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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Harbourvest Global Private Equity Limited | LSE:HVPE | London | Ordinary Share | GG00BR30MJ80 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 5.00 | 0.22% | 2,290.00 | 2,285.00 | 2,295.00 | 2,295.00 | 2,275.00 | 2,275.00 | 58,910 | 11:33:43 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Trust,ex Ed,religious,charty | -50.86M | -65.22M | -0.8245 | -34.75 | 2.27B |
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TIDMHVPE
28 September 2017
Half-year results for the six months ended 31 July 2017
Consistent NAV growth sustained with 8% increase over period
HarbourVest Global Private Equity Limited ("HVPE" or the "Company"), a
closed-end investment company, announces its unaudited results for the
six months ended 31 July 2017. All figures relate to the half year ended
31 July 2017 unless otherwise stated.
Continued growth
-- In the six months, 8% growth in net asset value ("NAV") per share to
$19.98
-- NAV per share approximately doubled since $10.00 starting point at
inception in 2007
-- Annual compound growth rate of 12% in the five years to 31 July
2017 (US dollars)
-- Share price up 6% to GBP12.70 at 31 July 2017
-- Active portfolio management, supporting next wave of growth
-- $162m committed to new HarbourVest funds (H1 2016: $200m)
-- $119m invested in private companies through HarbourVest funds (H1
2016: $131m)
-- $126m value growth from investment portfolio (H1 2016: $76m)
-- Strong performance from early venture assets, direct
co-investments and the European portfolio
-- A 2006 vintage US buyout fund-of-funds was the largest
individual contributor to NAV
-- Net realisations over period with $149m received (H1 2016: $101m);
larger exits realised at sustained weighted average of 30% above
carrying value
-- Net cash of $200m on balance sheet, zero borrowings
Sir Michael Bunbury, Chairman of HVPE, said:
"The six months to 31 July 2017 has been a period of continued progress
for HVPE. The Company has delivered NAV growth of 8% in US dollars,
building on eight consecutive full financial years of increasing NAV.
Furthermore, the Company has reached a significant milestone, with NAV
per share now having doubled since launch. This is testament to the
ongoing success of HVPE's consistent and proven investment strategy.
"As HVPE approaches its ten-year anniversary this December, I would like
to thank all our investors for their continued support. As the Company
enters its second decade, it is well-placed to take advantage of the
investment opportunities available in private markets as the asset class
continues to develop."
HVPE provides a complete private equity solution for institutional and
retail investors via access to a well-diversified portfolio managed
through four phases of the private equity cycle - Commitments,
Investment, Growth, and Realisation (Maturity) - in order to create
value.
To view the Company's semi-annual report please follow this link: Semi
Annual Report - Period Ending 31 July 2017:
http://www.hvpe.com//media/Files/H/Hvgpe/reports-and-presentations/reports/2017/hvpe-2017-sar.pdf
.
The semi-annual report will also shortly be available on the National
Storage Mechanism, which is situated at www.morningstar.co.uk/uk/nsm.
Enquiries:
HVPE
Richard Hickman Tel: +44 (0)20 7399 9847 rhickman@harbourvest.com
Charlotte Edgar Tel: +44 (0)20 7399 9826 cedgar@harbourvest.com
HarbourVest Partners
Laura Thaxter Tel: +1 (617) 348 3695 lthaxter@harbourvest.com
MHP Communications
Charlie Barker / Mark Lunn Tel: +44(0)20 3128 8100 hvpe@mhpc.com
/ Kelsey Traynor
Notes to Editors
About HarbourVest Global Private Equity Limited:
HarbourVest Global Private Equity Limited ("HVPE" or the "Company") is a
Guernsey-incorporated, closed-end investment company which is listed on
the Main Market of the London Stock Exchange and is a constituent of the
FTSE 250 index. HVPE is designed to offer shareholders long-term capital
appreciation by investing in a private equity portfolio diversified by
geography, stage of investment, vintage year, and industry. The Company
invests in and alongside HarbourVest-managed funds which focus on
primary fund commitments, secondary investments and direct
co-investments in operating companies. HVPE's investment manager is
HarbourVest Advisers L.P., an affiliate of HarbourVest Partners, LLC, an
independent, global private markets investment specialist with more than
35 years of experience.
About HarbourVest Partners, LLC:
HarbourVest is an independent, global private markets investment
specialist with over 35 years of experience and more than $45 billion in
assets under management. The Firm's powerful global platform offers
clients investment opportunities through primary fund investments,
secondary investments, and direct co-investments in commingled funds or
separately managed accounts. HarbourVest has more than 400 employees,
including more than 100 investment professionals across Asia, Europe,
and the Americas. This global team has committed more than $32 billion
to newly-formed funds, completed over $18 billion in secondary purchases,
and invested $7 billion directly in operating companies. Partnering with
HarbourVest, clients have access to customised solutions, longstanding
relationships, actionable insights, and proven results.
This announcement is for information purposes only and does not
constitute or form part of any offer to issue or sell, or the
solicitation of an offer to acquire, purchase or subscribe for, any
securities in any jurisdiction and should not be relied upon in
connection with any decision to subscribe for or acquire any Shares. In
particular, this announcement does not constitute or form part of any
offer to issue or sell, or the solicitation of an offer to acquire,
purchase or subscribe for, any securities in the United States or to US
Persons (as defined in Regulation S under the US Securities Act of 1933,
as amended ("US Persons")). Neither this announcement nor any copy of
it may be taken, released, published or distributed, directly or
indirectly to US Persons or in or into the United States (including its
territories and possessions), Canada, Australia or Japan, or any
jurisdiction where such action would be unlawful. Accordingly,
recipients represent that they are able to receive this announcement
without contravention of any applicable legal or regulatory restrictions
in the jurisdiction in which they reside or conduct business. No
recipient may distribute, or make available, this announcement (directly
or indirectly) to any other person. Recipients of this announcement
should inform themselves about and observe any applicable legal
requirements in their jurisdictions.
The Shares have not been and will not be registered under the US
Securities Act of 1933, as amended (the "Securities Act") or with any
securities regulatory authority of any state or other jurisdiction of
the United States and, accordingly, may not be offered, sold, resold,
transferred, delivered or distributed, directly or indirectly, within
the United States or to US Persons. In addition, the Company is not
registered under the US Investment Company Act of 1940, as amended (the
"Investment Company Act") and shareholders of the Company will not have
the protections of that act. There will be no public offer of the
Shares in the United States or to US Persons.
This announcement has been prepared by the Company and its investment
manager, HarbourVest Advisers L.P. (the "Investment Manager"). No
liability whatsoever (whether in negligence or otherwise) arising
directly or indirectly from the use of this announcement is accepted and
no representation, warranty or undertaking, express or implied, is or
will be made by the Company, the Investment Manager or any of their
respective directors, officers, employees, advisers, representatives or
other agents ("Agents") for any information or any of the opinions
contained herein or for any errors, omissions or misstatements. None of
the Investment Manager nor any of their respective Agents makes or has
been authorised to make any representation or warranties (express or
implied) in relation to the Company or as to the truth, accuracy or
completeness of this announcement, or any other written or oral
statement provided. In particular, no representation or warranty is
given as to the achievement or reasonableness of, and no reliance should
be placed on any projections, targets, estimates or forecasts contained
in this announcement and nothing in this announcement is or should be
relied on as a promise or representation as to the future.
Other than as required by applicable laws, the Company gives no
undertaking to update this announcement or any additional information,
or to correct any inaccuracies in it which may become apparent and the
distribution of this announcement. The information contained in this
announcement is given at the date of its publication and is subject to
updating, revision and amendment. The contents of this announcement have
not been approved by any competent regulatory or supervisory authority.
