## One share. ## A world of ## private company ## opportunities. ### Annual Report and Accounts 12 Months to 31 January 2024 ## Purpose ## 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. 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. Where to find us: www.hvpe.com 1Strategic Report 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 Governance Financial Statements Other Information HVPE Annual Report and Accounts 20242 ## Our year in numbers ## NAV resilience amidst a challenging ## macroeconomic backdrop. 12 months to, or at, 31 January 2024 unless otherwise stated. Net Asset Value (“NAV”) per Share ($) NAV per Share Return ($) APM | $50.47 | +4.0% | | --- | --- | | 31 January 2023: $48.52 | 12 months to 31 January 2023: -1.2% | | Share Price (£) | Share Price Return (£) | APM ## £23.15 +4.8% 31 January 2023: £22.10 12 months to 31 January 2023: -20% 1 Net Assets ($) Share Price Discount to Net Assets (£) APM ## $3.9bn -42% 31 January 2023: $3.8bn 31 January 2023: -44% 2 Total New Commitments ($) Net Portfolio Cash Flow ($) APM ## $295m $(283m) 12 months to 31 January 2023: $940m 12 months to 31 January 2023: $(56m) 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 ($593 million). Please refer to the Consolidated Statements of Cash Flows on page 96. APM Metrics with this APM icon denote our Alternative Performance Measures (“APMs”). For more information on APMs, please turn to pages 126 to 128. 3Strategic Report NAV per Share Performance vs. Share Price (USD) | +300% +300% | Key Key | | | --- | --- | --- | | | | NAV per share ($) NAV per share ($) | | | | Share price ($, converted)* Share price ($, converted)* | | | | FTSE AW TR ($) FTSE AW TR ($) | +251% +250% +250% +200% +200% +171% +150% +150% +138% +100% +100% +50% +50% | 0% 0% | | | | | | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | Jan Jan | | 2014 2014 | 2015 2015 | 2016 2016 | 2017 2017 | 2018 2018 | 2019 2019 | 2020 2020 | 2021 2021 | 2022 2022 | 2023 2023 | 2024 2024 | 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. Governance Financial Statements Other Information HVPE Annual Report and Accounts 20244 ## Chair’s statement Strategic Report Governance Financial Statements Other Information 5 ## 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. ### 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. ![img-0.jpeg](img-0.jpeg) 6 HVPE Annual Report and Accounts 2024 # **Chair's statement continued** # **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. 7Strategic Report Governance Financial Statements Other Information Carolina will remain involved with the investment decisions Company prospects and outlook made on behalf of the Company as both she and Richard In our view, the investment case for HVPE remains compelling. Hickman joined HVPE’s Investment Committee with effect The Company has outperformed public equity markets over the from 1 February 2024. In the Board’s view, Carolina’s and past ten years, and we are optimistic that this will continue in Richard’s close knowledge of the Company and their private the long term. HarbourVest is a high quality manager investing market expertise will strengthen HVPE’s investment process, with leading private equity managers, giving it access to a enhancing its ability to deliver the best possible outcome for wealth of talent and high quality opportunities from around shareholders over the long term. the world. HVPE’s track record attests to the resilience of its Given the persistence of a wide discount, and conscious of investment strategy during challenging periods and, in our view, the impact this has on shareholders’ returns, the Board has its diversified portfolio is well-positioned to continue to deliver decided that there should be no increase in the fees paid to strong returns and outperformance in the years ahead. Directors for the year ending 31 January 2025. HVPE’s near term prospects also appear favourable, as we share the Manager’s view that private equity markets Marketing and shareholder engagement will improve this year. IPOs and M&A transactions are both The Board is committed to regular and effective engagement rising, as demonstrated in our recent NAV updates, and there with its stakeholders, to improve understanding of the are widespread expectations that activity will gain further Company’s strategy and provide updates on investment momentum as the year progresses. The recovery in public activity. As one key element of this process, as in previous markets is alleviating concerns about valuations, which years, HVPE will hold a Capital Markets session for should help drive exit volumes. Modest declines in interest shareholders on 6 June 2024, at Peel Hunt’s offices in London. rates should provide a further boost to the sector, as will any This event will be a well-timed opportunity for shareholders to improvement in exit premiums. receive an update on HVPE’s results for the year to 31 January This may take time to play out, but we are confident HVPE 2024, ask any questions they may have and hear views on is heading in the right direction. The progress we have global markets and industry trends from both HarbourVest made over the year, including actions we have taken to Partners and external speakers. My fellow Directors and optimise shareholder returns, will position us well for the I look forward to welcoming as many shareholders as possible future. We are grateful to those patient shareholders who have in person to this event and we encourage you to register. remained invested for the long-term, and to those who have Shareholders who are interested in attending should contact joined the share register more recently. We thank you for your the team at hvpe_events@harbourvest.com. support and look forward to reporting back to you on HVPE’s The Company’s AGM with be held in Guernsey at 1.00PM further progress. BST on 17 July 2024. Formal notice will be sent to registered shareholders shortly and we encourage all registered Ed Warner shareholders to exercise their votes by proxy. Chair The Board also undertakes a series of other activities and 29 May 2024 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. HVPE Annual Report and Accounts 20248 ## At a glance ## HVPE invests exclusively in funds ## managed by HarbourVest Partners, ## an independent global private ## markets asset manager with ## over 40 years’ experience. 1 ## HarbourVest Partners by the numbers | 40+ | $125bn+ | 230+ | | --- | --- | --- | | Years of market experience | Assets under management | Investment professionals | | 25+ | 900+ | 1,100+ | | Average years of industry experience of MDs | Advisory board seats | Employees globally | ## 13 Global offices 9Strategic Report ## HVPE Focus and Approach The Result ## HVPE provides Investment into private companies We connect the everyday investor ## access to investments requires experience, skill, and with a broad base of private markets ## in private companies expertise. HVPE’s focus is on building experts. The result is a distinct single a comprehensive global portfolio of access point to HarbourVest Partners, ## through funds the highest-quality investments, in and a prudently managed global ## managed by a proactive yet measured way, with private companies portfolio designed the strength of our balance sheet to navigate economic cycles as ## HarbourVest Partners. | | underpinning everything we do. Our | smoothly as possible whilst striving to | | --- | --- | --- | | As at 31 January 2024, | multi-layered investment approach | deliver outperformance of the public | | | creates diversification, helping to | markets over the long term. | ## HVPE had net assets spread risk, and produces an attractive ## of $3.9 billion and a portfolio that no individual investor can replicate. ## market capitalisation ## of £1.8 billion. ## HarbourVest Partners Overview Depth of Experience ## Our Investment HarbourVest focuses exclusively The 78 HarbourVest Managing ## Manager, HarbourVest | | on private markets. The firm’s | Directors have average industry | | --- | --- | --- | | Partners, is an | powerful global platform offers its | experience of over 25 years. | | | clients investment opportunities | HarbourVest believes the experience | ## experienced and through primary fund investments, and continuity of investment personnel ## trusted global private secondary investments, and direct provides a valuable historical base of co-investments in commingled funds knowledge. Additionally, many of the ## markets asset | | or separately managed accounts. The | most sought-after underlying fund | | --- | --- | --- | | manager with more | firm has over $125 billion in assets | managers are often oversubscribed | | | under management across the US, | when they raise new funds, making | ## than $125 billion Europe, Asia Pacific, and emerging these funds difficult to access for ## in assets under markets. HarbourVest has deep many investors. The longevity and investment experience and dedicated stability of the HarbourVest team ## management as at on-the-ground teams in key private has enabled the firm to cultivate 1 ## 31 December 2023. markets around the world. 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. 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. Governance Financial Statements Other Information HVPE Annual Report and Accounts 202410 ## Investment ## Manager’s ## Review 11Strategic Report 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 Governance Financial Statements Other Information HVPE Annual Report and Accounts 202412 ## 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 Richard Hickman Gregory Stento John Toomey Managing Director, Managing Director, Chief Investment Officer, Co-Chief Executive Officer, HarbourVest Partners HarbourVest Partners HarbourVest Partners HarbourVest Partners Strategic Report Governance Financial Statements Other Information 13 ## 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 fundraising 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 25% to 24%, reducing the target Asia allocation from 28% 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. Pionkback, 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 74 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 82% 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, earned interest, and other expenses of the Harbourbird funds or the underlying managers, which will reduce returns. Past performance is not necessarily indicative of future returns. 3. Barr, data as of January 2024. 4. Refinitiv, data as of September 30, 2023. 5. Harbourbird, AICJ, and AFER, data as of September 30, 2023. 14 HVPE Annual Report and Accounts 2023 ## 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. ## 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 Klama, 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 NAV's 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 NAV's. 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. Managing Director 15Strategic Report Governance Financial Statements Other Information ## Investment Manager’s report NAV per Share – 12 Months to 31 January 2024 As at 31 January 2024, HVPE held investments in 63 1 HarbourVest funds and 16 secondary co-investments HVPE’s NAV per share increased by 4.0% in the 12 months (compared with 61 and 16 respectively at 31 January 2023). to 31 January 2024, ending the financial year at $50.47.The Of these, the largest fund contributors to NAV per share FTSE AW TR Index (in US dollars), increased by 15.3% in the movement in absolute terms during the 12 months to 31 same period. January 2024 are described below: Over the long term, HVPE’s NAV per share return has been • Fund XII Buyout, a US-focused buyout fund of funds, was the strong. The 31 January 2024 figure of $50.47 is more than largest contributor to NAV per share, adding $0.34 over the double the NAV per share figure reported five years earlier reporting period. With a vintage year of 2021, this fund is in (31 January 2019: $24.09) and more than 3.5x the respective its investment phase. The increase came predominately from figure ten years earlier (31 January 2014: $14.38). As a unrealised gains. reminder, these figures are net of all fees and costs. • Fund XI Buyout, a US-focused buyout fund of funds, was the HVPE remains well diversified by sector, which we believe is second-largest contributor over the reporting period, adding key to achieving consistently strong returns from a private $0.27 to NAV per share. With a vintage year of 2018, this fund markets portfolio. As at 31 January 2024, no single company is in its growth phase. The increase came predominately from represented more than 2.1% of the Investment Portfolio value unrealised gains. (31 January 2023: 2.4%), helping to mitigate company-specific risk. The top 100 companies in the portfolio represented 28% • Fund X Buyout, a US-focused buyout fund of funds, was of total value (31 January 2023: 29%), while the top 1,000 the third-largest contributor, adding $0.23 to NAV per share. companies represented 81% (31 January 2023: 81%). With a vintage year of 2015, this fund is in its growth phase. The increase was evenly split between realised and The Secondary portfolio was the best performing strategy in unrealised gains. percentage terms, delivering value growth of 8.2% over the 12 months. Geographically, Europe, North America and Rest • Fund X Venture, a US-focused venture fund of funds, was of World categories all saw growth at 9.5%, 6.6% and 6.2%, the largest negative contributor over the reporting period, respectively, while Asia saw a modest decline (-0.5%). Looking reducing NAV per share by $0.16. With a vintage year of at stages, the Buyout portfolio was the strongest performer, 2015, this fund is in its growth phase. This decrease came growing 8.6% in the 12 months ended 31 January 2024. predominantly from unrealised losses. Mezzanine and InfRA also grew, recording a 7.1% gain, along • Dover Street XI, a global-focused secondary fund, was the with a modest increase of the Venture and Growth Equity stage next largest contributor over the reporting period, adding to assets (+1.3%). 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. 2 NAV per Share Movement in the 12 Months to 31 January 2024 0.42 50.47 (0.30) 0.10 (0.24) (0.25) 0.23 0.14 0.27 0.34 (0.16) 48.52 1.40 | NAV per | Fund | Fund | Fund | Fund | Dover Street | | | Other | | Management | | | Performance | | | Net Operating | | Foreign | Share | NAV per | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Share at | XII | XI | X | X | | XI | HarbourVest | | | | Fees | 4 | | Fees | 5 | Expenses | 6 | Currency | Buybacks | Share at | | 31 Jan 2023 | Buyout | Buyout | Buyout | Venture | | Fund | | Funds | 3 | | | | | | | | | | | 31 Jan 2024 | Gross Realised Gain/Value Change 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). HVPE Annual Report and Accounts 202416 Investment Manager’s report continued Portfolio Cash Flows and Balance Sheet The largest HarbourVest fund capital calls and distributions over the reporting period are set out in the tables below. In the 12 months to 31 January 2024, HVPE received cash The top ten HarbourVest fund calls in aggregate accounted distributions of $310 million (12 months to 31 January 2023: for $436 million (74%) of the total calls and came from a $532 million) while funding capital calls of $593 million for broad mix of funds. The majority of total calls by value (78%) new investments (12 months to 31 January 2023: $588 were into primary opportunities. The top ten HarbourVest million). The result was net negative cash flow of $283 fund distributions totalled $155 million, or 50% of the total million over the reporting period. proceeds received in the period. Distributions by value were Distributions were driven in large part by particularly strong split between primary investments (64%) and secondary months in June and December 2023, during which combined investments (25%), with the remainder coming from direct cash proceeds of $138 million were received, predominately co-investments. from the primary funds. This contributed over 44% of the total The HarbourVest fund-level borrowing as at 31 January 2024 distributions over the period. is reported in Managing the Balance Sheet on page 28. A meaningful portion of the distributions received in the 12 months to 31 January 2024 came from the ongoing Top Five HarbourVest Fund Calls redemption of the HarbourVest Infrastructure Income Partnership (“HIIP”), the permanent capital vehicle resulting HarbourVest Vintage Called Fund Name Year Description amount from HVPE’s commitment to Adelaide. During the period HVPE Fund XII Buyout 2021 US-focused buyout fund $101.5m received $38 million in total distributions from the HIIP fund. of funds As mentioned in prior reports, HVPE has now completed the HIPEP IX 2020 International multi- $58.2m 50% redemption of the original commitment and will continue strategy fund of funds to receive a share of ongoing management fee revenue due to Co-Investment VI 2021 Global direct co- $56.3m its remaining holding in the fund. investment fund Dover Street XI 2022 Global multi-stage $42.5m secondary fund Fund XI Buyout 2018 US-focused buyout fund $39.2m of funds 1 Diversification at 31 January 2024 Geography Stage Strategy 4 1 1 1 3 3 3 2 2 2 | | Actual Target | | Actual Target | | Actual Target | | --- | --- | --- | --- | --- | --- | | North America 1 63% 60% | | Buyout 1 61% 55% | | Primary 1 50% 50% | | | Europe 2 21% 24% | | Venture and | | Secondary 2 30% 30% | | Growth Equity 2 31% 30% Asia Pacific 3 14% 16% Direct Mezzanine and Co-investment 3 20% 20% Rest of World 4 2% 0% infRA* 3 8% 15% *infRA incorporates infrastructure and real assets 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. 17Strategic Report Governance Financial Statements Other Information Top Five HarbourVest Fund Distributions • CarepathRx is a firm that partners with health systems, hospitals, physicians, and pharmacies to provide HarbourVest Vintage Distributed comprehensive pharmacy care in the United States. | Fund Name | | Year Description | | amount | | | --- | --- | --- | --- | --- | --- | | | 2 | | | | CarepathRx was HVPE’s 23rd largest company at 31 January | | HIIP | 2018 Global core / core+ | | | $38.0m | | | | | | infrastructure assets | | 2023, and generated proceeds of $8.6 million following the | sale of the company’s subsidiary BioPlus Specialty Pharmacy | HIPEP VII | 2014 International multi- | | $21.9m | | | --- | --- | --- | --- | --- | | Partnership | | strategy fund of funds | | as announced in November 2022. | | HIPEP VII Europe 2014 Europe-focused | | | $16.4m | | • Groundworks (formerly JES Construction) is a firm that multi-strategy fund provides structural engineering and construction services. HIPEP VI 2008 International-focused $14.8m It was HVPE’s 48th largest company at 31 January 2023 Partnership fund of funds and generated proceeds of $7.3 million following the Fund VIII Buyout 2006 US-focused buyout fund $12.9m of funds announcement of a strategic partnership with a global private equity firm. Portfolio Companies • Dynatrace provides software solutions for diagnosing performance problems in J2EE and .Net applications. During the period the ten largest individual company The company was HVPE’s 98th largest company at 31 realisations generated total distributions of $72 million, January 2023 and generated proceeds of $6.5 million. accounting for approximately 23% of all proceeds received. Of these ten companies, four were disclosed in HVPE’s top 100 • Virgin Pulse is a firm that provides employee wellness portfolio companies as at the end of the prior financial year. software and was HVPE’s 50th largest company at 31 January 2023. It generated proceeds of $5.8 million Further details are provided on these four below (ordered by following its merger with HealthComp, as announced in size of distribution). The top ten distributions by value are September 2023. listed on page 23. 2 The distribution represents a partial redemption as a result of its planned conversion from Adelaide into a permanent capital vehicle in July 2022 Phase Industry Currency | | | | | | 4 | 5 | | --- | --- | --- | --- | --- | --- | --- | | | 1 | | 8 | 1 | 3 | 1 | | 3 | | 7 | | | | | 2 6 5 2 4 2 3 | 1 Investment 42% | 1 Tech & Software 32% | 1 US dollar 82% | | --- | --- | --- | | 2 Growth 47% | 2 Consumer 14% | 2 Euro 14% | | 3 Mature 11% | 3 Medical & Biotech 13% | 3 Sterling 2% | | | 4 Financial 12% | 4 Australian dollar 1% | | | 5 Industrial & Transport 10% | 5 Other 1% | 6 Business Services & Other 10% 7 Energy & Cleantech 5% 8 Media & Telecom 4% HVPE Annual Report and Accounts 202418 Investment Manager’s report continued M&A Transactions and IPOs Top Five M&A transactions 2 During the 12 months ended 31 January 2024, there were a (by contribution to HVPE NAV per share ) total of 362 known M&A transactions and IPOs, compared to Reward Gateway Other Information Technology +$0.04 327 total transactions reported in the 12 months to 31 January GGW Holding Buyout Financials +$0.04 2023. Within HVPE’s portfolio, we are seeing some green Groundworks (formerly shoots in terms of IPO and M&A activity for the year ahead JES Construction) Buyout Industrials +$0.03 and are hopeful we will see an improvement in exit activity. Undisclosed Buyout Financials +$0.03 Approximately 88% (318) of these transactions were M&A Tuskerdirect Limited Buyout Consumer Discretionary +$0.03 (trade sales or sponsor-to-sponsor transactions), with the | remaining 12% (44) being IPOs. IPOs tend to represent a | Top Five IPOs | | | --- | --- | --- | | relatively small proportion of exits for HVPE even in normal | | 2 | | | (by contribution to HVPE NAV per share | ) | circumstances, consistent with wider industry trends. Tata Technologies Venture Industrials +$0.03 There was an approximately even split across buyout and Mankind Pharma (Maize venture transactions where, of HVPE’s total 362 known M&A Investments) Venture Health Care +$0.01 transactions and IPOs, 163, or 45%, related to buyout-backed Zhengzhou companies. A further 176 or 49% related to venture-backed Guoquanshihui Network Technology Co., Ltd. Venture Consumer Staples +$0.01 companies, and the remaining 23 (6%) related to Other Hitachi Kokusai Electric companies. Over the period, the weighted average uplift to Inc. Buyout Information Technology +$0.01 pre-transaction carrying value for a large sample of Savers, Inc. Other Consumer Discretionary +$0.01 1 transactions was 24%. The top five M&A transactions during the period (by contribution to HVPE NAV per share) are listed below. Breakdown of known M&A transactions and IPOs (by quarter end) Q1 Q2 Q3 Q4 Total 76 96 93 97 362 Breakdown of known M&A transactions and IPOs (by count) Buyout Venture Other M&A M&A M&A 88% 42% 40% 6% Buyout Venture Other IPO IPO IPO 12% 2% 9% 1% 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. 19Strategic Report ## Value creation cycle | Investing in private markets | 1 Commitment Phase | 3 Growth Phase | | --- | --- | --- | | requires a considered, | The first phase at which the | The third phase where most | | | Investment Manager and the Board | HarbourVest funds are fully invested | ### long-term approach. HVPE consider making new commitments during years five to nine, and managers ### provides a complete solution to the portfolio. are actively driving growth. The majority ### for public investors by of value accretion typically takes place | managing the portfolio | 2 Investment Phase | during this phase. | | --- | --- | --- | | through four phases of | The second phase where the | | | | HarbourVest funds invest HVPE’s | 4 Mature Phase | ### the cycle: Commitment, commitments over a period of The fourth phase within approximately ### Investment, Growth, approximately four years. seven to ten years of the HarbourVest ### and Mature. fund’s life, where underlying managers are typically realising investments. ### 1 ### Commitment Phase ### Investment Phase ### 2 ## Value ## creation ## cycle ### Mature Growth ### 34 ### Phase Phase For illustrative purposes only. Governance Financial Statements Other Information 20 HVPE Annual Report and Accounts 2024 Value creation cycle continued # Commitment phase ## Allocated and Unallocated Investment Pipeline ![img-1.jpeg](img-1.jpeg) 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. ## Projected timeline for capital calls from total Investment Pipeline 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 $360 million unlikely to be called (14% of the investment pipeline). For further details on sources of liquidity and coverage, please see the Medium-term Coverage Ratio on page 31. Anticipated capital calls per financial year ($m) ![img-2.jpeg](img-2.jpeg) ## 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 Stewardship Fund (Global direct co-investment fund) $35m Dover Street XI Fund (Global multi-strategy secondary fund) $25m Infrastructure Opportunities III Fund (Global infrastructure and real assets fund) $75m Continuation Solutions Fund (Global multi-strategy fund of funds) $35m Total $295m (12 Months to 31 January 2023: $140m) ## 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 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 of 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. 21Strategic Report ## Investment phase ### In the 12 months to 31 January 2024, HVPE invested ## $593 million into HarbourVest funds (see Consolidated Fund XII Buyout ### Statements of Cash Flows on page 96). The majority of Fund XII Buyout was HVPE’s ### investments were into primary funds at 78%, followed by largest source of capital calls in the 12 months to ### secondaries at 12%, and direct co-investments at 10%. 31 January 2024. ### The most active Primary managers were in North America Fund XII Buyout is a ### and had a buyout focus, as highlighted in the table below. 