HgCapital Trust maintains dividend, underlying performance "strong"

HgCapital Trust PLC on Monday said it is optimistic for the rest of this year, after a positive "underlying trading performance" in the first half.

The London-based investment trust, which provides access to private equity investments of manager Hg, reported a net asset value of 530.7 pence as of June 30, down from 561.5p at December 31.

The total return for the first half of 2026 was minus 4.9%, compared with plus 7.2% from the FTSE All-Share Index.

The NAV per share as of August 31 was 524.8p, and the year-to-date total return was minus 6.0%, while the FTSE All-Share's return was plus 11.9%.

HgCapital shares were down 1.2% at 405.00p on Monday morning in London.

HgCapital said a continued strong trading performance across the portfolio added 11% to the portfolio's value over the first half. However, the multiples used to value its portfolio companies fell due to "weakness in public software valuations, reflecting caution from investors over the potential impact of AI on the sector". This reduced valuations by 13% over the half-year.

The firm said it invested £146 million during the period. This included new investments in OneStream and Rightsline, and further investment in Septeo and Teamworks. It reported £134 million in realisations, compared with £165 million the year before.

HgCapital declared an interim dividend of 2.0p per share, unchanged from the prior year.

Chair Jim Strang commented: "The underlying trading performance...continues to be strong. The businesses that make up the HgT portfolio are demonstrating performance above the level seen in the prior year, growing profits at 19% on average.

"This core driver of long-term shareholder value, together with Hg's leadership in AI and a gradual recovery in the M&A market for technology companies, gives the board grounds for optimism about prospects for the second half of the year."

Also going forward, the company said: "The long-term investment case for the mission-critical B2B technology and services businesses that make up the HgT portfolio remains very much intact...[they] are typically deeply embedded in their own customers' workflows, hold proprietary domain data built up over many years, and operate in regulated or high-trust environments where switching costs are high.

"These are characteristics that we believe make them resilient to, and indeed well-placed to benefit from, the application of AI."

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