HarbourVest Global Private Equity’s monthly NAV update revealed strong underlying exit activity across their portfolio in December, bolstering the cash pool available for share buybacks.
The HarbourVest Global Private Equity (HVPE) Investment Trust provides public market investors with exposure to private equity through four key stages of valuation creation: Commitments, Investment, Growth, and Realisation. It is the last of these stages, the realisation of investments, that saw a big uptick in December, underpinning the current value in the trust’s share price.
HVPE reported a 0.9% decrease in its estimated Net Asset Value (NAV) per share to $52.38 in December, primarily due to unfavourable foreign exchange movements and declines in its Fund of Funds portfolio.
Despite the monthly dip, the company’s long-term performance remains strong, with a 10-year NAV growth rate of 13% annually and a total return of 233% over the same period. The share price has delivered a 13% return in sterling terms over the past year.
Realisation activity showed robust momentum in December, with the company receiving $89 million in distributions, more than double November’s figure. The company reported 43 exit transactions, significantly above the 12-month average of 33, indicating healthy market conditions. Of the 43 transactions in December, 42 were M&A, and one was an IPO.
There is a large disconnect between the underlying performance of the HVPE portfolio and the current share price, which is represented by a substantial share price discount to NAV some investors will see as an opportunity.
HVPE continues its active share buyback programme, deploying $15 million in December alone. Since launching its Distribution Pool mechanism in February 2024, the company has repurchased over $90 million worth of shares, adding 1.4% to NAV per share.
Total buybacks since September 2022 have reached $148 million, contributing a 3.1% increase to NAV per share.
HVPE’s Distribution Pool balance stood at $52.2 million at year-end, with the board indicating continued deployment for share buybacks in an effort to reduce the current share price discount to NAV.
As the Distribution Pool programme approaches its first anniversary, the board is actively engaging with shareholders to evaluate its effectiveness in managing the company’s discount to NAV.