froneri Limited Buyout 0.5% $21.7 United
Kingdom
Private Ice cream and frozen food manufacturer in Europe
Apotex
Pharmaceutical
Holdings Inc.
Buyout 0.5% $18.8 Canada Private Developer and manufacturers of pharmaceutical
products intended to serve the healthcare sector. The
company provides generic pharmaceuticals in various
dosages and formats and exports its products to
various countries around the globe
Alpha Trains Infrastructure 0.5% $18.5 Luxembourg Private Operator of a train leasing company in Luxembourg.
The company operates as an investor, owner, and
manager of passenger trains and freight locomotives
and also operates passenger fleets and electric
locomotives
Howden Group
Holdings
Buyout 0.4% $17.9 United
Kingdom
Private UK-based insurance distributor, providing B2B
insurance through its core activities of retail
insurance broking, specialty and reinsurance broking
and managed agency underwriting
Sidney Murray
Hydroelectric
Project
Infrastructure 0.4% $17.1 United States Private 192MW hydroelectric facility located near the
Mississippi River in eastern Louisiana and represents
one of the largest hydroelectric facilities constructed in
the US
Olink Proteomics
Holding AB
Venture/Growth 0.4% $16.3 Sweden Public Protein biomarker discovery
Figma, Inc. Venture/Growth 0.4% $16.3 United States Private Start-up building a cloud-based design suite which will
allow an online community of designers to share and
contribute their ideas with each other
Smarsh, Inc. Buyout 0.4% $15.6 United States Private Smarsh, Inc. (“Smarsh”) is a mission-critical
communications intelligence platform used by
regulated organisations to capture, archive and
supervise data. The company offers market-leading
technology that helps its customers manage risk
Databricks, Inc. Venture/Growth 0.4% $15.4 United States Private Offers a cloud platform that helps organisations to turn
data into value
Itinere
Infraestructuras,
S,A.
Infrastructure 0.4% $15.2 Spain Private Provides civil infrastructure management services and
is engaged in management operation, maintenance and
conservation of toll roads in Northern Spain
Knowlton
Development
Corporation
Buyout 0.4% $15.0 Canada Private Consumer products contract manufacturer
HVPE Annual Report and Accounts 2024112
Company Stage % Amount (m) Location Status Description
Discord, Inc. Venture/Growth 0.4% $14.3 United States Private The company's platform offers secure voice and text
chat which works on both desktops and phones,
helping to talk regularly with the people they care about,
enabling gamers to chat while playing without affecting
the gaming performance
AssuredPartners,
LLC
Buyout 0.3% $14.2 United States Private Insurance brokerage
Staples, Inc. Buyout 0.3% $13.7 United States Private Office supply retailer
Lytx, Inc. Buyout 0.3% $13.7 United States Private Driver risk management software
Undisclosed Venture/Growth 0.3% $13.3 United States Private Undisclosed
Movate Buyout 0.3% $12.5 India Private Global leader in technology support with expertise in
supporting enterprise and consumer products,
managing IT infrastructures and deploying networks
IVC Evidensia Buyout 0.3% $12.4 United
Kingdom
Private Veterinary clinic platform
Integrity Marketing
Group, LLC
Buyout 0.3% $12.0 United States Private Integrity Marketing Group, LLC provides marketing
services. The Company develops and distributes life
and health insurance products with insurance carrier
partners
ByteDance
Technology Co.
Venture/Growth 0.3% $12.0 China Private Offers personal information recommendation engine
services which includes news, pictures, and essays
Community
Brands (formerly
Ministry Brands)
Venture/Growth 0.3% $11.5 United States Private Faith-based organisation management software
Puget Sound
Energy
Infrastructure 0.3% $10.8 United States Private Provider of electric and gas utility services intended to
help in decarbonisation and greenhouse gas emissions
reduction
Ultimate Kronos
Group
Buyout 0.3% $10.7 United States Private Global provider of workforce management software
and services focused on both large enterprises and
small and medium businesses
Undisclosed Buyout 0.3% $10.5 United States Private Undisclosed
Verisure Buyout 0.3% $10.4 Sweden Private Largest European provider of monitored alarm and
security solutions for residential and small businesses
CarepathRx Buyout 0.3% $10.4 United States Private Pharmacy services
Veeam Software Venture/Growth 0.3% $10.4 Switzerland Private International software development company that
creates easy-to-use and affordable products built for
virtualisation and the cloud
Calpine
Corporation
Buyout 0.3% $10.3 United States Private Operates and owns power generation facilities
FlixMobility GmbH Venture/Growth 0.2% $10.1 Germany Private Bus travel
Anaplan Buyout 0.2% $9.9 United States Private Cloud-Based Planning software company with
finance focus
Consumer Cellular Buyout 0.2% $9.9 United States Private Postpaid wireless services
Solace Systems Venture/Growth 0.2% $9.8 Canada Private Enterprise messaging solutions
Scale AI, Inc. Venture/Growth 0.2% $9.7 United States Private Developer of a data-oriented platform intended to
provide training and validation data for AI applications
IFS AB Buyout 0.2% $9.6 Sweden Private Enterprise ERP, EAM, FSM software solutions
provider
Ascent Holdings,
LLC
Venture/Growth 0.2% $9.6 United States Private Provides renewable power
CHG Healthcare
Services, Inc.
Buyout 0.2% $9.4 United States Private Provider of temporary healthcare staffing
Revolut Venture/Growth 0.2% $9.3 United
Kingdom
Private Developer of a foreign exchange and money
transferring application designed to promote financial
cohesion across the communities in which it operates
Ardonagh Buyout 0.2% $9.3 United
Kingdom
Private Leading UK insurance broker
Hub International
Limited
Buyout 0.2% $9.2 United States Private Commercial insurance brokerage
Undisclosed Buyout 0.2% $9.2 United States Private Undisclosed
113Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Company Stage % Amount (m) Location Status Description
Circana, Inc. Buyout 0.2% $9.0 United States Private Circana is the leading advisor on the complexity of
consumer behaviour
San Miguel
Industrias PET
S.A.
