Edison issues update on HgCapital Trust (HGT): Strong earnings growth and realisations in FY23

Edison Investment Research Limited Edison issues update on HgCapital Trust (HGT): Strong earnings growth and realisations in FY23 22-March-2024 / 15:07 GMT/BST The issuer is solely responsible for the content of this announcement. London, UK, 22 March 2024 Edison issues update on HgCapital Trust (HGT): Strong earnings growth and realisations in FY23 HgCapital Trust (HgT) posted an 11.1% NAV total return in FY23 (based on final audited numbers), which allowed it to sustain strong five- and 10-year returns of 20.4% and 18.4% pa, respectively. This has been mostly driven by robust earnings momentum across its portfolio. HgT defied the tough private equity exit environment, generating £345.9m of total realisation proceeds excluding carried interest in FY23. Moreover, it has a healthy commitment coverage ratio of 73% (based on current pro forma figures). The market has rewarded HgT through a narrowing discount to NAV, which now stands at c 6% (vs c 22% at end-2022). Hg highlighted that sales and EBITDA growth across HgT’s top 20 holdings was 25% and 30% in 2023, respectively. This included 19% organic EBITDA growth, ahead of the 12% posted by listed US software and services businesses, which Hg believes was due to higher emphasis on margin and the superior quality of HgT’s portfolio compared to the average listed US software and service company. As this translated into an average margin of 31% across the top 20 holdings, HgT’s portfolio continues to fulfil the ‘Rule of 40’ (see our previous note for details). Growth was further assisted by high ‘buy-and-build’ activity, which benefited earnings growth and supported returns through a considerable multiples arbitrage.   Click here to view the full report. All reports published by Edison are available to download free of charge from its website www.edisongroup.com About Edison: Edison 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 company in-market 17 years ago, Edison has more than 100 employees and covers every economic sector. Headquartered in London, Edison also has offices in New York, Sydney and Wellington. 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 [phone] [e-mail] Katherine Thomson [phone] [e-mail] Learn more at www.edisongroup.com and connect with Edison on:  LinkedIn www.linkedin.com/company/edison-group-/ Twitter  www.twitter.com/Edison_Inv_Res YouTube www.youtube.com/edisonitv Dissemination of a CORPORATE NEWS, transmitted by EQS Group. The issuer is solely responsible for the content of this announcement.

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1865689  22-March-2024