(Alliance News) - HarbourVest Global Private Equity Ltd on Thursday said it will set aside 15% of all cash raised from portfolio realisations for share buybacks and special dividends, saying its new distribution policy comes in response to the board's conversations with shareholders.
The Guernsey-incorporated investment fund is managed by HarbourVest Partners LLC and provides exposure to private companies globally. With a market capitalisation of GBP1.80 billion, the company is a member of the FTSE 250 index. Shares were up 0.2% to 2,320.00 pence early Thursday in London.
HarbourVest Global Private Equity said it will create a new distribution pool to fund future share buybacks and capital returns. The pool will be funded by cash realisation from its portfolio of private equity holdings, with 15% of the cash raised to be allocated to the pool.
The company said its new shareholder distribution policy, which is effective from Thursday, will free up "materially more cash for shareholders to bolster their returns through the cycle".
In line with this effort, the fund promised that new private equity investment commitments "will be sized to preserve balance sheet strength and liquidity".
HarbourVest Global Private Equity also moved to making its board fully independent from its investment manager.
HarbourVest Managing Director Carolina Espinal will move from being a non-executive director of the investment fund to being a non-voting participant at board meetings and a member of the fund's investment committee. The change will come at the fund's annual general meeting in July.
"Together with the new distribution policy announced separately today, these changes represent a comprehensive package of measures taken in response to recent shareholder feedback," said HarbourVest Global Private Equity Chair Ed Warner.
By Tom Waite, Alliance News editor
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HarbourVest Private Equity (HVPE)