Harbourvest Global Priva... Share Discussion Threads

[rambutan2] 24/4/2024 04:21

I note that last month was the first for a year in which distributions were higher than calls. During that period calls totalled $590m, with distributions at $312m, so a $278m deficit. Fund level borrowing has remained at around $500m throughout the period. But the credit facility was undrawn a year ago, with net cash of $140m. Now it is $325m drawn, with $110m cash. So gearing is currently approx $720m ie in the high teens. I wouldn't have thought most shareholders or the board would want it much higher in the current uncertain climate. So, like it or not, fond imaginings of big buybacks ala Pantheon can be forgotten about for the time being.

[its the oxman] 12/4/2024 10:14

Added sub 2300p. Bit late but still looking low relative to a lot of other things that are moving up. Catch up to come hopefully.

[donald pond] 08/4/2024 16:02

I've written a piece. Please read and comment in support https://x.com/donaldpond6/status/1777337279679275449?s=46&t=YfR7OyhMlqZLtI-h86iCxA

[mozy123] 08/4/2024 11:03

Need an activist PE firm to take a huge shareholding and start chasing the weasels on the board.

[skyship] 08/4/2024 08:56

dp - absolutely, said it all along, by maximising AUM (no dividends and parsimonious buybacks) they maximise their fees. Sod the shareholders...

[donald pond] 08/4/2024 08:43

Very critical comments about HVPE from the head of research at DB/Numis on this weekends money makers podcast. Talks of buybacks being "grudging" and how compared to PIN and others they have "shot themselves in the foot".The board seem to be failing here: it appears (we obviously don't have the full story) that they are simply allowing the manager to focus on maintaining AUM rather than maximising shareholder returns.

[donald pond] 04/4/2024 17:35

It's been a real disappointment. As I say all the time, do buybacks in size or not at all.

[mozy123] 04/4/2024 17:09

Discount is seriously depressing now. Where are the activists!! LOL

[mrscruff] 17/3/2024 20:57

Note the buybacks had started last week. Small pull back on Friday. A rise this week depends on the US sentiment however downside somewhat protected with these buybacks. Discount now 40%. Slow and hopefully steady 10 year investment.

[its the oxman] 07/3/2024 10:41

Bit of catch up here, can see these nearer 2500p fairly soon if markets hold steady.

[apple53] 02/3/2024 21:11

Hope you got some below 2250 Oxman. I was too slow/busy, despite having sold some HRI ie had a little cash.

And MrScruff I reckon that's as good a guess as any, especially relative to US and global indices - world MSCI is 21% higher than the last time HVPE was around £22.

And Donald good point about IPO market.

[its the oxman] 01/3/2024 12:12

2250p , time to top up i reckon

[rambutan2] 29/2/2024 22:49

CousinIT, of course APEO has 50% of the shares held by Phoenix, and its shares have always been relatively illiquid, hence the nice jump on v little buyback.

Meanwhile, PIN has no problem buying back decent amounts even after the tender. With the share price still around the tender strike price.

[rambutan2] 29/2/2024 22:39

apple53, I very much agree with you re excess cash buybacks. And I don't think HVPE has helped its cause with its slightly ostrich head in the ground approach to the market realities of sitting on a 40-50% discount. I don't see why they couldn't have trimmed new commitments a little last year and given themselves a bit more flexibility. They always have access to plenty of deal flow.

[mrscruff] 29/2/2024 22:20

All this noise is now reflected in the discount of 43 percent. I call bottom 🤙

[cousinit] 28/2/2024 10:30

There was some useful discussion on the Money Makers podcast this week.

The general views were (as we know) that the sector needs to shrink and without cash bids that this could take some time. Buybacks and capital returns help but is a slow process. Demand should improve if the cost disclosure issues are fixed but unlikely to be transformational.

This would suggest that eventually the tide will start lifting all (credible) boats, including HVPE. Recognise that fewer buybacks aren't as accretive to NAV, but even at these wide discounts that may be in the 2-3% region.

