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Modern Slavery Act Disclosure

Slavery and human-trafficking statement

FINANCIAL YEAR ENDED 31 DECEMBER 2023

INTRODUCTION

HarbourVest’s response to modern slavery is rooted in the Firm’s values and its dedication to running its business with integrity and according to the highest ethical standards. Our Firm is committed to combatting modern slavery and human trafficking to the extent they may impact our business. This Slavery and Human Trafficking statement describes our approach towards ensuring that slavery and human trafficking are not taking place in our business or supply chain and includes the HarbourVest’s Modern Slavery Act statement (the “HarbourVest Modern Slavery Act Statement”) highlighting the specific steps HarbourVest Partners (U.K.) Limited (“HV UK”) has taken to uphold its obligations under the U.K. Modern Slavery Act (“MSA”).

OVERVIEW OF THE GLOBAL HARBOURVEST ORGANIZATION

HarbourVest Group Overview1

HarbourVest is an independent, global private markets firm with over 40 years of experience and more than $125+ billion assets under management as of December 31, 2023. Our interwoven platform provides clients access to global primary funds, secondary transactions, direct co-investments, real assets and infrastructure, and private credit. Our strengths extend across these strategies, enabled by our team of more than 1,200 employees, including more than 230 investment professionals across Asia, Europe, and the Americas.  Across our private markets’ platform, our team has committed more than $59 billion to newly-formed funds, completed over $55 billion in secondary purchases, and invested over $40 billion directly in operating companies. We partner strategically and plan our offerings innovatively to provide our clients with access, insight, and global opportunities.

HarbourVest Group Locations

HarbourVest Partners LLC is headquartered in Boston and has offices around the world, including: HarbourVest Partners (U.K.) Limited in London (established in 1990), HarbourVest Partners (Asia) Limited in Hong Kong (1994), HarbourVest Partners (Japan) Limited in Tokyo (2010), HarbourVest Partners, LLC Oficina de Representación in Bogotá (2011), HarbourVest Investment Consulting (Beijing) Company Limited in Beijing (2012), HarbourVest Partners (Canada) Limited in Toronto (2014), HarbourVest Partners Korea Ltd in Seoul (2015), HarbourVest Partners (Israel) Ltd in Tel Aviv (2015), HarbourVest Partners (Ireland) Limited in Dublin (2018), HarbourVest Partners (Singapore) Pte Ltd in Singapore (2020), HarbourVest Partners (Ireland) Limited, Zweigniederlassung Deutschland in Frankfurt (2021), HarbourVest Partners (Australia) in Sydney (2022), and HarbourVest Partners (Switzerland) GmbH in Zurich (2023).

HarbourVest Client Base

HarbourVest’s clients are principally institutional investors who are pension funds, endowments, foundations, and financial institutions as well as private wealth clients in North America, Europe, Asia Pacific, Latin America, and the Middle East.

HarbourVest’s Supply Chain

As a private markets’ investment specialist, HarbourVest’s supply chain is relatively short and consists predominantly of the purchase of professional services and business supplies. We regard providers of professional advice generally as presenting particularly low risk. We believe, therefore, that there is a low overall risk of slavery or human trafficking in connection with our business and supply chain.

HarbourVest does not regard its commingled funds or separately managed accounts, which invest into funds and operating companies, as part of HarbourVest’s supply chain. HarbourVest’s direct co-investments are primarily minority, non-control investments in operating companies alongside a lead sponsor who generally has voting control over the company. Despite not regarding these operating companies as part of its supply chain, HarbourVest is committed to ethical and responsible investing, and is also conscious of the reputational damage to the Firm and its funds or accounts if a slavery, human trafficking, child labor, or supply chain issue were to occur at an operating company in which the funds or accounts were invested. We describe below the due diligence processes and on-going monitoring of investments undertaken by HarbourVest.

OUR POLICIES

ESG Policy

HarbourVest’s ESG Policy is regularly reviewed to ensure it reflects our evolving understanding and treatment of the financial risks and opportunities that environmental, social, and governance considerations present to the assets we manage on our clients’ behalf in the short, medium, and long-term. By taking these considerations into account as part of our broader risk management and opportunity assessment, our objective is to reduce financial risk to client portfolios and to enhance value protection and creation potential.

