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TRANSCRIPT
CONFIDENTIAL
HarbourVest Global Private Equity Ltd
Capital Markets Presentation
8 JUNE 2017
CONFIDENTIAL
> Chairman’s Introduction
> Global Markets Review 2017
> Portfolio Construction
> Long Term Performance
> Financial Performance & Portfolio Highlights
> Key Take-Aways
> Appendix: Managers and Investments
1
Contents
CONFIDENTIAL
0
200
400
600
800
1,000
1,200
1,400
1,600
Reflects data as of 31 January of each year. Past performance is no guarantee of future returns
> Launched in December 2007
> Invests in and alongside HarbourVest funds
> Targets consistently strong NAV growth over the long term
> Offers a ready-made global private markets programme
HVPE is a FTSE 250 investment company with a market capitalisation of £1 billion
Chairman’s introduction
2013 2014 2015 2016
$12.46NAV per Share
$14.38NAV per Share
$15.86NAV per Share
$1,030$1,167
$1,266$1,337
(▲9%)(▲15%)
(▲10%)(▲6%)
HVPE Net Asset Value Growth
($ millions except per share data)
$16.75NAV per Share
$1,475 (▲10%)
2017
$18.47NAV per Share
2
GLOBAL MARKETS REVIEW
JUNE | 2017
CONFIDENTIAL 4
Global Markets Review 2017
> Reflections on the current macro environment
> Global private equity perspective 2016 / 2017
> Private markets outlook
CONFIDENTIAL
> Reflections on the current macro environment
> Global private equity perspective 2016 / 2017
> Private markets outlook
5
Global Markets Review 2017
CONFIDENTIAL
44
46
48
50
52
54
56
58
Eurozone UK US EmergingMarkets
Global
Mar 2015 Mar 2016 Mar 2017
Source: Real GDP Growth Forecasts: IMF, as of April 2017; Composite PMI: Bloomberg, as of March 31, 2017
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
US Eurozone UK EmergingMarkets
Global
2016 2017F 2018F
Real GDP Growth Forecasts Composite PMI, Year-on-Year Change
6
Near-term global economic outlook remains benign
PMI score >50 indicates
positive output and
employment intentions
CONFIDENTIAL
Citigroup Economic Surprise Index tracks how economic data are faring relative to expectations: the index rises when economic data exceed economists’ consensus estimates and falls when data come in below estimates
Source: Bloomberg, as of April 25, 2017
Citi Economic Surprise Index
7
Economic data continues to surprise on the upside
-30
-20
-10
0
10
20
30
40
50
60
2014 2015 2016 2017
Data
ah
ead
of e
xp
ecta
tio
ns
Data
be
low
exp
ecta
tio
ns
CONFIDENTIAL
Source: Bloomberg, as of March 31, 2017
Equity Market Valuations – EV / FWD EBITDA
8
Equity valuations look ‘priced to perfection’
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
S&P 500
10-Year Avg SPX
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
11.0x
12.0x
13.0x
14.0x
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
MSCI World
10-Year Avg MXWO
’07
’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
MSCI Europe
10-Year Avg MXEU
+21%
+30%
+17%
CONFIDENTIAL
Getty Images
9
Politics clouds the horizon
CONFIDENTIAL 10
Global Markets Review 2017
> Reflections on the current macro environment
> Global private equity perspective 2016 / 2017
> Private markets outlook
CONFIDENTIAL
> Liquidity flows moderated, but absolute levels still attractive
> LPs seek to maintain / increase private equity exposure
> Investment activity declined from 2015 peak, to levels consistent with post-GFC average
> Industry performance sustains the argument
11
Global private equity market summary 2016
CONFIDENTIAL
MSCI World Index
$290
$345
$67$82
$0
$150
$300
$450
$600
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Q1 ’16 Q1 ’17
US Europe Asia EM
Source: Bloomberg, Thomson Reuters, AVCJ, APER, EMPEA, supplemented by HarbourVest market insights
Global Private Equity-Backed Exits by RegionEV / FWD EBITDA of MSCI World Index
12
GPs have taken advantage of attractive exit conditions
14x
12x
10x
8x
6x
CONFIDENTIAL
’05 - ’08 cycle
$6.1 billion in distributions
(0.7x capital called)
’09 - ’12 cycle
$6.7 billion in distributions
(1.1x capital called)
’13 - ’16 cycle
$12.6 billion in distributions
(2.5x capital called)
Reflects cash flows from primary investments made by HarbourVest-managed funds and accounts; see notes 2 and 3
Past performance is no guarantee of future returns
Portfolio Cash Flows
13
Record liquidity to investors well in excess of capital calls
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
-800
-400
0
400
800
1,200
Q1 ’05 Q1 ’06 Q1 ’07 Q1 ’08 Q1 ’09 Q1 ’10 Q1 ’11 Q1 ’12 Q1 ’13 Q1 ’14 Q1 ’15 Q1 ’16 Q1 ’17
Distributions Capital Calls Distributions / Capital Calls
$ M
illio
ns
CONFIDENTIAL
Source: Thomson Reuters, Incisive Media, and HarbourVest analysis of Asia from AVCJ, APER, EMPEA, and GP reporting
Private Equity Funds Raised by Region
14
LP liquidity has supported a $1 trillion fundraising cycle
$35
$67
0%
10%
20%
30%
40%
0
100
200
300
400
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Q1 ’16 Q1 ’17
US Buyout Europe Buyout US Venture Asia EM % Buyout Funds >$5B
$ B
illio
ns
’13 - ’16 cycle