Interested to see how the APEO buyback progresses. The discount has tightened in quite significantly so you'd suspect that money will be recycled from there into other names.

[donald pond] 28/2/2024 09:33

But FWIW my view is the new policy was launched after discussions with shareholders. I assume mainly wealth managers. And the lack of buying since (compared to PIN) suggests those shareholders were hoping for more. A couple of exits are needed to show how it works in practice

[donald pond] 28/2/2024 09:22

The Russell index looks to be breaking out of a long weak period. With other indices at all time highs we should expect the IPO market to open up. That's the final piece in the jigsaw imo

[apple53] 28/2/2024 09:05

I get what you are saying, rambutan, but one thing is possibly a non-sequiteur. Buybacks do not have to be a drag on NAV growth - quite the opposite. Regular dividends require a margin of safety, but buybacks don't if you only do them out of 'excess' cash, and can increase marginally your investment discipline as you can slightly raise your return targets when you have an alternative 'investment' for your marginal dollar.
However, your points about calls before distributions and the existing relatively lean structure are well made and taken, and may indeed mean buybacks are delayed. I will buy more if we dip further, even though I am heavy.

[rambutan2] 28/2/2024 04:56

Until distributions really pick up, I don't see them doing anything much in buybacks. Currently they are over 15% geared and if calls pick up before distributions then that figure could easily go over 20%. The allocated pipeline is $1.8bn.

Now I'm not saying that they are going to get into trouble, as they've been through plenty of cycles before, but the reason HVPE has performed so well, say compared to Pantheon, is 1) it has access to the very best managers, and 2) it is tuned for high performance and runs lean. So no cash drag/big margin of safety. The single objective was capital growth. This (Porsche) model will have to be gradually detuned and back seats added (BMW?) in order to fit in the likes of dividends, buybacks and the stuff that shareholders currently think they want. It will take time. And it will cost (nav) performance.

Personally, I would prefer HVPE to stick to its proven formula for outperformance. As a long term shareholder it has served me very well. I hold other PEITs for divs and particular exposures that they offer.

[its the oxman] 27/2/2024 23:56

Does feel oversold and probably a good buying level.

[mrscruff] 27/2/2024 21:51

Well no buy backs yet just small but significant director buy. Let's see what happens to the DP when the buybacks come in.

[chc15] 27/2/2024 11:23

Agree, there are sellers out there, once cleared this should rise. I have added more today.

[donald pond] 27/2/2024 09:05

I agree Scruff but I think the recent price weakness reflects institutional exasperation at the poor corporate governance here. As John Singer at PIN has made clear, if you are trading at a 40% discount your starting point must be to wind the structure up. The board is there to represent shareholders. The recent announcement on returning capital had the tone of someone being dragged to an execution. There is no point buying back reluctantly. You either take the PIN/PSH route or else it will make no difference. Agree that a couple of IPOs would help. With US markets at aths the scepticism around valuations across the sector is baffling

[mrscruff] 24/2/2024 17:53

Sky and River. I believe we made an assumption about HVPE. The recent fall in its value may actually be due to the temporary pause in share buybacks, possibly in anticipation of upcoming results out at the end of last week. Additionally, forecasts in rate cuts have been delayed and reduced.

However, I remain optimistic. As someone who also holds buyout-focused ICGT shares, I recognise that HVPE has significant exposure to the US market that is doing well. The dollar remains strong with fewer rate cuts. This, combined with some rate cuts favouring venture capital (VC), as well as the ongoing buybacks and high leverage, should bode well for HVPE. The strategic shift toward real assets is sensible, especially considering the possibility of acquiring undervalued publicly traded companies and taking them private. Private real assets tend to offer a higher internal rate of return (IRR) than their public counterparts.

Historically, rate cuts have benefited geared investments, and I expect HVPE to follow suit. The companies HVPE invests in have a modern edge, including well-known names like Discord and Figma (an Adobe competitor). In my view, HVPE stands alongside other strong performers like HGT, Apollo, OCI, and KKR.

Keep the faith! 💪