The financial statements have been prepared under the historical cost convention, except for the revaluation of financial instruments at fair value as permitted by the Companies Act 2006 and in accordance with applicable UK law and UK Accounting Standards (\u2018UK GAAP\u2019), including Financial Reporting Standard 102 \u2013 \u2018The Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland\u2019 (\u2018FRS 102\u2019) and with the Statement of Recommended Practice \u2018Financial Statements of Investment Trust Companies and Venture Capital Trusts\u2019 (\u2018SORP\u2019), issued in July 2022. All of HgT\u2019s operations are of a continuing nature.
As stated above, all income that is recognised by the funds, net of PPS, is allocated to HgT and recognised when the right to this income is established.
The accounting policies below apply to the recognition of income by the funds, prior to allocation between the Partners:
Interest income on non-equity shares and fixed income securities is recognised on a time apportionment basis so as to reflect the effective yield when it is probable that it will be realised. Dividends receivable on unlisted equity shares where there is no ex-dividend date and on non-equity shares are brought into account when the right to receive payment is established.
HgT entered into separate limited partnership agreements to establish investment-holding limited partnerships to carry on the business of an investor, with HgT being the sole limited partner in these entities with the exception of HGT 8 LP and HGT LP, in which it is the majority limited partner.
Under the partnership agreements, HgT made capital commitments into the funds, with the result that HgT now holds direct investments in those funds and an indirect investment in the fixed-asset investments which are held by the funds, as it is the majority limited partner. These direct investments are included under fixed-asset investments on the balance sheet and in the table of investments on page\u00a061. The underlying investments which are held indirectly are included in the overview of investments on pages\u00a050\u00a0and\u00a051.
HgT does not have control over the operating, financial or governance activities of the limited partnerships in which it is a limited partner. The general partner of these partnerships has the day-to-day control and ultimate decision making powers over the activities of these partnerships.
Under the terms of the fund LPA's, each general partner (see note\u00a05) is entitled to appropriate, as a first charge on the net income of the funds, an amount equivalent to its priority profit share (\u2018PPS\u2019). HgT is entitled to net income from the funds, after payment of the PPS.
In years in which these funds have not yet earned sufficient net income to satisfy the PPS, the entitlement is carried forward to the following years. The PPS is payable quarterly in advance, even if insufficient net income has been earned. Where the cash amount paid exceeds the net income, an interest-free loan is advanced to the general partner by these funds, which is funded by a capital call from HgT. Such loans are recoverable from the general partner only by an appropriation of net income until net income is earned. At the HgT level such a call is expensed in the capital column as these amounts are not recoverable (see note\u00a05).
Accordingly, HgT\u2019s entitlement to net income and net capital gains is shown in the appropriate lines of the income statement. Notes 4, 5 and 10 to the financial statements disclose the gross income and gross capital gains of the funds and also reflect the proportion of net income and capital gains in the funds which has been paid to the general partner as its PPS.
Financial assets and financial liabilities are recognised in HgT\u2019s balance sheet when HgT becomes a party to the contractual provisions of the instrument. Trade receivables are stated at nominal value. Appropriate allowances for estimated irrecoverable amounts are recognised in the revenue return on the income statement.
The principle applied is that investments should be reported at \u2018fair value\u2019, in accordance with Sections 11 and 12 of FRS 102 and the International Private Equity and Venture Capital (\u2018IPEV\u2019) Valuation Guidelines, December 2022 edition. Where relevant, HgT applies the policies stated below to the investments held by the funds, in order to determine the fair value of its investments in these limited partnerships.
Purchases of investments are recognised on a trade date basis. Sales of investments held through the funds are recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the proceeds of sale less any transaction costs.
Quoted: Quoted investments are held at fair value, which is deemed to be their bid price.
Unquoted: Unquoted investments are also held at fair value and are valued using the following guidelines:
(i)\u00a0\u00a0\u00a0\u00a0the level of maintainable earnings or revenue and an appropriate earnings or revenue multiple, unless (iii) is required;
(ii)\u00a0\u00a0\u00a0\u00a0where more appropriate, investments can be valued based on other methodologies, including using their net assets or discounted cash flows, rather than on their earnings or revenue; and
(iii)\u00a0\u00a0\u00a0\u00a0appropriate fair value movements are made against all individual valuations where necessary to reflect unsatisfactory financial performance or a fall in comparable ratings.
Debt: The investments are valued using discounted cash flows, considering the impact of changes in the credit risk of the portfolio company and changes to the market rates of return on fair value.
Liquidity funds: these are short-term investments made in a combination of fixed and floating rate securities and are valued at the current fair value as determined by the manager of the fund. They can be realised at short notice.
Derivative financial instruments: derivative financial instruments are held at fair value and are valued using quoted market prices for financial instruments traded in active markets, or dealer price quotations for financial instruments that are not actively traded.
The preparation of these financial statements requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reported year. Although these estimates are based on management\u2019s best knowledge of the amount, event or actions, actual results may ultimately differ from those estimates.
The estimates and assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Capital reserve \u2013 realised
The following are accounted for in this reserve:
(i)\u00a0 \u00a0 gains and losses on the realisation of investments;
(ii)\u00a0 losses on investments where there is little prospect of realisation or recovering any value;
(iii)\u00a0 realised exchange differences of a capital nature; and
(iv)\u00a0 expenses, together with the related taxation effect, charged to this reserve in accordance with the above policies.
Capital reserve \u2013 unrealised
The following are accounted for in this reserve:
(i)\u00a0 \u00a0 increases and decreases in the valuation of investments held at the year-end;
(ii)\u00a0 increases and decreases in the valuation of the loans to general partners; and
As stated above, all income that is recognised by the funds, net of PPS, is allocated to HgT and recognised when the right to this income is established.
The accounting policies below apply to the recognition of income by the funds, prior to allocation between the Partners:
Interest income on non-equity shares and fixed income securities is recognised on a time apportionment basis so as to reflect the effective yield when it is probable that it will be realised. Dividends receivable on unlisted equity shares where there is no ex-dividend date and on non-equity shares are brought into account when the right to receive payment is established.
