HarbourVest Global Private Equity, a newly-established closed-ended investment company incorporated in Guernsey, has announced plans to conduct a global offering and a directed offering of
HarbourVest Global Private Equity, a newly-established closed-ended investment company incorporated in Guernsey, has announced plans to conduct a global offering and a directed offering of Class A ordinary shares and to seek a listing of its shares on Euronext Amsterdam. The company will be managed by HarbourVest Advisers, an affiliate of private equity fund of funds manager HarbourVest Partners.
HarbourVest has appointed Lehman Brothers International (Europe) as global co-ordinator and Lehman Brothers, Deutsche Bank (London Branch) and Goldman Sachs International as joint bookrunners. The offerings are scheduled to close in early December.
The fund will seek to raise up to USD400m in cash proceeds from the offerings, while a number of existing HarbourVest limited partners are contributing their interests in existing HarbourVest funds to the company in exchange for shares that will be subject to a lock-up. It is expected that on admission, the company’s initial market capitalisation will be approximately USD830m.
HarbourVest Global Private Equity aims to offer shareholders long-term capital appreciation through a private equity portfolio diversified by geography, by stage of investment, by vintage year and by industry.
Following the completion of the offerings, it is expected that the company will have more than 90 per cent of its equity capital invested in a portfolio of HarbourVest managed funds, which the investment manager says will present a strong platform for NAV growth. It will invest in HarbourVest funds that focus on primary partnership commitments, secondary investments or direct investments in operating companies.
On average, the net asset value of the initial investment portfolio has increased by 17.7 per cent per year since launch, with average increases of 37.5 per cent over the 12 months to the end of June this year and of 27.8 per cent per year over the three years to June/. At the end of 2006, the initial investments provided exposure to 524 private equity funds and 5,570 underlying company investments.
Brooks Zug, a director of HarbourVest Global Private Equity and senior managing director of HarbourVest, says: ‘HarbourVest is celebrating its 25th anniversary this year, and HVPE represents the latest phase in our growth.
‘HarbourVest has one of the longest track records in the industry and one of the most experienced management teams, and has achieved top quartile performance across all our private equity activities. HVPE is the only opportunity public equity investors have to access our highly successful funds through a listed vehicle.’
HarbourVest is one of the world’s longest-established private equity fund of funds managers, with investment commitments of more than USD29bn over the past 25 years. The group boasts an experienced and stable team of 17 managing directors with an average tenure at HarbourVest of 18 years.
There will be no duplication of fees, with public shareholders charged on the same basis as limited partners in HarbourVest funds and all the costs of the offering will be borne by HarbourVest. The board of directors will initially comprise seven members, including chairman Sir Michael Bunbury, and will have a majority of independent directors.
‘HarbourVest’s exceptional performance speaks for itself,’ says George Anson, a director of the Guernsey company and a managing director of HarbourVest. ‘HarbourVest Global Private Equity represents a fantastic opportunity for public market shareholders to access private-equity style returns, whilst benefiting from the liquidity of a listed vehicle. This is a compelling offering for shareholders, which we believe provides a strong platform for NAV growth.’
HarbourVest and its subsidiaries have 170 employees, including 65 investment professionals based in Boston, London, and Hong Kong. In 25 years of investing in private equity, the team has committed more than USD17.6bn to newly-formed funds, representing relationships with 200 private equity managers, completed more than USD3.9bn in secondary purchases of partnership interests and invested USD3.1bn directly in operating companies. The firm has 240 institutional clients including pension funds, endowments, foundations and financial institutions in the US, Canada, Europe, Australia, and Japan.
