Oakley Capital Investments NAV Rises 6% as Shares Fall 16%

Oakley Capital Investments Limited has reported further growth in the value of its private equity portfolio, but that progress has not been reflected in its listed shares.

For the six months ended 30 June 2026, net asset value per share rose by 6.0% to 782 pence. Excluding foreign exchange movements, the return was 6.5%.

In contrast, OCI's total shareholder return was -16%. That creates a striking gap between the performance of the underlying investments and the return experienced by shareholders during the period.

Oakley Capital Investments' key figures

Metric	Six months to 30 June 2026
Net asset value	£1,289 million
NAV per share	782 pence
Total NAV return per share	6.0%
NAV return excluding foreign exchange	6.5%
Total shareholder return	-16%
Investments	£43 million
Share of proceeds	£10 million
Cash	£81 million
Undrawn credit facilities	£74 million
Total liquidity	£155 million

Net asset value, or NAV, represents the value of the investment company's assets after deducting its liabilities. For OCI, it is mainly driven by the assessed value of its interests in private companies held through funds managed by Oakley Capital.

The company said its 6.0% NAV return added 44 pence per share during the half year. Foreign exchange was a modest drag, with the return reaching 6.5%, or 48 pence per share, before currency movements.

The largest individual contributors were Phenna at 13 pence per share, North Sails at 9 pence, TechInsights at 8 pence and Exaforce at 5 pence.

Earnings growth drove most of the progress

The quality of the NAV growth is an important part of this update.

OCI said sustained earnings growth accounted for 80% of portfolio performance, with valuation multiple expansion contributing the remaining 20%. Multiple expansion occurs when investors assign a higher valuation to the same level of earnings.

Earnings-led growth is generally more reassuring than an increase based primarily on higher valuation assumptions. It suggests the underlying businesses are making operational progress rather than OCI relying mainly on more generous pricing.

The portfolio also benefited from strategic acquisitions, particularly through buy-and-build activity in business services. This strategy involves using an existing portfolio company as a platform to acquire and combine additional businesses.

OCI also reported increasing adoption of artificial intelligence across the portfolio. It said this was supporting productivity improvements and, in selected cases, beginning to create new commercial opportunities. The financial contribution from these developments was not disclosed.

Why did the shares perform so poorly?

Despite the increase in NAV, OCI recorded a total shareholder return of -16% from the end of 2025. The company said this was largely caused by market weakness in the first quarter, driven by concerns about disruption from AI and conflict in the Middle East.

The weighted average return across the listed private equity sector was -18%, meaning OCI performed slightly better than the sector comparison provided in the announcement. That does not make a 16% decline comfortable, but it shows the weakness was not isolated to OCI.

Management described the share price reaction as unjustified, pointing to OCI's limited exposure to software, supply chain disruption and price inflation.

The divergence between positive NAV growth and a negative shareholder return indicates that market sentiment towards the shares weakened significantly. However, the period-end share price and the precise discount to NAV were not disclosed in the update.

This disconnect is the central issue for investors. Private equity valuations can continue to rise while listed investment company shares move in the opposite direction. Shareholders therefore depend on both portfolio performance and the market's willingness to place confidence in reported NAV.

This follows the more modest NAV growth reported in OCI's first-quarter 2026 trading update.

Investment activity remained ahead of proceeds

OCI invested £43 million during the half year, consisting of £19 million in new platform investments and £24 million in follow-on funding.

New investments included Senef, GB1 and Infinity. Follow-on capital supported businesses including K&M, ProductLife Group and ECOMMERCE ONE.

OCI's look-through share of proceeds from exits and refinancings was £10 million. Look-through proceeds represent OCI's underlying economic share of cash generated through the Oakley Funds.

Investments therefore exceeded proceeds by £33 million during the period. This is not necessarily negative for a long-term private equity vehicle, but it places greater importance on liquidity and the timing of future realisations.

Commitments remain the main balance sheet consideration

At 30 June, OCI had £155 million of liquidity, comprising £81 million of cash and £74 million of undrawn credit facilities.

Total outstanding commitments stood at £940 million. Of this, approximately £300 million is not expected to be called, leaving around £640 million expected to be invested over the next five years.

The five-year expected deployment period matters because these commitments are not presented as an immediate cash requirement. Future exits, refinancings and other portfolio proceeds may also contribute to funding them.

Even so, the gap between current liquidity and expected commitments is worth monitoring. Investors will want to see a healthy pace of cash realisations alongside new investment activity.

Share buybacks added to NAV per share

OCI continued its minimum £20 million share buyback programme for 2026. Between the programme's launch on 9 January and 30 June, it acquired and cancelled 1.9 million shares for £9.4 million.

The company said this enhanced NAV per share by 2.9 pence. Buying back shares can increase NAV per remaining share when purchases are completed below the prevailing NAV.

OCI had deployed less than half of the programme's minimum stated value by the period end, leaving scope for further repurchases during the remainder of 2026.

What investors should watch next

There is plenty to like in the portfolio performance. NAV per share grew by 6.0%, most of that growth came from earnings, and several investments made meaningful positive contributions. The buyback was also accretive to NAV per share.

The negatives sit mainly at the listed company level. Shareholder returns were sharply negative, investment outflows exceeded proceeds, and OCI retains substantial commitments relative to current liquidity. Private company valuations are also estimates rather than continuously quoted market prices.

Longer term, OCI reported annualised NAV and shareholder returns of 15% and 16% respectively over ten years. Its ten-year share price total return was 344%, outperforming the FTSE All-Share Index by 215% and the MSCI World Index by 100% over that period.

The immediate question is whether continued earnings-led portfolio growth, cash realisations and buybacks can rebuild confidence in the listed shares. OCI is scheduled to publish its unaudited interim results on 10 September 2026, when investors should receive a fuller picture of performance and financial positioning.

The full figures and company commentary are available in the original company announcement.