$1.0 trillion raised
’09 - ’12 cycle
$517 billion raised
’05 - ’08 cycle
$1.1 trillion raised
CONFIDENTIAL
Reflects gross performance of the primary and secondary investments made by HarbourVest-managed funds and accounts in each cycle (Vintages 2005-2008, 2009-2012, and 2013-2016), measured as of the end date of
the cycle (December 21, 2008, 2012, or 2016), see note 2
Past performance is no guarantee of future returns
Portfolio IRR at Cycle End DPI at Cycle End
GPs have used exit markets to lock in returns
-4%
28%
22%
-8%
11%
25%
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
’05 - ’08 ’09 - ’12 ’13 - ’16
US Buyout Europe Buyout
0.12x0.11x
0.22x
0.15x
0.07x
0.33x
0%
5%
10%
15%
20%
25%
30%
35%
’05 - ’08 ’09 - ’12 ’13 - ’16
US Buyout Europe Buyout
15
CONFIDENTIAL
Global Private Equity Investment Activity
16
Investments have increased only modestly post-GFC
$87 $78
0
200
400
600
800
1,000
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 Q1 ’16 Q1 ’17
US Buyout Europe Buyout US Venture Asia EM
$ B
illio
ns
’13 - ’16 cycle
$1.7 trillion invested
’09 - ’12 cycle
$1.1 trillion invested
’05 - ’08 cycle
$2.2 trillion invested
Source: Thomson Reuters, MergerMarket, S&P LCD and HarbourVest analysis of Asia from AVCJ, APER, EMPEA, and GP reporting
CONFIDENTIAL
74%
57%
28%
13%
64%
49%
35%
15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
’05 ’06 ’07 ’08 ’13 ’14 ’15 ’16
Cautious investing has left a healthy “unfunded buffer”
Reflects primary investments made by HarbourVest-managed funds and accounts in each vintage year of the cycle (2005-2008 and 2013-2016), measured as of the end date of the respective cycle (December 31, 2008 and
December 31, 2016)
Past performance is no guarantee of future returns
76%
66%
45%
18%
62%
49%
33%
9%
0%
10%
20%
30%
40%
50%
60%
70%
80%
’05 ’06 ’07 ’08 ’13 ’14 ’15 ’16
US Buyout Funded Level at Cycle End Europe Buyout Funded Level at Cycle End
%
Funded 47% 34% 48% 34%
17
CONFIDENTIAL
Source: S&P LCD Leveraged Buyout Report Q4 2016 and HarbourVest internal data (median EV / EBITDA by year)
As of December 31, 2016
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
11.0x
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
US US (HV Portfolio)
US Buyout Entry EV / EBITDA
5.0x
6.0x
7.0x
8.0x
9.0x
10.0x
11.0x
’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
Europe Europe (HV Portfolio)
International Buyout Entry EV / EBITDA
18
Asset pricing continues to be elevated
CONFIDENTIAL
Private equity
Other alternatives
Public markets
6.3%
6.0%
6.0%
12.3%
MSCI World
Hedge Funds
Infrastructure
Real Estate
Private Equity
10-year Returns
Source: Burgiss Q4 2016 benchmarks (global private equity, global real estate, global infrastructure), Hedge Fund Research (HFRI Fund Weighted Global Composite Index), Bloomberg (MSCI World, dividends reinvested in
the index) as of December 31, 2016. Past performance is no guarantee of future returns
Pooled Returns by Global Asset Class
Private equity – Sustained outperformance
20-year Returns
4.5%
3.2%
2.7%
6.0%
9.2%
MSCI World
Hedge Funds
Real Estate
Infrastructure
Private Equity
11.1%
4.3%
7.4%
10.2%
12.7%
MSCI World
Hedge Funds
Infrastructure
Real Estate
Private Equity
3-year Returns5-year Returns
4.4%
3.1%
6.9%
9.5%
9.8%
MSCI World
Hedge Funds
Infrastructure
Real Estate
Private Equity
N/A – no data
+6.0% +4.7%
+1.6% +5.4%
19
CONFIDENTIAL
> Expect continued inflows into global private equity
– Enduring strong performance (absolute and relative)
– Investor need for returns
– Surplus liquidity needs re-deploying to retain allocations
> Investment levels to remain stable
– Relatively large inventory of ‘dry powder’ and ample debt availability
– Asset pricing necessitates high conviction
– GPs should balance need to invest with rising macro-political risks
> Current benign economic conditions supporting returns
– Economic data remains short-term positive globally…
– …for now
– Top GPs possess differentiated value creation skills
20
Looking forward
CONFIDENTIAL 21
Global Markets Review 2017
> Reflections on the current macro environment
> Global private equity perspective 2016 / 2017
> Private markets outlook
CONFIDENTIAL
Source: Preqin
22
Private markets – Demand drives change
33%
25%
22%
2000 - ’04 2005 - ’09 2010 - ’13
Same-quartile persistency
Past Performance - An
Increasingly Unreliable Guide
Structural Underpinning to
Private Markets’ Expansion
Growing Number of
New Entrants
0
50
100
150
200
250
300
350
400
450
’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16
First-time funds
Privat
e
Feder
al
State
&
Local
Total
Assets Liability Gap
Total
(Pension
Funds)
State &
Local
US
Pensions
US
Federal
Pensions
US
Private
Pensions
8.2
3.8
1.5
2.9
4.3
1.9
1.9
0.59
CONFIDENTIAL 23
Adapting to tomorrow’s environment
Conventional Wisdom
Po
rtfo
lio
Co
ns
tru
cti
on
# Funds 40 - 50
GP Churn Less is more
Commitment
PacingTrack the fundraising cycle
J-Curve Goes with the territory
Tail-End
ManagementPatience is a virtue
