Investing: A Guide to the Top 20 Highest Return Stocks

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MANAGER’S QUARTERLY UPDATE – NOVEMBER 2015

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Important information: Past performance is not necessarily a reliable indicator of future results. The current environment feels to us, reminiscent of the years

2005-2007, particularly in terms of the abundance of credit. With such potential risks storing up, we take comfort from the resilient characteristics of our current portfolio. Nearly a third of our unrealised portfolio companies have consistently grown both revenues and EBITDA year on year for more than ten years. Our continued focus on businesses that provide a business critical product or service, to a fragmented customer base, benefiting from strong contracted or recurring revenue, hopefully positions us well to enable us to continue to generate strong risk-adjusted returns for our clients across market cycles.

In our view, the European private equity market seems exceptionally frothy and this very much informs our approach to both buying and selling investments. Whilst there is a strong pipeline of potential opportunities for both our mid-market buyout fund (Hg7) and our lower mid-market TMT fund (Mercury), we remain disciplined in terms of potentially committing to new investments – typically pursuing

opportunities where we have many years of knowledge of the business and a strong relationship with a founder or

management team. Equally, we are also carefully considering our own appetite for selling vs. holding onto businesses for longer (as seen in the recent minority sale of JLA).

Since the end of June 2015, we have completed the sales of SimonsVoss and the core Scandinavian business of e-conomic. We have additionally announced the minority sale of JLA and the full realisation of Casa Reha.

We have taken advantage of buoyant debt markets by recapitalising investments where we have good visibility of their future earnings, including IRIS, JLA and Sequel. We will continue to assess further opportunities here.

Our Portfolio Team takes an active role in the majority of our companies, helping to create value with growing expertise in areas such as Talent, Procurement, Sales and Marketing, Systems and Metrics and Customer Success. There are a number of projects implemented (including, for example, value creation planning at The Foundry & Eucon; implementing Tableau at A-Plan; and running data science projects at Zenith, Intelliflo and Allocate) and more underway across the portfolio driving business transformation.

We remain confident in a strong portfolio of sustainable growth companies. The robust performance of these, combined with further opportunities in the medium term to realise investments will continue to drive value for the shareholders of our largest client, HgCapital Trust plc.

NAV PER SHARE*

£13.10

SHARE PRICE

£10.70

NET ASSETS

£478.6m

MARKET CAPITALISATION

£399.4m

KEY FIGURES as at 31 October 2015

MANAGER’S OVERVIEW

OVERVIEW

2 HgCa pital T rust

References in this document to HgCapital Trust plc have been abbreviated to ‘HgCapital Trust’ or the ‘Trust’. HgCapital refers to the trading name of Hg Pooled Management Limited and HgCapital LLP. Hg Pooled Management Limited is the ‘Manager’. References in this document to ‘Total Return’ refer to a return where it is assumed that an investor has re-invested all historic dividends at the time when they were paid.

KEY FINANCIALS

Average LTM growth in sales of the top 20 buyout investments to 30 September 2015

+11%

Average LTM growth in EBITDA of the top 20 buyout investments to 30 September 2015

+9%

Cash deployed on behalf of the Trust since 30 June 2015

£15m

Cash returned to the Trust since 30 June 2015*

£51m

Total YTD return of the share price to 31 October 2015

+4.2%

A copy of the annual and interim reports can be found on www.hgcapitaltrust.com *Pro-forma including estimated impact of JLA and Casa Reha transactions, subject to completion and the impact of the revaluation of the carried interest provision.

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120 100 80 40 60 20 – £’million 140 <0% p.a. 6 20% 0% to <10% p.a. 3 8%

EBITDA growth bands

10% to <20% p.a. 5 50% >20% p.a. 6 22%

LTM Sales Number of investments within associated band

800 600 200 – £’million 1,200 1,000 400

% of top 20 portfolio by value within associated band

<0% p.a.

3 9

10% 33%

Sales growth bands

10% to <20% p.a. 0% to <10% p.a. 5 41% >20% p.a. 3 17%

LTM EBITDA Number of investments within associated band

120 100 80 40 60 20 – £’million 140

<0% p.a. 6 20% 0% to <10% p.a. 3 8%

EBITDA growth bands

10% to <20% p.a. 5 50% >20% p.a. 6 22%

LTM Sales Number of investments within associated band

800 600 200 – £’million 1,200 1,000 400

<0% p.a.

3 9

10% 33%

Sales growth bands

10% to <20% p.a. 0% to <10% p.a. 5 41% >20% p.a. 3 17%

• We continue to see consistent strong double digit performance in many of our larger companies including JLA, Zenith Leasedrive, IRIS, P&I and Visma.