Buyout 0.2% $8.9 Peru Private PET bottles and preforms
The Amynta Group Buyout 0.2% $8.8 United States Private Provides specialty property and casualty insurance
focusing on workers' compensation and commercial
package coverage for small business, specialty risk and
extended warranty coverage
Inspire Brands, Inc. Buyout 0.2% $8.6 United States Private Operator of a restaurant chain offering a wide range of
fast food cuisine
Undisclosed Buyout 0.2% $8.6 Mexico Private Undisclosed
Undisclosed Buyout 0.2% $8.6 United States Private Undisclosed
SonarSource SA Venture/Growth 0.2% $8.5 Switzerland Private Provides applications for code quality management in
various languages for companies worldwide
IQ-EQ Buyout 0.2% $8.4 Luxembourg Private Provider of compliance, administration, asset and
advisory services intended for investment funds, global
corporations, family offices and private clients
H-Line Shipping
(HCPE
Investments)
Buyout 0.2% $8.4 South Korea Private Bulk and LNG shipping
USCO SpA Buyout 0.2% $8.3 Italy Private Largest independent provider of aftermarket
undercarriage, ground engaging tools, and replacement
parts to the global construction industry
Fanatics, Inc. Venture/Growth 0.2% $8.2 United States Private Operates as an online seller of licensed sporting
apparel
EasyPark Holding
AS
Venture/Growth 0.2% $8.1 Sweden Private Digital parking marketplace
IU Group N.V. Buyout 0.2% $8.1 Germany Private Provider of private higher education and personnel
development services
Undisclosed Venture/Growth 0.2% $8.1 United States Private Undisclosed
Millennium Trust
Company
Buyout 0.2% $8.0 United States Private Tech-enabled financial services
Canam Group Buyout 0.2% $7.9 Canada Private Specialises in designing construction solutions and
fabricating customised steel components
NEW Asurion
Corporation
Buyout 0.2% $7.9 United States Private Leading provider of consumer product protection
programs in the United States
Duravant Buyout 0.2% $7.7 United States Private Leading provider of highly engineered automation
solutions for food processing, material handling, and
packing applications with customers in 190+ countries
globally
Undisclosed Venture/Growth 0.2% $7.6 India Private Undisclosed
zooplus Buyout 0.2% $7.6 Germany Private Online pet food retailer
CordenPharma Buyout 0.2% $7.6 Germany Private Contract development and manufacturing
organisation focused on niche drug modalities
Undisclosed Buyout 0.2% $7.6 United States Private Undisclosed
Vantage Airport
Group Ltd.
Infrastructure 0.2% $7.5 United States Private Provides airport management and development
services
Argus Media Buyout 0.2% $7.5 United
Kingdom
Private Produces independent price assessments, essential
data and analysis on the international energy and
commodity sectors, anchoring physical commodity
trade throughout global supply chains and underpinning
financial derivatives markets
Visma Group
Holdings A/s
Buyout 0.2% $7.4 Norway Private Enterprise resource planning software
Curia Global, Inc. Buyout 0.2% $7.4 United States Private Outsourced pharmaceutical contract manufacturer
McLarens Global
(ACP McLarens
Holdings)
Credit 0.2% $7.4 United States Private Claims management and loss adjustment services
Action Behavior
Centers
Buyout 0.2% $7.3 United States Private Autism treatment centres
HVPE Annual Report and Accounts 2024114
Company Stage % Amount (m) Location Status Description
Assemblin Caverion
Group
Buyout 0.2% $7.3 Sweden Private Technical installation and services company focused
on specialist services primarily within electrical,
heating & plumbing, and HVAC (Heating, Ventilation
and Air Conditioning)
Ayvens Buyout 0.2% $7.3 France Public Leading global mobility solutions provider
Grammarly, Inc. Venture/
Growth
0.2% $7.3 United States Private Provides artificial intelligence powered products
CleanSlate Centers,
Inc.
Venture/
Growth
0.2% $7.2 United States Private Operates a network of physician-led outpatient
addiction treatment centres
Zendesk Inc. Buyout 0.2% $7.2 United States Private Customer service software provider to SMB and
middle-market companies and customer support
centres
AllFunds Bank S.A. Buyout 0.2% $7.1 Spain Public European B2B fund distribution platform
Sign-Zone Credit 0.2% $7.0 United States Private Portable display products
Kuoni Group Buyout 0.2% $7.0 Switzerland Private Travel and tour operations
Peloton Computer
Enterprises
Venture/
Growth
0.2% $7.0 Canada Private Well data and drilling software
Klarna Ab Venture/
Growth
0.2% $7.0 Sweden Private Online consumer payment solutions
Sanfer Buyout 0.2% $7.0 Mexico Private Manufacturer and provider of pharmaceutical
products. The company markets prescription, generic
and brand generic drugs, oncological and OTC drugs,
as well as veterinary products to its customers
Personify Buyout 0.2% $7.0 United States Private Constituent organisation software
Odoo Venture/
Growth
0.2% $7.0 Belgium Private SaaS company that provides all-in-one management
software designed to provide a range of easy to use
business applications that form a complete suite of
tools to accompany any business need
Qlik Technologies,
Inc.
Buyout 0.2% $7.0 United States Private Leader in business discovery and user driven Business
Intelligence (BI)
Risk Strategies
Company, Inc.
