HarbourVest Global Private Equity Ltd. Capital Markets Session 15 June 2016
HarbourVest CONFIDENTIAL 1 Agenda Chairman’s Introduction HVPE Factsheet & Overview HVPE Performance vs. Peers Financial Performance & Portfolio Highlights Managers and Investments Key Take-Aways
HarbourVest CONFIDENTIAL 2 Chairman’s Introduction The history of HarbourVest Global Private Equity Manager award The management team The Board The year to 31 January 2016 in review Balance sheet and commitments HVPE NET ASSET VALUE GROWTH ($ millions except per share data) $1,337 ( ▲ 6%) 1400 $1,266 ( ▲ 10%) $1,167 ( ▲ 15%) 1200 $1,030 ( ▲ 9%) $944 ( ▲ 12%) 1000 $16.75 800 $15.86 NAV per Share 600 $14.38 NAV per Share $12.46 $11.42 400 NAV per Share NAV per Share NAV per Share 200 0 2012 2013 2014 2015 2016
HarbourVest CONFIDENTIAL 3 HVPE Factsheet HVPE is a Guernsey domiciled investment company, first listed in December 2007 Investment strategy has remained focused since launch HVPE is now the fourth largest listed PE investment company in London NAV performance over all time periods since inception has been very strong Key data points 30 April 2016 / Current* NAV $1,358 million Market capitalisation $1,072 million NAV/share USD (GBP) $17.01 (£11.82) Share price USD (GBP) $13.42 (£9.32)* Discount to NAV 21.1% NAV growth, 5 years USD (GBP) 62% (82%) Share price growth, 5 years USD (GBP) 94% (120%) Total shares in issue 79.9 million Shares traded, year to 3 rd Nov 2015 9.9 million (avg. 39,000 / day) Shares traded, 4 th Nov to 3 rd June 2016 18.3 million (avg. 125,000 / day) * Share price data as of market close, 3 rd June 2016. GBP/USD 1.440
HarbourVest CONFIDENTIAL 4 HVPE Overview HVPE is designed to provide access to a range of private market investments Invests in and alongside HarbourVest funds HarbourVest funds in turn make investments into private market funds and operating companies HVPE 34 HarbourVest Funds + 2 Co-Investments Primary Secondary Direct 49% 36% 15% 764 Funds / Partnerships Buyout VC & Growth 66% 34% 6,923 Operating Companies Industrial / Medical / Consumer / Financial Technology / Telecom Other Biotech 35% 31% 18% 16%
HarbourVest CONFIDENTIAL 5 Top 10 HarbourVest Funds HVPE is offered a minimum 5% investment into all new HarbourVest funds Commitment amounts are fine-tuned with respect to a series of portfolio construction targets HVPE’s top 10 HarbourVest fund holdings are shown below Fund Proportion of HVPE Fund Proportion of HVPE NAV NAV Fund VIII Buyout 11.0% Fund IX Venture 4.4% Dover VIII 8.7% 2007 Direct 4.4% Fund VII Partnership 7.5% Conversus 4.2% HIPEP VI Partnership 6.8% HIPEP VI Asia Pacific 3.2% 2013 Direct 4.7% Fund VIII Venture 3.2% Data as of 31 Jan 2016
HarbourVest CONFIDENTIAL 6 HVPE Portfolio Construction Targets HVPE commitments are made with reference to a set of agreed five-year targets Other external/macro factors will influence portfolio composition over time INVESTMENT PORTFOLIO CONSTRUCTION TARGETS By Stage By Geography By Strategy 70% Buyout 60% US 60% Primary 30% Venture and Growth Equity 25% Europe 25% Secondary 10% Asia Pacific 15% Direct 5% Rest of World
HarbourVest CONFIDENTIAL 7 Diversification at 30 April 2016 The current breakdown by stage, geography and strategy is shown below New commitments to Europe are expected to move this allocation closer to the target level over time INVESTMENT PORTFOLIO DIVERSIFICATION By Stage By Geography By Strategy 62% Buyout 62% US 49% Primary 34% Venture and Growth Equity 21% Europe 34% Secondary 4% Other 11% Asia Pacific 17% Direct 6% Rest of World
HarbourVest CONFIDENTIAL 8 HVPE Performance HVPE vs. Public Markets Share Price Discount to NAV Share Price Performance – Short-term Shareholder Register
HarbourVest CONFIDENTIAL 9 NAV Total Return HVPE total NAV return including the total distributions of $0.49 per share is now 70.1% since inception, representing annual growth of 6.5% vs. 2.5%* for the MSCI ACWI on a total return basis $20.00 HVPE NAV $17.01 $18.00 $15.86 MSCI ACWI TR $16.00 $14.38 HVPE Share Price $13.81 $14.00 $12.45 $11.42 $12.00 $10.39 $10.24 $10.00 $8.65 Cumulative Return (6 Dec 07 – 30 Apr 16) $7.61 $8.00 HVPE NAV 70.1% $6.00 HVPE Share Price 38.2% $4.00 MSCI ACWI TR 22.7% $2.00 Total Return Jan Jan Jan Jan Jan Jan Jan Jan Jan 2008 2009 2010 2011 2012 2013 2014 2015 2016 HVPE NAV $10.39 $7.61 $8.65 $10.24 $11.42 $12.46 $14.38 $15.86 $16.75 3.9% (26.8%) 13.7% 18.4% 11.5% 9.1% 15.4% 10.3% 5.6% MSCI ACWI 571.4 332.7 465.1 554.7 538.2 621.5 704.0 755.8 708.3 (8.7%) (41.8%) 39.8% 19.3% (3.0%) 15.5% 13.3% 7.4% (6.3%) *Compound annual growth rate calculated through 30 April 2016. Note: past performance is not an indication of future results
