HgCapital Trust NAV rises despite 'challenging' market environment

(Sharecast News) - HgCapital Trust reported a rise in its full-year net asset value on Friday despite a "challenging" market environment, although the share price has taken a hit amid recent volatility in the software sector. In an update for the year to the end of December 2025, the company said its NAV total return per share was 4% at 561.9p, with net assets of £2.6bn.

HgCapital said strong trading from the underlying portfolio companies was a key driver of performance over the year. It pointed to revenue growth of 17%, while earnings before interest, tax, depreciation and amortisation rose 20%.

The trust, which invests mainly in unquoted software companies, said investments of £357m were made over the year and realisation proceeds of £215m generated.

HgCapital said the recent selloff in listed software shares and associated volatility has had a "pronounced" negative impact on its share price, which is down 20% this year to date.

"The recent widespread selloff seen in the sector has been with little distinction made across the many different players in the space and their respective strengths and weaknesses," it said. "Given the strength of the HgT portfolio, the market positions that portfolio companies enjoy and Hg's skill and experience as a manager, the board believes that the current share price represents significant value.

"Given the scale of the recent dislocation between the share price and the value placed on the assets within the HgT portfolio, the board is actively considering a number potential actions to address the current discount to net asset value using the full set of tools at its disposal, including share buybacks, and following the well-established processes HgT has developed to manage such situations."

It said the board is in constant dialogue with the manager and its advisers around what proactive steps can be taken to mitigate the current situation, "one example of which being the accelerated release of this trading update".

The full-year trading update had been due for release on Monday 9 February.

At 1115 GMT, the shares were up 6.2% at 428.61p.