Buyout 0.2% $6.9 United States Private Specialty insurance broker
Undisclosed Buyout 0.2% $6.9 United
Kingdom
Private Undisclosed
Curriculum
Associates, LLC
Buyout 0.2% $6.9 United States Private Leading provider of technology-enabled assessment
and instructional programs for elementary and middle
school students, teachers, and administrators
SRS Distribution Inc. Buyout 0.2% $6.9 United States Private Distributor of commercial and residential roofing
products
Pathway Vet
Alliance
Buyout 0.2% $6.8 United States Private Veterinary clinics
GEON Performance
Solutions, LLC
Buyout 0.2% $6.7 United States Private Provider of PVC and polypropylene-based solutions
intended to serve the North American construction
and automotive end markets, providing contract
manufacturing, plastic compounded solutions,
polypropylene, thermoplastic polyolefin products, and
more
Fastmarkets Buyout 0.2% $6.7 United
Kingdom
Private Global price reporting agency, which offers critical
price data for the commodity markets it covers, as
well as supplementary market news, forecasts and
other data
Kaspi.kz Joint Stock
Company
Buyout 0.2% $6.7 Kazakhstan Public Kazakhstan's second largest distribution network, and
best-in-class risk management retail bank
Capillary
Technologies
International Pte. Ltd.
Venture/
Growth
0.2% $6.7 Singapore Private A software-as-a-service provider of customer
relationship management solutions to retailers in India
and other emerging markets
Navacord Inc. Buyout 0.2% $6.6 Canada Private Offers risk management and consulting solutions
from coast to coast who's value proposition benefits
independent insurance brokers
Yifeng Pharmacy
Chain Co. Ltd.
Venture/
Growth
0.2% $6.6 China Public Operator of a chain of retail stores that specialise in
pharmaceutical and over the counter remedies and
personal care products in China
Sweetwater Sound,
Inc.
Buyout 0.2% $6.6 United States Private Online musical instrument retailer
115Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Largest US Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 3.1% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 9.5% of the Investment Portfolio.
The 25 largest managers represented 26.6% of the Investment Portfolio.
In total, the largest managers (0.2% of invested value or larger) represented 46.0% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
Insight Venture Management, LLC Primary $126.5 3.12%
Thoma Bravo Primary $91.2 2.25%
Hellman & Friedman LLC Primary $60.0 1.48%
SK Capital Partners Primary $55.0 1.36%
Battery Ventures Primary $54.0 1.33%
Andreessen Horowitz Primary $52.7 1.30%
Berkshire Partners LLC Secondary $47.4 1.17%
Lightspeed Venture Partners Primary $47.3 1.17%
TA Associates Primary $46.0 1.13%
Kleiner Perkins Primary $41.0 1.01%
Spark Capital Primary $39.2 0.96%
Accel Primary $37.9 0.93%
Silver Lake Management, L.L.C. Primary $36.2 0.89%
ABRY Partners, LLC Primary $35.0 0.86%
GTCR, L.L.C. Primary $34.0 0.84%
Warburg Pincus Secondary $31.3 0.77%
H.I.G. Capital Primary $31.1 0.77%
Madison Dearborn Partners, LLC Secondary $29.6 0.73%
Lime Rock Management LP Secondary $29.2 0.72%
Summit Partners Primary $28.5 0.70%
Redpoint Ventures Primary $28.3 0.70%
Silversmith Capital Partners Primary $25.8 0.64%
Nautic Partners Primary $25.0 0.62%
Genstar Capital Partners Primary $24.5 0.60%
General Atlantic Secondary $24.3 0.60%
The Jordan Company, LP Secondary $23.7 0.59%
Flagship Pioneering Primary $23.4 0.58%
AIP, L LC Primary $23.1 0.57%
Pamlico Capital Primary $23.1 0.57%
Bain Capital Ventures Primary $22.4 0.55%
Incline Equity Management Primary $21.9 0.54%
Blackstone Secondary $21.2 0.52%
Alpine Investors Secondary $20.6 0.51%
Sun Capital Partners Primary $19.9 0.49%
Court Square Capital Management, L.P. Secondary $19.3 0.47%
Harvest Partners, Inc. Secondary $19.3 0.47%
JMI Equity Primary $19.1 0.47%
K1 Investment Management, LLC Secondary $18.8 0.46%
Frazier Healthcare Partners Primary $16.7 0.41%
TSG Consumer Partners Primary $16.6 0.41%
Stone Point Capital Secondary $16.1 0.40%
AE Industrial Partners, LLC Primary $16.0 0.39%
HVPE Annual Report and Accounts 2024116
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
Leonard Green & Partners Secondary $15.5 0.38%
Bain Capital Primary $15.1 0.37%
Oaktree Capital Management Secondary $14.9 0.37%
Ares Management LLC Secondary $14.8 0.36%
Energy Capital Partners Management, LP Secondary $14.4 0.36%
ArcLight Capital Partners Secondary $14.0 0.35%
Symphony Technology Group Primary $13.6 0.34%
Canaan Partners Primary $13.6 0.34%
Apollo Management, L.P. Primary $13.6 0.33%
Kelso & Company Primary $13.4 0.33%
First Reserve Corporation Secondary $12.8 0.32%
Roark Capital Group Secondary $12.8 0.32%
Golden Gate Capital Secondary $12.7 0.31%
Marlin Equity Partners, LLC Primary $12.7 0.31%
Charlesbank Capital Partners Primary $12.6 0.31%
Bessemer Venture Partners Primary $12.6 0.31%
Sycamore Partners Management, LLC Primary $11.9 0.29%
Vestar Capital Partners Primary $11.9 0.29%
SignalFire Primary $11.4 0.28%
Providence Equity Partners L.L.C. Secondary $11.1 0.27%
Cortec Group, Inc. Primary $10.9 0.27%
OMERS Infrastructure Secondary $10.8 0.27%
Unusual Ventures Primary $10.7 0.26%
Sentinel Capital Partners Primary $10.5 0.26%
Vector Capital Primary $10.3 0.25%
Parthenon Capital, LLC Primary $10.1 0.25%
The CapStreet Group Primary $9.9 0.24%
Searchlight Capital Partners LLP Primary $9.6 0.24%
Westlake BioPartners Primary $9.3 0.23%
Trive Capital Primary $9.2 0.23%
Windjammer Capital Investors Primary $9.2 0.23%
Sterling Investment Partners Management, L.L.C. Primary $9.2 0.23%
Gridiron Energy Management, LLC Secondary $9.1 0.23%
Data Collective Primary $8.9 0.22%
Gemspring Capital Primary $8.7 0.21%
Granite Growth Health Partners GP, L.L.C. Secondary $8.5 0.21%
WestView Capital Partners, L.P. Primary $8.5 0.21%
Charles River Ventures Primary $8.4 0.21%
Third Rock Ventures Primary $8.0 0.20%
TOTAL $1,867.6 46.0%
117Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Largest European Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 2.1% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 5.4% of the Investment Portfolio.
