Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

HgCapital suffers from cash drag and writedowns

HgCapital suffers from cash drag and writedowns

The £441 million HgCapital Trust has announced disappointing results for 2013, thanks in part to its heavy cash weighting.

HgCapital lost 1.6% on a net asset value basis last year, posting a 1.4% share price total return, while the FTSE All Share index rose by 20.8%.

The private-equity fund suffered from the amount of uninvested cash on its balance sheet, currently accounting for 19% of the portfolio, as well as several company-specific writedowns.

These included taking £8.3 million off the value of Lumesse, a HR software group, and £3.8 million off internet domain manager NetNames. Both were blamed on weak trading at the firms.

‘Though disappointing, the year’s return needs to be viewed in the context of the long-term returns achievable in private equity over the investment/realisation cycle,’ commented chairman Roger Mountford.

More positively, he pointed to a recent acceleration in investment activity, with £24 million allocated across three new deals so far this year. Sales have picked up too, including the floatation of Manx Telecom for a return of 2.1 times the initial outlay.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Volatility is back, Europe's future & Ethical's key moment

Volatility is back, Europe's future & Ethical's key moment

This week’s episode of Investment Pulse takes a look at European prospects, FTSE volatility and whether public pressure is about to provide a push for ethical investment

Play Volatility spike: How ETFs can soften the blow

Volatility spike: How ETFs can soften the blow

ETFGI’s Deborah Fuhr discusses the role of ETFs in client portfolios during volatile market conditions

Play Winter market warmers, the post QE world and timing the Fed

Winter market warmers, the post QE world and timing the Fed

This week’s episode of Investment Pulse looks at the winding down of quantitative easing, whether to try and time a US Federal Reserve rate rise and if strong seasonal performers can reverse recent market slumps

Wealth Manager on Twitter