Oakley Capital Investments: Backing Europe's Private Winners

The portfolio is spread across Europe, spanning roughly 38 companies across technology, education, consumer and business services. What links them is Oakley's method. It takes solid, often traditional businesses and modernises them: moving them online, building direct-to-customer sales, and bolting on smaller rivals. London estate agency Dexters and global sailmaker North Sails are old-economy names being digitised and scaled this way.

Alongside them sit established technology businesses with deeply embedded, recurring revenue: Cegid in accounting software, WebPros in web-hosting tools, and cybersecurity group I-TRACING. These are services customers cannot easily switch off. Some are positioned to ride the AI wave rather than be threatened by it: chip-analysis firm TechInsights sells exactly the intelligence the AI-driven semiconductor boom is fuelling demand for, while I-TRACING benefits as the spread of AI widens the digital threats companies must defend against. OCI provides exposure to that growth without the stretched valuations of the headline AI names.

Oakley rarely competes in noisy auctions. Around 77% of its deals since inception have been founder-led and roughly 70% uncontested, won privately through a network of entrepreneurs it has often backed before. That network compounds as a founder Oakley has already made money for will introduce it to other business owners, return with a new company after selling the last one, or invest alongside Oakley in later deals. These relationships surface businesses before they are openly for sale, so Oakley can negotiate directly with an owner rather than bid against rival buyers, which keeps entry prices sensible and gives it more room to grow a company before any eventual sale. Buying in early, then helping a company expand, is where much of Oakley's return is made.

OCI shares trade far below the stated value of the portfolio, recently around a 38% discount. The usual worry with private equity is that those values are hard to validate and may be inflated. Oakley's numbers point the other way. It holds the portfolio at a fairly conservative earnings multiple, only modestly above what it paid to buy in, and it earns nothing from marking assets higher; the only figure that earns Oakley a performance fee is the price achieved on exit. And the exits keep coming in strong. Across all realised deals, Oakley has sold at an average of around 29% above carrying value, and in 2025 it sold Spanish-founded legal-tech firm vLex at roughly four times its book value.

Exits above carrying value suggest the marks are not the problem, which raises the question of why the shares trade so far below them. Part of the gap reflects sentiment across the whole investment trust sector, where private equity in particular has been out of favour since interest rates rose and dealmaking slowed. In response, the board has committed at least £20m a year to buying back its own shares, which it considers undervalued at current levels.

• A narrowing discount: The August 2025 move to the Main Market and entry into the FTSE 250 widen OCI's investor base. Combined with steady buybacks and better sentiment toward private equity, the discount has room to shrink.
  
  

• Putting committed capital to work: OCI has sizeable commitments still to be deployed into Oakley's funds. Fresh investments in founder-led businesses seed the next wave of growth and future exits.

• More realisations: Oakley sold roughly £271m of holdings over the past two years, including vLex. A recovering deal market could bring further exits above carrying value, turning paper gains into cash and helping validate the NAV.
  
  

• Buybacks at a discount: OCI has already bought back £9.4 million of shares in H1 2026 toward its £20 million minimum 2026 target, and continued cancellations below NAV should keep lifting value per share and signalling the board's conviction the stock is cheap.

• Compounding earnings: The portfolio grew earnings double digits last year. Sustained growth across the holdings should keep pushing NAV higher over a full cycle, the real engine of long-term returns.
  
  

• A structural shift into private markets: As more of the economy's growth happens in private companies, demand for accessible, listed routes into private equity could build, supporting vehicles like OCI over the long run.

OCI reports in sterling, but the majority of its companies are valued in euros or dollars. That mismatch moves the numbers regardless of how the businesses actually trade. In 2025, roughly half of the 6% rise in net asset value came from favourable exchange rates rather than portfolio performance; in other years the effect has gone into reverse, dragging on returns. None of this reflects the quality of the underlying companies, but it adds a layer of volatility that shareholders cannot control and should expect from year to year.

OCI's discount represents an interesting entry point, but it also reflects the risks attached to investment trusts generally and the private equity sector in particular. Because private holdings are only valued periodically, reported NAV can lag reality, and in nervous markets investors demand a wide margin of safety against values they cannot check daily. The whole investment trust sector has endured double-digit average discounts since 2022, one of the longest such stretches on record, and listed private equity has been among the hardest hit, as higher interest rates and a slowdown in dealmaking made investors wary of how quickly private assets could be sold and at what price. Buybacks help, and OCI's own discount has narrowed at times, but there is no guarantee the gap closes on any particular timetable, and it can stay wide for years.

OCI holds a focused book of around 38 companies, and a handful of the largest holdings make up a meaningful share of the total. That concentration means trouble at any one of them, an operational wobble or a disappointing exit, would be felt across the group rather than cushioned by the rest. The newer worry is artificial intelligence, which has rattled listed software valuations on fears that AI could erode subscription business models. Oakley's answer is that many of its companies provide mission-critical services that are awkward to replace, and that some, such as chip-analysis firm TechInsights and cybersecurity group I-TRACING, should gain from the AI build-out rather than suffer from it. That case is plausible but unproven, and a sharp re-rating of technology assets would still weigh on the portfolio.