Hg, the manager of HgCapital (HGT), the software-focused private equity fund hit by the “SaaSpocalypse” in February, has set up an AI transformation business with Anthropic as it strives to ensure its companies end up as winners from artificial intelligence.
Extending collaboration they began in early 2024, Hg and the AI lab have agreed to invest with other “angel investors” in a company that will help European organisations advance their use of the technology in commercially significant ways.
HGT, the £1.8bn investment trust that invests in Hg funds, will co-invest in a new “ServiceCo” alongside other institutions investing through the Hg Saturn fund, “providing shareholders with unique exposure to this exciting opportunity”, the company said. Terms were not disclosed.
The company will launch before the end of this year with engineers using Anthropic’s Claude AI assistants to help businesses “move beyond simply adopting AI to building real, defensive advantage from it.”
In a statement, Hg co-CEOs Steve Batchelor and JB Brian, said: “This builds on Hg’s early conviction in the transformational power of AI. We’re delighted to announce our investment in this new company and look forward to further advancing Europe’s position within the global AI ecosystem.”
Steve Corfield, head of global business development and partnerships at Anthropic, said: “Businesses are looking for experienced teams to help them put Claude to work. We’re proud to invest in companies like this as they grow to meet that need.”
Shares in HGT eased a penny to 392.3p today. They have fallen from 502p in late January when fears about the competitive threat Claude posed to software and data analytics firms intensified, but have rallied from a 323p low in May. This puts them nearly 26% below the net asset value of their investments.
All eyes on ANT’s flotation
The partnership comes as Anthropic (ANT) prepares to float on the US Nasdaq technology exchange with investors nervous at the colossal sums being spent by hyperscalers and AI labs on an ambitious global rollout, including rival OpenAI.
A sell-off in AI stocks on Friday saw the Nasdaq index fall 2.9% with US semiconductor share prices down 20% since the correction began on 6 October.
After extremely rapid growth in the six-year-old business, investors are waiting to see if Anthropic manages to increase the $965bn valuation achieved in its last fund raise in May. The company originally hoped to surpass SpaceX’s record $1.77trn debut in the summer, but this is now in doubt.
Shareholders in Baillie Gifford’s Scottish Mortgage Trust (SMT), US Growth (USA) and Schiehallion (MNTN) will be watching most closely given the large 2.8%, 6.8% and 6.1% weightings they have to Anthropic’s unlisted shares.
Other investors include: Baillie Gifford’s Monks (MNKS) which has 1% invested; RIT Capital Partners (RCP), which has 1.7% invested; and HarbourVest Global Private Equity (HVPE) and rival Pantheon International (PIN), which have 0.7% and 0.2% in the firm respectively.
Our view
QuotedData senior analyst Richard Williams said: “While much of the attention has focused on the threat AI poses to established software business models, Hg clearly sees opportunities to harness the technology to enhance products, improve efficiency and strengthen competitive positions. The involvement of Anthropic adds credibility to the venture and should provide access to cutting-edge AI capabilities. The new business also offers HgT, which has considerable exposure to software and services businesses, an opportunity to benefit directly from growing demand for AI implementation services. With limited details disclosed, it is difficult to assess the potential impact on HgT’s NAV, but the initiative reinforces the message that Hg intends to be on the front foot in responding to AI disruption rather than simply defending its existing investments.”
