HarbourVest Global Private Equity, a listed funds-of-funds vehicle managed by Boston-based HarbourVest Partners LLC, is targeting U.K.-based investors with a secondary offering on London’s Specialist Fund Market.
The aim of the secondary offering, which involves the sale of shares from old shareholders to new ones, is to boost liquidity in the shares, diversify the shareholder base, provide a trading platform more easily accessible to U.K. investors, and raise HVPE’s profile in the London market.
The majority (60 percent) of the vehicle’s shareholders are based in the United States, and tend to be buy-and-hold investors. The hope is that the secondary offering will attract U.K. wealth managers more likely to trade the shares—thereby increasing liquidity.
To further enhance liquidity, HVPE is introducing a “put right” to new investors, which will entitle those investors to sell shares back to the company on Nov. 15, 2011 at either the price set in the secondary offering or the estimated NAV per share on Oct. 31, 2011 (whichever is lower). HVPE intends to offer put rights up to a total potential repurchase level of $40 million.
Sir Michael Bunbury, HVPE’s chairman, said in a prepared statement: “It is intended that the proposals announced will stimulate long-term interest and activity in the company’s shares. Furthermore, should the put rights be exercised, the company is likely to be buying its existing portfolio at a significant discount to NAV, which would be an attractive investment for the company to make.”
Following the offering, which is expected to be effective in May 2010, HVPE will have a dual-listing on both the Specialist Fund Market and Euronext Amsterdam.
HVPE’s unfunded commitments of $605.8 million fell by $9.7 million during March as a result of capital calls and currency movement. Of the total unfunded commitments, approximately $442.5 million has been committed by HarbourVest to underlying partnerships, while the remaining $163.3 million has not yet been committed.
The breakdown of HVPE’s investment portfolio based on NAV as of March 31, 2010 was as follows: HVPE’s buyout fund commitments increased to 59 percent of the portfolio (from 58 percent at Feb. 28), and venture decreased to 38 percent (from 39 percent). U.S. investments accounted for 64 percent of the portfolio and European investments remained at 27 percent. The NAV is split approximately 63 percent in primary partnerships, 19 percent in secondary investments, and 18 percent in direct investments.
HVPE has backed various U.S. buyout fund managers including American Capital, Bain Capital, Berkshire Partners, The Blackstone Group, Hellman & Friedman, Kelso & Company and Newbridge Capital Group. HVPE is managed by HarbourVest Advisers L.P., an affiliate of HarbourVest Partners LLC, which has committed more than $30 billion to private equity over its 28-year history.