HgCapital Trust invests in regulatory tech leader, CUBE

LONDON, UK:  HgCapital Trust plc (HgT), the investment management firm listed on the London Stock Exchange, has announced a strategic investment of approximately £9.7 million in CUBE.

This global leader in Automated Regulatory Intelligence and Regulatory Change Management technology is set to partner with Hg through the Hg Mercury 4 Fund, alongside other institutional clients.

While the transaction details remain undisclosed, this investment signifies a major step in CUBE’s journey to transform regulatory intelligence and change management for highly regulated sectors. CUBE, founded in 2011 by CEO Ben Richmond, has become a pivotal technology partner for top-tier banks, insurers, and asset managers worldwide, offering cloud-based solutions to streamline legal, compliance, and risk operations.

The investment aligns with HgT’s commitment to enabling investors to partake in Hg’s diverse investment portfolio. Post-investment, HgT’s liquid resources for future ventures stand at an estimated £691 million, accounting for 30% of the projected NAV as of 29 February 2024. Additionally, HgT’s outstanding commitments to Hg transactions will reduce to roughly £948 million, representing 41% of the projected NAV.

CUBE’s innovative platform provides a vast array of AI-driven regulatory data, encompassing every regulated jurisdiction globally. With its headquarters in the UK, CUBE’s operational reach extends across Europe, North America, Asia, and Australia, marking a significant stride in creating an industry-defining regulatory compliance and risk platform.

Ben Richmond, Founder and CEO of CUBE, said: “The solutions we provide to our customers are mission-critical and demand the highest standards of accuracy and data quality. To deliver this at a global scale requires significant resources and infrastructure to ensure customers are always one step ahead of their evolving regulatory obligations. With Hg’s vast experience and expertise in scaling software businesses, we look forward to accelerating our growth and continuing to deliver innovative regulatory intelligence and change management solutions that customers can depend upon in the long term.”

Richmond continues: “From foundation, CUBE has embraced the use of AI in everything we do and now in the era of generative AI the opportunities to drive further customer value in both realising efficiencies and reducing risk are significant. Quality and governance of AI is at the forefront of customers’ agendas and CUBE will continue to invest significantly to deliver the industry’s highest standards in this regard along with continued market-leading innovation, ultimately creating an industry defining regulatory compliance and risk platform.”

With $6.5bn invested in the regulatory, compliance and financial technology sectors alone, Hg invests in technology companies that are transforming their industries. Hg will leverage this deep sector expertise to support CUBE in its next phase of growth, providing strategic guidance and operational support to help the company scale its business, enhance its product offering and expand its global footprint through both organic growth and acquisitions where synergies exist for CUBE’s regulatory platform.

Christopher Fielding, Partner at Hg, said: “CUBE is an excellent example of a business that is using technology to solve real and pressing challenges for regulated industries. We have been impressed by CUBE’s innovative approach to regulatory intelligence and change management and the strong demand for its solutions amongst regulated firms across the globe. Ben is a visionary for this sector and we are excited to partner with him and the CUBE team in achieving their growth ambitions.”

Thomas Martin, Principal at Hg, said: “We have spent the last two years focusing on this sector and it’s clear that CUBE has built a unique platform that scales to the most demanding customer requirements and is highly differentiated in its ability to deliver. We are excited to be working with CUBE and their customers over the coming years building out transformational capabilities in managing compliance risk.”