Sub-Asset Class
FocusStay narrow on private equity
Inve
stm
en
t P
roc
es
s
Market Coverage Open door policy
Manager
SelectionBest GPs in each geography
Due Diligence Performance is all that matters
Cutting Edge
Data-driven analysis
Depends on risk-return objectives
Re-underwrite everything
Churn is critical
Consistent through the cycle
Even ticket sizes
Front-load secondaries
Prudent use of credit lines
Opportunistic asset sales
Tail end divestitures
Broader use of private markets
Value/growth/yield mix
Deep & embedded
Integrated across platform
Thematic focus
Balance portfolio
Investment due diligence +
operational and ESG due diligence
CONFIDENTIAL
HVPE is poised to become the default option for investors seeking global private equity exposure
through a listed vehicle
All performance figures are as of 31 January 2017 except where indicated. Past performance is no guarantee of future returns
Four key reasons to choose HVPE for your listed private markets exposure
Accessing global private markets through a listed vehicle
1. Strong performance > Last five years: annualised NAV return 10.1% in USD; 15.2% in GBP
> Since inception: annual NAV return 6.9% in USD; 12.6% in GBP
2. Daily liquidity > Median share trading volume equivalent to £0.5 million per day
> More than £250 million of shares traded in last 12 months
3. Managed risk > Well-diversified portfolio; strong balance sheet
> Low volatility in NAV and share price since 2010
4. Discounted entry > Share price trading 10-13% below NAV/share in first half of May 2017
> Uplift to carrying value has averaged 30-50% since 2012
24
CONFIDENTIAL
Image sources: Daily Mirror, CNN (Factset data), Getty Images
News headlines indicate the level of short-term emotion at play in the listed markets
25
Public markets can be volatile
FTSE suffers worst stock
market start in 16 years Telegraph
Brexit panic wipes $2
trillion off world markets Guardian
Wall Street welcomes
Trump with a bang CNN
Black Monday sees world's stock markets
plunge - but how scared should we be? Daily Mirror
Aug 2015 Jan 2016 Jun 2016 Nov 2016
CONFIDENTIAL
Past performance is no guarantee of future returns
HVPE has invested steadily through periods of short-term public market volatility
26
HVPE invests for the long term
£7.00
£8.00
£9.00
£10.00
£11.00
£12.00
£13.00
£14.00
£15.00
Jan-2015 Jul-2015 Jan-2016 Jul-2016 Jan-2017
HVPE NAV (£) HVPE Share Price (£) FTSE 250 (£) FTSE AW (£)
Apr-Sep 2016:
$115m drawn down for
new investment
Apr-Sep 2015:
$103m drawn down for
new investment
Sep 2015: HVPE
Main Market Listing
CONFIDENTIAL
* See www.hvpe.com for the full report
Past performance is no guarantee of future returns.
> NAV growth in the year of 10.3% in USD (24.8% in GBP)
> Share price increase of 21.1% in USD (37.2% in GBP)
> Realised uplifts continued above 30%
> New investment exceeded distributions
> Share trading turnover and daily liquidity continued to improve
27
Annual results - highlights
HVPE’s financial results for the year ending 31 January 2017 were released on 12 May 2017
CONFIDENTIAL
Data as of 31 January 2017
> In the year ending 31 January 2017, more than 33 million shares were traded in the market
> HVPE appeals to a broad range of investors, from individuals to large institutions
> Examples of known large buyers/categories are shown below
28
New investors
Buyer Year to 31 Jan 2017
(millions)
Prudential PMG £80
OMGI £30
Other UK institutions £40
UK wealth managers £30
Swiss/Nordic wealth managers £10
Private individuals £10
Total £200
CONFIDENTIAL
* As at 30 April 2017
> Non-US ownership had risen from 52% in September 2015 to 72% as of April this year
> Buyers include large institutions (+18%), index funds (+5%), private wealth managers in the UK and
continental Europe (+4%), and retail investors (+1%)
29
Current shareholder profile
September 2015 April 2017
US47.8%UK
43.7%
Other8.5%
US27.7%
UK62.4%
Other9.9%
New investors from the UK, Europe and Asia continued to build positions in the shares
CONFIDENTIAL
HVPE portfolio construction
> Building Blocks
> Geographic Diversification
> Sub Asset Classes Performance
> HVPE Portfolio Construction Targets
> Actual Diversification
30
CONFIDENTIAL 31
Private equity portfolio building blocks
Investment
Size
Stage
Geography
Vintage Year 2016
US
Buyout
Small Mid
Manager Industry Strategy
Large
Venture Mezzanine
Europe Asia RoW
Strategy Secondary Primary Direct
20152014
Each portfolio building block has to be diversified based on its own unique risk/return profile
CONFIDENTIAL
HarbourVest proprietary data set; Vintage years 1995 – 2012; Funds with residual value <20%
*Global portfolio weights are as follows: 55% US/15% Europe/15% Asia/15% RoW; 15% Venture/85% Buyout
**US portfolio weights are as follows: 15% Venture/85% Buyout. Past performance is no guarantee of future returns
The graphic and data above are based on a Monte Carlo simulation. See Note 1 for more information on the construction of this simulation
.
