TIDMAPAX
RNS Number : 0934J
Apax Global Alpha Limited
19 August 2021
INTRODUCTION
Who we are
Apax Global Alpha Limited ("AGA", "Apax Global Alpha" or the
"Company") is a closed-ended investment company that invests in a
portfolio of private equity funds advised by Apax Partners LLP
("Apax"). It also holds debt and equity investments ("Derived
Investments") which are identified as a direct result of the
private equity investment process, insights, and expertise of
Apax.
The Company has a Premium listing and is a constituent of the
FTSE 250 Index (LSE: APAX).
Adjusted NAV(1)
EUR1.4bn
68% PE / 32% DI
1. Adjusted NAV is an Alternative Performance Measure ("APM").
It represents NAV of EUR1,384.8m adjusted for the performance fee
reserve of EUR4.5m at 30 June 2021. Further details can be seen on
page 22
Our Objective
Our objective is to provide shareholders with superior long-term
returns through capital appreciation and regular dividends.
AGA aims to build and maintain a global portfolio of investments
across four core sectors, delivering sustained value across
economic cycles. Our unique business model allows shareholders to
access high-quality companies in the Tech & Digital, Services,
Healthcare and Internet/Consumer sectors through the private equity
funds advised by Apax ("Apax Funds") as well as via direct
investments.
target annualised Total NAV Return
12-15%
Target Dividend Yield p.a.
5%
of NAV
Our Investment Approach
Our investment approach seeks to provide investors with access
to Apax's different private equity funds across all stages of
maturity. Leveraging Apax's insights derived from private equity
activities, AGA also holds a focused portfolio of debt and equity
investments that provides additional liquidity and flexibility for
the Company with the aim of generating superior risk-adjusted
returns.
sectors
4
Investment advisor investing experience nearly 50 years
Apax Global Alpha Limited provides shareholders with unique
access to a diversified private equity portfolio across four core
sectors, as well as a focused portfolio of debt and equity
investments, derived from the insights gained by the Apax team.
INVESTMENT CASE
Why invest in AGA?
Unique Private Equity access
AGA provides investors with access to a range of private equity
funds advised by Apax, which contain an actively managed portfolio
of investments. Value creation is achieved through sector focus,
transformational ownership, and operational value-add
Sector-DRIVEN STRATEGY
We focus on four attractively positioned and dynamic sectors,
benefitting from accelerating changes in global trends: Tech &
Digital, Services, Healthcare, and Internet/Consumer
Attractive net returns
AGA targets a Total NAV Return of 12-15%, including a dividend
target of 5% of NAV per year, aiming to generate both capital
appreciation and an attractive level of dividend income for
investors
DISTINCTIVE Derived Investment APPROACH
We employ a portfolio of debt and equity investments identified
from the Apax team's insights in order to manage capital not
invested in Private Equity, providing liquidity and flexibility for
the portfolio while generating enhanced risk adjusted returns
KEY HIGHLIGHTS
H1 2021 Total return1
24.5%
Private Equity
7.3%
DERIVED Debt
28.6%
DERIVED Equity
h1 2021 Total NAV Return2
17.4%
interim 2021 Dividend
5.97p
Adjusted NAV3 as at 30 June 2021
EUR1,380m
Adjusted NAV3 per share
EUR2.81/GBP2.41
1. Total Return is an Alternative Performance Measure. It
reflects the sub-portfolio performance on a stand-alone basis. It
excludes items at overall AGA level such as cash, management fees
and costs. For details of calculations used see the glossary on
page 41
2. Total NAV Return is an APM. It means the return on the
movement in the Adjusted NAV per share over the period plus any
dividends. Further details can be seen on page 22
3. Adjusted NAV is an APM. It represents NAV of EUR1,385.6m
adjusted for the performance fee reserve of EUR4.5m at 30 June
2021. Further details can be seen on page 22
Investment lifecycle
Investment > Transformation > Realisation
Private Equity
11
new investments closed
Tech & Digital 7
Services 1
Healthcare 1
internet/Consumer 2
42.7%
LTM EBITDA growth
22.3%
LTM Revenue growth
12
Full and partial Exits
Tech & Digital 8
Services 2
Healthcare -
internet/Consumer 2
Derived Investments
13
new Investments
Derived debt 13
Derived equity -
6
Full exits
Derived debt 5
Derived equity 1
CHAIRMAN'S STATEMENT
A strong start to 2021
The performance of the Company in the first half of 2021
underlines the quality of our portfolio and the benefits of our
sector-led investment strategy.
Overview
The first half of 2021 continued to be dominated by the Covid-19
pandemic, with the emergence of new variants posing a new cause for
concern. The successful rollout of effective vaccines in many
developed countries has however brought a new sense of optimism,
positively impacting consumer sentiment as many governments have
gradually relaxed measures designed to slow the spread of the virus
thus allowing economies to re-open. Growth has rebounded and
economic activity is starting to return to pre-pandemic levels.
Despite a volatile start to the year, equity markets have
performed strongly, and the volume and value of M&A
transactions have been extremely robust. However, the difference in
performance between sectors persisted, with leisure and travel
still heavily impacted by lockdown measures, whilst technology, and
the other sectors to which AGA has exposure, largely continued to
excel.
Results
The Company delivered a Total NAV Return of 17.4% in the first
half of the year. Adjusted NAV per share increased from EUR2.45
(GBP2.19) to EUR2.81 (GBP2.41) and the Company's total Adjusted NAV
grew to just under EUR1.4bn.
Following a strong first quarter, AGA saw continued robust
performance in Q2 from Private Equity and, in particular, from the
Apax VIII and Apax IX funds which are now in the harvesting and
maturity phases of the investment lifecycle. As a whole, the
Private Equity portfolio delivered a Total Return of 24.5% (21.9%
in constant currency) for the first half of 2021 whilst Derived
Investments achieved a Total Return of 9.8% (7.0% constant
currency) in the same period.f
Portfolio update
Private Equity continues to make up just over two-thirds of the
Invested Portfolio, although the high level of exit activity meant
this proportion was lower than at the end of 2020. Private Equity
exits, primarily in Apax IX, delivered record distributions. A
total of EUR131m was returned to AGA in the period and, in line
with our investment strategy, any cash not invested in Private
Equity was deployed into Derived Debt, which increased to 29% of
the Invested Portfolio as a result. The remaining 3% is invested in
Derived Equity. High public market valuations in our target sectors
meant that no attractive opportunities were identified for
investment in this part of the portfolio.
Despite this persistent high valuation environment for quality
companies, the Apax Funds were able to identify a number of
attractive Private Equity opportunities, with AGA deploying
EUR85.0m in eleven new investments in the first half of 2021,
Thirteen new positions were acquired in Derived Debt with the focus
remaining on liquid first and high yielding second lien loans.
The portfolio sector split remained weighted towards Tech &
Digital (45%), followed by Services (21%), Healthcare (20%) and the
Internet/Consumer sector (14%). We have redesignated this sector to
reflect the increased focus on digital consumer investments in the
last few years, away from traditional "bricks-and-mortar" retail.