The principle applied is that investments should be reported at \u2018fair value\u2019, in accordance with Sections 11 and 12 of FRS 102 and the International Private Equity and Venture Capital (\u2018IPEV\u2019) Valuation Guidelines, December 2022 edition. Where relevant, HgT applies the policies stated below to the investments held by the funds, in order to determine the fair value of its investments in these limited partnerships.
Purchases of investments are recognised on a trade date basis. Sales of investments held through the funds are recognised at the trade date of the disposal. Proceeds are measured at fair value, which is regarded as the proceeds of sale less any transaction costs.
Quoted: Quoted investments are held at fair value, which is deemed to be their bid price.
Unquoted: Unquoted investments are also held at fair value and are valued using the following guidelines:
(i)\u00a0\u00a0\u00a0\u00a0the level of maintainable earnings or revenue and an appropriate earnings or revenue multiple, unless (iii) is required;
(ii)\u00a0\u00a0\u00a0\u00a0where more appropriate, investments can be valued based on other methodologies, including using their net assets or discounted cash flows, rather than on their earnings or revenue; and
(iii)\u00a0\u00a0\u00a0\u00a0appropriate fair value movements are made against all individual valuations where necessary to reflect unsatisfactory financial performance or a fall in comparable ratings.
Debt: The investments are valued using discounted cash flows, considering the impact of changes in the credit risk of the portfolio company and changes to the market rates of return on fair value.
Liquidity funds: these are short-term investments made in a combination of fixed and floating rate securities and are valued at the current fair value as determined by the manager of the fund. They can be realised at short notice.
Financial assets and financial liabilities are recognised in HgT\u2019s balance sheet when HgT becomes a party to the contractual provisions of the instrument. Trade receivables are stated at nominal value. Appropriate allowances for estimated irrecoverable amounts are recognised in the revenue return on the income statement.
Derivative financial instruments: derivative financial instruments are held at fair value and are valued using quoted market prices for financial instruments traded in active markets, or dealer price quotations for financial instruments that are not actively traded.
Revenue return | ||
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Total net income comprises: | ||
Interest | 26,886 | 35,942 |
Total net income | 26,886 | 35,942 |
All income that is recognised by the funds, net of PPS, is allocated to HgT and recognised when the right to this income is established. This income and PPS is analysed further below.
Revenue return | ||
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Income from investments held by the funds | ||
Unquoted investment income | 45,601 | 49,669 |
Other investment income: | ||
Liquidity funds income | 662 | 4,813 |
Total investment income | 46,263 | 54,482 |
Total other income | 191 | 484 |
Total income | 46,454 | 54,966 |
Priority profit share charge against income: | ||
Current period - HGT Genesis 10 LP | (8,674) | (5,833) |
Current period - HGT Genesis 9 LP | (6,331) | (6,684) |
Current period - HGT Saturn LP | (1,631) | (753) |
Current period - HGT Mercury 3 LP | (1,265) | (1,222) |
Current period - HGT Saturn 2 LP | (672) | (148) |
Current period - HGT LP | (509) | (362) |
Current period - HGT Mercury 4 LP | (304) | (1,078) |
Current period - HGT 7 LP | (176) | (113) |
Current period - HGT 8 LP | (6) | (140) |
Current period - HGT Mercury 2 LP | \u2013 | (2,691) |
Total priority profit share charge against income (note 5) | (19,568) | (19,024) |
Total net income | 26,886 | 35,942 |
Revenue return | ||
2025 | 2024 | |
Priority profit share payable to general partners | \u00a3000 | \u00a3000 |
Priority profit share payable: | ||
Current year amount | 31,570 | 29,023 |
|
|
|
Movement on loans to general partners: | ||
Less: Current year loans advanced to general partners | (16,184) | (12,959) |
Add: Prior year loans recovered from general partners | 4,182 | 2,960 |
Total losses on priority profit share loans advanced to general partners | (12,002) | (9,999) |
|
|
|
Current year charge against income | 19,568 | 19,024 |
Total priority profit share charge against income (note 4) | 19,568 | 19,024 |
The priority profit share payable on the funds rank as a first appropriation of net income from investments held in these partnerships respectively and is deducted prior to such income being attributed to HgT in its capacity as a Limited Partner. The net income of the funds earned during the year, after the deduction of the priority profit share, is shown on the income statement.
In years in which the funds described in note\u00a05 have not yet earned sufficient net income to satisfy the priority profit share, the entitlement is carried forward to the following years. The priority profit share is payable quarterly in advance, even if insufficient net income has been earned. Where the cash amount paid exceeds the net income, an interest free loan is advanced to the general partner by these funds, which is funded via a loan from HgT. Such loan is only recoverable from the general partner by an appropriation of net income. Until sufficient net income is earned, no value is attributed to this loan and hence an unrealised capital loss is recognised and reversed if sufficient income is subsequently generated.
The terms of the above priority profit share arrangements during 2025 were:
Fund partnership | Priority profit share |
HGT Genesis 10 LP | 1.75% on the fund commitment during the investment period |
HGT Genesis 9 LP | 1.5% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT 8 LP | 1.5% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT 7 LP | 1.5% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT Mercury 4 LP | 1.75% on the fund commitment during the investment period |
HGT Mercury 3 LP | 1.5% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT Mercury 2 LP | 1.5% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT Saturn 4 LP | 1.0% on the fund commitment during the investment period |
HGT Saturn 3 LP | 0.75% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT Saturn 2 LP | 0.75% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT Saturn LP | 1.0% of original cost of investments in the fund, less the original cost of investments which have been realised or written off |
HGT LP | 1.0% of original cost of investments in the fund, excluding co-investment |
Revenue return | ||
2025 | 2024 | |
(a) Operating expenses | \u00a3000 | \u00a3000 |
Registrar, management and administration fees | 2,586 | 2,288 |
Directors remuneration (note 8)1 | 461 | 412 |
Legal and other administration costs | 1,662 | 2,094 |
4,709 | 4,794 | |
Fees payable to HgT's auditor in relation to HgT: | ||
Audit fees2 | 153 | 161 |
Total fees payable to HgT's auditor | 153 | 161 |
Total other expenses | 4,862 | 4,955 |
1\u00a0 Excludes employer\u2019s National Insurance contributions of \u00a355,000 (2024: \u00a345,400).
