HgCapital Trust (LSE:HGT) posted an estimated net asset value (NAV) per share of 530.7p at 30 June, with a total return of 0.5% in the second quarter following a sharper 5.4% decline in the first.
That left the closed-end investment trust, which gives shareholders exposure to a portfolio of unquoted European technology companies managed by Hg, with a total return of -4.9% for the first half. Underlying portfolio trading added 11% to NAV over the half, but a fall in comparable company valuation multiples cut it by 13%, as investors grew cautious about AI's impact on software business models.
The weighted average valuation multiple across the portfolio fell to 22.9 times earnings before interest, tax, depreciation and amortisation (EBITDA), from 25.2 times at the end of December.
Revenue and EBITDA grew 16% and 19% respectively on a last-twelve-month basis, with organic growth of 11% and 17%.
HgT invested £146 million in the period, including new stakes in OneStream and Rightsline, and generated £134 million from realisations, including full exits of Intelerad and Geomatikk at an average 31% uplift to carrying value. The trust bought back £19 million of shares and held £254 million of available liquid resources at period end.
"The Board and Hg believe that the current share price undervalues the HgT portfolio and its future prospects," said chairman Jim Strang, pointing to Hg's plan to lift its own stake in the trust from around 6% to more than 15%.
HgT reports interim results on 14 September.
