HgCapital Trust plc Regulatory News (HGT)

HgCapital, the Manager of HgCapital Trust plc ("The Trust"), today announces a majority investment in Raet, a leading HR solutions provider, specialized in HR cloud software and services. The terms of this transaction were not disclosed.

HgCapital Trust plc will invest in Raet alongside other institutional clients of HgCapital, who will participate through the HgCapital 7 Fund. The Trust, whose shares are listed on the London Stock Exchange, gives private and institutional investors the opportunity to participate in all HgCapital's investments. The Trust will contribute a total of approximately £16.2 million.

The acquisition of Raet represents the tenth investment by the HgCapital 7 Fund, and following completion, the Fund will be approximately 68% invested.

Based on the 29 February 2016 reported NAV, the Trust's liquid resources available for future deployment, including all announced transactions and the proposed dividend payable in May 2016, are estimated to be £21.3 million (4% of the 29 February 2016 NAV). In addition, the Trust has access to a £40 million standby facility, which is currently undrawn. The transaction will reduce the Trust's outstanding commitments to invest in HgCapital deals to approximately £102 million (19% of the 29 February 2016 NAV).

HgCapital announces investment in Raet

HgCapital announced today a majority investment in Raet, a leading HR solutions provider, specialised in HR cloud software and services. Raet will sit within HgCapital's Technology, Media & Telecommunications ("TMT") sector. HgCapital will assume majority ownership from CVC Capital Partners and will be investing alongside the management team, who will retain a significant minority stake in the Company. The terms of this transaction were not disclosed.

Headquartered in Amersfoort, the Netherlands, Raet is a leading provider of HR cloud software and services, serving more than 10,000 customers internationally. The Company is in the process of expanding its international footprint in both Europe and South America and currently employs more than 1,000 staff. HgCapital has followed Raet closely for more than 5 years, building a strong relationship with the new management team, and will now work closely with them to accelerate Raet's robust organic growth.

This investment represents a continuation of HgCapital's theme of investing in leading payroll and HR-related businesses and follows prior investments in P&I, as well as Visma's and IRIS' payroll divisions. Raet demonstrates many of the business model characteristics that HgCapital looks for including: high levels of recurring revenue; high cash flow generation; strong customer loyalty and a strong management team. The investment is another example of the close cooperation between our teams, as with P&I, the Munich and TMT team worked closely together on the transaction, sharing resources and knowledge from prior transactions in this space.

Justin Von Simson, Partner and Head of the Munich office, said "we have known and tracked Raet for a number of years. The business has a fantastic position in the Dutch market and we have been greatly impressed by the new management team who have been spearheading the development of Raet beyond its home markets to a wider international audience since 2014. We are excited by the opportunity to support the team in these endeavours going forward".

Ed Wielechowski, a Principal in the HgCapital TMT team, commented, "we are very pleased that Kobe and his team chose HgCapital as their new investor. Raet has an opportunity to become a leading global provider of broad HR cloud software and services over the next few years and we will support this through our deep TMT sector expertise".

Kobe Verdonck, CEO of Raet commented "We are delighted to be partnering with the HgCapital team as we take our business forward with the vision of achieving sector leadership across HR software and HR services".

In addition to investments made from both the HgCapital 7 and the Mercury funds over the past year (including most recently, Sovos Compliance, Citation, Kinapse and Trace One), HgCapital has realised c. £822 million in the last twelve months, both through full and partial exits (TeamSystem, SimonsVoss, Casa Reha and JLA) and through recapitalisations (P&I, JLA, Zenith, IRIS, Sequel and Relay).

HgCapital was advised on this transaction by Nielen Schuman, White & Case, OC&C and Deloitte.

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For further details:

HgCapital

Maitland

About HgCapital Trust plc

HgCapital Trust plc is an investment trust whose shares are listed on the London Stock Exchange (ticker: HGT.L). The Trust is a client of HgCapital, giving investors exposure to a portfolio of high-growth private companies, through a liquid vehicle. New investments and existing portfolio companies are managed by HgCapital, 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.

Neither the contents of HgCapital Trust's, HgCapital's, CVC's, or Raet's websites nor the contents of any website accessible from hyperlinks on the websites (or any other website) is incorporated into, or forms part of, this announcement.