Online Marketplace companies such as Baltic Classifieds Group,
which recently listed on the London Stock Exchange, have also been
moved from Services to Internet/Consumer which accounts for AGA's
increased exposure to this sector compared to 31 December 2020.
Liquidity, commitments, and funding
AGA's liquidity position remains healthy. Proceeds received from
Private Equity exits were re-deployed into Derived Investments to
minimise cash drag for investors. In addition to EUR439.2m in
Derived Investments, AGA's net cash position after net liabilities
at 30 June 2021 was EUR29.0m, and the EUR140.0m evergreen revolving
credit facility remained undrawn.
This leaves AGA well-positioned to meet future Private Equity
calls. Undrawn commitments, including recallable distributions from
the Apax Funds, amounted to EUR419.2m at 30 June 2021, with the
majority relating to Apax X.
During the period, AGA announced its intention to make a
commitment of $90m to the Apax Digital Fund II ("ADF II"). This is
the successor fund to the successful Apax Digital Fund already held
by AGA which invests in a balanced portfolio of minority equity and
growth buyout opportunities in mid-market technology companies.
Dividend
In line with AGA's dividend policy to distribute 5% of NAV each
year to its shareholders, the Board has approved an interim
dividend for 2021 of 5.97 pence per share. The dividend will be
paid on 17 September 2021 to shareholders on the register of
members on 27 August 2021. The shares will trade ex-dividend on 26
August 2021.
AGM voting results
As required by the Company's prospectus, a triennial
discontinuation resolution was put forward to the Annual General
Meeting on 4 May 2021. This was the second such resolution and the
Directors were pleased that 99.8% of votes cast supported the
continuation of the Company in its current form. All other
resolutions received a similarly high level of support.
First 10-year lock-up release
On the sixth anniversary of AGA's IPO on 15 June 2021, an
additional tranche of 20% of the Company's ordinary shares held by
senior Apax executives was released from lock-up. The staggered
approach to the release of shares was designed to ensure that
employees of AGA's Investment Adviser remain committed to the
success of AGA in the long term, whilst the free float of AGA
shares would also be able to grow over time.
Outlook
The outlook is one of cautious optimism and uneven recovery,
with growth prospects diverging across regions, countries, and
sectors. Rising cost pressures may cause inflation to rise and,
depending on the response of central banks, could have a negative
impact on asset prices.
Meanwhile we should expect some permanent shifts in working,
consumption and investment patterns following the pandemic and, in
the longer term, from the consequences of government-imposed
measures to meet ambitious climate goals.
Against this backdrop, AGA's established investment process and
sector-based strategy should mean that the Company's portfolio
remains resilient and well-positioned to take advantage of any
emerging opportunities.
Tim Breedon CBE
Chairman
18 August 2021
Commitment to Responsible Investing
See page 6
Performance review
See page 10
RESPONSIBLE INVESTING
Responsible investment is important to protect and create
long-term investment value.
Committed to delivering sustainable returns
The Board of Directors of Apax Global Alpha believes that
approaching investing responsibly is important in protecting and
creating long-term value. The Board relies upon its Responsible
Investment policy and the practices of Apax to ensure it delivers
returns ethically and responsibly. Delivering sustainable returns
has been a key focus for Apax and the Apax Funds' portfolio
companies for over a decade. Apax has a strong track record in
responsible investing and has made a substantial effort and
investment over time to measure the Apax Funds' impact on society
and deliver sustainable financial returns while encouraging
sustainable business practices. Across Apax and the portfolio
companies, there is an enduring commitment to integrating
Environmental, Social and Governance ("ESG") considerations into
business processes. This has been recognised by many external
stakeholders who endorse the Apax approach as industry-leading. The
annual assessment by the Principles for Responsible Investment
("PRI") rates the Apax ESG programme as A+.
RESPONSIBLE INVESTMENT HIGHLIGHTS H1 2021
In the first six months of 2021, AGA published its Responsible
Investment policy, expanding the policy beyond the Private Equity
portfolio to also include Derived Investments. In Q2 AGA also made
available its ESG materials through the Association of Investment
Companies ("AIC") as part of their project to increase transparency
within the industry.
In March 2021, Apax published the 8th edition of its Annual
Sustainability Report, which highlights the wide-ranging ESG
initiatives undertaken at Apax and the Apax Funds' portfolio
companies. One of the areas highlighted in the report is the work
around climate action and, in July 2021, Apax reinforced its
commitment to tackle climate change by becoming a signatory to the
Initiative Climate International (iCI), a significant initiative
for the Private Equity industry backed by the PRI, focused on
cross-sector collaboration to share best practices for measuring,
managing and reducing portfolio carbon emissions.
The most recent Sustainability Report and other relevant
materials can be accessed on AGA's website
(https://www.apaxglobalalpha.com/investment-portfolio/sustainability/)
or via the Association of Investment Companies's website
(https://www.theaic.co.uk/).
INTEGRATION OF THE SUSTAINABILITY FRAMEWORK INTO THE Private
equity INVESTMENT PROCESS
Pre-investment
-- Apax's teams undertake standard ESG due diligence for each
new investment made by the Apax Funds
-- Apax's Sustainability Committee reviews the findings of the
ESG due diligence process and these are incorporated into the final
Investment Committee documentation prior to each new commitment
-- The objective is to create a high degree of awareness upfront
with regard to potential ESG issues which can contribute to value
creation at a very early stage
Post-investment
-- Pre-investment due diligence is backed up post-investment by
an annual ESG KPI collection cycle
-- Apax is able to capture the ESG footprint of the Apax Funds'
portfolio companies and establish possible areas where the Apax
investment teams together with the Apax Operational Excellence
Practice can create value
-- The key goal of the data collection for Apax is to develop a
better understanding of the materiality of certain ESG KPIs to the
overall operations of a portfolio company
Active ownership
-- Apax has a well-defined Responsible Investment policy and has
integrated ESG considerations into its investment processes and
ownership practices relating to the Apax Funds' portfolio
companies
-- Apax coordinates its sustainability efforts through a
Sustainability Committee which meets on a monthly basis
INVESTMENT MANAGER'S REPORT
Market Review
REVIEW OF H1 2021
COVID-19 AND MACROECONOMIC BACKDROP
2021 has so far been dominated by Covid-19 and the vaccine
rollout. A global phenomenon, Covid-19 saw some 180m confirmed
cases and c.4m reported fatalities as at 30 June 2021 according to
the World Health Organization, figures which almost certainly
understate the true scale of the pandemic.
While we are seeing new variants of the virus emerge, and the
virus remains deadly in many parts of the world, the vaccine has
proven to be effective in weakening the link between cases,
hospitalisations and deaths. This has allowed many governments to
gradually re-open their economies, in particular the US, the UK,
Israel and a number of European countries.
As a result of economies re-opening, significant monetary and
fiscal stimulus and pent-up demand, global GDP is forecast to grow
by 6.7% in 2021 after a decline of 3.3% in 2020. The US and China
are forecast to grow particularly strongly in 2021 at 6.9% and 8.5%
respectively. However, the recovery is uneven with certain service
sectors such as travel continuing to struggle whilst technology
broadly continues to thrive.
