HgTrust outperforms FTSE All-Share

Mid-market buyout firm HgCapital’s trust posts a rosy set of interim numbers for the first six months of 2006, highlighting the attraction of quoted vehicles for investors.

HgCapital Trust, the quoted investment business of buyout manager HgCapital, has reported an increase in net asset value per share of 12% or 696.1p in the six months to 30 June 2006.

In its interim results for that period, the company said its net asset value increased by 13.7% in the same period compared with 6.1% for the FTSE All-Share Index and 3.7% for the FTSE SmallCap Index.

Its share price rose by 9.6% from 583.5p at 31 December 2005 to 639.5p at 30 June 2006.  New and follow on investments amounted to £40 million ($75.4 million; €59 million). Realisations amounted to £32 million in cash.

Roger Mountford, the trust’s chairman said: “These sales were made at prices above year end book values, contributing further to growth in net asset value.  ClinPhone was successfully floated on the London Stock Exchange; Travelsphere was sold; and the company’s remaining holding in Raymarine was placed.

Hg took advantage of the continuing strong market conditions to agree the sale of investments in Castlebeck and Pharma Bio Research.  He said these sales were completed after the period under review but their valuations as at 30 June were increased to reflect the sale proceeds achieved.

However, the trust also wrote down the value of its investments in Match, a healthcare staff agency; Hoseasons, a UK holiday firm and Eagle Rock, a music and video producer.

However overall Mountford said the outlook for the trust was positive. He said Hg’s sector teams continue to identify new opportunities for investment. “Meanwhile, most businesses in the current portfolio have been achieving strong organic growth in sales and profits, suggesting potential for continuing growth in net asset value over the medium-term,” he said.

The trust invested a total of £37 million through three new buy-outs and a new investment in a renewable energy project.  Follow-on investments totalling £3 million were made in six other holdings.  €20 million was committed on the first closing of Hg’s specialist renewables fund.