2021-vintage fund, and provides a comprehensive solution for investors seeking to invest in US-based buyout Top Ten Primary Managers by Amount Invested (£m) investments. The fund intends GeographyStrategy to create a diversified portfolio of partnerships that focuses SK Capital Partners1 $10.6m Buyout United States on mature, stable companies, $7.8mIncline Equity Management2 Buyout United States high-growth enterprises, and under-utilised assets. The fund 3 $7.0mSymphony Technology Group Buyout United States focuses on primary partnership 4 $6.9mThoma Bravo Buyout United States investments in US-based buyouts, complemented by secondary $5.6mGenstar Capital Partners5 Buyout United States investments and direct co- investments (up to a limit of 6 Permira Advisers Limited $5.2m Buyout Europe 35% of the fund). | 7 | Sentinel Capital Partners | $5.0m | Buyout | United States | | --- | --- | --- | --- | --- | | | | $4.7mTSG Consumer Partners8 | Buyout | United States | | | Index Ventures $4.7m9 | | Venture/Growth | Europe | ## $102m ### call Governance Financial Statements Other Information $4.5mAdvent International Corp.10 Buyout Europe HVPE Annual Report and Accounts 202422 Value creation cycle continued ### 1 ## Growth phase Fund XII Buyout – 2 ## Largest gain ### In the 12 months to 31 January 2024, the Investment Fund XII Buyout was HVPE’s largest fund gain in the 12 months ### Portfolio increased by $140 million (see Audited to 31 January 2024. ### 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 ## $26m ### weighting of each category in the portfolio diversification. ### gain Growth by Stage Growth by Geography Growth by Strategy 10% Buyout +8.6% 15% 8% 10% Buyout +8.6% Europe +9.5% North America Secondary 8% +6.6% +8.2% 10% 6% Direct 8% Co-investment Mezzanine, +7.3% 6% Mezzanine, Infrastructure 6% & Real Assets 5% 4% Infrastructure Rest of World | | & Real Assets | +7.1% | | | | --- | --- | --- | --- | --- | | 4% | | | +6.2% | | | | +7.1% | | | Primary | 4% +4.5% -0% 2% 2% Venture & Asia -0.5% 2% Growth Equity +1.3% Venture & Growth Equity +1.3% 0% -5% 0% 0% | | Buyouts – the largest part of the portfolio | | North America – the largest weighting | The Primary strategy – 50% of | | --- | --- | --- | --- | --- | | | by stage (61%) – increased over the | | in the portfolio by geography (63%) | Investment Portfolio NAV – increased | | 10% | | Buyout +8.6% | | | | | reporting period driven by all sub-sectors | | increased by 6.6% over the reporting | by 4.5% over the 12 months to 31 | | | of large buyouts (+8.8%), medium buyouts | | period, driven by US large buyout | January 2024, driven by US and | 15% 8% (+8.3%), and small/micro buyouts (+8.7%). (+10.5%), US growth equity (+8.5%), European investments (+5.1% and Europe +9.5% North America | | | | and US mezzanine (+8.3%). | +6.9%, respectively), and buyout stage | | --- | --- | --- | --- | --- | | | The Venture and Growth Equity stage +6.6% | Mezzanine, | | | | 10% 6% | | | | investments (+9.6%). | Infrastructure – 31% of Investment Portfolio NAV – Europe – 21% of Investment Portfolio & Real Assets increased slightly over the reporting NAV, saw the largest increase by The Secondary strategy – 30% of +7.1% 4% period. Within the Venture and Growth geography, gaining 9.5%. This was Investment Portfolio NAV – was the 5% Equity stage, Early Venture (-4.1%) Rest of World largely driven by European small and strongest performer by Strategy, +6.2% 2% underperformed Balanced Venture medium buyout (+19.5% and +11.0%, increasing by 8.2%. This was largely Venture & (+1.4%) and Growth Equity (+5.3%). Growth Equity +1.3% respectively), as well as European driven by US and European investments -0% growth equity (+15.0%), partially offset (+9.3% respectively for each), along 0% Asia -0.5% Mezzanine, Infrastructure & Real Assets – by a decline in European balanced with all subcategories by stage the smallest stage at 8% of Investment venture (-6.3%). reporting increases. -5% Portfolio NAV – increased over the | reporting period with all significant | Asia – 14% of Investment Portfolio | The Direct Co-investment strategy | | --- | --- | --- | | sub-sectors within this category | NAV – was the only geography which | – 20% of Investment Portfolio NAV – | | reporting increases. | reported a small decrease over the | increase by 7.3%, driven by European | | | 12-month period. This was driven | investments (+14.8%), partially offset | | | by a decrease in Asia early venture | by Asia investments (-4.6%). All | | | and growth equity (-3.1% and -3.6%, | subcategories by stage also | | | respectively), offset by gains from Asia | contributed increases. | medium and large buyout (+7.1% and +4.7% respectively). 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. 8% 15% Secondary +8.2% 6% Direct Europe +9.5% North America Co-investment +6.6% +7.3% 10% 4% 5% Primary Rest of World +4.5% 2% +6.2% -0% Asia -0.5% 0% -5% 8% Secondary +8.2% 6% Direct Co-investment +7.3% 4% Primary +4.5% 2% 0% 23Strategic Report ## Mature phase ## HarbourVest ## In the 12 months to 31 January 2024, HVPE received Infrastructure ## proceeds of $310 million from HarbourVest funds (see Income Partnership ## Audited Consolidated Statements of Cash Flows on page (“HIIP”) ### 96). The top ten company distributions are outlined below. HIIP was HVPE’s largest fund 2 distribution in the 12 months to 31 January 2024. Top Ten Company Distributions HIIP is a fund that invests 1 February 2023 to 31 January 2024 in a portfolio of high-quality, Distributed stable infrastructure assets 1 | | Company Description | | Value | through structured liquidity | | --- | --- | --- | --- | --- | | 1 Undisclosed Q2 2023 M&A transaction - proceeds received from | | | $13.5m | solutions including whole-fund | | | | partial realisation | | restructurings and single asset | secondaries. HIIP primarily targets 2 CarepathRx Q1 2023 M&A transaction - proceeds received from $8.6m partial realisation OECD markets, with a focus on North America, Western Europe 3 Coinbase, Inc. Q1 2021 IPO - proceeds received from $7.7m and Australia. partial realisation 4 Groundworks Q1 2023 M&A transaction - proceeds received from $7.3m (formerly JES partial realisation Construction) 5 VMware, Inc. Q4 2023 M&A transaction - proceeds received from $7.2m full realisation ## $38m 6 DynaTrace, Inc. Q2 2020 M&A transaction - proceeds received from $6.5m partial realisation ### distribution 7 Virgin Pulse Q4 2023 M&A transaction - proceeds received from $5.8m partial realisation | 8 Reward | | Q2 2023 M&A transaction - proceeds received from | $5.5m | | --- | --- | --- | --- | | | Gateway | full realisation | | | 9 Works Human | | Q2 2023 M&A transaction - proceeds received from | $5.2m | | | Intelligence | partial realisation | | | 10 Prolacta | | Q4 2023 M&A transaction - proceeds received from | $4.9m | | | Bioscience, Inc. | full realisation | | 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. Governance Financial Statements Other Information HVPE Annual Report and Accounts 202424 ## Recent events HVPE Estimated NAV as at 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 HVPE releases an estimated NAV on a monthly basis. 2024, based on capital funded and taking foreign exchange These reports are available on the Company’s website, movements into account. generally within 20 calendar days of the month-end. HVPE’s cash and cash equivalents also decreased from $140 On 20 May 2024, HVPE published an estimated NAV per share million at 31 January 2024 to $60 million at 30 April 2024. at 30 April 2024 of $50.47 (£40.40), is unchanged since the final 31 January 2024 NAV (US Generally Accepted Accounting HVPE’s look-through exposure to borrowing at the HarbourVest Principles (“GAAP”)) figure of $50.47. This latest NAV per share fund level had decreased by $19 million, from $508 million at is based on a valuation breakdown of: 6% as at 30 April 2024 31 January 2024 to $489 million at 30 April 2024. The latest (reflecting the public company in the portfolio), 3% actual 31 balance sheet ratios can be found in the factsheet on the March 2024 and 91% actual 31 December 2023. Consistent HVPE website: www.hvpe.com. with previous estimated NAV reports, valuations are also adjusted for foreign exchange movements, cash flows, and any known material events to 30 April 2024. Strategic Report Governance Financial Statements Other Information 25 ## 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 £31.67 per share for a total consideration of £16.9 million (991.5 million). The total number of shares in issue is now 78,965,254. Currently, the Distribution Pool balance is 550 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 $800 million Facility. More details regarding the Facility are available on page 29. ## Share Price since 31 January 2024 The closing price of £22.85 on 24 May 2024 represents a fall of 1.3% since period-end. This compares to the FTSE AW TR index's increase of 9.1% in US dollars over the same period. The market capitalisation of the Company as at 24 May 2024 was £1.8 billion and, as of the same date, HVPE was ranked 75th in the FTSE 250 (19 May 2023: 77th). ![img-3.jpeg](img-3.jpeg) 26 HVPE Annual Report and Accounts 2024 ## KPIs and investment objective The Company's investment objective is to generate superior shareholder returns through long-term capital appreciation by investing primarily in a diversified portfolio of private markets investments. ### Key Performance Indicators ("KPIs")$^{1}$ #### 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: ![img-4.jpeg](img-4.jpeg) 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: ![img-5.jpeg](img-5.jpeg) 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: ![img-6.jpeg](img-6.jpeg) 10-year relative outperformance (annualised) to 31 January 2024: +4.3% 10-year relative outperformance (annualised) to 31 January 2023: +5.7% 1 Please note some of these KPIs are also Alternative Performance Measures ("APMs"). Please see pages 126 to 127 for our APMs. 2 Note "b" here refers to percentage points outperformance. Strategic Report Governance Financial Statements Other Information 27 ## 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 | 2024 | 16.7% | | --- | --- | | 2023 | 16.7% | | 2022 | 15.0% | | 2021 | 15.0% | b Net portfolio cash flow$^{3}$ | 2024 | $(225bn) | | --- | --- | | 2023 | $(36m) | | 2022 | $(22bn) | | 2021 | $(141m) | ## Liquidity in the Shares (Daily Trading Volume) Current and prospective shareholders place a high value on liquidity as it provides reassurance that there is a ready market in the shares should they wish to manage their position. The Board and the Investment Manager monitor liquidity on a regular basis using the daily mean. Daily liquidity, measured by mean daily trading volume, declined over the period. This largely reflects the lower levels of trading activity from market participants on the back of wider macro concerns. a Change in mean daily trading volume$^{4}$ | 2024 | 106,498 | -7.3% | | --- | --- | --- | | 2023 | 116,229 | -24.0% | | 2022 | 183,497 | +40.2% | | 2021 | 195,735 | +55.9% | 3 Cash distributions from private equity investments ($310 million) minus cash contributions to private equity investments ($393 million). Please refer to the Consolidated Statements of Cash Flows on page 96. 4 Includes trading volume for both holders, HVPE and HVPD. Historic years have been found up to this effect. HVPE Annual Report and Accounts 202428 ## Managing the balance sheet ## Effective and prudent balance sheet management is critical when running ## a closed-ended vehicle investing into a portfolio of private market funds ## with varying cash flow profiles. This is particularly true for a company such ## as HVPE which maintains a large pipeline of unfunded commitments ## (the “Investment Pipeline”), which is the amount of capital committed to ## an underlying HarbourVest fund, but not yet drawn down for investments. ## This section aims to outline HVPE’s approach to managing its balance sheet ## and explain the steps it takes to ensure that the Company is sufficiently ## resourced in preparation for periods of significant market stress. ## The chart below shows the gross and net cash flows in US dollar terms ## since inception. This reflects the cash flow cycles that our balance sheet ## management is designed to accommodate. Calls and distributions since inception, annual to 31 January ($m) 835 532 405 | | 356 | 363 | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | 307 | 308 | 290 | 310 | | 257 | | | 251 | | | | | 204 181 137 83 | | 48 | | | 52 | | | --- | --- | --- | --- | --- | --- | | (97) | | | (74) | | | | | | (128) | | | (141) | (163) (162) (199) (211) (251) (270) (313) (324) (396) (431) (515) (588) (593) 2020 2021201920182017201620152014201320122011201020092008 2023 20242022 2,203 2,873 3,838 3,9213,9221,9241,7141,4751,3371,2661,1671,030944850718631862 Distributions ($m) Calls ($m) Net Position ($m) Net Asset Value ($m) Strategic Report Government Financial Statements Other Information 29 ## 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. ![img-7.jpeg](img-7.jpeg) 20 HVPE Annual Report and Accounts 2024 # Managing the balance sheet continued # 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. 31Strategic Report Governance Financial Statements Other Information 1 Balance Sheet Ratios Commitment Ratios The Board and the Investment Manager refer to three ratios when assessing the Company’s commitment levels: | APM | 1. Total Commitment Ratio (“TCR”) | Total Commitment Ratio | | --- | --- | --- | | The level of the TCR is a key determinant of the Company’s | | (Total exposure to private markets investments as | | total commitment capacity for new HarbourVest funds and | | apercentage of NAV.) | co-investments within a given time period. The TCR remained Investment Portfolio + Investment Pipeline $6.5bn unchanged year over year. Divided by the NAV $3.9bn 167% (167% at 31 January 2023) Commitment Coverage Ratio APM 2. Commitment Coverage Ratio (Short-term liquidity as a percentage of total The nature of HVPE’s structure, whereby it commits to InvestmentPipeline.) HarbourVest funds, which in turn invest in private equity managers, means that it typically takes longer for commitments to be drawn Cash + available credit facility $0.7bn down compared with other listed private equity funds. As a result, Divided by the Investment Pipeline $2.5bn to remain fully invested, it has to maintain a larger pipeline of 27% (36% at 31 January 2023) unfunded commitments. This means that HVPE’s Commitment Coverage Ratio may appear relatively low in comparison with other 2 firms within its peer group. This ratio has decreased over the financial year due to a decline in available liquidity. APM 3. Medium-term Coverage Ratio (“MCR”) Medium-term Coverage Ratio HVPE’s Investment Manager uses this third specific metric (A measure of medium-term commitment coverage based on to provide greater insight into the Company’s balance sheet current commitments.) position and a more relevant comparison with the Company’s 2 Cash + available credit facility (total $0.7bn) + next peer group. This ratio decreased over the financial year due 3 12 months’ estimated distributions ($0.6bn) $1.3bn to a combination of lower available liquidity and refreshed cash flow projections. This includes a reduced outlook for Divided by the next 36 months’ estimated 3 distributions in the current market environment. investments $1.5bn 88% (104% at 31 January 2023) 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. 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. 32 HVPE Annual Report and Accounts 2024 ## Managing costs ### Total Expense Ratio ("TER") HVPE's TER reflects the total cost incurred by the Company in assembling and maintaining its portfolio of HarbourVest funds and co-investments. The figure is broken down into four distinct categories of expense. First, there is the direct cost of running the Company in its own right, encompassing items such as the maintenance 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' 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. HVPE Total Expense Ratio as a % of Average NAV ![img-8.jpeg](img-8.jpeg) 1 "HVPE: Charlotte Co-Investment L.P." in the Audited Consolidated Schedule of Investments. 33Strategic Report Governance Financial Statements Other Information Total Net Expense Ratio Breakdown | | 12 Months | | | 12 Months | | | --- | --- | --- | --- | --- | --- | | to 31 January | | | to 31 January | | | | | | 2024 | | | 2023 | 2 Operating expenses 0.72% 0.36% 3 HarbourVest fund operating expenses 0.22% 0.25% 4 Management fees 0.60% 0.59% Operating expense ratio 1.54% 1.20% 5 Interest income (0.23)% (0.10)% Net operating expense ratio 1.31% 1.10% 6 Performance fees 0.48% 0.08% 7 Total net expense ratio 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). HVPE Annual Report and Accounts 202434 ## Summary of net assets | 31 January | | 31 January | | | --- | --- | --- | --- | | | 2024 | | 2023 | | (millions*) | | (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 | | 12 Months | | | --- | --- | --- | --- | | | ended | | ended | | 31 January | | 31 January | | | | 2024 | | 2023 | | (millions*) | | (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 1 2 % of average Investment Pipeline 22% 22% 3. Growth Investment Portfolio (beginning) $3,616 $3,633 Cash invested $593 $588 Investment Portfolio growth $140 $(55) Distributions received $(310) $(532) 3 Accrued distribution $18 $(18) Investment Portfolio (end) $4,058 $3,616 4. Distributions Received Cash received from HarbourVest funds $310 $532 4 5 % of average Investment Portfolio 8% 15% * 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. 35Strategic Report Governance Financial Statements Other Information HVPE Annual Report and Accounts 202436 ## Stakeholder engagement 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 How the Board Engages > The Board communicates with shareholders through the Company’s regular financial reporting ### Shareholders and 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 ### Prospective Investors presentations from these events are made available to all shareholders on the Company’s website. Shareholders and prospective investors are The Board takes the opportunity presented by occasions such as the Capital Markets Session to today’s and tomorrow’s owners of the address investors’ concerns directly. The Board welcomes the views of shareholders who may Company and their interests are at the core of contact any Board member directly, including the Chair, the Senior Independent Director and the Chair every decision made by the Board. The of the Audit and Risk Committee, through the Company Secretary in writing to the registered office creation of long-term value for its shareholders or by email to hvpecosec@bnpparibas.com. is central to the Company’s purpose. Support > The Chair has held meetings with shareholders throughout the year at both HVPE’s and investors’ from this group of stakeholders is critical to the instigation, and the Chair has offered meetings to many other investors. He has also responded to success of HVPE and to the delivery of its shareholder questions via letter and email. The content of these interactions is shared with other investment objective 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. > Whether individually or collectively, Board members maintain a continuous dialogue with the ### HarbourVest Partners Investment Manager and with different members of its dedicated HVPE team. This includes calls, ### (theInvestment 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 ### Manager) challenge, and a strong partnership with a clear focus on promoting the success of HVPE for the benefit of all its stakeholders. It is essential that the Board maintains a strong relationship with its Investment Manager. As > The Board requests and receives detailed monitoring reports from HarbourVest on the investments set out in the Strategic Report, HarbourVest is and investment processes on a regular basis and in response to specific events. The Investment fundamental to HVPE’s business and to its Manager also proactively communicates with the Board on any matters which it believes are ability to achieve its strategic objectives. pertinent to it. The emphasis is on detailed and informative dialogue. HVPE invests in HarbourVest-managed funds > The Board undertakes strategic planning with the Investment Manager to assist the Company in in order to achieve its purpose of providing achieving its investment objective. Directors visit the Investment Manager’s offices, meet members easy access to a diversified global portfolio of of its global team in a wide range of investment and operational functions, request information and high-quality private investments. It is heavily receive presentations from relevant members of those teams and have the opportunity to attend the reliant on HarbourVest’s expertise, its access Investment Manager’s annual investment conference. to investment opportunities and its > The Board works with the Investment Manager to ensure that Board reports are continually evolving sophisticated and highly developed investment to remain current and to provide the most useful and relevant information on which the Board can processes. base its decisions. 37Strategic Report Governance Financial Statements Other Information Stakeholder How the Board Engages > The Board receives training and formal updates on HarbourVest’s ### Community and Environment ESG initiatives and processes at least twice a year and the HVPE Board’s engagement with ESG matters helps to drive the ESG agenda The impact of the Company on the community and the environment in which it at HarbourVest. operates, the positions adopted by its service providers, and, most importantly, the consideration that the Investment Manager gives to ESG matters, both in > The Board monitors the development of the Investment Manager’s its own business and in its investment processes, are important topics at ESG processes as they relate to the investments held by HVPE and Board meetings. has developed reporting metrics to assist it in identifying progress made in the content and scope of those processes. More details on our approach to ESG can be found on pages 68 and 69. > The Board maintains an open dialogue on governance matters with A description of the Investment Manager’s ESG practices, including all stakeholders. It also examines each of its material identified risks engagement with General Partners, can be found on pages 44 to 48. 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. > The Board holds regular meetings which ensures clear ### BNP Paribas communication between BNP Paribas, the Company, and its ### (the Company Secretary and Directors. The dedicated HVPE team at the Investment Manager is also in frequent and regular communication with BNP Paribas. ### Administrator) > All Directors have open access to any member of the relevant BNP Paribas team. BNP Paribas S.A., Guernsey Branch fulfils the essential functions of Company Secretary and Administrator. These are regulated roles which include oversight > Regular oversight of the full range of BNP Paribas’ functions is of the NAV process, the issuing of regulated news announcements to the conducted through Board and Committee reporting, and formal market, and the key company secretarial role of facilitating the functioning of MESPC review. the Board according to the policies and procedures of the Company and best > The Board provides and encourages regular and timely corporate governance practice. two-way feedback. > The Board regularly reviews the adequacy of the credit facility with ### Credit Facility Providers reference to its costs, the growth of the Company’s NAV and the likely future size of the Company. 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 > The Board receives regular updates from the Investment Manager fully invested as possible. It is therefore essential for the Company to have on the status of the credit facility. These have become more frequent funding available as it is needed. 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. > Through the activities of the Audit and Risk Committee (“ARC”) and in ### Regulators conjunction with the Administrator and the Investment Manager, the Board has established systems of controls which collectively ensure Regulators are key stakeholders for HVPE in ensuring the maintenance of the compliance with required regulation. 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 > The Board receives regular reports on the monitoring of those receive clear, current, and meaningful information about the Company. Key controls, which is overseen by the ARC. among them is the FCA in its capacity as the UK Listing Authority, the FRC in > The Board regularly considers how it meets regulatory and its oversight of UK accounting and governance issues, and the Guernsey statutory obligations. Financial Services Commission. Membership of the AIC and compliance with > Directors undertake individual training to keep them updated with the the AIC Code forms a central element of the Board’s efforts to maintain latest regulatory developments. compliance with relevant regulation and guidance. > The Board has access to all service providers, as do both the ### Other Service Providers Investment Manager and the Administrator. The Company depends on a number of service providers who are essential to > The brokers provide regular reports to the Board and attend Board the maintenance of its listed status and the delivery of its purpose. These Meetings to respond to Directors’ questions. include its brokers, legal advisers, PR advisers and the Registrar. > 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. HVPE Annual Report and Accounts 202438 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 | The Board continued to consider the options | The potential benefits to | | --- | --- | --- | | repurchases in May 2023 and of a further | of share repurchase programmes as a | shareholders of any buybacks of | | $25m of share repurchases in October 2023. | capital allocation decision to be measured | shares are examined with reference | | | against other investment opportunities | to the structured framework | | | available at the time and to be seen in the | established by the Board to ensure | | | context of the long term nature of the | that the effect on NAV per share is | | | Company’s investments. | likely to be positive in the long term, | and therefore of benefit to the Company’s shareholders. The Board commissioned an external The existence of this feedback permits the The report acted as a source independent report to identify how the Company Board to respond to investor sentiment of independent opinion on the and its Board were perceived by its major expressed candidly to a professional third Company’s performance and external shareholders and potential party and thereby to identify and address provided indications of where shareholders. any concerns expressed. communication could be improved, or other actions taken. The Board carried out a consultation exercise The evolution of the share register has The exercise was established with a variety of stakeholders to establish if increased the number of wealth managers to ensure that the Board there was any appetite for a change in the and retail investors who are holders of remained aware of shareholder Company’s distribution policy. HVPE’s shares. The Board responded to that considerations, that it responded change to remain informed on the range of appropriately to them and was not its shareholders’ priorities. overly influenced by the opinions of a single group. | The Board established a Distribution Pool as | The establishment of the Distribution Pool | The Board engaged actively with | | --- | --- | --- | | part of its updating of the Company’s Capital | makes funds available to be deployed by the | shareholders in establishing this | | Allocation Policy. The Distribution Pool will, at | Board in a flexible manner for the direct | Distribution Pool which includes | | the Board’s discretion, fund capital returns to | benefit of shareholders. The Board’s aim is | the potential to pay dividends. It is | | shareholders in the form of buybacks and | to optimise the long-term total return for | designed to permit shareholders to | | special dividends. 