Edison Investment Research has published a new report on HgCapital Trust plc (LSE: HGT), highlighting a 2.0% NAV total return for the third quarter of 2026, following a 0.5% gain in Q2 2026. The trust's NAV per share rose to 539.1p, continuing a recovery from a Q1 2026 low, while the year-to-date NAV total return decline narrowed to 3.1%. Strong underlying portfolio trading added 5% to gross portfolio value during Q3 2026, though a compression in valuation multiples partially offset those gains. Investors in the software-focused private equity trust will be watching whether valuation multiples stabilise in the quarters ahead.

Key Points

  • HgCapital Trust plc (LSE: HGT) — Edison Investment Research report published 10 November 2026
  • HgT delivered a 2.0% NAV total return in Q3 2026, bringing NAV per share to 539.1p
  • Last-12-month portfolio revenue and EBITDA grew 15% and 19% year-on-year respectively; weighted average EV/EBITDA multiple fell to 22.6x from 25.2x at end-2025
  • Investors should watch whether a broader recovery in application and vertical software valuations reduces multiple compression pressure on the portfolio

HgT's NAV per Share Reaches 539.1p After Q3 2026 Recovery Continues

HgCapital Trust reported a 2.0% NAV total return in Q3 2026, building on the 0.5% gain recorded in Q2 2026 and extending a recovery that began following the Q1 2026 low. The trust's NAV per share stood at 539.1p at the end of the quarter, according to the Edison report. Despite these sequential quarterly gains, the year-to-date NAV total return remains in negative territory at minus 3.1%, reflecting the broader valuation pressures that weighed on the portfolio earlier in 2026. The announcement states that strong trading across the portfolio has been the primary driver of the ongoing recovery.

Portfolio Companies Deliver 15% Revenue and 19% EBITDA Growth Over Last 12 Months

Trading performance across HgT's underlying portfolio remained robust in the period. Last-12-month revenue grew 15% year-on-year, while EBITDA expanded by 19%, of which 11% and 17% respectively was organic growth. The portfolio's EBITDA margin improved to 35% from 34% recorded at end-June 2026, the report discloses. Strong trading contributed a 5% uplift to gross portfolio value during Q3 2026 alone, with the year-to-date contribution reaching 15%. HgCapital Trust focuses on software and technology businesses, and these figures reflect the continued operational momentum across that concentrated sector exposure.

EV/EBITDA Multiple Compression to 22.6x Weighs on HgT Despite Partial Software Market Recovery

Despite a selective recovery in listed software valuations during Q3 2026, the Edison report notes that application and vertical software stocks have lagged the broader recovery, contributing to a further decline in HgT's weighted average EV/EBITDA multiple to 22.6x, down from 25.2x at end-2025. This multiple compression partially offset the strong trading gains across the portfolio. Average net debt to EBITDA across portfolio companies improved to 6.7x from 7.4x at end-2025, suggesting balance sheet conditions within the portfolio are gradually strengthening, which the disclosure indicates may provide some resilience against further valuation headwinds.