Relatively strong performance by MGT

The net asset value of Hg Capital’s Mercury Grosvenor Trust fell just 0.2 per cent compared to a 7.3 per cent fall in the FTSE All-share for the six months to 30 June.

The net asset value of Mercury Grosvenor Trust (MGT) fell by 0.2 per cent – from 411p to 410.2p – in the six months to 30 June. Earnings per share for the £103m (E163m) trust, which is managed by HgCapital, were 6.9p compared to 11.4p for the same period last year.

Hg Capital believes MGT’s strength can be attributed to active investment managers with dedicated sector expertise. These include healthcare, information communication technology (ICT), business services and media as well as larger buyouts in other sectors. It committed £9.5m to four new investments, three of which went into ICT companies Comnitel Technologies, Acuid Ltd and Burns e-Commerce Solutions. A further £1.4m was committed to follow-on investments.

Ian Armitage of HgCapital, believes that at present company values are vulnerable to further falls. He said that MGT retains significant financial flexibility, in the form of cash and undrawn borrowing facilities, amounting to over £50m. “We will be very selective in deploying this capital over the next six months,” he conceded.

Looking at the market in general he said that softening demand had in some companies, exposed weaknesses in market position and management. He said: “Some management teams will exploit the opportunities offered by recessionary forces to expand at the expense of weaker competitors, whereas others will struggle. Our job remains to support the stronger teams and supplement or replace the weaker ones.”