• Some of our companies that have historically seen lower growth are now seeing robust EBITDA progression including Parts Alliance, Radius, Atlas, Teufel and QUNDIS. • We continue to materially invest into the cost base of

a number of our portfolio companies, including Ullink, Achilles, Sequel and The Foundry, to further strengthen management, improve sales & marketing capabilities and make other operational improvements.

• The consequence of this investment is that EBITDA growth is either depressed or negative in the short-term. We fundamentally believe the benefit of this investment will be long-term, high, sustainable growth, as we have delivered before within this portfolio. We believe this investment will help create more value ahead of exit.

Investing in HgCapital Trust plc gives you access

to a portfolio where the top 20 buyout

companies (representing 88% of the portfolio by

value) have aggregate sales of £2.1 billion, profits

of £464 million and margins of 23%.

These investments have delivered aggregate

sales growth of 11% and EBITDA growth of

9% over the last 12 months (‘LTM’) to

30 September 2015.

Important information: Past performance is not necessarily a reliable indicator of future results.

TOP 20 PORTFOLIO TRADING PERFORMANCE

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TOP 20 LTM SALES GROWTH

TOP 20 LTM PROFIT GROWTH

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£51 million estimated to be returned to the Trust since 30 June 2015, primarily from three realisations EXITS AND REALISATIONS

PORTFOLIO ACTIVITY

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In September, the Industrials team completed the sale of SimonsVoss, a German-based electronic locking and access control systems provider, to Allegion plc, a listed global security products and solutions provider.

The outcome fell short of our targeted return but, despite this, the business evolved over our ownership period from a single-product focused company into a broad solutions provider in electronic access control, delivering year-on-year revenue growth over the last five years.

In November, we agreed the sale of Casa Reha, a leading private German provider of elderly care services, specialising in high quality, assisted living, to Euronext-listed Korian, a leading European provider of elderly health care services. Completion is subject to regulatory approval.

During its ownership, HgCapital supported Casa Reha in further building its position as a high quality provider of care, facilitating the opening of a significant number of new homes, an increase in occupancy and further improvement in quality. In October this year, our Services team announced a minority

sale and refinancing of JLA, a leading UK provider of business critical asset maintenance services to SMEs. Completion is subject to regulatory approval.

HgCapital will retain c. 62% of the equity in JLA going forward, taking advantage of the significant upside we believe remains within the business. The combined return represents an investment multiple of approximately 3.5x to date. These liquidity events have been driven by the consistently robust trading performance of the investment during our ownership period, where the business has doubled its revenues and EBITDA.

A copy of the annual and interim reports can be found on www.hgcapitaltrust.com UPLIFT TO BOOK VALUE AT 31 DECEMBER 2014

+£0.6m

£18.2m

CASH REALISED

+3%

+1.5

pence per share

UPLIFT TO BOOK VALUE AT 31 DECEMBER 2014

+£17.1m

£17.3m

CASH REALISED*

+84%

+45.8

pence per share

UPLIFT TO BOOK VALUE AT 31 DECEMBER 2014

+£4.1m

£7.9m

ESTIMATED CASH TO BE REALISED*

+107%

+10.9

pence per share

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FURTHER INVESTMENT

PORTFOLIO M&A RE-FINANCINGS

PORTFOLIO ACTIVITY

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Since 30 June 2015, a further £15.4 million has been deployed on behalf of the Trust into the current portfolio. The largest share of this was a £10 million co-investment made into Achilles (free of fees or carried interest) to support its further growth.

In August, the TMT team completed the recapitalisation of IRIS, a leading provider of software and services to the UK

accountancy market. This transaction returned £6.2 million of cash proceeds to the Trust (0.24x of original cost), with a similar amount retained to support the potential pipeline in the company’s ongoing M&A strategy.

In addition to exits over the period we have continued to take advantage of the buoyant debt markets by recapitalising investments where we have good visibility of earnings.

A copy of the annual and interim reports can be found on www.hgcapitaltrust.com In July, the TMT team completed the sale of the core

Scandinavian business of e-conomic to Visma, a leading provider of business software and outsourcing services to SMEs in the Nordic region and in which the Trust already holds a substantial interest, in an all share transaction. e-conomic is a leading European SaaS accounting solutions provider to SMEs, based in Denmark. As a result, approximately 12.6% of the Trust’s current NAV (£58.1 million) will be invested in Visma, which will then be our largest holding. The Trust will retain a stake in e-conomic’s international business and Debitoor, an invoicing and accounting-lite solution with over 320,000 sign-ups, through its commitment to HgCapital 6.