Inflation
This favourable macro-economic backdrop combined with loose
monetary policy is now giving rise to concerns around
inflation.
Whilst many argue that the current spike is transitory, should
more structural inflation take hold, tightening monetary policies
may lead to decreased market multiples, especially for long
duration, high-growth assets without demonstrated pricing
power.
Given this environment, the current focus is to capitalise on
high valuations to exit those investments that have completed their
"good to great" transitions or re-rated to very high levels in the
private equity portfolio. In terms of new investments, the Apax
Funds seek - and continue to find - idiosyncratic situations within
the target sectors and sub-sectors where opportunities exist to
"transform" an asset and generate alpha by increasing its quality
through business improvement.
Equity markets
Following the dramatic swings in 2020, equity markets have
performed strongly with the S&P up 15.3% and STOXX Europe 600
up 13.5% for the half year to 30 June 2021.
On the back of the macro-economic rebound, consensus corporate
earnings are expected to grow strongly at over 30% for the S&P
for 2021 and about 10% for 2022. However, price-to-earnings ratios
remain at elevated levels, albeit are more reasonable on an equity
risk premium basis given very low long-term bond yields.
Although there has been some recovery in more cyclical value
stocks as investors anticipate the recovery, there continues to be
a very significant divergence in performance between sectors and
companies as investors differentiate between those that are likely
to be long-term winners, and those that could be structurally
challenged. This distinction is evident within the AGA portfolio as
the core sectors to which the Apax Funds have exposure generally
performed better than the market as a whole since the beginning of
2021, with the exception of the legacy "bricks-and-mortar" retail
businesses. Further details on the portfolio are provided
throughout the rest of this report.
AGA H1 2021 PRIVATE EQUITY PERFORMANCE1
FTSE 250 10.3%
-------------------------------- ------
STOXX 600 15.8%
-------------------------------- ------
S&P 500 15.3%
-------------------------------- ------
AGA Private Equity Total Return 24.5%
-------------------------------- ------
1. Represents AGA's Private Equity Total Return for H1 2021
compared to major equity indices (calculated on a total return
basis)
Indices source: Bloomberg
Private equity update
In private equity markets, the volume and value of transactions
has been extremely robust in H1 2021.
At the start of the crisis, transaction volumes were depressed.
As confidence returned somewhat towards the end of Q2 2020 and
financing for transactions became available, more traditional
leveraged buyout transactions were completed which accelerated in
H2 2020. This trend has continued into the first half of 2021.
Credit market update
As the global economy has recovered, long-term government bond
yields rose. Yields on 10 year treasuries increased from 0.5% at
their lows in 2020 to 1.5% as at 30 June 2021 and German 10 year
bund yields have also increased from (0.9%) at their lows in 2021
to (0.2%) as of 30 June 2021. The market is currently pricing in
relatively benign long-term inflation. However, there is a tail
risk that inflation overshoots, leading to materially higher
short-term and long-term rates.
During the early phases of the crisis, credit spreads widened
materially for investment grade, high yield and leveraged loans. In
particular, high yield and loan markets dislocated severely, with
prices for loans in high-quality companies dropping in line with
the broader markets. However, from the second half of 2020, spreads
tightened across the credit spectrum and have been stable in 2021
at relatively narrow levels. As in public equities, investors
distinguished between what were perceived to be higher and lower
quality sectors and companies.
As might be expected, new issuance volume for credit supporting
leverage transactions was very low at the outset of the crisis, but
rebounded strongly from H2 2020 and into 2021.
OUTLOOK
The economic outlook remains positive in the short term. In most
developed markets, economies are growing strongly, driven by
re-opening (particularly in the service sector), pent-up demand,
and aggressive fiscal and monetary policy.
Valuation levels for both public and private equity markets are
at elevated levels. Equity markets have been supported by very low
bond yields and a lack of attractive liquid investment alternatives
indicating that valuations may remain elevated for the foreseeable
future.
While the market is pricing in relatively benign inflation,
there is a tail risk of higher than expected inflation with
knock-on implications for asset prices.
Valuations in both public and private markets will also likely
continue to be materially superior for those companies viewed as
better positioned for the long-term compared to those which are
more impacted by the pandemic or structurally challenged.
Performance review
Continued strong momentum across the portfolio
Performance highlights
AGA's sector-led strategy and the focus by the Apax Funds on
transformational, "good-to-great" investment opportunities in
private equity has continued to deliver strong results in the first
six months of 2021.
AGA's Total Adjusted NAV increased to EUR1,380.3m as at 30 June
2021 and Total NAV Return was 17.4% (14.9% constant currency) for
the first six months of 2021. This reflects continued strong
momentum in Q2, with AGA achieving a Total Return of 6.5% (7.2%
constant currency) in the second quarter.
The Private Equity portfolio materially contributed to these
strong results, delivering 24.5% Total Return (21.9% constant
currency) in H1 2021.
Exit activity in the Private Equity portfolio in H1 2021
delivered EUR131.1m in distributions to AGA. This flow of
realisations continued to complement income from the Derived
Investments portfolio to support the Company's dividend policy to
pay 5% of NAV each year, and dividends to shareholders totalled
EUR30.0m in H1 2021.
As at 30 June 2021, AGA was 98% invested, with an Invested
Portfolio of EUR1,355.8m. The majority of the portfolio was
invested in Private Equity (68%), with the Derived Investments
portfolio representing 32%. Net current assets (inclusive of cash)
represented EUR29.0m, or 2.1% of Adjusted NAV.
Total NAV Return
17.4%
Adjusted NAV
EUR1,380m
Adjusted NAV per share
EUR2.81/GBP2.41
TOTAL NAV RETURN CONTRIBUTIONS (%)
Private Equity 13.4%
---------------------------- ------
Derived Debt 1.3%
---------------------------- ------
Derived Equity 1.0%
---------------------------- ------
Costs and other movements (0.4%)
---------------------------- ------
Performance fee adjustments
(1) (0.4%)
---------------------------- ------
FX 2.5%
---------------------------- ------
Total NAV Return (2) 17.4%
---------------------------- ------
1. Performance fee adjustment accounting for the movement in the
performance fee reserve at 30 June 2021
2. Total NAV Return means the movement in the Adjusted NAV per
share over the period plus any dividends paid
ADJUSTED NAV DEVELOPMENT (EURM)
Adjusted NAV 31 December
2020 1,201.2
---------------------------- -------
Private Equity 161.0
---------------------------- -------
Derived Debt 15.8
---------------------------- -------
Derived Equity 11.8
---------------------------- -------
Costs and other movements (5.4)
---------------------------- -------
Dividends paid (30.0)
---------------------------- -------
Performance fee adjustments
(1) (4.5)
---------------------------- -------
FX 30.4
---------------------------- -------
Adjusted NAV 30 June
2021 1,380.3
---------------------------- -------
1. Performance fee adjustment accounting for the movement in the
performance fee reserve at 30 June 2021
Portfolio highlights
AGA's overall portfolio continued to be weighted towards Tech
& Digital which at 45% constituted the largest exposure,
followed by Services at 21%, Healthcare at 20% and
Internet/Consumer at 14%. The increased exposure to
Internet/Consumer over the period is largely due to a
reclassification of online marketplaces into this sector.