HarbourVest CONFIDENTIAL 10 Share Price Discount to NAV HVPE’s discount to NAV has narrowed in recent years Main Market listing has improved marketability of the shares Trading range among HVPE’s peer group is very wide Current Share Price Discount to NAV 3i 14.1% Electra -12.6% F&C Private Equity Trust -14.7% HarbourVest Private Equity -21.1% SVG Capital -22.1% UK FOFS Weighted Average -24.2% JP Morgan Private Equity -25.0% Pantheon International -25.6% NB Private Equity Partners -26.8% Standard Life Euro Private Eq -27.4% ICG (Graphite) -27.9% Aberdeen Private Equity -33.8% Altamir -39.6% -50% -40% -30% -20% -10% 0% 10% 20% Source: J.P. Morgan Cazenove Investment Companies Daily Interactive Stats sheet as of 6 June 2016.
HarbourVest CONFIDENTIAL 11 Share Price Performance – Sep 2015 Onwards HVPE’s share price has performed well since the Main Market listing Volatility has been significantly lower than that seen in the broader sector 130 125 120 115 Electra 110 SVG HVPE 105 Pantheon 100 NBPE 3i 95 90 85 80 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Source: Bloomberg data, 3 rd June 2016 Note: past performance is not an indication of future results
HarbourVest CONFIDENTIAL 12 Shareholder Register US ownership has fallen from 48% in September to 42% today Recent buyers include the UK arm of the Prudential (+6%), index funds (+6%), retail investors (+0.5%) and private wealth managers (+0.4%) September 2015 April 2016 Other Other 9% 8% US US 42% 48% UK UK 44% 49%
HarbourVest CONFIDENTIAL 13 Financial Performance & Portfolio Highlights Investments and Commitments NAV Performance Realisations Uplift on Carrying Values Expenses Portfolio Growth
HarbourVest CONFIDENTIAL 14 Investments and Commitments to 31 January 2016 Activity during the period (in millions except % data) Year Ended Year Ended Financial Summary 31 January 2016 31 January 2015 Commitments to HarbourVest funds $526.4 $350.5 Total Investment Pipeline $1,043.0 $734.1 Cash Invested in HarbourVest funds $211.0 $162.2 % of Investment Pipeline* 16.7% 12.8% Since 31 January 2016, HVPE has made commitments of a further $200m * % of Investment Pipeline at prior financial year-end, adjusted for commitments made during the year
HarbourVest CONFIDENTIAL 15 Total Unfunded Commitments at 31 January 2016 Of the total $1,043m in unfunded commitments, $423m (41%) is unallocated The rolling coverage ratio rose from 72% to 104% during the period as the net cash position continued to improve and the credit facility was increased from $300m to $500m Investment Pipeline Rolling Coverage Ratio (31 January 2016) At 31 January 2016 Cash + Available Credit Facility $704m Current Year Projected Realisations $286m Allocated Unallocated A: Total Liquid Resources $990m $620 $423 B: Next Three Years’ Estimated Investments $948m Rolling Coverage Ratio = A/B = 104% 1-3 yrs 4-6 yrs 7-10 yrs >10 yrs $316 $197 $60 $47
HarbourVest CONFIDENTIAL 16 NAV Performance to 31 January 2016 NAV increased in the period by 5.6%, from $15.86 to $16.75, vs. a decrease of 6.3% for the MSCI ACWI on a total return basis The increase was driven by profitable realisations By value, 67% of a large sample of underlying companies* grew EBITDA in the twelve months ending 31 January 2016 – Of these, 3/5 were growing at a rate greater than 10% per annum The weighted average EBITDA multiple in the sampled portfolio is 9.9x (from 9.4x in the prior year) The average debt multiple is 4.2x (3.9x) CHANGES IN NAV PER SHARE $18 $1.43 $16.75 $17 $15.86 ($0.26) ($0.12) ($0.16) $16 $15 $14 $13 $12 NAV per Share Realised Gain / Management and Operating Foreign NAV per Share at 31 Jan 2015 Value Change Performance Fees Expenses Currency at 31 Jan 2016 *These portfolio metrics reflect an analysis of 1,696 buyout companies in developing and investing U.S. and international HarbourVest funds where data is available. This represented 39% of the total buyout NAV at 31 January 2016. Please note that the sample is larger than that taken in the prior year, hence f igures will not tie back to last year’s Annual Report.
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