Harbourvest Global Priva... Share Discussion Threads

[spangle93] 30/11/2024 09:31

Investment company activist Metage Capital has demanded HarbourVest Global Private Equity (HVPE) introduce quarterly tenders or wind-up the £3.4bn ($4.3bn) portfolio to rectify the chronically wide discount on its shares.

In an open letter to shareholders, Metage chief investment officer Tom Sharp said the capital allocation policy announced by HVPE’s chair Ed Warner in February had clearly failed with the shares standing 45% below net asset value at the end of October.

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[the real stan] 29/11/2024 14:34

Good point here. Personally I am loading up on HVPE as buying at current discount is better value than committing to a new fund at par. So why doesn't HVPE do the same?

[donald pond] 29/11/2024 11:30

Someone on a twitter group tipped me off.
It is getting traction and in this article the suggestion is that Metage owns 0.9% of HVPE:

[integer] 29/11/2024 11:20

very interesting DP. how did you find the article? Do you know if Metage funds hold any HVPE?

[donald pond] 29/11/2024 11:09

Looks like an activist is getting involved:

[steelbreeze] 03/11/2024 20:20

The Investor Presentation on Tuesday 5 Nov is a good chance to grill them over their pathetic buyback policy. To me the key questions are:

HVPE recently made a large new fund commitment. What return is anticipated on this investment? How can this be expected to outperform the instant and risk-free 72.4% NAV uplift that would be earned by using this cash instead to buy back more shares at 58p in the pound (a 42% discount)?

HVPE presumably expects to outperform listed equities. By paying no dividend (whilst most equities do) it must therefore expect to become an ever-larger proportion of investors’ portfolios. But the current massive discount clearly shows that investors do not want to hold even the current NAV. Will the Board finally accept that shareholder interests would be best served by reversing this, i.e. for the fund to shrink substantially by making no new commitments and instead distributing 100% of cash receipts?

[hindsight] 01/11/2024 11:49

I was thinking that 5% higher up but proven wrong, partly by yield curve shift
Rightly or wrongly I tend to think thats a two sided coin as investee companies should be worth more in future with higher inflation

[its the oxman] 01/11/2024 11:38

Surely far too cheap c.2230p

[spangle93] 24/10/2024 07:53

Update view of future in the latest half year results



"Steady improvement in exit numbers, driven by M&A, with an increase of 37% compared to the six months to 31 July 2023, and realised at an average 29% premium to carrying value"


"Signs of steadily improving investor confidence, in spite of ongoing macro and geopolitical challenges

Investment environment increasingly supporting a more active phase in the private markets cycle

Exits expected to continue improving, supporting cash realisations and HVPE's Distribution Pool, to the benefit of shareholders."


"We view the future for HVPE with confidence and believe that the current share price in no way reflects the performance by the Company over many years and the opportunities in private markets that we foresee ahead."

[the millipede] 19/10/2024 10:57

Thanks guys. Interesting.

[mrscruff] 16/10/2024 21:41

Leverage is a good thing when rates are going down as it's the reverse of when rates go up. Even if rates settle at around 3-4 percent it won't matter. We have had higher rates historically.

[riverman77] 16/10/2024 08:39

Discount now above 43% after recent fall in GBP v USD - not my favourite PE fund but looks way too cheap now.

[riverman77] 14/10/2024 07:53

I don't think debt looks too much of a problem here. They use their credit facility to cover short term mismatches between new commitments and realisations. Realisations obviously a bit quiet at the moment so looks like they've increased drawn debt to 450m, but they still have plenty left on the facility and also cash of around 150m. Overall gearing (debt as proportion of c4bn portfolio) doesn't look stretched.

[the millipede] 13/10/2024 10:49

The problem here is surely the debt?

Debt has appeared just at the moment when literally no one will touch debt fuelled private equity and the plan seems to be to increase it.

I suspect this is why institutional investors are largely avoiding.

HVPE need realisations and positive cash flow. But till then, deserve a wider discount than other PE funds IMO.

[mrscruff] 09/10/2024 18:59

SkyShip, me too, will happily trade in the ISA.

When I meant distributions I meant the income from the holdings that generate money for HVPE to use for commitments, fees including any leverage in the trust and buybacks. I often have a few drinks and can not communicate clearly (and yes it was an early drink).

Agree the buybacks are pathetic, but this could change if they manage to generate more cash from selling assets. Even selling a small uplift of an asset could be plowed back into buybacks at 40% discount that it seems like a no brainer though HarbourVest themselves may have something to say about that.

[skyship] 09/10/2024 14:09

MrScruff - in reality buybacks are not distributions. Dividends are.

HVPE buybacks are pretty insignificant; and of course dividends ZILCH.

Nevertheless, I do trade HVPE from time to time; though always holding my nose and recognising that the HVPE managers/directors care nothing for shareholders. They just want to maximise their fees; and paying a dividend would of course hold back the NAV increase.

[mrscruff] 09/10/2024 13:07

Absolutely, with the 10Y having a negative impact. However at discount of 42% it is lagging the peer group and contains some of the very best private equity in the world. I have added and going overweight with a 3-month outlook including the US election for the ISA and a 18 year investment in the SIPP. Good to see buyacks though not on the same level as PIN... this could though accelerate as distributions grow.

[its the oxman] 09/10/2024 09:33

Starting to feel far too cheap again around 2300p

[kinbasket] 24/9/2024 08:47

I'm sure it's no coincidence that for all of those 40 years interest rates trended downwards all the way to zero. With the boomiest of boom times happening during the ZIRP years.

But i'm sure it'll all be fine now rates are much higher.

[skyship] 22/9/2024 07:29

Popit - you posted a highly selective para from that rather good article! Read below for the very next para...

"Vincent Mortier, chief executive of Amundi, Europe’s biggest asset manager, has previously compared PE to a “Ponzi scheme” that will unravel in the next three to five years.

But as one veteran analyst says: “The trouble is, people have been saying this for the last 40 years – and PE has just kept growing.”"

[its the oxman] 19/9/2024 08:04

Useful pull back for a top up.

[skyship] 15/9/2024 06:20

Vincent Mortier, chief executive of Amundi, Europe’s biggest asset manager, has previously compared PE to a “Ponzi scheme” that will unravel in the next three to five years.

"PREVIOUSLY MENTIONED"

Most likely 5-10yrs ago; so proved incorrect!!!

[popit] 14/9/2024 19:17

Private equity’s “extraordinary 40-year run is finished” as an era of cheap debt is replaced by higher interest rates, City figures have declared.