HarbourVest Private Equity Share Price (HVPE)

Bit late to be posting this, but might be useful to some. Here's a vid they did at results which updates on strategy & operations etc

https://youtu.be/kEhR_IUbuM0?si=JbMhYLwAUHwFukU6

It's early days but the planned $400m buyback tender offer is scheduled (Q4 IIRC) to spend around $400m to buy back shares at an expected discount of 10% to NAV. This works out at current valuation to around 10% of the total share capital and if we assume a 10%pa growth in NAV between the last valuation and end-September, this would give an offer of around £41 per share. The rise in the SP today is broadly consistent with getting a 33% uplift on 10% of the shares. BUT.... the proposals are clearly being planned as an annual thing so any LTH could theoretically over time tender all of their shares at the 10% discount effectively meaning that they'd get a 27% uplift to the SP if they were willing to wait long enough.

Now clearly, the hope is that this, along with other measures, leads to a reduction in the NAV discount, let's say to 20%. This would certainly be welcome and give everyone a 13% SP uplift on top of the fund performance. But even if a 20% discount persisted, you would still be able to either take the tender of 10% shares at a 12.5% premium to SP. And if you don't really need the money you can reinvest it for another year to get that same 1.25%p.a. uplift purely from the tender. If the NAV discount remains at 30%, that 1.25%p.a. uplift becomes 2.86%p.a.!!

In short there's lots to like about this plan. Either the discount narrows or we get left with a long term valuation disparity that will only add to the potential annual returns you can make on the shares. My guess is that the market will figure this out and the discount will narrow a little but would still leave a tidy annual margin.

Here's a vid from the team at HVPE which explains private equity and how HVPE operates in this world:

https://youtu.be/gM8IM7nClvM?si=VPJmrAMdIMO--FUR

HV did an investor meet on 5th Sept. There was an RNS reach for this, but it is not showing here. The video is only on the investor meet platform (not on youtube). Worth a watch, results in October.

Useful info:

HVPE invests via 63 funds managed by HarbourVest Partners and also in 16 co-investments. As a result, with 1,334 companies in the underlying portfolio.

I have 5% of my pf in HVPE, and 13% total PE exposure in IT's, though that counts some funds with PE elements, such as RCP. I want to add more PE, when funds available. Relying on PE for a significant growth component over the next 10 years, also helps provide geographic exposure and sector diversification.

HVPE has hit a 24 month high today.