Edison issues review on HgCapital Trust (HGT)

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.


Click here to view the full report or here to sign up to receive research as it is published.

 

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

www.edisongroup.com

About Edison: E dison is a leading research and investor relations consultancy, connecting listed companies to the widest pool of global investors. By 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 Athens, Johannesburg and Sydney.

Edison is authorised and regulated by the Financial Conduct Authority .

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

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

Learn more at www.edisongroup.comand connect with Edison on: 

LinkedIn          https://www.linkedin.com/company/edison-group-/

Twitter            www.twitter.com/Edison_Inv_Res

YouTube        www.youtube.com/edisonitv

This information is provided by Reach, the non-regulatory press release distribution service of RNS, part of the London Stock Exchange. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

Reach is a non-regulatory news service. By using this service an issuer is confirming that the information contained within this announcement is of a non-regulatory nature. Reach announcements are identified with an orange label and the word “Reach” in the source column of the News Explorer pages of London Stock Exchange’s website so that they are distinguished from the RNS UK regulatory service. Other vendors subscribing for Reach press releases may use a different method to distinguish Reach announcements from UK regulatory news.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
NRAFLFIEEAIRLIF
UK 100

Latest directors dealings