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Test An open-ended core diversified portfolio designed to provide exposure to private equity secondary and direct co-investments through a single commitment with monthly subscription and redemptions at NAV.

0
Year track record
$ 0 B+
in total AUM as of
September 30, 2022
0
Global offices
$ 0 B
committed to Private Equity investments in 2021
$ 0 M
Seed portfolio with private equity exposure day-1
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People
0
Investment professionals
0 +
Advisory board seats with GP partners

HarbourVest Global Private Solution (“HGPS”) is a perpetual vehicle designed to provide investors with the return and diversification benefits of a private equity portfolio, alongside the optionality for redemptions.

The vehicle will focus on the disciplined deployment into private equity’s more active strategies secondaries and direct co-investments, and leverage HarbourVest’s market leading deal flow, execution capabilities, high quality seed portfolio, and 40-year track record. During this period, HarbourVest has invested over $129 billion across a broad range of private equity strategies with over $16.5 billion to all strategies committed in 2021 alone. This investing scale is critical to the success of a semi-liquid, permanent capital vehicle focused on compounding NAV and is just one factor that differentiates HGPS from the perpetual vehicles offered by HarbourVest’s peers.

HGPS Differentiators

High-quality seed portfolio

Immediate exposure, diversification and value creation

High quality seed portfolio sourced, constructed, and managed from an institutional anchor investor resulting in immediate capital appreciation potential and removing blind pool risk

Pure-play
private equity

Capturing alpha of 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 larger/higher quality deal flow than other semi-liquid evergreen funds Long-term capacity needs managed by potential future children funds2

Track record


40 years of investment track record and 14 years of evergreen

14-year evergreen vehicle track record delivering a 15.4% CAGR3 and 4.0x multiple4

High quality seed portfolio sourced, constructed, and managed from an institutional anchor investor resulting in immediate capital appreciation potential and removing 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 larger/higher quality deal flow than other semi-liquid evergreen funds Long-term capacity needs managed by potential future children funds2
14-year evergreen vehicle track record delivering a 15.4% CAGR3 and 4.0x multiple4

1 As of December 31, 2021.

2 For further details, please contact HarbourVest.

3 In NAV from June 30, 2012, to June 30, 2022.

4 As of June 30, 2022. Past performance is not an indicator of future returns The information in this presentation is not complete and may be changed. This presentation is being provided in order to assist in determining the appropriate structure and terms for the Proposed Fund. The Proposed Fund does not exist, and there is no guarantee that it will exist in the future .These amounts reflect the current expectations for the allocation of the Proposed Fund. The ultimate allocation will differ based upon market conditions and available investment opportunities over the life of the Fund. These are not prescriptive  guidelines.

Market Perspectives

Private equity – Attractive opportunity set and returns

* Source: CapitalIQ as of November 29, 2021 includes all public and private companies with revenues ≥ $15 million.

** Source: Burgiss as of March 31, 2022. US benchmark includes US buyout, venture, and credit. Europe benchmark includes European buyout, venture, and credit. The Private Equity (All Funds) return is a pooled fund IRR based on the combined cash flows of all funds in the benchmark. The Private Equity (Top Quartile) return is a pooled fund IRR based on the combined cash flows for funds in the benchmark that achieved upper quartile performance. Public market equivalent (S&P 500, MSCI Europe) also provided by Burgiss is based on a methodology of buying and selling the index with the same timing of cash flows as the applicable All Funds return. The securities comprising the public market indices have substantially different characteristics than the private equity benchmarks, and the comparison is provided for illustrative purposes only. This industry data reflects the fees, carried interest, and other expenses of the funds included in the benchmark. Please note returns would be reduced by fees, carried interest, and other expenses borne by investors in a HarbourVest fund / account. See ‘Additional Important Information’ at the end of the presentation, including important disclosures related to Public Market Equivalent.

*** Adjusted index returns to reflect a comparable public market equivalent (“PME”).

† Source: Pitchbook as of September 30, 2021. Includes firms managing at least $10 million that have made an investment in the last three years.

The wide and deep opportunity set available to private equity funds managers from the number of private companies to the ability to take active management roles may help explain why private equity consistently returns an excess return over public equities. By adding a modest percentage of a portfolio into private equity, investors can capitalize on these advantages in conjunction with improved portfolio risk management, explained by historical analysis indicating weak correlation between private markets and public markets, to generate better portfolio.

The principle of improving portfolio risk management through private equity, can be extended further through realizing the benefits of manager diversification. To achieve an even higher return, a portfolio should be diversified with a range of investments in the best deals with the best managers.

Portfolio Performance

The HGPS portfolio will be modelled with the following construction approach:

Strategy

Stage

Geography

As of Q1 2022.

1 Fund level holding exposure.
2Company exposure.

The information in this presentation is not complete and may be changed. This presentation is being provided in order to assist in determining the appropriate structure and terms for the Proposed Fund. The Proposed Fund does not exist, and there is no guarantee that it will exist in the future. These amounts reflect the current expectations for the allocation of the Proposed Fund excluding cash and other short-term investments. The ultimate allocation will differ based upon market conditions and available investment opportunities over the life of the Proposed Fund. These are not prescriptive guidelines. The timeline above represents quarterly periods.

