Kevin Delbridge

AS AN LP, ARE YOU SATISFIED WITH THE QUALITY OF INVESTOR RELATIONS AT THE FUNDS YOU'VE COMMITTED TO?
The firms that we're invested with do a pretty good job of communicating with us on both good news, and actual or potential bad news. Part of the reason for that is these managers have raised and successfully invested several funds before, survived a variety of markets and understand that we want the truth ? we can handle the truth! They know they have little reason to sugarcoat the facts. Since informed investors read the papers and pick up news via word of mouth, they're better off taking a proactive approach to sharing news.

WHAT ELEMENTS MAKE UP HARBOURVEST'S OWN IR PROGRAM?
We hold a very comprehensive two-day annual meeting which delves into the US activities one day and non-US activities the second. We also hold our advisory committee meetings twice a year, one at the time of the annual meeting and another off cycle. For every client, we have at least one professional who's responsible for calling or visiting that client on a regular basis to update them on the portfolios or the market, or to address questions that they may ask. For some, the annual meeting materials, quarterly reports and one or two phone calls per year are sufficient. For others, more frequent contact is desired. Our organization is structured to handle either. In addition to the previously mentioned communication, we will occasionally hold special conferences, along the lines of a miniannual meeting, usually in Europe and Japan, for investors who are not able to attend our annual meetings. Right after the end of the year, and again just after the end of June, we send a summary update letter to LPs to let them know what's happened in terms of new commitments and the activities of our current funds.

HAS FAIR MARKET VALUATION SLOWED DOWN THE REPORTING PROCESS?
As a GP, we adopted FAS 157 in our direct investment program last year, but for our funds of funds, as an LP, I would say that it's slowed down our receipt of the financial statements of some of the funds. The reason is that auditors are taking a hard look at the portfolio companies and are more likely to request that the GP write up a company that hasn't had a round of financing. Given this change, there are plenty of funds that are swift even under these conditions. However, there are some are laggards that need to bolster their organizations to compensate for the increased workload. Overall, for 2007 reporting it is slower.

HAS YOUR PUBLICLY LISTED VEHICLE CHANGED THE IR AT HARBOURVEST?
We have a team dedicated to communicating with our public market investors, but we really treat the vehicle as another LP, and keep them up to date like any other investor. HVPE [HarbourVest Private Equity] is even more diversified than our institutional funds, but I feel we've done a good job of melding them with the rest of the investor base.

MANY INVESTORS CHOOSE A FUND OF FUNDS AS THEIR FIRST-TIME COMMITMENT TO THE ASSET CLASS. DOES HARBOURVEST HAVE TO BUILD IN MORE TIME TO SERVE AS EDUCATORS TO NEW LPS ABOUT PRIVATE EQUITY?
Absolutely. We need to especially educate newer investors to the asset class about a variety of items, such as the pace of the asset class. Using this item as an example, we walk them through the fact that FOFs invest over three or four years and the underlying funds then invest our commitments over three or four years. We discuss this with them before they commit, but often the structure needs to be reiterated. We do build the time to coach them, although some investors are surprisingly happy with minimum contact. However, we usually err on the side of too much, rather than too little, attention. Given the events of last fall, we called investors to discuss market events and asked if they had any questions. And a few replied that they did have questions, but since many of the investors were wrestling with not just private equity, but public equity, bonds. etc., they didn't have the time to think to call us. So, our proactively reaching out to our newer investors is not only a convenience, but good client service. Of course, we reach out to our veteran LPs as well. Some have a full-time PE staff with their own insights worth hearing. As time goes on, it really becomes collaboration between us and the client.