HgCapital Trust, a listed investment trust managed by the UK mid-market buyout firm, generated strong returns for investors in 2006 after enjoying a record year for investment and realisations.
The trust delivered a total return to shareholders of 27 percent in 2006, according to preliminary results released today, including a dividend of 14 per share – up from 10p in 2005. This was well above the performance of the FTSE All-Share Index, which yielded a 17 percent return for the year. Over a ten year period, the trust has now seen a total return of 18 percent, compared to 8 percent for the index.
Net asset value increased by 20 percent, to £188 million (€275 million; $363 million). It is expected to top £190 million following the completion of Hg’s sale of German company Hirschmann, which is awaiting regulatory approval.
The results were partly due to a record year for investment. The trust put £45 million to work last year in five of Hg’s deals, including its two biggest ever investments – in UK care home operator Paragon and accountancy software business Visma. It also invested €21 million in Hg’s €300 million renewable energy fund, which closed earlier this year.
The trust also realised proceeds of £62.3 million, up from £52 million in 2005 – another record. This included a £28.2 million realisation from Hg’s sale of specialist healthcare provider Castlebeck, an 8.6 times return on its original investment.