This announcement includes statements that are, or may be deemed to be,
"forward looking statements". These forward looking statements can be
identified by the use of forward looking terminology, including the
terms "believes", "projects", "estimates", "anticipates", "expects",
"intends", "plans", "goal", "target", "aim", "may", "will", "would",
"could", "should" or "continue" or, in each case, their negative or
other variations or comparable terminology. These forward looking
statements include all matters that are not historical facts and include
statements regarding the intentions, beliefs or current expectations of
the Company. By their nature, forward looking statements involve risks
and uncertainties because they relate to events and depend on
circumstances that may or may not occur in the future and may be beyond
the Company's ability to control or predict. Forward looking statements
are not guarantees of future performance. More detailed information on
the potential factors which could affect the financial results of the
Company is contained in the Company's public filings and reports.
All investments are subject to risk. Past performance is no guarantee of
future returns. Prospective investors are advised to seek expert legal,
financial, tax and other professional advice before making any
investment decision. The value of investments may fluctuate. Results
achieved in the past are no guarantee of future results.
This announcement is issued by the Company, whose registered address is
Ground Floor Dorey Court, Admiral Park, St Peter Port, Guernsey, GY1
2HT.
(c) 2017 HarbourVest Global Private Equity Limited. All rights reserved.
Chairman's Statement
Dear Shareholder
In May I signed out the Chairman's Statement which accompanied the
Annual Report to 31 January 2017 of your company, HarbourVest Global
Private Equity ("HVPE" or the "Company"). The ensuing four months have
proved relatively uneventful although material forward progress has been
maintained as reported in the Investment Manager's Review which follows.
Consequently in this introductory statement for the six months to 31
July 2017 I will highlight a few points covered in more detail elsewhere
in this report and deal with some additional corporate matters.
Performance and Net Asset Value
The Company's functional currency remains the US dollar and
approximately 78% of its underlying funds are denominated in US dollars.
In US dollars the Company's unaudited Net Asset Value ("NAV") per share
appreciated by 8.2% to $19.98. This growth builds on eight consecutive
full financial years of increasing NAV as reported at 31 January 2017.
The 31 July figures are reported using all 30 June reports on underlying
investments and half-year figures will always have a tendency to lag
movements in listed markets. For the six months to 31 July the total US
dollar return of the FTSE All World Index was 11.8%.
Share Price
The Company's shares are quoted in UK pounds sterling on the London
Stock Exchange. The relationship between the US dollar NAV and the share
price is affected both by the USD/GBP exchange rate movement and also by
the discount to NAV. Owing in part to a reduction in the discount from
18.6% at 31 January to 16.0% at 31 July, the share price rose by 6.3% to
end the period at GBP12.70.
Commitments and Balance Sheet
In keeping with the Company's strategy, new commitments of $162.2
million were made to funds managed by HarbourVest in the six month
period. The Investment Manager provides regular updates to the Board in
respect of the Company's projected cash flows for up to five years
forward. However, the precise timing of drawdowns of cash to fund
previously committed investments and realisations from existing
investments are subject to short-term fluctuations although over longer
periods the actual cash flows have been well in line with the
projections. During the six months realisations ran ahead of drawdowns
and the Company ended the period with cash balances totalling $200.4
million.
The Investment Manager expects that existing commitments will result in
a large part of the available cash being invested over the next two to
three years. The Company aims to optimise growth in NAV by investing in
private assets whilst maintaining a balance sheet which is positioned to
withstand unforeseen shocks. To that end the Company has the benefit of
committed bank credit lines totalling $500 million available until
December 2020. As I wrote in May, it is intended that those facilities
will be regularly renewed and extended such that facilities would be
available for at least the following 36 months. Indeed, the possibility
of a longer maturity date is being actively explored to provide even
more flexibility in the event of unforeseen events.
None of the scenario projections provided by the Investment Manager
suggest that material debt will actually be incurred in the Company's
strategic planning period which currently runs to 2022. Thus, as has
been the case since the launch of the Company in 2007, debt facilities
are primarily intended to bridge possible short-term cash flow
disparities although, as in the past, they may be used to finance
participation in secondary opportunities that may arise in the future.
Annual General Meeting
The Board is grateful to all those shareholders who voted their shares
at the AGM in July. Approximately 59% of all shares were voted. All the
resolutions were passed, mostly with votes in favour materially
exceeding 90%. It is very encouraging to know that a majority of the
owners of the outstanding shares, whether voted or not, have shown their
support for the direction that the Board and the Investment Manager have
set for the Company.
As the Company noted when releasing the results of the AGM, two
resolutions which related to the reappointment of the Auditors, Ernst &
Young, were passed albeit with less overwhelming majorities. On
investigation we became aware that some shareholders were not
comfortable seeing additional fees paid to Ernst & Young for tax
services amounting to nearly 80% of the audit fee. Those fees were
necessarily incurred because of the structure by which the Company holds
certain of its investments. It is a legal requirement that the Company
makes tax returns in many states in the US as well as a federal return.
These tax returns cannot be bypassed and the Company has to employ
professionals to undertake the necessary returns. However, in the light
of shareholder concern the Company has recently agreed that from 2018
onwards tax services will no longer be provided by the Company's auditor
but instead by a different firm. This will result in a substantial
reduction in the non-audit fees paid to Ernst & Young.
HVPE's Ten-Year Anniversary
The Company was launched with a NAV of $830 million on the Amsterdam
Stock Exchange in December 2007 as the financial world was heading into
the worst financial crisis for many decades. The Company weathered that
turbulent period without altering in any way its investment strategy and
without having to sell assets at a disadvantageous time nor raise any
emergency capital to shore up its balance sheet. So as the Company
approaches its ten-year anniversary its assets are nearly $1,600 million,
it is listed on the Premium Market of the London Stock Exchange and
included in the FTSE 250 Index. It is managed by one of the leading
global managers of private assets. Its shares trade regularly every day
and its size and liquidity make it one of the premier listed vehicles
through which all investors, from small individual personal holders
through to some of the world's largest investment institutions, can
access an asset class the performance of which has historically
materially outperformed listed equities. The Board is very appreciative
of the support for the Company from all shareholders, whether they
acquired their holding at launch in 2007 or have become shareholders
more recently.
The last ten years have delivered a wealth of data which has been put to
work in refining forecasting and validating the Company's proposition.
Once the ten-year statistics are published the Board is confident that
they will show the Company in an excellent light and fit and ready to
serve investors for the next ten years.
Outlook
The world looks increasingly unpredictable. The economic outlook appears
to be one for slower underlying rates of growth in many economies and,
despite the continuing benign conditions, the natural business cycle
will in due course reassert itself. Your Board and Investment Manager
will do their utmost to guard against complacency and continue to strive
for the benefit of all shareholders.
Michael Bunbury
Chairman
27 September 2017
Investment Manager's Review
NAV per Share
The NAV per share has grown steadily over the six months to 31 July
2017, increasing by 8.2% from $18.47 to $19.98. There was a recovery in
the performance of early venture investments in the period, with growth
of 10.3% marking a sharp turnaround from the negative performance
reported in the year ended 31 January 2017. Strong gains were made in
the direct co-investment portfolio, which saw a value increase of 11.0%,
as well as the European assets, which returned 15.0%, aided by foreign
exchange tailwinds. As might be expected given HVPE's substantial US
exposure, in absolute terms the US assets (60% of the Investment
Portfolio value) were the most significant contributor to growth in the
period.
