News Column

HgCapital Trust Total Return Down But Set To Benefit From Visma Deal

May 13, 2014

Samuel Agini

LONDON (Alliance News) - HgCapital Trust PLC Tuesday said its net asset value fell by 1.7% on a total return basis in the four months ended April 30, while the FTSE All-Share Index increased by 1.5%, but the trust said it expects to benefit from its reinvestment in Norway-based Visma Group Holdings.

In a statement, the trust, which has a target of achieving returns in excess of the FTSE All-Share Index in the long-term, but isn't intended to reflect movements in the index, said its share price on a total-return basis increased by 5.4% over the four-month period. Its share price ended the period at 1,036.0 pence, a discount of 8.4% against the NAV per share of 1,131.6 pence.

HgCapital Trust gives investors access to a private equity portfolio run by HgCapital.

According to the trust, the top 20 companies in the manager's portfolio have seen average sales growth in the last twelve months to March 31 of 9%. Of these investments, eight increased sales by greater than 10%, including three by more than 15%, according to the trust's statement.

"The pro-forma NAV per share is 1,155.8 pence, after adjusting for the impact of the Visma realisation and re-investment announced in April 2014 and expected to complete in July," the trust said in a statement.

In April, HgCapital, the trust's manager, announced a reinvestment in Visma Group Holdings, a software and business process outsourcing services business based in Oslo, following its partial sale by private equity firm KKR & Co LLP.

HgCapital will be a co-lead investor in the new transaction structure, as manager of its HgCapital 7 Fund and the trust, alongside KKR and Cinven, which each will hold 31%, with management holding the balance. Cinven is committing capital to the business for the first time. Completion of the deal is subject to regulatory approval and is expected in July.

The trust said the estimated proceeds of the transaction should return GBP40.7 million to it, representing an uplift of GBP9.1 million over the carrying value of GBP31.6 million in the April 30 NAV.

"Over the life of the investment to date, the trust is expected to receive a total return of GBP83.1 million, including the proceeds to be received in July, on a total investment of GBP16.3 million," the trust said.

HgCapital Trust shares were Tuesday flat at 1,068.00 pence.

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Source: Alliance News