The 25 largest managers (0.2% of invested value or larger) represented 13.1% of the Investment Portfolio.
In total, the largest managers (0.2% of invested value or larger) represented 13.9% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
Index Ventures Primary $ 87.0 2.14%
CVC Capital Partners Limited Primary $42.6 1.05%
Holtzbrinck Ventures Primary $33.0 0.81%
Advent International Corporation Primary $30.6 0.75%
Permira Advisers Limited Primary $25.6 0.63%
PAI Partners Secondary $23.9 0.59%
HgCapital Primary $23.1 0.57%
Inflexion Managers Limited Primary $22.3 0.55%
EQT Managers Primary $21.6 0.53%
Bridgepoint Capital Secondary $19.1 0.47%
Waterland Private Equity Investments B.V. Primary $18.9 0.46%
Triton Managers Limited Secondary $18.8 0.46%
Investindustrial Primary $16.7 0.41%
Arcus Infrastructure Partners Secondary $16.6 0.41%
Summit Partners Primary $15.3 0.38%
Christofferson Robb & Company Secondary $15.0 0.37%
Vitruvian Partners LLP Primary $13.9 0.34%
Corsair Capital Infrastructure Partners Secondary $12.9 0.32%
Cinven Limited Secondary $11.8 0.29%
Bridgepoint Development Capital Primary $11.5 0.28%
Summa Equity Primary $11.1 0.27%
IK Investment Partners Primary $10.6 0.26%
One Equity Partners Secondary $10.4 0.26%
Astorg Partners Secondary $9.4 0.23%
Deutsche Private Equity Secondary $8.4 0.21%
HitecVision Primary $8.3 0.20%
KLAR Partners Primary $8.2 0.20%
Oakley Capital Limited Secondary $8.1 0.20%
Hellman & Friedman LLC Secondary $8.0 0.20%
TOTAL $562.8 13.9%
HVPE Annual Report and Accounts 2024118
Largest Asia/Rest of World Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 3.4% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 5.7% of the Investment Portfolio.
The 25 largest managers represented 10.7% of the Investment Portfolio.
In total, the largest managers (0.2% of invested value or larger) represented 9.6% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
IDG Capital Partners Secondary $139.2 3.43%
Corsair Capital Infrastructure Partners Secondary $28.0 0.69%
Bain Capital Partners Asia Primary $22.7 0.56%
Avataar Capital Management Secondary $21.1 0.52%
Capital Square Partners Secondary $21.0 0.52%
DCM Primary $18.3 0.45%
Boyu Capital Primary $17.6 0.43%
TPG Asia Secondary $14.1 0.35%
Pemba Capital Partners Secondary $11.3 0.28%
General Atlantic Secondary $10.7 0.26%
Advent Latin America Private Equity Primary $10.3 0.25%
Highlight Capital Primary $9.9 0.24%
Qiming Venture Partners Primary $9.9 0.24%
Trustbridge Partners Primary $9.4 0.23%
Hahn & Company Primary $9.3 0.23%
ZhenFund Primary $9.2 0.23%
Redpoint Ventures China Primary $9.2 0.23%
GSR Ventures Primary $8.7 0.21%
Quadrant Private Equity Primary $8.3 0.21%
Baring Vostok Capital Partners Primary $7.9 0.19%
KKR Associates Asia L.P. Primary $7.8 0.19%
Templewater Private Equity Secondary $7.7 0.19%
SourceCode Capital Primary $7.6 0.19%
Legend Capital Primary $7.3 0.18%
Fortissimo Capital Primary $6.8 0.17%
TOTAL $432.9 10.7%
119Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Largest Buyout Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 2.2% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 7.6% of the Investment Portfolio.
The 25 largest managers represented 20.9% of the Investment Portfolio.
