HgCapital Trust plc
RESULTS FOR THE THREE MONTHS ENDED 31 MARCH 2026
CONTINUED STRONG TRADING DELIVERED FROM A RESILIENT PORTFOLIO OF TECHNOLOGY AND SERVICES BUSINESS IN CHALLENGING CONDITIONS
London, 7 May 2026: HgCapital Trust plc (‘HgT’), today announces its results for the three months ended 31 March 2026.
HgT provides investors with a listed vehicle to invest in one of the largest and fastest growing portfolios of unquoted technology companies in Europe, managed by Hg*.
The objective of HgT is to provide shareholders with consistent long‑term returns in excess of the FTSE All‑Share Index by investing predominantly in unquoted companies where value can be created through strategic and operational change.
This objective has been demonstrated with a 10-year share price total return of +15.4% p.a., outperforming the FTSE All-Share Index by +6.7% p.a. over this period.
Key highlights for Q1 2026 include:
- NAV per share total return decreased by 5.4% over the period, and as a result, at 31 March 2026 stood at £5.28 with net assets of £2.4 billion
- A material contraction in valuation multiples reduced the value of the portfolio by 9%. This was partially offset by a positive contribution of 5% from trading
- The share price total return showed a decrease of 22.9% year-to-date at £3.88 per share; market capitalisation at 31 March 2026 was £1.8 billion
- The weighted average EV/LTM EBITDA multiple stood at 24.0x at 31 March 2026, down from 25.2x at the start of 2026, and from 26.1x at the start of 2025
- Strong underlying performance from the portfolio with LTM revenue and EBITDA growth of 16% and 19% and margins of 34% for the overall portfolio; in line with prior period figures
- Investments of £42 million made and realisation proceeds of £91 million generated over the first quarter of 2026
- Realisations over the period included Intelerad at an uplift of >60% to book value, and the partial exit of Septeo (in which HgT converted its fund exposure into a fee-free co-investment of a similar amount)
- In March, HgT announced the exit of Geomatikk, (due to complete in Q2 2026) at a small uplift to its December 2025 carrying value
- Pro-forma available liquid resources of £297 million (12% of NAV), which includes a £375 million credit facility, of which £259 million is undrawn
- Pro-forma outstanding commitments to Hg funds totalling £2.1 billion (88% of NAV), of which £1.6 billion relates to recent commitments to Hg’s 2025/2026 vintage funds which are expected to be called over the next five to six years
- Share buyback programme initiated on 6 February 2026, with £19 million re-purchased to date
Based on HgT’s share price at 31 March 2026 and assuming all historic dividends have been reinvested, an investment of £1,000 twenty years ago would now be worth £9,254, a total return of 825%. An equivalent investment in the FTSE All-Share Index would be worth £3,599.
Jim Strang, Chairman of HgT, commented:
“Despite the challenging macro-environment backdrop and ongoing volatility in the public software markets, key operating metrics across the HgT portfolio continued to show encouraging progress in Q1. Specifically, companies reported LTM sales growth of 16% and EBITDA growth of 19% respectively, while EBITDA margins were 34%. The portfolio continues to grow significantly faster than typical public companies and to generate significant free cash, a trend that has been in place for some time.
The broad-based sell-off in the software sector, substantively driven by fears over the disruptive threat of AI to existing businesses, has been largely indiscriminate with little distinction between the many different types of businesses that are found across the software sector. Hg targets a range of technology related investments according to a disciplined investment model focused on vertical software companies with very specific characteristics: notably those with proprietary datasets, where outputs must be 100% accurate and where deep, embedded customer and domain knowledge are defining factors. While all technology assets will be impacted by the adoption of AI, the Hg portfolio companies are well placed to see their specific value propositions enhanced by AI integration rather than to be replaced altogether. Indeed, Hg continues to lead the thinking on how such effective augmentations and collaborations can be made.
Recent exit events, where strategic buyers have acquired assets at premiums to their carrying values, serve to demonstrate not only the appropriateness of the Hg valuation approach but also the success Hg have had in developing a portfolio which is positioned to be a net beneficiary of the AI transformation across the software industry. The level of time and resource Hg are investing in this initiative is of real significance with peer investors looking to Hg as ‘leading the thinking’ in how to drive successful AI transformation at scale.
Nonetheless, over the course of the period, the positive effect of continued strong trading performance (+5% contribution) was offset by a material contraction in the valuation multiples of comparable companies that make up the peer valuation baskets according to the HgT valuation policy. Historically, we have observed that c.20-40% of the movement in public market valuation multiples flows through to HgT portfolio valuations, both in positive and negative markets. The average multiple for the IGV software index declined by c.25% in Q1, with the -9% impact on HgT’s portfolio from multiples towards the top of this range, and in-line with the guidance provided with the release of the Company’s FY25 annual report.
The impact of these combined effects, resulted in a NAV per share decrease of 5.4% for the quarter while HgT’s share price declined by 22.9% over the period, broadly in line with the decline in the IGV index.
At this time of elevated risks and uncertainty, the Board remains focussed on four major areas. These are monitoring the portfolio trading performance, the capital structures of the portfolio companies, ensuring the Hg deal machine continues to operate effectively and finally, and most importantly of all, taking all necessary steps to support the long-term success of HgT.”
*By Enterprise Value, Source: Hg, Factset
Note: All references to total return allow for all historic dividends being reinvested
Past performance is not a reliable indicator of future results. The value of shares and the income from them can go down as well as up as a result of market and currency fluctuations and investors may not get back the amount they originally invested.
The Company’s Q1 2026 Report and full presentation to accompany the results are available to view at: http://www.hgcapitaltrust.com/