2 The audit fee is inclusive of VAT at the rate of 20%. In addition to the audit fees payable to the auditor in relation to HgT, audit fees payable to the auditor for the financial statements audit
of the funds in which HgT has an investment were \u00a3109,780 (2024: \u00a3101,265).
Revenue return | ||
2025 | 2024 | |
(b) Finance costs | \u00a3000 | \u00a3000 |
Interest paid | 1,647 | 2,596 |
Non-utilisation fees and other expenses | 4,563 | 4,351 |
Arrangement fees | 1,500 | 2,219 |
Total finance costs | 7,710 | 9,166 |
Reconciliation of net return before finance costs and taxation to net cash flow from operating activities | 2025 | 2024 |
Net return before finance costs and taxation | 106,077 | 245,261 |
Net loss / (gains) | (96,055) | (224,273) |
Purchase of fixed asset investments | (220,401) | (643,225) |
Increase in uninvested capital | \u2013 | 1,906 |
Net cash flows relating to the purchase of fixed asset investments | (220,401) | (641,319) |
Proceeds from the sale of fixed asset investments | 194,972 | 298,554 |
Non-cash movement on transactions | 30,495 | (23,494) |
Decrease/(Increase) in accrued income from liquidity funds | 662 | (4,813) |
Decrease in accrued income and other debtors | 55,317 | 71,867 |
Decrease in creditors | (741) | (1,308) |
Net cash inflow/(outflow) from operating activities | 70,326 | (279,525) |
The rate of corporation tax in the UK for a company was 25.0% during the year (2024: tax rate of 25.0%). However, the tax charge in the current and previous year was lower than the standard and effective tax rate, owing largely to the reduction in corporation tax from the interest distribution noted above. The effect of this and other items affecting the tax charge is shown in note\u00a09(b) below.
Revenue return | ||
2025 | 2024 | |
(a) Analysis of charge in the year | \u00a3000 | \u00a3000 |
Current tax: | ||
UK corporation tax | 3,579 | 5,455 |
Income streaming relief | (2,289) | (2,289) |
Income not subject to tax | (1,290) | (3,166) |
Current revenue tax charge/(credit) for the year | \u2013 | \u2013 |
Deferred tax: | ||
Reversal of timing differences | \u2013 | \u2013 |
Total deferred tax charge for the year (note 9(c)) | \u2013 | \u2013 |
Total taxation charge/(credit) | \u2013 | \u2013 |
Revenue return | ||
2025 | 2024 | |
(b) Factors affecting tax charge/(credit) for the year | \u00a3000 | \u00a3000 |
Net revenue return before taxation | 14,314 | 21,821 |
UK corporation tax charge at 25% thereon (2024: 25%) | 3,579 | 5,455 |
Effects of: | ||
Tax relief from interest distribution | (2,289) | (2,289) |
Income not subject to tax | (1,290) | (3,166) |
Total differences | (3,579) | (5,455) |
Total taxation charge/(credit) | \u2013 | \u2013 |
Revenue return | Capital return | |||
(a) Basic and diluted return per ordinary share | 2025 | 2024 | 2025 | 2024 |
Amount (\u00a3000): | ||||
Net return after taxation | 14,314 | 21,821 | 84,053 | 214,274 |
Weighted average number of ordinary shares (000): | ||||
Weighted average number of ordinary shares in issue | 457,729 | 457,729 | 457,729 | 457,729 |
Basic and diluted return per ordinary share (pence) | 3.13 | 4.77 | 18.36 | 46.81 |
The basic and diluted EPS are the same as HgT does not have dilutive financial instruments.
Capital return | ||
(b) Net asset value per ordinary share | 2025 | 2024 |
Amount (\u00a3000): | ||
Net assets | 2,570,263 | 2,497,071 |
Number of ordinary shares (000): | ||
Number of ordinary shares in issue | 457,729 | 457,729 |
Net asset value per ordinary share (pence) | 561.5 | 545.5 |
2025 | 2024 | |||
Record date | Payment date | \u00a3000 | \u00a3000 | |
Interim Dividend of 2.0p for the year ended 31\u00a0December 2025 | 25/9/2025 | 24/10/2025 | 9,155 | \u2013 |
Final Dividend of 3.5p for the year ended 31\u00a0December 2024 | 20/3/2025 | 19/5/2025 | 16,020 | \u2013 |
Interim Dividend of 2.0p for the year ended 31\u00a0December 2024 | 26/9/2024 | 25/10/2024 | \u2013 | 9,155 |
Final Dividend of 4.5p for the year ended 31\u00a0December 2023 | 21/3/2024 | 21/5/2024 | \u2013 | 20,598 |
Total equity dividends paid | 25,175 | 29,753 |
The proposed final dividend of 3.0\u00a0pence per ordinary share for the year ended 31\u00a0December 2025 is subject to approval by the shareholders at the annual general meeting and has not been included as a liability in these financial statements. The total dividends payable in respect of the financial year, which form the basis of the retention test as set out in Section 1159 of the CTA 2010, are set out below:
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Revenue available for distribution by way of dividend for the year | 14,314 | 21,821 |
Interim Dividend of 2.0p for the year ended 31\u00a0December 2025 | (9,155) | (9,155) |
Proposed final dividend of 3.0p for the year ended 31\u00a0December 2025 (based on 457,728,500 ordinary shares in issue at 31\u00a0December 2025) | (13,732) | (16,020) |
(Distributions in excess of revenue)/Undistributed revenue for Section 1159 purposes* | (8,573) | (3,354) |
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Investments held at fair value through profit or loss: | ||
