Investment Adviser’s report

Resilient earnings growth demonstrates the underlying strength of the portfolio

Steven Tredget Partner at Oakley Capital

Watch video: Results 2026

Realised gross returns

3.8x & 51%

Across all funds since inception, realised gross returns are 3.8x and average realised gross IRR is 51%.

Earnings-led value creation

c.80%

Portfolio performance driven by EBITDA growth

OCI continued to perform strongly in the first half of the year against a backdrop of macroeconomic and geopolitical uncertainty. Most encouragingly, performance was driven overwhelmingly by growth in the underlying portfolio companies. Earnings growth accounted for approximately 80% of portfolio performance during the period. Meanwhile, valuation multiple expansion contributed 20%, and was primarily attributable to a small number of companies.

This translated into a Total NAV Return per share of 6% for the six months to 30 June 2026, taking NAV per share to 782 pence and NAV to £1,289 million. Excluding foreign exchange movements, Total NAV Return per share was 6.5%. Phenna Group was the largest contributor to NAV growth, adding 13 pence per share, followed by North Sails at 9 pence, TechInsights at 8 pence and Exaforce at 5 pence. You can read more about these investments here.

It is important that the lion’s share of growth came from improved earnings rather than changes in valuation multiples. It reflects both the quality of the portfolio and the progress being made within companies as Oakley’s value creation plans take effect. International expansion, operational improvement and strategic M&A are all contributors, with successful buy-and-build strategies providing a further source of growth.

The portfolio’s maturity profile gives us confidence that there is more to come. Approximately one-third is invested in companies still at a relatively early stage of their development under Oakley’s ownership. These businesses are already benefitting from investment in their infrastructure and professionalisation, while the impact of broader value creation initiatives is beginning to emerge. A further third comprises more mature investments, where improvements in performance and sustained value creation are increasingly evident. The final third is approaching full maturity, supporting our confidence in the outlook for future realisations.

Steven Tredget Partner at Oakley Capital

Investing through the cycle

£43 million

Look-through investment during the period

AI-led value creation

5 pence

Exaforce contribution to NAV per share

Investing through the cycle

Uncertainty has not stopped us investing, although we remain highly selective about where we deploy capital. We continue to see attractive opportunities at both ends of the portfolio: investing in new opportunities to partner founder-led businesses while investing further behind existing portfolio companies where there is significant value still to create. During the first half, OCI invested £43 million through the Oakley Funds, comprising £19 million in new platform investments, including Senef, GB1 and Infinity, and £24 million of follow-on capital, including investments in Artemis Group, ProductLife Group and ECOMMERCE ONE. OCI’s look-through share of proceeds from exits and refinancings was £10 million.

Our focus remains on areas where Oakley has a differentiated ability to source attractive businesses and then actively support their growth to ultimately achieve strong exits. Typically, these are founder-led companies operating in markets benefitting from structural growth. They have attractive earnings characteristics and multiple ways in which we can help them develop, whether through M&A, internationalisation, digitalisation or operational improvement.

The portfolio exhibits sector diversity spanning Technology, Business Services, Education and Consumer, yet there is considerable common ground between the companies we back. They tend to have strong market positions, recurring or repeat revenues and exposure to secular rather than purely cyclical demand. Crucially, they also offer opportunities for Oakley to create value actively, rather than relying on leverage or rising valuation multiples to generate returns.

Increasingly, there is another question we ask when assessing both new and existing investments: what does AI mean for this business?

Oakley’s positioning in the AI era

There has been no shortage of debate about what AI means for investors. For Oakley, the answer is not simply to maximise exposure to the technology. Instead, we look at AI in the same way we consider any other fundamental change affecting a business: could it undermine the investment case, or can it make a good business even better?

This distinction matters.

At a portfolio level, we believe Oakley starts from a position of strength. Around 70% of the portfolio involves the physical delivery of products or services, making these businesses inherently more difficult for AI to displace. Across the portfolio more broadly, value is derived from specialist expertise, proprietary data, trusted brands, regulatory requirements or deeply embedded customer relationships and workflows. These characteristics are difficult to replicate and provide an additional layer of resilience against AI disruption.

But resilience is only one side of the equation. Our approach to capturing the AI opportunity is deliberately two-sided. First, we are using AI to transform, enhance and optimise our existing portfolio. At IU Group, for example, AI is being used to personalise learning and improve student outcomes. Second, we are investing directly in AI-native businesses through Oakley's Touring I strategy.

AI leadership

The Oakley Touring Fund strategy does more than consider if a company can be enhanced by AI and is a more direct way to participate in the rise of AI and the innovation and disruption it is seeding.

Led by a highly experienced technology investment team that has invested together across multiple technology cycles and leading global venture platforms, the Oakley Touring Fund is focused on a new generation of enterprise technology businesses being built around AI. As a result, OCI gains targeted exposure to businesses where advances in AI are not a threat to the investment case but fundamental to it.

