HgT is a private equity investment company that invests in leading, profitable, unquoted European mid-market businesses with an international footprint. These companies offer software solutions to small and medium-sized enterprises and benefit from a high share of recurring revenues based on software-as-a-service subscription models and high customer retention. HgT is managed by Hg, Europe’s leading private equity technology investor, which is well-positioned for the agentic AI opportunity. It provides public market investors with exposure to Hg’s portfolio of around 60 such holdings, representing more than $190bn in aggregate enterprise value.
1. HgT’s earnings growth is underpinned by the secular digitalisation trend.
HgT provides high-quality exposure to the corporate digitalisation theme, supported by the structural demographic trend of a declining working-age population, which drives up labour costs in developed countries and stimulates software adoption. HgT’s portfolio has historically delivered annual revenue growth of 20 to 30%, around half of which is organic, at a margin of around 30% or more. Therefore, it fulfils the so-called ‘Rule of 40’, which is a rule of thumb (but based on empirical evidence) that software stocks with combined revenue growth and EBITDA margins of 40% or more typically command higher valuations. Earnings growth has historically been the key driver of returns, and the trust delivered a strong 10-year NAV total return to end-March 2026 of 16.1% per year.
2. Hg has a dedicated AI product incubator.
We believe that HgT is well-placed to benefit from the AI augmentation of software products across its portfolio and to become one of the AI winners. This should allow its companies to expand beyond the $1tn market for software and into the $60tn cognitive labour market. Hg has developed an efficient engine that allows for end-to-end AI product roll-out within three months. This is underpinned by Hg Catalyst, Hg’s dedicated AI product incubator, with more than 100 engineers, designers and product managers, part of a broader team of more than 150 AI value-creation experts. Hg’s capabilities are further aided by its multiple partnerships with AI providers, such as Anthropic, in agentic coding and support, customer success, answer engine optimisation, sales and chat. This focus is already delivering measurable results: more than 1,600 AI projects are live across the portfolio, representing approximately $260m of budgeted EBITDA impact — a five-fold increase since 2024.
3. HgT’s portfolio companies have multiple competitive moats.
HgT’s portfolio companies are trusted providers of mission-critical software that typically represents a low proportion of customer spend, but is deeply embedded in customers’ systems and underpinned by proprietary datasets, deterministic workflows and extensive domain expertise. These features matter in agentic AI, because enterprise customers require accuracy, auditability, governance and workflow integration, not just access to a capable model. This is particularly relevant where AI agents are deployed in areas where error tolerance is low, including many of the segments that are Hg’s ‘sweet spot’, such as finance, ERP and payroll, legal and compliance, and healthcare IT.
4. The ‘skin in the game’ of insiders is set to increase.
During its 2026 capital markets day, Hg highlighted that, following the sell-off in public software this year, it believes that the market materially undervalues HgT’s shares and its prospects. Ahead of the event, Hg announced a strategic investment programme aimed at increasing the equity stake of Hg’s partners, employees and Hg’s balance sheet in HgT from around 6% currently to more than 15% over the medium term via on-market purchases. This follows meaningful earlier internal buying of HgT’s shares in the first half of 2026, including investments of around £20m by Hg partners and employees (who in aggregate have become the third-largest portion of HgT’s shareholder register), coupled with purchases from all seven of HgT’s non-executive directors.
5. HgT has delivered a high level of liquidity events.
Hg has delivered a considerable volume of liquidity events in recent years, with Hg fund vintages from 2012 to 2018 generating an average Distributed to Paid-in Capital multiple of 2.2x compared to a 1.3x median for the European private equity industry. Hg fund vintages from 2020 to 2021 delivered a Distributed to Paid-in Capital multiple of 0.5x compared to the industry median of just 0.1x, and Hg aims to reach 1.0x for these vintages over the 12 to 18 months from its 2026 capital markets day. Hg has generated $24bn of liquidity for clients, including HgT, from 57 liquidity events since the end of 2021, at an average uplift of 22%. The ability to deliver meaningful liquidity above carrying value in a tough environment is a clear differentiator in the context of a decline in global private equity exit activity from the 2021 peak.
Published 11 August 2026
