Trustnet Magazine Issue 46 December 2018 | Page 18

Your portfolio
16 / 17
Ewan Lovett-Turner, Numis
With markets focused on the
geopolitical uncertainty going into
2019, Ewan Lovett-Turner, director
of investment companies research at
Numis, believes it is an attractive time
to invest in HgCapital Trust. This is a
private equity vehicle which he says
is differentiated through “its clearly
defined investment approach focused
on technology and technology-
enabled services”.
“The portfolio has little sensitivity
to economic growth, due to a focus
on fast-growing, cash-generative
businesses, with a high
proportion of recurring
earnings,” Lovett-Turner
adds.
“Software as a
service (SaaS)
companies
represent a
significant
portion of
the portfolio.”
HgCapital’s 20
largest investments
have average sales growth of 23 per
cent and earnings growth of 19 per
cent. These sorts of figures have helped
it achieve NAV total return growth of
13.3 per cent per annum over the past
20 years, significantly above the 5.7 per
cent from the FTSE All Share.
Lovett-Turner adds the trust has
a strong record of timing the cycle
well and has been a net seller of
investments over recent years,
“consistently exiting at significant
uplifts to carrying value”.
“Even though the portfolio is now
less mature, we believe HgCapital is
well positioned to continue delivering
double-digit NAV growth
over the long term,” he
says.
The trust
currently trades
Disclaimer:
on a 9 per cent
Hg is the owner of FE
discount.
FE TRUSTNET