HGCapital Trust PLC · LSE:HGT
HGCapital Trust — Q1 2021 Earnings Presentation
23 slides from HGCapital Trust's earnings presentation, May 2021
Slide 1: Get connected: Listed access to the 2nd largest software business in Europe
Listed access to the 2nd largest Listed access to the 4th largest software business in Europe Get connected software business in Europe December 2019 To a universe of software and service businesses This document accompanies the Interim Report & Accounts for the third quarter ended 30 September 2019
Slide 2: Overview
Overview A long-term investment into unquoted software and business service companies that may otherwise be inaccessible to public market investors FTSE 250 investment company listed on the LSE Providing listed access to the 2nd largest (unquoted) software company in Europe ‘Direct’ investor o
Slide 3: HGT Performance Q1 2021
HGT Performance Q1 2021 A strong quarter for HGT with NAV per share continuing to outperform +8.4% c. £1.4 billion net assets total return Performance primarily driven by double-digit trading and uplifts to book value at exit 336.3p NAV per share +4.9% c. £1.4 billion market capitalisation tot
Slide 4: A long-term track record of outperformance
A Long-term track record of outperformance The HGT share price and NAV has seen compound growth of > 14% p.a. over the past 10 years v. 6% p.a. from the FTSE All-Share, this growth has accelerated over the last 5 years Based on HGT’s share price at 31 March 2021 and allowing for all historic dividen
Slide 5: A healthy balance sheet
A healthy balance sheet Pro-forma balance sheet as at 31 March 2021, including all announced transactions YTD £485m (33% of NAV) commitments £136m (9% of NAV) Commitments likely to be invested liquid resources over the next 3 to 4 years (c. £150m p.a.) £200m further credit facility completed in Oc
Slide 6: HGT is Hg's largest client, committed to all Hg funds
HGT is Hg’s largest client, committed to all Hg funds HGT provides shareholders with access to an unquoted software portfolio that would otherwise be inaccessible to listed investors © Copyright Hg 2021 6
Slide 7: Hg is the #2 largest software and #4 largest PE firm in Europe
is the #2 largest software and #4 largest PE firm in Europe Hg Snapshot $166bn c. 10% of Hg Founded in 1990 with investment offices in London, Munich, New York -1% >$30 billion of AuM and >230 employees, > 140 investment professionals Fourth largest PE firm in Europe $60bn $57bn Specialised
Slide 8: A single strategy across three funds
A single strategy across three funds - delivering broad market coverage Strategy Lower-mid market Mid-market Upper mid-market Target enterprise value €100 - 500 million €500 - €1,500 million >€1,500 million Target investment equity €50 - 200 million €200 - 600 million >€600 million COMMON FEATURES S
Slide 9: A unique and dedicated portfolio team
A unique and dedicated portfolio team set up to support Hg portfolio businesses to accelerate their growth potential Promoting a culture of working together sharing Sharing best practice and resources with tailored ideas and experiences across the portfolio. In 2020: teams of technical experts, Hg w
Slide 10: Growing sustainable businesses which are great employers
Growing sustainable businesses which are great employers is an integral part of Hg’s investment process AA++ c 30 4.5 27% 1% 1% of every fund’s carry 2020 UNPRI Average Women in Hg’s of LLP profit donated to Nationalities committed to the rating Glassdoor score executive team charity annually Hg Fou
Slide 11: Targeting robust and resilient 'Hg sweet-spot' business models
Targeting robust and resilient ‘Hg sweet-spot’ business models BUSINESS MODEL ATTRIBUTES DEEP SECTOR KNOWLEDGE… Tax & Accounting Business critical need delivered as software or service ERP & Payroll Legal and Compliance Subscription or repeat revenue model Automation and Engineering SWEET Insurance
Slide 12: Focusing on 'Hg Clusters' driving deep sub-sector knowledge
Focusing on “Hg Clusters” driving deep sub-sector knowledge Note: Number of years refers to the number of years that Hg has invested in each cluster © Copyright Hg 2021 12
Slide 13: Hg has continued to selectively invest in companies tracked for many years
Hg has continued to selectively invest in companies tracked for many years… 2020 was a record year for investment, with £4.5bn deployed by Hg including £403m by HGT into 15 businesses with continued transactions in 2021 39% Average 20% of NAV invested p.a. over the past 10 years 26% 15% 20% 25% 18%
Slide 14: ...and return cash to HGT
…and return cash to HGT 2020 was a record year for realisations, with £4.2bn returned to clients by Hg including £364m to HGT and further proceeds in 2021 35% Average 24% of NAV p.a. 38% realised over past 10 years 36% 25% 15% 23% 19% 18% 15% 13% £62m £80m £66m £83m £64m £135m £224m £272m £117m £364
Slide 15: Significant completed realisations at uplifts to book value
With significant completed realisations at uplifts to book value Over the past 10 years, Hg has realised 54 investments with an average uplift to valuation of 27% 2020 2021 Average 50% uplift 22% 55% 26% 86% 40% 73% 18% 30% 43% to book value over 5.5x 2020 4.3x Average 3.5x multiple of 3.0x 3.1x 2.8
Slide 16: Summary and outlook
Summary and outlook Robust double-digit growth continues to underpin a resilient portfolio Against the backdrop of COVID-19, Hg’s portfolio has performed well and contributed positively to stakeholders’ livelihoods and retirements. The overall portfolio valuations were up over 25% for the year t
Slide 17: Appendices
Listed access to the 4th largest software business in Europe December 2019 Appendices This document accompanies the Interim Report & Accounts for the third quarter ended 30 September 2019 and contains a summary of information set out in that document. Reference should be made to the full and Interim
Slide 18: A focus on Western Europe with experience building transatlantic businesses
A focus on Western Europe with experience building transatlantic businesses Benevity Geomatikk Visma Intelerad Citation IT Relation Transatlantic Prophix Commify businesses CaseWare A-Plan MediFox Sovos Achilles Access Mein Auto Lyniate Allocate Azets Warweg Gen-II Argus Media IRIS F24 Litera Evalua
Slide 19: Large and well-resourced investment 'machine'
Large and well-resourced investment “machine” Hg LLP BOARD INVESTMENT COMMITTEE REALISATION COMMITTEE • Nic Humphries (Chair) • Matthew Brockman (Chair) • Andrew Land (Chair) DEAL EXECUTION Partners Directors & Principals Associates & Analysts Total 7 8 13 28 8 6 27 41 3 8 10 21 Total: 90 PORTFOLIO
Slide 20: The HGT portfolio in 2021
The HGT portfolio in 2021 High growth companies with resilient and defensive characteristics continuing to perform in a challenging environment “Sometimes, it’s the small things that make the biggest difference. For example, automating those dull tasks that nobody likes to do”. David Toms, Hg © Copy
Slide 21: Contact
Appendix Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact our Investor Relations Team at: investorrelations@hgcapitaltrust.com Laura Dixon Hannah Brown +44 78 2459 2894 +44 20 8078 9144 You can also follow us: Linkedin at www.linkedi
Slide 22: Disclaimer
Appendix Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES OR TO “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR INTO OR WITHIN AUSTRALIA
Slide 23: Disclaimer
Appendix Disclaimer These materials include statements that are, or may be deemed to be, "forward-looking statements" which are based on current expectations and projections about future events. In some cases, these forward- looking statements may be identified by the use of forward-looking terminol