HarbourVest Global Private Equity Ltd Annual Results Presentation - PowerPoint PPT Presentation

HarbourVest Global Private Equity Ltd Annual Results Presentation 12 Months to 31 January 2019 30 May 2019

Outline Tenth consecutive year of net asset value (“NAV”) growth Chairman’s Introduction The Case for HVPE Annual Results – 12 Months to 31 January 2019 Longer Term Performance Global Private Markets Key Takeaways Secondary Market Perspectives Appendix // 2

Chairman’s Introduction Sir Michael Bunbury 3

The Case for HVPE & Annual Results Richard Hickman Director, Investment and Operations 4

Complete private markets solution HVPE is a $1.9bn portfolio of 1,000+ material exposures within a listed wrapper Provides access to a broad range of private markets opportunities Well-diversified to limit downside risk from individual holdings Invests in and alongside HarbourVest funds $24.09 $21.46 $18.47 $16.75 $15.86 $18.75 $14.38 $17.77 $12.46 $15.03 $11.42 $10.24 $9.25 $12.73 $12.41 $8.65 $10.75 $8.66 $7.61 $6.37 $6.18 $5.00 2016 2009 2010 2011 2012 2013 2014 2015 2017 2018 2019 NAV Per Share Share Price* Note: Holdings in publicly-traded companies, often resulting from IPOs in the private equity portfolio, represent 10% of HVPE’s investment portfolio value. * HVPE introduced an additional US dollar share price on 10 December 2018; from this date onwards, the actual US dollar share price, as reported by the London Stock Exchange, has been used. Past performance is not necessarily indicative of future results. // 5

Portfolio cannot easily be replicated Structured to provide a complete, fully-managed private markets portfolio HVPE provides access to private companies typically available only to institutional investors Buying shares in HVPE puts an investor on a level playing field with those institutions Aim is to deliver material outperformance of public markets over the long term HVPE 46 HarbourVest Funds and 7 Secondary Co-Investments Direct Primary Secondary 24% 45% 31% GP GP GP GP 1 2 3 4 Holdings in publicly-traded companies, often resulting from IPOs in the private equity portfolio, represent 10% of HVPE’s investment portfolio value. *The top 1,000 companies represent 82% of NAV. In total there are 8,704 companies in the portfolio. Figures as at 31 January 2019. // 6

Improving share trading liquidity Member of the FTSE 250 index with the scale to meet the needs of all investors Liquidity is good and improving HVPE has substantial stakeholder engagement Award-winning reporting, communication, and shareholder events Mean Median Modal 132,482 73,079 71,277 67,857 60,458 44,935 34,492 30,109 27,706 5,000 16,117 0 2016 2017 2018 2019 Source data: Bloomberg. Average trading levels (mean, median, modal) based on the period 1 February to 31 January for each reported year. Past performance does not indicate future results. // 7

Evolving shareholder profile Our focus is on delivering value to shareholders HVPE is a high-quality, unique offering Represents a fully-managed programme for buy-and-hold investors of all types Increasing shareholder base in UK, Europe, and Asia since listing on Main Market of LSE SEPTEMBER 2015 MAY 2019 MOVEMENT 66.7% 47.8% 43.7% +23.0% 8.5% 20.1% +4.7% 13.2% UK US Other UK US Other UK US Other -27.7% Source data: JPMC Shareholder Register. As at May 2019. Past performance does not indicate future results. // 8

Strategic diversification HVPE provides well-balanced global exposure to private markets HVPE portfolio comprises multiple uncorrelated elements Enhances consistency of returns over time Aim is to optimise returns over the long run whilst managing downside risk STAGE STRATEGY GEOGRAPHY INDUSTRY 24% 16% 15% 12% 11% Business Ser. 7% 10% Technology US 57% Buyout 58% Primary 45% Consumer 5% Industrial Financial Medical Energy Europe 20% Secondary 31% Media Venture 32% Direct 24% Asia 15% RA & Mezz 10% ROW 8% Diversification as at 31 January 2019. // 9

The Investment Manager, HarbourVest Partners 10

HarbourVest has a global platform One of the longest established firms in the industry EMEA First investment 1984 Dublin London $21.5 billion committed Toronto Boston Beijing North America Seoul Tel Aviv Tokyo First investment 1982 $38.1 billion committed Hong Kong Bogotá Asia Pacific First investment 1984 $6.5 billion committed Latin America First investment 1994 $0.7 billion committed Expertise across capital structure (equity and debt) and investment types PRIMARY SECONDARY DIRECT CO-INVEST REAL ASSETS $35.6 billion committed $19.8 billion committed $9.5 billion committed $2.0 billion committed As of September 30, 2018. Based on primary, secondary, direct and real assets commitments made by HarbourVest. Indicates HarbourVest team location. // 11