15% of cash distributions | shareholders through the cycle while | share more directly in the returns | | received from HVPE’s investments will be | preserving the strength of the balance sheet. | created from HVPE’s portfolio. | dedicated to the Distribution Pool. | Governance Changes resulting in a fully | Underpins the long-term success of the | Change made in response to | | --- | --- | --- | | independent Board with effect from the | Company in demonstrating that it is | concerns expressed by some | | 2024 AGM. | operated in accordance with best | stakeholders and accomplished | | | governance practice. | through open dialogue between | a range of stakeholders including shareholders, the Investment Manager, and the Directors. 39Strategic Report Governance Financial Statements Other Information HVPE Annual Report and Accounts 202440 ## Principal risks and uncertainties Risk Factors and Internal Controls Risk Appetite The Board is responsible for the Company’s risk management The Board’s investment risk appetite is to follow an over- and internal control systems and actively monitors the commitment policy that optimises investment returns and risks faced by the Company, taking steps to mitigate and associated distributions, allows balanced, regular investment minimise these where possible. Further details on the Board’s through economic and investment cycles, and ensures that it governance and oversight can be found on pages 77 to 79. 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 The Company is dependent on its Investment Manager and on HarbourVest has a strong long term track record of managing Stable ## Performance of HarbourVest the performance of HarbourVest’s investment professionals. private equity investments. It maintains good relationships with HVPE has maintained its record of long-term The risk posed by the Company’s dependence on The vast majority of the Company’s assets are invested in key managers and has a consistent and repeatable investment outperformance in NAV growth despite challenging its Investment Manager. HarbourVest funds and significant reliance is placed by the process with low turnover of senior investment professionals. market conditions. It continues to enhance its investment Company on HarbourVest’s control environment. Any inability There is a high level of diversification by geography, strategy processes and the quantitative inputs to its investment by HarbourVest to maintain its investment performance, and vintage which mitigates the risk. HVPE has a dedicated decision making and maintains its access to new whether in absolute or relative terms, could result in a Investment Committee within HarbourVest. The Board investment opportunities. No significant matters of concern significant deterioration in net asset value for the Company monitors HarbourVest’s performance through the MESPC, regarding the HarbourVest control environment arose and its shareholders. and its controls environment is assessed by the Audit and during the year. Risk Committee. Equity market volatility increases overall levels of uncertainty The Company’s exposure to individual public markets Stable ## Public Market Risks for HVPE and its investments. Increasing geopolitical risks is partially mitigated by the geographical and sectoral The portfolio has proved itself to be resilient despite The risk of a decline in global public markets or influence how markets trade, reversing the potential positive diversification within the portfolio. In previous downturns challenging market conditions over the past year and the a deterioration in the economic environment. effects of developing improvements in economic indicators. private market valuations have not been impacted as much as increased political risk that has affected markets. The level Overall declines in public markets impact HVPE’s NAV per public markets. The Board regularly reviews scenario analyses of this risk was increased in the previous financial year and share by directly reducing the value of public securities in prepared by the Investment Manager which incorporate the has been maintained at this heightened level. HVPE’s portfolio and indirectly influencing private market effects of significant public market downturns. valuations. They are also likely to have a direct impact on HVPE’s share price. Uncertainty and distrust in relation to the valuation of private Both the Investment Manager and the GPs of underlying funds Stable ## Valuation Risk equity investments may lead investors to make their own value investments in accordance with industry standards and This risk was identified as a Principal Risk during the The risk that market instability leads to continuing judgements based on incomplete information which could accounting regulations. All the valuations are audited annually. financial year under review and was disclosed as such uncertainty about private asset valuations based on result in a lack of confidence in the reliability of HVPE’s When the Company reports its monthly NAV, it discloses the in the 2023 Annual Report and Accounts. Given that the comparisons with listed companies, together with published NAV. The low level of exits and liquidity events that date of the underlying valuations to provide transparency risk level was elevated at that stage, it has not been further general market scepticism about the likely movement has been seen recently reduces the ability to present public to shareholders. increased since then. The Board believes that this risk in valuations. substantiation of valuation levels. The Audit and Risk Committee receives reports on the will remain a focus until there is an increase in the level Investment Manager’s control environment, including the of exit activity and therefore of external validation of processes relating to valuations. valuation levels. 41Strategic Report Governance Financial Statements Other Information Risk Management In considering material risks, the Board identified those which should be categorised as principal risks, which are those As recommended by the Audit and Risk Committee (see the where the combination of probability and impact is assessed report on the activities of that Committee on pages 77 to 79), as being most significant and which the Board therefore the Directors have adopted a risk management framework considers could seriously affect the performance, future which governs how the Board identifies and measures risks, prospects, or reputation of the Company. determines risk appetite, assesses mitigation and controls, and reports on risks. During the year under review, the Board has adapted its approach to ESG risk which it now considers as a distinct The Board reviews risks at least twice a year and receives aspect of all the individual risks faced by the Company. in depth reports on specific risks as recommended by the As a result, ESG risk has been integrated into the Board’s Audit and Risk Committee. The Board divides identified risks assessment of all the material risks faced by the Company, into those which have a higher probability and a significant and while ESG regulatory risk is still considered as a risk in its potential impact and those which are less material and are own right, broader ESG risk is no longer separately identified monitored on a watch list. The Board also conducts an annual as a principal risk. exercise to identify new or emerging risks. Principal Risk Description and Potential Impact Mitigation and Management Commentary The Company is dependent on its Investment Manager and on HarbourVest has a strong long term track record of managing Stable ## Performance of HarbourVest the performance of HarbourVest’s investment professionals. private equity investments. It maintains good relationships with HVPE has maintained its record of long-term The risk posed by the Company’s dependence on The vast majority of the Company’s assets are invested in key managers and has a consistent and repeatable investment outperformance in NAV growth despite challenging its Investment Manager. HarbourVest funds and significant reliance is placed by the process with low turnover of senior investment professionals. market conditions. It continues to enhance its investment Company on HarbourVest’s control environment. Any inability There is a high level of diversification by geography, strategy processes and the quantitative inputs to its investment by HarbourVest to maintain its investment performance, and vintage which mitigates the risk. HVPE has a dedicated decision making and maintains its access to new whether in absolute or relative terms, could result in a Investment Committee within HarbourVest. The Board investment opportunities. No significant matters of concern significant deterioration in net asset value for the Company monitors HarbourVest’s performance through the MESPC, regarding the HarbourVest control environment arose and its shareholders. and its controls environment is assessed by the Audit and during the year. Risk Committee. Equity market volatility increases overall levels of uncertainty The Company’s exposure to individual public markets Stable ## Public Market Risks for HVPE and its investments. Increasing geopolitical risks is partially mitigated by the geographical and sectoral The portfolio has proved itself to be resilient despite The risk of a decline in global public markets or influence how markets trade, reversing the potential positive diversification within the portfolio. In previous downturns challenging market conditions over the past year and the a deterioration in the economic environment. effects of developing improvements in economic indicators. private market valuations have not been impacted as much as increased political risk that has affected markets. The level Overall declines in public markets impact HVPE’s NAV per public markets. The Board regularly reviews scenario analyses of this risk was increased in the previous financial year and share by directly reducing the value of public securities in prepared by the Investment Manager which incorporate the has been maintained at this heightened level. HVPE’s portfolio and indirectly influencing private market effects of significant public market downturns. valuations. They are also likely to have a direct impact on HVPE’s share price. Uncertainty and distrust in relation to the valuation of private Both the Investment Manager and the GPs of underlying funds Stable ## Valuation Risk equity investments may lead investors to make their own value investments in accordance with industry standards and This risk was identified as a Principal Risk during the The risk that market instability leads to continuing judgements based on incomplete information which could accounting regulations. All the valuations are audited annually. financial year under review and was disclosed as such uncertainty about private asset valuations based on result in a lack of confidence in the reliability of HVPE’s When the Company reports its monthly NAV, it discloses the in the 2023 Annual Report and Accounts. Given that the comparisons with listed companies, together with published NAV. The low level of exits and liquidity events that date of the underlying valuations to provide transparency risk level was elevated at that stage, it has not been further general market scepticism about the likely movement has been seen recently reduces the ability to present public to shareholders. increased since then. The Board believes that this risk in valuations. substantiation of valuation levels. The Audit and Risk Committee receives reports on the will remain a focus until there is an increase in the level Investment Manager’s control environment, including the of exit activity and therefore of external validation of processes relating to valuations. valuation levels. HVPE Annual Report and Accounts 202442 Principal risks and uncertainties continued Principal Risk Description and Potential Impact Mitigation and Management Commentary The Company’s balance sheet strategy and its policy for the The size and term of the Company’s credit facility mitigates Increased risk ## Balance Sheet Risks use of leverage are described on page 29. The Company this risk. The Board has put a monitoring programme in place, The Distribution Pool is being funded by a proportion of Risks to the Company’s balance sheet resulting from its continues to maintain an overcommitment strategy and supported by sophisticated and comprehensive cash flow the cash realisations from the Company’s portfolio. This overcommitment strategy, borrowing arrangements and may draw on its credit facility to bridge periods of negative modelling, which underpins the commitment strategy and has resulted in adjustments being made to the financial policy for the use of leverage. cash flow when capital calls on investments are greater limits the likelihood of unexpected shocks. This programme models relating to the Company’s future commitments. than distributions received. The level of potential borrowing mitigates the requirement to sell assets at a discount during available under the credit facility could be negatively affected any but the most extreme periods of negative cash flow. The In previous years, strong NAV gains and distributions by declining NAV. In a stressed environment characterised by monitoring programme also considers the level of borrowing strengthened the balance sheet. The levels of distributions declining NAVs, reduced realisations, and rapid substantial at HarbourVest fund level. Both the Board and the Investment received during the year under review fell significantly in capital calls, the Company’s net leverage ratio could increase Manager will continue to monitor these metrics actively and comparison with previous years and with the modelled beyond an appropriate level, resulting in a need to sell assets. will take appropriate action as required, such as pausing further scenarios. As a result, cash flow was negatively affected A reduction in the availability or use of borrowing at the commitments, to attempt to mitigate these risks. and there was increased use of the credit facility. The Board HarbourVest fund level, or accelerated repayment thereof, intends to renew the credit facility well ahead of the earliest Please also see the Going Concern and Viability Statement on could result in an increase in capital calls to a level in excess expiry date. page 72 for information on the scenarios that are considered of the modelled scenarios. by the Board. 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. Investor sentiment towards the Listed Private Equity sector Private equity has performed strongly as an asset class over Stable ## Popularity of the Listed Private may deteriorate, resulting in a widening of the Company’s the years and the Company has demonstrated the value of While discounts within the sector remain wide, they have Equity Sector share price discount relative to its NAV per share. This may investing through the investment cycle and gaining exposure stabilised during the year and the market commentary on be because of perceptions of the position of the market to a diverse range of markets. HVPE, together with its peers, The risk that investor sentiment towards the listed private the sector has become more balanced. The Board believes in the private equity cycle, perceptions about the cost of continues to advocate for the sector, to increase investors’ equity sector as a whole may deteriorate significantly. that market sentiment towards the sector should turn more private equity investing, or due to investors making their own familiarity with private equity and to describe the advantages positive once there is an increase in realisation events judgements regarding current valuations. HVPE’s discount is of the investment trust structure to provide access to illiquid which validate valuations and support cash flow. currently wider than its historical average and has remained assets through a liquid share. so for a sustained period. HVPE’s relatively wide discount risks undermining investor The Board has made robust efforts to enhance its Increased risk ## Trading Liquidity and Price confidence and could erode levels of shareholder satisfaction. communications, to describe its strategy, to engage with its Despite the substantive efforts made to communicate the The risk that the number of shares traded in the Company Despite the substantive efforts made by the Board to address shareholders, and to listen and respond to the views expressed. Board’s strategy and the NAV performance that has been is insufficient to maintain interest in the stock, or that this issue through its establishment of the Distribution Pool The Distribution Pool has been established to address certain achieved, HVPE’s discount remains at the more extreme the discount of the share price to the NAV per share and active engagement with shareholders, some investors issues raised and there is regular and extensive consideration end of the discount range. A long-term improvement has fails to narrow. may remain unconvinced by its proposals. of potential options to close the discount, including enhanced not yet been seen and any positive response to the Board’s disclosure and transparency for shareholders. The Board efforts has not yet been convincingly reflected in the continues to stress the long-term nature of HVPE, the share price performance despite the continued positive consistent performance and the benefits of its diversification investment performance and increase in NAV per share. strategy as it remains determined to satisfy its investment objective and purpose. 43Strategic Report Governance Financial Statements Other Information Principal Risk Description and Potential Impact Mitigation and Management Commentary The Company’s balance sheet strategy and its policy for the The size and term of the Company’s credit facility mitigates Increased risk ## Balance Sheet Risks use of leverage are described on page 29. The Company this risk. The Board has put a monitoring programme in place, The Distribution Pool is being funded by a proportion of Risks to the Company’s balance sheet resulting from its continues to maintain an overcommitment strategy and supported by sophisticated and comprehensive cash flow the cash realisations from the Company’s portfolio. This overcommitment strategy, borrowing arrangements and may draw on its credit facility to bridge periods of negative modelling, which underpins the commitment strategy and has resulted in adjustments being made to the financial policy for the use of leverage. cash flow when capital calls on investments are greater limits the likelihood of unexpected shocks. This programme models relating to the Company’s future commitments. than distributions received. The level of potential borrowing mitigates the requirement to sell assets at a discount during available under the credit facility could be negatively affected any but the most extreme periods of negative cash flow. The In previous years, strong NAV gains and distributions by declining NAV. In a stressed environment characterised by monitoring programme also considers the level of borrowing strengthened the balance sheet. The levels of distributions declining NAVs, reduced realisations, and rapid substantial at HarbourVest fund level. Both the Board and the Investment received during the year under review fell significantly in capital calls, the Company’s net leverage ratio could increase Manager will continue to monitor these metrics actively and comparison with previous years and with the modelled beyond an appropriate level, resulting in a need to sell assets. will take appropriate action as required, such as pausing further scenarios. As a result, cash flow was negatively affected A reduction in the availability or use of borrowing at the commitments, to attempt to mitigate these risks. and there was increased use of the credit facility. The Board HarbourVest fund level, or accelerated repayment thereof, intends to renew the credit facility well ahead of the earliest Please also see the Going Concern and Viability Statement on could result in an increase in capital calls to a level in excess expiry date. page 72 for information on the scenarios that are considered of the modelled scenarios. by the Board. 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. Investor sentiment towards the Listed Private Equity sector Private equity has performed strongly as an asset class over Stable ## Popularity of the Listed Private may deteriorate, resulting in a widening of the Company’s the years and the Company has demonstrated the value of While discounts within the sector remain wide, they have Equity Sector share price discount relative to its NAV per share. This may investing through the investment cycle and gaining exposure stabilised during the year and the market commentary on be because of perceptions of the position of the market to a diverse range of markets. HVPE, together with its peers, The risk that investor sentiment towards the listed private the sector has become more balanced. The Board believes in the private equity cycle, perceptions about the cost of continues to advocate for the sector, to increase investors’ equity sector as a whole may deteriorate significantly. that market sentiment towards the sector should turn more private equity investing, or due to investors making their own familiarity with private equity and to describe the advantages positive once there is an increase in realisation events judgements regarding current valuations. HVPE’s discount is of the investment trust structure to provide access to illiquid which validate valuations and support cash flow. currently wider than its historical average and has remained assets through a liquid share. so for a sustained period. HVPE’s relatively wide discount risks undermining investor The Board has made robust efforts to enhance its Increased risk ## Trading Liquidity and Price confidence and could erode levels of shareholder satisfaction. communications, to describe its strategy, to engage with its Despite the substantive efforts made to communicate the The risk that the number of shares traded in the Company Despite the substantive efforts made by the Board to address shareholders, and to listen and respond to the views expressed. Board’s strategy and the NAV performance that has been is insufficient to maintain interest in the stock, or that this issue through its establishment of the Distribution Pool The Distribution Pool has been established to address certain achieved, HVPE’s discount remains at the more extreme the discount of the share price to the NAV per share and active engagement with shareholders, some investors issues raised and there is regular and extensive consideration end of the discount range. A long-term improvement has fails to narrow. may remain unconvinced by its proposals. of potential options to close the discount, including enhanced not yet been seen and any positive response to the Board’s disclosure and transparency for shareholders. The Board efforts has not yet been convincingly reflected in the continues to stress the long-term nature of HVPE, the share price performance despite the continued positive consistent performance and the benefits of its diversification investment performance and increase in NAV per share. strategy as it remains determined to satisfy its investment objective and purpose. HVPE Annual Report and Accounts 202444 ## 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. 