HVPE holds 41 HarbourVest funds and two secondary co-investments in
total. Of these, the five largest drivers of NAV per share growth in the
six months to 31 July are shown individually in the chart below.
// Fund VIII Buyout, a 2006 vintage US buyout fund-of-funds programme,
is the largest holding in the portfolio, and is now in the mature phase.
Continued strong realisations from this fund helped to deliver growth of
8.9% on HVPE's $137 million holding, adding $0.16 to NAV per share.
// Dover Street VIII, a 2012 vintage global secondary fund, is currently
in the growth phase. This fund delivered a return of 8.8% on HVPE's $130
million holding, adding $0.15 to NAV per share.
// The 2007 Direct global co-investment fund, now maturing, delivered
the strongest growth rate among the top five funds at 21.4% in the
period. HVPE's $54 million holding generated growth in NAV per share of
$0.14.
// A similar fund from a later vintage, 2013 Direct, is just entering
the growth phase and contributed a further $0.12.
// HIPEP VI, a 2008 vintage international fund-of-funds programme, is
nearing the end of the growth phase and contributed $0.10 to NAV per
share.
A notable contribution from a fund outside the top five was the $0.07 in
NAV per share delivered by Fund X Buyout, a 2015 vintage US buyout
fund-of-funds programme still in the early part of its investment phase.
HVPE's holding in this fund grew by 18.8% in the period, due primarily
to unrealised value gains on the new underlying investments.
New Commitments
In November 2016 HVPE's Strategic Asset Allocation ("SAA") targets were
amended with a view to optimising NAV growth over the long term. A
review of the current portfolio composition with reference to these
targets is included on page 23 of the Semi-Annual Report. HVPE makes
commitments to new HarbourVest funds in such a way that the portfolio
composition is expected to converge on these targets over a rolling
five-year period. New commitments in the six months to 31 July 2017 were
focused on the 2017 Global Fund and the international fund-of-funds
programme (HIPEP VIII). The Company also committed $10.2 million to
participate, alongside other HarbourVest funds, in the acquisition of a
portfolio of seven venture capital funds managed by Asia-based venture
managers. The funds in this portfolio span a range of vintage years from
2005 to 2015.
Cash Flows
Commitments to HarbourVest funds are drawn down over a number of years
as investments are made by, or alongside, underlying managers. In
contrast to the year ended 31 January 2017, when investments outpaced
realisations, the six months to 31 July 2017 has been characterised by a
positive net cash flow trend, with HVPE receiving $149 million in
distributions while investing $119 million. This reflects the wider
private equity market, where exit activity has outpaced the rate of new
investment. In the HVPE portfolio, realisations have been driven by the
US and European primary funds, as well as the global secondary funds,
while investments have been concentrated in the global fund programme
and the more recent secondary funds.
Market Environment
The private markets continue to be favourable for sellers, with M&A and
IPO activity continuing at a strong pace. Partly as a consequence of the
resulting cash flow to investors, fundraising has gained momentum
through the year, with record amounts raised globally in 2017 to-date(1)
. However, levels of uninvested commitments ("dry powder") remain high,
meaning competition for assets is strong and prices are being driven
upwards. In this environment, private equity managers are scrutinising
deals in more depth to ensure that the entry valuation is fully
justified by the investment case, and that good returns are achievable
even under the assumption of a declining valuation multiple through to
exit.
Across all three of HarbourVest's main strategies, deal flow in the six
months to 31 July 2017 has been strong. In the fund-of-funds business,
HarbourVest continues to secure commitments to over-subscribed funds as
a result of its strong and enduring relationships with management
groups. The secondaries market continues to evolve, with HarbourVest at
the leading edge, focusing on the more complex end of the market to
source attractive deals outside of the highly competitive traditional
space. The direct co-investment team continues to originate a robust
pipeline of deal opportunities, leveraging HarbourVest's relationships
with leading managers.
With 35 years' experience, HarbourVest has invested through numerous
market cycles and through previous episodes of political uncertainty.
HVPE commits to a variety of HarbourVest funds which, in turn, invest
over multi-year periods thereby ensuring that capital is put to work at
a measured pace in a diverse range of investments. This approach has
delivered strong returns for HVPE shareholders over a period approaching
ten years, and the strategy remains fundamentally unchanged.
Principal Risks and Uncertainties
Risk Factors
The Board and the Investment Manager have identified a number of risks
to the Company's business. A comprehensive risk assessment process is
undertaken on a quarterly basis to re-evaluate the impact and
probability of each risk materialising and the financial or strategic
impact of the risk. Those risks which have a higher probability and a
signficant potential impact on performance, strategy, reputation or
operations are identified below as principal risks faced by the Company
over the next six months.
The Company's Board is responsible for monitoring and oversight of the
risks facing the Company and conducts a structured review of these risks,
and associated mitigants, on at least a quarterly basis.
Risk Description Mitigating Factor
Foreign Exchange Approximately 20% of the value of HVPE's total assets The Board and the Investment Manager monitor the foreign
Risks are denominated in non-US dollar currencies, primarily exchange risk experienced by the Company and will
euros. Foreign currency movement affects the Company's consider implementing hedging arrangements if deemed
investments, borrowings on the multi-currency credit appropriate.
facility, and unfunded commitments.
Public Public markets in many developed countries are trading Both the Board and the Investment Manager actively
Market Risks close to all-time highs. While economic fundamentals monitor the Company's NAV, and exposure to individual
have improved, structural imbalances remain. The Company public markets is partially mitigated by the geographical
makes venture capital and buyout investments in companies diversification of the portfolio. The Board notes
where operating performance is affected by the broader that it has limited ability to mitigate public market
economic environment within the countries in which risk.
those companies operate. While these companies are Stress testing takes place as part of the portfolio
generally privately owned, their valuations are, in composition process to model the effect of different
most cases, influenced by public market comparables. macro-economic scenarios to provide comfort to the
In addition, approximately 12% of the Company's portfolio Board that the balance of risk and reward is appropriate
is made up of publicly traded securities whose values in the event of a downturn in public markets.
increase or decrease alongside public markets. Should
global public markets decline or the economic situation
deteriorate, it is likely that the Company's NAV could
be negatively affected.
Balance The Company's balance sheet strategy and a willingness The Board has put in place a monitoring programme
Sheet Risks to utilise leverage to finance new investments is with a defined Total Commitment Ratio cap, determined
described on page 65 of the Annual Report. The Company with reference to portfolio models, in order to mitigate
also continues to maintain an over-commitment strategy against the requirement to sell assets at a discount
and may draw on its credit facility to bridge periods during periods of NAV decline. Both the Board and
of negative cash flow when cash calls on investments the Investment Manager actively monitor these metrics
are greater than realisations. The level of potential and will take appropriate action as required to attempt
borrowing available under the credit facility could to mitigate these risks.
be negatively affected by declining NAVs. Therefore,
in a period of declining NAVs, reduced realisations,
and rapid substantial cash calls, the Company's net
leverage ratio could increase beyond an appropriate
level, resulting in a need to sell assets.
Borrowing Risk While it is currently undrawn, the Company depends The Board monitors developments in credit markets
on the availability of its credit facility in order and intends to renew the credit facility regularly
to operate an overcommitment strategy. The Company's with the aim that there should always be a minimum
lenders may be unable or unwilling to renew or extend of 36 months of unexpired facility available. The
the Company's credit facility. Board is also actively considering options for other
sources of financing.