Record of consistent outperformance HarbourVest has outperformed the broader market in the majority of vintage years 2006-2011 2012-2016 // Returns above private equity average in 3 of 6 vintage years // Returns above private equity average in all vintage years 26% 24% 23.5% 22% HarbourVest 20% 21.1% 21.0% Private Equity Pooled 20.6% 20.3% 18% 17.4% 16% 16.7% 16.4% 15.9% 14% 15.3% 15.3% 15.1% 15.1% 15.2% 14.0% 12% 12.6% 12.5% 12.3% 10% 11.2% 11.0% 10.8% 10.8% 8% 9.0% 6% 6.3% 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 06-'16 Vintage Year As of December 31, 2018. HarbourVest returns reflect the combined return (pooled IRR) of all primary, secondary, and direct investments in the HVPE portfolio in that vintage year. Private Equity returns reflect the combined return (pooled IRR) of all private equity investments included in the Burgiss Manager Universe for that vintage year. Past performance is no guarantee of future returns. // 12

HVPE Annual Results – 12 Months to 31 January 2019 13

Performance highlights Tenth consecutive year of net asset value growth NAV growth in year of 12.3% in USD (21.5% in GBP) Share price increase of 13.9% in GBP Improved liquidity in share trading Total new commitments of $730.0m made to five HarbourVest vehicles Realised uplifts continued above 30% Net investor; new investments ($396.2m) exceeded distributions ($306.6m) Full report can be viewed on www.HVPE.com // 14

Commitment, Investment, & Distributions Net investor during the period (in millions, except % data) FINANCIAL SUMMARY 31 JANUARY 2019 31 JANUARY 2018 Investment Portfolio $1,760.2 $1,452.2 Commitments to HarbourVest funds $730.0 $339.8 Total Investment Pipeline $1,562.7 $1,237.5 Cash Invested in HarbourVest funds $396.2 $312.7 % of Investment Pipeline 28.3% 25.7% *Pct. of average Investment Pipeline over period Distributions Received $306.6 $405.1 % of Investment Portfolio 19.1% 29.5% *Pct. of average Investment Portfolio over period Past performance does not indicate future results. // 15

Commitments to 31 January 2019 Total of $730.0 committed to five HarbourVest funds HARBOURVEST FUND DESCRIPTION TOTAL AMOUNT HarbourVest Fund XI US-focused fund-of-funds $385.0m 2018 Global Fund Global multi-strategy fund-of-funds $70.0m HarbourVest Adelaide Real assets vehicle $150.0m Secondary Overflow III Secondary co-investment vehicle $75.0m HarbourVest Co-Invest V Global co-investment fund $50.0m TOTAL $730.0m // 16

Investment Portfolio movement $218.4m of investment portfolio value growth Direct co-investments outperformed Primary and Secondary investments Venture and growth equity led all other stages US and Asia Pacific were the strongest performing regions STRATEGY STAGE GEOGRAPHY 19.5% 16.2% 14.7% 13.1% Venture/Growth Equity 11.4% 11.3% Direct co-investment 10.8% 10.5% 10.5% 10.2% Real Assets Asia Pacific Secondary 3.0% Primary Europe Buyout Other ROW US Past performance does not indicate future results. // 17

Buyout portfolio metrics Analysis of 948 companies representing 31% of total NAV Weighted average EBITDA increase over the previous year is 13% 76% of the underlying companies increased EBITDA during the year Approximately 74% of these companies are growing EBITDA by more than 10% per annum Overall valuation multiple is 11.2x EBITDA Overall debt multiple is 4.5x EBITDA The sample of portfolio companies used for this analysis changes period on period, based on the information available to the Company at the time. Past performance does not indicate future results. // 18

Realisations timed to maximise value Different strategies perform at different points in the cycle A broad spread of vintage years supports a steady flow of distributions The 2014 vintage was the most significant contributor at 15% Crisis-era vintages are now largely realised 2018 2019 17% 15% 14% 10% 10% 10% 10% 10% 9% 9% 8% 8% 8% 8% 8% 7% 6% 6% Venture/Growth Equity Direct co-investment 5% 5% 4% 4% 3% 1% 1% 2% 2% 0% Real Assets Asia Pacific Secondary < 2006 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Primary Europe Buyout Other ROW US Mature Growth Investment Distributions calculated as a percentage of HVPE’s investment portfolio, based on reported values at 31 January 2019. Past performance does not indicate future results. // 19