HVPE, a FTSE 250 investment company, has finalized plans to transition to a new, simplified investment model managed by HarbourVest Partners. This strategic shift, originally announced in January 2025, is part of broader efforts to enhance shareholder returns and reduce the discount to NAV.

Key Changes:
New Investment Structure:

• HVPE will move from investing in HarbourVest’s co-mingled funds to a Separately Managed Account (SMA).
• The SMA will directly invest in third-party General Partner funds, secondary opportunities, and co-investments.
• The transition will be gradual; existing investments will continue unchanged while new capital is committed annually to the SMA.

Expected Benefits:
Greater Flexibility:

• HVPE gains more control over liquidity events, including the ability to sell assets on the secondary market if beneficial to shareholders.

Lower Debt Exposure:

• As older HarbourVest funds mature, debt levels and unfunded commitments will decline, leading to more predictable cash flows and reduced borrowing needs.

Cost Efficiency:

• The management fee on the SMA (60bps of NAV) is in line with the current fee rate (62bps), despite offering a more tailored structure.
• Carried interest will be charged at levels consistent with comparable co-mingled funds.

Continued Exclusive Access:

• HVPE will maintain first-in-line access to HarbourVest’s high-quality investment opportunities, ensuring ongoing exposure to attractive private market investments.
• This new model is expected to streamline operations, enhance capital deployment efficiency, and improve returns for shareholders over time.

Ed Warner, Chair of HVPE, said:

“The Board has listened to feedback from shareholders, and as a result announced three new initiatives earlier this year: doubling the allocation to share buybacks, putting in place a continuation vote for July 2026 and implementing a simplified investment structure for HVPE going forward, which I am pleased to announce has been agreed with the Manager subject to signing the Limited Partnership Agreement. We believe the SMA will offer considerable benefit for shareholders, most notably increased Board control and flexibility around investment pacing and portfolio liquidity, and reduced look-through gearing. The Board has moved swiftly to agree the terms and framework of the new structure with the Manager, whilst maintaining access to the best opportunities for HVPE’s investors from across the HarbourVest Partners stable.

With time, we believe this structure should help to reduce the discount to NAV.”

Below is an interview with Chairman Ed Warner & Managing Director, Richard Hickman