- HVPE said it shared the frustrations of those dismayed with its discount to NAV
- The FTSE 250 group said it would bring forward a continuation vote next year
Harbourvest Global Private Equity (HVPE) has unveiled a number of radical proposals to help bolster shareholder returns and keep discounts to net asset value under control.
HVPE said it shared the frustrations of those dismayed with the firm’s significant discount to net asset value, which currently stands at about 40 per cent.
It comes as London-listed investment trusts take fresh action on performance and discounts to keep potential activists at bay, following Saba Capital’s bombshell intervention in December.
HVPE has announced three new initiatives with an ambition to improve its value and maximise capital returns.
It intends to double the percentage allocation of gross cash realisations going to the distribution pool from 15 to 30 per cent.
Investment bank Deutsche Numis expects this to result in $235million being available for share buybacks this year, equivalent to 10 per cent of HVPE’s market cap.
HVPE also said it is formulating plans to hand out capital via a ‘separately managed account,’ whereby a professional investment group manages a portfolio of securities on behalf of an individual investor.
Payouts: Harbourvest Global Private Equity has unveiled a number of radical proposals to help bolster shareholder returns
It believes the move will lead to a ‘substantial reduction’ in leverage, greater flexibility when deploying capital, and more control over a portfolio’s liquidity.
Finally, the FTSE 250 business confirmed it would bring forward a continuation vote at its annual general meeting in July 2026.
Such votes are usually a make-or-break matter for investment trusts because they allow investors to determine whether they can continue trading.
In HVPE’s case, shareholders will be asked by a simple majority vote if they want the company to carry on.
HVPE called the vote ‘an important milestone in promoting shareholder democracy’, noting that it was the first listed private equity fund of funds investment operator to undertake such an action.
A fund of funds is a vehicle that invests in other funds instead of individual securities or private assets like stocks and bonds.
Analysts at broker Jefferies said the introduction of the vote ‘appears timed to act as a backstop should the other measures not address the discount’.
Ed Warner, HVPE chair, said: ‘Despite our NAV growth the majority of our peers over the course of the calendar year, HVPE’s discount to NAV remains a key focus.’
He added that the firm thought the three proposals ‘will maximise returns, help to address the discount, improve flexibility and give shareholders greater control over their investment.’
HVPE provides investors with material exposure to over 1,000 businesses across various industries by solely investing in funds managed by HarbourVest Partners.
Among its largest holdings are Chinese fashion retailer Shein, digital bank Revolut, software group Databricks, and cargo handling operator DP World Australia.
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