Strategy

New commitments by HGPS during its initial years are expected to be allocated between approximately 40% to 60% to direct co-investments. Over the longer term (approximately 4-6 years) new commitments will continue to be evenly split between secondaries and direct co-investments. We will also consider primary fund allocation of up to 10%.These commitments will be deployed opportunistically at the later stages of the primary funds’ fundraising period to target accelerated exposure.

HGPS seeks to identify undervalued assets and develop innovative liquidity solutions for complex, GP-led, secondary investments.

Secondary Investments

HGPS seeks to identify undervalued assets and develop innovative liquidity solutions for complex, GP-led, secondary investments.

Direct Co-Investments

HGPS expects to make investments directly in operating companies and other assets through direct co-investments with other private markets managers.

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.

Secondary Investments

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.

Secondaries

HarbourVest seeks to identify undervalued assets and develop innovative liquidity solutions for complex, GP-led, transactions. The private equity secondary market of the 1980s and 1990s was comprised almost entirely of traditional transactions (i.e., the sale of one or more limited partnership interests by a single seller). While traditional transactions are still a significant part of the current secondary market activity, the market has evolved substantially to include a broad range of complex transactions that provide holders of private market assets with liquidity options through increasingly sophisticated, non-traditional deal types, including GP-Led secondaries, structured liquidity solutions, team spin-outs/buy-ins, public market transactions and other investments deemed to be secondary investments by HarbourVest.

 

Direct Co-investments

HGPS expects to make investments directly in operating companies and other assets through direct co-investments with other private markets managers. HarbourVest seeks to invest in established or growing companies that offer a differentiated product or service with management teams that have achieved prior success. HarbourVest seeks to invest alongside managers who have demonstrated success in their investment strategies.

Primaries

HGPS intends to invest in newly formed funds raised by experienced managers that invest in buyout, and to a lesser extent, growth equity and venture capital, special situations, and other private markets transactions. The Sub-Fund intends to make capital commitments in the later stages of the fundraising period of the underlying primary funds to reduce the amount of unfunded liability in a newly formed fund. HarbourVest seeks to identify and select high-quality primary fund investments managed by experienced fund managers with the potential to generate superior rates of return.

HGPS anticipated portfolio composition over time

  • We expect the portfolio to primarily be comprised of secondary and direct co-investments over time
  • Without adjusting for specific seed assets and subject to further modelling, our approach is:
    • Initial portfolio construction: (approx. first 5 years): new commitments allocated 60% secondaries and 40% directs
    • Long-term target portfolio construction: 40-60% secondaries, 40-60% direct co-investments, 0-10% opportunistic primaries
  • In addition, liquidity (cash and other short-term instruments, credit line, overcommit) will be managed to accommodate foreseeable fund obligations, including capital calls and redemption requests

*Each bar represents a time period of one quarter following transfer of seed portfolio assets from anchor institutional investor

The information in this presentation is not complete and may be changed. This presentation is being provided in order to assist in determining the appropriate structure and terms for the Proposed Fund.

The Proposed Fund does not exist, and there is no guarantee that it will exist in the future. These amounts reflect the current expectations for the allocation of the Proposed Fund excluding cash and other short-term investments. The ultimate allocation will differ based upon market conditions and available investment opportunities over the life of the Proposed Fund. These are not prescriptive guidelines. The timeline above represents quarterly periods

Stage

Consistent with the profile of HarbourVest’s overall private equity investments, HGPS will comprise a mix of investment stages with the largest segment, buyout, representing approximately 70% to 90% of the portfolio. The fund will also have some exposure to Growth/Venture investments (approximately 10% to 30%).

Geography

HGPS is projected to deploy a significant portion, between 50% to 60%, of its capital into North America-based investments. Europe will also likely have significant exposure in the portfolio, with 25% to 35% of investments being based in this region. Asia, with a projected 15% to 20% of the portfolio, should complete HGPS’s geographic profile.

 

No Blind Pool Risk

HGPS benefits from a sizeable and high-quality seed portfolio from January 1st 2023. The existing portfolio is highly diversified across stage, geography, vintage, and industry. Day-1 investors benefit from:

Key portfolio attributes:

  • ~$790m in NAV as of March 31, 2022 (to be updated with Sept’s figures)
  • Significant capital appreciation potential
  • Strong distribution profile to maximize compounding benefits

Returns Potential

HGPS returns potential will be based our experience with:

  • HVPE, which has generated a 15%+ CAGR since 2012
  • Secondaries, which since 2012 has generated a 26.3% gross IRR
  • Direct Co-Investments, which since 2012 has generated a 22.9% gross IRR

Portfolio Management

Given the projected continual inflow of subscriptions and the associated need to rapidly deploy capital, the management of HGPS will require close coordination of the HGPS Fund Manager, Portfolio Management Team and HarbourVest’s Portfolio Construction Committee. In addition, the vehicle’s Portfolio Management Team will rely upon a series of decision support tools, which include those data and analytical platforms already utilized by HarbourVest’s investment, client service, and portfolio management teams, as well as bespoke HGPS tools, such as the Python-based solution developed by HarbourVest’s Quantitative Investment Sciences team that will aid with fund management.

Resources

Content below is FPO

  • Link to BNY reports
  • We will need to include monthly performance when available
  • NAV per share section
  • (example from Hamilton Lane. Note not avl on day one, earliest march as that will be the first calculated performance avl since launch. Single graphic that gets updated on a monthly basis)

Contact Us

Our offices span the globe from Boston to Beijing. Reach out through our contact form or find the HarbourVest location closest to you.