At 60%, the majority of AGA's overall geographic exposure
continued to be to North America, followed by Europe at 17%. This
is largely mirrored by the currency exposures of the Fund, with US
dollar representing 65% and the euro representing 16% of the
portfolio.
Tech & Digital
In Tech & Digital, valuations increased further in the first
six months, particularly for tech-enabled services and software
assets.
-- There was significant investment activity, with seven new
Private Equity investments and nine new positions in Derived
Debt.
-- Looking at the target sub-sectors, notable events in
tech-enabled services included a new funding round for Thoughtworks
which values the company at 8.2x MOIC as at 30 June 2021, and
submission of a confidential draft registration statement to the
SEC for the company's proposed IPO. Meanwhile, cybersecurity
services firm Coalfire showed strong bookings momentum in H1 and,
in June, it acquired Denim Group, an advanced application security
solutions provider.
-- In software, there were three new Private Equity investments,
of which two were in the Apax Digital Fund. Azentio, which was
carved out from 3i Infotech in Q1, signed two new acquisitions in
May and July, respectively, enhancing the company's presence in the
Middle East and Africa. The Apax Funds also saw two significant
partial realisations in the period, including the further selldown
of shares in Duck Creek, and Genius Sports' SPAC merger which saw
the company start trading on the NYSE. Post period end, Paycor went
public and began trading on NASDAQ.
-- In telecom, Inmarsat has performed well, with some recovery
in the aviation segment and particularly strong performance in the
government segment.
Services
There was good momentum across the Services portfolio.
-- Among density-driven businesses, Private Equity portfolio
company Authority Brands continued to add high-quality franchised
home service brands to its platform, completing its sixth add-on
acquisition since Apax IX's investment. ADCO's performance also
continued to be strong in H1, following a good 2020.
-- In outsourced sales and marketing, there was one new
investment both in the Private Equity and the Derived Investments
portfolios in PIB Group, an independent specialist insurance
broker. The Apax Funds have significant experience with insurance
brokers through the prior investments in Hub and Assured Partners.
Following completion in Q1, the company is now focusing on M&A
and accelerating international opportunities.
Healthcare
All sub-sectors experienced increasing momentum in H1 2021,
complemented by rising market multiples for certain
sub-sectors.
-- In medical technology, Private Equity portfolio company
Candela returned to pre-Covid-19 top-line levels, supported by a
rebound in Asia Pacific. Whilst Covid-19 related ventilator and
consumables orders started to subside, Vyaire experienced continued
demand for ventilator and respiratory diagnostic systems. The Apax
Funds also made one new medical technology investment in the period
in Rodenstock Group, a manufacturer of premium ophthalmic
lenses.
-- In healthcare services, Private Equity portfolio company
InnovAge listed on the NYSE. Elsewhere Unilabs continued to benefit
from strong demand for Covid-19 testing whilst also seeing a
further rebound in non Covid-19 diagnostics including medical
imaging.
internet/Consumer
Online marketplaces experienced increasing market multiples
whilst legacy retail/consumer and education businesses are still
recovering from the Covid-19 pandemic at varying rates.
-- Online marketplaces which make up 29% of the
Internet/Consumer portfolio experienced strong performance in H1
2021. The Apax Funds sold Boats Group and Baltic Classifieds Group
started trading on the London Stock Exchange. Elsewhere, Trade Me
continued to show good growth in usage and engagement throughout
the year.
-- In consumer services Cadence, which operates pre-school
education facilities in the US, has been rebounding, albeit is
still below pre-Covid-19 levels. The company has however re-started
acquisition activity.
-- There was one new Private Equity investment in the consumer
packaged goods sub-sector in Nulo, a high-growth pet food
brand.
-- Elsewhere in the Private Equity portfolio, while still below
pre-Covid levels, Cole Haan is seeing increased gross margins and
improved wholesale bookings.
-- There was no deal activity in Derived Investments in the sector.
PORTFOLIO SPLIT BY SECTOR
Total Private Equity Derived Investments
------------------ ----- -------------- -------------------
internet/Consumer 14% 13% 1%
------------------ ----- -------------- -------------------
TEch & Digital 45% 31% 14%
------------------ ----- -------------- -------------------
Services 21% 14% 7%
------------------ ----- -------------- -------------------
Healthcare 20% 14% 6%
------------------ ----- -------------- -------------------
Portfolio review
Private Equity
A sector-led investment strategy, underpinned by digital
HIGHLIGHTS
Private Equity TOTAL RETURN
24.5%
LTM EBITDA Growth
42.7%
% of NAV
66%
Total New investment1
EUR85.0m
Distribution from Apax funds
EUR131.1m
Average Uplift on exits (2)
25.7%
1. AGA's investment cost on a look-through basis
2. See page 17 for further details
Performance update
Strong performance driven by earnings growth in the underlying
portfolio and an increase in comparable multiples
The Private Equity portfolio delivered strong performance in the
first six months of 2021, reflecting secular earnings growth, a
rebound as Covid-related lockdowns started easing, and operational
improvements in the underlying portfolio as well as premium
valuations achieved on exits.
LTM EBITDA growth across the portfolio was 42.7% and the
weighted average valuation multiple was 18.0x, reflecting the
re-rating of public market valuations over the year.
During the period, there was a good pace of investment and,
despite valuations for quality companies remaining high in H1 2021,
the Apax Funds were able to identify attractive opportunities. On a
look-through basis, AGA deployed EUR85.0m into eleven new
investments which closed in the period.
The Apax Funds were able to execute an investment strategy with
modest levels of financial leverage at entry, which on average was
4.2x net debt/EBITDA in Apax IX and 4.0x in Apax X as at 30 June
2021.
The Private Equity portfolio is now well diversified across fund
vintages with 23% in the harvesting phase, 66% in the maturity
phase, and 11% in the investment phase. In May, AGA announced a
commitment of $90m to the Apax Digital Fund II. The Fund will aim
to continue the predecessor fund's strategy of investing in a
balanced portfolio of minority equity and growth buyout
opportunities in mid-market technology companies globally.
NAV performance
Gains of EUR161.0m, reflecting strong performance in Apax IX and
Apax VIII
Private Equity Adjusted NAV increased from EUR788.3m at 31
December 2020 to EUR916.6m at 30 June 2021, reflecting strong
performance across the Apax Funds. In the period, AGA received
EUR131.1m of distributions from exits, balanced with EUR78.7m of
calls, mainly from Apax X (EUR70.0m) for investments.
The strongest valuation gains during the first six months were
in Global-e, Genius Sports, and Authority Brands. The largest
valuation decline in the portfolio was from Cole Haan, followed by
KAR Global and Max Stock, with the latter two investments
reflecting share price volatility in the period.
INVESTMENT ACTIVITY
EUR85.0m deployed across eleven new investments
The Apax Funds closed eleven new investments in the first six
months of 2021 with AGA investing EUR85.0m on a look-through basis.
