HgCapital Trust (HGT) has bagged an £18m gain on the £71m sale of its stake in Gen II Fund Services. The New York-based global fund administration company has been bought for $5.1bn by private equity giant KKR from Hg, manager of HGT, General Atlantic and other minority investors. The uplift for HGT represents an increase of 34%, or 4p of net asset value (NAV) per share, over the £53m valuation at 31 August. It lifts the £2.4bn software-dominated private equity portfolio to a pro forma NAV per share of 529.5p to which its shares, at last night’s close of 373p, stand at a 29.4% discount. The shares de-rated in February over fears that many of its portfolio companies would be disrupted by artificial intelligence, a view it sought to challenge with second quarter results showing a 0.5% return.
Richard Williams, senior analyst at QuotedData, said: “This is an excellent exit for HGT, capping a successful six-year investment during which Gen II has quadrupled both revenue and EBITDA through a combination of organic growth and acquisitions. The proceeds add to HgT’s liquidity at a useful time given its sizeable investment pipeline, although its £2bn of outstanding commitments remain substantial relative to the £347m of liquid resources currently available.”
Taylor Maritime (TMI), the winding-down shipping operator, has announced a fourth return of capital, saying it will distribute $45m to shareholders through a compulsory purchase of shares in November. This will deliver most of the $48.6m raised from the sale of three handysize vessels, which has just completed. The company, which returned $45m to shareholders in July, is in the process of selling its last ship.
BP Marsh & Partners (BPM), the £233m AIM-listed backer of early-stage financial services businesses, has made an investment in Dauntless U/W Limited, a newly formed London Market underwriting agency specialising in marine hull insurance. It has bought a 30% equity interest for a nominal sum and is providing a £2m loan facility. Dauntless has been co-founded by Des Keane and Charles Scott-Hopkins, who have held senior underwriting positions at Lloyd’s syndicates including Tokio Marine Kiln, CNA Hardy and Ascot.
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