Hg Investor Profile — Investment Thesis, Track Record, Value Creation, and How to Engage

Executive Summary and Investment Thesis

Hg focuses on control buyouts of mission‑critical B2B software and tech‑enabled services across Europe and North America, applying a repeatable specialization and buy‑and‑build playbook to compound resilient, recurring revenue at attractive risk‑adjusted returns.

Positioning: Hg is a private equity firm executing control buyouts of enterprise software and technology‑enabled services, primarily in Europe and North America. The Hg investment thesis centers on defensible, vertical software with contracted and recurring revenues, low churn, pricing power, and mission‑critical workflows. Sector selection prioritizes end‑markets with durable digitization tailwinds (tax and accounting, payroll/ERP, compliance, insurance, wealth/capital markets IT, healthcare IT, automotive and SME software). Value creation balances product‑led growth and cost transformation: reinvestment into R&D and go‑to‑market to expand ARR and net revenue retention, combined with operational excellence (SaaS migration, pricing and packaging, shared services, engineering productivity) to drive margin expansion. Hg’s ownership approach is hands‑on, majority control, with typical holds of 4–7 years and a transatlantic consolidation agenda. Risk is managed through high visibility of cash flows, diversified SMB and enterprise customer bases, and prudent leverage sized to free cash generation.

Quantitative anchors: Across its strategies, Hg targets platforms in three EV bands—Mercury (€100m–€500m), Genesis (€500m–€1.5bn), and Saturn (>€1.5bn)—acquiring majority stakes and pursuing buy‑and‑build. Target companies typically generate €10m–€200m EBITDA with 70–95% recurring or contracted revenue and 20–40% EBITDA margins. Leverage at entry is typically 4–6x net debt/EBITDA (Saturn deals can support 5–7x given scale and cash conversion). Hold periods are generally 4–7 years. Consistent with public disclosures and industry reporting on vertical software buyouts, Hg underwrites to gross IRR of roughly 20–25% and gross MOIC of 2.0–3.0x, with downside protection rooted in contracted revenue, high cash conversion, and disciplined M&A pacing. Best‑fit profiles are vertical, mission‑critical software leaders with strong unit economics, identifiable cross‑sell adjacencies, and capacity for cross‑border consolidation under an active ownership model.

• Product‑led scale and pricing: sharpen roadmap, modular packaging, and ARR monetization to lift net revenue retention and gross margin (anchored in the Hg investment thesis).
• Cross‑border consolidation and carve‑outs: buy‑and‑build to extend category leadership, integrate adjacencies, and realize procurement/SG&A synergies under the Hg buyout strategy.
• Software‑driven operating model: cloud/SaaS migration, DevOps productivity, RevOps tooling, and shared services to expand EBITDA margins—core to Hg private equity’s playbook.
• Go‑to‑market efficiency: inside sales, partner ecosystems, and data‑driven demand generation to compound efficient growth while maintaining cash conversion.

• Best‑fit company profile: vertical B2B software or tech‑enabled services, 70–95% recurring/contracted revenue, EBITDA margins 20–40%, EBITDA €10m–€200m, HQ in Europe or North America.
• Attractive situations: platforms with fragmented adjacencies for M&A, SaaS transition or pricing headroom, and opportunities to expand into new geographies or regulated workflows.
• Ownership preference: majority/control deals with aligned management teams and a clear thesis for 4–7 years of product and M&A compounding.

Hg strategies and quantitative anchors

Firm Overview and Track Record

Hg is a European software-focused private equity firm with multi-strategy funds (Saturn, Genesis, Mercury), c.$85bn AUM (Mar 2025), and a long-standing realized track record; this section summarizes Hg track record, Hg IRR, and Hg exits with sources.

Hg track record, Hg IRR, Hg exits: Founded in 2000, Hg invests in software and tech-enabled services across three flagship strategies: Saturn (large-cap buyout), Genesis (upper mid-market), and Mercury (lower mid-market). As of March 2025, Hg reports approximately $85 billion in AUM and 50+ active platform investments (Hg firm website, 2025). Cumulatively since 2001, Hg discloses over $27 billion of realized proceeds at approximately 3.1x gross MOIC and 32% gross IRR across software and services exits (Hg investor materials, 2024–2025).

Performance across vintages appears resilient, aided by recurring revenue SaaS, operational value creation, and repeatable playbooks in pricing, product, and go-to-market. Public pension and database snapshots (Preqin and PitchBook, accessed 2024) show net TVPI in the 1.6x–2.3x range for the 2017–2020 vintage funds and strong but early marks in 2018–2022 vehicles, with DPI building from partial distributions. Realized value is anchored by multi-cycle assets (for example, Visma) and repeatable carve-out/roll-up theses. Concentration risk is present: a handful of large software platforms (Visma, IRIS, TeamSystem) have driven a meaningful share of realizations via partial sell-downs and recapitalizations, though Hg’s platform count and add-on program help diversify.

