Hg Capital Trust Reports 4% NAV Decline in Q1 2026 After Marking Down 14 of 20 Largest Holdings

Hg Capital Trust cut the value of most of its largest investments during the first quarter of 2026, Benzinga reported. 4% drop in net asset value during the first quarter of 2026. It also recorded a 9% decrease in portfolio valuations over the same period.

Fourteen of Hg Capital Trust’s 20 largest positions were marked down during the first quarter of 2026, the Financial Times reported. The valuation markdowns at Hg Capital Trust were tied to a broad pullback in software valuations. Those markdowns were linked to AI-related concerns.

"While all technology assets will be impacted by the adoption of AI, the Hg portfolio companies are well placed to see their specific value propositions enhanced by AI integration rather than to be replaced altogether. Indeed, Hg continues to lead the thinking on how such effective augmentations and collaborations can be made," Strang said.

The first-quarter results mark a notable contraction for the trust after years of strong performance in technology-focused private equity.

4% net asset value drop, reflecting the concentrated nature of Hg Capital Trust’s holdings in software businesses. Fourteen of the 20 largest positions required writedowns, leaving only six of the top holdings untouched by the markdowns. Benzinga reported that the moves reflect sector-wide pressure rather than company-specific operational shortfalls.

Software valuations have faced broad reconsideration as investors reassess growth projections amid rapid advances in artificial intelligence capabilities. The trust’s portfolio, heavily weighted toward enterprise software and related services, absorbed the impact of that reassessment in the three months ended March 31, 2026.

Strang’s statement sought to draw a distinction between general technology sector exposure and the specific positioning of Hg’s holdings.

The executive emphasized that while AI adoption will affect all technology assets, the portfolio companies stand to gain from integration of the technology into their existing offerings. Hg, according to Strang, continues to lead industry thinking on effective AI augmentations that enhance rather than displace core value propositions.