HGT Saturn 3 LP | 683,188 | 625,250 |
HGT Genesis 10 LP | 368,018 | 227,457 |
HGT Saturn 2 LP | 321,917 | 351,828 |
HGT Genesis 9 LP | 299,450 | 344,365 |
HGT LP | 233,259 | 227,039 |
HGT 8 LP | 190,399 | 234,290 |
HGT Saturn LP | 102,687 | 117,482 |
HGT Mercury 4 LP | 94,591 | 81,151 |
HGT Mercury 3 LP | 78,181 | 76,762 |
HGT Mercury 2 LP | 72,165 | 78,088 |
HGT 7 LP | 18,614 | 19,253 |
HGT Saturn 4 LP | 13,819 | \u2013 |
Other1 | (5,190) | (7,671) |
Total fixed asset investments | 2,471,098 | 2,375,294 |
Total fixed asset investments consist of: | ||
Fund limited partnerships | 2,471,098 | 2,375,294 |
1 Includes HgT currency hedges and direct investments.
2025 | 2024 | ||
\u00a3000 | \u00a3000 | ||
Opening valuation as at 1 January | 2,375,294 | 1,783,857 | |
Opening unrealised appreciation | - investments | (463,424) | (369,326) |
Opening book cost as at 1 January | 1,911,870 | 1,414,531 | |
Movements in the year: | |||
Additions at cost | 220,401 | 643,225 | |
Disposals | (194,972) | (220,029) | |
- realised gains on sales | 67,129 | 74,143 | |
Closing book cost of investments | 2,004,428 | 1,911,870 | |
Add: closing unrealised appreciation | - investments | 466,670 | 463,424 |
Closing valuation of investments at 31\u00a0December | 2,471,098 | 2,375,294 |
Capital return | |||
2025 | 2024 | ||
\u00a3000 | \u00a3000 | ||
Realised: | |||
Realised gains/(losses) | - fixed asset investments | 67,129 | 74,143 |
- reallocation between reserves | \u2013 | 35,964 | |
- liquidity funds | \u2013 | (9) | |
- aborted deal fees | \u2013 | 8,553 | |
Net realised gains | 67,129 | 118,651 | |
Unrealised: | |||
Unrealised (losses)/gains | - fixed asset investments | 3,246 | 94,098 |
- reallocation of investment fees to revenue reserve | \u2013 | 29,023 | |
- foreign exchange on investments | 30,495 | (23,495) | |
- liquidity funds | (2,799) | 1,010 | |
- aborted deal fees | \u2013 | 4,986 | |
- foreign exchange on loan facility | (2,016) | \u2013 | |
28,926 | 105,622 | ||
Net unrealised gains | 28,926 | 105,622 | |
Total gains | 96,055 | 224,273 |
Capital return | |||
2025 | 2024 | ||
\u00a3000 | \u00a3000 | ||
Realised: | |||
Realised gains/(losses) | - fixed asset investments | 67,129 | 74,143 |
- reallocation between reserves | \u2013 | 35,964 | |
- liquidity funds | \u2013 | (9) | |
- aborted deal fees | \u2013 | 8,553 | |
Net realised gains | 67,129 | 118,651 | |
Unrealised: | |||
Unrealised (losses)/gains | - fixed asset investments | 3,246 | 94,098 |
- reallocation of investment fees to revenue reserve | \u2013 | 29,023 | |
- foreign exchange on investments | 30,495 | (23,495) | |
- liquidity funds | (2,799) | 1,010 | |
- aborted deal fees | \u2013 | 4,986 | |
- foreign exchange on loan facility | (2,016) | \u2013 | |
28,926 | 105,622 | ||
Net unrealised gains | 28,926 | 105,622 | |
Total gains | 96,055 | 224,273 |
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Amounts receivable after one year: | ||
Accrued income on fixed assets | 106,053 | 115,039 |
Total amounts receivable after one year | 106,053 | 115,039 |
Amounts receivable within one year: | ||
Prepayments and other debtors | 2,080 | 3,399 |
Deferred consideration | \u2013 | 45,012 |
Total amounts receivable within one year | 2,080 | 48,411 |
Total debtors | 108,133 | 163,450 |
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Investments held at fair value through profit or loss: | ||
Opening valuation | 40,637 | 221,930 |
Purchases at cost | 142,987 | 280,841 |
Redemptions | (165,291) | (467,948) |
Foreign exchange gains/(losses) | (2,799) | 1,010 |
Movement in accrued income | (662) | 4,813 |
Realised capital (losses)/gains | \u2013 | (9) |
Closing valuation | 14,872 | 40,637 |
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Analysis and reconciliation of net funds: | ||
Net funds at 1 January | (79,734) | 51,603 |
Change in cash | (4,208) | (33,113) |
Change in debt due after one year | 63,953 | (98,224) |
Other non-cash changes | (2,016) | \u2013 |
Net (debt)/funds at 31\u00a0December | (22,005) | (79,734) |
Net funds comprise: | ||
Cash | 14,282 | 18,490 |
Debt due after one year | (36,287) | (98,224) |
The following disclosures relating to the risks faced by HgT are provided in accordance with sections 11 and 12 of FRS 102. The reference to investments in this note is in relation to the underlying investments in HGT\u00a0LP, HGT\u00a07\u00a0LP, HGT\u00a08\u00a0LP, HGT\u00a0Genesis\u00a09\u00a0LP, HGT Genesis 10 LP, HGT Mercury\u00a02\u00a0LP, HGT Mercury 3 LP, HGT Mercury 4 LP, HGT\u00a0Saturn\u00a0LP, HGT\u00a0Saturn\u00a02\u00a0LP, HGT Saturn 3 LP HGT Saturn 4 LP and as described in note 3 on page\u00a064.
