The HgCapital Trust plc (LON: HGT) share price rose 1.76% after announcing its investment in the expansion of GGW Group (“GGW”), a premier insurance brokerage platform serving the European small and medium-sized enterprise (“SME”) sector.
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The investment initiative is awaiting regulatory approvals and is expected to be finalised in the second quarter of 2024. While the specifics of the financial terms remain confidential, the anticipation surrounding the closure of this deal underscores its significance.
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In a strategic move, Hg has opted to leverage an existing option to reinvest in GGW, which underscores the firm’s confidence in GGW’s business model and prospects. By exercising this option, Hg is set to acquire a significant co-control interest in GGW, sharing ownership stakes with another major player in the investment sphere, Permira.
The commitment from HgCapital Trust plc to this venture is substantial, with a planned investment of approximately £44.2 million into GGW. This investment will be conducted alongside additional institutional clients of Hg, all pooling their resources through the Hg Saturn 3 Fund, indicating a collaborative effort to bolster GGW’s market position and operational capabilities.
The Company, listed on the London Stock Exchange, enables private and institutional investors to engage with Hg’s portfolio of investments. It should be noted that the figures provided pertain solely to HgCapital Trust’s portion of the collective investment in GGW Group.
Following all disclosed transactions, including the undrawn banking facility and the interim dividend paid in October 2023, HGT’s liquid resources ready for future investment are projected to be around £709 million, constituting 31% of the pro-forma net asset value (NAV) as of 30 September 2023, which stands at £2.3 billion.
This new investment commitment will bring HGT’s remaining obligations to invest in Hg transactions down to an estimated £808 million, representing 35% of the pro-forma NAV as of 30 September 2023.
HgCapital Trust share price.
The HgCpital Trust share price rose 1.76% to trade at 433.8p from Thursday’s closing price of 426.3p but later fell back.
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