HgCapital Trust Share Price Traded Sideways on Its Annual Report

The HgCapital Trust plc (LON: HGT) share price was trading sideways after the company released its annual results for the year ending 31 December 2023. HgT offers investors a unique opportunity to channel their investments into private companies under the management of Hg, the leading investor in software and services enterprises across Europe.

HgT aims to deliver shareholders sustainable long-term gains that outperform the FTSE All-Share Index. This goal is achieved by investing in private companies where strategic enhancements and operational improvements can significantly elevate their value.

The effectiveness of HgT's strategy is evidenced by its remarkable track record, with a decade-long share price total return of +18.8% per annum. The company’s portfolio's robust trading performance was a pivotal factor, resulting in an 11.1% increase in the total return on net asset value (NAV), which rose to 500.5p per share by year's end, alongside net assets reaching £2.3 billion.

The share price saw an impressive total return of +26.2% throughout the year, concluding at 434.5p per share and achieving a market capitalisation of £2.0 billion. The discount between NAV and share price significantly reduced from 23% to 13%.

HgT actively pursued investment opportunities, deploying £74 million into new and additional investments within Hg's primary investment sectors. Moreover, transactions estimated at £148 million have been signed and are anticipated to be finalised in 2024.

The year also saw £324 million in realisations through complete and partial exits, averaging a 25% uplift over the valuations at the end of December 2022. Additionally, realisations worth an estimated £191 million have been signed, with completions expected in 2024.

For the third consecutive year, HgT has been recognised as the top investment company by The Association of Investment Companies (AIC), capable of generating over £1 million for its investors. 

Jim Strang, Chairman of HgT, commented: “HgT delivered a resilient performance in 2023, successfully navigating challenging market conditions. The portfolio maintained strong underlying performance over the year, with sales and EBITDA across the top 20 investments (76% of the portfolio) growing at 25% and 30%, respectively. Investment activity was notably lower in the first half of 2023 than seen in previous years, as the Manager took a cautious stance on investment activity. However, a stabilisation in market conditions supported an increase in activity for the kind of highly sought-after companies that constitute the portfolio throughout the second half of the year.”

HgCapital Trust share price. 

The HgCapital share price traded sideways, alternating between gains and losses on the annual report.