HVPE seeks to generate superior returns for shareholders through long-term capital appreciation by investing primarily in a diversified portfolio of private markets investments.

HVPE is managed by HarbourVest Partners, who are an independent, global private markets investment specialist, with over 42 years of experience and more than $147 billion of assets under management as at 31 March 2025.

Simplified Investment Structure

On 30 January 2025 HVPE announced a new simplified investment model with HarbourVest Partners.

Historically HVPE has committed to “co-mingled funds” (see the Glossary for an explanation) managed by HarbourVest Partners, the Investment Manager

Going Forward HVPE will be adopting a “Separately Managed Account” (SMA) structure, whereby capital will be deployed by the Manager via a dedicated HVPE vehicle directly into third party General Partner funds, secondary opportunities and co-investments.

Defining an SMA: An SMA is a tailored portfolio of investments administered by a financial advisor or asset manager on behalf of a client to match the unique objectives that they have.

How will the new Investment Structure Operate?

Benefits of HVPE’s SMA

  • Improved Flexibility: HVPE will have increased influence on the timing and mechanics of liquidity events in the portfolio. As the sole investor in the dedicated HVPE SMA vehicle, the Company may ask the Manager to explore a sale of underlying assets via the secondary market should the Board believe this to be in the best interests of shareholders as a whole.

  • Reduced Overall Debt: the Company’s overall exposure to debt will reduce, with borrowing at the HarbourVest fund level expected to decline materially over time as the funds in HVPE’s existing portfolio mature and pay down debt. Furthermore, the Company’s pipeline of unfunded commitments to HarbourVest funds will also decline, leading to more predictable cash flows and a reduced need for borrowing at the HVPE level.

  • Competitive Management Fee: the Board has successfully negotiated that there will be no expected increase in the level of HarbourVest Partners’ fees, despite the more resource-intensive nature of the new structure. The management fee on HVPE’s SMA, at 60 basis points on NAV, is no greater than the current effective management fee rate incurred on HVPE’s existing portfolio of HarbourVest funds.

  • Exclusive Access: HVPE will continue to benefit from first-in-line allocation to high-quality investment opportunities within the Manager’s stable. As a result, HVPE will continue to provide public market investors with access to a broad range of attractive private markets opportunities through HarbourVest Partners.

What is the investment process for the SMA?

At the end of each year the HVPE Board will approve an SMA commitment figure which will be allocated across HarbourVest deals over the subsequent 12-month period. This process remains unchanged from when HVPE historically has invested in HarbourVest’s co-mingled funds. The agreed plan for the commitment deployment by HarbourVest is aligned with the Strategic Asset Allocation that is decided upon by the Investment Committee and approved by the Board annually. Subject to agreement by HarbourVest, the commitment figure may be revised during the year in response to changes in the investment environment.

Commitment allocation is assessed across a range of factors and considerations including the anticipated pace of investments and realisations, with the breakdown by investment type being decided with reference to the agreed Strategic Asset Allocation targets (see Portfolio Diversification).

The result is a complete private markets solution providing investors with diverse exposure to over 1,000 material private companies and a range of private markets strategies.

Will capital be called more quickly with an SMA?

Yes, the capital committed to the SMA is allocated to underlying investment opportunities on an annual basis. This differs from the previous structure of investing through HarbourVest comingled funds where committed capital was typically allocated to underlying investment opportunities on a multi-year basis.

The impact is that the timing on capital calls from each tranche will be shorter than historically. Additionally, moving to the SMA will reduce HVPE’s unfunded commitments balance going forward, as the revised structure will require lower unallocated commitments. As such HVPE will adjust its commitment plan accordingly.

When will the impact of the SMA be seen?

There will be no change to the arrangements with respect to HVPE’s existing portfolio of HarbourVest funds which will continue to call remaining committed capital as new investments are made and make distributions as investments are sold. The existing portfolio will gradually run-off as the HarbourVest funds mature.

It will take time for the Net Asset Value (NAV) of SMA assets to build up, particularly for the primary portion of the portfolio as the SMA will still be making commitments to underlying funds with multi-year investment timelines.

What is the current valuation policy and will this change with the SMA?

HVPE’s NAV is based on the NAV of each HarbourVest fund, adjusted for any changes in public equity prices, FX, cashflows, expenses and known material events occurring between the fund reporting date and HVPE NAV date. The valuation of each HarbourVest fund is presented on a fair value basis in accordance with US generally accepted accounting principles (“US GAAP”) and is based on the underlying NAVs reported by the managers of the underlying investments.

There will be no change to this policy under the SMA.