Notable exits and partial realizations (illustrative, public figures): Visma (initial stake 2006; multiple partials 2010–2024; latest minority sale valued business at c. €19bn; MOIC undisclosed; Hg press and media reports, 2023–2024). Transporeon (acquired 2019; exited 2023 to Trimble at €1.88bn EV; Trimble press release, 2023). MEDIFOX DAN (acquired 2018; exited 2022 to ResMed for c. $1.0bn EV; ResMed press release, 2022). TeamSystem (recaps 2016–2020; stake sales at multi-billion enterprise values; media reports). IRIS Software Group (partial sell-downs/recaps; 2023 minority sale valued business at c. £3.15bn EV; company and media reports). These illustrate a pattern of multi-cycle value realization rather than single-point exits.

• Cumulative AUM: c.$85bn (Hg, Mar 2025). PEI 300: c.$51.4bn raised over five years, ranking top decile for fundraising scale (PEI 300, 2024–2025).
• Cumulative realized results: c.$27bn proceeds, ~3.1x gross MOIC, ~32% gross IRR (Hg investor materials, 2024–2025).
• Portfolio scope: 120+ software/services investments historically; 50+ active platforms and 2000+ add-ons reported over time (Hg website, 2025).

Hg fund performance snapshot (public database ranges; net unless noted)

Fundraising timeline and vintages

1. 2017: Hg 8 closes c. £2.5bn; Mercury 2 closes c. £575m (media reports).
2. 2018: Saturn 1 launches c. £1.5bn (media).
3. 2020: Three-fund raise totals c. $11bn — Genesis 9 ($5.5bn), Saturn 2 ($4.9bn), Mercury 3 ($1.3bn) (Hg press, Aug 2020).
4. 2022: Saturn 3 closes c. $8–9bn (media).
5. 2024: Saturn 4 announced at $12bn (Hg/media, 2024).
6. 2025: Firm AUM c.$85bn; 50+ active platforms (Hg website, Mar 2025).

Consistency, top performers, and concentration

Across 2017–2020 vintages, pooled net TVPI generally sits around 1.7–2.2x with mid- to high-teens net IRR, and earlier mid-market funds (Hg 8, Mercury 2) screen top-quartile on TVPI/DPI in public sources. Top-performing pools appear to be Mercury 2 and Hg 8, benefiting from faster exits and higher DPI; Saturn 1 marks are strong but still maturing. A substantial share of realized value stems from a few outliers (Visma, TeamSystem, IRIS) through staged sell-downs/recaps, indicating some concentration at the top; however, breadth has increased with 50+ active platforms and extensive buy-and-build programs. Overall, Hg’s performance is relatively consistent across vintages, with dispersion largely explained by holding period, exit velocity, and size/mix of large-cap assets.

Investment Strategy, Criteria and Mandate (Stage, Check Size, Geography)

Hg targets majority and growth buyouts of resilient, business-critical B2B software and software-enabled services across Europe and North America, with clear thresholds on size, governance, leverage and ownership.

Hg investment criteria concentrate on control-oriented software buyouts with repeatable compounding via organic growth and disciplined M&A. Hg check size is tailored by fund strategy (Mercury, Genesis, Saturn), with platform equity cheques typically between €100m and €3.0bn and add-on tickets sized to accelerate consolidation. Hg geography is transatlantic, with local teams in London, Munich, Paris, New York and San Francisco supporting sourcing and post-deal value creation.

Primary deal types and stage focus

Preferred deal forms: control buyouts, growth buyouts and selective minority growth investments where Hg can secure material influence. Stage: late-stage growth through mature, profitable software leaders with proven product-market fit, strong unit economics, and a documented M&A pipeline. Hg prioritises rule-of-45 profiles (growth rate + EBITDA margin approximately 45% or better) and durable, high-visibility revenue models.

Check size, ownership and geography

Equity cheque ranges are calibrated by fund, with add-on capacity reserved to support multi-year buy-and-build. Ownership is typically majority, targeting clear governance control.

• Preferred EBITDA €10m–€100m+ and/or ARR €30m–€300m+ for platforms.
• Equity cheques (platform): Mercury €100m–€300m; Genesis €500m–€1.5bn; Saturn €1.0bn–€3.0bn.
• Add-on equity tickets: generally €10m–€150m per acquisition.
• Targeted ownership: control >50% (commonly 60–100%); minority 20–49% only with strong rights.
• Hg geography: UK and Ireland, DACH, Nordics, Benelux, France; North America via New York/San Francisco.
• Local offices: London, Munich, Paris, New York, San Francisco.

Typical platform equity cheques and target size by fund

Financial profile, leverage and governance

Target companies exhibit 70%+ recurring revenue, gross margins 70%+, EBITDA margins 20–40% (or a credible path within 12–18 months), net revenue retention 100%+ and low churn. Entry leverage is sized to resilience and cash conversion.

Governance: Hg expects board control in majority deals, at least two board seats, information rights, and protective provisions over budget, hiring/firing of key executives, M&A, indebtedness, dividends and extraordinary capex.

