Governance

Hg has a Board whose principal duties include monitoring the business and its performance and ensuring that the business has a clear and defined strategy, effective leadership and management in all areas and at all times, and that the business provides a service and delivers investment performance that exceeds client expectations.

The Senior Leadership Team is responsible for day-to-day operational leadership of the business, including:

implementation of effective internal systems relating to investments, client services, sales and marketing, financial and regulatory compliance controls;

preparing annual budget and business planning processes;

oversight of recruitment; and

implementation and management of business rules, policies and procedures.

The heads of the three fund teams, Value Creation team, client services team, finance, HR, compliance and risk, and legal teams report to the Board.

There is an investment committee for each fund and an overall realisation committee. The Board appoints the chairperson for each investment committee and the realisation committee. Each chairperson then appoints the other committee members. The investment committee for each fund has the primary responsibility for all investment decisions and the realisation committee has the primary responsibility for all divestment decisions.

The UK Financial Reporting Council’s Stewardship Code (the “Code”) comprises a set of ‘apply and explain’ principles for asset managers and asset owners and sets high stewardship standards for those investing money on behalf of UK savers and pensioners, and those that support them. The FRC defines stewardship as the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society. The Code comprises twelve principles, the purpose of which is to promote transparency in the methods used by asset managers in overseeing the companies they own, and is directed at equity holdings in UK-listed companies.

Whilst the Code itself is voluntary, under COBS 2.2.3R of the FCA Handbook, Hg Capital LLP and Hg Pooled Management Limited (together “Hg”) are required to disclose clearly this website the nature of its commitment to the Code or, where it does not commit to the Code, its alternative investment strategy.

On the basis that investment strategies managed by Hg do not in their ordinary course invest in equity holdings in UK-listed companies (and where they do, this is incidental to Hg’s primary investment strategies and does not form a material part of Hg’s assets under management), whilst Hg supports the principles underpinning the Code, it has not become a signatory to the Code. Further, the approach of Hg, in relation to engagement with issuers and their management, is determined on a global basis. A consistent global approach is taken to engagement with issuers and their management in all of the jurisdictions in which Hg invests and, consequently, Hg does not consider it appropriate to commit to any particular voluntary code of practice relating to any individual jurisdiction.

While Hg has chosen not to become a signatory to the Code, it is fully committed to responsible investing and environmental, social and governance (ESG) issues, and considers that the principles behind this approach are aligned with those of the Code. Further details on Hg’s approach to responsible investing can be found at www.hgcapital.com/responsibility.

This statement is reviewed annually and updated where necessary to reflect changes in circumstances and actual practice.

A description of our portfolio companies can be found here.

Hg is committed to conforming with the Guidelines for Disclosure and Transparency in Private Equity published by Sir David Walker in 2007 (the “Walker Guidelines”) and to promoting conformity on the part of portfolio companies. As a long-term investor, the typical holding period for investments is 3-5 years, with a number of portfolio companies having been held for far longer than that.

All of the information required to be disclosed under the Walker Guidelines, and more, can be found either here or elsewhere on our website.

Hg Capital (“Hg”) is a UK head quartered private equity investment manager with operations in the UK, US, Germany, Luxembourg and France. The UK Tax Strategy is prepared for Hg’s UK group entities, including all UK incorporated companies and partnerships. The UK Tax Strategy set out below which is considered to meet Hg’s obligation to publish a Tax Strategy under paragraph 16 (2) of Schedule 19 to the Finance Act 2016, is drafted in respect of the financial year ended 31 March 2025.

This document was approved by the board of Group HoldCo 1 Limited on 2 April 2024. The UK Tax Strategy is subject to annual review and will be updated as appropriate.

