HgCapital Trust

Strong momentum continues

9 June 2021

HgCapital Trust (HGT) posted a strong NAV TR of 8.4% in Q121, driven primarily by double-digit earnings growth across the portfolio (LTM EBITDA for top 20 holdings up 30% y-o-y). After record-high transaction volumes in FY20 (investments at £403m and realisations at £364m), HGT has maintained a high transaction activity to date in 2021 (£147m and £112m, respectively). Its coverage ratio was a healthy 69% at 12 May 2021, supported by tap equity issues, which totalled c £50m to 8 June 2021 (versus £25m in FY20), and a £200m credit facility agreed in Q420, which remains undrawn. MORE »

Posting a 24% NAV total return in FY20

31 March 2021

HgCapital Trust (HGT) reported a strong NAV total return of 24.0% in FY20, driven by double-digit earnings growth across the portfolio (last 12 months EBITDA for top 20 holdings up 31% y-o-y) and solid uplifts to end-2019 book values on exits (50% on average in FY20). Investments and realisations reached record-high levels in FY20 and HGT had a healthy coverage ratio of c 64% as at 24 March 2021 (vs 48% on average between 2015 and 2019), backed by a £200m credit facility secured in Q420 and c £56m raised in tap equity issues in FY20 and FY21 to end-March 2021. MORE »

Flying high despite COVID-19

22 December 2020

HgCapital Trust (HGT) continues to outperform its benchmark over the short and long term, with NAV total return strongly increasing c 20% in the nine months to end-September 2020 (vs a fall of c 20% for the FTSE All-Share Index in the period). Following a record amount of investments and realisations in FY20, we estimate HGT’s commitment ratio stood at 60% in mid-December (vs 48% on average between 2015 and 2019), supported by a new £200m credit facility that it secured in early October 2020. The manager expects transaction activity to remain high and highlights his confidence in the value creation potential of HGT’s software and technology portfolio, driven by the ongoing digitalisation of businesses, accelerated by COVID-19. MORE »

Reporting a considerable uplift to NAV

14 September 2020

Following a solid H120, HgCapital Trust (HGT) announced several portfolio transactions representing a considerable uplift to the carrying value at end March 2020 and translating into a c 12.0% ytd NAV total return (TR) to end August. On completion of these deals, HGT’s cash resources will improve significantly to £314m from £123m in early July, while its unfunded commitments will decline to £814m. Consequently, HGT’s commitment coverage ratio will improve markedly to c 39% vs 13% in early July. MORE »

Resilience from tech and services focus

8 July 2020

HgCapital Trust’s (HGT) 12-month NAV TR to end-March 2020 was a solid 13.8% despite the COVID-19 market downturn in March 2020 (ytd NAV performance since end-December 2019 was a 6.2% decline). The coverage ratio reached a historically low level (13% vs three-year average of 53%) after HGT notably increased its investment activity and commitments in Q120. However, a significant part of these new commitments will not be drawn in the near term. The board continues to review its future funding arrangements and may also opt out of a new investment without penalty across all funds. HGT’s portfolio focus is on the resilient software and technology sector and the manager expects a limited direct earnings impact on its portfolio from the COVID-19 pandemic. MORE »

Good momentum continues

17 December 2019

Hg Capital Trust’s (HGT) investment activity in 2019 to end-November has been broadly in line with last year, while the volume of realisations was lower following an exceptionally strong 2018 and 2017. HGT’s NAV total return (TR) to end-September 2019 was a solid 18.4%, backed by revaluations of portfolio holdings, which continue to deliver good operational performance. Following several major new and follow-on investments in 2019 (including team.blue, Transporeon, Visma, Litera Microsystems and Argus Media), HGT’s coverage ratio increased to c 80% in September 2019 from 50% at end-2018. That said, HGT expects to announce further commitments to invest alongside Hg funds in early 2020. MORE »