32
Benefits of geographic diversification
1.77x
1.97x
0%
10%
20%
30%
40%
50%
1.00x 1.50x 2.00x 2.50x 3.00x
Probability Density
DPI Multiple
Return Comparison Diversified US and Global Portfolios(even allocation over 3 vintage years)
US Median Global Median US Diversified Porfolio Global Diversified Portfolio
US
Portfolio
Global
Portfolio
% < = 1.0x 6.3% 0.0%
1.0x < % <=1.5x 9.7% 11.6%
1.5x < % <= 2.0x 75.9% 40.7%
2.0x < % <= 2.5x 7.9% 27.5%
2.5x < % <= 3.0x 0.2% 19.4%
% > 3.0x 0.0% 0.8%
> Geographically diversified portfolio has a median DPI of 1.97x compared to the median DPI of 1.77x
for a diversified US portfolio with the same venture/buyout weights*
> Diversified US portfolio delivers below 1.0x return in 6.3% of cases, while the return on a globally
diversified portfolio is always above 1.0x** using this simulation
CONFIDENTIAL
Past performance is no guarantee of future returns
Performance of sub-asset classes across cycles
33
Sub asset classes performance
> Some strategies prove to be more correlated and
volatile relative to the economic cycle
> It is hard to predict the top and the bottom
> Performance can vary dramatically
Takeaways:
> Diversify across key markets
> Commit continuously
> Don’t time the market
Legend Rank 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20133 Yr
IRR
5 Yr
IRR
10 Yr
IRR
Asia 1 104.3% 83.1% 33.4% 12.0% 33.1% 38.1% 37.5% 22.1% 26.1% 11.6% 15.5% 14.6% 16.4% 20.6% 25.0% 28.0% 21.8% 20.9% 16.8% 15.8% 12.2%
Euro Buyout 2 28.1% 18.7% 20.4% 10.2% 32.5% 36.9% 37.5% 20.3% 24.2% 10.9% 10.7% 11.3% 14.8% 20.2% 18.2% 22.8% 16.9% 15.3% 16.7% 15.0% 12.0%
Global Secondaries 3 19.1% 17.7% 20.3% 9.8% 17.3% 25.3% 29.8% 19.8% 20.3% 9.0% 9.2% 10.6% 14.5% 16.9% 17.5% 20.5% 16.3% 15.2% 15.7% 14.8% 11.2%
US Buyout 4 13.3% 16.9% 14.7% 9.4% 16.6% 23.8% 22.1% 17.8% 15.4% 8.8% 9.1% 9.9% 14.1% 15.8% 15.9% 18.2% 14.7% 14.2% 13.9% 14.2% 10.8%
US Growth 5 10.6% 14.5% 11.4% 8.9% 16.1% 20.2% 21.9% 17.2% 13.4% 8.6% 8.2% 9.4% 14.0% 15.2% 14.9% 16.5% 13.8% 11.3% 12.9% 13.4% 10.4%
US Venture 6 10.6% 12.4% 10.7% 8.4% 15.9% 20.0% 20.1% 16.1% 12.6% 7.8% 8.0% 9.4% 13.5% 14.6% 13.9% 15.9% 13.7% 9.4% 12.2% 12.7% 10.3%
Global Credit 7 5.9% 12.1% 9.3% 6.1% 15.3% 20.0% 18.6% 16.1% 11.5% 7.7% 7.9% 9.3% 13.4% 13.3% 12.4% 15.4% 12.7% 8.6% 10.1% 12.1% 9.9%
US Credit 8 5.6% 10.4% 8.0% 2.6% 13.2% 18.8% 17.8% 12.2% 7.8% 7.2% 7.1% 8.9% 13.3% 11.2% 10.1% 8.9% 12.2% 6.8% 9.6% 11.7% 9.6%
Global PE Energy 9 5.6% 10.1% 5.1% 0.4% 10.4% 13.4% 16.1% 11.9% 7.1% 7.1% 7.1% 8.7% 11.2% 10.5% 9.5% 8.4% 12.1% 6.4% 7.9% 10.0% 9.4%
US PE Energy 10 5.0% 9.9% 2.3% 7.9% 10.1% 8.9% 8.3% 6.7% 6.9% 6.8% 8.5% 1.0% 10.4% 1.3% 7.1% 6.0% 6.3% 7.5% 8.9% 7.1%
Global Infrastructure 11 4.8% -3.0% 3.6% 8.3% 5.5% 7.6% 4.2% 6.5% -0.6% 8.2% 0.3% 8.9% 1.0% 4.1% 5.1% 5.3% -3.0% 2.1% 5.5%
Global PE 12 -4.8% 0.0% 3.6% 1.6% 2.1% 6.1% -1.6% 7.7% -0.4% -3.4% 1.3% 5.2%
US Economy
OECD Global Economy
Source: Cambridge Associates net LP pooled returns as of 9/30/2016, RecessionAlert.com
Euro Buyout returns represented in EUR
CONFIDENTIAL
> HVPE commitments are made with reference to a set of agreed five-year targets
> The Board reviewed and revised these targets at the end of 2016
> Other external/macro factors will influence portfolio composition over time
34
HVPE portfolio construction targets
By Stage By Geography By Strategy
INVESTMENT PORTFOLIO CONSTRUCTION TARGETS
65% Buyout
30% Venture and Growth Equity
5% Mezzanine and Real Assets
65% US
18% Europe
12% Asia Pacific
5% Rest of World
60% Primary
25% Secondary
15% Direct
CONFIDENTIAL
Data as per 30 April 2017 Monthly Factsheet
> The current breakdown by stage, geography and strategy is shown below
35
Actual diversification at 30 April 2017
By Stage By Geography By Strategy
INVESTMENT PORTFOLIO DIVERSIFICATION
63% Buyout
31% Venture and Growth Equity
6% Mezzanine and Real Assets
62% US
19% Europe
12% Asia Pacific
7% Rest of World
46% Primary
30% Secondary
24% Direct
CONFIDENTIAL
HVPE long-term performance
> HVPE vs. Public Markets
> NAV Total Return Vs. Peers
> Share Price Discount to NAV
36
CONFIDENTIAL
* Compound annual growth rate calculated through 30 April 2017
Past performance is no guarantee of future returns
HVPE total NAV return including the total distributions of $0.49 per share is now 87% since
inception, representing annual growth of 6.7% vs. 4.2%* for the FTSE AW on a total return basis
37
Long-term NAV total return (USD)
$10.39
$7.61
$8.65
$10.24
$11.42$12.46
$14.38
$15.86
$16.75
$18.47
$18.66
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
$18.00
$20.00
HVPE NAV ($)
FTSE AWI TR
HVPE Share Price ($)
$16.12
Jan
2008
Jan
2009
Jan
2010
Jan
2011
Jan
2012
Jan
2013
Jan
2014
Jan
2015
Jan
2016
Jan
2017
Apr
2017
HVPE NAV $10.39 $7.61 $8.65 $10.24 $11.42 $12.46 $14.38 $15.86 $16.75 $18.47 $18.66
3.9% (26.8%) 13.7% 18.4% 11.5% 9.1% 15.4% 10.3% 5.6% 10.3% 1.0%
