Hg Capital Share Discussion Threads

[makinbuks] 18/1/2021 16:38

Appreciate I'm talking to myself here but todays announcement is also somewhat questionable. If I read it correctly, they sold this business some time ago to another PE house but retained a minority stake. Now that other PE manager is selling it internally between his funds at a price which is greater than our last valuation (but so what? We're not receiving any cash) and we have increase our stake at that higher price, again through a later vehicle within our structure. You could go on like this for years convincing yourselves this business is worth more and more and indeed it might be, but as we can't see any actual numbers we have to take it on trust. A lot of fees racking up through all this churn

[makinbuks] 05/10/2020 15:55

Again, is it a little incestuous? They sell A Plan to Hyperion, trumpet it as a great deal having recognised fantastic returns. They then "churn the sale proceeds into Hyperion at an undisclosed price.

I agree they don't seem to put a foot wrong and I also hold a (for me) decent amount but these last two deals don't sit quite right with me

[robsy2] 30/9/2020 11:45

looks good to me in that they don't really seem to put a foot wrong.

[lasata] 29/9/2020 18:29

Is this bullish news for HTG?




NS Number : 4973A

HgCapital Trust PLC

29 September 2020

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces an investment in Hyperion Insurance Group Limited ("Hyperion"), the international insurance intermediary. The full terms of the transaction are not disclosed.

HgCapital Trust plc will invest approximately GBP33.1 million in Hyperion, with other institutional clients of Hg investing alongside HGT through the Hg Saturn 2 Fund.

HGT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

Note that these figures only relate to HGT's share of Hg's overall investment in Hyperion.

HGT's liquid resources available for future deployment (including all announced transactions and the interim dividend payable in October 2020) are estimated to be GBP278 million (24% of the 31 August 2020 pro-forma NAV of GBP1.16 billion, including the increase in equity via tap equity issues over the third quarter of 2020). The investment will reduce HGT's outstanding commitments to invest in Hg transactions to approximately GBP759 million.

Hg invests in Hyperion in a transaction valued at US$5 billion

Transaction and debt raise will provide up to $1.5bn to accelerate strategic growth and Hyperion's focus on technology and data

London, UK. 29(th) September, 2020 - Hg, a leading European investor in software and tech-enabled services businesses, today announces that it will make a significant long-term equity investment in Hyperion Insurance Group Limited ("Hyperion"), the international insurance intermediary. The transaction values the business at an enterprise value of around US$5 billion. In conjunction with an additional debt raise and existing resources, the investment will provide Hyperion with up to $1.5bn to accelerate its growth with both selective acquisitions and investments in data and technology.

Hg will join Hyperion as an aligned, long-term, growth partner alongside General Atlantic, which invested in Hyperion in 2013, and CDPQ, which invested in Hyperion in 2018. Both General Atlantic and CDPQ remain committed to being partners of Hyperion alongside Hg. The Hyperion management team and employees will remain the largest shareholder group in the company, with more than 1,000 individuals now owning shares. The transaction establishes a sustainable, long-term capital model with core employee ownership supported by collaborative investment partners, enabling Hyperion to build out Howden as a leading international challenger broker and DUAL as an international specialist MGA.

The full terms of the transaction are not disclosed and closing is subject to obtaining relevant regulatory approvals.

Founded in 1994 and headquartered in London, Hyperion is a leading international insurance distribution group. Through its core activities of retail, speciality & reinsurance broking and through DUAL, one of the world's leading international MGAs, it facilitates the provision of B2B insurance across a wide geographic footprint. The Group operates across 200+ global offices in 40 countries and employs c.6,000 people to manage c. $9.0 billion of Gross Written Premium ("GWP") on behalf of its clients. It is the 5(th) largest employee-owned business in the UK and has a differentiated position as a leading international insurance intermediary.

The investment continues Hg's focus on insurance distribution and insuretech. Hyperion will represent Hg's sixth investment in the wider sector over the last 5 years - with these businesses together totalling over $1 billion of invested client capital.

Hyperion's broking arm, Howden, recently announced it had reached agreement to acquire A-Plan Group from Hg. Hg helped to drive a focus on embedding data and technology in A-Plan Group's best-in-class service model over its investment period. This experience in technology will also benefit Hyperion X, the Group's digital, data and analytics business.

David Howden, Chief Executive Officer of Hyperion, said: "I am thrilled to welcome Hg as a long-term partner. During our conversations on A-Plan Group it was clear that Hg and Hyperion share an understanding of what building a business to last means for employees and clients. This, the quality of the Hg team, their support for our core employee ownership and our culture of empowerment, and the desire of the Hg partners to contribute to our digital and data strategy, makes them an excellent partner to join General Atlantic and CDPQ as we continue our journey."