Reliance on The Company is dependent on its Investment Manager This risk is mitigated by the Board monitoring the
HarbourVest and HarbourVest's investment professionals. With the performance of the Investment Manager on an ongoing
exception of the 2011 Absolute investment and 2012 basis, including through regular reports and visits
Conversus investment, nearly all of the Company's to the Investment Manager's London and Boston offices.
assets, save for cash balances and short-term liquid In addition, the Audit Committee reviewed a recent
investments, are invested in HarbourVest funds. ISAE 3402 (SOC1) report from the Investment Manager
Additionally, HarbourVest employees play key roles to assess the controls environment of the Investment
in the operation and control of the Company. The departure Manager. Succession planning at the Investment Manager
or reassignment of some or all of HarbourVest's professionals is monitored by the Board of the Company.
could prevent the Company from achieving its investment
objectives.
Trading Liquidity Any ongoing or substantial discount to NAV has the The Company's shares are admitted to trading on the
and Price potential to damage the Company's reputation and to Main Market of the London Stock Exchange to appeal
cause shareholder dissatisfaction. to a wide variety of shareholders and to increase
The five largest shareholders represent approximately the liquidity of the Company's shares. In addition,
45% of the Company's shares in issue. This may contribute the Board continues to monitor the discount to NAV
to a lack of liquidity and widening discount. Also, and will consider appropriate solutions to address
in the event that a substantial shareholder chose any ongoing or substantial discount to NAV. The Company
to exit the share register, this may have an effect has attracted new shareholders and the concentration
on the discount to NAV. of shares held by the five largest shareholders has
increased from 45% to 47% in the six months under
review.
Popularity of Investor sentiment may change towards the Listed Private The Board has set the Investment Manager the objective
Listed Private Equity Sector, resulting in a widening of the Company's of ensuring that the widest possible variety of investors
Equity Sector share price discount to NAV. are informed about the Company's performance and proposition
in order to mitigate against this. In addition, the
Investment Manager actively participates in the marketing
of the sector. The size of the Company means that
its own success will contribute to the popularity
of the sector as a whole.
Directors' Report
Interim Management Report
A description of the important events that have occurred during the
first six months of the financial year and their impact on the
performance of the Company as shown in the financial statements are
given in the Chairman's Statement , the Investment Manager's Review, and
the Notes to the financial statements, and are incorporated here by
reference.
The principal risks and uncertainties facing the Company and how the
Company seeks to mitigate them can be found above. These remain
unchanged from those disclosed in the Company's most recent Annual
Report for the year ended 31 January 2017.
There were no material related party transactions which took place in
the first six months of the financial year, other than those disclosed
in Note 9 to the financial statements. There have been no changes to the
related party transactions described in the last Annual Report that
could have a material effect on the financial position or performance of
the Company in the first six months of the current financial year.
This half-yearly financial report has not been audited or reviewed by
auditors pursuant to the Auditing Practices Board guidance on Review of
Interim Financial Information.
Going Concern
The performance of the investments held by the Company over the
reporting period are described in Note 4 to the financial statements and
the outlook for the future is described in the Chairman's Statement. The
Company's financial position, its cash flows and liquidity position are
set out in the financial statements and the Company's financial risk
management objectives and policies, details of its financial instruments
and its exposures to market risk, credit risk, interest rate risk and
currency risk are set out in Note 2 of the financial statements in the
Company's Annual Report and are unchanged. After making due enquiries,
the Directors have a reasonable expectation that the Company has
adequate resources to continue in operational existence for the
foreseeable future. Accordingly, they continue to adopt the going
concern basis in the preparation of this interim financial report.
Statement of Directors' Responsibilities in Respect of the Financial
Statements
In accordance with the Disclosure Guidance and Transparency Rules
("DTR"), the directors of the Company confirm to the best of their
knowledge that:
// the condensed set of financial statements, which have been prepared
in accordance with US Generally Accepted Accounting Principles gives a
true and fair view of the assets, liabilities, financial position, and
profit or loss of the Company, or the undertakings included in the
consolidation as a whole as required by DTR 4.2.4 R;
// the interim management report includes a fair review of the
information required by DTR 4.2.7 R; and
// the interim management report includes a fair review of the
information concerning related parties transactions required by DTR
4.2.8 R.
By order of the Board
Sir Michael Bunbury
Chairman
Keith Corbin
Chairman of the Audit Committee
27 September 2017
Unaudited Consolidated Financial Statements
Consolidated Statements of Assets and Liabilities
At 31 July 2017 and 31 January 2017
31 July 31 January
2017 2017
In US Dollars (Unaudited) (Audited)
ASSETS
Investments 1,391,743,499 1,295,753,465
Cash and equivalents 200,422,562 175,195,209
Other assets 4,711,102 5,275,923
Total assets 1,596,877,163 1,476,224,597
LIABILITIES
Accounts payable and accrued expenses 1,210,103 1,119,843
Accounts payable to HarbourVest Advisers L.P. (Note
9) 266,906 246,933
Total liabilities 1,477,009 1,366,776
NET ASSETS $1,595,400,154 $1,474,857,821
NET ASSETS CONSIST OF
Ordinary shares, Unlimited shares authorised, 79,862,486
shares issued and outstanding at 31 July 2017 and
31 January 2017, no par value 1,595,400,154 1,474,857,821
NET ASSETS $1,595,400,154 $1,474,857,821
Net asset value per share for ordinary shares $19.98 $18.47
The Unaudited Consolidated Financial Statements were approved by the
Board on 27 September 2017 and were signed on its behalf by:
Michael Bunbury Keith Corbin
Chairman Chairman of the Audit Committee
Consolidated Statements of Operations
For the Six Month Period Ended 31 July 2017 and the Year Ended 31
January 2017
31 July 31 January
2017 2017
In US Dollars (Unaudited) (Audited)
REALISED AND UNREALISED GAINS (LOSSES) ON INVESTMENTS
Net realised gain (loss) on investments 84,820,920 88,816,643
Net change in unrealised appreciation (depreciation)
on investments 40,919,047 58,688,595
NET GAIN ON INVESTMENTS 125,739,967 147,505,238
INVESTMENT INCOME
Interest from cash and equivalents 882,100 982,036
EXPENSES
Non-utilisation fees (Note 6) 2,890,972 4,713,889
Management fees (Note 3) 859,268 1,735,159
Investment services (Note 3) 679,681 1,112,274
Financing expenses 620,282 1,237,357
Professional fees 342,755 629,155
Directors' fees and expenses (Note 9) 286,580 572,744
Tax expenses (refund) (15) 250,546
Non-recurring listing expenses - 12,710
Other expenses 400,211 671,390
Total expenses 6,079,734 10,935,224
NET EXPENSE (5,197,634) (9,953,188)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $120,542,333 $137,552,050
The accompanying notes are an integral part of the consolidated
financial statements.
Consolidated Statements of Changes in Net Assets
For the Six Month Period Ended 31 July 2017 and the Year Ended 31
January 2017
31 July 31 January
2017 2017
In US Dollars (Unaudited) (Audited)
INCREASE IN NET ASSETS FROM OPERATIONS
Net realised gain (loss) on investments 84,820,920 88,816,643
Net change in unrealised appreciation
(depreciation) 40,919,047 58,688,595
Net investment loss (5,197,634) (9,953,188)
Net increase in net assets resulting from
operations 120,542,333 137,552,050
NET ASSETS AT BEGINNING OF PERIOD 1,474,857,821 1,337,305,771
NET ASSETS AT OF PERIOD $1,595,400,154 $1,474,857,821
The accompanying notes are an integral part of the consolidated
financial statements.