FTSE AW TR 242.2 140.3 200.3 240.7 233.1 269.5 305.0 327.9 307.7 365.4 387.0
(8.1%) (42.1%) 42.8% 20.1% (3.2%) 15.6% 13.2% 7.5% (6.2%) 18.8% 5.9%
Cumulative Return
(6 Dec 07 – 30 Apr 17)
HVPE NAV ($) 86.6%
HVPE Share Price TR ($) 60.5%
FTSE AW TR 46.8%
CONFIDENTIAL
Source: Edison Research / MorningStar / Datastream data, 31 March 2017
* All figures GBP
Past performance is no guarantee of future returns
> HVPE is ranked among the top performing listed private equity funds for NAV growth over five years,
and, as of 31 March 2017, is the top performer in its peer group since inception in December 2007
38
NAV performance compared to peers (GBP)
23%
68%
103%
195%
23%
58%
75%
93%
33%
57%
97%
133%
0%
50%
100%
150%
200%
NAV TR 1 Year NAV TR 3 Years NAV TR 5 Years NAV TR Since Inception
HVPE NAV growth Peer Median Average NAV Growth FTSE AW TR*
HVPE NAV Performance vs. Peers*
CONFIDENTIAL
Source: J.P. Morgan Cazenove Investment Companies Daily Interactive Stats sheet as of 10 May 2017
> HVPE’s discount continues to narrow and is now inside the listed fund-of-funds average
> The market does not yet give full credit for HVPE’s long-term performance
> Increased marketing and communications activity is helping to build demand
39
Share price discount to NAV
Current Share Price Discount/Premium to NAV
-26.3%
-20.2%
-16.6%
-16.5%
-13.2%
-13.2%
-11.3%
-10.3%
-8.2%
-2.1%
3.7%
43.6%
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
Altamir
Aberdeen Private Equity
Pantheon International
JP Morgan Private Equity
NB Private Equity Partners
ICG Enterprise Trust
UK FOFS Weighted Average
HarbourVest Private Equity
Standard Life Euro Private Eq
Electra
F&C Private Equity Trust
3i Group
CONFIDENTIAL
> Investments and Commitments
> Credit Facility
> Realisations
> Uplift on Carrying Values
> Portfolio Growth
> Expenses
40
Financial performance and portfolio highlights
CONFIDENTIAL
Investments and commitments to 31 January 2017
Activity during the period (in millions except % data)
41
Financial Summary
Year Ended
31 January 2017
Year Ended
31 January 2016
Commitments to HarbourVest funds $425.0 $526.4
Total Investment Pipeline $1,200.5 $1,043.0
Cash Invested in HarbourVest funds $270.0 $211.0
% of Investment Pipeline* 22.4% 16.7%
Since 31 January 2017 (to 30 April 2017), HVPE has made additional commitments
of $97m
* % of Investment Pipeline at prior financial year-end, adjusted for commitments made during the year
CONFIDENTIAL
Total unfunded commitments at 31 January 2017
42
Of the total $1,201m in unfunded commitments (Investment Pipeline), $322m (27%) is
unallocated
The rolling coverage ratio rose slightly from 104% to 105% during the period as the net cash
position was maintained
Unallocated$322
Allocated $879
Investment PipelineAt 31 January 2017
1-3 yrs 4-6 yrs 7-10 yrs >10 yrs
$598 $152 $49 $79
Rolling Coverage Ratio (31 January 2017)
Cash + Available Credit Facility $675m
Current Year Projected Realisations $269m
A: Total Liquid Resources $944m
B: Next Three Years’ Estimated Investments $898m
Rolling Coverage Ratio = A/B = 105%
CONFIDENTIAL
> HVPE has a $500m revolving facility provided jointly by Lloyds and Credit Suisse
> Facility was successfully renewed in December 2016
> Runs to December 2020
> Commitment fee is 115 bps per annum on the undrawn amount
> Margin over LIBOR on the total of any drawn amount scales as follows:
– 300 bps up to $250m
– 330 bps up to $500m
43
Credit facility
CONFIDENTIAL
Past performance is no guarantee of future returns
> Cash from realisations decreased in the 12 months to 31 January 2017 following record exit activity in
2014 and 2015 and a return to more ‘normalised’ M&A and IPO activity in 2016
> The portfolio is positioned for investment and future growth
> The 2005-8 vintages continue to generate the strongest realisation flow, with an increasingly
significant contribution from the 2011 vintage
44
Profile of realisations year to 31 January 2017
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Pre-2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
INVESTMENT PORTFOLIO REALISATIONS BY VINTAGE YEAR% Realised during 12 months ended 31 January 2017
CONFIDENTIAL
* Uplift represents weighted average return for the 148 largest M&A and IPO transactions which represent approximately 85% of the value of the known 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 no guarantee of future returns
> The weighted average uplift achieved for the largest transactions (85% by value) at realisation was
30% (at an average multiple of 3.7x cost*) in the 12 months ended 31 January 2017
> Realisations from the Venture portfolio were particularly strong, with an average multiple on cost of
5.2x
45
Uplift on carrying value at realisation to 31 January 2017
30% 30% 31% 30% 30%
0%
20%
40%
Total Venture Buyout M&A IPO
Weighted Average Uplift % on the Carrying Value*
