HgT’s muted -0.3% NAV total return (TR) in H125 (according to its preliminary trading update) was negatively affected by public market volatility that reduced HgT’s private portfolio valuations by 4pp. That said, it represents a NAV rebound in Q225 following the -2.0% TR in Q125. Last 12-month (LTM) revenue and EBITDA growth to end-May 2025 across HgT’s entire portfolio were both a robust 19%, translating to a 7pp positive effect on portfolio value. Minor headwinds came from fx changes and higher portfolio net debt (1pp NAV impact each). Gross realisation proceeds reached £165m (7% of opening NAV), which according to Hg compares favourably with peers in a challenging environment. Investments (including reinvestments) stood at £306m, or 12% of opening NAV.

HgT’s portfolio of IT software and services companies providing mission-critical, low-spend services to SMEs has maintained its strong sales and earnings momentum on the back of the secular digitalisation trend. Revenue and EBITDA growth in FY24 were 19% and 23% across HgT’s top 20 holdings (at an average 34% EBITDA margin) respectively. As valuation multiples remained broadly stable and portfolio debt increased amid high refinancing activity (which resulted in improved debt pricing), this led to a 10.4% NAV total return (TR) in FY24. HgT maintains a healthy long-term track record with five- and 10-year NAV TR of c 18% pa. HgT’s manager, Hg, remains committed to leveraging GenAI across its portfolio, noting some initial promising progress, and it hopes to see a more meaningful impact on the top and bottom line in the next one to two years. Therefore, it could prove a good play on the rise of AI-powered applications following the global investment in AI infrastructure (most notably chips and data centres). HgT’s shares now trade at a 9% discount to NAV versus a slight premium at end-2024.