Hg Capital Share Discussion Threads

[robsy2] 06/9/2021 07:54

So glad I bought this. I remember thinking it was fully priced , no discount etc but it goes from strength to strength.

[steve c1] 06/9/2021 07:52

Absolutely. If the 20% premium carries on then over £5 likely.

[brexitplus] 06/9/2021 07:24

Excellent results, as usual.

[brexitplus] 04/8/2021 13:43

HGT generally sells at quite a premium to quoted NAV its holdings, so the @ctual premium is hard to assess. It may actually be at a real discount. It all depends on how the value of each holding is assessed.

I have the same problem with GROW and OCI.

[tykethat] 04/8/2021 11:02

@martindjzz Thats the quandary of investing in HG capital and is the reason why I buy more on a monthly basis. In reality I have no idea if the current buying price is good bad or indifferent.

What I do know is that HG would be one of the last investments that I would sell.

[martindjzz] 04/8/2021 10:26

I've been looking to add for some time but the premium gets ever wider so will keep waiting.

[steve c1] 03/8/2021 17:01

Not sure but this is my largest holding now and it's on a 19% premium. Sell, top slice or do nothing, decisions decisions.

[games] 03/8/2021 15:52

Anyone any idea what is driving the price here

[makinbuks] 13/5/2021 10:52

Yes, the continuing growth in Revenue and EBITA of the top holdings is the ante-dote to that argument of overvaluation on a historic basis. I guess I would have three concerns a) if there were a general downturn (unlikely) could these software support firms maintain that pace of growth; b) looking again at the recent disposals I am reminded about the incestuous nature of them and how NAV is very much an in house exercise and c) we are rated about as highly as you could be (deservedly so) against NAV so we will be hurt badly by any setbacks.

None the less I agree I bought a few years back, added about 25% later and am a long term do nothing holder

[robsy2] 12/5/2021 18:08

just had a look at the Q1 report . Looks fine . This is a holding that I never really think about much , never causes any problems.

[makinbuks] 26/4/2021 16:05

If you watch the Fundsmith Q & A session following their AGM on U tube, Terry Smith illustrates this point with a very good chart. He simply illustrates the rating of some of his best investments several years ago compared to stocks with more of a value rating and proves what is obvious if you think about it, that quality has a price but also delivers

[skyship] 26/4/2021 08:48

RAM - fair comment. But did you take a look at who pocketed those JPEL shares dumped by Barings?

As for the portfolio - 46% now represented by French consumer products group Swania; and the recent NAV uplift suggests they have revalued that holding in a positive direction.

[rambutan2] 26/4/2021 04:29

SKY, for as long as I can remember you've said that HGT is fully/overvalued. But the real opportunity cost has surely been not to hold it. Sometimes it's worth paying up for quality, leaving it be and letting it compound. My stakes in HGT and HVPE are up multiples from when I bought them and continue to outperform.

Now, I certainly wouldn't have advocated holding JPEL (in its various different guises) for the long term, because the managers, right from the early days have disappointed. Currently yes there is a potential discount trade there, but how much of that nav is actually realisable at the marked price. Some of that portfolio is looking rather aged to me. No where to hide once deep into liquidation mode. The OZ fund that sold out recently is a sector specialist, and knows its stuff. So I wonder why is did sell. Interestingly, it has held onto its position in HGT.

[skyship] 25/4/2021 20:39

ItO - its all about opportunity cost. HGT fully valued; JPEL grossly under-valued. So an opportunity to trade the anomaly; exactly as I did with NBPE this past month!

I admit it is only for those with a more activist nature; but it is those who tend to outperform...

GLA

[its the oxman] 25/4/2021 18:48

Guess if you look at position today a good short term trading case can be made for jpel but look at their share price performance over the last three years v hgt and you can see why hgt still remains attractive in many investors eyes.

[skyship] 25/4/2021 13:44

Hmm - agreed, fantastic track record; but there is such a thing as valuation. Clearly more limited upside when a trust stands at a premium. Also the 1.5% yield is rather miserly to say the least; though of course what isn’t paid out helps to massage the NAV.

Still, you’re right to buy into a PE Trust, I just question as to whether you might do better buying into one of the many others, including quite a few on 20%+ discounts and higher yields.

As I posted on the PE thread last month, I was luckily a strong bull of NBPE which have since jumped 17%, yet remain on a 20% discount. The other I mention there is more speculative – JPEL. On offer at 127c with a 187c NAV, in spite of the fact that they are in liquidation mode. So, with the discount at 32.1%, clearly considerably undervalued IMO.

[markyp23] 23/4/2021 19:27

I was buying today

NAV/financial update is coming in May
Track record is fantastic and fall in NAV end Dec to Feb announcement is all currency related
Expect that the underlying NAV at end March will be higher than current share price

[chrysalis99] 15/3/2021 15:02

It's an interesting looking share price chart! Still waiting for the market pull back before dipping my toe here. Been waiting a while!

[makinbuks] 15/3/2021 12:54

Interesting update today. Clearly the share price had got ahead of itself a bit and still trades at a premium to NAV. I liked the announcement that co-investments would increase to 15% of the fund

[mrscruff] 21/1/2021 12:14

Was the NAV not adjusted down post C19 like it was for HVPE? This then got revised upwards in December when the proper revaluation is done for HVPE. My other funds are the same like Draper Esprit. If not no worries. I was told that valuations of listed does factor a little in these valuations not quality but yearly. Back to my sound thinking being assumptions then!!!

[makinbuks] 20/1/2021 12:25

So the graph shows one year performance of the index +40% compared to Hg +22% and your hypothesis is that Hg will increase its NAV to catch up, is that right? I hope you're right and certainly its an encouraging stat, but here's some thoughts:
1.Hg calculates its NAV bottom up driven more by individual performance in Revenue and EBITA terms than perceived market value.
2.None of Hg's companies are in the index so it doesn't follow necessarily that they will behave like them
3. PE's tend to value conservatively compared to market trends. This is so that they can show a profit on disposal. Better to keep gaining a little every time you value than to saw tooth up and down

[tykethat] 20/1/2021 12:17

As usual when my monthly buy order goes in the price goes up! HGT are a genuine high quality outfit whose long term record is very good.

[makinbuks] 18/1/2021 23:14

Thanks MrScruff, you make some good points and by the way I hold HarbourVest, Apax Partners and Oakley as my exposure to the PE sector as well as HG.

I'm with you on considering HG less as a PE fund and more of a SAAS company. Indeed it would be interesting to see their consolidated results on an IFRS basis as if that were the case. Of course they are not a group and do not behave as such, either in terms of cross selling or cost synergies. I guess they're a hybrid in that they are actively driving, or at least influencing, strategy but not in operational control

Its interesting that former stock market darlings such as Hanson were conglomerates and now very much out of fashion. Yet were they so different? They DID of course produce consolidated accounts and did not publish a NAV but in many ways they were just investment vehicles benefiting from leverage. They were sometimes criticised for the degree of leverage they took on but it was nothing compared to a PE fund

[mrscruff] 18/1/2021 21:09

Makinbuks your not on your own now and yes we need to trust them. With private equity you are really buying into the company HG. Just like you would with HarbourVest. Both have strong track records with HG in London and HarbourVest in the US.

The fees are there because private equity actively participate in the running of the business even after the intensive due diligence.

In a way both can't be looked at like a fund like BMO Private Equity or Pantheon who tend to simply buy a fund. This is more like a Microsoft or Google who own lots of companies.

The listed SAAS sector has risen strongly. Europe stocks have rallied. HGT will catch up on performance chasing alone. I suspect as much as 20 percent before H2 presuming equity markets remain strong.