45Strategic Report ## Purposeful growth (Environmental, Social, and Governance) ## From our Investment Manager, HarbourVest Partners: HarbourVest’s commitment to ESG is founded on a tenet that our ESG Council and ESG team, the latter of which reports has served us well for over 40 years: better information drives into our Head of Investments and works closely with our better results. In support of this belief, we centre our approach ESG investment team leads to integrate ESG factors into our to responsible investing on three areas of focus: performance, investment processes. ESG investment processes are the transparency, and alignment. responsibility of each investment team member, and we place a high priority on regular staff training relating to our ESG Performance objectives, process, and developments in our approach. • Invest with a broader lens to make well-informed decisions Throughout 2023, we continued to invest in our ESG program • Manage portfolio risk and support value creation to expand our resourcing, refine our governance and policies, and integrate ESG data into our systems and processes, all in Transparency an effort to help us uncover better information and deliver better results for our clients. We also firmly believe that we have a role • Report to stakeholders and support industry standards to play in seeking solutions to ESG-related challenges for private • Anticipate and comply with ESG-related regulation markets investors, and we selectively participate in initiatives and produce research that aligns with our priorities. Alignment At the end of 2023, we launched the HarbourVest ESG Forum, • Add value to our partnerships and clients a consortium of HarbourVest professionals responsible for • Strive to be a responsible corporate citizen representing their respective functions at quarterly meetings to learn about key updates from our ESG team and report back to HarbourVest has built a robust oversight structure to support their respective teams. As HarbourVest continues to grow, the our ongoing ESG implementation efforts. Our Executive ESG Forum will bring colleagues across our global functions Management Committee (“EMC”) is ultimately responsible for together to provide an effective channel for both disseminating our ESG Policy and objectives, with critical inputs from both updates on our ESG program and offering feedback. 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/ 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/ Governance Financial Statements Other Information HVPE Annual Report and Accounts 202446 Purposeful growth (Environmental, Social, and Governance) continued ## ESG Data Insights HarbourVest has instituted robust ESG due diligence We believe a GP’s ESG policies, processes, and resources can procedures within each of our investment strategies to support be an indicator for fund excellence and should be considered sound investment decision-making and create compelling, risk- alongside other investment indicators accordingly. Our adjusted returns for our investors. ESG review is incorporated proprietary ESG Manager Scorecard provides an overall ESG as standard in investment committee materials across all rating for GPs based on an assessment formed by evaluating strategies and typically includes our ESG Manager Scorecard three key scorecard indicators: and RepRisk information. Partnership management • Quality of ESG policy and ability to execute on ESG Manager Scorecard commitments Our proprietary ESG Manager Scorecard is used to evaluate • Commitments to areas such as climate change, and a GP’s ESG integration approach and maturity. Evaluation diversity, equity and inclusion (DEI) criteria are aligned with industry standards and the resulting assessment is generated by proprietary weightings, taking Investment process into account the GP’s policy, processes, and resources to • Sophistication and mechanics behind processes for manage financial ESG-related risks and opportunities in their considering ESG factors in investment decision-making investments, and their commitment to transparent and regular and portfolio engagement portfolio reporting. The ESG Scorecard ranking methodology runs from 0.0 (lowest) to 4.0 (highest). A 4.0 ranking Reporting and transparency represents a level of best practice that is not market standard; • Quality of reporting and incident monitoring we set a deliberately high bar to give the more advanced • Commitment to proactively and transparently engage with managers room to improve. LPs on ESG activities Summarizing the data and metrics ESG overall We compile our ESG Scorecard data annually to assess A tighter concentration of scores in the upper ranges GP rankings and identify trends. This year’s analysis indicates that most GPs have established ESG process, draws from a dataset of 270 GPs as of November policy, and resourcing. We continue to generally observe 2023. From our most recent benchmarking analysis, we the most sophisticated practices from European GPs generally found improvements across assessed metrics, and those that are focused on the buyout market. albeit at a moderate scale. This gradual improvement | is consistent with our expectations, as thoughtful ESG | 2023 | | --- | --- | | programs take time and investment to build. High level | ESG process, policy, and resourcing | | observations regarding 2023’s scores include: | 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 1.0-1.9 2.0-2.9 3.0-4.0 Overall ESG score: Derived from Scorecard rankings on partnership management, investment process, and reporting and transparency. 47Strategic Report Governance Financial Statements Other Information RepRisk by the numbers (in 2023) Active companies Incidents tracked by HarbourVest screened by HarbourVest RepRisk is a global database that provides reputational ## 14,500 255 risk ratings for GPs and operating companies based on an assessment of reported ESG incidents associated with GPs Direct engagements* linked to that company, which are subsequently weighted according tracked by HarbourVest RepRisk data to severity, frequency, and source. Risk categories include reporting on fraud, misleading communication, child labor, occupational health and safety, and pollution or waste. ## 700+ 36 In 2023, we screened 255 incidents through RepRisk and selectively engaged with GPs on 36 reports which we * Direct engagements reflect only the number of completed considered to be potentially material. These engagements engagements as of 31 December 2023 and do not include demonstrate the quality of our partnerships with GPs and engagements that were initiated in 2023 but are still ongoing as of calendar year-end. allow us to better understand their ESG risk management and incident response capabilities. Climate change DEI While we noted an uptick in the proportion of GPs that Of the three main outputs of our Scorecard, we generally have developed a climate change strategy in 2023, most saw the most progress from GPs on DEI. This included GPs still have much work to do on climate risk analysis, improvements in monitoring workplace diversity and more emissions data collection, and target-setting. Due to the robust initiatives to drive diversity. nascency of climate change methodology and guidance in private equity, this is unsurprising, and we expect that 2023 industry progress will support GPs in moving forward on 60% have a DEI/anti-harassment policy developing their approach to climate change. 71% monitor workplace diversity 24% conduct anti-bias/conscious inclusion training 2023 71% have recruitment initiatives in place to drive DEI 29% have developed and 33% are committed to developing a 28% have thoughtful policies in place to improve retention climate change strategy 17% have mentorship programs 6% make TCFD-aligned disclosures 16% have conducted climate risk mapping of the portfolio 20% conduct carbon footprint analysis of portfolios < 1.0 < 1.0 1.0-1.9 Climate change score: Derived 1.0-1.9 from Scorecard indicators on | 2.0-2.9 | a manager’s commitment to | 2.0-2.9 | DEI score: Derived from Scorecard | | --- | --- | --- | --- | | | developing a climate change | | indicators on a manager’s senior | | 3.0-4.0 | strategy and implementation of | 3.0-4.0 | investment team diversity, their | | | a strategy in alignment with the | | approach to improving diverse | | | Recommendations of the Taskforce | | recruitment and retention, advocacy, | | | on Climate-related Financial | | and their strategy with respect to | | | disclosures (TCFD). | | diversity in the portfolios. | HVPE Annual Report and Accounts 202448 Purposeful growth (Environmental, Social, and Governance) continued ## Industry Stewardship 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 1 private markets. 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. 1 https://www.newprivatemarkets.com/influencers-in-sustainable-private-markets-sustainability-professionals/ 49Strategic Report ## 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. Governance Financial Statements Other Information HVPE Annual Report and Accounts 202450 1 ## Manager spotlight ## Top ten managers across all ## strategies at 31 January 2024 held ## within HVPE’s underlying portfolio. ## Primary Investments Secondary Investments > Commitments to newly-formed funds being > Purchases of private equity assets in raised by experienced managers existing funds or portfolios of direct investments > Access to leading private equity funds > Attractive pricing opportunities > Comprehensive foundation of a private equity programme > Diversification across prior vintage years > Potential driver of long-term performance > 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. 51Strategic Report ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 3.4% | $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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 3.1% | $126.5m | Governance Financial Statements Other Information HVPE Annual Report and Accounts 202452 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 2.3% | $93.0m | ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 2.2% | $91.2m | 53Strategic Report ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.7% | $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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.4% | $55.0m | Governance Financial Statements Other Information HVPE Annual Report and Accounts 202454 Manager spotlight continued ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.3% | $54.0m | ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.3% | $52.7m | 55Strategic Report ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.2% | $48.5m | ## 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 | Investment value | | --- | --- | | at 31 January 2024 | at 31 January 2024 | | 1.2% | $47.4m | Governance Financial Statements Other Information HVPE Annual Report and Accounts 202456 ## Top ten direct companies ### 1 ## Top ten disclosable companies at ## 31 January 2024 held within HVPE’s ## direct co-investment portfolio. ## 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 1 Some direct holdings cannot be disclosed due to confidentiality agreements in place. 57Strategic Report ## 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 Investment value at 31 January 2024 at 31 January 2024 ## 0.7% $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 Investment value at 31 January 2024 at 31 January 2024 ## 0.7% $27.9m Governance Financial Statements Other Information HVPE Annual Report and Accounts 202458 Top ten direct companies continued ## 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 Investment value at 31 January 2024 at 31 January 2024 ## 0.4% $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 Investment value at 31 January 2024 at 31 January 2024 ## 0.4% $16.3m 59Strategic Report ## 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 Investment value at 31 January 2024 at 31 January 2024 ## 0.4% $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 Investment value at 31 January 2024 at 31 January 2024 ## 0.3% $14.2m Governance Financial Statements Other Information ![img-9.jpeg](img-9.jpeg) ![img-10.jpeg](img-10.jpeg) ![img-11.jpeg](img-11.jpeg) NPR Social-Report and Accounts # 7 # STAPLES ## Staples, Inc. Stage: Buyout | 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 68% 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 61Strategic Report ## 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 Investment value at 31 January 2024 at 31 January 2024 ## 0.3% $12.4m ## 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 Investment value at 31 January 2024 at 31 January 2024 ## 0.3% $11.5m Governance Financial Statements Other Information HVPE Annual Report and Accounts 202462 ## Governance 63 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 ## The Company’s long-term ## “ ## performance remains ## strong and is the basis ## of the Board’s belief ## in our strategy.” Ed Warner Chair, HVPE Strategic Report Financial Statements Other Information HVPE Annual Report and Accounts 202464 ## Board of Directors | Edmond (“Ed”) Warner | Anulika Ajufo | | --- | --- | | Chair, Independent | Independent Non-Executive | | Non-Executive Director, | Director, appointed | | appointed August 2019 | May 2022 | Key relevant skills: Key relevant skills: > Leadership skills > Extensive private equity investment experience > Investment strategist > Experience in investment strategy development and execution > Extensive financial services experience > Strong background in ESG Ed Warner has extensive financial services experience from years spent Anulika manages a portfolio of investments across EMEA and is the in senior positions at several investment banks and financial institutions, Founder of the Sequoia Platform, a leading educational not for profit including IFX Group, Old Mutual Plc, NatWest Markets, and Dresdner focused on social mobility in the United Kingdom. She recently stood Kleinwort Benson. He has considerable Plc experience and has chaired down as Chair of the Board of Governors at University of East London. the boards at a range of prominent organisations. He is also currently Anulika has extensive investment experience and believes in investing independent chair of the online derivatives exchange LMAX, and of JLEN, for good. Having worked at some of the leading financial institutions, a listed environmental infrastructure investment fund. Lehman Brothers and Goldman Sachs in investment banking, and Prior chair roles include Air Partner Plc, the BlackRock Energy and in private equity with The Carlyle Group and Soros Fund, Anulika has Resources Income Trust, Grant Thornton UK LLP, Standard Life Private developed an impressive investment track record. She has led the Equity Trust, and Panmure Gordon & Co. development of greenfield impact investment structures in emerging markets and developed inclusive investment strategies for development finance institutions (DFIs), corporations, and foundations. Committees: Chair of the Inside Information, and Nomination Committees and Member of the Management Engagement and Service Provider, and Committees: Remuneration Committees. Member of the Audit and Risk, Management Engagement and Service Provider, Nomination, and Remuneration Committees. | Francesca Barnes | Elizabeth (“Libby”) Burne | | --- | --- | | Senior Independent | Independent | | Non-Executive Director, | Non-Executive Director, | | appointed April 2017 | appointed March 2021 | Key relevant skills: Key relevant skills: > Extensive private equity investment experience > Chartered certified accountant > Ten years’ governance experience on public and private company > Extensive audit and risk management experience boards > Over 20 years’ experience of working with Guernsey regulated, listed, > Risk management experience and closed-ended investment structures Francesca Barnes is a Non-Executive Director of NatWest Holdings Libby Burne has spent her career working within the financial services Limited, and a number of NatWest Group’s other ring-fenced bank sector. She is a Non-Executive Director of Bluefield Solar Income Fund boards, as well as Capvis private equity. She was on the board of Coutts Limited (FTSE 250) as well as a number of unlisted venture capital, & Co, and chair of the Audit and Risk committees until 2021. She is a private equity, real estate and insurance structures. Prior to becoming member of the University of Southampton council and has been Chair of a Non-Executive Director, Libby was an audit director at PwC in the Trustees for Penny Brohn UK and Chair of Governors for two secondary Channel Islands and, previously, PwC Australia. Libby is a Fellow of the schools. Francesca spent 16 years at UBS AG. For the latter seven of Association of Chartered Certified Accountants, holds a degree in Applied these she served as Global Head of Private Equity, following on from Accounting, and is a Guernsey resident, as such bringing recent and senior positions in restructuring and loan portfolio management. Prior relevant financial and sector experience. 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 Management Engagement and Service Provider Committee, Committees: and Member of the Audit and Risk, Nomination, and Remuneration Chair of the Remuneration Committee, and Member of the Audit and Committees. Risk, Management Engagement and Service Provider, and Nomination Committees. 65Strategic Report Governance Financial Statements Other Information | Carolina Espinal | Steven Wilderspin | | --- | --- | | Non-Executive Director, | Independent | | appointed July 2019 | Non-Executive Director, | appointed May 2018 Key relevant skills: Key relevant skills: > 19 years’ private equity investment experience > Chartered accountant, qualified in audit > Responsibility for strategy and business development of European and > Extensive governance experience on public and private company global primary businesses boards Carolina Espinal joined HarbourVest in 2004 to focus on partnership Steven Wilderspin has more than 15 years’ experience as a Non- investments in Europe and other emerging markets and became a Executive Director on the boards of private structures and listed Managing Director in 2015. Carolina focuses on managing European investment companies. venture capital and buyout partnership investments and has collaborated with the secondary and co-investment groups on several investment Steven, a qualified Chartered Accountant, has provided independent opportunities. As a HarbourVest executive she currently serves on directorship services since 2007. He has served on a number of the advisory boards of funds managed by Synova, Inflexion, and private equity, property, and hedge fund boards as well as commercial Advent International. companies. Steven currently serves as the Chair of Blackstone Loan Financing Limited, Chairman of the audit and risk committee of GCP Her previous experience includes two years as a financial analyst with Infrastructure Investments Limited, and non-executive director of the Merrill Lynch Energy and Power M&A team in Houston. Phoenix Spree Deutschland Ltd. Steven previously served on the Board of 3i Infrastructure Plc, where he was Chairman of the audit and Carolina graduated from Rice University with a BA in Managerial Studies, risk committee. From 2001 until 2007, Steven was a Director of fund Policy Studies, and Economics in 2000. She received an MSc in Finance administrator Maples Finance Jersey Limited, where he was responsible from the London Business School in 2003. for fund and securitisation structures. He originally qualified with PwC in London. Steven has recent and relevant financial and sector experience. Committees: None (as a HarbourVest executive) Committees: Chair of the Audit and Risk Committee, and Member of the Inside Information, Nomination, Remuneration, and Management Engagement and Service Provider Committees. HVPE Annual Report and Accounts 202466 ### Directors’ report Annual Report and Audited Consolidated Cash at any time not held in such longer-term investments will, pending such investment, be held in cash, cash equivalents, Financial Statements money market instruments, government securities, asset- The Directors present their report and the Audited backed securities, and other investment-grade securities and Consolidated Financial Statements (the “Financial Statements” interests in any private equity vehicle that is listed or traded on or “Accounts”) for the year ended 31 January 2024. any securities exchange (“Temporary Investments”). The Strategic Report starts with the Chair’s Statement on The Company uses an over-commitment strategy in order pages 4 to 7, and describes HVPE’s principal activities, its to remain as fully invested as possible. To achieve this principal risks and uncertainties, the important events that objective, the Company has undrawn capital commitments occurred during the financial year and those that happened to HarbourVest Funds and Co-investments which exceed after the year-end. The Strategic Report also sets out how its liquid funding resources but uses its best endeavours to HVPE’s performance, as shown in the Financial Statements, maintain capital resources which, together with anticipated was influenced by HVPE’s activities and the year’s events, cash flows, will be sufficient to enable the Company to satisfy as well as indicating HVPE’s likely future development. such commitments as they are called. Corporate Summary Diversification and Investment Guidelines The Company is a closed-ended investment company The Company will, by investing in a range of HarbourVest incorporated in Guernsey on 18 October 2007 with an Funds, Co-investments, and Third-Party Funds, seek to achieve unlimited life. The Company currently has one class of shares portfolio diversification in terms of: (the “Ordinary Shares”), and these shares are admitted to trading on the Main Market of the London Stock Exchange. > geography: providing exposure to assets in the US, Europe, Asia, and other markets; With effect from 10 December 2018, the Company introduced an additional US dollar market quotation which operates > stage of investment: providing exposure to investments alongside the Company’s existing sterling quotation, allowing at different stages of development such as early stage, shares to be traded in either currency. balanced and late stage venture capital, small and middle-market businesses or projects, large capitalisation Investment Objective and Investment Policy investments, mezzanine investments, and special situations The Company’s investment objective is to generate superior such as restructuring of funds or distressed debt; shareholder returns through long-term capital appreciation > strategy: providing exposure to primary, secondary, by investing primarily in a diversified portfolio of private equity and direct co-investment strategies; investments. The Company may also make investments > vintage year: providing exposure to investments made in private market assets other than private equity where it across many years; and identifies attractive opportunities. > industry: with investments exposed, directly or indirectly, The Company seeks to achieve its investment objective to a large number of different companies across a broad primarily by investing in investment funds managed by array of industries. HarbourVest, which invests in or alongside third-party managed investment funds (“HarbourVest Funds”). In addition, the Company will observe the following HarbourVest Funds are broadly of three types: (i) investment restrictions: “Primary HarbourVest Funds”, which make limited partner > With the exception, at any time, of not more than one commitments to underlying private market funds prior to HarbourVest Fund or Co-investment to which up to 40% final closing; (ii) “Secondary HarbourVest Funds”, which make of the Company’s Gross Assets (see page 124 for the purchases of private market assets by acquiring positions definition) may be committed or in which up to 40% of the in existing private market funds or by acquiring portfolios Company’s Gross Assets may be invested, no more than of investments made by such private market funds; and 20% of the Company’s Gross Assets will be invested in or (iii) “Direct HarbourVest Funds”, which invest into operating committed at any time to a single HarbourVest Fund or companies, projects, or assets alongside other investors. Co-investment. In addition, the Company may, on an opportunistic basis, > No more than 10% of the Company’s Gross Assets will be make investments (generally at the same time and on invested (in aggregate) in Third-Party Funds. 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. 67Strategic Report Governance Financial Statements Other Information > The Investment Manager will use its reasonable endeavours Company’s Right to Invest in HarbourVest Funds to ensure that no more than 20% of the Company’s Gross Pursuant to contractual arrangements with HarbourVest, the Assets, at the time of making the commitment, will be Company has the right to invest in each new HarbourVest committed to or invested in, directly or indirectly, whether Fund, subject to the following conditions: by way of a Co-investment or through a HarbourVest Fund, (a) any single ultimate underlying investment, or (b) one or > Unless the Board agrees otherwise, no capital commitment more collective investment undertakings which may each to any HarbourVest Fund may, at the time of making invest more than 20% of the Company’s Gross Assets in the commitment, represent more than 35% or less than other collective investment undertakings (ignoring, for 5% of the aggregate total capital commitments to such these purposes, appreciations, and depreciations in the HarbourVest Fund from all its investors. value of assets, fluctuations in exchange rates, and other > Unless HarbourVest agrees otherwise, the Company shall circumstances affecting every holder of the relevant asset). not have a right to make an investment in, or a commitment > Any commitment to a single Co-investment which exceeds to, any HarbourVest Fund to which ten or fewer investors 5% of the Company’s NAV (calculated at the time of making (investors who are associates being treated as one investor such commitment) shall require prior Board approval, for these purposes) make commitments. provided however that no commitment shall be made to Leverage any single Co-investment which, at the time of making such commitment, represents more than 10% (or, in the case of The Company does not intend to have on its balance sheet a Co-investment that is an investment into an entity which aggregate leverage outstanding at Company level for is not itself a collective investment undertaking (a “Direct investment purposes at any time in excess of 20% of the Investment”), 5% of the aggregate of: (a) the Company’s NAV Company’s NAV. The Company may use additional borrowings at the time of the commitment; and (b) undrawn amounts for cash management purposes, or in the event of a material available to the Company under any credit facilities. downturn. These borrowings could be for extended periods of time depending on market conditions. > The Company will not, without the prior approval of the Board, acquire any interest in any HarbourVest Fund from Principal Risks and Uncertainties a third party in a secondary transaction for a purchase The principal risks the Board has identified are disclosed on price that: pages 40 to 43 of the Strategic Report. (i) exceeds 5% of the Company’s NAV; or Results and Dividend (ii) is greater than 105% of the most recently reported NAV of such interest (adjusted for contributions made to and The results for the financial year ended 31 January 2024 are distributions made by such HarbourVest Fund since set out in the Consolidated Statements of Operations within such date). the Financial Statements on page 94. The Directors did not declare any dividends during the year under review and the Save for cash awaiting investment which may be invested Directors do not recommend the payment of dividends as in Temporary Investments, the Company will invest only in at the date of this report. 