HarbourVest’s ESG Policy includes a commitment to respect and endeavour to uphold human rights to the best of our ability through our internal business and investment activities. HarbourVest implements the UN Guiding Principles on Business and Human Rights (UNGPs) through our broader ESG framework. Please “click here” to view the HarbourVest’s ESG Policy.

HarbourVest has been a proud signatory to the Principles for Responsible Investment (PRI)2 since 2013. The six Principles for Responsible Investment were developed by investors, for investors, and signatories represent a majority of the world’s professionally managed investments.

Other Key Policies and Actions

HarbourVest has adopted the following policies, procedures, and initiatives which reinforce the Firm’s fundamental values, including:

  • A Code of Ethics and Anti-Bribery and Anti-Corruption Policy, which describe the standards of behavior expected from HarbourVest employees;
  • UK Whistleblowing Policy for the reporting of suspicious and illegal activity;
  • Global Respectful Workplace Policy, which aims to ensure that all individuals with whom we interact on behalf of the Firm are free from discrimination, workplace violence, harassment, bullying, and other forms of inappropriate conduct; and
  • A Complaints Policy, which provides a framework for the effective consideration and proper handling of complaints from HarbourVest customers, potential customers, or former customers.

RISK MITIGATION 

Investment Due Diligence Process

Our most fundamental commitment is to seek to deliver superior risk-adjusted returns for our clients within the mandates they grant us, consistent with our fiduciary duties and contractual obligation. HarbourVest has instituted robust ESG due diligence procedures within each of our investment strategies. HarbourVest believes these procedures support sound investment decision-making, which is at the core of how we seek to create compelling, risk-adjusted returns for our investors.

Our investment teams rely on two primary tools: (i) our internally developed ESG Manager Scorecard which we use to assess private markets fund managers on their ESG policies and processes, including their efforts to monitor and support portfolio companies to adhere to sustainability or ethical business guidelines; and (ii) RepRisk®, an external database, to perform due diligence, monitor ESG and business conduct risks, and collect relevant data. ESG analysis is typically included in investment committee materials and would where, where material and relevant, be factored into the committee’s final approval of whether HarbourVest commits to any investment.

Areas of heighted scrutiny

HarbourVest generally seeks to incorporate an analysis of applicable legal and governance factors into its investment diligence. Such factors may include, among others, a history of a company’s compliance with applicable laws or regulations, adherence to business integrity norms, and high ethical standards. HarbourVest will not invest into companies that it knows are engaged in forced labor and/or child labor in contravention of applicable laws, human trafficking, and/or which are out of compliance with applicable sanctions prohibitions. Further, HarbourVest takes a cautious and case-by-case approach to investing in certain categories of investments, which may present heightened ESG risks. These include, but may not be limited to, portfolio companies that HarbourVest knows are materially engaged in deforestation, manufacturing of firearms and/or weapons, and certain “vice” or “sin” industries such as gambling or tobacco.

Operational Due Diligence (“ODD”)

We recognize the Goals identified by the Liechtenstein Initiative, Finance Against Slavery & Trafficking, Goal one being to strengthen compliance with laws against modern slavery and human trafficking. We request available compliance policies of private market fund managers that are subject to our operational due diligence process, which typically includes, but may not be limited to:

  • Code of Ethics;
  • AML and counter-terrorist financing policy;
  • Anti-bribery and anti-corruption policy;
  • Global economic sanctions policy;
  • Data protection/privacy policy; and
  • Modern Slavery Act policy.

In addition, for private market fund managers which are subject to an ODD review, one of the current conditions of our operational due diligence process is that the manager runs their investor base through an OFAC/Sanctions listing to ensure their client base is not included on one of these listings.

Investment Monitoring

Investments are monitored through RepRisk (which includes human rights abuses and corporate complicity as a specific topic flag in their reporting system) and subject to a regular, periodic review process that screens for potentially material ESG incidents. We have protocols in place to discuss ESG incidents with the relevant manager or lead sponsor, where considered relevant and material, and to record the outcome of that engagement.