Additionally, Apax X and ADF signed three new deals which are
expected to close in Q3. The majority of new deals were in the Tech
& Digital sector, primarily in the tech-enabled services and
software sub-sectors.
The new investments reflect the Apax Funds' sector-driven
strategy with a continued focus on resilient and growth sub-sectors
where Apax's "transformative" approach and "good to great" strategy
can support operational improvements and generate significant value
creation.
Turning to realisations, the Apax Funds made three full and nine
significant partial exits in the period, primarily in Tech &
Digital. Exits were achieved at an average uplift to previous
Unaffected Valuations of 25.7%. Average Gross MOIC was 3.9x and
average gross IRR was 52.4%. Strong public market valuations saw
four public listings (InnovAge, Genius Sports, Global-e and Baltic
Classifieds Group) in the period with Thoughtworks having also
submitted a confidential draft registration statement to list in
the US. Post period end, Apax IX portfolio company Paycor also
started trading on the NYSE.
PRIVATE EQUITY PERFORMANCE (%)
Movement in underlying portfolio companies'
earnings 21.8%
-------------------------------------------- ------
Movement in net debt (1) (0.3%)
-------------------------------------------- ------
Movement in comparable companies' valuation
multiples (2) 9.2%
-------------------------------------------- ------
One-off and other (3) (2.4%)
-------------------------------------------- ------
Management fees and carried interest
accrued by the Apax funds (6.5%)
-------------------------------------------- ------
Movement in AEVII and AEVI carried interest
value 0.1%
-------------------------------------------- ------
Movement in performance fee reserve (4) -
-------------------------------------------- ------
FX 2.6%
-------------------------------------------- ------
H1 Total Return 24.5%
-------------------------------------------- ------
1. Represents movement in all instruments senior to equity
2. Movement in the valuation multiples captures movement in the
comparable companies valuation multiples. In accordance with
International Private Equity and Venture Capital Valuation ("IPEV")
guidelines, the Apax Funds use a multiple-based approach where an
appropriate valuation multiple (based on both public and private
market valuation comparators) is applied to maintainable earnings,
which is often but not necessarily represented by EBITDA to
calculate Enterprise Value
3. Mainly dilutions from the management incentive plan as a
result of growth in the portfolio's value
4. Performance fee adjustment accounting for the movement in the
performance fee reserve at 30 June 2021
PRIVATE EQUITY ADJUSTED NAV DEVELOPMENT (EURM)
Adjusted NAV at 31 December 2020 788.3
--------------------------------- -------
Calls 78.7
--------------------------------- -------
Distributions (131.1)
--------------------------------- -------
Gains 161.0
--------------------------------- -------
Performance fee adjustment(1)
--------------------------------- -------
FX 19.7
--------------------------------- -------
Adjusted NAV at 30 June 2021(2) 916.6
--------------------------------- -------
1. Performance fee adjustment accounting for the movement in the
performance fee reserve at 30 June 2021
2. Includes AGA's exposure to carried interest holdings in AEVII
and AEVI which were respectively valued at EUR17.5m and EUR4.6m at
30 June 2021
PRIVATE EQUITY LIFECYCLE
HARVESTING PHASE AVIII, AEVI, AEVII
---------------- ------------------
INVESTMENT PHASE AX
---------------- ------------------
MATURITY PHASE AIX, AMI, ADF
---------------- ------------------
private equity case study
Baltic Classifieds Group
DATE OF INVESTMENT
2019
--------------------------
FUND
Apax IX
--------------------------
SECTOR
Internet/Consumer
--------------------------
REGION
Baltics
--------------------------
STATUS
Partially realised
--------------------------
Website
www.balticclassifieds.com
--------------------------
Partnering with the Baltic's leading classifieds group
Baltic Classifieds Group ("BCG") is the leading online
classifieds group in the Baltic countries. BCG owns and operates a
portfolio of twelve online classifieds portals in Lithuania,
Estonia and Latvia, comprising eight vertical portals across
automotive, real estate, and jobs and services, and four generalist
portals. BCG's portals are some of the most visited websites in
their respective countries, attracting more than 60m monthly visits
on average2.
The Apax Funds have a long and successful track record of
investing in online marketplace and classifieds businesses,
including household names such as Auto Trader and idealista, and
were able to identify BCG as a standout business with a
market-leading position in several verticals, led by an excellent
management team. After a period of robust due diligence, the Apax
Funds invested in BCG in July 2019.
Under the Apax Funds' ownership, BCG has performed strongly with
revenue growing at a 21% CAGR3 and has increased its leadership
position over the number two players. The Apax Funds worked closely
with BCG's leadership team on several key initiatives to drive
growth, including enhancing the monetisation of its core
classifieds segments and facilitating the involvement of
marketplace pioneers Ed Williams (former CEO of Rightmove) and
Trevor Mather (former CEO of Auto Trader) as co-investors and board
directors. The Apax Funds also assisted with BCG's M&A
strategy, including working on the strategic acquisition of Auto24,
the leading automotive classifieds portal in Estonia, which has a
similar monetisation opportunity. These initiatives helped
accelerate the company's already impressive growth trajectory as it
worked towards an IPO.
In June 2021, BCG started conditional trading on the main market
of the London Stock Exchange using the ticker symbol "BCG", priced
at GBP1.65 per share. Having acquired the business at a substantial
multiple discount to relevant peers, such was the transformation of
the business under the Apax Funds' ownership, that it attained a
premium to the same peers at IPO.
3.6x
GROSS MOIC(1)
92.9%
GROSS IRR(1)
1. Gross IRR and Gross MOIC calculated based on the concurrent
aggregate expected cash flows and remaining fair value in euro
2. Data for FY April 2021
3. Data from FY April 2019 to FY April 2021
Derived Investments
Continued focus on Derived Debt investments
HIGHLIGHTS
DERIVED INVESTMENTS TOTAL RETURN
9.8%
DERIVED DEBT TOTAL RETURN
7.3%
DERIVED EQUITY TOTAL RETURN
28.6%
% OF NAV
32%
TOTAL NEW INVESTMENT
EUR161.3m
TOTAL DIVESTED
EUR69.8m
Derived Investments
Performance update
Good performance across the portfolio
The Derived Investments portfolio achieved a Total Return of
9.8% (7.0% constant currency) in the first six months of 2021.
Performance was primarily driven by Derived Debt, which made up 88%
of the Derived Investments portfolio. The focus remained on
investments in lower risk first and second lien loans where there
is a high degree of visibility on cash flow, and in target
sub-sectors where Apax has unique insights, gained from the team's
private equity investment activity. Derived Debt generated a Total
Return of 7.3% (4.5% constant currency), Derived Equity achieved a
Total Return of 28.6% (25.0% constant currency) in the six months
to 30 June 2021.
The Derived Debt portfolio experienced strong operational
performance from underlying portfolio companies, as demonstrated by
the LTM EBITDA growth from 26.2% at 31 December 2020 to 37.3% as at
30 June 2021. Reflecting the increased share of first lien loans in
the portfolio, the overall yield to maturity of the portfolio
reduced to 6.8% at 30 June 2021.
