Q1 Report to 31 March 2022

Please find below a link to the Quarterly Report, covering HGT’s performance to 31 March 2022.

https://www.hgcapitaltrust.com/sites/hgcapital-trust/files/Q1-Report-March-2022.pdf

Him Strang, Chairman Hg Capital Trust commented:

“The New Year has brought with it a significant increase in geo-political risk and uncertainty, especially the tragic events still unfolding in Ukraine, which has seen destruction and human suffering unseen in Europe for over 75 years. This, combined with the ongoing effects of Covid-19 make for a challenging investment environment.

As a consequence, investors have chosen to reduce exposure to risk assets, and in particular to high growth businesses with less established business models, which has had a direct negative effect on share prices and stock market valuations in these areas. There has also been some collateral impact on the valuations of established and profitable businesses, some of which form the peer group which HGT uses to derive it valuations.

Nonetheless, while a fall in comparable company multiples places downward pressure on the valuations of HGT’s portfolio of assets, the underlying operating performance of the HGT portfolio remains extremely strong. The portfolio continues to trade ahead of comparable figures for the last year and indeed ahead of budgeted performance. The strength of trading has helped to offset the downward effect on valuations resulting from lower multiples.

The Board believes the long-term prospects of the portfolio to remain favourable and there have been no material changes made to the ultimate return expectations from the portfolio.

The quarter saw ongoing investment activity, despite the challenging factors already noted. Hg signed a deal for its latest Saturn fund to which HGT recently made a commitment of $850 million. This investment, IFS, fits the pattern of investments established in the portfolio and investment activity is expected to continue in the usual way as the second quarter of the year progresses.”

Below is a short animated clip highlighting the key points from the Year End Results