3.7x
5.2x
2.9x 3.6x4.1x
0x
2x
4x
6x
Total Venture Buyout M&A IPO
Weighted Average Multiple on the Cost of Investment
CONFIDENTIAL
Past performance is no guarantee of future returns
> Value growth in the portfolio is analysed regularly in order to verify the asset allocation strategy
> During the year, value growth of the direct portfolio was particularly strong
> Buyout investments grew strongly; Early Venture saw a pull-back as a result of broad-based, but
modest, valuation declines
> By geography, RoW saw the strongest growth
46
Portfolio growth to 31 January 2017
11%12%
9%
15%
0%
5%
10%
15%
20%
Europe AsiaPacific
US RoW
By Geography
13%
3%
(3%)
12%
-5%
0%
5%
10%
15%
20%
Buyout GrowthEquity
VC Other
By Stage
8%
6%
20%
0%
5%
10%
15%
20%
Primary Secondary Direct
By Strategy
INVESTMENT PORTFOLIO GROWTH
Gain over 31 January 2017 value, adjusted for new investments during the period
Early
Venture
CONFIDENTIAL
> HVPE’s Total Net Expense Ratio is 2.17% of NAV on a run-rate annualised basis
> This has declined considerably in recent years, and compares well against peers
> This figure does not include fees and carried interest paid to third party managers within the
HarbourVest funds themselves, which are deducted at source from the distributions received by those
funds
47
HVPE total expense ratio
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2009 2010 2011 2012 2013 2014 2015 2016 2017
% o
f A
vera
ge N
AV
HVPE Total Expense Ratio
HVPE Operating Expenses HVPE Management Fee HVPE Carried Interest HVPE Total Expense Ratio (TER)
CONFIDENTIAL
Total expenses to 31 January 2017
48
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
Year Ended 31 Jan2017
Year Ended 31 Jan2016
Carried Interest
Management Fees(HarbourVest)
Management Fees (Co-investments)
Other Expenses
Directors' Fees andExpenses
Professional Fees
Investment Services
Credit facility
$31.5m $30.4m
$10.9m $11.2m
> HVPE incurred direct operating expenses of $10.9m in the year ending 31 January 2017, down from
$11.2m in the previous year
> Total expenses fell marginally from 2.19% of NAV in 2016 to 2.17% in 2017
CONFIDENTIAL
> FTSE 250 company
> Focused, consistent strategy: private equity fund of funds
> Continuous exposure through the private equity cycle
> A carefully selected, diversified portfolio
> Integrated, complementary approach: primary, secondary, and direct co-investment
> Run by a high quality manager
> Currently trading at a discount whilst realising assets at a premium
49
Key take-aways
Visit us at www.hvpe.com
Upcoming events
> Capital Markets Session 4 October 2017
> Ten-Year Anniversary 29 November 2017
CONFIDENTIAL
Appendix
CONFIDENTIAL
> Top 10 Managers
> Top 10 Portfolio Companies
> Notable Exits
51
HVPE managers and investments
CONFIDENTIAL
> No single manager represents more than 1.8% of the portfolio
> Portfolio includes household names as well as more specialised groups
52
Top 10 managers by share of HVPE NAV at 31 January 2017
Manager Region Stage % of Investment Value
Thoma Bravo US Buyout and Venture 1.8%
Welsh, Carson, Anderson &
Stowe
US Buyout and Mezzanine 1.5%
Compass Partners International Europe Buyout 1.4%
TPG Capital US Buyout 1.3%
The Blackstone Group US Buyout 1.3%
Index Ventures Europe Venture and Growth Equity 1.2%
Health Evolution Investments US Growth Equity 1.2%
Lightspeed Venture
Partners
US Venture and Growth Equity 1.2%
Insight Venture US Venture 1.1%
Hellman & Friedman US Buyout 1.1%
CONFIDENTIAL
> No single company represents more than 2.2% of the portfolio
> As of 31 January, the top 10 companies shown below represented 11.8% of the portfolio value, while
the top 100 companies represented 40%
53
Top 10 companies by share of HVPE NAV at 31 January 2017
Top 10 companies Region Description% of Investment
Value
Lightower Fiber Networks US Fibre optic
telecommunications
2.14%
Press Ganey US Healthcare data provider 1.34%
Preston Hollow Capital US Speciality finance platform 1.33%
Capsugel US Drug delivery systems 1.31%
LeasePlan EUR Leasing and fleet management 1.12%
Acrisure US Provider of insurance and consulting
services
1.05%
Infinitas EUR Education content and services 0.97%
H-Line Shipping ASIA Gas shipping business 0.93%
Wayfair US Online retailer 0.86%
Ministry Brands US Software solutions provider
for faith-based organisations
0.77%
CONFIDENTIAL
> Below is a selection of particularly interesting companies sold from within the HVPE portfolio in recent
years
> With more than 7,000 underlying company investments, HVPE typically sees 30-50 liquidity events per
month
Company Date Country Stage Exit route
GoPro Jun 2014 US Venture NASDAQ
The Trainline Jan 2015 UK Buyout M&A (KKR)
Auto Trader Mar 2015 UK Buyout LSE
Glaukos Jun 2015 US Venture NASDAQ
Worldpay Oct 2015 UK Buyout LSE
PhotoBox Oct 2015 UK Venture M&A (Exponent & Electra Partners)