We saw the potential of that exposure during the first half of 2026. Exaforce, an AI-powered security operations platform, contributed 5 pence per share to OCI’s Total NAV Return, making it one of the four largest contributors across the entire portfolio. It is exactly the type of opportunity that Touring was established to access: a business where AI enables a fundamentally better product and, in turn, significant growth opportunities.

Further evidence came shortly after the period-end, when CuspAI raised $450 million in a Series B funding round involving investors including Kleiner Perkins and Bezos Expeditions, valuing the company at $2.6 billion.

Touring, however, brings more than just AI investment exposure. The team provide a valuable flow of AI expertise and insight that benefits all the Oakley funds and their underlying investments. This helps Oakley to stay ahead of developments and better identify the opportunities and risks.

We look at AI in the same way we consider any other fundamental change affecting a business: could it undermine the investment case, or can it make a good business even better?”

Steven Tredget Partner at Oakley Capital

Net Debt/EBITDA Multiple

4.4x

At the period-end, the average net debt to EBITDA ratio of the Private Equity Portfolio stood at 4.4x.

EV/EBITDA Multiple

16.4x

EV multiples remained stable during the period against a backdrop of continued macroeconomic and geopolitical uncertainty. Net debt continued to represent less than 30% of average portfolio company EV, consistent with previous years.

Business Services: mission-critical businesses benefitting from structural growth

Business Services continues to be an important source of both performance and new opportunities for Oakley. Regulation, outsourcing, growing complexity and the need for specialist expertise underpin demand for many of these services, while fragmented markets provide considerable scope to accelerate growth through M&A.

Phenna was the largest individual contributor to OCI’s NAV growth during the period, adding 13 pence per share, while TechInsights contributed a further 8 pence. We also invested additional capital in ProductLife Group to support its continued expansion.

What attracts us to these businesses is the critical nature of what they do. Their customers rely on them to operate effectively, comply with regulation and make important decisions. Those services are difficult to displace – including by AI – while the fragmented markets in which many operate provide significant opportunities for consolidation and international expansion.

Technology: embedded solutions with AI opportunities

The rapid development of AI makes selectivity in Technology more important than ever. Our focus remains on specialist tech businesses that are deeply embedded in customer workflows, operate in complex markets and benefit from recurring revenues and high switching costs.

Our investment in Groupe Senef during the period is a good example of this approach. Senef provides critical software to sectors including cleaning, home care, security and hospitality, supporting essential functions such as workforce management, payroll, compliance and invoicing. These are complex, regulated and operationally intensive environments where systems of record remain central to customers’ day-to-day operations.

There are also plenty of opportunities to build on strong business fundamentals. Alongside product development and selective M&A, we intend to use AI to improve functionality, make customer workflows more efficient and deepen the value delivered by the platform.

This particular example captures our broader approach to Technology: back established businesses with defensible market positions, then use AI as another tool to capture further upside.

Education: structural demand and technology-enabled outcomes

The long-term need for accessible, high-quality education and professional skills continues to create attractive opportunities for Oakley.

Our experience in the sector has centred on using technology, internationalisation and M&A to develop high-quality education platforms and extend their reach. AI adds another tool to improve effectiveness. Across the portfolio, we are supporting education businesses to use the technology to deliver greater personalisation, more responsive student support and improved efficiency, ultimately helping to improve the student experience and outcomes.

Importantly, these opportunities do not change what we look for in an education investment. Our focus remains on businesses that combine the ability to adopt new technology with the institutional advantages, quality and reputation that underpin their long-term value.

Consumer: differentiated and enduring brands

In Consumer, our focus remains highly targeted. We favour differentiated businesses with strong, established brands, particularly in luxury or specialist markets where their positioning provides some insulation from broader changes in discretionary spending. North Sails was a notable performer during the period, contributing 9 pence to OCI’s NAV return.

Oakley has considerable experience helping these businesses to expand internationally, develop their digital distribution and improve their marketing without losing the characteristics that made their brands distinctive. AI does not fundamentally change that playbook. The strength of these businesses lies in their brands and the experiences and products they offer – but AI can still provide another source of value creation through better customer insight and improved operational efficiency.

Outlook

The momentum we are seeing across the portfolio is encouraging, but not unexpected. As investments mature, the benefits of the value creation initiatives undertaken over recent years are becoming increasingly evident in their performance.

At the same time, Oakley continues to build momentum as a manager, with growing international recognition and an expanding presence across Europe, including markets where Private Equity penetration remains low, such as Southern Europe. This was reflected in Oakley being ranked the highest-performing European manager, and fifth globally, in the 2025 HEC Paris–Dow Jones Upper Mid-Market Buyout Performance Ranking.

Taken together, the performance of the portfolio and the continued development of the Oakley platform give us confidence in the prospects for the existing portfolio and in the exciting pipeline of new opportunities ahead.

Steven Tredget Partner at Oakley Capital
9 September 2026