Matthew Brockman, CEO and Managing Partner at Hg, spoke with Tom Mackenzie on Bloomberg's Daybreak Europe about the transformative opportunity AI presents for the software sector—and how Hg is seizing this across our portfolio.

These themes echo broader conversations across Hg, from our Software Leadership Gathering and Silicon Valley Leadership Summit to forward-looking perspectives on how B2B software businesses may operate by 2028.

Watch the interview or read the transcript below.

Tom Mackenzie (Host):

Microsoft has signed a multi-year deal worth up to $19.4 billion with Nvidia for AI cloud computing services. The agreement, which runs through 2031, highlights how AI is reshaping the software industry.

Joining us to discuss the broader impact of AI is Matthew Brockman, CEO and Managing Partner at Hg, one of the world’s leading private equity investors in software and services. Hg is now Britain’s second-largest private equity firm, with $100 billion in assets under management and a portfolio of more than 55 companies, including Visma, IFS, and AuditBoard.

Matthew, this month marks 25 years for Hg. Looking at the firm’s journey, do you see AI as a pivotal moment for the software sector and for your portfolio?

Matthew Brockman (Hg):

Yes—AI is absolutely a defining technology. If you think about the PC in the 1970s, the internet, and then SaaS, each represented a wave of transformation. AI is the next wave, and it may be as significant as the PC revolution.

Right now, huge amounts of capital are going into infrastructure—the models, chips, and data centers. The real opportunity lies in diffusion: how AI becomes integrated into everyday life and work. Whether it’s completing a tax return, managing payroll, or delivering legal advice, the question is how AI will enhance these activities at scale. That’s where Europe can compete.

Host:

Where in your portfolio are you seeing AI make a tangible impact?

Brockman:

We see two main areas:

Running software companies more effectively.
AI is already improving developer productivity, customer support, sales, and marketing. Every one of our companies is adopting these tools, driving margin improvements through automation.

Building AI-first products.
For the past 18–24 months, we’ve focused on embedding AI into products themselves. Our Catalyst team at Hg helps portfolio companies accelerate this work. These AI-first solutions allow our businesses to deliver better data analysis, smarter insights, and more value to their customers.

Host:

How critical is it for companies to adapt?

Brockman:

It’s vital. Over the next few years, companies either embrace AI or risk falling behind. White-collar professionals—lawyers, accountants, tax specialists—will expect AI-enabled tools as standard. If software providers don’t deliver, they’ll quickly lose relevance.

Host:

Which parts of the software market are most attractive to you now?

Brockman:

Professional services, particularly legal, are a standout. Globally, about $1 trillion is spent on lawyers, yet only $20 billion on legal software—just 2%. AI makes this market far more addressable.

The shift won’t happen overnight—products need to be built and widely adopted—but the potential to augment labour is significant. AI will allow fewer lawyers to handle more cases, and fewer developers to build more software. That’s transformative.

Host:

Capital markets have been challenging, but we’ve seen signs of activity—Visier, one of your portfolio companies, is listing in London, while Klarna is preparing a New York listing. Are markets reopening?

Brockman:

Yes, for the right companies. Businesses with growth, resilience, and exposure to structural trends like AI are finding investor appetite. In the US, Figma’s IPO is a good example—there is strong demand for high-quality technology companies.

Host:

Private equity has struggled with liquidity. How are you managing that?

Brockman:

Liquidity is a huge focus across the industry. A lot of capital was invested in 2019–2021 during the low interest rate environment, and investors are now waiting for distributions.

We’ve been fortunate: our companies have maintained strong growth, which has allowed us to achieve liquidity in most cases. But industry-wide, there is an “indigestion” effect that is well understood. The challenge is getting capital back to investors on time.

Host:

Matthew, thank you for your insights.

Brockman:

Thank you.