Hg plans to raise interest in 'materially' undervalued HgCapital Trust
HgCapital Trust PLC on Thursday said manager Hg intends to increase its strategic investment in the trust over the medium term.
Hg believes that the current share price materially undervalues the HgCapital Trust portfolio and its future prospects, the FTSE 250-listed investment trust said. As a result, Hg intends to make an increased strategic investment in HgCapital Trust and raise its stake to over 15% from around 6% currently, through on-market purchases.
In response, HgCapital Trust shares rose 7.2% to 413.90 pence each in London on Thursday, though they remain down 16% in the past 12 months.
HgCapital Trust invests alongside other Hg funds in software, technology, and business services companies across Europe and North America, giving public access to Hg’s private equity deals.
Shares in HgCapital Trust have been knocked back by sharp falls in software companies in 2026, amid concerns about cannibalisation of their business by artificial intelligence. The IGV software index reached a trough of down 29% for the year in early April. While the IGV index has since recovered, HgCapital Trust’s partial rally has lagged the index.
Hg’s Co-Chief Executive Steven Batchelor said: ‘We have always believed that having skin in the game is the best way to demonstrate our alignment with clients.’
He noted the partners and staff of Hg already have £600 million plus invested in ‘our current portfolio alongside HgT via our funds, and have agreed another £800 million [plus] irrevocably committed into the new vintage of funds which we have just successfully raised.’
Batchelor said Hg is ‘excited’ to have an opportunity to ‘further increase our exposure via on-market purchases of HgT shares at this deep discount, and continue to strengthen our alignment with HgT shareholders and all Hg’s clients.’
HgCapital Trust on Thursday is hosting a capital markets day for investors and analysts at the Institution of Engineering & Technology in London focused on how AI is reshaping and expanding the market opportunity for software investors.
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