China Hydroelectric Corporation Dec 2015 China Venture M&A (Shenzhen Energy)
Quotient Clinical Dec 2015 US Venture M&A (GHO)
Swissport Feb 2016 EUR Buyout M&A (HNA Group)
US Foods May 2016 US Buyout NYSE
As of 31 July 2016, HVPE retains a holding (directly or via an underlying manager) in a number of the public companies listed above. Company names shown for illustrative purposes.
54
Notable exits, 2014-16
CONFIDENTIAL 55
Disclaimer
STRICTLY CONFIDENTIAL
This document and this presentation have been prepared and issued by HarbourVest Global Private Equity Limited (the “Company”) for information
purposes only and may not be used in making any investment decision.
None of the Company, its investment manager, HarbourVest Advisers, L.P. (the “Investment Manager”) or HarbourVest Partners, LLC (“HarbourVest”) has
independently verified the information contained in this document and this presentation. This document and this presentation contain only summary
information and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information
contained herein and no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) is or will be accepted by the Company,
HarbourVest, the Investment Manager or any of their respective affiliates or by any of their respective officers, employees or agents in relation to it. Each of
the Company, HarbourVest, the Investment Manager and their respective affiliates and officers, employees or agents expressly disclaims any and all
liability which may be based on the document and any errors therein or omissions therefrom. In particular, no representation or warranty is given as to the
achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views contained herein are based
on financial, economic, market and other conditions prevailing as of the date of this document and this presentation. The information contained in this
document and this presentation will not be updated. Further information on the Company, its Investment Manager and HarbourVest can be found on the
Company’s website at www.hvgpe.com and HarbourVest’s website at www.harbourvest.com, including in announcements available on those sites.
This document and this presentation do not constitute any form of financial opinion or recommendation on the part of the Company, HarbourVest or the
Investment Manager or any of their respective affiliates and are not intended to be an offer, or the solicitation of any offer, to buy or sell any securities in
any jurisdiction.
This document and this presentation contain track record data in relation to the performance of funds of funds managed by HarbourVest and its affiliates.
When considering such track record data, investors should bear in mind that past performance is not necessarily indicative of future results and, as a
result, the Company’s actual returns may be greater or less than the amounts shown herein. Investment returns will depend on the increase or decrease in
the trading price of the Company’s shares. In addition the Company is a closed-end investment company and the performance data presented herein for
HarbourVest, as well as the private equity index performance data, relates principally to funds structured as self-liquidating partnerships and in which
investor contributions were made only when the underlying fund made an actual investment.
Neither this document, nor this presentation, nor any copy of either may be taken or transmitted into the United States of America, its territories or
possessions or distributed, directly or indirectly, in the United States of America, its territories or to any US person (as defined in Rule 902 of Regulation S
under the US Securities Act of 1933 (the “Securities Act”)). The distribution of this document and this presentation in other jurisdictions may be restricted by
law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.
Continued on next page
CONFIDENTIAL 56
Disclaimer (continued)
STRICTLY CONFIDENTIAL
This document and this presentation are being distributed in the United Kingdom only to (i) persons who have professional experience in matters relating to
investments who fall within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the “Order”), or
(ii) persons who are high net worth entities falling within Article 49(2) (a) to (d) of the Order, and/or (iii) persons to whom it may otherwise be lawfully
communicated, and (iv) "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000, as amended (all such persons
together being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents.
Any investment or investment activity to which the presentation and these slides relate is available only to relevant persons and will be engaged in only
with relevant persons.
By participating in this presentation or by accepting any copy of this document, you agree to be bound by the foregoing limitations.