In total, the largest managers (0.2% of invested value or larger) represented 38.4% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
Thoma Bravo Primary $90.7 2.23%
Hellman & Friedman LLC Primary $68.0 1.68%
SK Capital Partners Primary $55.0 1.36%
Berkshire Partners LLC Secondary $47.4 1.17%
CVC Capital Partners Limited Primary $45.7 1.13%
TA Associates Primary $43.1 1.06%
H.I.G. Capital Primary $40.9 1.01%
Silver Lake Management, L.L.C. Primary $36.2 0.89%
GTCR, L.L.C. Primary $34.0 0.84%
Advent International Corporation Primary $30.6 0.75%
Madison Dearborn Partners, LLC Secondary $29.6 0.73%
Permira Advisers Limited Primary $25.6 0.63%
Nautic Partners Primary $25.0 0.62%
Genstar Capital Partners Primary $24.5 0.60%
General Atlantic Secondary $24.3 0.60%
PAI Partners Secondary $23.9 0.59%
The Jordan Company, LP Secondary $23.7 0.59%
HgCapital Primary $23.1 0.57%
AIP, L LC Primary $23.1 0.57%
Pamlico Capital Primary $23.1 0.57%
EQT Managers Primary $22.7 0.56%
Bain Capital Partners Asia Primary $22.7 0.56%
Inflexion Managers Limited Primary $22.3 0.55%
Incline Equity Management Primary $21.9 0.54%
ABRY Partners, LLC Primary $21.6 0.53%
Blackstone Secondary $21.2 0.52%
Capital Square Partners Secondary $21.0 0.52%
Alpine Investors Secondary $20.6 0.51%
Sun Capital Partners Primary $19.9 0.49%
Court Square Capital Management, L.P. Secondary $19.3 0.47%
Marlin Equity Partners, LLC Primary $19.1 0.47%
Bridgepoint Capital Secondary $19.1 0.47%
Waterland Private Equity Investments B.V. Primary $18.9 0.46%
Triton Managers Limited Secondary $18.8 0.46%
K1 Investment Management, LLC Secondary $18.8 0.46%
Harvest Partners, Inc. Secondary $17.1 0.42%
Investindustrial Primary $16.7 0.41%
Frazier Healthcare Partners Primary $16.7 0.41%
TSG Consumer Partners Primary $16.6 0.41%
AE Industrial Partners, LLC Primary $16.0 0.39%
Leonard Green & Partners Secondary $15.5 0.38%
Apollo Management, L.P. Primary $15.2 0.37%
HVPE Annual Report and Accounts 2024120
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
TPG Asia Secondary $14.1 0.35%
Vitruvian Partners LLP Primary $13.9 0.34%
Bain Capital Primary $13.8 0.34%
Symphony Technology Group Primary $13.6 0.34%
Kelso & Company Primary $13.4 0.33%
Roark Capital Group Secondary $12.8 0.32%
Charlesbank Capital Partners Primary $12.6 0.31%
Warburg Pincus Secondary $12.1 0.30%
Sycamore Partners Management, LLC Primary $11.9 0.29%
Vestar Capital Partners Primary $11.9 0.29%
Cinven Limited Secondary $11.8 0.29%
Bridgepoint Development Capital Primary $11.5 0.28%
Pemba Capital Partners Secondary $11.3 0.28%
Summa Equity Primary $11.1 0.27%
Providence Equity Partners L.L.C. Secondary $11.1 0.27%
Cortec Group, Inc. Primary $10.9 0.27%
Stone Point Capital Secondary $10.9 0.27%
IK Investment Partners Primary $10.6 0.26%
One Equity Partners Secondary $10.4 0.26%
Advent Latin America Private Equity Primary $10.3 0.25%
Vector Capital Primary $10.3 0.25%
Parthenon Capital, LLC Primary $10.1 0.25%
The CapStreet Group Primary $9.9 0.24%
Searchlight Capital Partners LLP Primary $9.6 0.24%
Astorg Partners Secondary $9.4 0.23%
Hahn & Company Primary $9.3 0.23%
Sterling Investment Partners Management, L.L.C. Primary $9.2 0.23%
Gemspring Capital Primary $8.7 0.21%
Clayton, Dubilier & Rice Secondary $8.6 0.21%
WestView Capital Partners, L.P. Primary $8.5 0.21%
Trive Capital Primary $8.5 0.21%
Windjammer Capital Investors Primary $8.5 0.21%
Deutsche Private Equity Secondary $8.4 0.21%
Quadrant Private Equity Primary $8.3 0.21%
HitecVision Primary $8.3 0.20%
Sentinel Capital Partners Primary $8.2 0.20%
KLAR Partners Primary $8.2 0.20%
Oakley Capital Limited Secondary $8.1 0.20%
TOTAL $1,559.3 38.4%
121Strategic Report Governance Financial Statements Other Information
Supplementary data continued
Largest Venture Capital/Growth Equity Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 3.4% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 11.5% of the Investment Portfolio.
The 25 largest managers represented 23.9% of the Investment Portfolio.
In total, the largest managers (0.2% of invested value or larger) represented 26.6% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
IDG Capital Partners Secondary $139.2 3.43%
Insight Venture Management, LLC Primary $126.5 3.12%
Index Ventures Primary $93.0 2.29%
Battery Ventures Primary $54.0 1.33%
Andreessen Horowitz Primary $52.7 1.30%
Lightspeed Venture Partners Primary $47.3 1.17%
Summit Partners Primary $43.8 1.08%
Accel Primary $42.4 1.04%
Kleiner Perkins Primary $41.3 1.02%
Spark Capital Primary $39.2 0.96%
Holtzbrinck Ventures Primary $33.0 0.81%
Redpoint Ventures Primary $28.3 0.70%
Silversmith Capital Partners Primary $25.8 0.64%
Flagship Pioneering Primary $23.4 0.58%
Bain Capital Ventures Primary $22.4 0.55%
Avataar Capital Management Secondary $21.1 0.52%
DCM Primary $20.9 0.52%
Warburg Pincus Secondary $19.2 0.47%
JMI Equity Primary $19.1 0.47%
Boyu Capital Primary $17.6 0.43%
Canaan Partners Primary $13.6 0.34%
Golden Gate Capital Secondary $12.7 0.31%
Bessemer Venture Partners Primary $12.6 0.31%
SignalFire Primary $11.4 0.28%
General Atlantic Secondary $10.7 0.26%
Unusual Ventures Primary $10.7 0.26%
Highlight Capital Primary $9.9 0.24%
Qiming Venture Partners Primary $9.9 0.24%
Trustbridge Partners Primary $9.4 0.23%
Westlake BioPartners Primary $9.3 0.23%
ZhenFund Primary $9.2 0.23%
Redpoint Ventures China Primary $9.2 0.23%
Data Collective Primary $8.9 0.22%
GSR Ventures Primary $8.7 0.21%
Granite Growth Health Partners GP, L.L.C. Secondary $8.5 0.21%
Charles River Ventures Primary $8.4 0.21%
Third Rock Ventures Primary $8.0 0.20%
TOTAL $1,081.1 26.6%
HVPE Annual Report and Accounts 2024122
Largest Real Assets/Other Managers at 31 January 2024
Based on the Investment Portfolio
No external manager represented more than 1.20% of the Investment Portfolio.
As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE,
although not listed here.
The five largest managers represented 3.0% of the Investment Portfolio.
The 25 largest managers represented 6.4% of the Investment Portfolio.