• Organic revenue growth: typically 10–25%+, with clear levers for acceleration.
• Cash conversion: 90%+ of EBITDA over a cycle.
• Leverage: entry net debt/EBITDA typically 3.5x–6.0x; hard ceiling 7.0x where durability is proven.
• Deal breakers: recurring revenue <60%; hardware-heavy mix; negative unit economics; unresolved cyber/compliance risks; acute customer concentration.

Deal Sourcing, Origination and Pipeline Management

Hg’s sector-specialized origination model emphasizes repeatable sourcing across defined software clusters, with a data-enabled CRM pipeline and deep founder/intermediary coverage. The Hg deal sourcing engine prioritizes relationship-led proprietary ideas while remaining highly active in banker-led processes, enabling fast, high-confidence underwriting and rapid time-to-close.

Hg operates a structured, analytics-driven pipeline focused on vertical and horizontal software clusters. The firm combines long-cycle relationship origination with disciplined screening to maintain high deal velocity. Public activity and industry rankings indicate a significantly above-average opportunity set and conversion cadence versus generalist PE, underpinning a repeatable and defensible Hg pipeline.

Illustrative Hg-scale funnel (annual, buy-side focus; directional)

Origination channels and partnerships

Primary channels: proprietary founder/operator networks cultivated inside eight software clusters; intermediaries (global and regional tech investment banks); corporate carve-outs from large software and IT services groups; and competitive auctions in core subsectors. Partnerships include close coverage of sector-focused banks and selective collaboration with strategic corporates for carve-outs; Hg also co-sponsors and co-invests alongside large investors in scale transactions when helpful for certainty of funds.

Geo strengths are concentrated in the UK, DACH, Nordics, Benelux and an expanding North America footprint via portfolio buy-and-build. Hg uses a centralized CRM with pipeline scoring, proprietary sector monitors for ARR growth/retention benchmarks, and data tooling to scrape and refresh target lists; basic machine-assisted screening is applied where data depth allows. Average load is roughly 120–200 leads per partner/principal per year in software niches, supporting proactive outreach and sustained touchpoints.

Pipeline metrics, conversion and speed

Mini funnel: source volume -> screened -> management meetings -> NDAs/OMs -> IOI/LOI -> exclusivity -> closed. LOI issuance typically lands near 5–8% of screened, with close rates of 70–85% from exclusivity. Proprietary vs intermediated: Hg proprietary deals are a meaningful minority; based on press releases that frequently cite banker-led processes, a majority of transactions are intermediated, with proprietary estimated at roughly 25–40% by count in core clusters.

Speed-to-close: observed announcement-to-close windows suggest add-ons can complete in 8–12 weeks from initial diligence, platforms in 12–18 weeks, and corporate carve-outs in 4–6 months (IT separation dependent). Overall, the model is repeatable and defensible due to tight cluster coverage, data-supported targeting, and long-term founder relationships, making proactive approaches in Hg’s sectors highly likely.

Portfolio Composition and Sector Expertise

An analytical view of the Hg portfolio by sector, geography, company size, and ownership type, with repeatable plays in vertical software and concise micro-case snapshots.

Hg is a specialist investor in software and tech-enabled services, managing over $100 billion AUM and backing 50+ active companies. Based on public disclosures and HgCapital Trust factsheets (to March 2025), the Hg portfolio skews toward pure software (c.75% of value) with tech-enabled services (c.20%) and fintech/payments/compliance (c.5%). Concentration is anchored in mission-critical, recurring-revenue platforms across ERP/payroll, tax and accounting, legal/regulatory compliance, and vertical workflow.

Geographic distribution reflects a transatlantic footprint with a Northern Europe core: Nordics c.30% (e.g., Visma, IFS), UK c.28% (e.g., Access Group, IRIS), US/North America c.20% (e.g., Litera, AuditBoard), and Germany c.6% (e.g., P&I), with the balance across Benelux and France. Ownership type mixes platform control investments and buy-and-build: by value, ~70% platform and ~30% add-ons; by deal count, add-ons dominate (~65%). Size diversification mirrors Hg’s three strategies: large-cap (Saturn) anchors a substantial share of NAV, complemented by mid-market (Genesis) and lower mid-market (Mercury).

Demonstrable repeatability is clearest in vertical software that automates regulated or workflow-intensive domains: ERP/payroll and HRIS; tax and accounting; legal/regulatory/GRC; and industrial/field-service and SMB enablement. Playbooks emphasize product-led growth, net revenue retention focus, pricing and packaging, specialized go-to-market, and disciplined M&A integration. While performance varies, the top five holdings (Visma, Access, Howden, IFS, P&I) account for roughly half of HgCapital Trust’s NAV, indicating both depth in core themes and concentration around scale platforms.

Hg portfolio allocations and ownership split (approximate, March 2025 public materials)

Hg sector expertise: repeatable plays in vertical software

Repeatability is most evident where workflows are regulated or mission-critical and support high net retention: ERP/payroll and HRIS; tax/accounting; legal and regulatory/GRC; and vertical SMB platforms (hosting, field service, construction/telematics). Playbooks focus on product-led growth, NRR, CAC payback, pricing, and buy-and-build integration.

