Hg Capital, a UK-based private equity firm, marked down the valuation of its fund by 9% after a sharp decline in its software portfolio holdings. The write-down signals sustained pricing pressure in the software market as multiples normalize post-pandemic and growth expectations reset.
The move echoes broader concern about PE SaaS valuations as higher interest rates and shrinking expansion multiples weigh on returns. Many PE-backed software companies are facing margin pressure and slower growth, forcing repricing across the sector. This pressures limited partners to reassess software-heavy allocations.