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HarbourVest NAV rises by 1.8 per cent in December

HarbourVest Private Equity’s net asset value per share was USD8.55 at 31 December 2009, representing a 1.8 per cent increase from the 30 November 2009 estimated NAV per share of USD8.40.

This change was driven primarily by a positive valuation adjustment (approximately USD0.26 per share) taken by the HarbourVest funds to reflect the investment manager’s preliminary estimate of year-end 2009 valuation increases.

This was partially offset by foreign currency movements (USD0.09 decrease in NAV per share) and ongoing operating expenses (USD0.02 per share).

During December, the euro and pound sterling depreciated 4.6 per cent and 1.6 per cent, respectively, against the US dollar, and the MSCI All Country World Index (USD) increased by 2.0 per cent.

During December, HVPE did not make any new commitments or purchase additional interests in HarbourVest-managed funds. The company continued to benefit from ongoing commitments made by the actively-investing HarbourVest funds in its portfolio, which made new partnership commitments in Europe and Asia, as well as two new direct investments in the US and Europe.

During the month, HVPE funded USD9.2m of capital calls to US fund of funds, direct funds, and the global secondary fund. HVPE received USD18.7m in distributions from eight HarbourVest funds during December, resulting in a net positive cash flow of USD9.5m. Approximately 30 per cent of the distributions were received from Fund VI Direct, which distributed proceeds from the December 2009 sale of Datatel to Hellman & Friedman and JMI Equity.

With respect to liquidity, merger and acquisition and initial public offering activity remains active across HVPE’s underlying portfolio. Five underlying companies completed IPOs in December, including KAR Auction Services (holding company for Adesa), which is held directly in Fund VIII Buyout and indirectly in HVPE’s US fund-of-funds. During the month, 24 portfolio companies completed sale transactions.

HVPE’s unfunded commitments of USD631.5m decreased by USD18.1m during December, as a result of funding capital calls and currency movement. Of the total unfunded commitments, approximately USD452.6m has been committed by HarbourVest funds to underlying partnerships, while the remaining USD178.9m has not yet been committed.

During December, the company repaid USD5.0m of outstanding borrowing against its USD500m credit facility, which is committed until December 2014 and subject to certain covenants. As at 31 December 2009, a total of USD75.0m has been drawn. Based on the facility’s most restrictive covenant, the remaining amount currently available is USD380.5m. This amount has increased by USD14.5m since 30 November 2009 primarily as a result of the USD4.1m increase in HVPE’s estimated NAV of investments and the USD5.0m facility repayment.

The company has USD7.3m in cash on its balance sheet, an increase of USD3.2m from 30 November, primarily reflecting the net positive cash flow during the month. As at 31 December 2009, HVPE’s cash and available credit facility of USD387.8m represents 86 per cent of commitments allocated to underlying partnerships and 61 per cent of total commitments (compared to 81 per cent and 57 per cent, respectively, at 30 November).

HVPE’s buyout investments increased to 59 per cent of the portfolio (from 58 per cent at 30 November 2009), and venture investments decreased to 38 per cent (from 39 per cent). US investments remained at 64 per cent of the portfolio, and European investments remained at 27 per cent. The NAV is split approximately 63 per cent in primary partnerships, 20 per cent in secondary investments, and 17 per cent in direct investments.

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