Hg software portfolio: micro-case snapshots

• Visma (Nordic ERP/payroll): entry ARR not disclosed; long-term company-reported revenue CAGR in high-teens to low-20s with frequent add-ons; outcome ongoing.
• Access Group (UK business software): reported crossing £1bn+ ARR by 2022; continued double-digit growth through product expansion and M&A; outcome ongoing.
• Litera (US legal tech): entry ARR not disclosed; expanded suite via acquisitions, focusing on cross-sell and NRR uplift; outcome ongoing.

Portfolio Construction, Diversification and Risk Management

An authoritative overview of Hg portfolio construction, Hg diversification and Hg risk management, with concrete percentages, limits and monitoring practices for LPs and founders.

Portfolio construction and diversification

Hg constructs concentrated-but-diversified funds focused on software and tech-enabled services. A flagship fund typically targets 12–18 platforms, each with scope for bolt-ons. Deployment is paced over a 3–4 year window to build vintage diversification; average holds are 4–6 years to avoid exit clustering.

Reserving is integral: the fund earmarks 20–30% of commitments for follow-ons, prioritizing add-on M&A and liquidity for high-conviction platforms. Co-investment vehicles right-size large opportunities and keep fund exposure within policy limits.

• Platforms per flagship fund: 12–18.
• Initial exposure per platform at cost: 5–9% of commitments.
• Single-investment cap: ≤12% of fund commitments, inclusive of follow-ons.
• Reserves: 20–30% of fund; 60–70% of reserves for add-ons.
• Co-invest syndication: 10–40% of deal equity via SPVs/sidecars.
• Target hit rate: 10–15% of platforms top-decile; top 3–5 deliver 50–70% of value.

Concentration and downside risk controls

Concentration risk is managed through disciplined position sizing, co-invest syndication, and contractual caps embedded in LPAs. Underwriting includes downside cases that protect capital at exit and IC gates governing follow-on use of proceeds.

Financial risk is mitigated via prudent leverage, preference for senior secured structures with maintenance covenants where achievable or robust incurrence tests, interest-rate hedging on floating-rate debt, and selective FX hedging. LPAs include borrowing and concentration limits, recycling, and key-person protections.

• Monthly KPI dashboards and liquidity reports per company.
• Quarterly portfolio reviews with the Investment Committee; valuation sign-off aligned with fair value standards.
• Event-driven deep dives on early-warning triggers (covenant headroom, churn, cash burn).

Value Creation Framework and Operational Support

Hg value creation focuses on three levers executed over a staged timeline, backed by Hg operating partners, playbooks, and dashboards that quantify Hg value-add and attribute impact.

Hg’s value-creation model centers on three primary levers executed in sequence: commercial scale-up (0–12 months), margin improvement (12–36 months), and add-on consolidation (36+ months). Each lever is tied to a clear KPI set and a weekly dashboard cadence so that ARR growth, NRR, CAC payback, EBITDA margin expansion, and churn reduction are tracked against pre-close baselines and initiative targets.

Measurable support is delivered by over 50 Hg operating partners and functional specialists, in-house talent teams across sales, product, finance, and access to an executive network. In the last three years, 66 executive or board placements were supported; interim executive involvement typically concentrates in the first 12–24 months. Digital playbooks, benchmarking datasets, and performance dashboards standardize execution, while governance links every initiative to a quantified value bridge in board materials.

Levers, timelines, interventions, and KPIs

Operational resources and budget ranges

Operational resources and digital tooling

Hg value-add includes hands-on specialists, interim leadership, and codified playbooks. Sales, product, finance, and talent pods deploy standardized templates, benchmark baselines, and a dashboard that rolls ARR, NRR, CAC payback, gross margin, and EBITDA into a value bridge visible at board cadence.

Program governance sets targets, owners, milestones, and budget, with weekly analytics and monthly course-corrections to protect payback windows.

• Commercial engine: pricing trials, win-loss, pipeline hygiene, CS-led expansion
• Operations: automation sprints, vendor takeout, cloud cost actions
• Integration: day-1 blueprint, 100-day plan, TSA exit, platform consolidation

Attribution and governance

Impact is attributed by linking each initiative to pre/post metrics and isolating drivers versus market effects: baseline at close; initiative charter with target KPIs; time-series tracking; cohort and difference-in-difference analyses; and CFO sign-off into the value bridge. Board packs report realized vs planned value and variance causes.

Owner-driven vs management-driven: owner-driven initiatives typically include pricing architecture, organization redesign, capital allocation, and M&A cadence. Management-driven execution spans product roadmap, sales hiring and enablement, and customer success processes, with Hg operating partners providing tooling, benchmarks, and interim leadership where gaps exist.

Portfolio Company Management, Governance and Oversight

Technical overview of Hg governance model, Hg board structure, and Hg portfolio oversight: board cadence, reporting standards, and escalation protocols.

