This trust invests in unlisted companies or private equity opportunities around the world with a heavy focus on technology.
Update on NAV looks good market ignoring it though.
https://www.hl.co.uk/shares/shares-search-results/h/hg-capital-trust-plc-ord-gbp0.025/share-news
A reason for its fall appears to be a read across from the IT sector as whole. iT is classed as a growth sector and growth as we all know has fallen over cliff.
HGT invests in non discretionary IT/software. Payroll for instance. They call it dull tech.
During a recessions companies are in no rush to change there software. Thats both an advantage and disadvantage. Dont loose customers and down gain new customers. HGT having non discretionary software in 6 sectors and are managing some cross selling.
They recently said 70% of there companies have increased EBITDA between 25% and 30%.
There’s is belief that private equity comes will struggle to sell/list companies at a decent uplift. The average uplift is around 20%.
This is not born out by recent sales.
3i has recently sold a company on 50% uplift.
An uplift is where a companies is sold for a greater amount than it is valued at in the portfolio. As the companies are unlisted they must be valued conservatively. Only when sold do you know there true worth.
Do your own research.
For those maybe interested in HGT.
Now on a 27% discount.
This maybe a rare opportunity to buy a PE investment trust on big discount that regularly trades at premium. A rarity in itself.
https://online.hl.co.uk/…y_details/sedol/BJ0LT19
Also an interesting article on isa millionaires
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"Update on HGT’s Commitment to Hg’s Saturn 3 Fund
On the 13th of March, in HGT’s Annual Report and Accounts for the year ended 31 December 2022, we reported that the Board of HGT agreed to take advantage of the opportunity to reduce HGT’s commitment to Hg Saturn 3 by c.15%.
This reduction of commitment has now completed and allows for increased investment flexibility for HGT ahead of what is envisaged to be an attractive period for new investment, through both Hg funds and in particular, increased exposure to co-investments where HGT has a goal of investing up to 10% of its capital (free of fees and carried interest). An additional benefit here is the ability to manage single asset concentration.
Drawn capital to-date will be repaid to HGT pro-rata. HGT is simply exchanging invested NAV at par for cash, therefore, there is no negative impact on the HGT balance sheet from the proposed resizing of the fund commitment. Following completion, HGT’s pro-forma available liquid resources are £663m (including the £350 million undrawn bank facility), with pro-forma outstanding commitments of £934m, which are expected to be drawn down over the next three to four years.
Jim Strang, the Chairman"
Putting money aside for an expected/hoped for fall in the value of private companies.
Bargain time…in there opinion.
Assuming no problems in the US on the debt ceiling, the company’s good returns plus the discount, this should be a short term winner. 43% of my private equity in this and 43% in 3i group.
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I’m really pleased to have picked this up at relatively good prices over the past six months. Part of me wishes I’d paired it with III rather than HVPE though.
Where’s your remaining 14% allocated?
Off possible interest
3i group 43%
HGT43%
ICGT 5%
NBPE 8%
TOTAL 42% of total investments
If I include AUGMENTUM and Petershill 48% of my investments are in private equity.
Got to take advantage of the abnormal discounts. While they last.
I assume i will hold onto HGT and 3i long term or at least till i reach my goals.
3i group has one company risk as action is 51% of 3i and the premium is 15%. Both those figures are out of date as they don’t include the recent update.
On the otherhand
“Action achieved annual revenue growth of 30% and EBITDA growth of 46% in 2022”
As you can see Action will become a bigger and bigger part of 3i overtime which if it keeps up its growth will lead to greater and greater growth for 3i.
I am in for the ride!!
HGT has such an in depth knowledge of IT specifically non discretionary software that they will always in the top rankings of private equity.
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Nearly 50% of your portfolio in private equity is ballsy but go big or go home, I suppose.
I have about 2.5% each in HGT and HVPE plus some unlisted equities through other trusts such as SMT, taking me to about 10% overall.
I like the look of ICGT and NBPE too but I’m hesitant to add any more trusts from one sector.
Sold my last Murray International just now. I will miss them, I was fond of them. A good reason in itself to sell them.
3i started the day down. Murray up slightly. Bought 3i £19.34
I may have enough now!
I have a plan!
Also you have to take advantage of discounts. For instance I started buying 3i end June. That’s was my one mistake, as HGT discount has remained in place for so long I just kept adding to it and have put more money into it.
3i was on 25% discount at the time, I have made 16 purchases the first at £11.07p. I should have hammered it. I am only up 31% today.
It’s now back to premium. All the sites I have looked at have not updated the NAV so it’s not quite as big as stated. I intend on buying upto a 15% premium. The growth in Action shows to sign of abating. It increases profits significantly in all market conditions. I think the recent increase in EBITDA was 46%.
If the US debt goes to the line it will be a great chance to buy more. I will sell the remainder of Murray International in advance (a guess obviously) possibly some legal and general.
Sorry @rehpot whoever the administrator is they always approve my posts the wrong way round. The first one is today 23rd may the second was yesterday the 22nd May
Up 29% on 3i today I have continued to buy averaging up. Last purchase £19.34.
Edit up 30.4% today.
About a 12% premium still happy to buy upto 15% premium, if I had the money.
Last quarterly update brought the premium back to par.
HGT not doing as well. But far from a dog
HGT on the other hand is up 20% in my sipp. About an average of 10% in my other accounts. Still not bad.
Still averaging up bought 3i yet again today at £19.56 (17th purchase) finished the day £19.98p. Up 30.65%
HGT is showing some decent share price gain. About time the discount is undeserved.
As far as I can make out HGT has been punished the most in the private equity sector by the interest rate rise. Looking at a bit of recovery today but definitely not to late to take advantage of the fall.
I sold half of my lgen Wednesday to buy 3i on yesterdays exdivided day. The fall was actually twice the dividend, didn’t get the bottom. But not far off. Today fell further! Sold the remainder of LGEN and bought…more 3i!
Used some dividends today to buy some HGT.
Not my first choice wanted more renewables on big fat dividends but…
Share price rises PE for the last month
AUGM 21.57%
3I 15.9%
NBPE 8.73%
ICGT 8.13%
HGT 2.09%
To low, far to low compared to how the share price has been behaving with any upswing in the market over the last 18 months or so.
Discount 20%
One of the few PE investment trusts that regularly trade on a premium.
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