Private equity firm Hg is planning to increase its ownership stake in its London-listed investment trust after a recent selloff in technology and software-related stocks, according to a report by Bloomberg citing a company statement.
Hg said HgCapital Trust is currently trading at a valuation that “materially undervalues” both its underlying portfolio and long-term growth prospects. The firm intends to raise the combined ownership of its partners, employees and balance sheet exposure in the trust to more than 15%, up from approximately 6%, via market purchases.
HgCapital Trust, which has a market capitalisation of around £1.8bn ($2.4bn), provides public market investors with exposure to a portfolio of privately held European software businesses, including companies such as IFS and Visma.
The trust has been trading at a significant discount to net asset value, recently around 26%, amid broader weakness in software equities. The sector has come under pressure in recent months due to concerns that advances in artificial intelligence could disrupt earnings growth trajectories across enterprise software.
Hg’s move signals confidence in the underlying resilience of its portfolio, even as listed valuations have come under pressure. The trust’s share price is down roughly a quarter year-to-date, reflecting broader volatility in the European technology sector.
