Last close As at 05/08/2026
GBP3.91
▲ −1.00 (−0.26%)
Market capitalisation
GBP1,776m
Research: Investment Companies
HgT’s preliminary unaudited FY23 trading update reported a 10.7% net asset value total return (NAV TR) in FY23 (of which c 1% in Q423). This was supported by continued strong trading across its portfolio, with the top 20 holdings (representing 77% of the portfolio’s value) posting average revenue and EBITDA growth of 25% and 28% respectively. HgT therefore sustained its multi-year track record of delivering c 20–30% pa revenue and EBITDA growth. Despite muted global M&A activity and private equity exits, HgT had a good level of liquidity events in FY23 with £343m of proceeds from exits and refinancings. The discount narrowing from 23% to 13% during FY23 (now c 14%) translated into a share price TR of 26.2%.
HgT |
Preliminary FY23 NAV total return of 10.7% |
Investment trusts |
05 February 2024 |
Analysts
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HgT’s preliminary unaudited FY23 trading update reported a 10.7% net asset value total return (NAV TR) in FY23 (of which c 1% in Q423). This was supported by continued strong trading across its portfolio, with the top 20 holdings (representing 77% of the portfolio’s value) posting average revenue and EBITDA growth of 25% and 28% respectively. HgT therefore sustained its multi-year track record of delivering c 20–30% pa revenue and EBITDA growth. Despite muted global M&A activity and private equity exits, HgT had a good level of liquidity events in FY23 with £343m of proceeds from exits and refinancings. The discount narrowing from 23% to 13% during FY23 (now c 14%) translated into a share price TR of 26.2%.
Healthy uplifts on HgT’s exits continued in FY23
HgT achieved a strong average uplift to end-2022 carrying values of 25% on its full and partial exits of portfolio holdings in FY23. This includes £109m from the full exit of the cloud-based transportation management software platform Transporeon (at an uplift of 18% to the last carrying value) and c £22m from the full exit of Commify, a business messaging solutions provider to local enterprises (at a 32% uplift to the end-March 2023 carrying value). Finally, HgT decided to conduct a secondary sale of 25% of its limited partner position in Hg Genesis 8 (a 2017 vintage mid-market fund) for £91m and agreed with Hg to reduce its commitment to Hg Saturn 3, which led to a £47.3m rebate of invested capital (see our previous note for details).
Further liquidity events agreed recently
HgT has announced four further transactions in recent weeks, which Hg expects, to generate c £295m of proceeds to HgT upon closure in 2024 (of which some will be reinvested in the same businesses). These include the onboarding of new investors into Visma via the Hg Saturn funds (with HgT making a net investment of £83.5m), the £93.8m full exit from GGW Group (£44.2m will be reinvested in the business), the partial realisation of IRIS (with net proceeds to HgT of c £42.1m), and the £52m full exit from Argus Media. We note that the GGW Group and Argus Media exits value the businesses at a 40% and 7% uplift to the end-September 2023 carrying value, respectively. The IRIS deal values the business in line with the end-September 2023 carrying value, but c 14% above the end-2022 carrying value. We believe that the FY23 realisations and recently announced deals are a testament to the quality of the trust’s portfolio and its conservative valuation approach.
Comfortable balance sheet position
HgT was cautious in terms of new and follow-on platform investments in FY23, with total investments of £71m, including GTreasury, Nomadia, JTL, P&I and Howden. That said, it had previously highlighted the attractive pricing and strong flow of opportunities for smaller bolt-on acquisitions throughout 2023. After accounting for all the transactions agreed but not yet closed at end-2023, HgT’s available liquid resources stand at £735m (including £350m of undrawn credit facility). This compares with its £808m outstanding commitments, which should be drawn over the next few years.
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Research: Investment Companies
Gresham House Energy Storage Fund (GRID) is the largest UK fund investing in utility-scale battery energy storage systems (BESS). A recent sharp decline in gas prices, a ‘disappointing’ start to the Energy System Operator’s (ESO’s) new energy trading platform and systemic delays connecting completed projects to the national grid have raised concerns about the revenue generating capacity of the BESS sector. This has placed significant downward pressure on the share prices of GRID and others in the sector. GRID’s share price has declined by more than 50% over the past month and is trading at a 67% discount to its last published NAV. A recent trading update by GRID’s manager, Ben Guest, provided details of the company’s response to these challenging market conditions, while also reiterating confidence in GRID’s positive long-term prospects.