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. 68 HVPE Annual Report and Accounts 2024 # Directors' report continued # 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 Ajulo | 958 | - | | Francesca Barnes | 5,300 | 4,200 | | Libby Burns | 786 | 786 | | Carolina Espinal | 3,732^{1} | 4,732 | | Ed Warner | 13,000 | 8,000 | | Steven Wilderajan | 1,300 | 1,300 | 1. Ms Ajulo was appointed as a Director with effect from 14 May 2023 2. Of the total shares held, 3,732 shares were split equally (1,264 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&S Investment Management | 6.68 | 6.75 | | Evelyn Partners^{1} | 5.39 | -5.03^{2} | | 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. 69Strategic Report Governance Financial Statements Other Information As an investment company with no direct employees, the core Anti-bribery Policy of the Company’s ESG initiatives is derived from its oversight The Directors have undertaken to operate the business in of its service providers, most importantly the Investment an honest and ethical manner, and accordingly take a zero- Manager. However, the Board also considers the application tolerance approach to bribery and corruption, including the of ESG standards to its own activities as an Investment facilitation of corporate tax evasion. The key components of Company, including the following: this approach are implemented as follows: > Carbon Footprint: The Board initiated a project to calculate > The Board is committed to acting professionally, fairly, and its own carbon footprint in 2021 and since that time, has with integrity in all its business dealings and relationships. continued to offset its operational carbon emissions, the majority of which result from travel. The offsetting > The Company implements and enforces effective programme compensates for emissions by delivering procedures to counter bribery. finance to emission reduction projects, which are > The Company requires all its service providers and advisers independently reviewed to assure emissions reductions to adopt equivalent or similar principles. are occurring. Disclosures Required Under LR 9.8.4R > Relations with Stakeholders: The Board has extended its interaction with its shareholders and other stakeholders The Financial Conduct Authority’s Listing Rule 9.8.4R requires to include a consideration of ESG matters. that the Company includes certain information relating to arrangements made between a controlling shareholder and the > Position on Modern Slavery: The Board recognises the Company, waivers of Directors’ fees, and long-term incentive importance of the issues which the UK Modern Slavery Act schemes in force. The Directors confirm that there are no 2015 is designed to address. It has expanded its oversight of disclosures to be made in this regard. outsourced providers, including the Investment Manager, to include questions relating to their policies to combat Modern Investment Manager Slavery. As Chair, Ed Warner assumes direct oversight of A description of how the Company has invested its assets, the Company’s statements and its response to the issue of including a quantitative analysis, may be found on pages 2 modern slavery. A description of the Board’s approach to this to 61, with further information disclosed in the Notes to the subject is set out on the Company’s website. Financial Statements on pages 101 to 107. The Board has considered the appointment of the Investment Manager and, Significant Votes Against Policy in the opinion of the Directors, the continuing appointment of The Directors have adopted a policy whereby, should 20% or the Investment Manager on the terms agreed is in the interests more of votes be cast against a recommendation made by the of its shareholders as a whole. Board for a resolution, the Company shall: In considering this appointment, the Board has reviewed the > explain, when announcing voting results, what actions past performance of the Investment Manager, the engagement it intends to take to consult shareholders in order to of the Investment Manager with shareholders and the Board, understand the reasons behind the result; and the strategic plan presented to the Board by > no later than six months after the shareholder meeting the Investment Manager. publish an update on the views received from shareholders The Investment Manager is HarbourVest Advisers L.P., and and actions taken; and its principal duties as stated in the Investment Management > provide a final summary in the Annual Report and, if Agreement are as follows: applicable, in the explanatory notes to resolutions at the next > to manage the assets of the Company in accordance with shareholder meeting stating what impact the feedback has the investment policy of the Company (subject always to the had on the decisions the Board has taken and any actions or overall supervision and direction of the Board, and subject to resolutions proposed. any restrictions contained in any prospectuses published by No significant votes were received against any Board- the Company); recommended resolution at the 2023 AGM. > to assist the Company with shareholder liaison; and > to monitor compliance with the Investment Policy on a regular basis. 70 HVPE Annual Report and Accounts 2024 # Directors' report continued 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. 71Strategic Report Governance Financial Statements Other Information Distribution Pool Introduction to the Going Concern and As announced on 1 February 2024, the Board has established Viability Statement a Distribution Pool to fund buybacks or to return capital to Since the inception of HVPE, the Directors have relied shareholders by means of special dividends. The Distribution upon model scenarios to manage the Company’s liquidity Pool will be funded by a proportion of the cash realisations requirements and balance sheet risk more generally. This from the Company’s portfolio going forward, with this modelling allows the Directors to evaluate whether the Company proportion set initially at 15%. The Distribution Pool will is a going concern and provides evidence to support the accumulate on a rolling basis, up to a maximum balance set Directors’ viability statement in the Company’s Annual Report by the Board. The Distribution Pool will be deployed for share and Accounts. While the modelling process has been refined buybacks and/or special dividends at the sole discretion of the over the years, it has provided a consistent approach through Independent HVPE Board Directors (the “Distribution Group”). which the Directors have been able to provide a firm assessment, When determining the timing, amount and nature of a as demonstrated through the Global Financial Crisis and shareholder distribution, the Distribution Group will consider COVID-19 pandemic. the macroeconomic environment, the discount to NAV at Historically the Directors have assessed four scenarios: which HVPE’s shares are trading (both in absolute terms and Optimistic, Base, Low and Extreme Downside presented by relative to peers), market sentiment, and the relative merits of the Investment Manager. This allows the Directors flexibility in distributing capital against the potential benefit of committing choosing the most appropriate scenario for the current market to new investment opportunities. environment and actual activity recorded since the end of the By way of illustration, at times when the discount is deemed reporting period. As more fully explained in the Investment especially wide, the Distribution Group may elect to distribute Manager’s Report above, during the period under review and the cash in the form of share buybacks. Alternatively, a special subsequent to the period-end, the challenging macroeconomic dividend may be the preferred option. Equally, the Distribution and geopolitical environment has resulted in increasing inflation, Group may choose to retain the Distribution Pool for an increasing interest rates, volatility in public markets and subdued extended period to preserve capacity ahead of a future activity in private markets. The Company’s cash flows have been downturn, or allocate some of the cash for reinvestment. tracking closer to the Low scenario considered at the start of If the balance in the Distribution Pool reaches the maximum, the year. the ongoing 15% allocation from portfolio distributions will be In considering Going Concern for the required one-year period diverted to new investment until such time as the balance falls for these 2024 Annual Report and Accounts, the Directors below the maximum, at which point the 15% allocation will therefore primarily focused on two model scenarios: the Low once again be used to replenish the Distribution Pool. In and the Extreme Downside. These have been used to form establishing this new distribution policy, the Board’s intention is the basis of the Going Concern and Viability statements as to optimise the long-term total return for shareholders through provided below. The credit facility provides an additional source the cycle while preserving the strength of the balance sheet. 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. 72 HVPE Annual Report and Accounts 2024 # Directors' report continued # 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. 73Strategic Report Governance Financial Statements Other Information Statement of Directors’ Responsibilities in Disclosure of Information to the Auditor Respect of the Financial Statements So far as each of the Directors is aware, there is no relevant The Directors are required to prepare Financial Statements audit information of which the Company’s auditor is unaware, for each financial year which give a true and fair view of and each has taken all the steps they ought to have taken as the assets, liabilities, financial position, and profit or loss a Director to make themselves aware of any relevant audit of the Company in accordance with US GAAP at the end information and to establish that the Company’s auditor is of the financial year, and of the gain or loss for that period. aware of that information. In preparing those Financial Statements, the Directors are required to: Responsibility Statement The Board of Directors, as identified on pages 64 and 65, jointly > select suitable accounting policies and apply and severally confirm that, to the best of their knowledge: them consistently; > the Financial Statements, prepared in accordance with > make judgements and estimates that are reasonable US GAAP, give a true and fair view of the assets, liabilities, and prudent; financial position, and profits of the Company and its > state whether applicable accounting standards have been undertakings; followed, subject to any material departures disclosed and > this report includes a fair review of the development and explained in the Financial Statements; and performance of the business and the position of the > prepare the Financial Statements on the going concern basis Company and the undertakings included in the consolidation unless, it is inappropriate to presume that the Company will taken as a whole, together with a description of the principal continue in business. risks and uncertainties that they face; and The Directors are responsible for keeping proper accounting > the Annual Report and Financial Statements taken as a records which disclose with reasonable accuracy at any whole are fair, balanced, and understandable, and provide time the financial position of the Company and enable them the information necessary for shareholders to assess the to ensure that the Financial Statements have been properly Company and its undertakings’ position, performance, prepared in accordance with The Companies (Guernsey) Law, business model, and strategy. 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. Signed on behalf of the Board by: 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 Ed Warner Company complies with the provisions of the Rules which, Chair with regard to corporate governance, require the Company to 29 May 2024 disclose how it has applied the principles, and complied with the provisions, of the corporate governance code applicable to the Company. HVPE Annual Report and Accounts 202474 ## Board structure and committees 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 of Directors ### Audit and Risk Inside Management Nomination Remuneration ### Committee Information Engagement Committee Committee ### Committee and Service ### Provider ### Committee Role Role Role Role Role To ensure that the To consider whether any To review the quality To oversee the process To determine the policy Company maintains developments which and value of the service for the selection and for Directors’ high standards of risk may constitute price provided by the recruitment of new remuneration, to set the management, integrity, sensitive information. Company’s service Directors and to Chair’s remuneration, financial reporting, and providers, including the nominate candidates for and to make internal controls. Investment Manager. approval by the Board. recommendations to the Board for Directors’ remuneration levels. Members Members Members Members Members Chaired by: Chaired by: Chaired by: Chaired by: Chaired by: Steven Wilderspin Ed Warner Libby Burne Ed Warner Francesca Barnes Anulika Ajufo Steven Wilderspin Anulika Ajufo Anulika Ajufo Anulika Ajufo Francesca Barnes Francesca Barnes Francesca Barnes Libby Burne Libby Burne Ed Warner Libby Burne Ed Warner Steven Wilderspin Steven Wilderspin Steven Wilderspin 75Strategic Report Governance Financial Statements Other Information 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: Inside Scheduled Audit and Risk Information Management Engagement Nomination Remuneration Board Committee Committee and Service Provider Committee Committee 2 Director Meetings Meetings Meetings Committee Meetings Meetings 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 1 Peter Wilson 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 Responsibilities controls and other matters that are relevant to the business The Board has adopted formal responsibilities for the Chair of the Company. Such information is brought to the attention and the Senior Independent Director, as well as a schedule of the Board by the Investment Manager, the Administrator, of matters reserved for the Board. All of these documents and the Company Secretary in their regular reports to the are available on the Company’s website: Board. The Directors also have access, where necessary in the www.hvpe.com/shareholders/corporate-governance. furtherance of their duties, to professional advice at the expense of the Company. Further details of the Board Committees is Board Composition set out below and their terms of reference are available on the Together, the members of the Board possess a balance of skills, Company’s website: experience, and length of service which the Directors believe is https://www.hvpe.com/shareholders/corporate-governance/ appropriate. Succession planning remains an ongoing process, All Directors received notice of the meetings, the agenda, and designed to bring effective and smooth transition between supporting documents and were able to comment on the matters Director appointments and to avoid undue disruption. This to be raised at the proposed meeting. During each meeting, the ensures that the Board is well-balanced through the appointment Chair promoted and facilitated open, constructive debate on of new Directors with the necessary skills and experience. each topic, encouraging input from all Directors. As well as the All continuing Directors are subject to annual re-election by scheduled Board and strategy meetings, the Board also received shareholders. When a new Director is appointed to the Board, detailed information from the Investment Manager via update they participate in a structured induction process comprising calls, with particular reference to the impact on the Company of of a series of meetings with the Chair of the Board and Chair external developments. In addition to the above meetings, ad-hoc of the Audit and Risk Committee, key individuals within the Board and Committee meetings can be convened at short notice Investment Manager, and other service providers. Directors and, as they only require a quorum of two Directors, there is a must be able to demonstrate commitment to the Company and possibility of lower attendance than for the scheduled meetings. ensure that they have sufficient time to fulfil their roles effectively. If any Director is unable to attend a meeting, they receive the Therefore, in accordance with the Board’s established protocol papers and have the opportunity to discuss them with the Chair. on the management of potential conflicts, if a Director wishes to During the financial year, there were two ad-hoc Board meetings undertake additional external appointments, approval is sought with a quorum at each. from the Chair in order to confirm that the Director will be able to At each scheduled Board meeting, amongst other items, the continue to dedicate sufficient time to carry out their duties as a Directors review and discuss the Investment Manager’s report, Director of the Company, in addition to assessing any potential HVPE’s financial position, drivers of performance, how HVPE conflicts of interest and independence issues. In the case of any has performed, the commitment plan, the corporate broking potential appointment for the Chair, the relevant assessment is report (which includes an update on the Company’s peer group) conducted by the Senior Independent Director. 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. HVPE Annual Report and Accounts 202476 Board structure and committees continued Tenure Policy Policy on Diversity and Inclusion When considering its composition, the Board is strongly The Board has adopted a Policy on Diversity and Inclusion committed to striking the correct balance between the to ensure that the benefits of diversity are a significant benefits of continuity, experience, and knowledge, and those consideration in recruitment. that come from the introduction of Directors with diversity of The Board and Nomination Committee actively consider perspectives and skills. The Board has adopted a Tenure Policy the diversity of the Board when contemplating future confirming its intention that each independent Director will appointments. The Board currently consists of four women retire at the AGM immediately following the completion of their and two men and as such exceeds the Hampton-Alexander ninth year on the Board. Review target for 40% female representation on FTSE 350 It is acknowledged that there could be unusual circumstances company boards. Of three senior Board positions, the Chair is in which a short extension of that time period could be male, the Senior Independent Director is female, and the Chair appropriate. In that event, a comprehensive explanation of the of the Audit and Risk Committee is male. The Company has circumstances would be provided to stakeholders. no employees. The Board has also achieved the level of ethnic diversity targeted by the Parker Review, with one of the five As a representative of the Investment Manager, Carolina Directors seeking re-election at the AGM being from an ethnic Espinal, who was appointed to the Board in July 2019, is minority background. outside the scope of this policy. The independent Directors believe her contributions to the Board have offered The Board recognises that diversity includes racial, socio- considerable value to shareholders. However, Ms Espinal economic, and other factors such as physical ability, and that will not be standing for re-election at HVPE’s Annual General different backgrounds and experiences can bring real value to Meeting on 17 July 2024, after which the Tenure Policy will the Company in terms of decision-making. The Board does not apply to the whole Board. have any specific diversity targets in mind, given the range of factors that this term necessarily covers, and its main priority Board and Committees Evaluation will always be to appoint the most appropriate candidate for The Board undertakes a formal annual evaluation of any role. its performance and of the performance of each of its The Company has met the targets on board diversity set out Committees. This includes the Chair carrying out an individual in the Financial Conduct Authority’s Listing Rule 9.8.6R (9) as review with each Director of their respective performance and demonstrated in the tables set out below. The Company has contribution, and the Senior Independent Director leading an collected the data for the following two tables by making due annual evaluation by the rest of the Board of the performance enquiry of the Directors. of the Chair. Number of senior An externally facilitated Board evaluation occurs every three Number positions on the years and the last such evaluation was conducted in 2022 of board Percentage board (CEO, CFO, 1 by Board Alpha. members of the board SID and chair) Men 2 33% 2 Each Committee of the Board considers its performance Women 4 67% 1 annually, including whether it should undertake any Not specified/prefer 0 0% 0 additional activities. not to say Number of senior Number positions on the of board Percentage board (CEO, CFO, 1 members of the board SID and chair) White British or other 4 66% 3 White (including minority white groups) Mixed/Multiple Ethnic 0 0 0 Groups Asian/Asian British 0 0 0 Black/African/ 1 17% 0 Caribbean/Black British Other ethnic group, 1 17% 0 including Arab Not specified/prefer 0 0 0 not to say 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”. 77Strategic Report Governance Financial Statements Other Information The Company’s auditor has been engaged by the Company ### Audit and Risk Committee since 2007 and was re-engaged following a competitive tender About the Committee process in May 2017. The partner responsible for the audit, The Audit and Risk Committee members are outlined on Richard Le Tissier, commenced his role for the year ended page 74. Ms Barnes and Ms Ajufo each held senior banking 31 January 2022 audit. The Company’s auditor performed and finance roles for a number of years as described in their the audit of the Company’s Financial Statements, prepared in biographies. Ms Burne is a former auditor with 20 years’ accordance with applicable law, US GAAP, and audited under experience. Mr Wilderspin is a qualified Chartered Accountant both relevant US Generally Accepted Auditing Standards (“US and has over 15 years’ experience as an executive and non- GAAS”) and International Standards on Auditing (UK). The audit executive director on a number of private and listed fund approach remained substantially unchanged relative to the boards as well as commercial companies. Members of the prior year. Committee are deemed by the Board to have recent and Auditor Independence relevant financial and sector experience. The Audit and Risk Committee understands the importance The Audit and Risk Committee is responsible for the review of auditor independence, and, during the year, the Committee of the Company’s accounting policies, periodic Financial reviewed the independence and objectivity of the Company’s Statements and auditor engagement. The Committee is also auditor. The Committee received a report from the external responsible for making appropriate recommendations to auditor describing its independence, controls, and current the Board, including that the Financial Statements are fair, practices to safeguard and maintain auditor independence. balanced, and understandable, and ensuring that the Company Other than fees paid for conducting a review of the Interim complies to the best of its ability with applicable laws and Financial Statements, there were no other non-audit fees paid regulations and adheres to the tenet of generally accepted to the auditor by the Company. The Committee has adopted codes of conduct. The Committee is also responsible for a non-audit services policy that complies with the Revised overseeing the Company’s risk management framework and Ethical Standard 2019 issued by the UK FRC, which determines regulatory compliance. those services that the auditor is prohibited from providing to the Company and those services that the auditor may conduct. All of the Company’s management and administration The policy includes a cap on the cost of any non-audit services functions are delegated to independent third parties or the provided by the auditor at 70% of the average of the previous Investment Manager and it is therefore felt that it would not three years’ audit fees. be practical or cost effective for the Company to have its own internal audit facility. This matter is reviewed annually. In all cases the Committee reviews the potential engagement The Audit and Risk Committee does have the power to of the auditor in advance to ensure that the auditor is the most commission third-party assurance work as it sees fit, but appropriate party to deliver the proposed services and to put in did not do so in the year under review. place safeguards, where appropriate, to manage any threats to auditor independence. Activities of the Committee Terms of Engagement Audit and Risk Committee Meetings The Audit and Risk Committee reviewed the audit scope In the financial year ended 31 January 2024, the Audit and and fee proposal set out by the auditor in its audit planning. Risk Committee met seven times. A summary of Director The auditor requested an increase in fees for 2024 for a attendance is included in the “Board and Committee Meetings number of reasons, including an increase in their cost base and Attendance Record” section on page 75. In these in a competitive market for talent, an increase in regulatory meetings, the Committee considered the following matters: requirements, and growth in the number of underlying funds that the Company invests in. This was discussed by Auditor Tenure the Committee which also noted general audit market and The Audit and Risk Committee reviewed the effectiveness inflationary fee pressure. The Committee recommended to of the external audit process during the year, including the Board the total fee for audit and interim review work of audit quality, objectivity (level of challenge and professional £353,830 for 2024, a 20% increase on the fees charged scepticism), and independence, using a detailed questionnaire for 2023. 