HgCapital reports solid first-half performance

HgCapital Trust reported a strong first-half performance in its underlying portfolio in an update on Monday, with its estimated net asset value (NAV) per share reaching 524p, representing a total return of 5.6% on an NAV basis.

The London-listed firm said that growth was supported by impressive last 12 months (LTM) revenue and EBITDA increases of 20% and 25%, respectively, among its top 20 companies, which make up 78% of the portfolio.

Its share price return was even more notable at 12.7%, resulting in the discount narrowing from 13% to 7%.

Investment activities in the first half included £310m in new and follow-on investments, with significant allocations to companies such as Visma, IRIS, GGW, CUBE, CINC, and Induver.

Additionally, post-period investments totaling £108m were committed to Focus Group and AuditBoard.

On the realisation front, HgT saw proceeds of £347m from exits and refinancings.

That included the completion of transactions involving Visma, IRIS, GGW, and the full realisation of Argus.

Additionally, the trust anticipated receiving an estimated £71m from post-period realisations of F24, TeamSystem, and team.blue.

Notably, full and partial realisations achieved an average uplift of 13% to their carrying values.

As of 30 June, HgCapital reported available liquid resources of £550m, including a £375m undrawn credit facility.

Pro-forma figures, accounting for transactions announced before Monday, indicated available liquid resources of £508m, factoring in a £67m draw on the credit facility post-period.

Outstanding commitments to Hg funds stood at £847m, adjusted to £725m on a pro-forma basis.

“As reported in the full year results, exit activity has continued within the portfolio, including most recently the full realisations of F24 and TeamSystem and the partial realisation of team.blue,” the HgCapital board said in its statement.

“Including these realisations, Hg has achieved 40 liquidity events since the start of 2022, the equivalent of more than one per month, generating proceeds of over $16bn over this period.

“This record of realisations achieved stands out as the industry continues to find generating liquidity events challenging, highlighting the fundamental strengths and attractiveness of the underlying portfolio to both trade and financial buyers.”

HgCapital said investment activity increased during 2024, with a continued focus on companies within the end market, mission-critical software and services 'clusters' which the firm had tracked for a number of years.

“In addition to the investments that completed in the first half of the year, in July 2024, Hg completed the investment in AuditBoard.

“The previously announced investment in Focus Group is also expected to close in the coming months.”

HgCapital Trust said it would report its interim results for the period ended 30 June on 16 September.

At 1103 BST, shares in HgCapital Trust were down 1.7% at 520p.

Reporting by Josh White for Sharecast.com.