Investment Activity
Significant investment activity, with EUR161.3m deployed in
Derived Debt
The overall value of the Derived Investments portfolio increased
from EUR319.4m at 31 December 2020 to EUR439.2m at 30 June 2021 as
investment activity ramped up in Q2 to deploy the significant
distributions received from realisations in the Private Equity
portfolio. At period end, the Derived Investment portfolio
represented 32% of the total invested portfolio.
All new investments in the period were in debt securities. With
Apax X, the latest Private Equity buyout fund, now in full
investment mode, the investment strategy took into account the
overall risk and liquidity requirements of the portfolio to ensure
flexibility for AGA to meet future calls from the Private Equity
funds.
AGA was able to identify opportunities to invest in high-quality
securities despite a competitive market environment and deployed
EUR161.3m across thirteen new positions and made two add-on
investments in Derived Debt in the first six months of 2021.
The majority of realisations were also in Derived Debt achieving
a Gross IRR of 9.5% and MOIC of 1.2x on full exits in the first six
months of 2021.
DERIVED INVESTMENTS PERFORMANCE (%)
Income 2.9%
------------------------------ ------
Realised gains 0.2%
------------------------------ ------
Unrealised gains 5.2%
------------------------------ ------
Performance fee adjustment(1) (1.3%)
------------------------------ ------
FX 2.8%
------------------------------ ------
Total Return 9.8%
------------------------------ ------
1. Performance fee adjustment accounting for the movement in the
performance fee reserve at 30 June 2021
PRIVATE EQUITY
INVESTMENTS
Total new investment (1) EUR85.0m
Tech & Digital 33%
---------
Healthcare 20%
---------
Services 23%
---------
Internet/Consumer 24%
---------
EURm
New Investments closed (1)
--------------------------------------------------------------------- ----
Tech & Digital 28.0
--------------------------------------------------------------------- ----
Azentio - AX
Provider of critical, vertical-specific software products for
customers in banking, financial services and insurance 5.8
--------------------------------------------------------------------- ----
Comax - AMI
Provider of SaaS-based retail ERP system that primarily serves
the food retail space in Israel 1.4
--------------------------------------------------------------------- ----
Faculty - ADF
AI and machine learning ("ML") specialists 1.9
--------------------------------------------------------------------- ----
Guesty - ADF & AMI
Provider of end-to-end solution for professional hosts and property
management companies 2.0
--------------------------------------------------------------------- ----
Herjavec Group - AX
Provider of cybersecurity products and services to enterprise
organizations 5.7
--------------------------------------------------------------------- ----
Lutech - AX
IT services, software and technology company in Italy 8.8
--------------------------------------------------------------------- ----
Tide - ADF
The UK's leading business financial platform 2.4
--------------------------------------------------------------------- ----
Healthcare 17.4
--------------------------------------------------------------------- ----
Rodenstock - AX
Manufacturer of premium ophthalmic lenses in Germany 17.4
--------------------------------------------------------------------- ----
Services 19.5
--------------------------------------------------------------------- ----
PIB Group - AX
Insurance advisory business 19.5
--------------------------------------------------------------------- ----
Internet/Consumer 20.1
--------------------------------------------------------------------- ----
idealista - AX
Online real estate classifieds 9.9
--------------------------------------------------------------------- ----
Nulo - AX
One of the fastest growing major pet food brands in the US pet
specialty channel 10.2
--------------------------------------------------------------------- ----
DIVESTMENTS
Gross MOIC(2) 3.9x
Tech & Digital 55%
-----
Services 5%
-----
Internet/Consumer 40%
-----
GROSS
MOIC GROSS UPLIFT
Full Exits (2) IRR (2) (3)
----------------------------------------------------------- ----- -------- ------
Tech & Digital 3.9x 61.9% 22.7%
----------------------------------------------------------- ----- -------- ------
Signavio - ADF
Next-gen business process management software platform 2.8x 98.1% 78.6%
----------------------------------------------------------- ----- -------- ------
ZAP Group - AMI
Consumer internet business in Israel 2.4x 22.5% 14.1%
----------------------------------------------------------- ----- -------- ------
significant PARTIAL EXITS / IPOs
----------------------------------------------------------- ----- -------- ------
Duck Creek - AVIII
Provider of SaaS core systems solutions for P&C insurance
carriers 8.3x 57.0% 6.9%
----------------------------------------------------------- ----- -------- ------
Genius - AIX
Global leader in sports data technology 5.4x 84.1% 72.9%
----------------------------------------------------------- ----- -------- ------
Paycor - AIX
Provider of SaaS payroll and human capital management
software to small and medium-sized businesses in the
United States 3.2x 53.4% 16.2%
----------------------------------------------------------- ----- -------- ------
SoYoung - ADF
Largest online medical aesthetic marketplace in China 2.4x 30.2% 2.8%
----------------------------------------------------------- ----- -------- ------
Thoughtworks - AIX
Digital transformation and software
development company 8.2x 82.9% 15.3%
----------------------------------------------------------- ----- -------- ------
TietoEVRY - AVIII
Nordic IT services business 2.7x 35.1% (0.7%)
----------------------------------------------------------- ----- -------- ------
Services 0.9x (1.4%) 14.2%
----------------------------------------------------------- ----- -------- ------
significant PARTIAL EXITS
----------------------------------------------------------- ----- -------- ------
Psagot - AEVII
One of the largest asset management business in Israel 0.7x (2.9%) 18.3%
----------------------------------------------------------- ----- -------- ------
Boasso Global (Quality Distribution) - AVIII
Operates the largest bulk tank truck network in North
America 1.2x 2.9% 13.8%
----------------------------------------------------------- ----- -------- ------
Internet/Consumer 3.7x 61.7% 51.2%
----------------------------------------------------------- ----- -------- ------
Boats Group - AIX
Online marketplace and provider of software solutions
for the recreational marine industry 4.2x 40.0% 40.9%
----------------------------------------------------------- ----- -------- ------
significant PARTIAL EXITS/IPOs
----------------------------------------------------------- ----- -------- ------
Baltic Classifieds Group - AIX
Online classifieds group in Baltics 3.6x 92.9% 59.1%
----------------------------------------------------------- ----- -------- ------
Derived Investments
INVESTMENTS
Total new investment EUR161.3m
Tech & Digital 60% Derived Debt 60%
Derived Equity 0%
Healthcare 13% Derived Debt 13%
-------------- ---
Derived Equity 0%
-------------- ---
Services 27% Derived Debt 27%
---- -------------- ---
Derived Equity 0%
---- -------------- ---
New Investments EURm
-------------------------------------------------------------------- ----
Tech & Digital 97.0
-------------------------------------------------------------------- ----
Aptean - Second lien term loan
Provider of industry-specific ERP, supply chain and compliance
software 12.4
-------------------------------------------------------------------- ----
Astra - First lien term loan
Mission-critical software for higher education institutions to
manage the student lifecycle and data 14.0
-------------------------------------------------------------------- ----
HelpSystems - First lien term loan
Provider of software solutions to IT departments 20.5
-------------------------------------------------------------------- ----
Mitratech - First lien term loan + Second lien term loan
Provider of end-to-end software products for legal & compliance
professionals 8.2
-------------------------------------------------------------------- ----
Therapy Brands - First lien term loan + Second lien term loan