Consolidated Statements of Cash Flows
For the Six Month Period Ended 31 July 2017 and the Year Ended 31
January 2017
31 July 31 January
2017 2017
In US Dollars (Unaudited) (Audited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations 120,542,333 137,552,050
Adjustments to reconcile net increase in net assets
resulting from operations
to net cash (used in) provided by operating activities:
Net realised (gain) loss on investments (84,820,920) (88,816,643)
Net change in unrealised (appreciation) depreciation (40,919,047) (58,688,595)
Contributions to private equity investments (119,080,548) (269,770,234)
Distributions from private equity investments 148,830,481 251,009,550
Other 675,054 (516,298)
Net cash (used in) provided by operating activities 25,227,353 (29,230,170)
NET (DECREASE) INCREASE IN CASH AND EQUIVALENTS 25,227,353 (29,230,170)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 175,195,209 204,425,379
CASH AND EQUIVALENTS AT OF PERIOD $200,422,562 $175,195,209
The accompanying notes are an integral part of the consolidated
financial statements.
Consolidated Schedule of Investments
At 31 July 2017 (Unaudited)
In US Dollars
Unfunded Amount Distributions Fair Value
US Funds Commitment Invested (1) Received Fair Value as a % of Net Assets
HarbourVest Partners V-Partnership Fund L.P. 2,220,000 46,709,079 45,688,697 1,583,625 0.1
HarbourVest Partners VI-Direct Fund L.P. 1,312,500 46,722,408 38,404,878 6,016,764 0.4
HarbourVest Partners VI-Partnership Fund L.P. 5,175,000 204,623,049 219,172,417 20,651,455 1.3
HarbourVest Partners VI-Buyout Partnership Fund L.P. 450,000 8,633,048 8,960,310 517,949 0.0
HarbourVest Partners VII-Venture Partnership Fund
L.P.(2) 2,318,750 135,290,448 156,492,828 46,708,896 2.9
HarbourVest Partners VII-Buyout Partnership Fund L.P.(2) 3,850,000 74,417,291 86,417,718 16,450,267 1.0
HarbourVest Partners VIII-Cayman Mezzanine and Distressed
Debt Fund L.P. 2,000,000 48,201,553 49,320,399 16,585,911 1.0
HarbourVest Partners VIII-Cayman Buyout Fund L.P. 13,750,000 239,008,801 257,617,272 123,818,514 7.8
HarbourVest Partners VIII-Cayman Venture Fund L.P. 1,000,000 49,191,736 46,802,299 35,908,742 2.2
HarbourVest Partners 2007 Cayman Direct Fund L.P. 2,250,000 97,876,849 132,302,768 38,433,935 2.4
HarbourVest Partners IX-Cayman Buyout Fund L.P. 26,092,500 45,188,226 17,244,775 47,378,209 3.0
HarbourVest Partners IX-Cayman Credit Opportunities
Fund L.P. 4,687,500 7,861,193 3,206,587 7,204,079 0.5
HarbourVest Partners IX-Cayman Venture Fund L.P. 10,500,000 59,825,714 17,951,909 66,074,229 4.1
HarbourVest Partners 2013 Cayman Direct Fund L.P. 5,478,996 94,881,486 13,792,883 130,719,347 8.2
HarbourVest Partners Cayman Cleantech Fund II L.P. 11,900,000 8,155,952 126,588 8,996,664 0.6
HarbourVest Partners X Buyout Feeder Fund L.P. 24,280,000 27,747,552 2,090,570 34,693,934 2.2
HarbourVest Partners X Venture Feeder Fund L.P. 122,470,000 25,583,838 1,110,000 29,456,221 1.8
HarbourVest Partners Mezzanine Income Fund L.P. 37,155,000 13,066,579 1,100,360 14,688,012 0.9
Total US Funds 476,890,246 1,232,984,802 1,097,803,258 645,886,753 40.4
Consolidated Schedule of Investments continued
At 31 July 2017 (Unaudited)
In US Dollars
Unfunded Amount Distributions Fair Value
International/Global Funds Commitment Invested (1) Received Fair Value as a % of Net Assets
HarbourVest International Private Equity Partners
III-Partnership Fund L.P. 3,450,000 147,728,557 148,029,855 958,860 0.1
HarbourVest International Private Equity Partners
IV- Direct Fund L.P. - 61,452,400 52,518,672 3,694,839 0.2
HarbourVest International Private Equity Partners
IV-Partnership Fund L.P. 3,125,000 126,647,051 142,528,965 9,328,033 0.6
HIPEP V - 2007 Cayman European Buyout Companion Fund
L.P.(4) 1,685,708 63,880,350 59,814,038 25,366,368 1.6
Dover Street VII Cayman L.P.(3) 4,250,000 95,750,000 112,058,060 25,231,248 1.6
HIPEP VI-Cayman Partnership Fund L.P. (5) 13,618,300 110,254,700 39,930,865 117,153,800 7.3
HIPEP VI-Cayman Asia Pacific Fund L.P. 4,250,000 45,937,431 16,482,684 49,278,552 3.1
HIPEP VI-Cayman Emerging Markets Fund L.P. 5,025,000 25,034,489 4,818,697 23,528,181 1.5
HVPE Avalon Co-Investment L.P. 1,643,962 85,135,136 117,309,747 6,263,046 0.4
Dover Street VIII Cayman L.P. 26,100,000 154,024,389 98,293,031 125,467,849 7.9
HVPE Charlotte Co-Investment L.P. - 93,894,011 117,215,233 37,819,640 2.4
HarbourVest Global Annual Private Equity Fund L.P. 40,800,000 59,201,202 5,586,910 70,924,456 4.4
HIPEP VII Partnership Feeder Fund L.P. 84,062,500 40,937,500 1,542,113 47,459,587 3.0
HIPEP VII Asia Pacific Feeder Fund L.P. 17,925,000 12,075,000 384,028 13,839,440 0.9
HIPEP VII Emerging Markets Feeder Fund L.P. 12,700,000 7,300,000 371,359 7,476,691 0.5
HIPEP VII Europe Feeder Fund L.P. (6) 48,866,011 24,401,828 2,657,535 26,442,645 1.6
HarbourVest Canada Parallel Growth Fund L.P.(7) 24,513,786 1,081,968 - 1,074,241 0.1
HarbourVest 2015 Global Fund L.P. 53,500,000 46,517,309 4,416,515 51,788,170 3.2
HarbourVest 2016 Global AIF L.P. 68,000,000 32,026,107 2,098,503 38,337,068 2.4
HarbourVest Partners Co-Investment IV AIF L.P. 76,500,000 23,500,000 - 26,887,918 1.7
Dover Street IX Cayman L.P. 87,000,000 13,000,000 2,402,554 15,781,102 1.0
HarbourVest Real Assets III Feeder L.P. 42,500,000 7,500,000 542,545 8,245,838 0.5
HarbourVest 2017 Global AIF L.P. 69,999,300 700 - 772,572 0.0
HIPEP VIII Partnership AIF Fund L.P. 81,999,180 820 - 452,637 0.0
Secondary Overflow III Tranche B 2,165,760 7,992,077 - 12,283,968 0.8
Total International/Global Funds 773,679,507 1,285,273,025 929,001,909 745,856,746 46.8
TOTAL INVESTMENTS $1,250,569,753 $2,518,257,827 $2,026,805,167 $1,391,743,499 87.2%
(1) 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) Includes ownership interest in Dover Street VII (AIV 1) Cayman L.P.
(4) Fund denominated in euros. Commitment amount is EUR47,450,000.
(5) Fund denominated in euros. Commitment amount is EUR100,000,000.
(6) Fund denominated in euros. Commitment amount is EUR63,000,000.
