HarbourVest - Secondary Case Studies

Investment Strategy

Secondary Case Studies

Traditional LP Interests
Secondary Direct
Structured Transactions

Acquisition of limited partner commitments to existing private equity partnerships.

This part of the market accounts for the majority of secondary activity and is the most competitive, as these transactions are relatively straight forward and are often brokered by intermediaries. HarbourVest seeks transactions with limited competition or where it has a proprietary advantage.

Transaction Dynamic	Transaction Structure	HarbourVest Advantage
HarbourVest indentified a number of assets within a fund family for which we had strong pricing relative to typical market discounts Sourcing initiative was launched to identify sellers of these assets Multiple sellers accepted our offers Process involved close coordination with general partner	Traditional purchase of multiple interests in three funds managed by an established U.S. buyout manager Multiple position in same funds merged into single interest to accommodate potential investor count concerns by the general partner	Leveraged HarbourVest platform to gain better insight into selected assets As an existing primary investor in the funds, HarbourVest was viewed as a preferred buyer Relationship with general partner allowed us to effectively manage through complicated transfer issues Sellers’ familiarity with HarbourVest provided them with confidence in our ability to close

Purchases of portfolios of direct investments through a new special purpose entity or via a new fund manager.

This is a more sophisticated transaction type that requires greater resources and a differentiated skill set. HarbourVest has been active in this portion of the market since the mid-1990s and closed one of the first secondary direct transactions in the industry in 1995.

Transaction Dynamic	Transaction Structure	HarbourVest Advantage
Publishing business funded digital media in-house team and portfolio Team approached HarbourVest on a proprietary basis to finance a spinout HarbourVest reached agreement with the corporate parent to jointly back the general partner	New joint venture vehicle formed to purchase interests in a portfolio of 47 direct company interests Significant general partner commitment to transaction Downside protection with attractive pricing	Demonstrated experience leading transactions of this type and complexity Clear track record of investing in and supporting growth portfolios Proprietary transaction given long-standing relationship with team Manager attracted by HarbourVest’s primary platform

Tailor-made liquidity solutions that often involve the creation of innovative and proprietary transaction structures designed specifically to accomplish the goals of a particular seller.

These transactions often involve portfolios of significant size and scale. As sellers continue to explore the secondary market with the hopes of satisfying complex objectives, we expect to maintain our position at the forefront of this subset of the market.

Transaction Dynamic	Transaction Structure	HarbourVest Advantage
Absolute Private Equity (“Absolute”), a listed private equity vehicle on SIX Swiss Exchange, owned diversified portfolio of high quality funds well known to HarbourVest Absolute was under pressure to find liquidity for several shareholders Board of Absolute recommended HarbourVest’s offer as liquidity solution for all shareholders HarbourVest launched tender offer to acquire Absolute with majority of Absolute shareholders tendered into HarbourVest offer	Created acquisition company structure and Swiss acquisition vehicle to acquire public shares HarbourVest acquired an indirect interest in over 90 underlying assets, attained Board control, and will continue current run-off strategy in place HarbourVest completed the squeeze-out of all remaining shareholders and de-listed Absolute from the SIX Exchange	Demonstrated experience and reputation for leading large, innovative, and complex transactions Existing general partner relationships facilitated our ability to diligence large, diversified portfolio in short time frame Relationship cultivated with Board of Absolute, which recommended HarbourVest’s offer and recognized our extensive experience and knowledge of private equity

HarbourVest Partners, LLC is a registered investment adviser under the Investment Advisers Act of 1940. The information on this site is intended solely for the benefit of firms and companies seeking private equity investment capital by providing general information on our services and philosophy. The material on this site is for informational purposes only and does not constitute an offer or solicitation to purchase any investment solutions or a recommendation to buy or sell a security nor is it to be construed as investment advice. Additionally, the material on this site does not constitute a representation that the solutions described therein are suitable or appropriate for any person. By using this website you agree to the terms and conditions in the Terms of Use.