As part of our value creation strategy, we have pursued a number of bolt-on acquisitions across the portfolio through a combination of fund investment and cash from the balance sheet of the individual companies. The largest of these was the acquisition of GSF by the Parts Alliance in September 2015, with £3.9 million invested on behalf of the Trust.

In November, the Mercury Team completed the recapitalisation of Sequel Business Solutions, the leading provider of

applications software to the Lloyds of London insurance market. The refinancing is expected to return c. £2.2 million of cash proceeds to HgCapital Trust (representing c. 0.5x of the investment’s original cost) within 16 months of the Fund’s original investment in the business.

£15 million invested on behalf of the Trust since 30 June 2015

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INVESTMENT OBJECTIVE

HgCapital Trust plc, which was established in 1989, is an investment trust listed on the London Stock Exchange (ticker: HGT.L). The Trust’s objective is to provide shareholders with long-term capital appreciation in excess of the FTSE All-Share Index by investing in unquoted companies.

The Manager, HgCapital, seeks to meet the investment objective of the Trust using a business model that combines deep sector knowledge, a rigorous research-based approach and associated thematic investment origination and selection to systematically identify and repeatedly invest in the most attractive segments of the European mid-market, optimising deal flow and improving returns. HgCapital focuses on buyouts across the TMT, services and industrials sectors and specialist infrastructure through renewable energy projects.

WHY INVEST?

The Trust provides investors with a liquid investment vehicle through which they can obtain exposure to HgCapital’s diversified portfolio of private equity investments across multiple vintages primarily in Northern Europe. HgCapital’s long standing investment in establishing and maintaining deep sector expertise is a key differentiator in the European private equity environment which has delivered superior returns over the long-term. Based on the Trust’s share price at 31 October 2015 and allowing for dividends to be reinvested, an investment of £1,000 ten years ago would now be worth £2,353. An equivalent FTSE All-Share Index return would be worth £1,858.

A copy of the annual and interim reports and accounts can be found on our website, www.hgcapitaltrust.com

Share price

NAV per share FTSE All-Share Index

Pe

rformance Index

Oct-05 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 300 200 150 100 50 250 –

FINANCIAL HIGHLIGHTS (total return to 31 October 2015)

Twenty-year compound annual growth rate of the share price on a total return basis

+14.3%

Twenty-year compound annual growth rate of the NAV per share on a total return basis

+13.4%

Twenty-year historic outperformance of the FTSE-All Share Index on a total return basis

2.0x

1 _{Including investment valuation and accrued interest.}

2_{Valuation prior to carried interest provision of £12,654,000. This is prior to the}

impact of the JLA transaction announced in October.

Year to date % 1 year % 3 years % p.a. 5 years % p.a. 10 years % p.a. 20 years % p.a. Share price 4.2 4.0 5.5 5.3 10.9 14.3

NAV per share 3.0 11.3 4.8 8.6 8.9 13.4 FTSE All-Share Index 1.7 3.0 8.5 7.1 6.4 7.0 Share price performance p.a.

relative to FTSE All-Share Index 2.5 1.0 (3.0) (1.8) 2.5 7.3

HISTORICAL PERFORMANCE % P.A.

(total return to 31 October 2015)

CUMULATIVE HISTORIC PERFORMANCE % P.A.

(total return to 31 October 2015)

PERFORMANCE

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NET ASSETS (as at 31 October 2015) Twenty largest

buyout investments Sector investmentYear of valuationTotal 1 (£’000 ) Portfolio value (%) 1 IRIS TMT 2011 50,427 10.9% 2 Visma TMT 2014 38,013 8.2% 3 TeamSystem TMT 2010 35,081 7.6% 4 P&I TMT 2013 33,003 7.1% 5 Achilles TMT 2008 28,794 6.2% 6 JLA Services 2010 27,445 5.9%

7 Zenith Leasedrive Services 2013 25,701 5.6%

8 The Foundry TMT 2015 20,178 4.4% 9 e-conomic TMT 2013 18,767 4.1% 10 Radius Services 2013 18,158 3.9% 11 A-Plan Services 2015 15,174 3.3% 12 QUNDIS Industrials 2012 14,827 3.2% 13 NetNames TMT 2011 12,636 2.7% 14 Lumesse TMT 2010 11,540 2.5%

15 Parts Alliance Services 2012 11,293 2.4%

16 Atlas Services 2007 10,519 2.3%

17 Frösunda Healthcare 2010 9,750 2.1%

18 Ullink TMT 2014 9,339 2.0%

19 Allocate Software TMT 2014 7,492 1.6%

20 Sequel TMT 2014 6,793 1.5%

Top twenty investments 404,930 87.5%

Other investments 30,732 6.8%

Total buyout investments 435,662 94.2% Other buyout funds (Hg6E) 12,813 2.8%

Renewable energy funds 13,216 2.9%

Total all investments2 _{461,691 100.0%}

Total return performance record rebased to 100 at 31 October 2005.

