Hg
Hg is a private equity investment firm, founded in 1990 as Mercury Private Equity, the private equity ("PE") arm of Mercury Asset Management, which was part of UK investment bank SG Warburg. In 1997, Mercury Asset Management was acquired by Merrill Lynch, and in 2000, Mercury Private Equity spun off from Merrill Lynch to become Hg Capital (renamed Hg in 2017).
Today, the company is wholly owned by its partners and has offices in London, Munich, New York, Paris and San Francisco.
A very clear investment philosophy
Hg targets exclusively software and technology-enabled services companies, including :
- Revenues are highly recurrent, with annual growth rates of 15-25% for Saturn funds, and 5-40% for Mercury funds.
- They have high EBITDA margins (>40%) and can improve their profitability in the long term by accelerating their migration to a cloud-based SaaS model powered by artificial intelligence.
- The market position is dominant, the market is fragmented and the appetite of industrial players is strong.
Thanks to its presence in 3 market segments (core mid-market, upper mid-market, large cap), Hg covers all market opportunities in the niches that interest it; the teams of each fund are independent, but effectively pool their knowledge and sector expertise.
Hg has a highly-structured Value Creation Team (> 60 professionals), well-sized to implement the best operational recipes proven by the firm in its 200 previous transactions ("Hg Playbook").
Hg is an ultra-specialized firm with no plans to diversify into other asset classes.
The depth of industrial research on a tech company
Within the IT market, the firm focuses on 8 very "niche" segments of the software universe, where it has intimate knowledge of the players, key success factors and key performance indicators (KPIs).
Its hyperspecialization enables it to mobilize an impressive number of experts in each segment, and to know each of its niches as well as the best industrial players.
In the Tech Private Equity market, Hg is one of the world's largest acquirers of software companies. It is 3 times larger than competing European private equity funds, and boasts exceptional sourcing networks.
Hg identifies its main competitors as Tech companies (SAP, Dassault Systèmes...) and not Private Equity funds.
An exceptional track record
Thanks to its in-depth expertise, the firm is able to implement highly effective scale effects to outperform other PE players: cutting-edge sourcing, performance acceleration by a quality Operations team equivalent to that of the best software publishers, knowledge of industrial acquirers to make the most of its exits.
Hg has one of the world's best track records in the Tech buyout segment, with a netinvestor IRR ≥ 20% for all mature Hg Saturn funds and ≥ 25% for all mature Hg Mercury funds.
An extremely low loss rate: zero for Saturn funds and between 0% and just 6% for Mercury funds.
HG Capital Genesis 10
HG Capital Saturn 3
HG Mercury 4
HG Saturn 4
HG Mercury 5
