(Alliance News) - HgCapital Trust PLC on Monday reported a rise in net asset value in the third quarter despite a "challenging" operating environment.
NAV per share at September 30 was 450.7 pence, up 2.3% from 443.2p on June 30 and up 8.7% from 414.80p a year ago.
NAV total return for the year-to-date in 2022 was 4.1%, compared to a total return of 36% by the same point last year.
The London-based investment vehicle provides shareholders access to the unquoted businesses managed by Hg.
HgCapital shares were down 2.6% at 370.28p on Monday morning in London. The stock closed September 30 at 340.00p.
The trust's top 20 investments generated earnings and revenue growth of 27% and 31%, respectively, over the past 12 months, but HgCapital said the operating environment for the portfolio companies is likely to deteriorate in the months to come.
"The level of economic uncertainty has led to a reduction in M&A activity, exacerbated by a decrease in credit availability," Chair Jim Strang said.
He added: "While the general picture is clearly challenging at this time, HGT remains well positioned. In such times the sector-leading investments that make up the majority of our portfolio typically improve their relative competitive position and subsequently, their profitability."
While no full exits from portfolio companies were achieved over the period, a total of GBP61 million was returned to HgCapital, mostly via the recapitalisation of business software firm Visma and the partial sale of medical imaging firm Intelerad.
Looking ahead, HgCapital expects inflation to have a "muted" long-term impact on the businesses in which it is invested.
It said that geopolitical challenges, fiscal tightening, supply chain constraints, and cost increases will mean some of its portfolio's end-customers may feel the need to postpone investments in systems and software.
By Jaskeet Briah; jaskeetbriah@alliancenews.com
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HgCapital Trust plc (HGT)