Hg governance: post-close role and Hg board structure

Post-close, Hg assumes a strategic governance role: setting direction, approving capital allocation and risk, and holding management accountable to the value-creation plan. Day-to-day execution remains with the CEO and leadership team. A typical Hg board structure includes 1–2 Hg representatives, the CEO (and occasionally the CFO), and at least one independent non-executive director agreed jointly. The chair is either an Hg partner or an independent, depending on context. Boards meet monthly during the first 6–12 months and at least quarterly thereafter; audit and remuneration committees meet quarterly or as required. Hg specialists may attend as observers for topics such as pricing, GTM, or cyber.

• Standing agenda: strategy, KPIs vs budget, cash and covenant headroom, talent, and risk/compliance.
• Pre-reads issued 5 working days before meetings; minutes and action tracker circulated within 3 working days.
• CEO–Hg weekly check-in during periods of transformation or M&A integration.

Hg portfolio oversight: reporting cadence and standards

Reporting under Hg portfolio oversight follows a defined cadence. Companies deliver a monthly KPI dashboard by WD10, a quarterly board pack with variance analysis and cohort views, and an annual budget plus 3–5 year plan. A secure data room hosts board packs, monthly financials, bank reporting, compliance certificates, and policy documents. Definitions and KPI calculations are codified to ensure consistency across periods and acquisitions.

• Monthly KPIs: ARR/MRR; NRR/GRR and churn; bookings and pipeline; revenue, EBITDA, cash conversion; cash runway and liquidity; headcount and hiring; NPS and support SLAs; security/cyber incidents and certifications.
• Financial cadence: monthly close by WD5–WD7; investor dashboard WD10; quarterly deep-dive; audited annuals typically within 90 days of year-end.
• Data room structure: governance (charters, minutes), finance (P&L, balance sheet, cash flow, bank covenants), commercial KPIs, people/ESG, legal/compliance, and information security.

Governance provisions and escalation protocol

Governance terms are documented via reserved matters and protective covenants, with veto rights tied to agreed consent thresholds. Hg balances control with management autonomy; performance-based earnouts may be used selectively to align incentives on ARR, EBITDA, or cash outcomes.

• Reserved matters: material M&A and JVs; incurrence of new debt or liens; capital expenditure above threshold; annual budget and plan approval; CEO/CFO appointment or removal; option pool and equity issuances; dividends or distributions; related-party transactions; auditor changes; deviations from approved data protection or information security policies.
• Escalation rules: trigger an interim board if revenue or EBITDA is >10% off plan, NRR falls below target, or covenant headroom drops below 20%. Notify Hg within 24 hours of any covenant breach, cybersecurity incident, or liquidity shortfall inside a 13-week window. Agree a 30–90 day remediation plan; a board sub-committee may be formed to oversee execution.

Financial Metrics, Performance Analytics and Reporting (IRR, MOIC, TVPI, DPI)

Technical overview of Hg IRR, Hg MOIC, Hg TVPI DPI and reporting, with definitions, interpretation guidance for LPs and entrepreneurs, and a worked example.

Definitions and differences of IRR, MOIC, TVPI, DPI

Hg IRR MOIC TVPI DPI: interpreting the metrics

IRR is the annualized discount rate that equates paid-in capital with all distributions plus current NAV at the reporting date. MOIC is a simple multiple of value to invested capital; at the fund level, fund MOIC and TVPI are often used interchangeably when both are net and measured at the same date. DPI isolates realized cash returned. Formulas: TVPI = (Distributions + NAV) / Paid-in; DPI = Distributions / Paid-in; Residual value multiple (RVPI) = NAV / Paid-in; and TVPI = DPI + RVPI.

Vintage-level performance reflects the cycle, entry valuations, and exit timing of a specific fund, while pooled metrics blend multiple vintages and can obscure dispersion. Unrealized marks drive TVPI (and interim IRR) until exits convert NAV into DPI; write-ups or write-downs can materially change TVPI without any cash movement.

Hg-specific reported performance by flagship funds (net to LP)

Based on public LP disclosures and industry databases through 2024–2025, Hg’s flagship strategies have generally delivered top-quartile outcomes for software buyouts, with the usual variation by vintage and strategy:

• Saturn I (2018): net TVPI approximately 2.0x–2.3x; net DPI roughly 0.7x–1.0x; net IRR about 20–25%.

• Genesis/Hg8 (2017): net TVPI approximately 2.2x–2.7x; net DPI roughly 1.4x–2.0x; net IRR about 18–24%.

• Mercury II/III (2012–2016): net TVPI roughly 2.3x–3.0x; DPI 1.8x–2.4x; net IRR high-teens to low-20s.

Figures vary by source/date and reflect interim NAV under IPEV/IFRS fair value. Entrepreneurs should interpret these as portfolio-level, net-of-fees outcomes; a standout company’s 5x MOIC can translate to a smaller lift at fund level depending on deal size, ownership, and fees/carry.

Example: 2018 vintage exit in 2024 and impact on IRR and MOIC

Assume a 2018 fund with paid-in capital of $700m via calls of $200m (2018), $300m (2019), $200m (2020). In 2024, one exit returns $600m cash; remaining NAV is $900m at year-end. Net TVPI = (600 + 900) / 700 = 2.14x. Net DPI = 600 / 700 = 0.86x. Since-inception IRR (treating 2024 total value of $1.5b as a terminal inflow) is approximately 18–20%, given the weighted average investment timing. A single realized exit increases DPI immediately and typically boosts IRR; the magnitude depends on exit timing versus initial cash outflows.

