In brief : Hg, the manager of HgCapital Trust (HGT), announced in June 2026 that it intends to raise its stake in the trust from around 6% to more than 15% through market purchases. A real-world case to understand what alignment of interests between a manager and a trust’s shareholders means.

HgCapital Trust is a London-listed trust that invests in Hg’s funds. Hg specialises in buyouts of software and business services companies in Europe. In spring 2026, software stocks fell sharply on concerns linked to artificial intelligence. According to AJ Bell, HGT shares were down as much as 36% year to date at their low on 21 May.

On 4 June 2026, Hg announced its intention to increase the stake held in the trust by the management company, its partners and employees from around 6% to more than 15% over the medium term, through market purchases. Hg considers the trust’s shares “materially undervalued”. Co-CEO Steven Batchelor said Hg has always believed that “having skin in the game is the best way to demonstrate our alignment with clients”. The shares rose 7.2% on the day, to 413.9 pence.

Hg made its first purchases for its own balance sheet on 12 June 2026. On 8 September, the trust published a notification showing that Hg and persons acting in concert held 6.01% of the share capital at 7 September.

In a trust, the manager is paid through management fees and often a performance fee. Shareholders, for their part, are exposed to the share price and the discount. When the manager itself owns a significant share of the capital, its interests move closer to those of shareholders: it bears the discount just as they do.

Hg’s announcement also sends a signal: the party that knows the portfolio best considers the share price to be below its value. The market took note, as the rise on the day showed. But a signal is not a guarantee, and the purchases will be made gradually, over the medium term.

One point to watch: above certain thresholds, a large stake held by the manager gives it greater weight in votes, notably on renewing the management agreement. This is why trust boards, made up mainly of directors independent of the manager, remain responsible for defending the interests of all shareholders.

Alignment of interests (skin in the game) :
The manager invests its own money in what it manages, and so shares shareholders’ gains and losses.

Acting in concert :
Several connected parties (company, partners, employees) whose holdings are added together in disclosures.

Market purchases :
The gérant buys the trust’s shares on the market at the prevailing price, without new shares being issued.

Major shareholding notification :
The mandatory disclosure when a holding crosses certain percentages of the share capital.

Sources : HgCapital Trust, Hg announcement, 4 June 2026 – AJ Bell, 4 June 2026 – HgCapital Trust, update on Hg shareholding, 8 September 2026

AVERTISSEMENT
This article is for educational purposes only. It does not constitute investment advice, a recommendation, or a solicitation to buy or sell any security. Past performance is not a reliable indicator of future results.