Manager Strategy Sum of NAV ($m)
% Investment
Portfolio Value
Corsair Capital Infrastructure Partners Secondary $48.5 1.20%
Lime Rock Management LP Secondary $28.9 0.71%
Arcus Infrastructure Partners Secondary $16.6 0.41%
Christofferson Robb & Company Secondary $15.0 0.37%
Energy Capital Partners Management, LP Secondary $14.4 0.36%
Ares Management LLC Secondary $14.1 0.35%
ArcLight Capital Partners Secondary $14.0 0.35%
ABRY Partners, LLC Primary $13.4 0.33%
First Reserve Corporation Secondary $12.8 0.32%
OMERS Infrastructure Secondary $10.8 0.27%
Oaktree Capital Management Secondary $10.7 0.26%
Gridiron Energy Management, LLC Secondary $9.1 0.23%
NGP Energy Capital Management LLC Secondary $7.2 0.18%
Global Infrastructure Partners Secondary $6.3 0.16%
Sciens Capital Management Secondary $5.3 0.13%
Carlyle Global Infrastructure Secondary $4.6 0.11%
CIFC Asset Management Secondary $4.5 0.11%
iSquared Global Infrastructure Secondary $3.8 0.09%
iCON Infrastructure LLP Secondary $3.2 0.08%
White Deer Management LLC Secondary $2.9 0.07%
B-29 GP, LLC Secondary $2.6 0.07%
Ancala Partners LLP Secondary $2.6 0.06%
EnCap Investments LLC Secondary $2.4 0.06%
Sentinel Capital Partners Primary $2.3 0.06%
Domain Timber Advisors Secondary $2.3 0.06%
TOTAL $258.5 6.4%
123Strategic Report Governance Financial Statements Other Information
Glossary
Term Definition
Allocated Investments Commitments made to HarbourVest funds that have been allocated to, and can be called by, an underlying
General Partner
Beta A measure of the volatility of a security or portfolio compared to the market as a whole
Bridge Financing An interim financing option used by private equity funds to delay or aggregate capital calls. A given
investment is financed using a bridging loan, typically for a period of six to 12 months, with a capital call
required only once the bridging loan is due to be repaid
Buyout An investment strategy that involves acquiring controlling stakes in mature companies and generating
returns by selling them at a profit after operational efficiencies, expansion, and/or financial improvements
Called Capital Total amount of capital called for use by the HarbourVest fund or General Partner
Capital Call or Drawdown A request made by the HarbourVest fund or General Partner for a portion of the capital committed by
a Limited Partner
Carried Interest, Carry or Performance
Fee
The share of profits due to a General Partner once the Limited Partner’s commitment to a fund plus a
defined hurdle rate is reached
Co-investment (sometimes Direct
Co-investment)
A minority investment, made directly into an operating company, alongside a fund or other private equity
investor
Commingled Fund A fund structure that pools investments from multiple investors into a single fund
Commitment Period or Investment
Period
The period of time within which a fund can make investments as established in the Limited Partnership
Agreement
Committed Capital or Commitment The capital a Limited Partner has agreed to commit to a fund across its lifespan
Contributed Capital or Paid-In Capital The total amount of capital paid into a fund at a specific point in time
Cost (Current, Realised, Total) Current: The cost of current underlying companies
Realised: The cost of underlying companies from which the fund has fully or partially exited
Total: The cost of underlying companies, both current and fully or partially exited
Current Value or Residual Value The fair value of all current/unrealised investments
Discount An investment company trades at a discount if the share price is lower than the Net Asset Value per share.
The discount is shown as the percentage difference between the share price and NAV per share
Discount (Notional) As of the date of this report, the audited 31 January 2024 US GAAP NAV per share will become known and
available to the market. This information was not available on 31 January 2024 and market participants
could not have used it as a reference when making an investment decision. The discount calculated by
comparing the 31 January 2024 share price with the audited 31 January 2024 US GAAP NAV is, therefore,
a notional/retrospective discount
Distributed or Distributions The total amount of cash (and/or stock) that has been returned to a fund and/or Limited Partners
Dry Powder Capital that has been raised, but not yet invested
Due Diligence The process undertaken to confirm the accuracy of all data relating to a fund, company, or product prior to
an investment. This can also refer to the investigation of a buyer by a seller
Earnings Before Interest, Taxes,
Depreciation and Amortisation
(“EBITDA”)
A measure of earnings before interest and taxes that exclude non-cash expenses. Valuation methods are
commonly based on a comparison of private and public companies’ value as a multiple of EBITDA
Fund-level Borrowing Exposure to leverage in underlying private equity funds. In the context of HVPE, this refers to the Company’s
look-through exposure to borrowings at the HarbourVest fund level
Fund of funds An investment strategy of holding a portfolio of third-party private equity funds and/or other investments
rather than investing directly in companies
Funded Capital The amount of contributed capital that has been invested by the fund, or capital invested by a fund in a
third-party investment
General Partner (“GP”) The manager of a fund
Gross Assets All of the assets of the Company accounted for under US GAAP before deducting any liabilities
Growth Capital or Growth Equity Investment in newly mature companies looking to raise funds, often to expand or restructure operations,
enter new markets, or finance an acquisition
Initial Public Offering (“IPO”) The first offering of stock by a company to the public on a regulated exchange
Internal Rate of Return (“IRR”) (Gross,
Net, Realised Gross)
A measure of the absolute annual rate of return of an investment that takes both the timing and magnitude
of cash flows into account, calculated using contributed capital, distributions, and the value of unrealised
investments
Gross: Without fees and carried interest taken into account
Net: With fees and carried interest deducted
Realised Gross: The return from underlying holdings from which the fund has already fully or partially exited,
