RCS - HgCapital Trust PLC - Edison issues review on HgCapital Trust (HGT)

HgCapital TrustAnnouncement

17/05/2022 07:00

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RNS Number : 6670L  HgCapital Trust PLC  17 May 2022

London, UK, 17 May 2022

 

Edison issues review on HgCapital Trust (HGT)

HgCapital Trust's (HGT's) sector expertise has allowed it to consistently
deliver strong performance, with a 10-year NAV total return (TR) at 17.6% per
year (with 30.9% over the last 12 months), materially above the FTSE All-Share
of 7.2% per year and LPX Europe NAV Index of 11.5% per year. Importantly, this
has largely been driven by top-line and earnings growth (90% of returns on
HGT's software and services holdings exited in 2001-2022 ytd) rather than
multiple expansion, with five-year EBITDA growth to end-2021 across HGT's top
20 holdings of 28% per year. While HGT typically assumes a multiple
contraction as part of its asset investment case, it has not actually seen
much of this historically, due to its successful repositioning of portfolio
companies, most notably through boosting recurring software-as-a-service
(SaaS) revenues.

While HGT has been the top performer in UK-listed private equity (PE) over the
10 years to end-March 2022 (returning 406% vs PE peer average at 302%), we
note its five-year NAV TR of 194% was ahead of the average 164% for UK-listed
investment companies focused on public tech stocks (see below). HGT's
five-year share price TR of 218% was also ahead of several tech
exchange-traded funds (ETFs), which on average returned 177%. HGT's NAV TR
over 10 years was less robust than these two peer groups and we believe partly
due to the strong returns of 'big tech' such as FAANG stocks. While 'big tech'
may find it difficult to sustain its results over the next decade, HGT's
performance seems much more repeatable.

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All reports published by Edison are available to download free of charge from
its website

www.edisongroup.com (http://www.edisongroup.com)

About Edison: Edison is a leading research and investor relations consultancy,
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focusing on the volume and quality of investors reached - across institutions,
family offices, wealth managers and retail investors - Edison can create and
gauge intent to purchase, even in the darkest pools of capital, and then make
introductions via non-deal roadshows, events or virtual meetings.

Having been the first in-market 17 years ago, Edison now has more than 100
analysts covering every economic sector. Headquartered in London, Edison also
has offices in New York, Frankfurt, Amsterdam and Tel Aviv and a presence in
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Edison is not an adviser or broker-dealer and does not provide investment
advice. Edison's reports are not solicitations to buy or sell any securities.

For more information, please contact Edison:

Milosz Papst +44 (0)20 3681 2519 investmenttrusts@edisongroup.com
(mailto:investmenttrusts@edisongroup.com)

Richard Williamson +44 (0)20 3077 5700 investmenttrusts@edisongroup.com
(mailto:investmenttrusts@edisongroup.com)

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