Approach to governance, risk management and compliance with UK tax laws

Responsibility for managing Hg’s tax risks and tax compliance ultimately lies with the board of Group Holdco 1 Limited who delegate to the Finance Director the ongoing management of the Group’s tax affairs. Designated tax professionals employed by Hg are charged with day-to-day management of UK tax affairs and report to the Finance Director and other members of the Senior Leadership Team as appropriate. The tax professionals have a close working relationship with Hg’s in-house compliance, deal execution and finance departments to ensure that tax decisions are aligned with Hg’s broader business and compliance, regulatory and legal requirements. The tax professionals provide advice to the business on tax-related issues, oversee tax filings and other tax compliance-related matters and manage Hg’s relationship with tax authorities and third-party advisors. External advice is sought in relation to areas of complexity or uncertainty to seek to ensure that risks are mitigated, and that Hg complies with applicable UK and other tax laws.

Our UK tax compliance oversight framework includes Hg’s annual Senior Accounting Officer certification filing to HM Revenue & Customs to certify that we had appropriate tax accounting arrangements throughout the relevant financial year.

Hg does not tolerate tax evasion, nor the facilitation of tax evasion, by any employee or other person acting on their behalf.

Approach towards tax planning

When conducting its business activities, Hg is fully committed to acting in accordance with applicable laws and regulations of the countries in which it operates and in line with its broader commitments to good corporate governance. When advising on the structure of business activities in the UK, including with respects to the funds it manages, the tax professionals consider relevant tax laws and utilise tax reliefs and incentives in a manner designed to be consistent with the intentions of Parliament and to enhance value to stakeholders and investors while reducing the risk of uncertainty or dispute. Hg does not participate in tax avoidance schemes or artificial tax transactions with no economic purpose. External advice is sought in relation to areas of complexity or uncertainty to seek to ensure that risks are mitigated, and that Hg complies with applicable UK and other tax laws.

Hg also seeks ongoing advice relating to international initiatives to ensure it conducts its commercial activities in compliance with applicable international tax legislation.

Following significant change to UK or other tax laws or a major change to the business, the Board are updated by the tax team on the impact on Hg. They are closely involved in decisions where there is material tax uncertainty and complexity to ensure that tax risk is appropriately monitored, controlled, and mitigated when necessary.

Level of tax risk the group is willing to accept

The level of UK tax risk Hg will accept is low, consistent with the Group’s broader business risk management, compliance and governance framework. Hg manages identified and accepted tax risks in a similar way to other areas of operational risk. Tax risk is assessed and monitored by qualified tax professionals (with external input obtained where necessary) and, where appropriate, matters are escalated to the Senior Leadership Team and relevant internal stakeholders.

Relationship with HMRC

Hg is committed to a constructive and collaborative relationship with HMRC and all tax authorities with which it interacts. Hg ensures it meets all tax filing and payment obligations in line with statutory deadlines.

When submitting tax returns to HMRC and other relevant tax authorities, Hg is committed to providing a full relevant disclosure where appropriate in the spirit of transparency. When corresponding with HMRC and other relevant tax authorities, Hg is committed to responding in a timely manner and on a clear basis. Hg will work together with all tax authorities to resolve any disputes in a collaborative, timely and transparent manner.

Approach to tax policy in investments/portfolio companies

Portfolio companies held by Funds managed by Hg are not part of the Hg group. As such, the directors and management of each portfolio company are responsible for managing their own tax affairs in the countries in which they operate. As a responsible investor, Hg works closely with its portfolio companies to help them comply with their respective statutory obligations.

A downloadable version of this document is available here.

Background to Hg

Hg is a leading investor in software and services, and our mission is to build enduring software and services leaders that transform how people work. Our purpose is to improve the future of millions of investors by building sustainable businesses for tomorrow.

We do this by living our values:

Be genuine

Go beyond

Win right

Outlearn

Maintaining the trust of our clients, counterparties, colleagues, regulators and the general public is an undisputed obligation of every Hg employee. Trust is established by always behaving with integrity and respect.

Through these values and business conduct expectations, Hg adheres to the key principles outlined by our regulators. Where applicable, we expect the same of our suppliers.

Our use of suppliers

We work with suppliers to support aspects of our business where their specific expertise will support Hg in its core operational and investment activities. They are therefore an important part of our business model.