Financial instruments and risk profile
HgT\u2019s investment objective is to achieve long-term capital appreciation by indirectly investing in unquoted companies. It does this through its investments in fund partnerships, mostly in the UK and Europe. Additionally, HgT holds European and US Government securities, cash, liquidity funds and items such as debtors and creditors arising directly from its operations. In pursuing its investment objective, HgT is exposed to a variety of risks that could result in either a reduction of HgT\u2019s net assets or a reduction in the profits available for distribution by way of dividends. Valuation risk, market risk (comprising currency risk and interest rate risk), liquidity risk and credit risk, and the Directors\u2019 approach to the management of them, are described below. The Board and Hg coordinate HgT\u2019s risk management. The objectives, policies and processes for managing the risks, and the methods used to manage the risks, that are set out below, have not changed from the previous accounting period.
Valuation risk
HgT\u2019s exposure to valuation risk arises mainly from movements in the value of the underlying investments (held through fund partnerships), the majority of which are unquoted. A breakdown of HgT\u2019s portfolio is given on page\u00a045 and a breakdown of the most significant underlying investments is given on page\u00a050. In accordance with HgT\u2019s accounting policies, the investments in fund limited partnerships are valued by reference to their underlying unquoted investments, which are valued by the Directors following the IPEV Valuation Guidelines. Pages\u00a072 and 73 includes details of the most significant assumptions included in the valuations. HgT does not hedge against movements in the value of these investments, apart from foreign exchange movements as explained below, though the borrowing arranged to fund these investments is normally denominated in the currency in which the business is operating and valued (see page\u00a075). HgT has exposure to interest rate movements, through bank deposits and liquidity funds.
In the opinion of the Directors, the diversified nature of HgT\u2019s investments significantly reduces the risks of investing in unquoted companies.
FRS 102 requires HgT to classify fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:
\u2022Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
\u2022Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
\u2022Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
The level in the fair value hierarchy, within which the fair value measurement is categorised in its entirety, is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that is a level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability.
The determination of what constitutes an \u2018observable\u2019 input requires significant judgement by the Board. The Board considers observable data relating to investments actively traded in organised financial markets, in which case fair value is generally determined by reference to stock exchange quoted market bid prices at the close of business on the balance sheet date, without adjustment for transaction costs necessary to realise the asset.
The following table analyses, within the fair value hierarchy, the fund\u2019s financial assets
(by class) measured at fair value at 31\u00a0December 2025.
Level 1 | Level 2 | Level 3 | Total | |
\u00a3000 | \u00a3000 | \u00a3000 | \u00a3000 | |
Investments held at fair value through profit or loss: | ||||
- Investment in HGT Saturn 3 LP | \u2013 | \u2013 | 683,188 | 683,188 |
- Investment in HGT Genesis 10 LP | \u2013 | \u2013 | 368,018 | 368,018 |
- Investment in HGT Saturn 2 LP | \u2013 | \u2013 | 321,917 | 321,917 |
- Investment in HGT Genesis 9 LP | \u2013 | \u2013 | 299,450 | 299,450 |
- Investment in HGT LP | \u2013 | \u2013 | 233,259 | 233,259 |
- Investment in HGT 8 LP | \u2013 | \u2013 | 190,399 | 190,399 |
- Investment in HGT Saturn LP | \u2013 | \u2013 | 102,687 | 102,687 |
- Investment in HGT Mercury 4 LP | \u2013 | \u2013 | 94,591 | 94,591 |
- Investment in HGT Mercury 3 LP | \u2013 | \u2013 | 78,181 | 78,181 |
- Investment in HGT Mercury 2 LP | \u2013 | \u2013 | 72,165 | 72,165 |
- Investment in HGT 7 LP | \u2013 | \u2013 | 18,614 | 18,614 |
- Investment in HGT Saturn 4 LP | \u2013 | \u2013 | 13,819 | 13,819 |
- Other investments\u00b9 | \u2013 | (5,190) | \u2013 | (5,190) |
Total fixed asset investments | \u2013 | (5,190) | 2,476,288 | 2,471,098 |
- Liquidity funds | \u2013 | 14,872 | \u2013 | 14,872 |
Total investments as at 31\u00a0December\u00a02025 | \u2013 | 9,682 | 2,476,288 | 2,485,970 |
1 Includes HgT currency hedges.
Level 1 | Level 2 | Level 3 | Total | |
\u00a3000 | \u00a3000 | \u00a3000 | \u00a3000 | |
Investments held at fair value through profit or loss: | ||||
- Investment in HGT Saturn 3 LP | \u2013 | \u2013 | 625,250 | 625,250 |
- Investment in HGT Saturn 2 LP | \u2013 | \u2013 | 351,828 | 351,828 |
- Investment in HGT Genesis 9 LP | \u2013 | \u2013 | 344,365 | 344,365 |
- Investment in HGT 8 LP | \u2013 | \u2013 | 234,290 | 234,290 |
- Investment in HGT Genesis 10 LP | \u2013 | \u2013 | 227,457 | 227,457 |
- Investment in HGT LP | \u2013 | \u2013 | 227,039 | 227,039 |
- Investment in HGT Saturn LP | \u2013 | \u2013 | 117,482 | 117,482 |
- Investment in HGT Mercury 4 LP | \u2013 | \u2013 | 81,151 | 81,151 |
- Investment in HGT Mercury 2 LP | \u2013 | \u2013 | 78,088 | 78,088 |
- Investment in HGT Mercury 3 LP | \u2013 | \u2013 | 76,762 | 76,762 |
- Investment in HGT 7 LP | \u2013 | \u2013 | 19,253 | 19,253 |
- Other investments\u00b9 | \u2013 | (7,671) | \u2013 | (7,671) |
Total fixed asset investments | \u2013 | (7,671) | 2,382,965 | 2,375,294 |
- Liquidity funds | \u2013 | 40,637 | \u2013 | 40,637 |
Total investments as at 31\u00a0December 2024 | \u2013 | 32,966 | 2,382,965 | 2,415,931 |
1 Includes HgT currency hedges and other direct investments.
Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1, include government securities and actively traded listed equities. HgT does not adjust the quoted bid price of these investments.
