HarbourVest Global Private Equity Ltd Capital Markets Presentation Financial Year in Review 13 June 2018
Contents HVPE Overview Annual Results – Year to 31 January 2018 Longer-Term Performance Key Takeaways // 2
HVPE Overview 3
HVPE at a glance Building long-term wealth by investing in private companies London listed and a member of the FTSE 250 $1.7bn net asset value (NAV) £1.0bn market capitalisation Proven track record $21.46 $21.23 $18.47 $16.75 $15.86 $14.38 $17.77 $17.31 $12.46 $15.03 $12.73 $12.41 $10.75 $8.66 Jan 2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan 2018 Apr 2018 (est) NAV Per Share Share Price* Note: Holdings in publicly- traded companies, often resulting from IPOs in the private equity portfolio, represent 10% of HVPE’s investment portfolio value. *Share price as quoted in US$ to September 2015; converted from GBP thereafter. Past performance is not necessarily indicative of future results. // 4
HVPE’s structure How does it work? HVPE invests in and alongside HarbourVest funds Provides selective diversification through an actively managed portfolio Accesses a range of private market assets HVPE 42 HarbourVest Funds and 2 Co-Investments Primary Secondary Direct 46% 31% 23% GP GP GP GP GP 5 1 2 4 3 7,756 Companies * Holdings in publicly- traded companies, often resulting from IPOs in the private equity portfolio, represent 10% of HVPE’s invest ment portfolio value. *As at 30 April 2018. // 5
The Investment Manager 6
HarbourVest has a global private markets platform One of the longest established firms in the industry EMEA First investment 1984 London $21.0 billion committed Toronto Boston North America Beijing Seoul Tokyo Tel Aviv First investment 1982 $34.5 billion committed Hong Kong Bogotá Asia Pacific First investment 1984 $6.0 billion committed Latin America First investment 1994 $0.7 billion committed Expertise across capital structure (equity and debt) and investment types PRIMARY SECONDARY DIRECT CO-INVEST $34.1 billion committed $19.8 billion committed $8.4 billion committed As of March 31, 2018. Based on primary, secondary, and direct commitments made by HarbourVest. Indicates HarbourVest team location. // 7
HarbourVest’s scale Comprehensive coverage and disciplined selection Direct – Equity & Credit Primary Secondary & Real Assets 683 605 450+ Funds Sourced Deals Sourced Deals Logged 131 217 100+ Deals Reviewed Funds Reviewed Offers and Indications in Depth in Depth 54 36 27 Managers Deals Closed Deals Closed Selected $2.8B Committed $2.2B Committed $1.8B Committed HarbourVest has spent 35 years developing and refining a highly selective process for completing investments globally Represents all investment opportunities reviewed and approved for all HarbourVest funds / accounts from January 1, 2017 through December 31, 2017. Number of committed and closed deals in 2017, independent of when they were sourced. Direct deals do not include follow-on investments. // 8
HarbourVest’s performance Consistent outperformance over both short and longer-term time frames HarbourVest returns have outperformed the private equity index and the public market over both short and longer-term time frames 20.1% 16.6% 16.6% 15.3% 14.7% 14.5% 14.1% 11.8% 10.4% 8.4% 6.4% 6.1% 1 YR 3 YR 5 YR 10 YR HarbourVest Private Equity Pooled Public Market Equivalent As of September 30, 2017. Public Market Equivalent (PME+) based on MSCI ACWI Index. HarbourVest returns reflect the combined return (pooled IRR) of all primary, secondary, and direct investments in the HVPE po rtfolio in that vintage year. Private equity returns reflect the combined return (pooled IRR) of all private equity investments included in the Burgiss Man ager Universe for that vintage year. Past performance is not necessarily indicative of future results. // 9
Annual Results – Year to 31 January 2018 10
Financial performance Activity during the year to 31 January 2018 Highlights Investment Portfolio Growth Buyout Portfolio Metrics Profile of Realisations Uplift on Carrying Values Credit Facility Expenses // 11
Annual results – highlights Year to 31 January 2018 NAV growth in year of 16.2% in USD (3.0% in GBP) Share price increase of 18.2% in USD (4.8% in GBP) Commitments to HarbourVest funds of $340m Realised uplifts continued above 30% Positive net cash flow trend; distributions of $405m exceeded new investments of $313m Net cash on balance sheet of $257m at year-end ($208m at 30 April) Share trading turnover and daily liquidity remained consistent See www.HVPE.com for the full report. // 12