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. 78 HVPE Annual Report and Accounts 2024 # **Audit and Risk Committee continued** # **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 HarbourWest 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. 79Strategic Report Governance Financial Statements Other Information Audited Financial Statements, Significant Judgements Governance and Effectiveness and Reporting Matters The Committee conducted a review of its activities against As part of the 31 January 2024 year-end audit, the Audit its constitution and terms of reference in respect of the year and Risk Committee reviewed and discussed the most under review and concluded that all requisite activities had relevant issues for the Company, most notably the risk been undertaken. of misstatement or manipulation of the valuation of its In presenting this report, I have set out for the Company’s investments in underlying HarbourVest funds, the ongoing shareholders the key areas that the Audit and Risk Committee impact of geopolitical events and macroeconomic events, focuses on. If any shareholders would like any further specifically with regard to the Board’s statements on going information about how the Audit and Risk Committee operates concern and viability. and its review process, I, or any of the other members of the The greatest element of judgement by the Investment Audit and Risk Committee, would be pleased to meet them Manager in the valuation process is the roll forward of 31 to discuss this. 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 Steven Wilderspin valuation techniques used are accurate and appropriate for Chair of the Audit and Risk Committee the Company’s investments and consistent with the 29 May 2024 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. HVPE Annual Report and Accounts 202480 Nomination Committee Management Engagement and Service Provider Committee About the Committee The Nomination Committee was established on 24 November About the Committee 2015 and is chaired by Mr Warner, Chair of the Company. The MESPC was established on 24 November 2015 and Its members are all independent Directors, as outlined on is chaired by Ms Burne. Its members are all independent page 74. Directors, as outlined on page 74. There was one scheduled meeting held during the year, which The MESPC held two meetings in the year under review and was attended by all members. The mandate of the Nomination all members of the Committee attended the meetings. Committee is to consider issues related to the identification Activities of the Committee and appointment of Directors to the Board. In the course of the year under review, the MESPC conducted a review of the Company’s service providers to ensure the Activities of the Committee effective management and administration of the Company’s Changes to Board Composition business under terms which were competitive and reasonable In accordance with the approach to succession planning for the shareholders. outlined below, no changes to the composition of the Board were required. Investment Manager Review The annual review of the Investment Manager was undertaken Approach to Succession Planning in July 2023. As part of this review, the Board received The Committee engages with third party recruitment presentations from the HVPE Investment Committee, firms to appoint effective candidates to the Board who as well as from various operational teams and the senior will complement the skills already represented by existing management of the Investment Manager. Subjects covered Directors. The Committee defines the requirements for each included investment strategy, ESG, manager selection appointment in such a way as to be inclusive and to encourage processes and other matters relating to the Company’s affairs. and maintain diverse representation on the Board. Following this review, the Board discussed its conclusions with Governance and Effectiveness the Investment Manager. The Board and MESPC are satisfied During the year, the Nomination Committee conducted a with the performance of the Investment Manager with respect review of its activities against its constitution and terms to investment returns and the overall level of service provided of reference in respect of the year under review and to the Company. The Board as a whole undertook visits to concluded that it had satisfactorily complied with all of the Investment Manager’s offices in London during the its terms of reference. 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. 81Strategic Report Governance Financial Statements Other Information Remuneration Committee Inside Information Committee About the Committee About the Committee The Remuneration Committee was established on 23 March The Committee was formed on 12 July 2016 and is chaired 2021 and is chaired by the Senior Independent Director of by Mr Warner. Any Director can form part of this Committee, the Company, Ms Barnes. Its members are all independent but its usual Member is Mr Wilderspin. Directors, as outlined on page 74. The purpose of the Committee is to assist and inform the decisions of the Board concerning the identification of inside The Remuneration Committee has been delegated information and to make recommendations as to how and responsibility for determining the policy for Directors’ when any such information may need to be made public in remuneration and setting the remuneration of the Chair of order for the Company to comply with its obligations under the Board. The Committee also makes recommendations the UK Market Abuse Regulation. 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. HVPE Annual Report and Accounts 202482 ## Directors’ remuneration report 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. | | Fees Paid for the 12 | | Fees Paid for the 12 | | | --- | --- | --- | --- | --- | | | Months ended 31 | | Months Ended 31 | | | Director Role | | January 2024 | | January 2023 | 1 Anulika Ajufo Independent Director £57,913 £40,217 2 Francesca Barnes Senior Independent Director £60,913 £59,661 3 Libby Burne Chair of MESPC, Independent Director £60,913 £58,434 Carolina Espinal Director Nil Nil 4 Alan Hodson Independent Director Nil £27,75 6 Ed Warner Chair, Independent Director £108,827 £106,605 Steven Wilderspin Chair of ARC, Independent Director £69,870 £68,246 5 Peter Wilson Director Nil 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. Annual Fee from Annual Fee to 31 Annual Fee to Role 1 February 2024 January 2024 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 Ed Warner Steven Wilderspin Chair Chair of the Audit and Risk Committee 29 May 2024 83Strategic Report Governance Financial Statements Other Information ## 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 HVPE Annual Report and Accounts 202484 ## Financial ## Statements 85 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 ## 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 Strategic Report Governance Other Information HVPE Annual Report and Accounts 202486 ## Independent Auditor’s Report ### to the Members of HarbourVest Global Private Equity Limited Opinion Conclusions Relating to Going Concern We have audited the Consolidated Financial Statements of HVPE In auditing the Consolidated financial statements, we have concluded (the ”Company”) and its subsidiaries (the ”Group”) for the year ended that the Directors’ use of the going concern basis of accounting in the 31 January 2024 which comprise the Consolidated Statements of preparation of the Consolidated Financial Statements is appropriate. Assets and Liabilities, the Consolidated Statements of Operations, the Our evaluation of the Directors’ assessment of the Group’s and Consolidated Statements of Changes in Net Assets, the Consolidated Company’s ability to continue to adopt the going concern basis of Statements of Cash Flows, the Consolidated Schedule of Investments, accounting included: and the related notes 1 to 12, including a summary of significant > We discussed with the Directors their assessment of going accounting policies. The financial reporting framework that has concern, which included four scenario analysis models - ‘Base been applied in their preparation is applicable law and United States Case’, ‘Low Case’, ‘Optimistic Case’ and ‘Extreme downside Case’ Generally Accepted Accounting Principles (“US GAAP”). scenarios - the ‘Low Case’ being considered by the Directors to be In our opinion, the Financial Statements: the most likely scenario; > give a true and fair view of the state of the Group’s affairs as at 31 > We ascertained that the going concern assessment covered a January 2024 and of its profit for the year then ended; period up until 30 June 2025 from the date of approval of the Financial Statements; > have been properly prepared in accordance with US GAAP; and > We reviewed the arithmetical accuracy of the ‘Low Case’ and > have been properly prepared in accordance with the requirements ‘Extreme downside Case’ scenario models; of the (Guernsey) Law, 2008. > For the ‘Low Case’ scenario we reviewed the working capital Basis for Opinion documentation which supports the Directors’ assessment of going concern; We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under > We considered the estimation uncertainty of the prior year’s most those standards are further described in the Auditor’s responsibilities likely scenario by comparing it to the Group’s actual performance for the audit of the financial statements section of our report. We to date, discussed the material movements with the Board and believe that the audit evidence we have obtained is sufficient and the Investment Manager, and obtained the required supporting appropriate to provide a basis for our opinion. documentation; > For the ‘Extreme downside Case’ scenario, we challenged the Independence sensitivities and assumptions used in the forecast through reverse We are independent of the Group and Company in accordance with stress testing to understand how severe the downside scenario the ethical requirements that are relevant to our audit of the financial would have to be to result in the elimination of liquidity headroom statements, including the FRC’s Ethical Standard as applied to or a covenant breach; listed public interest entities, and we have fulfilled our other ethical > We held discussions with the Audit Committee and Investment responsibilities in accordance with these requirements. Manager to determine whether, in their opinion, there is any The non-audit services prohibited by the FRC’s Ethical Standard were material uncertainty regarding the Group’s ability to pay liabilities not provided to the Group or the Company and we remain independent and commitments as they fall due. Through these discussions we of the Group and the Company in conducting the audit. 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. 87Strategic Report Governance Financial Statements Other Information Based on the work we have performed, we have not identified any Climate Change material uncertainties relating to events or conditions that, individually Stakeholders are increasingly interested in how climate change will or collectively, may cast significant doubt on the Group and Company’s impact HVPE. The Group has determined that the most significant ability to continue as a going concern over a period from the date of future impacts from climate change on their operations will be approval of the Financial Statements to 30 June 2025. from the investments made by the underlying partnerships in which In relation to the Group’s reporting on how they have applied the UK they are invested. These are explained on pages 44 to 49 in the Corporate Governance Code, we have nothing material to add or draw Purposeful Growth (Environmental, Social and Governance). All of attention to in relation to the Directors’ statement in the financial these disclosures form part of the “Other information,” rather than statements about whether the Directors considered it appropriate to the audited Consolidated Financial Statements. Our procedures on adopt the going concern basis of accounting. these unaudited disclosures therefore consisted solely of considering whether they are materially inconsistent with the Consolidated Our responsibilities and the responsibilities of the Directors with Financial Statements or our knowledge obtained in the course of the respect to going concern are described in the relevant sections of audit or otherwise appear to be materially misstated, in line with our this report. However, because not all future events or conditions can responsibilities on “Other information”. be predicted, this statement is not a guarantee as to the Group and Company’s ability to continue as a going concern. 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. Overview of Our Audit Approach The Group has explained in Note 2 its articulation of the impact of Key audit Risk of misstatement or manipulation of the valuation climate change in the financial statements. There are no significant matters of the Group’s investments in the underlying Primary or judgements or estimates relating to climate change in the notes to Secondary HarbourVest funds, together the the financial statements as the Board has concluded specifically that “HarbourVest investment funds”. climate change including physical and transition risks, does not have a material impact on the Group’s financial statements in Note 2. Materiality Overall Group materiality of £78.4m which represents 2% of Net Assets. 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 An Overview of the Scope of Our Audit conclusions that there was no material impact on the recognition and separate measurement considerations of the assets and liabilities Tailoring the Scope of the Group as at 31 January 2024. As part of this evaluation, we Our assessment of audit risk, our evaluation of materiality and our performed our own risk assessment to determine the risks of material allocation of performance materiality determine our audit scope misstatement in the financial statements from climate change which for each company within the Group. Taken together, this enables needed to be considered in our audit. us to form an opinion on the Consolidated Financial Statements. We take into account size, risk profile, the organisation of the group Based on our work we have not identified the impact of climate and effectiveness of group-wide controls, changes in the business change on the financial statements to be a key audit matter or environment and other factors such as the potential impact of climate to impact a key audit matter. change when assessing the level of work to be performed. Key Audit Matters The audit was led from Guernsey and utilised audit team members from the Boston office of Ernst & Young LLP in the US. We operated Key audit matters are those matters that, in our professional judgment, as an integrated audit team across the two jurisdictions, and we were of most significance in our audit of the Consolidated Financial performed audit procedures and responded to the risk identified as Statements of the current period and include the most significant described below. assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the The Group comprises the Company and its five wholly owned greatest effect on: the overall audit strategy, the allocation of resources subsidiaries as explained in Note 2 to the Group Financial Statements. in the audit; and directing the efforts of the engagement team. These The Company, each subsidiary and the consolidation are subject to matters were addressed in the context of our audit of the financial full scope audit procedures. Other than the investments which the statements as a whole, and in our opinion thereon, and we do not Company holds directly, the subsidiaries own the investments, which provide a separate opinion on these matters. are set out in the Consolidated Schedule of Investments, and on which we performed our work on valuation. 88 HVPE Annual Report and Accounts 2024 # 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. | Strategic Report Governance Financial Statements Other Information 89 ## 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: $76.8 million), 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. HVPE Annual Report and Accounts 202490 Independent Auditor’s Report continued Corporate Governance Statement Auditor’s Responsibilities for the Audit of the Financial Statements We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Our objectives are to obtain reasonable assurance about whether the Statement relating to the group and company’s compliance with the Consolidated financial statements as a whole are free from material provisions of the UK Corporate Governance Code specified for our misstatement, whether due to fraud or error, and to issue an auditor’s review by the Listing Rules. report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in Based on the work undertaken as part of our audit, we have concluded accordance with ISAs (UK) will always detect a material misstatement that each of the following elements of the Corporate Governance when it exists. Misstatements can arise from fraud or error and are Statement is materially consistent with the financial statements or considered material if, individually or in the aggregate, they could our knowledge obtained during the audit: reasonably be expected to influence the economic decisions of users > Directors’ statement with regards to the appropriateness of taken on the basis of these financial statements. adopting the going concern basis of accounting and any material uncertainties identified set out on pages 71 to 73; Explanation as to what extent the audit was considered capable of detecting irregularities, > Directors’ explanation as to its assessment of the company’s including fraud prospects, the period this assessment covers and why the period is appropriate set out on pages 71 to 73; Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our > Director’s statement on whether it has a reasonable expectation responsibilities, outlined above, to detect irregularities, including that the group will be able to continue in operation and meets its fraud. The risk of not detecting a material misstatement due to fraud liabilities set out on pages 71 to 73; is higher than the risk of not detecting one resulting from error, as > Directors’ statement on fair, balanced and understandable set out fraud may involve deliberate concealment by, for example, forgery or on page 73; intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including > Board’s confirmation that it has carried out a robust assessment fraud is detailed below. of the emerging and principal risks set out on pages 40 to 43; However, the primary responsibility for the prevention and detection of > The section of the annual report that describes the review of fraud rests with both those charged with governance of the company effectiveness of risk management and internal control systems and management. set out on page 78; and; > We obtained an understanding of the legal and regulatory > The section describing the work of the audit committee set out on frameworks that are applicable to the Group and determined that pages 77 to 79. the most significant are: Responsibilities of Directors – Financial Conduct Authority (“FCA”) Listing Rules; As explained more fully in the directors’ responsibilities statement – Disclosure Guidance and Transparency Rules (“DTR”) of the FCA; set out on page 73, the Directors are responsible for the preparation – The 2018 UK Corporate Governance Code; of the Consolidated Financial Statements and for being satisfied that they give a true and fair view, and for such internal control as the – The 2019 AIC Code of Corporate Governance; Directors determine is necessary to enable the preparation of financial – The Companies (Guernsey) Law, 2008, as amended. statements that are free from material misstatement, whether due to fraud or error. > We understood how Group is complying with those frameworks by: In preparing the Consolidated Financial Statements, the Directors are – Discussing the processes and procedures used by the responsible for assessing the Group and Company’s ability to continue Directors, the Investment Manager, the Company Secretary as a going concern, disclosing, as applicable, matters related to going and Administrator to ensure compliance with the relevant concern and using the going concern basis of accounting unless the frameworks; Directors either intend to liquidate the Group or the Company or to – Inspecting the Group’s relevant documented policies, processes cease operations, or have no realistic alternative but to do so. and procedures; and – Reviewing internal reports that evidence compliance testing. 91Strategic Report Governance Financial Statements Other Information > We assessed the susceptibility of the Group’s Consolidated Other Matters We are Required to Address Financial Statements to material misstatement, including how > Following the recommendation from the audit committee we fraud might occur by: were appointed by the Company on 2 November 2007 to audit – Identifying misstatement or manipulation of the valuation of the financial statements for the year ending 31 January 2008 and the Group’s investments in the HarbourVest funds and subsequent financial periods. The period of total uninterrupted undertaking the audit procedures set out in the Key Audit engagement including previous renewals and reappointments Matters section above; is 17 years, covering the years ending 31 January 2008 to 31 January 2024. – Obtaining an understanding of entity-level controls and considering the influence of the control environment; > The audit opinion is consistent with the additional report to the Audit and Risk Committee. – Obtaining management’s assessment of fraud risks including an understanding of the nature, extent and frequency of such Use of Our Report assessment documented in the HVPE Risk Review; This report is made solely to the company’s members, as a body, in – Making inquiries with those charged with governance as to accordance with Section 262 of The Companies (Guernsey) law 2008. how they exercise oversight of management’s processes for Our audit work has been undertaken so that we might state to the identifying and responding to fraud risks and the controls Company’s members those matters we are required to state to them established by management to mitigate specifically those risks in an auditor’s report and for no other purpose. To the fullest extent the entity has identified, or that otherwise help to prevent, deter permitted by law, we do not accept or assume responsibility to anyone and detect fraud; 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. – 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 Richard Geoffrey Le Tissier For and on behalf of Ernst & Young LLP – Making inquiries with management and those charged with Guernsey governance regarding their knowledge of any actual or suspected 29 May 2024 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. 