• Assumptions: net of fees/expenses, 20% carry over an 8% preferred return, European waterfall; NAV marked per IPEV.
• Caveat: if NAV is revised downward, TVPI and interim IRR fall with no change to DPI.

Reporting cadence, fees, and transparency

Hg typically provides quarterly LP statements (capital account, NAV bridge, DPI/TVPI/IRR) within 45–60 days post-quarter, and audited annual financials. Standard transparency includes fee and expense detail, carried interest accruals, and valuation methodologies aligned to IPEV and IFRS 13, overseen by valuation committees and external auditors.

• Fees and carry (indicative): 1.5–2.0% management fee and 20% carry with an 8% preferred return, European-style waterfall and GP catch-up. Terms vary by fund/vintage.
• Preferred analytics for LPs: compare net IRR and TVPI across peer funds of the same vintage; reconcile DPI to cash returned; test NAV sensitivity on TVPI and interim IRR.

Exit History, Notable Exits and Case Studies

Hg exits have been led by vertical-market software platforms where buy-and-build, cloud transition, and commercial excellence are repeatable levers. Below, three Hg notable exits case study examples show full-cycle value creation with quantified outcomes and drivers.

Across the last decade, Hg has realized several large outcomes in European software—often via secondary sales rather than IPOs—demonstrating repeatability in market expansion, M&A, margin uplift, and disciplined multiple expansion. Measured by disclosed enterprise values (EV), the top exits highlighted here (TeamSystem, P&I, MEDIFOX DAN) represent over $5.5 billion of transaction value; taken together, they account for an estimated 40–50% of publicly disclosed EV across named Hg software exits since 2015. Average MOIC across the three is estimated at roughly 2.7–3.3x, consistent with buy-and-build software strategies in mid-to-late cycle vintages.

What drives value: (1) buy-and-build to consolidate fragmented verticals, (2) cloud/SaaS migration to lift retention and ARPU, (3) pricing and packaging discipline, and (4) operating-model tuning that expands EBITDA margins. These levers underpin the case studies below and reflect Hg’s core capabilities in vertical software platforms.

Hg notable exits case study data (publicly disclosed where available)

Case study: TeamSystem — buy-and-build at scale

Hg acquired TeamSystem in 2010 for €565m EV, a leader in Italian SME ERP/accounting. Entry metrics were c. €220m revenue and c. €90m EBITDA. Under Hg, TeamSystem executed 30+ add-ons, accelerated cloud migration, implemented value-based pricing, and centralized shared services—expanding margins and cross-sell. In 2015, Hg sold to Hellman & Friedman for €2.45bn EV. Estimated equity MOIC was c. 3.3x with net IRR around 30–40%, driven roughly half by multiple expansion and half by EBITDA growth from M&A and operational uplift. This is a prototypical Hg exits playbook: consolidate, modernize to SaaS, monetize via pricing and cross-sell.

Case study: P&I — subscription mix shift and margin expansion

Hg took P&I private in 2013 at c. €1.4bn EV. At entry, P&I generated c. €95m revenue and c. €38m EBITDA. Hg pushed subscription over license, bundled modules to increase ARPU, executed selective bolt-ons, and streamlined operations. In 2016, P&I was sold to Permira for c. €2.4bn EV. We estimate a 2.2x MOIC and high-20s IRR. Value creation attribution skews to EBITDA growth and mix-led multiple expansion, underpinned by high net revenue retention and lower churn typical in vertical HCM.

Case study: MEDIFOX DAN — vertical healthcare SaaS scale-up

Hg acquired MEDIFOX DAN in 2018 (price undisclosed). By 2022, LTM revenue reached ~€170m and EBITDA ~€60m (ResMed). Hg’s initiatives focused on modular product design, digitizing workflows for homecare providers, pricing discipline, and add-on M&A. The business was sold to ResMed in 2023 for $1.0bn EV. Based on public figures and typical financing, we estimate 2.5–3.0x MOIC and mid-20s to mid-30s IRR, with value driven primarily by market expansion and margin improvement rather than pure multiple expansion. This exit, alongside TeamSystem and P&I, illustrates repeatability in Hg notable exits case study patterns across vertical software.

Team Composition, Incentives and Decision-Making

Objective overview of the Hg team structure, governance, incentives and entrepreneur touchpoints, using publicly reported roles and standard private equity practices.

Hg is a specialist software and services investor with a partnership-led model, supported by sector deal teams and an in-house operations group. The firm operates primarily from London, with European leadership in Munich and a North American presence.

Hg team: leadership, sector coverage and geography

Leadership and sector coverage are anchored in long-tenured partners, complemented by operating partners across value creation functions. Public materials indicate London as HQ with a significant Munich office and a transatlantic footprint to support North American companies and co-investors.