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Analysis by value of investment return* relative to its original cost 78% Above 22% Below outer circle 41mm inner circle 25mm 1.5pt stroke 1mm round corners inner glow – white screen 20% 2mm blur centre

Sector by value of primary buyout portfolio

65% TMT 25% Services

6% Industrials 4% Healthcare

Net assets by class 94% Unquoted 6% Cash & other assets

Geographic spread by value of primary buyout portfolio

58% UK 16% Nordic Region 14% Germany 8% Italy 2% France 1% Switzerland 1% Republic of Ireland

Investment vintage by value of primary buyout portfolio 9% 2015 15% 2014 23% 2013 6% 2012 15% 2011 20% 2010 12% pre 2010

Deal type by value 91% Buyout

3% Renewable Energy 6% Buyout – small-cap

Deal type by value 91% Buyout 3% Renewable Energy 6% Buyout – small-cap original cost 78% Above 22% Below outer circle 41mm inner circle 25mm 1.5pt stroke 1mm round corners inner glow – white screen 20% 2mm blur centre

Numis Securities Ltd

The London Stock Exchange Building 10 Paternoster Square

London EC4M 7LT

BROKER

HgCapital Trust plc 2 More London Riverside London SE1 2AP

+44 (0)20 7089 7888

[email protected] www.hgcapitaltrust.com

CONTACT DETAILS

Hg Pooled Management Limited www.hgcapital.com

MANAGER CALENDAR

Year-end 31 December

Full year results published 7 March 2016

1_{Includes ten months net revenue of 23.68p.} 2_{Includes estimated impact of the JLA and Casa Reha}

transactions, subject to completion, and the impact of the revaluation of the carried interest provision.

Unquoted investments were last valued at 30 June 2015, and will next be revalued at 31 December 2015.

Index: FTSE All Share

Ticker code: HGT

Ordinary shares in issue: 37,324,698

Net assets1_: _{£478.6 million}

Market capitalisation: £399.4 million

NAV per share: 1,282.3 p

Pro-forma NAV per share2_: _{1,309.9 p}

Ordinary share price: 1,070.0 p

Ordinary Share price

discount to pro-forma NAV: 18.3%

Continuation vote: 2020

FINANCIALS

(as at 31 October 2015)

Roger Mountford (Chairman) Richard Brooman

Peter Dunscombe Mark Powell Anne West

BOARD OF DIRECTORS

For more information on the structure and fee arrangements for HgCapital Trust plc, please refer to the latest edition of the HgCapital Trust report and accounts, available at www.hgcapitaltrust.com

MANAGEMENT FEE ARRANGEMENTS

IMPORTANT INFORMATION

This document is issued and approved by Hg Pooled Management Limited. Nothing in this document is intended to constitute advice and this document should not be taken as a recommendation to buy or sell shares in HgCapital Trust plc. If you are interested in HgCapital Trust plc, you should contact your financial advisor before making any investment decision. Remember that past performance is not necessarily a reliable indicator of future results, and that the value of shares can go down as well as up. HgCapital is the trading name for Hg Pooled Management Limited and HgCapital LLP, both of which are authorised and regulated by the Financial Conduct Authority.

58% UK 16% Nordic Region 14% Germany 8% Italy 2% France 1% Switzerland 1% Republic of Ireland Sector by value of primary buyout portfolio

Net assets by class 94% Unquoted

6% Cash & other assets Investment vintage by value of primary buyout portfolio

9% 2015 15% 2014 23% 2013 6% 2012 15% 2011 32% pre 2011

SHAREHOLDER INFORMATION

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*Based on the 31 October 2015 reported NAV, and all subsequent reported transactions. Based on the 31 October 2015 NAV, liquid

resources (including all subsequent reported transactions) are estimated to be £53.9 million (11% of the pro-forma 31 October 2015 NAV). The Trust also has a £40 million bank facility that is currently undrawn.

The Trust’s undrawn commitments to HgCapital

funds are approximately £166 million (34% of the pro-forma 31 October 2015 NAV).

HgCapital Trust plc has the benefit of an opt-out provision in its commitment to invest alongside HgCapital 7, so that it can opt out of a new investment without penalty should it not have the cash available to invest.

LIQUID RESOURCES AND OUTSTANDING COMMITMENTS