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Posted at 08/4/2024 08:43 by donald pond 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. |
Posted at 28/2/2024 04:56 by rambutan2 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. |
Posted at 24/2/2024 17:53 by mrscruff 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! 💪 |
Posted at 23/2/2024 09:39 by riverman77 HVPE's plans got a lukewarm reception from analysts so that probably explains the pullback. They could have certainly done more. Looks very cheap again, although not sure it's going to massively rerate anytime soon. ICGT currently my pick as they pay a reasonable dividend and doing buybacks, while on a wider discount than most of its peers. |
Posted at 23/2/2024 09:30 by apple53 Discount has opened up again and is materially higher than all its peers, with ICGT probably the closest.MSCI World is up 17% since end September, which remains the valuation date for 92% of the portfolio in today's end Jan statement. If you assume that half of this jump in global markets feeds into valuations if done today, then NAV would be £42.3 vs today's published £39.2. If you do the same calculation for PIN (but based on end Dec NAV), today's NAV would be 517p. I try to do the same for the other peers, and generally discounts are 30-40%. For ICGT the same calculation is based on end July world MSCI, and results in £20.63. Please note that in terms of published data even when we move the majority of HVPE (and PIN) valuations forward, which we will presumably only get in April for end March (??), we will still only have valuations based on end December, and World MSCI is up 5% since then. I am not attempting to comment on whether HVPE's discount deserves to be higher than its peers. |
Posted at 19/2/2024 09:04 by donald pond HVPE is clearly a high quality long term play at a very large discount. However, the response to the recent news on buybacks was very predictable. The purpose of buybacks has to be value creation: PSH have bought back in size most days for many years and while it has done little to narrow the discount it improves the NAV all the time. BUT you have to buyback in size and consistently. PIN set out the model for PEs. The HVPE approach seems half-hearted and the market has seen through it. They don't really want to do it but all their shareholders have asked so OK, we'll do some. No good: either commit fully or don't bother. |
Posted at 04/2/2024 20:24 by cerrito I held HVPE about 8 years ago and was impressed by Harborvest when they managed £50m for a pension fund I was involved in the last decade but they have been out of sight out of mind for me till I read today the following in Citywire.Will contain nothing new for many of you but interesting for some of you will be a good synopsis. quote HarbourVest Global Private Equity (HVPE) hopes to finally narrow its wide share price discount after it announced plans to return more capital to shareholders and move to a fully independent board. In response to shareholder feedback, including from wealth manager Quilter Cheviot, which began red-carding weak boards last September, the global private equity investor will establish a ‘distribution pool’ funded by profits on disposals that will be used for share buybacks and special dividends. The board and manager have agreed that 15% of cash realisations will go to the pool, which launches immediately, helped by a decision to place on hold a ‘specific̵ The company has languished on a discount of about 40% since 2022, giving the £3.1bn portfolio of funds and direct company stakes a market value of £1.8bn. A £25m buyback plan launched last May did nothing to move the dial. HVPE has purchased £45m worth of shares since September 2022 but expects the returns from the pool to be ‘materially greater’. As an indication, it said total annual cash proceeds received from disposals averaged $568m (£448.9m) over the last three calendar years. HVPE said that in deciding the timing, amount and nature of distributions, it would take into account the macroeconomic environment, the discount, market sentiment and ‘relative merits of distributing capital against the potential benefit of committing to new investment opportunities’ Ed Warner, chair of HVPE, said he had ‘engaged actively’ with shareholders in coming up with the proposals, and that the ‘new, more flexible policy, including the potential to pay dividends for the first time since HVPE was created, will make a significant difference to shareholders’. ‘It will help ensure they benefit more directly from the strong value growth delivered by HVPE’s high-quality portfolio, which has consistently outperformed public market benchmarks over the long term,’ he said. HVPE has delivered total underlying returns of 121% and 349% over five years and 10 years respectively, compared with the MSCI World, which rose 77% and 210%. However, investors haven’t reaped all the benefit as the shares have returned 62% and 254% over the same periods. Activity from the private equity sector has picked up in recent months after Pantheon International (PIN) was applauded by analysts for its ‘bold’ £200m buyback plan, with the board called ‘a leader’ in the space. Earlier this month, Abrdn Private Equity (APEO) said it was planning to use proceeds from selling its stake in Dutch discount retailer Action to start a buyback programme. Board independence The investment company also improved its governance structure following feedback from shareholders, including wealth manager Quilter Cheviot, who holds 4.6% of shares. Carolina Espinal, a managing director at HVPE, will not stand for re-election as a non-executive director at the annual general meeting in July. As a result, the board will be fully independent of its investment manager. However, Espinal and Richard Hickman, another managing director at HVPE, will be non-voting participants of the board and join the investment committee alongside managing director John Toomey and chief investment officer Greg Steno. ‘Board independence is an increasingly important area of focus for investors and I am confident HVPE will be viewed as having adopted best practice in this regard,’ said Warner. In September, the wealth management firm said it was opposed to employees of a trust’s fund manager sitting on the board as a non-independent as it set out its wider expectations for boards of the sector. Gemma Woodward, head of responsible investment at Quilter Cheviot, said she had engaged with the private equity company on independence and was ‘really pleased to see HVPE’s board take the move to become fully independent’. ‘It is good to see the power proactive engagement can have to help get boards acting in the interests of shareholders,’ said Woodward. ‘This sets a strong example to other trusts within the sector, which continue to have manager representation on the board.’ Quilter Cheviot’s sister company Quilter Investors also has a stake in HVPE with 2.5% of shares. Other large shareholders include M&G with 7.5%, Evelyn Partners and Lothian pension fund with 5.6% apiece, and Schroders with 5%. |
Posted at 01/2/2024 09:39 by riverman77 Good to see HVPE follow the likes of PIN and APEO in retuning cash to shareholders. I think a distribution pool is a sensible approach - gives them flexibility to adjust the amount of returns depending on the level of realisations, and also decide whether to go for dividends or buybacks depending on level of discount. The last thing you want is for them to commit to a fixed dividend which they then have to cut, for example if realisations temporarily dry up. The fact they have put in place a fully independent board to oversee all this is another positive.Also worth noting - the total amount of cash allocation to the Pool in 2024 will be materially greater than the amount spent on buybacks since Sep 22. The buybacks were worth 1. 3% so hopefully at least 2.5% to 3%. They say the average realisations over past 3y is 568m USD - 15% of this would represent a roughly 3.8% shareholder return at current market price. Not bad. |
Posted at 31/1/2024 23:27 by lynton3 I found this in Peel Hunt's 2024 recs on Citywire. Has anyone seen any other reference to HVPE looking at implementing a dividend policy?Peel Hunt’s corporate client HarbourVest Global Private Equity (HVPE) ... The board has bought back 2.2m shares over the last 18 months for £48m, but still trades 39% below par and is in discussions with shareholders about a potential dividend policy to be funded by realisations. |
Posted at 30/1/2024 10:20 by apple53 HVPE has slipped again vs others going sideways or up, so now has the highest discount by around 5pp (on my 'real time' NAV). So I have sold Herald and OSB to buy more HVPE. ii is giving me a great quote of 2314, close to the bid (spread 2310-30), which means essentially no spread and no stamp. |
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