Whilst suppliers are not part of Hg itself, their products and services are relied upon by us to deliver the best outcomes for our investors. Therefore, we must ensure we take care when engaging a supplier and that we have a robust set of policies and procedures in place to oversee our supply chain.

This includes seeking to monitor our suppliers’ adherence to applicable legal and regulatory obligations and aligning with Hg’s purpose, values and business conduct expectations.

Purpose of the Supplier Code of Conduct (the “Code”)

The Code sets out the minimum standards expected of all suppliers when providing goods or services to Hg and creates a minimum level of consistency across our entire supply chain and is an important tool in helping us to obtain greater oversight over our suppliers and in meeting our own legal and regulatory obligations.

Our expectations of suppliers

Our minimum expectations of suppliers are set out below.

Legal and regulatory compliance

Hg adheres to applicable laws and regulations and to high standards of business integrity and fair dealing; Hg expects all suppliers to adhere to applicable laws and regulations and these same high standards.

All suppliers must maintain the appropriate licences and authorisations required to perform the contracted services to Hg.

Environmental, Social and Governance

Hg is committed to playing our part in building a sustainable world by reducing our environmental impact and seeking to have a positive impact on society.

Hg is committed to fostering structures and a culture that supports:

The ten principles of the UN Global Compact1 which reflect a business’ fundamental responsibilities to operate in ways that, at a minimum, seek to address key areas: human rights, labour rights, environment and anti-corruption.

The Organisation for Economic Cooperation and Development (“OECD”) Guidelines for Multinational Enterprises2 which reflects the expectation from governments to businesses on how to act responsibly and covers all key areas of business responsibility, including human rights, labour rights, environment, bribery, consumer interests, as well as information disclosure, science and technology, competition and taxation.

The UN Guiding Principles on Business and Human Rights (“UNGP”) to seek to identify, prevent and mitigate adverse human rights impacts across the company’s operations and engage in remediation where required.

We expect our suppliers to do the same.

Hg suppliers must have in place policies and procedures to identify the direct and indirect environmental impact associated with the goods and services provided to Hg. They must also seek to minimise or mitigate their impact on the environment. Data relating to these impacts (such as carbon emissions) and mitigations must be made available to Hg upon request.

Hg is fully committed to providing equality in the workplace and all opportunities for, and during employment, will be afforded to individuals fairly and irrespective of age, disability, sex, gender reassignment, marital or civil partnership status, pregnancy or maternity, race including colour, ethnic or national origins and nationality, religion or belief or sexual orientation (“the protected characteristics”). We expect suppliers to uphold the same standard by creating working environments that are free from discrimination, abuse, bullying and harassment in any form, in which all employees are treated with dignity and respect.

Where applicable, suppliers should take into account and comply with accessibility standards when delivering goods or services to Hg. We strongly encourage suppliers to commit to fostering and advancing diversity and inclusion across their own business and, where possible, their own supply chain. Hg expects its suppliers to exhibit good governance in their business dealings and in relation to the goods and services provided to Hg. To demonstrate this, we expect suppliers to have well defined management structures and have in place policies and procedures which at a minimum cover the topics set out in the Code.

Modern Slavery and labour practices

Hg is committed to conducting business responsibly, which includes ensuring that slavery and human trafficking are not taking place in any part of our business or supply chain. Our suppliers must ensure that slavery, child labour, forced labour or human trafficking is not taking place within their organisation or supply chain. Suppliers must also ensure they are paying all employees at least the legal minimum wage of the country in which they are operating and that employees’ working hours are in accordance with local regulations.

Suppliers must notify Hg immediately (by emailing complianceteam@hgcapital.com) of any instances of slavery, child labour, forced labour or human trafficking identified within their organisation or supply chain.

Suppliers must respect employees’ rights to decide whether or not to join a union and engage in collective bargaining (where permitted by applicable laws).

Financial Crime compliance

Hg has a zero-tolerance policy with respect to Financial Crime of any kind. This includes through actions taken by any Hg employee or any suppliers providing goods or services to Hg.

