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HarbourVest Global Private Solution
SICAV S.A.
HarbourVest Global Private Solution SICAV S.A. (HGPS) is an open-ended private equity vehicle with an investment strategy aimed at providing investors with majority secondary and direct co-investments exposure through a single, compounding investment.
Why HGPS?
HGPS seeks to capitalize on the deep opportunity set available to HarbourVest’s private equity platform, from the vast number of potentially investable private companies to the ability to take active board positions with fund managers.
HarbourVest’s open architecture platform has the potential to enable investors to access the highest quality deals from the leading managers. At the same time, HGPS works towards retaining the benefit of stronger levels of liquidity for investors, compared to traditional closed-ended funds.
What differentiates HGPS from other private equity open-ended funds?
HGPS is designed to be a core-diversified holding within a private equity portfolio specifically or a sub-component of an investor’s growth or equity allocation. Secondaries provide immediate diversification and direct co-investments provide a higher expected multiple compared to other PE strategies and fee-efficient deployment.
High-quality seed portfolio
Immediate exposure, diversification and no blind pool risk
Pure play
private equity
Capturing alpha of active capital gain focused active strategies
Market leading
deal flow
Investment capacity to scale with client demand
Track record
HarbourVest has 40 years of investment trach record and 14 years of managing another evergreen vehicle
High quality seed portfolio sources, constructed, and managed by HarbourVest from an institutional anchor investor resulting in immediate capital appreciation potential and removal of blind pool risk
Capturing the upside potential of capital gain focused private equity whilst maintaining diversification through secondary investments
HarbourVest’s ability to deploy $10bn+per annum1 in direct co-investments and secondaries via an open architecture platform leads to potentially larger/higher quality deal flow than other open-ended evergreen funds
14 year evergreen vehicle track record delivering a 15.1% CAGR2 and 4.1x multiple over the last 10 years3
1 As of December 31, 2021, and dependent on the availability of suitable investments and economic conditions.
2 In NAV from September 30, 2012, to September 30, 2022. No individual investor received these returns and provided for informational purposes only.
3 As of September 30, 2022. Past performance is not an indicator of future returns provided for informational purposes only.
High-quality seed portfolio
Immediate exposure, diversification and no blind pool risk
High quality seed portfolio sources, constructed, and managed by HarbourVest from an institutional anchor investor resulting in immediate capital appreciation potential and removal of blind pool risk
Pure play
private equity
Capturing alpha of active capital gain focused active strategies
Capturing the upside potential of capital gain focused private equity whilst maintaining diversification through secondary investments
Market leading
deal flow
Investment capacity to scale with client demand
HarbourVest’s ability to deploy $10bn+per annum1 in direct co-investments and secondaries via an open architecture platform leads to potentially larger/higher quality deal flow than other open-ended evergreen funds
Track record
HarbourVest has 40 years of investment trach record and 14 years of managing another evergreen vehicle
1 As of December 31, 2021, and dependent on the availability of suitable investments and economic conditions.
2 In NAV from September 30, 2012, to September 30, 2022. No individual investor received these returns and provided for informational purposes only.
3 As of September 30, 2022. Past performance is not an indicator of future returns provided for informational purposes only.
The private equity opportunity
Private equity presents investors with the potential to access expanded avenues of return based on historically lower volatility, shallower drawdowns2 and diversification.
As an asset class, private equity has outperformed public equity consistently over the last two decades (see figure 1 below).
Figure 1: Private equity has significantly outperformed public markets over the long term
Comparing growth of $100 investment in global private equity* and public equities
*Global Private Equity includes buyout, growth, and venture investments.
Source: Burgiss, S&P Capital IQ. As of June 30, 2022. Based on time-weighted returns. Past performance is not a reliable indicator of future results.
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We believe that private equity should be considered part of any investor’s portfolio due to the high-quality investment opportunities it can potentially create.
These investment opportunities can be further enhanced by the many advantages that HGPS offers, including: manager diversification, strong liquidity positioning and access to an open architecture platform that enables investors to access the highest quality deals from leading managers.
Combined with HarbourVest’s integral market risk mitigation capabilities and long-standing track record of return generation and deal flow, we believe that HPGS can create stronger portfolio returns for our valued clients.
The private equity strategy
The secondary platform invests in a wide array of secondary deals including both traditional LP interests and GP-led transactions. The market is meaningfully under-capitalized which means there is simply not enough secondary capital to absorb all the assets that institutions and GPs would like to sell.