Investment portfolio growth $248.8m of investment portfolio value growth Secondaries and Direct Co-investments outperformed Primary investments Buyout performance led all other stages European and Asia Pacific were the strongest performing regions Investment Portfolio Growth % gain over the year to 31 January 2018, at the partnership level 21.9% 21.6% 18.7% 17.0% 16.8% 16.5% 16.3% 15.0% 14.5% 13.8% 14.0% Primary Secondary Direct Co- Buyout Early Other Growth US Europe Asia Pacific RoW investment Venture Equity Strategy Stage Geography Past performance is not necessarily indicative of future results. // 13
Buyout portfolio metrics Figures from a sample of 694 buyout companies representing 28% of total NAV Weighted average EBITDA increase over previous year is 11% 66% of the underlying companies increased EBITDA during the year Approximately 45% of these companies are growing earnings at >10% per annum Overall valuation multiple is 11.8x EBITDA (compared to 11.1x at prior year end) Overall debt multiple is 5.2x EBITDA (compared to 4.6x at prior year end) Past performance is not necessarily indicative of future results. // 14
Profile of realisations $405.1m of cash distributions Cash from distributions increased in the year to 31 January 2018 Largest exits included; Lightower ($33.0m), Capsugel ($15.4m), and Wayfair ($11.0m) The 2007 vintage was the most significant contributor to realisations in 2018 at 17% 2013-2015 vintages generated strong realisation flows Investment Portfolio Realisations By Vintage Year % Realised during year ended 31 January 2018 vs. 31 January 2017 31-Jan-17 31-Jan-18 19% 17% 17% 13% 12% 10% 10% 10% 9% 9% 8% 8% 8% 6% 6% 4% 4% 4% 4% 1% 1% 3% 1% 1% 3% 3% 3% 2% 2% 2% 0% 0% < 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Mature phase Growth phase Investment phase Past performance is not necessarily indicative of future results. // 15
Uplift on carrying value at realisation Six consecutive years of uplifts of at least 30% over carrying value on realisations 31% weighted average uplift achieved at realisation (average multiple of 3.8x cost) Realisations from the Venture portfolio (6.8x) and IPOs (7.0x) were particularly strong verage Uplift % on the Carrying Value * Weighted A verage Multiple on the Cost of Investment Weighted A 7.0x 6.8x 34% 32% 31% 31% 3.8x 19% 3.4x 2.9x Total Buyout Venture M&A IPO Total Buyout Venture M&A IPO Uplift represents weighted average return for the 100 largest M&A and IPO transactions which represent approximately 84% of the value of the known transactions during the financial year. This analysis represents a subset of the transactions during the financial year. This analysis represents a subset of the transactions and does not represent the portfolio as a whole. Additionally, this analysis does not reflect management fees, carried interest, and other expenses of the HarbourVest funds or the underlying managers, which will reduce returns. Past performance is not necessarily indicative of future results. // 16
Credit facility Access to funding, should it be required $500m revolving credit facility provided jointly by Lloyds and Credit Suisse Facility was successfully renewed in December 2017 Runs to December 2022 Commitment fee is 115 bps per annum on the undrawn amount Margin over Libor on the total amount of any drawn amount scales as follows • 275 bps up to $250m • 305 bps up to $500m // 17
TER has trended downwards over time Reflects the cost of providing a fully comprehensive private equity programme TER, net of interest income, is 2.90% at 31 January 2018 Management fee component has declined steadily since inception to 1.01% Carried interest varies with USD NAV growth performance HVPE Total Expense Ratio 6.0% HVPE Operating Expenses HVP Funds Management Fees HVP Funds Carried Interest HVPE Total Expense Ratio (TER) 5.0% 4.0% % of NAV 3.0% 2.0% 1.0% 0.0% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 HVPE’s Total Expense Ratio of 2.90% at 31 January 2018 is comprised of a Net Operating Expense Ratio, 1.76%, plus Carried Int erest, 1.14%. // 18
Longer-Term Performance 19
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