HarbourVest Global Private Equity's (HVPE) record $356 million (€325 million; £233 million) realisation figure for the financial year ending 31 January 2015 is attributable to the buoyancy of the initial public offering (IPO) market and managers' inherent conservatism regarding initial book values, HarbourVest associate director Richard Hickman told Private Equity International. The value of realisations was up $99 million or 39 percent on the previous year-end.
US-based HarbourVest, which commits capital to its own funds, which in turn invest in primary funds, secondary investments and direct co-investments, reported a net asset value on exit of 42 percent, up 10 percent on the previous year.
When asked whether the IPO exit trend is likely to continue Hickman, who works on portfolio development, said: “If anything the market has become more buoyant. It's hard to call for the rest of the year, but the first four months for which we have data were very strong.”
HVPE had investments in companies that listed in the biggest IPOs of last year, including the UK's AA and China's Alibaba, Hickman noted, as well as “big name” tech IPOs. These include online game developer King and bandwidth infrastructure company Zayo, according to its annual report. In the venture space, the fund was invested in GoPro and Just Eat that went to market.
“We have a diversified portfolio of 6,300 underlying companies and are exposed to different markets, including Asian IPOs and US venture capital,” Rickman noted.
HVPE's largest realisation was $13.7 million from US insurance company York Risk Services Group, of which at least part was a direct co-investment. US private equity firm Abry Partners sold its majority shareholding in the company to Onex Corporation in mid-2014. Overall, realisations were split roughly a third to IPOs and two thirds to trade sales, Rickman noted.
HVPE's venture portfolio saw 196 merger and acquisitions and 100 IPOs, while its buyout and other funds saw 215 merger and acquisitions and 55 IPOs.
In terms of new commitments, since year-end, HVPE's has committed $218 million to its HarbourVest X fund, split $100 million to its buyout sub-fund and $118 million to its venture fund. HVPE has also topped up by $25 million its commitment to its international fund-of-funds focused on Europe, HIPEP VII Europe.
In the 12 months ending January 2015, HVPE made commitments of $351 million to new proprietary funds and co-investments, and invested $162 million.
In September, HarbourVest plans to move its share listing from Euronext Amsterdam to the main market of the London Stock Exchange. It has dual listings on the Amsterdam market and London's Specialist Fund Market.
“The motivation is to simplify the quote,” Hickman said. “We will enfranchise the shares, which are currently non-voting. This will benefit investors that can't buy non-voting shares and it should broaden demand across the investment community.”
Upon listing, the company is expected to qualify for the FTSE All Share Index, and could make the FTSE 250 depending on market capitalisation, which is currently quoted in dollars and subject to changes in the exchange rate, Hickman noted.