HARBOURVEST MODERN SLAVERY ACT STATEMENT

Risk Assessment and Mitigation of Supply Chain Risk

In order to comply with the obligations of the MSA, HV UK has undertaken the following:

  • Review of Business and Supply Chain:HV UK has reviewed its suppliers for 2023 and risk-ranked them for purposes of MSA analysis. The criteria used to make an assessment of suppliers includes, but is not limited to, the nature of services provided by the supplier, the jurisdiction in which the supplier operates, and the value of payments made by HV UK to those suppliers.
  • Due Diligence:HV UK has conducted due diligence for each of its medium- and high-risk suppliers and engaged with them to address HV UK’s supply chain risk.

Training

Given our assessment of slavery and human trafficking risks are low to HarbourVest’s business and with regard to our straightforward supply chains, our planned approach is one that is proportionate, and risk based. We will continue to review and provide, as appropriate, training to relevant staff members, in particular, those who manage key supplier relationships.

Implementation

This Modern Slavery Act Statement is made pursuant to section 54(1) of the MSA and constitutes HV UK’s slavery and human-trafficking statement for the financial year ending 31 December 2023. It has been approved by the Executive Management Committee of HarbourVest.

June 2024

Peter G. Wilson

On behalf of the Executive Management Committee of HarbourVest Partners, LLC and the Board of Directors of HarbourVest Partners (U.K.) Limited3.

—

(1) Figures as of 31 March 2024.
(2) As a signatory to the PRI, HarbourVest has a regular obligation to complete the PRI Reporting Framework. HarbourVest’s most recent PRI Transparency Report can be found on the PRI website.
(3) The Board of Directors of HarbourVest Partners (U.K.) Limited approved the HarbourVest Modern Slavery Act Statement only.

Professional Investor Definition

“Professional Investor” under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the “SFO”) and its subsidiary legislation) means:

(a) any recognised exchange company, recognised clearing house, recognised exchange controller or recognised investor compensation company, or any person authorised to provide automated trading services under section 95(2) of the SFO;

(b) any intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong;

(c) any authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(d) any insurer authorized under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong), or any other person carrying on insurance business and regulated under the law of any place outside Hong Kong;

(e) any scheme which-

(i) is a collective investment scheme authorised under section 104 of the SFO; or

(ii) is similarly constituted under the law of any place outside Hong Kong and, if it is regulated under the law of such place, is permitted to be operated under the law of such place,

or any person by whom any such scheme is operated;

(f) any registered scheme as defined in section 2(1) of the Mandatory Provident Fund Schemes Ordinance (Cap. 485 of the Laws of Hong Kong), or its constituent fund as defined in section 2 of the Mandatory Provident Fund Schemes (General) Regulation (Cap. 485A of the Laws of Hong Kong), or any person who, in relation to any such registered scheme, is an approved trustee or service provider as defined in section 2(1) of that Ordinance or who is an investment manager of any such registered scheme or constituent fund;

(g) any scheme which-

(i) is a registered scheme as defined in section 2(1) of the Occupational Retirement Schemes Ordinance (Cap. 426 of the Laws of Hong Kong); or

(ii) is an offshore scheme as defined in section 2(1) of that Ordinance and, if it is regulated under the law of the place in which it is domiciled, is permitted to be operated under the law of such place,

or any person who, in relation to any such scheme, is an administrator as defined in section 2(1) of that Ordinance;

(h) any government (other than a municipal government authority), any institution which performs the functions of a central bank, or any multilateral agency;

(i) except for the purposes of Schedule 5 to the SFO, any corporation which is-

(i) a wholly owned subsidiary of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong;

(ii) a holding company which holds all the issued share capital of-

(A) an intermediary, or any other person carrying on the business of the provision of investment services and regulated under the law of any place outside Hong Kong; or

(B) an authorized financial institution, or any bank which is not an authorised financial institution but is regulated under the law of any place outside Hong Kong; or

(iii) any other wholly owned subsidiary of a holding company referred to in subparagraph (ii); or

(j) any person of a class which is prescribed by rules made under section 397 of the SFO for the purposes of this paragraph as within the meaning of this definition for the purposes of the provisions of the SFO, or to the extent that it is prescribed by rules so made as within the meaning of this definition for the purposes of any provision of the SFO.