Provider of fully-integrated practice management and EHR solutions
for mental and behavioral health providers 12.7
-------------------------------------------------------------------- ----
Infogain - First lien term loan
Global IT service provider 13.9
-------------------------------------------------------------------- ----
Precisely Software - First lien term loan
Provider of infrastructure software solutions 12.5
-------------------------------------------------------------------- ----
Add-on
-------------------------------------------------------------------- ----
EverCommerce - First lien term loan
Multi-vertical portfolio of marketing, business management and
customer experience software solutions 1.2
-------------------------------------------------------------------- ----
Syndigo - Second lien term loan
Provider of product content management solutions 1.6
-------------------------------------------------------------------- ----
EURm
-------------------------------------------------------------------- ----
Healthcare 20.6
-------------------------------------------------------------------- ----
AccentCare - First lien term loan
Provider of post-acute healthcare services in the US 20.6
-------------------------------------------------------------------- ----
Services 43.7
-------------------------------------------------------------------- ----
Hightower - Senior unsecured note
Provider of investment services 4.2
-------------------------------------------------------------------- ----
PIB - First lien term loan
Insurance advisory business 22.9
-------------------------------------------------------------------- ----
PSSI - First lien term loan
Provider of cleaning, sanitation, and compliance services to food
processing plants 16.6
-------------------------------------------------------------------- ----
DISINVESTMENTS
Total DISINVESTED EUR69.8m
Tech & Digital 61% Derived Debt 59%
Derived Equity 2%
Healthcare 30% Derived Debt 30%
-------------- ---
Derived Equity 0%
-------------- ---
Services 9% Derived Debt 2%
---- -------------- ---
Derived Equity 7%
---- -------------- ---
GROSS GROSS
MOIC IRR
Full Exits (2) (2)
----------------------------------------------------------------------- ----- -------
Tech & Digital 1.3x 10.6%
----------------------------------------------------------------------- ----- -------
Astra - First lien term loan
Mission-critical software for higher education institutions to manage
the student lifecycle and data 1.0x 1.1%
----------------------------------------------------------------------- ----- -------
Rocket Software - Second lien term loan
Provider of legacy infrastructure software 1.2x 8.3%
----------------------------------------------------------------------- ----- -------
Syncsort - Second lien term loan
Provider of infrastructure software solutions 1.4x 12.2%
----------------------------------------------------------------------- ----- -------
Healthcare 1.1x 4.8%
----------------------------------------------------------------------- ----- -------
AccentCare - First lien term loan
Provider of post-acute healthcare services in the US 1.1x 4.8%
----------------------------------------------------------------------- ----- -------
Services 0.7x (12.7%)
----------------------------------------------------------------------- ----- -------
Development Credit Bank - Listed equity
SME and retail focused private sector bank 0.6x (13.1%)
----------------------------------------------------------------------- ----- -------
Veritext - First lien term loan
Provider of court reporting services for out-of-court depositions 1.0x 12.4%
----------------------------------------------------------------------- ----- -------
1. Represents AGA's look-through cost to investments acquired by the Apax Funds during H12021
2. For Private Equity, represents Gross IRR and Gross MOIC on
full and partial exits calculated based on the concurrent aggregate
expected cash flows and remaining fair value in euro across all
funds signed, or an exit was sufficiently close to being signed
that the Apax Funds incorporated the expected exit multiple into
the quarter end valuation. For Derived Investments, represents
Gross IRR and Gross MOIC calculated based on the aggregate
concurrent euro cash flows since inception of deals fully realised
during H1 2021
3. Uplift represents proceeds received (translated at FX rates
received) or proceeds expected to be received for deals yet to sign
(at period end FX rates) compared to their last Unaffected
Valuation4 at AGA level. For deals that were partially realised or
IPO'd it includes proceeds received and the latest remaining fair
value at 30 June 2021. For investments where there were subsequent
partial realisations since December 2020, uplift calculated by
taking proceeds received in H1 2021 plus remaining fair value at 30
June 2021 compared to fair value at 31 December 2020
4. Unaffected Valuation is determined as the fair value in the
last quarter before exit, when valuation is not affected by the
exit process (i.e. because an exit was signed, or an exit was
sufficiently close to being signed that the Apax Funds incorporated
the expected exit multiple into the quarter end valuation)
PRIVATE EQUITY PORTFOLIO AT 30 June 2021
INVESTED PORTFOLIO EUR916.6M
------------------- ---------
AIX 39%
------------------- ---------
AVIII 12%
------------------- ---------
AEVII 2%
------------------- ---------
AEVI 0%
------------------- ---------
AMI 4%
------------------- ---------
ADF 3%
------------------- ---------
AX 8%
------------------- ---------
DI 32%
------------------- ---------
APAX IX
AGA NAV: EUR522.6m
Distributions1: EUR121.3m
% of AGA PE
portfolio: 57%
Vintage: 2016
Commitment: EUR154.5m
+ $175.0m
Invested and
committed: 91%
Fund size: $9.5bn
----------------- ---------------------------
APAX X
-----------
AGA NAV: EUR103.7m
Distributions1: EUR0.0m
% of AGA PE
portfolio: 11%
Vintage: 2020
Commitment: EUR199.8m
+ $225.0m
Invested and
committed: 35%
Fund size: $11.7bn
------------------------------- -----------
Apax VIII
AGA NAV: EUR172.2m
Distributions1: EUR520.0m
% of AGA PE
portfolio: 19%
Vintage: 2012
Commitment: EUR159.5m
+ $218.3m
Invested and
committed: 108%
Fund size: $7.5bn
----------------- --------------------------
Apax Europe
VII
----------
AGA NAV: EUR26.2m
Distributions1: EUR89.4m
% of AGA PE
portfolio: 3%
Vintage: 2007
Commitment: EUR86.1m
Invested and
committed: 108%
Fund size: EUR11.2bn
------------------------------- ----------
Apax EUROPE
VI
AGA NAV: EUR6.6m
Distributions1: EUR8.1m
% of AGA PE
portfolio: 1%
Vintage: 2005
Commitment: EUR10.6m
Invested and
committed: 107%
Fund size: EUR4.3bn
----------------- --------------------------
AMI
----------
AGA NAV: EUR50.0m
Distributions1: EUR13.2m
% of AGA PE
portfolio: 5%
Vintage: 2015
Commitment: $30.0m
Invested and
committed: 71%
Fund size: $0.5bn
------------------------------- ----------
Apax Digital
AGA NAV: EUR35.3m
Distributions1: EUR10.3m
% of AGA PE
portfolio: 4%
Vintage: 2017
Commitment: $50.0m
Invested and
committed: 74%
Fund size: $1.1bn
----------------- ---------
Top 30 Private Equity Investments - AGA's Indirect Exposure
------------------------------------------------------------------------------------
Valuation
Portfolio company Sector Geography EURm % of NAV
-------------------------- ------------------ --------------- --------- --------
Thoughtworks Tech North America 91.5 7%
-------------------------- ------------------ --------------- --------- --------
Duck Creek Technologies Tech North America 66.9 5%
-------------------------- ------------------ --------------- --------- --------
Unilabs Healthcare Europe 62.0 4%
-------------------------- ------------------ --------------- --------- --------
Paycor2 Tech North America 54.0 4%
-------------------------- ------------------ --------------- --------- --------
Vyaire Medical2 Healthcare North America 41.1 3%
-------------------------- ------------------ --------------- --------- --------
Candela Healthcare North America 40.2 3%
-------------------------- ------------------ --------------- --------- --------
Global-e Tech Israel 39.7 3%
-------------------------- ------------------ --------------- --------- --------
Trade Me2 Internet/Consumer Rest of world 38.6 3%
-------------------------- ------------------ --------------- --------- --------
