HarbourVest Global Private Equity (LON:HVPE) outlined a package of six new shareholder-focused initiatives during an investor update call, with board and management emphasizing that the measures are designed to address what they described as a “stubborn” share price discount to net asset value (NAV).
Chairman Edmond Warner said the company had reviewed the shareholder-friendly actions announced in early 2025 and remained dissatisfied with where the shares trade versus NAV. While he highlighted strong recent performance—citing 18% share price growth in sterling last year and saying the shares were “up almost a third over the last 12 months”—Warner said the discount has stayed “in the high 20%.”
Six measures aimed at narrowing the discount
Hickman said the first change is an enhancement to the company’s Distribution Pool, introduced in early 2024 to allocate capital to shareholder distributions. He said the pool had been used solely for share buybacks, which he said had delivered 5.7% NAV-per-share accretion to date.
He said HVPE is suspending the cap that had limited the pool’s total balance. In addition, the company will continue allocating 30% of “natural distributions” to the pool, but will allocate 100% of secondary sale proceeds to the pool for the current year, up from a prior 30% allocation. Hickman said this includes the secondary transaction announced in December expected to generate $300 million of proceeds, of which $136 million was received at the end of March; he said the “full amount” is already effectively transferred into the pool.
Second, Hickman said the company has committed to distribute at least $500 million to shareholders during 2026, which he described as around 12% of current NAV and inclusive of buybacks already completed. He said the $500 million would be delivered via:
- A $400 million tender offer expected in the autumn, struck at around a 10% discount to NAV
- $100 million of share buybacks, with buybacks expected to continue monthly (the company had previously been in the market daily)
Third, the board intends to distribute approximately 5% to 10% of NAV annually up to the next continuation vote, using periodic tender offers and continued buybacks, with tenders expected to represent a “material proportion” of future distributions.
Fourth, Hickman said HVP’s investment committee will conduct a formal twice-yearly liquidity review to identify potential asset sale opportunities, weighing secondary market conditions, achievable pricing and the trade-off of selling assets that could otherwise generate future returns.
Fifth, HVPE will place new commitments on hold for the remainder of 2026. Hickman said HVPE has already committed $250 million to a separate managed account (SMA), and that the most recent commitment to a HarbourVest fund was nearly 18 months ago. He emphasized that the pause does not mean the company will stop investing, because existing commitments will continue to be drawn over the coming years.
Sixth, the board said it will hold a subsequent continuation vote no later than July 2029, following the continuation vote scheduled for July of this year.
Tender pricing and the secondary market
Asked why the autumn tender is expected to be priced at a 10% discount to NAV rather than at NAV, Hickman said it “certainly doesn’t suggest the marks are too high.” He said the pricing is intended to provide a “material uplift” to the current share price while still preserving some NAV-per-share accretion for shareholders who do not tender.
Warner added that the tender discount is intended to be reflective of secondary market conditions. He referenced the December portfolio sale, which he said carried a 6% “headline” discount but, due to deferred proceeds, translated to “sort of 10%” on a time-weighted basis. He also said the tender price could be “tweak[ed] according to market conditions nearer the time.”
On secondary market liquidity, the company said the market remains active, noting that buyers have raised significant capital and are positioned to provide liquidity. Hickman said HVPE is not “banking on” a quick return to long-run average exit activity and is modeling for a continuation of depressed exit markets, suggesting the company expects to be “more active” in the secondary market over time. However, he said HVPE does not need additional asset sales this year to fund the commitments announced.
Why distributions are not dividends
Warner said the company is not introducing a dividend, and that shareholder returns will be delivered via buybacks and tenders rather than income payments. He said feedback from wealth managers has been that they seek income elsewhere in portfolios and view HVPE as a capital growth exposure to private equity, adding that dividends can be tax inefficient for many investors.
“That’s not what HVPE has ever been about,” Warner said, adding that the company believes capital distributions via the Distribution Pool are more aligned with the shareholder base.
Portfolio, leverage, and outlook topics raised in Q&A
Responding to concerns about whether pausing new commitments could impact long-term NAV compounding, Hickman said HVPE has $2.4 billion of unfunded commitments, providing what he described as a large pre-committed investment pipeline. He said the pause applies only for the remainder of 2026 and that there will be another decision point regarding 2027.
On leverage, Hickman said the company’s credit facility does not constrain its plans and that HVPE has “very substantial headroom” under covenants. He said the facility is committed until June 2029, with the minimum draw continuing until refinancing.
Addressing private credit, Hickman said HVPE has 3% of NAV in private credit on a look-through basis and said the team is not seeing issues in the portfolio, citing “extremely low default rates historically” in HarbourVest private credit portfolios.
On the macro environment, the company said geopolitical conflict and volatility have tempered deal activity versus earlier-year expectations, though it also pointed to valuation corrections in software as creating potential buying opportunities. The company noted that impacts tend to flow through private market portfolios more slowly and could depend on the duration of conflict and second-order effects such as energy prices, inflation and interest rates.
In closing remarks, Warner said he believes the new measures are “market leading” and intended to “unlock value,” while reiterating the board’s focus on shareholder value and discount reduction.
About HarbourVest Global Private Equity (LON:HVPE)
HVPE exists to provide easy access to a diversified global portfolio of high-quality private companies by investing in HarbourVest-managed funds, through which we help support innovation and growth in a responsible manner, creating value for all our stakeholders.
Our focus is on building a comprehensive global portfolio of the highest quality investments, in a proactive yet measured way, with the strength of our balance sheet underpinning everything we do.
Our multi-layered investment approach creates diversification, helping to spread risk, and is fundamental to our aim of creating a portfolio that no individual investor can replicate.