without fees and carried interest taken into account
HVPE Annual Report and Accounts 2024124
Term Definition
Investment Pipeline (or unfunded
commitments)
Total commitments to HarbourVest funds, which are to be prospectively called or invested by an underlying
General Partner. This is comprised of allocated investments and unallocated investments
J-curve A term given to the typical shape adopted by the annual returns from a private equity fund during its lifecycle
when graphed. Due to the investment process, capital calls and fees precede value creation and potential
distributions
Limited Partner (“LP”) The investors in a Limited Partnership – the typical structure of a private equity fund. Limited Partners are
not involved in the day-to-day management of a fund
Limited Partnership Agreement (“LPA”) The document which constitutes and defines a Limited Partnership, the legal structure typically adopted by
private equity funds
Management Fee The fee paid to a fund, typically a percentage of the Limited Partner’s commitment
Mean The average value calculated from a set of numbers
Median The middle value in an ordered sequence of numbers
Mergers and Acquisitions (“M&A”) The consolidation of companies, for example where the ownership of a company in the underlying portfolio
is transferred to, or combined with, another entity
Mezzanine Finance/Debt An investment strategy that typically includes junior debt and senior equity, often with the option to convert
debt into equity in the event of default
Net Asset Value (“NAV”) The total value of a company’s assets minus the total value of its liabilities
Preferred Return or Hurdle Rate A minimum annual rate of return, determined in the Limited Partnership Agreement, that a fund must
achieve before the General Partner may receive carried interest
Primary Fund or Primaries A fund where investors make a commitment at inception, usually as a Limited Partner in a new Limited
Partnership
Principal Documents The Company’s legal and organisational documents, including the Articles of Incorporation and the
Prospectus
Private Markets Investments made in non-public companies through privately negotiated transactions
Real Assets An investment strategy that invests in physical assets that derive value and generate returns from their
substance and properties, including infrastructure, agricultural land, oil and gas, and other commodities
Realised Investment or Exit An underlying holding from which the General Partner has exited
Realised Value or Proceeds The returns generated from the liquidation or realisation of underlying holdings
Realised Value to Total Cost (“RV/TC”)
Multiple
The returns generated from the liquidation or realisation of underlying holdings divided by the cost of all
holdings, both remaining and exited
Recapitalisation A refinancing strategy used by private equity funds, typically involving an increase in the level of borrowing to
enable an early cash distribution to investors
Secondary Fund or Secondaries A fund that purchases pre-existing interests in private equity funds or portfolios of operating companies
Share Buyback or Share Repurchase A share buyback is where a company purchases its own shares from the market
Special Situations An opportunistic investment strategy that looks to take advantage of market dislocations and unique
situations to invest in private companies at discounts to their “fair” market value
Strategic Asset Allocation (“SAA”) Asset allocation across different stages, strategies, and geographies, together creating portfolio
construction targets
Total Value The fund’s total value plus any capital distributions already made
Total Value/Total Cost (“TV/TC”)
Multiple
The total value divided by the total cost to date
Unallocated Investments Commitments made to HarbourVest funds that have not been allocated to, and cannot be called by, an
underlying General Partner
Unfunded Commitment The portion of investors’ capital commitment that has yet to be “drawn down” or called by a fund manager
Uplift Increase in value received upon realisation of an investment relative to its carrying value prior to exit
Valuation Multiple The value of an asset relative to a key financial metric
Venture (or Venture Capital) An investment strategy that generates returns by backing start-up and early-stage companies that are
believed to have long-term growth potential
Vintage Year Usually the year in which capital is first called by a particular fund, though definitions can vary based on the
type of fund or investment
125Strategic Report Governance Financial Statements Other Information
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 2023 and 31 January 2024, those being the
31 December 2022 and 31 December 2023 estimates of $48.04 (sterling equivalent £39.76) and $50.04 (sterling equivalent £39.31), respectively,
adjusted for GBP/USD foreign exchange movement, against share prices of £22.10 at 31 January 2023 and £23.15 at 31 January 2024.
The table below outlines the notional discounts to the share price at 31 January 2024, based on the NAVs per share published after this date
(31 January 2024 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 2024
GBP/USD
Exchange Rate
(1.2673)
Share Price
at 31 January
2024
Discount
to NAV
at 31 January
2024
Estimated NAV at 31 December 2023
(published 23 January 2024) $50.04 £39.49 £23.15 41%
Estimated NAV at 31 January 2024
(published 22 February 2024) $49.67 £39.19 £23.15 41%
Final NAV (US GAAP) at 31 January 2024
(published 30 May 2024) $50.47 £39.82 £23.15 42%
Annualised Outperformance of FTSE AW TR Index Over the Last 10 Years
NAV (US dollar) Compound Annual Growth Rate (“CAGR”)
31 January 2014 $14.38
31 January 2024 $50.47
Elapsed time (years) 10
US dollar CAGR 13.4%
FTSE AW TR Index (US dollar) CAGR
31 January 2014 305.00
31 January 2024 725.17
Elapsed time (years) 10
FTSE AW TR CAGR 9.0%
Annualised outperformance of FTSE AW TR Index Over the Last 10 Years calculation
13.4% minus 9.0%
4.33 percentage
points (“pp”)
1
KPIs (pages 26 to 27)
The KPI metrics show the movement between the NAV per share (in US dollars) and the share price in sterling and translated into US dollars.
Relative to the FTSE AW TR Index, this is the difference in movement between the year-on-year change of this index vs the particular HVPE KPI.