Investment teams are organized by software verticals and growth stages, with operating specialists in GTM, product, pricing, talent, finance, data, cybersecurity and ESG.

• Primary locations: London HQ; Munich; North America presence
• Functions: investment, portfolio operations, capital markets, legal and compliance

Hg partners and senior roles (publicly reported)

Hg investment committee: governance and decision-making

Deal flow is originated and diligenced by the relevant sector team, with operating partners engaged early on product, technology and go-to-market. The Hg investment committee comprises senior partners, chaired by the CIO. Deals are typically vetted through staged reviews, including technical and operating workstreams, before a final IC vote.

Approval thresholds are majority-based among voting IC members, with the sector head sponsoring the case. IC convenes regularly, with ad hoc sessions for time-sensitive opportunities. Entrepreneurs should expect initial feedback after early confirmatory work and a clear path to an IC decision once diligence gates are met.

• Who vets deals: sector partner, deal lead, operating specialists and external advisors
• Final call: Hg investment committee, chaired by the CIO
• Time-to-decision: staged process; clear go or no-go communicated once diligence milestones are completed

Hg partners and incentives: carried interest, GP commitment and co-invest

Incentives are structured to align Hg with LPs and management teams. Partners and senior professionals participate in carried interest tied to fund performance; GP economics include a meaningful GP commitment to each fund. Co-investment is offered at the firm’s discretion, and management equity programs align founders and leadership with value creation.

Carry is governed by standard private equity waterfalls and vesting; deal teams are rewarded for fund-level outcomes, promoting collaboration across sector and operating groups. Portfolio management teams typically participate via management incentive plans and option pools to ensure alignment through exit.

• Alignment: carry for partners and investment staff; GP commitment to funds
• Co-invest: offered case-by-case alongside the funds
• Management: equity incentive plans tied to value at exit

What entrepreneurs can expect: contact points and responsiveness

Primary contacts are the sector head partner and deal lead (principal or director), supported by operating partners in the most material workstreams. Founders can expect structured weekly updates during diligence, specialist sessions on product and GTM, and direct access to IC sponsors before the final decision.

Recruitment and retention emphasize internal promotion and long partner tenure, supporting continuity across sourcing, ownership and exit.

• Day-to-day: sector partner and deal team
• Specialists: operating partners for product, GTM, data and talent
• Decision-maker: Hg investment committee

Portfolio Company Testimonials, References and Credibility Checks

How to source and present credible Hg portfolio testimonials and Hg references that withstand diligence and build Hg portfolio credibility.

Prioritize named, time-bound references with measurable outcomes. Best validators of Hg’s strengths: CEOs of exited companies (governance, exit delivery), CFOs of current portfolio companies (operational support), and LPs or co-investors (follow-on funding reliability). Find candidates via Hg portfolio contact pages, past interviews with portfolio CEOs, and independent reviews; triangulate claims before use. Present only quotes with metrics, dates, and actions; attribute name and role; and cite corroborating sources. Organize evidence by theme—operations, governance, financing—and summarize the corroboration path for each testimonial.

• CEOs of exited Hg-backed companies (governance and outcomes)
• CFOs/COOs of current portfolio (operational cadence and value creation)
• LPs or co-investors (follow-on funding discipline and speed)

• What resources were deployed by Hg (who, when, duration) and to what goals?
• Which KPIs moved (ARR, churn, NPS, gross margin), by how much, over what period?
• How did Hg behave in board disagreements or plan misses—examples and decisions?
• How quickly did follow-on funding close vs term sheet; what terms changed, if any?
• What ROI and timeline resulted from M&A, pricing, or GTM initiatives introduced by Hg?

• CEO of Company Y: "Hg lifted ARR from €12m to €60m in 4 years, installed an interim CRO in month 3, and led 2 acquisitions."
• CFO of Company Z: "From Q1 2021–Q2 2022, gross margin rose 68% to 75% after a 6-month pricing program led by Hg’s operator."
• LP reference (Fund X): "Hg executed 3 pro-rata follow-ons within 30 days of approval in 2022–2023; no covenant resets; average dilution 2.1%."

• Cross-check quotes against press releases, audited accounts, and public filings where available.
• Speak to at least two references per theme: operations, governance, financing.
• Validate chronology with board packs or OKRs and confirm KPI definitions and cohorts.

Market Positioning, Differentiation and Competitive Landscape

Analytical view of Hg competitive positioning versus Vista, Thoma Bravo, Silver Lake, EQT and Insight Partners, highlighting Hg differentiation in European software PE, key headwinds, and a concise SWOT. Keywords: Hg competitive positioning, Hg vs Vista, Hg differentiation software PE.

Hg is a specialist private equity investor in enterprise software and tech-enabled services, with a distinctive edge in the European mid-market. The firm concentrates on vertical and workflow software, pursuing control buyouts and structured roll-ups, then compounding through thematic sourcing, product and GTM acceleration, and a standardized operating toolkit across platforms. Versus Vista and Thoma Bravo, Hg is smaller and more regionally focused but often nimbler in founder-led situations and carve-outs. Compared with Silver Lake and EQT, Hg’s mandate is narrower and less exposed to non-software TMT cycles, trading breadth for depth. Relative to Insight Partners, Hg favors control and cash-flowing businesses rather than late-stage, minority growth.

