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HarbourVest loan fund NAV drops

London-listed HarbourVest Senior Loans Europe has invested or committed roughly 69% of its proceeds since listing on the London Stock Exchange in May.

HarbourVest Senior Loans Europe (HSLE)’s net asset value of 97.07 pence per share at the end of January is down from the London-listed debt vehicle’s opening NAV of 98 pence per share upon listing on 26 May.

The change is attributed to “ongoing operating expenses and negative foreign currency movement” according to a HarbourVest monthly report. HSLE’s share price of 96.5 pence per share as of 31 January also represents a slight decline from the 100 pence per share price as of 26 May.

HarbourVest Senior Loans Europe is on track to being “substantially invested” by the end of February, having invested or committed 69 percent of its net proceeds as of 31 January, according to HarbourVest’s first interim report. Proceeds were invested in or committed to 11 senior secured loans in private equity-backed mid-market companies as of 31 January.

“These businesses display attractive characteristics for lenders as they benefit from high-yield recurring revenues, very high barriers to entry and as a result generate a high and resilient level of free cash flow, which is our key focus,” said HarbourVest managing director Alex Rogers during a media call Wednesday. Rogers added that there are “few industry segments where we haven’t seen opportunities”. 

HarbourVest Senior Loans Europe is not a distressed strategy, but targets performing loans on both a primary and secondary basis. The vehicle invests in senior secured loans of up to 30 European small- and mid-market private equity-backed companies, and has a targeted mix of 75 percent secondary loans and 25 percent primary loans.

“Fundamentally this is very vanilla and simple: we are providing loan capital alongside, in partnership – not competition – with the banks to middle-market or small-cap European business,” Rogers said in April.