We expect suppliers to comply with all applicable Financial Crime laws and sanctions (including anti-bribery laws); be aware of common warning signs that may be indicative of Financial Crime; and respond appropriately if they suspect suspicious or illegal activity. Suppliers must notify Hg immediately (by emailing complianceteam@hgcapital.com) of any instances of suspected or actual Financial Crime relating to the provision of goods or services to Hg, in addition to reporting through the appropriate regulatory channels.

Whistleblowing

Hg seeks to conduct its business honestly and with integrity at all times and we also expect this of our suppliers. However, when the actions of individuals or businesses fall short of these expectations, it is important to ensure the appropriate reporting mechanisms are in place.

We expect suppliers to have reporting mechanisms in place for their employees, so that instances of unethical or illegal behaviour can be reported to them. Suppliers must prohibit retaliation against employees who make good faith reports of unethical or illegal behaviour.

If unethical or illegal behaviour involves an Hg employee, or relates to goods or services provided to Hg, we ask that suppliers report this directly to complianceteam@hgcapital.com.

Antitrust

Suppliers must compete fairly and comply with all applicable antitrust and competition laws or other regulations dealing with unfair restraints of trade and relationships with competitors as well as customers.

Health and Safety

Hg is committed to providing safe working conditions for its employees and any other individual, supplier or contractor working at one of its premises, aligned with relevant Health and Safety legislation. Hg expects its suppliers to provide safe working conditions that align with relevant Health and Safety legislation.

Confidentiality, data privacy and security

Hg expects suppliers to respect the privacy and confidential information relating to all employees, customers, clients and other third parties.

Confidential information, including personal data, must always be processed securely and in accordance with applicable contractual requirements and data privacy laws and regulations.

Intellectual property rights.

Hg expects suppliers to respect and protect Hg’s and any third-party intellectual property rights including confidential information and not to violate, misappropriate, or infringe any intellectual property rights of Hg or any third party. Hg expects suppliers to only use information technology and software that has been legitimately acquired and licensed and to manage technology and know-how in a manner that protects intellectual property rights including confidential information. Suppliers must not make public any reference or details to Hg and its portfolio without prior consent.

Artificial intelligence (AI)

If Hg's suppliers develop, deploy and / or use AI systems, whether in-house or third party, Hg expects its suppliers to do so in a secure, ethical, fair, and transparent manner, respecting human rights, including privacy, and other third-party rights, minimizing bias, promptly remediating unintended consequences and errors, and to ensure adherence to and regularly audit compliance with AI-related laws, regulations and industry standards

Conflicts of interest

The overriding principle which we adopt at Hg is that clients’ interests are paramount. To this end, Hg maintains and operates organisational and administrative arrangements designed to ensure it takes all appropriate steps to identify, prevent or, where they cannot be prevented; manage and monitor conflicts of interest.

We expect the same of our suppliers. Each supplier must have controls in place, appropriate to the size and nature of its organisation and business activities, to identify and manage conflicts of interest which have the potential to
impact its ability to act in the best interests of Hg.

Compliance with the Code

All goods and services must be provided in full compliance with the Code. Suppliers must ensure that their employees and sub-contractors working on Hg business understand and comply with the Code. Suppliers must be able to demonstrate compliance with the Code and Hg reserves the right to request evidence of a supplier’s compliance with the Code.

Hg expects suppliers, within a reasonable timeframe, to notify it of breaches of the Code, or of any facts or circumstances that indicate or could lead to a breach of this Code, along with the action plans put in place to remedy or mitigate any impacts (or likely impacts) of the breach. Suppliers must cooperate with any subsequent investigation. Non-compliance with the Code will form part of any decision making around future relationships between a supplier and Hg.

By providing goods or services to Hg, each supplier is deemed to have agreed to comply with the Code

1 https://www.unglobalcompact.org/what-is-gc/mission/principles
2 https://mneguidelines.oecd.org/mneguidelines/