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. HVPE Annual Report and Accounts 202492 ## Report of Independent Auditors ### To the Directors of HarbourVest Global Private Equity Limited Opinion In performing an audit in accordance with GAAS, we: We have audited the consolidated financial statements of HarbourVest > Exercise professional judgment and maintain professional Global Private Equity Limited (the “Company”) and its subsidiaries scepticism throughout the audit. (together the “Group”), which comprise the consolidated statements > Identify and assess the risks of material misstatement of the of assets and liabilities, including the consolidated schedules of financial statements, whether due to fraud or error, and design investments, as of 31 January 2024 and 2023, and the related and perform audit procedures responsive to those risks. Such consolidated statements of operations, changes in net assets, and procedures include examining, on a test basis, evidence regarding cash flows for the years then ended, and the related notes 1 to 12 the amounts and disclosures in the financial statements. (collectively referred to as the “financial statements”). > Obtain an understanding of internal control relevant to the audit In our opinion, the accompanying financial statements present fairly, in order to design audit procedures that are appropriate in the in all material respects, the financial position of the Group at 31 circumstances, but not for the purpose of expressing an opinion on January 2024 and 2023, and the results of its operations, changes in the effectiveness of the Group’s internal control. Accordingly, its net assets and its cash flows for the year then ended in accordance no such opinion is expressed. with accounting principles generally accepted in the United States > Evaluate the appropriateness of accounting policies used and of America. the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the Basis for Opinion financial statements. We conducted our audit in accordance with auditing standards > Conclude whether, in our judgment, there are conditions or events, generally accepted in the United States of America (GAAS). Our considered in the aggregate, that raise substantial doubt about responsibilities under those standards are further described in the the Group’s ability to continue as a going concern for a reasonable Auditor’s Responsibilities for the Audit of the Financial Statements period of time. section of our report. We are required to be independent of the Group We are required to communicate with those charged with governance and to meet our other ethical responsibilities in accordance with the regarding, among other matters, the planned scope and timing of the relevant ethical requirements relating to our audit. We believe that audit, significant audit findings, and certain internal control-related the audit evidence we have obtained is sufficient and appropriate to matters that we identified during the audit. provide a basis for our audit opinion. Other Information Responsibilities of Management for the Management is responsible for the other information. The other Financial Statements information comprises the Strategic Report, Governance, and Other Management is responsible for the preparation and fair presentation Information but does not include the financial statements and our of the financial statements in accordance with accounting principles auditor’s report thereon. Our opinion on the financial statements does generally accepted in the United States of America, and for the design, not cover the other information, and we do not express an opinion or implementation, and maintenance of internal control relevant to the any form of assurance thereon. preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a In preparing the financial statements, management is required to material inconsistency exists between the other information and the evaluate whether there are conditions or events, considered in the financial statements, or the other information otherwise appears to be aggregate, that raise substantial doubt about the Group’s ability materially misstated. If, based on the work performed, we conclude to continue as a going concern for one year after the date that the that an uncorrected material misstatement of the other information financial statements are available to be issued. exists, we are required to describe it in our report. Auditor’s Responsibilities for the Audit of the Financial Statements Guernsey, Channel Islands Our objectives are to obtain reasonable assurance about whether the 29 May 2024 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. Strategic Report Governance Financial Statements Other Information 93 # 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 94 HVPE Annual Report and Accounts 2024 # Consolidated Statements of Operations 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. Strategic Report Governance Financial Statements Other Information 95 # 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 | (60,223) | | **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** | **$3,920,372** | **$3,837,926** | The accompanying notes are an integral part of the Financial Statements. 06 HVPE Annual Report and Accounts 2024 # 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 | (592,793) | (704,903) | | Distributions from private equity investments | 310,296 | 667,385 | | 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 | (38,503) | (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. Strategic Report Governance Financial Statements Other Information 57 # 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 | | --- | --- | --- | --- | --- | --- | | HarbourWest Partners V-Partnership Fund L.P. | 2,220 | 46,709 | 45,934 | 802 | 0.0 | | HarbourWest Partners VI-Direct Fund L.P. | 1,513 | 46,722 | 41,081 | 1,766 | 0.0 | | HarbourWest Partners VI-Partnership Fund L.P. | 5,175 | 204,623 | 237,227 | 464 | 0.0 | | HarbourWest Partners VII-Venture Partnership Fund L.P.* | 2,319 | 135,290 | 204,327 | 2,127 | 0.1 | | HarbourWest Partners VIII-Cayman Mezzanine and Distressed Debt Fund L.P. | 2,000 | 48,202 | 62,811 | 699 | 0.0 | | HarbourWest Partners VIII-Cayman Buyout Fund L.P. | 7,500 | 245,259 | 417,067 | 4,931 | 0.1 | | HarbourWest Partners VIII-Cayman Venture Fund L.P. | 1,000 | 49,192 | 91,307 | 13,875 | 0.4 | | HarbourWest Partners 2007 Cayman Direct Fund L.P. | 2,250 | 97,877 | 165,442 | 288 | 0.0 | | HarbourWest Partners IX-Cayman Buyout Fund L.P. | 8,520 | 62,761 | 92,387 | 43,194 | 1.1 | | HarbourWest Partners IX-Cayman Credit Opportunities Fund L.P. | 1,438 | 11,111 | 12,034 | 6,029 | 0.2 | | HarbourWest Partners IX-Cayman Venture Fund L.P. | 3,500 | 66,826 | 132,015 | 84,464 | 2.2 | | HarbourWest Partners 2013 Cayman Direct Fund L.P. | 3,229 | 97,131 | 159,293 | 36,077 | 0.9 | | HarbourWest Partners Cayman Cleantech Fund II L.P. | 900 | 19,156 | 18,730 | 17,466 | 0.4 | | HarbourWest Partners X Buyout Feeder Fund L.P. | 34,650 | 217,378 | 165,062 | 233,547 | 6.0 | | HarbourWest Partners X Venture Feeder Fund L.P. | 6,290 | 141,764 | 99,019 | 258,319 | 6.6 | | HarbourWest Partners Mezzanine Income Fund L.P. | 8,155 | 42,067 | 63,788 | 20,675 | 0.5 | | HarbourWest Partners XI Buyout Feeder Fund L.P. | 90,300 | 259,700 | 82,013 | 324,967 | 8.3 | | HarbourWest Partners XI Micro Buyout Feeder Fund L.P. | 5,655 | 59,345 | 19,811 | 73,692 | 1.9 | | HarbourWest Partners XI Venture Feeder Fund L.P. | 13,300 | 176,736 | 42,421 | 236,782 | 6.0 | | HarbourWest Adelaide Feeder L.P. | 6,000 | 144,000 | 176,644 | 1,455 | 0.0 | | HarbourWest Partners XII Buyout Feeder Fund L.P. | 356,400 | 138,609 | 3,268 | 164,565 | 4.2 | | HarbourWest Partners XII Micro Buyout Feeder Fund L.P. | 58,000 | 22,000 | - | 24,486 | 0.6 | | HarbourWest Partners XII Venture Feeder Fund L.P. | 100,238 | 34,763 | 240 | 39,087 | 1.0 | | HarbourWest Partners XII Venture AIF SCSp | 95,450 | 19,625 | - | 23,431 | 0.6 | | Harbourwest 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 | 98 HVPE Annual Report and Accounts 2024 # Consolidated Schedule of Investments continued | | Unfunded Commitment (in thousands) | Amount Invested* (in thousands) | Distributions Received (in thousands) | Fair Value (in thousands) | Fair Value as a % of Net Assets | | --- | --- | --- | --- | --- | --- | | **International/Global Funds** | | | | | | | 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 | | HPEP VII Cayman Partnership Fund L.P.** | 5,409 | 117,845 | 177,872 | 56,878 | 1.5 | | HPEP VI-Cayman Asia Pacific Fund L.P. | 2,500 | 47,687 | 50,275 | 19,589 | 0.5 | | HPEP VI-Cayman Emerging Markets Fund L.P. | - | 30,059 | 15,319 | 22,461 | 0.6 | | Dover Street VIII Cayman L.P. | 14,650 | 165,724 | 262,315 | 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 | 91,201 | 137,497 | 74,761 | 1.9 | | HPEP VII Partnership Feeder Fund L.P. | 10,625 | 114,375 | 116,455 | 127,623 | 3.3 | | HPEP VII Asia Pacific Feeder Fund L.P. | 1,500 | 28,500 | 21,222 | 29,925 | 0.8 | | HPEP VII Emerging Markets Feeder Fund L.P. | 2,600 | 17,400 | 8,267 | 22,389 | 0.6 | | HPEP VII Europe Feeder Fund L.P.** | 6,815 | 64,229 | 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 | 76,628 | 1.9 | | HarbourVest 2016 Global AIF L.P. | 16,000 | 84,026 | 85,450 | 77,026 | 2.0 | | HarbourVest Partners Co-Investment IV AIF L.P. | 7,000 | 93,000 | 92,953 | 84,382 | 2.2 | | Dover Street IX Cayman L.P. | 12,000 | 88,000 | 91,612 | 60,234 | 1.5 | | HarbourVest Real Assets XI Feeder L.P. | 3,750 | 46,250 | 13,607 | 47,212 | 1.2 | | HarbourVest 2017 Global AIF L.P. | 19,500 | 80,521 | 62,587 | 87,239 | 2.3 | | HPEP VII Partnership AIF L.P. | 28,475 | 141,525 | 36,116 | 175,297 | 4.5 | | Secondary Overflow Fund III L.P. | 22,841 | 62,316 | 59,234 | 62,341 | 1.6 | | HarbourVest Asia Pacific VIII AIF Fund L.P. | 3,375 | 46,631 | 11,092 | 50,461 | 1.3 | | HarbourVest 2018 Global Feeder Fund L.P. | 13,300 | 56,700 | 21,628 | 75,861 | 1.9 | | HarbourVest Partners Co-Investment V Feeder Fund L.P. | 22,500 | 77,548 | 19,777 | 124,512 | 3.2 | | HarbourVest Real Assets IV Feeder L.P. | 13,500 | 36,500 | 11,664 | 39,590 | 1.0 | | HarbourVest 2019 Global Feeder Fund L.P. | 26,000 | 74,007 | 15,885 | 99,439 | 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. | 44,200 | 105,768 | 37,683 | 135,128 | 3.2 | | Secondary Overflow Fund IV L.P. | 49,931 | 79,475 | 26,807 | 87,813 | 2.2 | | HPEP IX Feeder Fund L.P. | 329,800 | 155,208 | 11,752 | 177,838 | 4.5 | | HarbourVest 2020 Global Feeder Fund L.P. | 10,750 | 39,251 | 4,147 | 43,755 | 1.1 | | HarbourVest Partners Co-Investment VI Feeder Fund L.P. | 37,500 | 87,506 | 378 | 95,003 | 2.4 | | HarbourVest Asia Pacific 5 Feeder Fund L.P. | 250,000 | 45,000 | - | 37,456 | 1.0 | | HarbourVest 2021 Global Feeder Fund L.P. | 76,822 | 93,230 | 2,790 | 103,962 | 2.7 | | HarbourVest 2022 Global Feeder Fund L.P. | 71,000 | 29,000 | 1,185 | 36,161 | 0.9 | | Dover Street XI Feeder Fund L.P. | 207,500 | 42,300 | - | 57,726 | 1.5 | | HarbourVest Credit Opportunities III Feeder Fund L.P. | 75,000 | - | - | (63) | 0.0 | | HPEP X Feeder Fund L.P. | 125,000 | - | - | 964 | 0.0 | | HarbourVest Infrastructure Opportunities III Feeder Fund L.P. | 75,000 | - | - | 268 | 0.0 | | Secondary Overflow Fund V L.P. | - | - | - | (75) | 0.0 | | HarbourVest Partners Stewardship Feeder Fund L.P. | 30,888 | 4,166 | - | 3,938 | 0.1 | | HarbourVest Private Equity Continuation Solutions Feeder Fund L.P. | 35,000 | - | - | - | 0.0 | | **Total International/Global Funds** | **1,685,100** | **2,731,565** | **2,050,263** | **2,340,149** | **59.8** | | **Total Investments** | **2,500,899** | **5,235,635** | **4,420,139** | **4,057,606** | **103.5** | * Includes purchase of limited partner interests for shares and cash at the time of HVPE's IPO. † Includes ownership interests in HarbourVest Partners VII Cayman Partnership entities. § Fund denominated in euros. Commitment amount is €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 €522,000,000. As of 31 January 2024, the cost basis of partnership investments is $2,696,155,000. Totals and subtotals may not recalculate due to rounding. The accompanying notes are an integral part of the Financial Statements. Strategic Report Governance Financial Statements Other Information 99 # 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. | 1,513 | 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. | 7,500 | 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 | 277,494 | 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 | 2,342,743 | 2,362,798 | 1,533,549 | 40.0 | 100 HVPE Annual Report and Accounts 2024 # Consolidated Schedule of Investments continued | International/Global Funds | Unfunded Commitment (in thousands) | Amount Invested^{a} (in thousands) | Distributions Received (in thousands) | Fair Value (in thousands) | Fair Value as a % of Net Assets | | --- | --- | --- | --- | --- | --- | | HarbourVest International Private Equity Partners III Partnership Fund L.P. | 3,450 | 147,729 | 148,440 | 395 | 0.0 | | HIPEP V 2037 Cayman-European Buyout Companion Fund L.P.^{2} | 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.^{2} | 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 | 17,400 | 7,585 | 21,462 | 0.6 | | HIPEP VII Europe Feeder Fund L.P.^{2} | 9,411 | 61,749 | 62,637 | 75,215 | 2.0 | | HarbourVest Canada Parallel Growth Fund L.P.^{2} | 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 | 77,869 | 2.0 | | HarbourVest Partners Co-Investment IV AIF L.P. | 7,000 | 93,000 | 85,330 | 86,145 | 2.2 | | Dover Street III 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. | 27,500 | 72,521 | 53,510 | 81,961 | 2.1 | | HIPEP VII 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 VII 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 | 77,548 | 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 | 87,489 | 2.3 | | HarbourVest Credit Opportunities Fund II L.P. | 2,500 | 47,500 | 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 | 97,008 | 7,093 | 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. | 111,300 | 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** | $^{a}$ Includes purchase of limited partner interests for shares and cash at the time of HVPE's IPO. $^{2}$ Includes ownership interests in HarbourVest Partners VII Cayman Partnership entities. $^{3}$ Fund denominated in euros. Commitment amount is €47,450,000. $^{a}$ Fund denominated in euros. Commitment amount is €100,000,000. $^{2}$ Fund denominated in euros. Commitment amount is €63,000,000. $^{2}$ Fund denominated in Canadian dollars. Commitment amount is €32,000,000. 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. Strategic Report Government Financial Statements Other Information 101 # 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 inwards 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, passing 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. HVPE Annual Report and Accounts 2024102 Notes to Consolidated Financial Statements continued Method of Accounting Foreign Currency Transactions The Financial Statements are prepared in conformity with US The currency in which the Company operates is US dollars, which is generally accepted accounting principles (“US GAAP”), The also the presentation currency. Transactions denominated in foreign Companies (Guernsey) Law, 2008, and the Principal Documents. currencies are recorded in the local currency at the exchange rate Under applicable rules of Guernsey law implementing the EU in effect at the transaction dates. Foreign currency investments, Transparency Directive, the Company is allowed to prepare its investment commitments, cash and equivalents, and other assets financial statements in accordance with US GAAP instead of and liabilities are translated at the rates in effect at the year-end date. International Financial Reporting Standards (“IFRS”). Foreign currency translation gains and losses are included in realised and unrealised gains (losses) on investments as incurred. The Company is an investment company following the accounting The Company does not segregate that portion of realised or unrealised and reporting guidance of the Financial Accounting Standards Boards gains and losses attributable to foreign currency translation (“FASB”) Accounting Standards Codification (“ASC”) Topic 946 – on investments. Financial Services – Investment Companies. Cash and Equivalents Estimates The Company considers all highly liquid investments with an original The preparation of the Financial Statements in conformity with maturity of three months or less to be cash equivalents. The carrying US GAAP requires management to make estimates and assumptions amount included in the Consolidated Statements of Assets and that affect the amounts reported in the Financial Statements Liabilities for cash and equivalents approximates their fair value. and accompanying notes. Actual results could differ from The Company maintains bank accounts denominated in US dollars, those estimates. in euros, and in pounds sterling. The Company may invest excess Investments cash balances in highly liquid instruments such as certificates of Investments are stated at fair value in accordance with the deposit, sovereign debt obligations of certain countries, and money Company’s investment valuation policy. The Board has concluded market funds that are highly rated by the credit rating agencies. specifically that climate change, including physical and transition The associated credit risk of the cash and equivalents is monitored by risks, does not have a material impact on the recognition and the Board and the Investment Manager on a regular basis. The Board separate measurement considerations of the assets and liabilities has authorised the Investment Manager to manage the cash of the Group in the financial statements as of 31 January 2024, balances on a daily basis according to the terms set out in the but recognises that climate change may have an effect on the treasury policies created by the Board. investments held in the underlying partnerships. The inputs used to determine fair value include financial statements provided by the Investment Income investment partnerships which typically include fair market value Investment income includes interest from cash and equivalents, capital account balances. In reviewing the underlying financial dividends, and interest received from certain investments due to statements and capital account balances, the Company considers subsequent fund closings. Dividends are recorded when they are compliance with ASC Topic 820 – Fair Value Measurement, the declared and interest is recorded when earned. currency in which the investment is denominated, and other Operating Expenses information deemed appropriate. Operating expenses include amounts directly incurred by the Company The fair value of the Company’s investments is primarily based on the as part of its operations, and do not include amounts incurred from the most recently reported NAV provided by the underlying Investment operations of the investment entities. Manager as a practical expedient under ASC Topic 820. This fair Net Realised Gains and Losses onInvestments value is then adjusted for known investment operating expenses For investments in private equity funds, the Company records its and subsequent transactions, including investments, realisations, share of realised gains and losses as reported by the Investment changes in foreign currency exchange rates, and changes in value Manager, including fund-level related expenses and management of private and public securities. This valuation does not necessarily fees, and is net of any carry allocation. Realised gains and losses are reflect amounts that might ultimately be realised from the investment calculated as the difference between proceeds received and the and the difference can be material. related cost of the investment. Securities for which a public market does exist are valued by the Net Change in Unrealised Appreciation Company at quoted market prices at the year-end date. Generally, the partnership investments have a defined term and cannot be andDepreciation on Investments transferred without the consent of the GP of the limited partnership For investments in private equity funds, the Company records its in which the investment has been made. 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. Strategic Report Governance Financial Statements Other Information 103 ### 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 recognizing 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. ![img-12.jpeg](img-12.jpeg) 104 HVPE Annual Report and Accounts 2024 # Notes to Consolidated Financial Statements continued # Investment Management Agreement The Company has retained HarbourVest Advisors 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. 105Strategic Report Governance Financial Statements Other Information Note 5 Commitments Note 6 Debt Facility As of 31 January 2024, the Company had unfunded investment As of 31 January 2024, the Company had an agreement with commitments to other limited partnerships of $2,500,899,000 Mitsubishi UFJ Trust and Banking Corporation, New York Branch which are payable upon notice by the partnerships to which the (“MUFG”), Credit Suisse AG, London Branch (“Credit Suisse”) and commitments have been made. As of 31 January 2023, the Company The Guardians of New Zealand Superannuation as manager and had unfunded investment commitments to other limited partnerships administrator of the New Zealand Superannuation Fund (“New of $2,804,113,000. Zealand Super”) for the provision of a multi-currency revolving credit facility (the “Facility”) with a termination date no earlier than August The Investment Manager is not entitled to any direct remuneration 2027, subject to usual covenants. The MUFG commitment was (save expenses incurred in the performance of its duties) from the $300 million. On 20 December 2021, the Credit Suisse commitment Company, instead deriving its fees from the management fees and was increased from $300 million to $400 million. On 15 August 2022, carried interest payable by the Company on its investments in the commitment was further increased by $100 million through New underlying HarbourVest Funds. The Investment Management Zealand Super as the lender. Agreement (the “IMA”), which was amended and restated on 30 July 2019 and again on 31 January 2023, may be terminated by either Amounts borrowed against the Facility accrue interest at an party by giving 12 months’ notice. In the event of termination within aggregate rate of Term SOFR/SONIA/EURIBOR, a margin, and, ten years and three months of the date of the listing on the Main under certain circumstances, a mandatory minimum cost. Market on 9 September 2015, the Company would be required to pay The Facility is secured by the private equity investments and cash a contribution, which would have been $1.5 million at 31 January and equivalents of the Company, as defined in the agreement and is 2024 and $2.3 million at 31 January 2023, as reimbursement of the subject to certain loan-to-value ratios (which factor in borrowing on Investment Manager’s remaining unamortised IPO costs. In addition, the Facility and fund-level borrowing) and portfolio diversity tests the Company would be required to pay a fee equal to the aggregate of applied to the Investment Portfolio of the Company. At 31 January the management fees for the underlying investments payable over 2024 and 31 January 2023, there was $275,000,000 and no debt the course of the 12-month period preceding the effective date of outstanding against the Facility, respectively. For the years ended such termination to the Investment Manager. 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. 106 HVPE Annual Report and Accounts 2024 # 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 realized 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)% | | Refers 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. Strategic Report Government Financial Statements Other Information 107 ### Note 8 Publication and Calculation of Net Asset Value The NAV of the Company is equal to the value of its total assets less its total liabilities. The NAV per share is calculated by dividing the 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 | 714,184 | 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. HVPE Annual Report and Accounts 2024108 ## Other ## Information 109 Other Information 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 Strategic Report Governance Financial Statements HVPE Annual Report and Accounts 2024110 ## 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 111Strategic Report Governance Financial Statements Other Information 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. HVPE Annual Report and Accounts 2024112 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 Infrastructure 0.8% $30.8 Australia Private Operates marine terminals and provides cargo handling Pty Ltd services and container terminals throughout Australia Action Nederland Buyout 0.7% $28.8 Netherlands Private Leading European discount general merchandise BV retailer Preston Hollow Buyout 0.7% $27.9 United States Private Specialty municipal finance company Capital, LLC Froneri Limited Buyout 0.5% $21.7 United Private Ice cream and frozen food manufacturer in Europe Kingdom Apotex Buyout 0.5% $18.8 Canada Private Developer and manufacturers of pharmaceutical Pharmaceutical products intended to serve the healthcare sector. The Holdings Inc. 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 Buyout 0.4% $17.9 United Private UK-based insurance distributor, providing B2B Holdings Kingdom insurance through its core activities of retail insurance broking, specialty and reinsurance broking and managed agency underwriting Sidney Murray Infrastructure 0.4% $17.1 United States Private 192MW hydroelectric facility located near the Hydroelectric Mississippi River in eastern Louisiana and represents Project one of the largest hydroelectric facilities constructed in the US Olink Proteomics Venture/Growth 0.4% $16.3 Sweden Public Protein biomarker discovery Holding AB 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 Infrastructure 0.4% $15.2 Spain Private Provides civil infrastructure management services and | Infraestructuras, | | is engaged in management operation, maintenance and | | --- | --- | --- | | S,A. | | conservation of toll roads in Northern Spain | | Knowlton | Buyout 0.4% $15.0 Canada Private Consumer products contract manufacturer | | Development Corporation 113Strategic Report Governance Financial Statements Other Information 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, Buyout 0.3% $14.2 United States Private Insurance brokerage LLC 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 Private Veterinary clinic platform Kingdom Integrity Marketing Buyout 0.3% $12.0 United States Private Integrity Marketing Group, LLC provides marketing Group, LLC services. The Company develops and distributes life and health insurance products with insurance carrier partners ByteDance Venture/Growth 0.3% $12.0 China Private Offers personal information recommendation engine Technology Co. services which includes news, pictures, and essays Community Venture/Growth 0.3% $11.5 United States Private Faith-based organisation management software Brands (formerly Ministry Brands) Puget Sound Infrastructure 0.3% $10.8 United States Private Provider of electric and gas utility services intended to Energy help in decarbonisation and greenhouse gas emissions reduction Ultimate Kronos Buyout 0.3% $10.7 United States Private Global provider of workforce management software Group 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 Buyout 0.3% $10.3 United States Private Operates and owns power generation facilities Corporation 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, Venture/Growth 0.2% $9.6 United States Private Provides renewable power LLC CHG Healthcare Buyout 0.2% $9.4 United States Private Provider of temporary healthcare staffing Services, Inc. Revolut Venture/Growth 0.2% $9.3 United Private Developer of a foreign exchange and money Kingdom transferring application designed to promote financial cohesion across the communities in which it operates Ardonagh Buyout 0.2% $9.3 United Private Leading UK insurance broker Kingdom Hub International Buyout 0.2% $9.2 United States Private Commercial insurance brokerage Limited Undisclosed Buyout 0.2% $9.2 United States Private Undisclosed HVPE Annual Report and Accounts 2024114 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 Buyout 0.2% $8.9 Peru Private PET bottles and preforms Industrias PET S.A. 