The distribution of interests in HarbourVest Global Private Equity Limited (the “Fund”), a closed-ended investment company organised under the law of
Guernsey, in Switzerland will be exclusively made to, and directed at, qualified investors (the "Qualified Investors"), as defined in the Swiss Collective
Investment Schemes Act of 23 June 2006, as amended ("CISA") and its implementing ordinance. Accordingly, the Fund has not been and will not be
registered with the Swiss Financial Market Supervisory Authority (FINMA). The representative of the Fund in Switzerland is Hugo Fund Services SA, 6
Cours de Rive, 1204 Geneva. The Paying Agent in Switzerland is Banque Cantonale de Genève, 17 Quai de l'Ile, CH-1211 Geneva 2, Switzerland. The
place of performance for Interests of the Fund offered or distributed in or from Switzerland is the registered office of the Representative. Copies of the
Prospectus, Articles of Association and annual and semi-annual reports of the Fund can be obtained free of charge from the Representative.
CONFIDENTIAL 57
Additional information
The performance information includes realized and unrealized investments. Unrealized investments are valued by the applicable general partner in accordance
with the valuation guidelines contained in the applicable partnership agreement. Actual realized returns on unrealized investments will depend on, among other
factors, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of
sale, all of which may differ from the assumptions on which the valuations used in prior performance data contained herein are based. Accordingly, the actual
realized returns on these unrealized investments may differ materially from returns indicated herein.
In considering the prior performance information contained herein, investors should bear in mind that past performance is not necessarily indicative of
future results, and there can be no assurance that any fund will achieve comparable results or be able to implement its investment strategy.
1. These model (hypothetical) portfolios are intended for illustrative purposes only. Performance information for each hypothetical portfolio utilized a Monte Carlo
Simulation. These are based on the actual cash flows of a proprietary data set that includes partnership investments made by HarbourVest Funds and accounts,
along with partnership data from external sources. The capital calls and distribution data is based on historic partnership investment cash flows, but does not
represent the actual experience of any investor or any HarbourVest fund. The results of the simulation are impacted by an uneven representation of funds with
different vintage years, sizes, mangers, and strategies, and a limited pool of investment cash flow data. The actual pace and timing of cash flows is likely to be
different and will be highly dependent on the underlying partnerships’ commitment pace, the types of investments made by the fund(s), market conditions, and
terms of any relevant management agreements. The results presented are based entirely on the output from numerous mathematical simulations. The simulations
are unconstrained by the fund size, market opportunity, and minimum commitment amount, and do not take into account the practical aspects of raising and
managing a fund. The simulated hypothetical portfolio results should be used solely as a guide and should not be relied upon to manage your investments or make
investment decisions. Past performance is not a guarantee of future returns, and there can be no assurance that future funds or accounts will achieve comparable
results. Investments in private funds involve significant risks, including loss of the entire investment.
2. This information (Distributed / Funded, Total Value / Funded, Gross Portfolio IRR, Gross IRR) is presented on a gross basis and reflects the performance of the
investment portfolio, including primary fund investments, secondary investments, and/or direct co-investments. For primary and secondary investments, these
returns reflects the fees, expenses, and carried interest of the underlying partnership investments, but do not reflect management fees, carried interest, and other
expenses borne by investors in the HarbourVest funds/accounts, which will reduce returns. Gross Portfolio IRR represents the annual return calculated using
monthly cash flows from the funds managed by HarbourVest to and from the various partnerships or companies in which the HarbourVest funds invested during the
period specified. These returns do not represent the performance of any specific fund or the return to limited partners.
3. This performance includes all primary investments made by HarbourVest-managed funds and accounts for the period specified. This performance excludes
three custom accounts for a single client that made investments primarily in emerging venture capital managers, which was outside of HarbourVest’s core private
markets focus.
Continued on the next page
CONFIDENTIAL 58
Additional information (continued)
Certain information contained herein (including financial information and information relating to investments) has been obtained from published and non-published
sources. Such information has not been independently verified by HarbourVest. Except where otherwise indicated herein, the information provided herein is based
on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that
subsequently becomes available, or circumstances existing or changes occurring after the date hereof.
These materials do not constitute an offer to sell or the solicitation of an offer to buy interests in any investment sponsored by HarbourVest Partners L.P. or its
affiliates. Any offering of interests in the funds will be made solely pursuant to the Private Placement Memorandum of the funds and subscriptions will be accepted
solely pursuant to definitive documentation. Offers and sales of interests in the funds will not be registered under the laws of any jurisdiction and will be made solely
to “qualified purchasers” as defined in the Investment Company Act of 1940, as amended. These materials do not purport to con tain all the information relevant to
evaluating an investment in the funds.
Past performance is not a guarantee of future success and there can be no assurance that investors in funds will achieve the returns discussed herein. Investments
in private funds, involve significant risks, including loss of the entire investment. Before deciding to invest in a fund, prospective investors should pay particular
attention to the risk factors contained in the fund documents. Investors should have the financial ability and willingness to accept the risk characteristics of an
investment in a fund.
CONFIDENTIAL 59
Forward-looking statements
This document 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 indentified 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. 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. 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. HarbourVest qualifies any and all of its forward-looking statements by these cautionary factors. Please keep this cautionary note
in mind while reading this report.
REGISTERED OFFICE
HarbourVest Global Private Equity Limited
Company Registration Number: 47907
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey GY1 2HT
Tel +44 (0)14 8170 2400
Fax +44 (0)14 8170 2407
INVESTMENT MANAGER
HarbourVest Advisers L.P.
c/o HarbourVest Partners, LLC
One Financial Center
44th Floor
Boston MA 02111
U.S.A.
Tel +1 617 348 3707
Fax +1 617 350 0305
Richard Hickman
Director, Investment and Operations
+44 (0)20 7399 9847