We believe this supply / demand imbalance allows us to be highly selective and to negotiate favorable pricing and terms. The highly favorable buyer’s market we are benefitting from today resembles the market dynamics following the Global Financial Crisis.
Direct co-investment activity has evolved throughout this post-Pandemic period of public market volatility with less experienced co-investors stepping away due to liquidity constraints and risk aversion.
More experienced platforms like HarbourVest can maintain exposure, be more selective, and focus on sourcing companies with strong pricing power and a good degree of locked-in revenues that are well placed to weather the current macro environment.
Additionally, many private equity sponsors have been using co-investment as a tool to provide primary and secondary capital to their existing portfolio companies for some time. This follow-on funding can help support a large add-on acquisition at a time when debt financing has become more expensive.
How does HGPS work?
Strategy
Source: HarbourVest, 2023.
Stage
Geography
Source: HarbourVest, 2023.
Strategy4
Over time, the HGPS fund will be made up of a majority of secondary investments and direct co-investments, with some opportunistic exposure to primary partnership investments.
The allocation to secondaries will enable HGPS to mitigate the J curve and utilize a quicker distribution profile to reinvest and compound the fund’s returns. HGPS will leverage HarbourVest’s secondary platform to identify undervalued assets and develop innovative liquidity solutions for complex, GP-led, secondary investments.
The allocation to co-investments will allow HGPS to make direct investments alongside a sponsor, and so lowering the fee burden to end-investors. HGPS will also make direct investments in operating companies through direct co-investments with other private markets managers.
HGPS will retain an opportunistic allocation to primaries to continue to access experienced managers where the return profile will meet the expectations of the vehicle.
Stage
Consistent with the profile of HarbourVest’s overall private equity investment strategy, HGPS will comprise a mix of investment stages:
- 70-90% Buyout
- 10-30% Growth/Venture investments
Geography
HGPS will comprise a diversified mix of geographic exposures:
- 50%-60% North America
- 25-35% Europe
- 15-20% Asia
Strategy
HGPS seeks to identify undervalued assets and develop innovative liquidity solutions for complex, GP-led, secondary investments. For more information on our primary investments capability please visit our Secondary Investments page.
Direct Co-Investments
HGPS expects to make investments directly in operating companies and other assets through direct co-investments with other private markets managers. For more information on our primary investments capability please visit our Direct Co-Investments page.
Opportunistic Primaries
HGPS intends to invest in newly formed funds raised by experienced managers that invest in buyout and growth equity/late-stage venture capital. For more information on our primary investments capability please visit our Primary Investments page.
Product Structure
HarbourVest Global Private Solution SICAV S.A. is an open-ended fund, established in the form of an investment company with variable share capital (Société d’investissement à capital variable – SICAV) subject to part II of the Luxembourg law of 17 December 2010 on undertakings for collective investment.
The Fund qualifies as an alternative investment fund and is subject to the permanent prudential supervision of the Luxembourg supervisory authority of the financial sector, the Commission de Surveilliance du Secteur Financier (“CSSF”). The Fund is registered with the Luxembourg register of commerce and companies under number B272336.
HarbourVest Partners (Ireland) Limited, authorised and regulated by the Central Bank of Ireland (“CBI”) as an alternative investment fund manager (“AIFM”) in accordance with the Alternative Investment Fund Managers Directive (AIFMD), has been appointed as AIFM of HGPS.
HGPS is a single legal entity incorporated as an umbrella fund initially comprised of a single separate sub-fund, HarbourVest Global Private Solution SICAV S.A. – Diversified Private Equity Fund. Additional sub-funds may be created in future, subject to the approval of the CSSF.
The Fund enables non-US investors access to institutional quality private markets exposure through a single investment.
This website is not an offer to sell interests in a financial product and is not soliciting an offer to buy interests in a financial product in any jurisdiction where, and to investors to whom, such offer is not permitted. An investment in this Fund should be considered a speculative investment that entails substantial risks; you may lose part or all of your investment or your investment may not perform as well as other similar investments. Such an investment is therefore suitable for sophisticated investors for whom such an investment is part of a diversified portfolio, and who fully understand and are capable of bearing the risk of an investment in this Fund. Potential investors should carefully consider the risk factors in Section IX. “Risk Factors & Conflicts of Interest” of the Prospectus before making a decision to invest in the Fund.
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