(7) Fund denominated in Canadian dollars. Commitment amount is
C$32,000,000.
The accompanying notes are an integral part of the consolidated
financial statements.
In US Dollars
Fair Value
Unfunded Amount Distributions as a % of
US Funds Commitment Invested (1) Received Fair Value Net Assets
HarbourVest Partners V-Partnership Fund L.P. 2,220,000 46,709,079 5,688,697 1,617,558 0.1
HarbourVest Partners VI-Direct Fund L.P. 1,312,500 46,722,408 38,404,878 6,541,186 0.4
HarbourVest Partners VI-Partnership Fund L.P. 5,175,000 204,623,049 215,470,151 24,361,699 1.7
HarbourVest Partners VI-Buyout Partnership Fund L.P. 450,000 8,633,048 8,760,808 686,998 0.1
HarbourVest Partners VII-Venture Partnership Fund
L.P. (2) 2,318,750 135,290,448 147,179,691 56,254,486 3.8
HarbourVest Partners VII-Buyout Partnership Fund L.P.
(2) 3,850,000 74,417,291 84,512,312 17,823,287 1.2
HarbourVest Partners VIII-Cayman Mezzanine and Distressed
Debt Fund L.P. 2,000,000 48,201,553 46,609,133 18,212,867 1.2
HarbourVest Partners VIII-Cayman Buyout Fund L.P. 15,000,000 237,758,801 232,097,301 137,212,744 9.3
HarbourVest Partners VIII-Cayman Venture Fund L.P. 1,000,000 49,191,736 43,534,496 37,732,362 2.6
HarbourVest Partners 2007 Cayman Direct Fund L.P. 2,250,000 97,876,849 106,746,408 53,571,256 3.6
HarbourVest Partners IX-Cayman Buyout Fund L.P. 28,222,500 43,058,226 11,870,827 46,387,135 3.1
HarbourVest Partners IX-Cayman Credit Opportunities
Fund L.P. 4,812,500 7,736,193 2,653,130 7,107,749 0.5
HarbourVest Partners IX-Cayman Venture Fund L.P. 12,250,000 58,075,714 14,317,235 64,720,636 4.4
HarbourVest Partners 2013 Cayman Direct Fund L.P. 5,478,996 94,881,486 9,832,883 125,855,850 8.5
HarbourVest Partners Cayman Cleantech Fund II L.P. 12,750,000 7,305,952 126,588 7,435,728 0.5
HarbourVest Partners X Buyout Feeder Fund L.P. 230,580,000 21,447,552 - 25,047,983 1.7
HarbourVest Partners X Venture Feeder Fund L.P. 133,940,000 14,113,838 - 16,009,714 1.1
HarbourVest Partners Mezzanine Income Fund L.P. 43,655,000 6,566,579 646,022 6,891,243 0.5
Total US Funds 507,265,246 1,202,609,802 1,008,450,560 653,470,481 44.3
In US Dollars
Fair Value
Unfunded Amount Distributions as a % of
International/Global Funds Commitment Invested (1) Received Fair Value Net Assets
HarbourVest International Private Equity Partners
III-Partnership Fund L.P. 3,450,000 147,728,557 146,925,855 2,024,086 0.1
HarbourVest International Private Equity Partners
IV- Direct Fund L.P. - 61,452,400 52,518,672 2,136,113 0.1
HarbourVest International Private Equity Partners
IV-Partnership Fund L.P. 3,125,000 126,647,051 139,809,839 11,404,813 0.8
HIPEP V - 2007 Cayman European Buyout Companion Fund
L.P. (4) 1,537,095 63,880,348 50,056,237 31,273,616 2.1
Dover Street VII Cayman L.P. (3) 4,250,000 95,750,000 108,286,143 29,091,472 2.0
HIPEP VI-Cayman Partnership Fund L.P. (5) 15,657,100 106,947,200 36,623,365 103,919,679 7.0
HIPEP VI-Cayman Asia Pacific Fund L.P. 6,500,000 43,687,431 13,909,704 45,764,584 3.1
HIPEP VI-Cayman Emerging Markets Fund L.P. 6,225,000 23,834,490 4,818,697 20,679,116 1.4
HVPE Avalon Co-Investment L.P. 1,643,962 85,135,136 117,309,747 7,883,332 0.5
Dover Street VIII Cayman L.P. 29,700,000 150,424,390 78,069,738 130,150,150 8.8
HVPE Charlotte Co-Investment L.P. - 93,894,011 109,170,334 43,265,096 2.9
HarbourVest Global Annual Private Equity Fund L.P. 43,300,000 56,701,202 5,586,910 62,735,835 4.3
HIPEP VII Partnership Feeder Fund L.P. 91,562,500 33,437,500 1,035,117 35,274,466 2.4
HIPEP VII Asia Pacific Feeder Fund L.P. 20,700,000 9,300,000 220,628 10,028,009 0.7
HIPEP VII Emerging Markets Feeder Fund L.P. 15,800,000 4,200,000 152,570 4,126,230 0.3
HIPEP VII Europe Feeder Fund L.P. (6) 47,108,975 21,646,444 1,566,975 21,397,109 1.5
HarbourVest Canada Parallel Growth Fund L.P. (7) 23,702,325 857,901 - 877,777 0.1
HarbourVest 2015 Global Fund L.P. 61,500,000 38,517,309 2,061,041 41,592,379 2.8
HarbourVest 2016 Global AIF L.P. 90,000,000 10,026,107 - 13,677,257 0.9
HarbourVest Partners Co-Investment IV AIF L.P. 81,500,000 18,500,000 - 18,485,772 1.3
Dover Street IX Cayman L.P. 96,000,000 4,000,000 1,402,554 4,920,061 0.3
HarbourVest Real Assets III Feeder L.P. 50,000,000 - - 1,576,032 0.1
Total International/Global Funds 693,261,957 1,196,567,477 869,524,126 642,282,984 43.5
TOTAL INVESTMENTS $1,200,527,203 $2,399,177,279 $1,877,974,686 $1,295,753,465 87.8
1 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 Includes ownership interest in Dover Street VII (AIV 1) Cayman L.P.
4 Fund denominated in euros. Commitment amount is EUR47,450,000.
5 Fund denominated in euros. Commitment amount is EUR100,000,000.
6 Fund denominated in euros. Commitment amount is EUR63,000,000.
7 Fund denominated in Canadian dollars. Commitment amount is
C$32,000,000.
Notes to the Consolidated Financial Statements
NOTE 1 COMPANY ORGANISATION AND INVESTMENT OBJECTIVE
HarbourVest Global Private Equity Limited (the "Company" or "HVPE") is a
closed-end investment company registered with the Registrar of Companies
in Guernsey under The Companies (Guernsey) Law, 2008 (as amended). The
Company's registered office is Ground Floor, Dorey Court, Admiral Park,
St Peter Port, Guernsey GY1 2HT.
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 is
intended to invest in and alongside existing and newly-formed
HarbourVest funds. HarbourVest is a global private equity fund-of-funds
manager and typically invests capital in primary partnerships, secondary
investments, and direct investments across vintage years, geographies,
industries, and strategies.
Operations of the Company commenced on 6 December 2007, following the
initial global offering of the Class A ordinary shares.
Share Capital
At 31 July 2017, the Company's ordinary shares were listed on the London
Stock Exchange under the symbol "HVPE". At 31 July 2017, there were
79,862,486 ordinary shares issued and outstanding. The ordinary 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 (as amended).
Dividends will be paid to shareholders pro rata to their shareholdings.