Financial instruments that trade in markets that are not considered to be active, but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs, are classified within level 2. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.
Investments classified within level 3 have significant unobservable inputs. Level 3 instruments include private equity and corporate debt securities. As observable prices are not available for these securities, the Board has used valuation techniques to derive the fair value. In respect of unquoted instruments, or where the market for a financial instrument is not active, fair value is established by using recognised valuation methodologies, in accordance with IPEV Valuation Guidelines. Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm\u2019s length transaction.
There were no transfers of assets from level 1 to level 2 or 3, level 2 to level 1 or 3 and level 3 to level 1 or 2.
The following table presents the movement in level 3 investments for the year ended 31\u00a0December 2025 by class of financial instrument.
Total investments in limited partnerships | 2025 | 2024 |
\u00a3000 | \u00a3000 | |
Opening balance | 2,375,294 | 1,783,857 |
Purchases | 220,401 | 643,225 |
Realisations at 31\u00a0December 2024 valuation | (127,843) | (145,886) |
Unrealised appreciation of fixed asset investments | 3,246 | 94,098 |
Closing unrealised valuation of level 3 investments | 2,471,098 | 2,375,294 |
Equity price risk
Equity price risk is the risk of a fall in the fair value of HgT\u2019s ownership interests (comprising equities and shareholder loans) held by HgT indirectly through its direct investments in fund limited partnerships. The Board revalues each investment on a quarterly basis. The Board manages the risks inherent in HgT\u2019s investment activities by ensuring full and timely access to relevant information from Hg. The Board meets regularly and at each meeting reviews the trading performance of the principal underlying investments. If there appears to the Board to be a fair value movement in value between regular valuations, it can revalue the investment. The Board also monitors Hg\u2019s compliance with HgT\u2019s investment objective and investment policy.
For unquoted equity investments, the market risk variable is deemed to be the multiples applied to a maintainable earnings figure to calculate the individual investment
valuations within each of the funds; borrowing is then deducted to arrive at a valuation of the net equity held by HgT. These multiples are largely based on the trading multiples of comparable businesses, both quoted and unquoted, and therefore there is a potential impact on the valuation of unquoted investments of a compression in the multiples of such businesses. Hg\u2019s best estimate of the effect on the net assets of HgT due to a 1x reduction in the multiples applied to calculate the enterprise value of each investment valued on an EBITDA basis, is as follows:
2025 | 20241 | |||
\u00a3000 | NAV per ordinary share Pence | \u00a3000 | NAV per ordinary share Pence | |
Sensitivity to equity price risk: 1x reduction in EV to EBITDA multiple applied to unquoted investments | (178,411) | (39.0) | (149,033) | (32.6) |
Hg\u2019s best estimate of the effect on the net assets of HgT due to a 0.3x reduction in the multiples applied to calculate the enterprise value of each investment valued on a revenue basis (which implies a 30% margin which is typical for the underlying portfolio companies in which HgT invests), with all other variables held constant, is as follows:
2025 | 20241 | |||
\u00a3000 | NAV per ordinary share Pence | \u00a3000 | NAV per ordinary share Pence | |
Sensitivity to equity price risk: 0.3x reduction in EV to Revenue multiple applied to unquoted investments | (13,785) | (3.0) | (11,378) | (2.5) |
1\u00a0\u00a0\u00a0\u00a0In the prior year, a 1x reduction was applied to both EBITDA and revenue multiples. The figures as at 31\u00a0December 2024 above have been disaggregated to reflect the revised methodology applied in 2025 and to show the sensitivity to revenue and EBITDA multiples separately.
There are likely to be other correlations (either positive or negative) between the assumptions and other factors. Other inputs, such as the earnings of individual investments within the funds are likely to have a significant impact on the value of unquoted investments. See page\u00a052 of the Manager\u2019s report for an analysis of the portfolio trading performance as at 31\u00a0December 2025. The Board regularly stress tests the net asset value.
Credit risk
Credit risk is the risk of financial loss in the event that any of HgT\u2019s market counterparties fail to fulfil their contractual obligations to HgT. HgT\u2019s financial assets (excluding fixed asset investments) that are subject to credit risk, were neither impaired nor overdue at the year-end. HgT\u2019s cash balances were held with the Royal Bank of Scotland International and amounts not required for day-to-day use were invested in liquidity funds managed by Treasury Spring. HgT subscribes only to funds with sovereign debt or bank deposits as their underlying asset. Foreign exchange forward contracts and options are held with counterparties which have credit ratings which the Board considers to be adequate. The Board regularly monitors the credit quality and financial position of these market counterparties. The credit quality of the above mentioned financial assets was deemed satisfactory.
Market risk
The fair value of future cash flows of a financial instrument held by HgT may fluctuate due to changes in market prices of comparable businesses. This market risk may comprise: currency risk (see below), interest rate risk and/or equity price risk (see above). The Board of Directors reviews and agrees policies for managing these risks. Hg assesses the exposure to market risk when making each investment decision, and monitors the overall level of market risk across all of HgT\u2019s investments on an ongoing basis.
Currency risk and sensitivity
HgT is exposed to currency risk as a result of investing in fund partnerships which invest in companies that operate and are therefore valued in currencies other than sterling. The value of these assets in sterling, being HgT\u2019s functional currency, can be significantly influenced by movements in foreign exchange rates. Borrowing raised to fund each acquisition in such companies is normally denominated in the currency in which the business is operating and valued, thus limiting HgT\u2019s exposure to the value of its investments, rather than the gross enterprise value. From time to time, HgT is partially hedged against movements in the value of foreign currency against sterling where a movement in exchange rate could affect the value of an investment, as explained below. Hg monitors HgT\u2019s exposure to foreign currencies and reports to the Board on a regular basis. The following table illustrates the sensitivity of the revenue and capital return for the year in relation to HgT\u2019s year-end financial exposure to movements in foreign exchange rates against sterling. The rates represent the range of movements against sterling over the current year for the currencies listed, and are considered the best estimate for movements looking forward.