The first of such classes of additional “professional investor”, under the Securities and Futures (Professional Investor) Rules (Cap. 571D of the Laws of Hong Kong), are:

(k) any trust corporation (registered under Part VIII of the Trustee Ordinance (Cap. 29 of the Laws of Hong Kong) or the equivalent overseas) having been entrusted under the trust or trusts of which it acts as a trustee with total assets of not less than HK$40 million or its equivalent in any foreign currency at the relevant date (see below) or-

(i) as stated in the most recent audited financial statement prepared-

(A) in respect of the trust corporation; and

(B) within 16 months before the relevant date;

(ii) as ascertained by referring to one or more audited financial statements, each being the most recent audited financial statement, prepared-

(A) in respect of the trust or any of the trust; and

(B) within 16 months before the relevant date; or

(iii) as ascertained by referring to one or more custodian (see below) statements issued to the trust corporation-

(A) in respect of the trust or any of the trusts; and

(B) within 12 months before the relevant date;

(l) any individual, either alone or with any of his associates (the spouse or any child) on a joint account, having a portfolio (see below) of not less than HK$8 million or its equivalent in any foreign currency at the relevant date or-

(i) as stated in a certificate issued by an auditor or a certified public accountant of the individual within 12 months before the relevant date; or

(ii)  as ascertained by referring to one or more custodian statements issued to the individual (either alone or with the associate) within 12 months before the relevant date;

(m) any corporation or partnership having-

(i) a portfolio of not less than HK$8 million or its equivalent in any foreign currency; or

(ii) total assets of not less than HK$40 million or its equivalent in any foreign currency, at the relevant date, or as ascertained by referring to-

(iii) the most recent audited financial statement prepared-

(A) in respect of the corporation or partnership (as the case may be); and

(B) within 16 months before the relevant date; or

(iv) one or more custodian statements issued to the corporation or partnership (as the case may be) within 12 months before the relevant date; and

(n) any corporation the sole business of which is to hold investments and which at the relevant date is wholly owned by any one or more of the following persons-

(i) a trust corporation that falls within the description in paragraph (k);

(ii) an individual who, either alone or with any of his or her associates on a joint account, falls within the description in paragraph (k);

(iii) a corporation that falls within the description in paragraph (m);

(iv) a partnership that falls within the description in paragraph (m).

For the purposes of paragraphs (k) to (n) above:

  • “relevant date” means the date on which the advertisement, invitation or document (made in respect of securities or structured products or interests in any collective investment scheme, which is intended to be disposed of only to professional investors), is issued, or possessed for the purposes of issue;
  • “custodian” means (i) a corporation whose principal business is to act as a securities custodian, or (ii) an authorised financial institution under the Banking Ordinance (Cap. 155 of the Laws of Hong Kong); an overseas bank; a corporation licensed under the SFO; or an overseas financial intermediary, whose business includes acting as a custodian; and
  • “portfolio” means a portfolio comprising any of the following (i) securities; (ii) certificates of deposit issued by an authorised financial institution under the Banking Ordinance (Cap, 155 of the Laws of Hong Kong) or an overseas bank; and (iii) except for trust corporations, cash held by a custodian.

Institutional Investor / Accredited Investor Definition

An institutional investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(a) the Singapore Government;

(b) a statutory board as may be prescribed by regulations made under section 341 of the SFA, as prescribed in the Second Schedule of the Securities and Futures (Classes of Investors) Regulations 2018;

(c) an entity that is wholly and beneficially owned, whether directly or indirectly, by a central government of a country and whose principal activity is —

(i) to manage its own funds;

(ii) to manage the funds of the central government of that country (which may include the reserves of that central government and any pension or provident fund of that country); or

(iii) to manage the funds (which may include the reserves of that central government and any pension or provident fund of that country) of another entity that is wholly and beneficially owned, whether directly or indirectly, by the central government of that country;