The ordinary shareholders must approve any amendment to the Memorandum
and Articles of Incorporation. The approval of 75% of the ordinary
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 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 Fund
Administrator, under advice to the directors, pursuant to service
agreements with those parties. The Investment Manager is responsible for,
among other things, selecting, acquiring, and disposing of the Company's
investments, carrying out financing, cash management, and risk
management activities, providing investment advisory services, including
with respect to HVPE's investment policies and procedures, and arranging
for personnel and support staff of the Investment Manager to assist in
the administrative and executive functions of the Company.
Directors
The directors are responsible for the determination of the investment
policy of the Company on the advice of the Investment Manager and have
overall responsibility for the Company's activities. This includes the
periodic review of the Investment Manager's compliance with the
Company's investment policies and procedures and the approval of certain
investments. A majority of directors must be independent directors and
not affiliated with HarbourVest or any affiliate of HarbourVest.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting policies have been applied consistently as presented in the
latest audited accounts. Certain comparative amounts have been
reclassified to conform to the current period's presentation.
NOTE 3 MATERIAL AGREEMENTS AND RELATED FEES
Administrative Agreement
The Company has retained JTC Group ("JTC") as Company Secretary and
Administrator. Fees for these services are paid as invoiced by JTC and
include an administration fee of GBP14,372 per annum, a secretarial fee
of GBP30,631 per annum, an additional value fee equal to 1/12 of 0.005%
of the net asset value of the Company above $200 million as at the last
business day of each month, and reimbursable expenses.
During the period ended 31 July 2017, fees of $64,337 were incurred to
JTC and are included as other expenses in the Consolidated Statements of
Operations.
Registrar
The Company has retained Capita as share registrar. Fees for this
service include a base fee of GBP8,813, corporate portal fee of GBP1,550
per annum, register update requests of GBP5,771, proxy evaluation of
GBP1,608, plus other miscellaneous expenses. During the period ended 31
July 2017, registrar fees of $34,408 were incurred and are included as
other expenses in the Consolidated Statements of Operations.
Independent Auditor's Fees
For the period ended 31 July 2017, $67,700 has been accrued for
auditor's fees and is included in professional fees in the Consolidated
Statements of Operations. Non-audit fees paid to the Auditor by the
Company were nil. The Auditor was paid non-audit fees of $53,725 by the
Investment Manager, in relation to tax services provided by the
independent Auditor for the period ended 31 July 2017, which were
reimbursed by the Company.
Investment Management Agreement
The Company has retained HarbourVest Advisers L.P. as the Investment
Manager. The Investment Manager is reimbursed for costs and expenses
incurred on behalf of the Company in connection with the management and
operation of the Company. 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 six months to 31 July 2017, reimbursements for
services provided by the Investment Manager were $679,681.
During the period ended 31 July 2017, HVPE had two parallel investments:
HarbourVest Acquisition S.à.r.l. (via HVPE Avalon Co-Investment
L.P.) and HarbourVest Structured Solutions II, L.P. (via HVPE Charlotte
Co-Investment L.P.). Management fees paid for the parallel investments
made by the Company were consistent with the fees charged by the funds
alongside which the parallel investments were made during the period
ended 31 July 2017 and the year ended 31 January 2017. Management fees
included in the Consolidated Statements of Operations are shown in the
table below:
31 July 31 January
2017 2017
(Unaudited) (Audited)
HVPE Avalon Co-Investment L.P. 466,921 938,238
HVPE Charlotte Co-Investment L.P. 392,347 796,921
Total Management Fees $859,268 $1,735,159
For the period ended 31 July 2017, management fees on the HVPE Avalon
Co-Investment L.P. investment were calculated based on a weighted
average effective annual rate of 1.08% on committed capital to the
parallel investment. For the period ended 31 July 2017, management fees
on the HVPE Charlotte Co-Investment L.P. investment were calculated
based on a weighted average effective annual rate of 0.95% on capital
originally committed (0.90% 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
United States, 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.
Level 3 - Inputs that are unobservable. Generally, the majority of the
Company's investments are valued utilising unobservable inputs, and are
therefore classified within Level 3.
Level 3 partnership investments include limited partnership interests in
other investment partnerships. For investments in limited partnerships
and other pooled investment vehicles, the Company encourages all
managers to apply fair value principles in their financial reports that
are consistent with US Generally Accepted Accounting Principles. Inputs
used to determine fair value include financial statements provided by
the investment partnerships which typically include fair market value
capital account balances. In reviewing the underlying financial
statements and capital account balances, the Company considers
compliance with authoritative guidance on fair value measurements, the
currency in which the investment is denominated, and other information
deemed appropriate. If the Company shall in good faith determine that a
manager is not reporting fair value consistent with US Generally
Accepted Accounting Principles, the Company shall use best efforts to
undertake its own valuation analysis using fair market value principles
and adjust such value so it is in accordance with the authoritative
guidance. Income derived from investments in partnerships is recorded
using the equity pick-up method.
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.
The following table summarises the Company's investments that were
accounted for at fair value by level within the fair value hierarchy:
Level
Level 1 2 Level 3 Total
Balance at 31 January 2016 $- $- $1,129,487,543 $1,129,487,543
Contributions to investments 269,770,234 269,770,234
Net realised gain (loss) on investments 29,438 88,787,205 88,816,643
Net change in unrealised appreciation (depreciation)
on investments 58,688,595 58,688,595
Distributions received from investments (29,438) (250,980,112) (251,009,550)
Balance at 31 January 2017 $- $- $1,295,753,465 $1,295,753,465
Contributions to investments 119,080,548 119,080,548
Net realised gain (loss) on investments 84,820,920 84,820,920
Net change in unrealised appreciation (depreciation)
on investments 40,919,047 40,919,047
Distributions received from investments (148,830,481) (148,830,481)
Balance at 31 July 2017 $- $- $1,391,743,499 $1,391,743,499
Net change in unrealised gain (loss) on investments
still held at 31 July 2017 $40,919,047
The Company recognises transfers at the current value at the transfer
date. There were no transfers during the period ended 31 July 2017.
Investments include limited partnership interests in private equity
partnerships, all of which carry restrictions on redemption. The
investments are non-redeemable and the Investment Manager estimates a
weighted average remaining life of nine years(1) with a range of one to
18 years remaining.
As of 31 July 2017, the Company had invested $2,574,982,881, or 67.3% of
the Company's committed capital in investments and had received
$2,079,353,992 in cumulative distributions (including dividends from the
formerly held investment HarbourVest Senior Loans Europe).
There were no investment transactions during the period ended 31 July
2017 in which an investment was acquired and disposed of during the
period.
NOTE 5 COMMITMENTS
As of 31 July 2017, the Company has unfunded investment commitments to
other limited partnerships of $1,250,569,753 which are payable upon
notice by the partnerships to which the commitments have been made.
Unfunded investment commitments of $1,161,885,948 are denominated in US
dollars, $64,170,019 are denominated in euros, and $24,513,786 are
denominated in Canadian dollars.
NOTE 6 DEBT FACILITY
On 4 December 2007, the Company entered into an agreement with Lloyds
Bank plc regarding a multi-currency revolving credit facility
("Facility") for an aggregate amount up to $500 million. As of 28
September 2015, the debt facility was amended to include Credit Suisse
as an additional lender to the Company's Facility Agreement with Lloyds
Bank Plc. On 22 December 2016, the Facility was amended to extend the
expiry date to December 2020. Lloyds Bank plc provides $300 million and
Credit Suisse $200 million for a total facility of $500 million.
