Oakley Capital: 56 Pence of Self-Help, a 33% Discount, and an AI Venture Bet

Interim NAV of 782p and a 6% half-year return mask the real question — why the market still pays two-thirds of what OCI says its portfolio is worth.

OCI.L · Earnings Call · 2026-09-10

The discount is the whole story

Oakley Capital Investments walked into its 2026 interim results with the same structural gripe that has dogged it for years: a share price that simply refuses to reflect the asset value underneath. NAV closed June at GBP 1.29bn, or 782 pence per share — a 6% total return over the half and a 15% compound over a decade. The market, meanwhile, still marks the whole thing at a 33% discount. Management's answer was blunt: “No discount is the appropriate level of discount in my mind, given the long track record of NAV growth, year on year since its inception in 2007.” — Steven Tredget, Partner · 2026-09-10 What makes the H1 progression unusual is its cleanliness. The NAV moved from 738p to 782p, with 56 pence of that coming from unrealized portfolio gains — and 80% of those gains driven by earnings growth rather than multiple expansion. This is genuine NAV growth powered by operating performance, not financial engineering. Only a small handful of assets contributed the multiple movement, which is exactly the kind of narrow, self-inflicted variance an investor wants to see in a listed private equity vehicle.

Touring, AI-native venture, and riding a global wave

The genuinely fresh layer here is the venture strategy. The Touring Fund — seeded in 2023, right after the ChatGPT moment — is now large enough to move OCI's headline numbers. The fund's fourth-largest NAV contributor was Exaforce, an agentic cybersecurity name that just closed a GBP 125m round at double the valuation OCI invested at a year ago, and CuspAI — an AI-for-materials-science company — went from an EUR 89m seed post-valuation to a EUR 2.6bn Series B. Senior Partner Samir Kumar was direct about the opportunity: “Software is not just a tool for human productivity, software is now doing the work. Software is going to take a piece of the overall labor TAM in different industries.” — Samir Kumar, Founder or Senior Executive · 2026-09-10 This is a theme OCI shares with the rest of the tape rather than owns. This reporting season is thick with it — Adobe talked up its agentic software positioning, Oracle flagged an "Agentic Studio," and Braze, Gloo and YQ all leaned on AI agents and multimodal models. The global keyword set also flags Physical AI — which is precisely how Kumar segments part of the Touring portfolio (Netradyne's NVIDIA-powered driver-safety cameras). So OCI is riding a broad wave here, not pioneering one.

The moat is unglamorous — and that is the point

The counterweight to all this AI excitement is OCI's own defensibility argument, and it is unusually well-articulated. Roughly 70% of portfolio value sits in businesses that require a human in the loop — field services, education, branded goods — which management labels AI-insulated. Only about 20% is in software and data assets like Cegid, held as systems of record.

70% of the portfolio involves some form of physical delivery. These are AI-insulated services that require a human in the loop... While we believe that our software and data assets like Cegid have defendable positions as systems of record... they are only 20% of asset value.
Steven Tredget, Partner · 2026-09-10

That framing also explains the portfolio's average 9% weighted EBITDA growth — below what Oakley typically delivers — because a chunk of the book sits in the early years of ownership, where spending is deliberately suppressing near-term reported earnings. Add M&A and growth climbs to 17-18%. Portfolio leverage sits at a conservative 4.4x net debt/EBITDA, with roughly 75% of company debt maturing from 2030 onwards.

North Sails, Cegid and the awkward direct holdings

On the idiosyncratic side, North Sails added 9 pence to NAV, and its warrant was exercised post-period. The tell is that OCI now holds much of it inside a continuation vehicle alongside other shareholders, and management was explicit that the position is too large a slice of NAV: “Expect us to explore ways to address the size of North, and we'd hope to have more to say on that over the next six months.” — Steven Tredget, Partner · 2026-09-10 The second direct, publicly listed Time Out, is a media-recovery and refinancing story, with results due in November. The notable detractor was Cegid, down four pence per share as software multiples contracted — cushioned by the announced intention to merge Cegid with Silae to create a EUR 1.6bn-revenue European software leader. Elsewhere, affordability pressure in Germany softened IU Group's B2C intake, and PLG struggled with a demanding demand backdrop.

Liquidity and the capital return lever

Underneath it all sits a balance-sheet arithmetic problem. OCI carries GBP 940m of outstanding commitments across the funds, GBP 640m net of the portion not expected to be called — about half its NAV. Liquid resources of roughly GBP 230m give only about a year of drawdown cover against the GBP 150-200m of annual calls management expects, versus an 18-24 month comfort target. That is the tension: there is more private capital to fund, and only realizations to fund it with. Management sees four companies in exit processes that could return up to GBP 200m, though with clear timing risk. The lever within management's control is the buyback program, which repurchased GBP 9.4m in H1 (GBP 13m year-to-date) at a significant discount, delivering four pence of accretion. As Tredget framed the broader re-rating case, the obstacles are structural — stock-market outflows and the persistent mispricing of investment companies — not operational. The puzzle for an investor is whether a 33% discount on a portfolio admittedly valued at 16.4x EV/EBITDA is the market being wrong, or the market pricing a genuinely stubborn exit environment. The next six months of realizations will settle that argument.