NAV Per Share ($) & 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 $27.5 8 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
APM
1
Due to rounding, please note this figure does not cast correctly on the page from the respective figures above it (4.3pp displayed vs. 4.4pp 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
HVPE Annual Report and Accounts 2024126
10-year Outperformance of FTSE AW TR
NAV (US dollar)
31 January 2014 $14.38
31 January 2024 $50.47
US dollar total return 251%
FTSE AW TR (US dollar)
31 January 2014 305.02
31 January 2024 725.17
FTSE AW TR total return 138%
10-year outperformance of FTSE AW TR calculation 113%
251% minus 138%
113 percentage
points (“pp”)
Total Shareholder Return (£)
Date Share Price (£)
Period-on-period
Change
31 January 2018 £12.52 +4.8%
31 January 2019 £14.26 +13.9%
31 January 2020 £18.36 +28.8%
31 January 2021 £18.70 +1.9%
31 January 2022 £27.75 +48.4%
31 January 2023 £22.10 -20.4%
31 January 2024 £23.15 4.8%
Total Commitment Ratio
(Total exposure to private markets investments as a percentage of NAV)
31 January
2024 ($m)
31 January
2023 ($m)
Investment Portfolio $4,058 $3,616
Investment Pipeline $2,501 $2,804
Total $6,559 $6,420
NAV $3,921 $3,838
Total Commitment Ratio 167% 167%
Net Portfolio Cash Flow
(The difference between calls and distributions over the reporting period)
31 January
2024 ($m)
31 January
2023
Calls $(593) $(588)
Distributions $310 $532
Net Portfolio Cash Flow $(283) $(56)
Both “Total Commitment Ratio” and “Net Portfolio Cash Flow” also form part of “Managing the Balance Sheet”.
127Strategic Report Governance Financial Statements Other Information
Managing the Balance Sheet
Medium-term Coverage Ratio
(A measure of medium-term commitment coverage)
31 January 2024
($m)
31 January 2023
($m)
Cash $140 $198
Available credit facility $525 $800
Estimated distributions during the next 12 months $627 $633
Total sources $1,292 $1,631
Estimated investments over the next 36 months $1,467 $1,579
Medium-term Coverage Ratio 88% 104%
Commitment Coverage Ratio
(Short-term liquidity as a percentage of Total Investment Pipeline)
31 January 2024
($m)
31 January 2023
($m)
Cash $140 $198
Available credit facility $525 $800
Total sources $665 $998
Investment Pipeline $2,501 $2,804
Commitment Coverage Ratio 27% 36%
Alternative Performance Measures continued
HVPE Annual Report and Accounts 2024128
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 2.1% 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 ofNetAssetValue
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.
129Strategic Report Governance Financial Statements Other Information
Regulatory Information
HVPE is required to comply with the 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 UnderUSGAAP
HVPE’s 31 January 2024 NAV is based on the 31 December 2023
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 2024.
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 104.
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 three 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.
> 2% 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.
> 0.3% of underlying partnership holdings are denominated in
Canadian dollars. The Canadian dollar-denominated Investment
Pipeline is C$5.9 million.
> 0.3% of underlying partnership holdings are denominated in Swiss
francs. There is no Swiss franc-denominated Investment Pipeline.
HVPE has exposure to foreign currency movement through foreign
currency-denominated assets within the Investment Portfolio and
through its Investment Pipeline of unfunded commitments, which are
long term in nature. The Company’s most significant currency
exposure is to euros. The Company does not actively use derivatives or
other products to hedge the currency exposure.
HVPE Annual Report and Accounts 2024130
Key information
Exchange
London Stock Exchange (Main Market)
Ticker
HVPE (£)/HVPD ($)
Listing date
9 September 2015 (LSE Main Market)
2 May 2010 (LSE Specialist Fund Segment – since migrated to LSE
Main Market)
6 December 2007 (Euronext – since delisted)
Fiscal year end
31 January
Base currency
US dollars
Sterling quote
London Stock Exchange
US dollar quote
London Stock Exchange
ISIN
GG00BR30MJ80
ISIN
GG00BR30MJ80
SEDOL
BR30MJ8
SEDOL
BGT0LX2
TIDM
HVPE LN
TIDM
HVPD LN
Investment Manager
HarbourVest Advisers L.P.
(affiliate of HarbourVest Partners, LLC)
Registration
Financial Conduct Authority
Fund consent
Guernsey Financial Services Commission
Outstanding shares
77,683,508 ordinary shares at 31 January 2024
76,969,354 ordinary shares at 29 May 2024
2024/25 Calendar
Monthly NAV estimate: Generally within 20 days of month end
Annual General Meeting 2024: 17 July 2024
Semi-Annual Report and Unaudited Condensed Interim Consolidated
Financial Statements: October 2024
Company Advisers
Investment Manager
HarbourVest Advisers L.P.
c/o HarbourVest Partners, LLC
One Financial Center
Boston MA 02111
Tel +1 617 348 3707
Auditor
Ernst & Young LLP
Royal Chambers
St Julian’s Avenue
St Peter Port
Guernsey GY1 4AF
Company Secretary and Administrator
BNP Paribas S.A. (Guernsey Branch)
BNP Paribas House
St Julian’s Avenue
St Peter Port
Guernsey GY1 1WA
Tel +44 (0)1481 750 800
www.bnpparibas.je
Registrar
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Tel +44 (0)871 664 0300
Tel +44 (0)20 8369 3399 (outside UK)
Swiss Representative
Acolin Fund Services AG
Succursale Genève
6 Cours De Rive
1204 Geneva
Switzerland
Swiss Paying Agent
Banque Cantonale de Genève
17 Quai de l’Ile
1211 Geneva 2
Switzerland
Joint Corporate Brokers
Jefferies Hoare Govett
100 Bishopsgate
London EC2N 4JL
Tel +44 (0)20 7029 8000
Registered Office
HarbourVest Global Private Equity Limited
Company Registration Number: 47907
BNP Paribas House
St Julian’s Avenue
St Peter Port
Guernsey GY1 1WA
Tel +44 (0)1481 750 800
Designed and produced by Design Motive Ltd.
Peel Hunt
7th Floor
100 Liverpool Street
London EC2M 2AT
Tel +44 (0)20 7418 8900
131Strategic Report Governance Financial Statements Other Information
HarbourVest Global Private Equity Limited
Company Registration Number: 47907
BNP Paribas House, St Julian’s Avenue, St Peter Port,
Guernsey GY1 1WA
Tel +44 1481 750 800
www.hvpe.com