Amounts borrowed against the Facility accrue interest at an aggregate
rate of the LIBOR/EURIBOR, a margin, and, under certain circumstances, a
mandatory minimum cost. The Facility is secured by the private equity
investments and cash and equivalents of the Company, as defined in the
agreement. Availability of funds under the Facility and interim
repayments of amounts borrowed are subject to certain covenants and
diversity tests applied to the Investment Portfolio of the Company. At
31 July 2017 and 31 January 2017, there was no debt outstanding against
the Facility. Included in other assets at 31 July 2017 are deferred
financing costs of $3,949,613 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 calculated as 90 basis
points per annum from 1 February 2016 to 22 December 2016 and 115 basis
points per annum from 23 December 2016 to 31 July 2017 on the total
facility of $500 million. For the period ended 31 July 2017, $2,890,972
in non-utilisation fees have been incurred.
(1) Weighted average calculation based on current values including
extensions
NOTE 7 FINANCIAL HIGHLIGHTS
For the Six Month Period Ended 31 July 2017 and Year Ended 31 January
2017
31 July 31 January
2017 2017
(Unaudited) (Audited)
Ordinary shares
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $18.47 $16.75
Net realised and unrealised gains 1.57 1.85
Net expense (0.06) (0.13)
Total from investment operations 1.51 1.72
Net asset value, end of period $19.98 $18.47
Market value, end of period $16.78(3) $15.03
Total return at net asset value 8.2%(5) 10.3%
Total return at market value 11.6%(5) 21.1%
RATIOS TO AVERAGE NET ASSETS
Expenses(1) 0.79%(4) 0.78%
Net investment loss (0.68)% (4) (0.71)%
PORTFOLIO TURNOVER(2) 0.0% 0.0%
(1) Does not include operating expenses of underlying investments.
(2) The turnover ratio has been calculated as the number of transactions
divided by the average net assets.
(3) Represents share price of GBP12.70 converted.
(4) Annualised.
(5) Not annualised.
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 ordinary shares as calculated,
monthly in arrears, at each month-end, generally within 15 days.
NOTE 9 RELATED PARTY TRANSACTIONS
Other amounts payable to HarbourVest Advisers L.P. of $266,906 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 July 2017.
HarbourVest fund-of-funds invest in partnerships managed by Sofinnova
Partners, of which director Jean-Bernard Schmidt is a former Managing
Partner.
Board-related expenses, primarily compensation, of $286,580 were
incurred during the period ended 31 July 2017.
NOTE 10 INDEMNIFICATIONS
General Indemnifications
In the normal course of business, the Company may enter into contracts
that contain a variety of representations and warranties and which
provide for general indemnifications. The Company's maximum exposure
under these arrangements is unknown, as this would involve future claims
that may be made against the Company that have not yet occurred. Based
on the prior experience of the Investment Manager, the Company expects
the risk of loss under these indemnifications to be remote.
Investment Manager Indemnifications
Consistent with standard business practices in the normal course of
business, the Company has provided general indemnifications to the
Investment Manager, any affiliate of the Investment Manager and any
person acting on behalf of the Investment Manager or such affiliate when
they act in good faith, in the best interest of the Company. The Company
is unable to develop an estimate of the maximum potential amount of
future payments that could potentially result from any hypothetical
future claim, but expects the risk of having to make any payments under
these general business indemnifications to be remote.
Directors and Officers Indemnifications
The Company's Articles of Incorporation provide that the directors,
managers or other officers of the Company shall be fully indemnified by
the Company from and against all actions, expenses and liabilities which
they may incur by reason of any contract entered into or any act in or
about the execution of their offices, except such (if any) as they shall
incur by or through their own negligence, default, breach of duty or
breach of trust respectively.
NOTE 11 SUBSEQUENT EVENTS
In the preparation of the financial statements, the Company has
evaluated the effects, if any, of events occurring after 31 July 2017 to
27 September 2017, the date that the financial statements were issued.
On 26 September 2017, the Company committed $30 million to HIPEP VIII
Asia Pacific Partnership Fund.
There were no other events or material transactions subsequent to 31
July 2017 that required recognition or disclosure in the financial
statements.
Disclosures
Investments
The companies represented within this report are provided for
illustrative purposes only, as example portfolio holdings. There are
over 7,000 individual companies in the HVPE portfolio, with no one
company comprising more than 2.8% of the entire portfolio.
The deal summaries, general partners (managers), and/or companies shown
within the report are intended for illustrative purposes only. While
they may represent an actual investment or relationship in the HVPE
portfolio, there is no guarantee they will remain in the portfolio in
the future.
Past performance is no guarantee of future returns.
Forward-looking Statements
This report contains certain forward-looking statements.
Forward-looking statements relate to expectations, beliefs, projections,
future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts. In some
cases, forward-looking statements can be identified by terms such as
"anticipate," "believe," "could," "estimate," "expect,"
"intend," "may," "plan," "potential," "should," "will," and
"would," or the negative of those terms or other comparable
terminology. The forward-looking statements are based on the Investment
Manager's beliefs, assumptions, and expectations of future performance
and market developments, taking into account all information currently
available. These beliefs, assumptions, and expectations can change as a
result of many possible events or factors, not all of which are known or
are within the Investment Manager's control. If a change occurs, the
Company's business, financial condition, liquidity, and results of
operations may vary materially from those expressed in forward-looking
statements.
By their nature, forward-looking statements involve known and unknown
risks and uncertainties because they relate to events, and depend on
circumstances, that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. Any forward-looking statements are only made as at the date of this document, and the Investment Manager 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 qualifies any and all of its forward-looking statements by these cautionary factors. Please keep this cautionary note in mind while reading this report. Some of the factors that could cause actual results to vary from those expressed in forward-looking statements include, but are not limited to: // the factors described in this report; // the rate at which HVPE deploys its capital in investments and achieves expected rates of return // HarbourVest's ability to execute its investment strategy, including through the identification of a sufficient number of appropriate investments; // the ability of third-party managers of funds in which the HarbourVest funds are invested and of funds in which the Company may invest through parallel investments to execute their own strategies and achieve intended returns; // the continuation of the Investment Manager as manager of the Company's investments, the continued affiliation with HarbourVest of its key investment professionals, and the continued willingness of HarbourVest to sponsor the formation of and capital raising by, and to manage, new private equity funds; // HVPE's financial condition and liquidity, including its ability to access or obtain new sources of financing at attractive rates in order to fund short-term liquidity needs in accordance with the investment strategy and commitment policy; // changes in the values of, or returns on, investments that the Company makes; // changes in financial markets, interest rates or industry, general economic or political conditions; and // the general volatility of the capital markets and the market price of HVPE's shares. Publication and Calculation of Net Asset Value The NAV of the Company is equal to the value of its total assets less its total liabilities. The NAV per share of each class is calculated by dividing the net asset value of the relevant class account by the number of shares of the relevant class in issue on that day. The Company intends to publish the estimated NAV per share and the NAV per share for the ordinary shares as calculated, monthly in arrears, as at each month-end, generally within 15 days. Regulatory Information HVPE is required to comply with the Listing Rules, Disclosure Guidance and Transparency Rules of the Financial Conduct Authority in the United Kingdom (the "LDGT Rules"). It is also authorised by the Guernsey Financial Services Commission as an authorised closed-ended investment scheme under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (the "POI Law"). HVPE is subject to certain ongoing requirements under the LDGT Rules and the POI Law and certain rules promulgated thereunder relating to the disclosure of certain information to investors, including the publication of annual and half-yearly financial reports. This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients. The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein. Source: HarbourVest Global Private Equity Limited via Globenewswire http://www.hvgpe.com/
(END) Dow Jones Newswires
September 28, 2017 02:00 ET (06:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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