(d) any entity —

(i) that is wholly and beneficially owned, whether directly or indirectly, by the central government of a country; and

(ii) whose funds are managed by an entity mentioned in sub‑paragraph (c);

(e) a bank that is licensed under the Banking Act 1970;

(f) a merchant bank that is licensed under the Banking Act 1970;

(g) a finance company that is licensed under the Finance Companies Act 1967;

(h) a company or co‑operative society that is licensed under the Insurance Act 1966 to carry on insurance business in Singapore;

(i) a company licensed under the Trust Companies Act 2005;

(j) a holder of a capital markets services licence;

(k) an approved exchange;

(l) a recognised market operator;

(m) an approved clearing house;

(n) a recognised clearing house;

(o) a licensed trade repository;

(p) a licensed foreign trade repository;

(q) an approved holding company;

(r) a Depository as defined in section 81SF of the SFA;

(s) a pension fund, or collective investment scheme, whether constituted in Singapore or elsewhere;

(t) a person (other than an individual) who carries on the business of dealing in bonds with accredited investors or expert investors;

(u) a designated market‑maker as defined in paragraph 1 of the Second Schedule to the Securities and Futures (Licensing and Conduct of Business) Regulations;

(v) a headquarters company or Finance and Treasury Centre which carries on a class of business involving fund management, where such business has been approved as a qualifying service in relation to that headquarters company or Finance and Treasury Centre under section 43D(2)(a) or 43E(2)(a) of the Income Tax Act 1947;

(w) a person who undertakes fund management activity (whether in Singapore or elsewhere) on behalf of not more than 30 qualified investors;

(x) a Service Company (as defined in regulation 2 of the Insurance (Lloyd’s Asia Scheme) Regulations) which carries on business as an agent of a member of Lloyd’s;

(y) a corporation the entire share capital of which is owned by an institutional investor or by persons all of whom are institutional investors;

(z) a partnership (other than a limited liability partnership within the meaning of the Limited Liability Partnerships Act 2005) in which each partner is an institutional investor.

An accredited investor as defined in Section 4A of the SFA and Securities and Futures (Classes of Investors) Regulations 2018 is:

(i)  an individual —

(A) whose net personal assets exceed in value $2 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(B) whose financial assets (net of any related liabilities) exceed in value $1 million (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount, where “financial asset” means —

(BA) a deposit as defined in section 4B of the Banking Act 1970;

(BB) an investment product as defined in section 2(1) of the Financial Advisers Act 2001; or

(BC) any other asset as may be prescribed by regulations made under section 341; or

(C) whose income in the preceding 12 months is not less than $300,000 (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe in place of the first amount;

(ii)  a corporation with net assets exceeding $10 million in value (or its equivalent in a foreign currency) or such other amount as the Authority may prescribe, in place of the first amount, as determined by —

(A) the most recent audited balance sheet of the corporation; or

(B) where the corporation is not required to prepare audited accounts regularly, a balance sheet of the corporation certified by the corporation as giving a true and fair view of the state of affairs of the corporation as of the date of the balance sheet, which date must be within the preceding 12 months;

(iii) A trustee of a trust which all the beneficiaries are accredited investors; or

(iv) A trustee of a trust which the subject matter exceeds S$10 million; or

(v) An entity (other than a corporation) with net assets exceeding S$10 million (or its equivalent in a foreign currency) in value. “Entity” includes an unincorporated association, a partnership and the government of any state, but does not include a trust; or

(vi) A partnership (other than a limited liability partnership) in which every partner is an accredited investor; or

(vii) A corporation which the entire share capital is owned by one or more persons, all of whom are accredited investors.

Continuation solutions encompass a host of transaction types in which a GP secures interim liquidity and/or additional primary capital for their LPs in a strongly performing asset, or set of assets, that the GP will continue to own and control. Specifically, they include continuation funds, new funds created by GPs for the purpose of acquiring the asset(s) that continue to be managed by the same GP and capitalized by one or several secondary buyers, or equity recapitalizations involving a direct equity or structured equity investment into a portfolio company. These transactions can also include a parallel investment from the GP’s latest fund into that same pool of assets (a “cross-fund trade”).