A strong tech and IT services compounder

HgT’s portfolio of IT software and services companies providing mission-critical, low-spend services to SMEs has maintained its strong sales and earnings momentum on the back of the secular digitalisation trend. Revenue and EBITDA growth in FY24 were 19% and 23% across HgT’s top 20 holdings (at an average 34% EBITDA margin) respectively. As valuation multiples remained broadly stable and portfolio debt increased amid high refinancing activity (which resulted in improved debt pricing), this led to a 10.4% NAV total return (TR) in FY24. HgT maintains a healthy long-term track record with five- and 10-year NAV TR of c 18% pa. HgT’s manager, Hg, remains committed to leveraging GenAI across its portfolio, noting some initial promising progres...