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 Buyout 0.2% $8.4 South Korea Private Bulk and LNG shipping (HCPE Investments) 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 Venture/Growth 0.2% $8.1 Sweden Private Digital parking marketplace AS 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 Buyout 0.2% $8.0 United States Private Tech-enabled financial services Company Canam Group Buyout 0.2% $7.9 Canada Private Specialises in designing construction solutions and fabricating customised steel components NEW Asurion Buyout 0.2% $7.9 United States Private Leading provider of consumer product protection Corporation 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 | Infrastructure 0.2% $7.5 United States Private Provides airport management and development | | | | | --- | --- | --- | --- | --- | | Group Ltd. | | | | services | | Argus Media Buyout 0.2% $7.5 United | | | Private Produces independent price assessments, essential | | | | | Kingdom | | 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 Buyout 0.2% $7.4 Norway Private Enterprise resource planning software Holdings A/s Curia Global, Inc. Buyout 0.2% $7.4 United States Private Outsourced pharmaceutical contract manufacturer McLarens Global Credit 0.2% $7.4 United States Private Claims management and loss adjustment services (ACP McLarens Holdings) Action Behavior Buyout 0.2% $7.3 United States Private Autism treatment centres Centers 115Strategic Report Governance Financial Statements Other Information Company Stage % Amount (m) Location Status Description Assemblin Caverion Buyout 0.2% $7.3 Sweden Private Technical installation and services company focused Group 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/ 0.2% $7.3 United States Private Provides artificial intelligence powered products Growth CleanSlate Centers, Venture/ 0.2% $7.2 United States Private Operates a network of physician-led outpatient Inc. Growth 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 | Venture/ | 0.2% $7.0 Canada Private Well data and drilling software | | --- | --- | --- | | Enterprises | Growth | | | Klarna Ab Venture/ | | 0.2% $7.0 Sweden Private Online consumer payment solutions | Growth 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/ 0.2% $7.0 Belgium Private SaaS company that provides all-in-one management Growth 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, Buyout 0.2% $7.0 United States Private Leader in business discovery and user driven Business Inc. Intelligence (BI) Risk Strategies Buyout 0.2% $6.9 United States Private Specialty insurance broker Company, Inc. Undisclosed Buyout 0.2% $6.9 United Private Undisclosed Kingdom Curriculum Buyout 0.2% $6.9 United States Private Leading provider of technology-enabled assessment Associates, LLC 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 Buyout 0.2% $6.8 United States Private Veterinary clinics Alliance GEON Performance Buyout 0.2% $6.7 United States Private Provider of PVC and polypropylene-based solutions Solutions, LLC 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 Private Global price reporting agency, which offers critical Kingdom price data for the commodity markets it covers, as well as supplementary market news, forecasts and other data | Kaspi.kz Joint Stock | Buyout 0.2% $6.7 Kazakhstan Public Kazakhstan's second largest distribution network, and | | | | --- | --- | --- | --- | | Company | | | best-in-class risk management retail bank | | Capillary | Venture/ | 0.2% $6.7 Singapore Private A software-as-a-service provider of customer | | | Technologies | Growth | | relationship management solutions to retailers in India | | International Pte. Ltd. | | | 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 Venture/ 0.2% $6.6 China Public Operator of a chain of retail stores that specialise in Chain Co. Ltd. Growth pharmaceutical and over the counter remedies and personal care products in China Sweetwater Sound, Buyout 0.2% $6.6 United States Private Online musical instrument retailer Inc. 116 HVPE Annual Report and Accounts 2024 # Supplementary data continued # Largest US Managers at 31 January 2024 # Based on the Investment Portfolio No external manager represented more than 3.1% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 9.5% of the Investment Portfolio. The 25 largest managers represented 26.6% of the Investment Portfolio. In total, the largest managers (0.2% of invested value or larger) represented 46.0% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | Insight Venture Management, LLC | Primary | $126.5 | 3.12% | | Thoma Bravo | Primary | $91.2 | 2.35% | | Hellman & Friedman LLC | Primary | $60.0 | 1.48% | | SK Capital Partners | Primary | $55.0 | 1.36% | | Battery Ventures | Primary | $54.0 | 1.33% | | Andreessen-Holowitz | Primary | $52.7 | 1.30% | | Berkshire Partners LLC | Secondary | $47.4 | 1.17% | | Lightspeed Venture Partners | Primary | $47.3 | 1.17% | | T& Associates | Primary | $46.0 | 1.13% | | Kleiner Perkins | Primary | $41.0 | 1.01% | | Spark Capital | Primary | $39.2 | 0.96% | | Acoal | Primary | $37.9 | 0.93% | | Silver Lake Management, L.L.C. | Primary | $36.2 | 0.89% | | ABRY Partners, LLC | Primary | $35.0 | 0.86% | | GTOR, 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% | | Sivensmith 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, LLC | 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% | | TSS Consumer Partners | Primary | $16.6 | 0.41% | | Stone Point Capital | Secondary | $16.1 | 0.40% | | All Industrial Partners, LLC | Primary | $16.0 | 0.39% | Strategic Report Government Financial Statements Other Information 117 | Manager | Strategy | Sum of NAV ($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, L.P. | 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% | | Rowk 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% | | True 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% | | Gernepning Capital | Primary | $8.7 | 0.21% | | Granite Growth Health Partners BP, 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** | | **$1,867.6** | **46.0%** | 118 HVPE Annual Report and Accounts 2024 # Supplementary data continued # Largest European Managers at 31 January 2024 # Based on the Investment Portfolio No external manager represented more than 2.1% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 5.4% of the Investment Portfolio. The 25 largest managers (0.2% of invested value or larger) represented 13.1% of the Investment Portfolio. In total, the largest managers (0.2% of invested value or larger) represented 13.9% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | Index Ventures | Primary | $87.0 | 2.14% | | CVS Capital Partners Limited | Primary | $42.6 | 1.05% | | Holtzbrinck Ventures | Primary | $33.0 | 0.81% | | Advent International Corporation | Primary | $30.6 | 0.75% | | Permire 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% | | Consair Capital Infrastructure Partners | Secondary | $12.9 | 0.32% | | Crown 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% | | HiltecVision | 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** | | **$562.8** | **13.9%** | Strategic Report Government Financial Statements Other Information 119 # Largest Asia/Rest of World Managers at 31 January 2024 ## Based on the Investment Portfolio No external manager represented more than 3.4% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 5.7% of the Investment Portfolio. The 25 largest managers represented 10.7% of the Investment Portfolio. In total, the largest managers (0.2% of invested value or larger) represented 9.6% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | IDG Capital Partners | Secondary | $139.2 | 3.43% | | Consair Capital Infrastructure Partners | Secondary | $28.0 | 0.69% | | Bain Capital Partners Asia | Primary | $22.7 | 0.56% | | Avalaar Capital Management | Secondary | $21.1 | 0.52% | | Capital Square Partners | Secondary | $21.0 | 0.52% | | ECM | 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 Voodok 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 | | $432.9 | 10.7% | 138 HVPE Annual Report and Accounts 2024 # Supplementary data continued # Largest Buyout Managers at 31 January 2024 # Based on the Investment Portfolio No external manager represented more than 2.2% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 7.6% of the Investment Portfolio. The 25 largest managers represented 20.9% of the Investment Portfolio. In total, the largest managers (0.2% of invested value or larger) represented 38.4% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | Thomas 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% | | GTCB, 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% | | Permits 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% | | PKI Partners | Secondary | $23.9 | 0.59% | | The Jordan Company, LP | Secondary | $23.7 | 0.59% | | HgCapital | Primary | $23.1 | 0.57% | | AIP, LLC | Primary | $23.1 | 0.57% | | Pamlico Capital | Primary | $23.1 | 0.57% | | EGT 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% | | Martin 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 | $15.2 | 0.37% | Strategic Report Governance Financial Statements Other Information 121 | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | TPG Asia | Secondary | $14.1 | 0.35% | | Vitoxisen 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% | | R. 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% | | Axiong 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, Dubber & Rice | Secondary | $8.6 | 0.21% | | Westview Capital Partners, L.P. | Primary | $8.5 | 0.21% | | Truv 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% | | Hilwichsion | 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** | | **$1,559.3** | **38.4%** | 122 HVPE Annual Report and Accounts 2024 # Supplementary data continued # Largest Venture Capital/Growth Equity Managers at 31 January 2024 # Based on the Investment Portfolio No external manager represented more than 3.4% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 11.5% of the Investment Portfolio. The 25 largest managers represented 23.9% of the Investment Portfolio. In total, the largest managers (0.2% of invested value or larger) represented 26.6% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($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% | | Avalaar Capital Management | Secondary | $21.1 | 0.52% | | DCM | Primary | $20.9 | 0.52% | | Walburg 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% | | Gening 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** | | **$1,081.1** | **26.6%** | Strategic Report Government Financial Statements Other Information 123 # Largest Real Assets/Other Managers at 31 January 2024 ## Based on the Investment Portfolio No external manager represented more than 1.20% of the Investment Portfolio. As the Investment Manager of the HarbourVest direct funds, HarbourVest Partners, LLC is the largest manager held in HVPE, although not listed here. The five largest managers represented 3.0% of the Investment Portfolio. The 25 largest managers represented 6.4% of the Investment Portfolio. | Manager | Strategy | Sum of NAV ($m) | % Investment Portfolio Value | | --- | --- | --- | --- | | Consair 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% | | ABRV Partners, LLC | Primary | $13.4 | 0.33% | | First Reserve Corporation | Secondary | $12.8 | 0.32% | | DMERS Infrastructure | Secondary | $10.8 | 0.27% | | Daktree Capital Management | Secondary | $10.7 | 0.26% | | Gridron 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% | | Anzalis 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 | | $258.3 | 6.4% | HVPE Annual Report and Accounts 2024124 ## 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 The share of profits due to a General Partner once the Limited Partner’s commitment to a fund plus a Fee defined hurdle rate is reached Co-investment (sometimes Direct A minority investment, made directly into an operating company, alongside a fund or other private equity Co-investment) investor Commingled Fund A fund structure that pools investments from multiple investors into a single fund Commitment Period or Investment The period of time within which a fund can make investments as established in the Limited Partnership Period 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, A measure of earnings before interest and taxes that exclude non-cash expenses. Valuation methods are Depreciation and Amortisation commonly based on a comparison of private and public companies’ value as a multiple of EBITDA (“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, A measure of the absolute annual rate of return of an investment that takes both the timing and magnitude Net, Realised Gross) 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 125Strategic Report Governance Financial Statements Other Information Term Definition Investment Pipeline (or unfunded Total commitments to HarbourVest funds, which are to be prospectively called or invested by an underlying commitments) 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”) The returns generated from the liquidation or realisation of underlying holdings divided by the cost of all Multiple 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”) The total value divided by the total cost to date Multiple 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 HVPE Annual Report and Accounts 2024126 ## Alternative Performance Measures APM ### 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. NAV Converted at | | 31 January 2024 | | | | | Discount | | | --- | --- | --- | --- | --- | --- | --- | --- | | | | GBP/USD | Share Price | | | | to NAV | | | Exchange Rate | | at 31 January | | at 31 January | | | | Date of NAV (estimate and final) NAV per Share | | (1.2673) | | 2024 | | | 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 $50.47 Elapsed time (years) 10 US dollar CAGR 13.4% FTSE AW TR Index (US dollar) CAGR 31 January 2014 305.00 31 January 2024 725.17 Elapsed time (years) 10 FTSE AW TR CAGR 9.0% Annualised outperformance of FTSE AW TR Index Over the Last 10 Years calculation 4.33 percentage 1 13.4% minus 9.0% points (“pp”) ### KPIs (pages 26 to 27) The KPI metrics show the movement between the NAV per share (in US dollars) and the share price in sterling and translated into US dollars. Relative to the FTSE AW TR Index, this is the difference in movement between the year-on-year change of this index vs the particular HVPE KPI. NAV Per Share ($) & Relative Performance Relative Absolute FTSE AW TR Index Performance vs Date NAV per Share Performance Movement 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 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 Strategic Report Governance Financial Statements Other Information 127 ## 10-year Outperformance of FTSE AW TR ### NAV (US dollar) | 31 January 2014 | $14.58 | | --- | --- | | 31 January 2024 | $60.47 | | **US dollar total return** | **251%** | ### FTSE AW TR (US dollar) | 31 January 2014 | 309.02 | | --- | --- | | 31 January 2024 | 725.17 | | **FTSE AW TR total return** | **138%** | ### 10-year outperformance of FTSE AW TR calculation | | **113%** | | --- | --- | | **251% minus 138%** | **113 percentage points ('pp')** | ## Total Shareholder Return (£) | Date | Share Price (£) | Period-on-period Change | | --- | --- | --- | | 31 January 2018 | £12.52 | +4.8% | | 31 January 2019 | £14.26 | +13.9% | | 31 January 2020 | £18.36 | +28.8% | | 31 January 2021 | £18.70 | +1.9% | | 31 January 2022 | £27.75 | +48.4% | | 31 January 2023 | £22.10 | -20.4% | | 31 January 2024 | £23.15 | 4.8% | ## Total Commitment Ratio | (Total exposure to private markets investments as a percentage of NAV) | 31 January 2024 ($m) | 31 January 2023 ($m) | | --- | --- | --- | | Investment Portfolio | $4,058 | $3,816 | | Investment Pipeline | $2,501 | $2,804 | | Total | $6,359 | $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 | $332 | | **Net Portfolio Cash Flow** | **$(283)** | **$(56)** | Both "Total Commitment Ratio" and "Net Portfolio Cash Flow" also form part of "Managing the Balance Sheet". 138 HVPE Annual Report and Accounts 2024 # Alternative Performance Measures continued # Managing the Balance Sheet # Medium-term Coverage Ratio | (A measure of medium-term commitment coverage) | 31 January 2024 ($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%** | 129Strategic Report Governance Financial Statements Other Information ## Disclosures Investments 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 companies represented within this report are provided for illustrative purposes only, as example portfolio holdings. There are > the factors described in this report; over 14,000 individual companies in the HVPE portfolio, with no > the rate at which HVPE deploys its capital in investments and one company comprising more than 2.1% of the entire portfolio. achieves expected rates of return; The deal summaries, General Partners (managers), and/or > HarbourVest’s ability to execute its investment strategy, including companies shown within the report are intended for illustrative through the identification of a sufficient number of appropriate purposes only. While they may represent an actual investment or investments; relationship in the HVPE portfolio, there is no guarantee they will > the ability of third-party managers of funds in which the remain in the portfolio in the future. HarbourVest funds are invested and of funds in which the Past performance is no guarantee of future returns. Company may invest through parallel investments to execute their own strategies and achieve intended returns; Forward-looking Statements > the continuation of the Investment Manager as manager of the Company’s investments, the continued affiliation with This report contains certain forward-looking statements. Forward- HarbourVest of its key investment professionals, and the looking statements relate to expectations, beliefs, projections, future continued willingness of HarbourVest to sponsor the formation of plans and strategies, anticipated events or trends, and similar and capital raising by, and to manage, new private equity funds; expressions concerning matters that are not historical facts. In some cases, forward-looking statements can be identified by terms such as > HVPE’s financial condition and liquidity, including its ability to “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, access or obtain new sources of financing at attractive rates in “potential”, “should”, “will”, and “would”, or the negative of those terms, or order to fund short-term liquidity needs in accordance with the other comparable terminology. The forward-looking statements are investment strategy and commitment policy; based on the Investment Manager’s and/or the Directors’ beliefs, > changes in the values of, or returns on, investments that the assumptions, and expectations of future performance and market Company makes; developments, taking into account all information currently available. > changes in financial markets, interest rates, or industry, general These beliefs, assumptions, and expectations can change as a result economic, or political conditions; and of many possible events or factors, not all of which are known or are > the general volatility of the capital markets and the market price of within the Investment Manager’s and/or the Directors’ control. If a HVPE’s shares. change occurs, the Company’s business, financial condition, liquidity, and results of operations may vary materially from those expressed in forward-looking statements. Publication and Calculation ofNetAssetValue By their nature, forward-looking statements involve known and The NAV of the Company is equal to the value of its total assets less unknown risks and uncertainties because they relate to events, and its total liabilities. The NAV per share is calculated by dividing the NAV depend on circumstances, that may or may not occur in the future. of the Company by the number of shares in issue. The Company Forward-looking statements are not guarantees of future performance. intends to publish the estimated NAV per share as calculated, Any forward-looking statements are only made as at the date of this monthly in arrears, as at each month-end, generally within 20 days. 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. HVPE Annual Report and Accounts 2024130 Regulatory Information Management of Foreign Currency Exposure The Investment Portfolio includes three euro-denominated HVPE is required to comply with the Listing Rules, Disclosure HarbourVest funds and a Canadian dollar-denominated fund. Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom (the “LDGT Rules”). It is also authorised by the > 14% of underlying partnership holdings are denominated in euros. Guernsey Financial Services Commission as an authorised closed- The euro-denominated Investment Pipeline is €11.3 million. end investment scheme under the Protection of Investors (Bailiwick > 2% of underlying partnership holdings are denominated in sterling. of Guernsey) Law, 2020, as amended (the “POI Law”). HVPE is subject There is no sterling-denominated Investment Pipeline. to certain ongoing requirements under the LDGT Rules and the POI > 1% of underlying partnership holdings are denominated in Law and certain rules promulgated thereunder relating to the Australian dollars. There is no Australian dollar-denominated disclosure of certain information to investors, including the Investment Pipeline. publication of annual and half-yearly financial reports. > 0.3% of underlying partnership holdings are denominated in Valuation Policy Canadian dollars. The Canadian dollar-denominated Investment Valuations Represent Fair Value UnderUSGAAP Pipeline is C$5.9 million. HVPE’s 31 January 2024 NAV is based on the 31 December 2023 > 0.3% of underlying partnership holdings are denominated in Swiss NAV of each HarbourVest fund and Conversus, adjusted for changes francs. There is no Swiss franc-denominated Investment Pipeline. in the value of public securities, foreign currency, known material HVPE has exposure to foreign currency movement through foreign events, cash flows, and operating expenses during January 2024. currency-denominated assets within the Investment Portfolio and The valuation of each HarbourVest fund is presented on a fair value through its Investment Pipeline of unfunded commitments, which are basis in accordance with US generally accepted accounting principles long term in nature. The Company’s most significant currency (“US GAAP”). See Note 4 in the Notes to the Financial Statements on exposure is to euros. The Company does not actively use derivatives or page 104. other products to hedge the currency exposure. The Investment Manager typically obtains financial information from 90% or more of the underlying investments for each of HVPE’s HarbourVest funds to calculate the NAV. For each fund, the accounting team reconciles investments, distributions, and unrealised/realised gains and losses to the Financial Statements. The team also reviews underlying partnership valuation policies. 131Strategic Report Governance Financial Statements Other Information ## Key information Exchange Company Advisers London Stock Exchange (Main Market) Investment Manager Ticker HVPE (£)/HVPD ($) HarbourVest Advisers L.P. c/o HarbourVest Partners, LLC Listing date One Financial Center 9 September 2015 (LSE Main Market) Boston MA 02111 Tel +1 617 348 3707 2 May 2010 (LSE Specialist Fund Segment – since migrated to LSE Main Market) Auditor 6 December 2007 (Euronext – since delisted) Ernst & Young LLP Royal Chambers Fiscal year end St Julian’s Avenue 31 January St Peter Port Guernsey GY1 4AF Base currency US dollars Company Secretary and Administrator Sterling quote US dollar quote BNP Paribas S.A. (Guernsey Branch) London Stock Exchange London Stock Exchange BNP Paribas House ISIN ISIN St Julian’s Avenue GG00BR30MJ80 GG00BR30MJ80 St Peter Port SEDOL SEDOL Guernsey GY1 1WA BR30MJ8 BGT0LX2 Tel +44 (0)1481 750 800 TIDM TIDM www.bnpparibas.je HVPE LN HVPD LN Registrar Investment Manager HarbourVest Advisers L.P. Link Asset Services (affiliate of HarbourVest Partners, LLC) The Registry 34 Beckenham Road Registration Beckenham Financial Conduct Authority Kent BR3 4TU Tel +44 (0)871 664 0300 Fund consent Tel +44 (0)20 8369 3399 (outside UK) Guernsey Financial Services Commission Swiss Representative Outstanding shares Acolin Fund Services AG 77,683,508 ordinary shares at 31 January 2024 Succursale Genève 76,969,354 ordinary shares at 29 May 2024 6 Cours De Rive 1204 Geneva 2024/25 Calendar Switzerland Monthly NAV estimate: Generally within 20 days of month end | Annual General Meeting 2024: 17 July 2024 | Swiss Paying Agent | | --- | --- | | Semi-Annual Report and Unaudited Condensed Interim Consolidated | Banque Cantonale de Genève | | Financial Statements: October 2024 | 17 Quai de l’Ile | 1211 Geneva 2 Switzerland Joint Corporate Brokers | Jefferies Hoare Govett | Peel Hunt | | --- | --- | | 100 Bishopsgate | 7th Floor | | London EC2N 4JL | 100 Liverpool Street | | Tel +44 (0)20 7029 8000 | London EC2M 2AT | Tel +44 (0)20 7418 8900 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. 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