Andrew Land, Partner at Hg, said: "It is a privilege for Hg to back David and his fantastic team through this investment in Hyperion. The company is a unique and special business, driven by its outstanding culture and quality of talent, and it has a significant growth opportunity across the global insurance sector in the coming years. We got to know David during the recent sale by Hg of A-Plan Group to Hyperion, and it became clear that our long-term investment approach and specialism in technology were a great match for him and his team. In addition to providing capital, Hg's deep knowledge of software and data will help Hyperion stay at the forefront of technology adoption across the insurance sector."

Nic Humphries, Senior Partner at Hg, said: "This long-term investment in Hyperion reflects Hg Saturn's strategy of backing entrepreneur-led growth businesses in software and tech-enabled services that are sector champions. In Saturn's recent investments in Visma, P&I, Argus Media, Sovos and now Hyperion, we developed a trusted relationship with the founder or CEO over a long period, enabling us to offer them the investment structure they needed to meet their long-term plans. David and his team have built one of the global leaders in insurance distribution and we are excited in supporting them for many years to come."

Dominic Collins, Chairman of Hyperion, said: "I am delighted that Hg have chosen to become a partner alongside General Atlantic and CDPQ. It is a privilege to work with three partners who embrace our core ambition to build a sustainable and successful business, and who will help us to deliver on our strategy over the coming years at this very exciting time in the industry. The Hg team bring not only significant capital, but also considerable expertise and I look forward to welcoming them to the Board."

[makinbuks] 23/9/2020 15:12

Is this sell to another PE House and then reinvest a few months later at a higher valuation not a bit dodgy?

[lasata] 14/9/2020 11:38

Agree and chart breakout very positive too

Good times ahead

[makinbuks] 14/9/2020 10:20

Positive and punchy

[tykethat] 14/9/2020 10:04

Pleased to see NAV back above the share price! I don't like premia!

[games] 14/9/2020 08:22

Decent update. With some caution.

[skyship] 23/8/2020 14:45

Nice play Andy - well done indeed. Very tempted to short this - to trade at an NAV premium is totally crazy...

[andyj] 22/8/2020 11:31

I took profits yesterday. Probably too early but happy to take 30% profits in the current situation and sit on cash. It looks a bit spikey.

[games] 21/8/2020 08:00

Decent uplift to nav due to Visma.

A little concerned that Visma is such a high percentage of hg, but as the saying goes, let your winners run.

[technovator] 13/5/2020 09:29

I see HGT is still defying gravity with it's non-independent valuations of it's unlisted holdings. Reminds me some of Neil Woodford's funds!

GLG opened a short over the last couple of weeks.

[andyj] 16/4/2020 07:08

I agree, but I cannot see that price being reached as much as I hope it is.

[scorpio51] 02/4/2020 16:12

One of the highest quality pe trusts. I would wait until it retests lows around 165p before buying/topping up.

[rambutan2] 15/3/2020 03:19

Even HGT can't defy gravity:

Our valuation policy is applied consistently, in accordance with the IPEV Valuation Guidelines. Each company has been valued individually, based on the trading multiples of comparable businesses and relevant and recent M&A activity; this resulted in an average EBITDA multiple for the top 20 buyout investments of 19.8x (19.5x at 30 June 2019).

[steve c1] 13/3/2020 16:44

Anyone know whay happened to justify such a drop? Thought this might hold up better than most especially after recent results.

[robsy2] 10/3/2020 06:06

Indeed, market beating performance on the up and the downside.

[rambutan2] 10/3/2020 03:50

Wasn't an ideal day to release results! But they were, of course, excellent:

[p1nkfish] 11/11/2019 08:28

Yes, looks like coming towards end of some valuation cycle or other. They are not burying their heads in the sand.

[psync] 11/11/2019 07:47

Impressive results in the Q3 report this morning. NAV is given as 249.8p so the share price might be toppy but perhaps not out of touch with reality. This sounds a little bit forboding:

"Despite the persisting heat of the current market, we do continue to see attractive investment opportunities in our target clusters, just as we did in the closing stages of the last period of high valuations, in 2005 to 2008"

games - I also bought Pantheon along with HGT, though much more recently. Good to hear you're still holding. Have you trimmed those positions back over the years?

[games] 10/11/2019 15:44

Steve,

Yes hg did hold up relatively well, It was my first purchase, and I paid £6 something, I also bought PIN at the same time at £3 something. Hg ticked along nicely, while pin if I remember halved again by the following march.

I still hold both positions.

If there is a financial downturn, and your good at timing, pin may be worth watching.

Agree the chart looks to be getting ahead of itself, time will tell if there is a reason for this.

[skyship] 10/11/2019 09:09

Aided by recent press comment the share price has spiked too far - now provides a 1% NAV premium and a sub-2% yield.

Seems clearly over-priced, especially as the valuation of the 42% of the portfolio in Europe will have suffered somewhat from the recent strength in GBP.