In the opinion of the Directors, the sensitivity analysis below may not be representative of the year as a whole, since the level of exposure changes as HgT\u2019s holdings change through the purchase and realisation of investments to meet HgT\u2019s objectives.
2025 | 2024 | ||||||||
Revenue return | Capital return | Revenue return | Capital return | ||||||
NAV per ordinary share | NAV per ordinary share | NAV per ordinary share | NAV per ordinary share | ||||||
\u00a3000 | Pence | \u00a3000 | Pence | \u00a3000 | Pence | \u00a3000 | Pence | ||
Highest value against sterling during the year: | |||||||||
Euro | (1,350) | (2.9) | (18,183) | (39.7) | (222) | (0.5) | (3,347) | (7.3) | |
US dollar | (1,267) | (2.8) | (58,064) | (126.9) | (993) | (2.2) | (67,380) | (147.2) | |
(2,617) | (5.7) | (76,247) | (166.6) | (1,215) | (2.7) | (70,727) | (154.5) | ||
Lowest value against sterling during the year: | |||||||||
Euro | 6,998 | 15.3 | 94,248 | 205.9 | 2,470 | 5.4 | 37,232 | 81.3 | |
US dollar | 277 | 0.6 | 12,677 | 27.7 | 234 | 0.5 | 15,861 | 34.7 | |
7,275 | 15.9 | 106,925 | 233.6 | 2,704 | 5.9 | 53,093 | 116.0 |
At 31\u00a0December 2025, the following rates were applied to convert foreign denominated assets into sterling: Euro (1.1453); US dollar (1.3451).
Hedging
At times, HgT uses derivative financial instruments such as forward foreign currency contracts and option contracts to manage the currency risks associated with its underlying investment activities. The contracts entered into by HgT are denominated in the foreign currency of the geographic areas in which HgT has significant exposure against its reporting currency. The contracts are used for hedging and the fair values thereof are recorded in the balance sheet as investments held at fair value. Unrealised gains and losses are taken to capital reserves. At the balance sheet date, there was \u00a35.2\u00a0million in outstanding derivative financial instruments (2024: \u00a37.7\u00a0million).
HgT does not trade in derivatives but may hold them from time to time to hedge specific exposures with maturities designed to match the exposures they are hedging. It is the intention to hold both the financial investments giving rise to the exposure and the derivatives hedging them until maturity and therefore no net gain or loss is expected to be realised.
Derivatives are held at fair value, which represents the replacement cost of the instruments at the balance sheet date. Movements in the fair value of derivatives are included in the income statement. HgT does not adopt hedge accounting in the financial statements.
Interest rate risk and sensitivity
HgT has exposure to interest rate movements as this may affect the fair value of funds awaiting investment, interest receivable on liquid assets and managed liquidity funds, and interest payable on borrowings. HgT has little immediate direct exposure to interest rates on its fixed assets, as the majority of the underlying investments are fixed rate loans
or equity shares that do not pay interest. Therefore, HgT\u2019s revenue return is not materially affected by changes in interest rates.
However, funds awaiting investment have been invested in managed liquidity funds and, as stated above, their valuation is affected by movements in interest rates. The sensitivity of the capital return of HgT to movements in interest rates has been based on the ECB deposit and Federal funds rates. With all other variables constant, a 0.25% decrease in these rates should increase the capital return in a full year by about \u00a337,180 (2024: \u00a3101,500) with a corresponding decrease if the rates were to increase by 0.25%. In the opinion of the Directors, the above sensitivity analyses may not be representative of the year as a whole, since the level of exposure changes as investments are made and realised throughout the year.
Liquidity risk
Investments in unquoted companies, which form the majority of HgT\u2019s investments, may not be as readily realisable as investments in quoted companies, which might result in HgT having difficulty in meeting its obligations. Liquidity risk is currently not significant as 1% of HgT\u2019s net assets at the year-end are liquid resources and, in addition, HgT has a \u00a3375\u00a0million multi-currency bank facility which was 90% undrawn at the year end. The Board gives guidance to Hg as to the maximum amount of HgT\u2019s resources that should be invested in any one company. Please refer to HgT\u2019s Investment Policy on page\u00a029.
Currency and interest rate exposure
HgT\u2019s financial assets that are subject to currency and interest rate risk are analysed below:
2025 | 2024 | ||||||||
Fixed and floating rate | Non interest- bearing | Total | Total | Fixed and floating rate | Non interest- bearing | Total | Total | ||
\u00a3000 | \u00a3000 | \u00a3000 | % | \u00a3000 | \u00a3000 | \u00a3000 | % | ||
Sterling | 59,285 | 581,008 | 640,293 | 24.6 | 147,279 | 585,523 | 732,802 | 28.8 | |
Euro | 151,218 | 759,355 | 910,573 | 34.9 | 192,516 | 588,610 | 781,126 | 30.6 | |
US dollar | 106,064 | 949,375 | 1,055,439 | 40.5 | 132,173 | 903,359 | 1,035,532 | 40.6 | |
Total | 316,567 | 2,289,738 | 2,606,305 | 100.0 | 471,968 | 2,077,492 | 2,549,460 | 100.0 |
The fixed and floating rate assets consisted of cash and liquidity funds, of which the underlying investments are a combination of fixed and floating rate. The non-interest-bearing assets represent the investments held in fund limited partnerships, gross of the provision for performance fees and debtors.
Capital management policies and procedures
HgT\u2019s capital management objectives are to ensure that it will be able to finance its business as a going concern and to maximise the revenue and capital return to its equity shareholders.
