HgCapital Trust plc Regulatory News (HGT)

Hg, the Manager of HgCapital Trust plc ("HGT"), today announces an investment in Hyperion Insurance Group Limited ("Hyperion"), the international insurance intermediary. The full terms of the transaction are not disclosed.

HgCapital Trust plc will invest approximately £33.1 million in Hyperion, with other institutional clients of Hg investing alongside HGT through the Hg Saturn 2 Fund.

HGT, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all Hg's investments.

Note that these figures only relate to HGT's share of Hg's overall investment in Hyperion.

HGT's liquid resources available for future deployment (including all announced transactions and the interim dividend payable in October 2020) are estimated to be £278 million (24% of the 31 August 2020 pro-forma NAV of £1.16 billion, including the increase in equity via tap equity issues over the third quarter of 2020). The investment will reduce HGT's outstanding commitments to invest in Hg transactions to approximately £759 million.

Hg invests in Hyperion in a transaction valued at US$5 billion

Transaction and debt raise will provide up to $1.5bn to accelerate strategic growth and Hyperion's focus on technology and data

London, UK. 29th September, 2020 - Hg, a leading European investor in software and tech-enabled services businesses, today announces that it will make a significant long-term equity investment in Hyperion Insurance Group Limited ("Hyperion"), the international insurance intermediary. The transaction values the business at an enterprise value of around US$5 billion. In conjunction with an additional debt raise and existing resources, the investment will provide Hyperion with up to $1.5bn to accelerate its growth with both selective acquisitions and investments in data and technology. 

Hg will join Hyperion as an aligned, long-term, growth partner alongside General Atlantic, which invested in Hyperion in 2013, and CDPQ, which invested in Hyperion in 2018. Both General Atlantic and CDPQ remain committed to being partners of Hyperion alongside Hg. The Hyperion management team and employees will remain the largest shareholder group in the company, with more than 1,000 individuals now owning shares. The transaction establishes a sustainable, long-term capital model with core employee ownership supported by collaborative investment partners, enabling Hyperion to build out Howden as a leading international challenger broker and DUAL as an international specialist MGA.

The full terms of the transaction are not disclosed and closing is subject to obtaining relevant regulatory approvals.

Founded in 1994 and headquartered in London, Hyperion is a leading international insurance distribution group. Through its core activities of retail, speciality & reinsurance broking and through DUAL, one of the world's leading international MGAs, it facilitates the provision of B2B insurance across a wide geographic footprint. The Group operates across 200+ global offices in 40 countries and employs c.6,000 people to manage c. $9.0 billion of Gross Written Premium ("GWP") on behalf of its clients. It is the 5th largest employee-owned business in the UK and has a differentiated position as a leading international insurance intermediary.

The investment continues Hg's focus on insurance distribution and insuretech. Hyperion will represent Hg's sixth investment in the wider sector over the last 5 years - with these businesses together totalling over $1 billion of invested client capital.

Hyperion's broking arm, Howden, recently announced it had reached agreement to acquire A-Plan Group from Hg. Hg helped to drive a focus on embedding data and technology in A-Plan Group's best-in-class service model over its investment period. This experience in technology will also benefit Hyperion X, the Group's digital, data and analytics business.

David Howden, Chief Executive Officer of Hyperion, said: "I am thrilled to welcome Hg as a long-term partner. During our conversations on A-Plan Group it was clear that Hg and Hyperion share an understanding of what building a business to last means for employees and clients. This, the quality of the Hg team, their support for our core employee ownership and our culture of empowerment, and the desire of the Hg partners to contribute to our digital and data strategy, makes them an excellent partner to join General Atlantic and CDPQ as we continue our journey."

Andrew Land, Partner at Hg, said: "It is a privilege for Hg to back David and his fantastic team through this investment in Hyperion. The company is a unique and special business, driven by its outstanding culture and quality of talent, and it has a significant growth opportunity across the global insurance sector in the coming years. We got to know David during the recent sale by Hg of A-Plan Group to Hyperion, and it became clear that our long-term investment approach and specialism in technology were a great match for him and his team. In addition to providing capital, Hg's deep knowledge of software and data will help Hyperion stay at the forefront of technology adoption across the insurance sector."

Nic Humphries, Senior Partner at Hg, said: "This long-term investment in Hyperion reflects Hg Saturn's strategy of backing entrepreneur-led growth businesses in software and tech-enabled services that are sector champions. In Saturn's recent investments in Visma, P&I, Argus Media, Sovos and now Hyperion, we developed a trusted relationship with the founder or CEO over a long period, enabling us to offer them the investment structure they needed to meet their long-term plans. David and his team have built one of the global leaders in insurance distribution and we are excited in supporting them for many years to come."

Dominic Collins, Chairman of Hyperion, said: "I am delighted that Hg have chosen to become a partner alongside General Atlantic and CDPQ. It is a privilege to work with three partners who embrace our core ambition to build a sustainable and successful business, and who will help us to deliver on our strategy over the coming years at this very exciting time in the industry. The Hg team bring not only significant capital, but also considerable expertise and I look forward to welcoming them to the Board."

For further details:

Hg

Laura Dixon +44 (0)20 8396 0930

Brunswick

Azadeh Varzi +44 (0)207 404 5959

About HgCapital Trust plc

HgCapital Trust plc, whose shares are listed on the London Stock Exchange (ticker: HGT.L), gives investors exposure through a liquid vehicle to a portfolio of high-growth private companies in the software and services sector. The selection of new investments and creation of value in these businesses are managed by Hg, an experienced and well-resourced private equity firm with a long-term track record of delivering superior risk-adjusted returns for its investors. For further details, please see www.hgcapitaltrust.com.

The contents of the Hg, HGT, A-Plan Group and Hyperion websites are not incorporated into, and do not form part of, this announcement.