HgCapital Trust (HGT) has released its preliminary results for the year ended 31 December 2024 during which it has an estimated NAV total return for the year of 10.1%, driven by resilient trading in its underlying portfolio. Its shares have also enjoyed a rerating from a 13% discount to a 2% premium, which is reflected in its share price total return of 25.7%. Other highlights for 2024 include:

• HGT’s unaudited estimated net assets of £2.5bn as at 31 December 2024, represent an estimated NAV per share of 544.1 pence, based on portfolio company valuations at 31 December
• LTM revenue and EBITDA growth of 19% and 22% for the top 20 companies (76% of the portfolio) to 30 November 2024
• Investments of £601m and gross realisations of £505,
• Year-end available liquid resources of £342m (including a £375m credit facility, of which £98m was drawn as at 31 December 2024)
• Year-end outstanding commitments to Hg funds of £734m which are expected to be called over the next 2-3 years
• Investment activity

HGT’s share of deployment from new and follow-on investments made during 2024 was £601m, including Visma, AuditBoard, IRIS, GGW, Ivalua, Ncontracts, Septeo, Howden, Focus Group, Access, Azets, CINC Systems, CTAIMA & e-coordina, Empyrean, team.blue, Cube Global and Induver. There has been a post-period investment of £32m from the new investment in Citation, which is expected to complete in Q1 2025.

Realisation activity

Gross proceeds from exits and refinancings during the period of £505m: this includes proceeds from IRIS, GGW, Visma, Argus, team.blue, Septeo, TeamSystem, Dext, Azets, MeinAuto and F24. Estimated gross proceeds of £45m are to be received from the post-period realisation of Citation. Full and partial realisations in 2024 were at an average uplift of 15% to their carrying value.

Pro-forma balance sheet

HGT says that, after allowing for all transactions announced as at the date of its trading update, it has pro-forma available liquid resources of £441m (including a £375m credit facility of which £49m remains drawn at the time of its announcement). It also has pro-forma outstanding commitments to Hg funds of £643m, which are expected to be called over the next 2-3 years.

Comments on 2024

HGT says that 2024 saw a return to a more balanced environment for investment and realisation activity. Investment activity increased compared to the prior year, with a total of 14 new investments across the Hg platform, consistent with the long-run average. Investment activity continues to focus on companies within the end market, mission-critical software and services ‘clusters’ which Hg has tracked for many years.

Over 2024, Hg realised over $7bn of proceeds from 20 liquidity events, as it continued to focus on cash back to clients, including HGT. Hg has achieved 43 liquidity events since the start of 2022, the equivalent of more than one per month, generating proceeds of over $17.5bn over this period.

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

HGT will report its full year audited results for 2024 on 10 March 2025.