HgT\u2019s capital at 31\u00a0December 2025 comprised:
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Equity: | ||
Equity share capital | 11,443 | 11,443 |
Share premium | 372,224 | 372,224 |
Capital redemption reserve | 1,258 | 1,258 |
Retained earnings and other reserves | 2,185,338 | 2,112,146 |
Total capital | 2,570,263 | 2,497,071 |
With the assistance of Hg, the Board monitors and reviews the broad structure of HgT\u2019s capital on an ongoing basis. This review covers:
\u2022the projected level of liquid funds (including access to bank facilities);
\u2022the desirability of buying back equity shares, either for cancellation or to hold in treasury, balancing the effect (if any) this may have on the discount at which shares in HgT are trading against the advantages of retaining cash for investment;
\u2022the opportunity to raise funds by an issue of equity shares; and
\u2022the extent to which revenue in excess of that which is required to be distributed should be retained, while maintaining its status under Section 1158 of the CTA 2010.
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Facility at 1 January | 98,224 | \u2013 |
Draw on loan facility | 64,227 | 138,147 |
Repayment of loan facility | (128,180) | (39,923) |
Unrealised foreign exchange (gains)/losses | 2,016 | \u2013 |
Total loan facility | 36,287 | 98,224 |
2025 | 2024 | |
\u00a3000 | \u00a3000 | |
Accruals | 1,835 | 2,576 |
Total creditors | 1,835 | 2,576 |
2025 | 2024 | |||
No. 000 | \u00a3000 | No. 000 | \u00a3000 | |
Ordinary shares of 2.5p each: | ||||
Allotted, called up and fully paid: | ||||
At 1 January | 457,729 | 11,443 | 457,729 | 11,443 |
Issues of ordinary shares | \u2013 | \u2013 | \u2013 | \u2013 |
Purchase of own shares | \u2013 | \u2013 | \u2013 | \u2013 |
At 31\u00a0December | 457,729 | 11,443 | 457,729 | 11,443 |
Total called-up share capital | 457,729 | 11,443 | 457,729 | 11,443 |
Share premium account | Capital redemption reserve | Capital reserve unrealised | Capital reserve realised | Revenue reserve | |
\u00a3000 | \u00a3000 | \u00a3000 | \u00a3000 | \u00a3000 | |
As at 1 January 2025 | 372,224 | 1,258 | 688,642 | 1,409,090 | 14,414 |
Reserves reallocation on investments | \u2013 | \u2013 | (82,497) | 82,497 | \u2013 |
Net movement in unrealised appreciation of fixed asset investments | \u2013 | \u2013 | 85,743 | \u2013 | \u2013 |
Net movement on sale of fixed asset investments | \u2013 | \u2013 | \u2013 | (15,368) | \u2013 |
Foreign exchange gain/(loss) on fixed asset investments | \u2013 | \u2013 | 30,495 | \u2013 | \u2013 |
(Losses)/gains on liquidity funds | \u2013 | \u2013 | (2,799) | \u2013 | \u2013 |
Foreign exchange (loss)/gain on loan facility | \u2013 | \u2013 | (2,016) | \u2013 | \u2013 |
Dividends paid | \u2013 | \u2013 | \u2013 | \u2013 | (25,175) |
Net revenue return | \u2013 | \u2013 | \u2013 | \u2013 | 14,314 |
Net loans advanced to General Partners | \u2013 | \u2013 | (12,002) | \u2013 | \u2013 |
As at 31\u00a0December 2025 | 372,224 | 1,258 | 705,566 | 1,476,219 | 3,553 |
Fund | Fund currency | Original commitment | Original commitment | 1 | Outstanding at 31 Dec | ||
2025 | 2024 | ||||||
\u00a3000 | \u00a3000 | \u00a3000 | |||||
HGT Saturn 4 LP | USD | 1,000,000 | 743,470 | 743,470 | \u2013 | ||
HGT Genesis 11 LP | EUR | 700,000 | 611,200 | 611,200 | \u2013 | ||
HGT Mercury 5 LP | EUR | 300,000 | 261,950 | 261,950 | \u2013 | ||
HGT LP | USD | 176,060 | 130,890 | 114,800 | 124,813 | ||
HGT Saturn 3 LP | USD | 875,000 | 650,530 | 105,480 | 153,000 | ||
HGT Genesis 10 LP | EUR | 500,000 | 436,570 | 92,020 | 196,489 | ||
HGT Mercury 4 LP | EUR | 175,000 | 152,800 | 85,950 | 70,412 | ||
HGT Saturn 2 LP | USD | 400,000 | 297,390 | 82,230 | 94,444 | ||
HGT Genesis 9 LP | EUR | 360,000 | 314,330 | 56,290 | 55,113 | ||
HGT Mercury 3 LP | EUR | 115,000 | 100,410 | 19,320 | 20,091 | ||
HGT 8 LP | GBP | 260,000 | 260,000 | 13,950 | 14,473 | ||
HGT Saturn LP | GBP | 150,000 | 150,000 | 5,680 | 5,829 | ||
HGT 7 LP | GBP | 200,000 | 200,000 | 230 | 228 | ||
HGT Mercury 2 LP | GBP | 80,000 | 80,000 | \u2013 | \u2013 | ||
Total outstanding commitments | 2,192,570 | 734,892 |
Hg acts as Manager of HgT through a management agreement and indirectly participates through fund limited partnership agreements as the general partners and, alongside a number of Hg\u2019s executives (past and present), as the founder partners of the fund partnerships in which HgT invests. In addition, Hg acts as Administrator of HgT.
HgT has no ultimate controlling party.
Commitments
On 27 February 2026, HgT completed a reduction to its commitment in Hg Saturn 4 of $100\u00a0million, resulting in a final commitment to the fund of $900\u00a0million.
Share Buyback
Since the year ended 31\u00a0December 2025, the Company has undertaken a programme of share buybacks in the open market.
In the period from 9 February 2026 to 6 March 2026 (being the date of approval of
these financial statements), the Company has repurchased 2,252,887 ordinary shares
at an average price of 422.7p per share, for a total consideration of \u00a39.5 million.
The repurchased shares have been held as treasury shares.