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Shares in Sophos, the UK cyber security group, fell more than 7 per cent on Tuesday after Apax, its biggest shareholder, sold down almost half its stake.

The London private equity group invested in Sophos five years before its initial public offering in 2015 and owned more than a fifth of the company.

After markets closed on Monday it announced its intention to sell 51m shares, or 11 per cent of the group, in the second move to cut its stake since the IPO.

The sale appeared to spur investors to sell following a rally in cyber security stocks since the start of the year after a series of high-profile hacking attacks.

By Tuesday afternoon in London, shares had recovered slightly but were still 6.9 per cent down.

Analysts said the sale had likely fuelled concerns that Sophos had become overvalued following a doubling in its share price since the start of the year.

“Apax selling down is a good thing in that you’re getting rid of an overhang in the market, but there is general nervousness in the market that tech has done extremely well,” said George O’Connor, analyst at Stifel. “The cyber security sector is valued in excess of its long-term average valuation — they were quids in and no one would say that you’re a fool for banking your profit.”

Despite the share price drop, Sophos, which sells anti-virus and encryption software, is still trading near record highs as the wave of cyber attacks boosts demand for its products.

Fallout from f the WannaCry and Petya cyber attacks, which hit organisations around the world this year, helped the company become one of the UK’s big technology success stories.

Since its IPO, the software company has steadily added customers and gained market share in a sector that analysts estimate to be worth $35bn. It supplies companies including Pixar, Ford, Toshiba and Xerox, as well as the UK’s National Health Service, which was severely disrupted by the WannaCry attack in May.

In December 2015, Apax sold 60m shares — about a 13 per cent stake — at 265p a share. After the latest placing, the private equity firm is blocked from selling down its holding further for another 90 days.

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