European tech‑focused private equity investor Hg saw the value of most of its flagship listed vehicle plunge in Q1, marking down almost two‑thirds of its top holdings. The Hg Capital Trust, which mirrors the $100 billion private‑equity firm’s portfolio, reported that 14 of its 20 biggest companies lost ground, underscoring fresh pressure on software valuations.

Among the writedowns, co‑controlled AI‑driven manufacturing software maker IFS slipped 7 percent after securing a €15 billion 2025 valuation, while flagship accounting provider Visma fell only 1 percent. Hg blamed the slide on a “significant contraction” in comparable‑company multiples, even as the underlying portfolio posted 16 percent sales growth and 19 percent earnings expansion over the past year.

The trust’s net asset value per share dropped 5.4 percent in the quarter, reflecting the multiple compression. Hg made no fresh purchases, limiting exposure to newly‑priced assets, and argued its remaining businesses run “complex, regulated processes” less vulnerable to AI‑driven commoditisation. Analysts now gauge how much further private‑market de‑rating could erode valuations.

The writedowns illustrate broader market anxiety as investors reassess SaaS multiples amid AI disruption. With private‑credit funds already feeling pressure, the opaque nature of PE fund valuations makes vehicles like Hg Capital a rare transparent gauge. The latest decline leaves the trust’s market capitalisation notably lower, confirming that software investors are now pricing in AI risk.