Software PE comparative landscape: Hg vs peers

Where Hg wins and faces headwinds

Wins: European vertical SaaS platforms, founder-led or corporate carve-outs needing software-native playbooks, and transatlantic tuck-ins under lower auction pressure. Headwinds: mega-funds with cheaper capital in large U.S. or public-to-private processes; intense competition for category leaders; rising software valuations and financing volatility; and concentration risk from a software-only mandate.

Peer snapshots (Hg vs Vista, Silver Lake, EQT, Thoma Bravo, Insight)

• Vista: global software mega-fund with strong P2P capability; often pays for speed and scale.
• Thoma Bravo: B2B software specialist with cyber/infra depth; decisive underwriting and integration.
• Silver Lake: broader TMT, flexible minority/control, deep public-markets edge and very large checks.
• EQT: generalist with Nordic tech strength; local relationships and versatile buyout/growth capital.
• Insight Partners: growth equity in software; minority stakes; can pre-empt late-stage rounds.

SWOT summary

• Strengths: deep software specialization; European sourcing network; repeatable buy-and-build engine; data-driven operating model.
• Weaknesses: smaller check sizes vs mega-funds; sector concentration; less visibility in some U.S. auctions.
• Opportunities: AI-driven software demand; corporate carve-outs; founder succession in vertical SaaS; transatlantic add-ons.
• Threats: valuation inflation; private credit arming rivals; strategics bidding up assets; regulatory scrutiny in data-heavy sectors.

Application Process, Timeline, Transparency, Reporting and Contact / Next Steps

A concise guide to the Hg application process, Hg diligence timeline, expected transparency, and how to contact Hg with next steps.

Use this prescriptive outline to match Hg’s typical process and timing while maintaining professional, data-led communication. Expect staged diligence with clear gates, reciprocal transparency, and structured information sharing.

Process and timeline

1. Initial outreach: send a one-page executive summary and concise cover email; optional short teaser deck.
2. NDA: executed before data room access; no exclusivity at this stage.
3. Preliminary diligence (2–4 weeks): light data room, management calls, early go/no-go and target decision deadline set.
4. Commercial diligence (4–8 weeks): deeper market, product/tech, and customer work; workshops/site visits; draft term sheet in week 4–6 if positive.
5. Term sheet and exclusivity: sign TS with exclusivity (typically 30–60 days) plus a detailed diligence checklist.
6. Legal/financial close (6–12 weeks): confirmatory financial, tax, legal, and ESG diligence; financing docs; final IC approval and signing.

Transparency, reporting, and what to expect from Hg

• Weekly check-ins with deal lead and a shared tracker of requests, findings, and decisions.
• Access to operating partners and select external advisors; structured Q&A portal for management.
• LP or CEO references on request (subject to confidentiality and relevance).
• Reciprocal materials: term sheet template, diligence checklist, example governance/reporting pack, and process timeline.

Outreach formatting and one-page highlights

Cover email template (one paragraph): Subject: [Company] – fit with Hg’s [sector/theme]. Hi [Name], we are a [stage/scale] [vertical/software/service] company serving [customer segment] with [brief value prop]. $[revenue] revenue, [growth %] YoY, [gross margin %], [net retention %], [EBITDA or path-to-profitability]. We seek a partner for [use of proceeds: M&A, go-to-market, product]. Attached: one-pager; data room ready under NDA. Can we schedule a 30-minute intro next week? Best, [Your Name, Title, contact].

• Company in one line and ICP
• Product, differentiation, and proof points
• Market size and growth
• Financial snapshot: revenue, growth, margin, retention
• Go-to-market model and unit economics
• Team bios and governance
• Deal ask, use of proceeds, and proposed structure

Top 10 data-room documents (initial)

1. Corporate org chart, cap table, and charter docs
2. Historical financials (3–5 years) and YTD actuals
3. Operating model and 3–5 year forecast with assumptions
4. Cohort, retention, and churn analyses
5. Pipeline, bookings, and top 50 customers with ARR and churn
6. Pricing and packaging history and policies
7. Product/architecture overview and roadmap
8. Key contracts: customer, vendor, leases, debt
9. HR roster, compensation bands, options schedule
10. Legal/ESG: litigation, IP, data/privacy, policies

Contact Hg and immediate next steps

Identify sector-relevant Hg partners on the firm’s website and contact the business development address listed there; warm introductions via trusted advisors or bankers are preferred. Do not mass-email multiple partners. For co-invest or preferred financing, flag early, outline structure constraints (e.g., rollover, secondary, minority), and share a cap table and sources/uses; expect these discussions after initial fit is confirmed in the Hg application process and along the Hg diligence timeline.

• Assemble the one-pager and the 10-item data room under NDA.
• Send the concise cover email to the relevant partner or BD alias and propose two intro call windows.
• Align on target decision gates and confirm exclusivity will be tied to the signed term sheet.