Authority Brands Services North America 38.4 3%
-------------------------- ------------------ --------------- --------- --------
Genius Sports Group Tech United Kingdom 37.8 3%
-------------------------- ------------------ --------------- --------- --------
Assured Partners Services North America 36.3 3%
-------------------------- ------------------ --------------- --------- --------
InnovAge Healthcare North America 35.8 3%
-------------------------- ------------------ --------------- --------- --------
Cole Haan Internet/Consumer North America 32.6 2%
-------------------------- ------------------ --------------- --------- --------
Baltic Classifieds Group Internet/Consumer Europe 27.4 2%
-------------------------- ------------------ --------------- --------- --------
Wehkamp Internet/Consumer Europe 27.0 2%
-------------------------- ------------------ --------------- --------- --------
Tosca Services Services North America 25.0 2%
-------------------------- ------------------ --------------- --------- --------
Safetykleen Europe Services United Kingdom 23.9 2%
-------------------------- ------------------ --------------- --------- --------
ADCO Group Services Europe 20.9 2%
-------------------------- ------------------ --------------- --------- --------
PIB Group2 Services United Kingdom 20.7 1%
-------------------------- ------------------ --------------- --------- --------
Inmarsat Tech Europe 19.0 1%
-------------------------- ------------------ --------------- --------- --------
Rodenstock Healthcare Europe 17.4 1%
-------------------------- ------------------ --------------- --------- --------
MatchesFashion Internet/Consumer United Kingdom 16.8 1%
-------------------------- ------------------ --------------- --------- --------
Coalfire Tech North America 16.5 1%
-------------------------- ------------------ --------------- --------- --------
Lexitas Services North America 16.2 1%
-------------------------- ------------------ --------------- --------- --------
Fractal Analytics Tech India 16.0 1%
-------------------------- ------------------ --------------- --------- --------
Boasso Global (Quality
Distribution)2 Services North America 15.8 1%
-------------------------- ------------------ --------------- --------- --------
KAR Global Internet/Consumer North America 15.4 1%
-------------------------- ------------------ --------------- --------- --------
Cadence Education Internet/Consumer North America 13.5 1%
-------------------------- ------------------ --------------- --------- --------
MyCase Tech North America 12.8 1%
-------------------------- ------------------ --------------- --------- --------
idealista Internet/Consumer Europe 12.4 1%
-------------------------- ------------------ --------------- --------- --------
Total top 30 gross values 931.6 68%
--------------------------------------------------------------- --------- --------
Other investments 229.8 17%
--------------------------------------------------------------- --------- --------
Carried interest (153.0) (11%)
--------------------------------------------------------------- --------- --------
Capital call facilities
and other (91.8) (8%)
--------------------------------------------------------------- --------- --------
Total Private Equity 916.6 66%
--------------------------------------------------------------- --------- --------
Top 30 Derived Investments holdings
Valuation
Instrument Sector Geography EURm % of NAV
----------------------------- ----------------- ------------------ --------------- --------- --------
Paycor3 Preferred shares Tech North America 26.9 2%
----------------------------- ----------------- ------------------ --------------- --------- --------
PIB Group3 1L term loan Services United Kingdom 23.3 2%
----------------------------- ----------------- ------------------ --------------- --------- --------
AccentCare 1L term loan Healthcare North America 21.1 2%
----------------------------- ----------------- ------------------ --------------- --------- --------
HelpSystems 1L term loan Tech North America 21.1 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Exact Software 2L term loan Tech Europe 20.1 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Boasso Global (Quality
Distribution)3 2L term loan Services North America 17.3 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Planview 2L term loan Tech North America 16.8 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
PSSI 1L term loan Services North America 16.8 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
EverCommerce 1L term loan Tech North America 16.6 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
AmeriLife 2L term loan Services North America 15.2 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Neuraxpharm 1L term loan Healthcare Europe 15.2 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Vyaire Medical3 1L term loan Healthcare North America 14.3 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Astra 1L term loan Tech North America 14.3 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Infogain3 1L term loan Tech North America 14.0 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Airtel Africa Listed equity Tech Rest of World 13.4 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
1L + 2L term
Therapy Brands loan Tech North America 13.1 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
WIRB-Copernicus Group 1L term loan Healthcare North America 12.7 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
PowerSchool 2L term loan Tech North America 12.7 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Precisely Software 1L term loan Tech North America 12.7 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Aptean 2L term loan Tech North America 12.6 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Trade Me3 2L term loan Internet/Consumer Rest of World 12.6 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Alexander Mann Solutions 1L term loan Services United Kingdom 12.5 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Just Group Listed equity Services United Kingdom 11.3 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
PCI 1L term loan Healthcare North America 10.2 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Sinopharm Group Listed equity Healthcare China 8.9 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
1L + 2L term
Mitratech loan Tech North America 8.5 1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Navicure 1L term loan Healthcare North America 8.4 <1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Southern Veterinary Partners 2L term loan Healthcare North America 6.9 <1%
----------------------------- ----------------- ------------------ --------------- --------- --------
FullBeauty Equity Internet/Consumer North America 5.8 <1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Repco Home Finance Listed equity Services India 5.6 <1%
----------------------------- ----------------- ------------------ --------------- --------- --------
Other 18.3 3%
------------------------------------------------------------------------------------- --------- --------
Total Derived Investments 439.2 32%
------------------------------------------------------------------------------------- --------- --------
1. Represents distributions received by AGA since 15 June 2015
2. Investments where AGA also holds Derived Investments
3. Investments also held by Apax Funds
1L: first lien 2L: second lien
Strategic reportStatement of Directors' responsibilities
Statement of principal risks and uncertainties
As an investment company with an investment portfolio comprising
financial instruments, the principal risks associated with the
Company's business largely relate to financial risks, strategic and
business risks, and operating risks. A detailed analysis of the
Company's principal risks and uncertainties is set out on pages 41
to 43 of the Annual Report and Accounts 2020 and they have not
changed materially since the date of the report. The Company has
not identified any material new risks that will impact the
remaining
six months of the financial year.
Statement of Directors' responsibilities in respect of the
Interim Report and Accounts
The Directors confirm that to the best of their knowledge:
-- the condensed interim financial statements have been prepared
in accordance with IAS 34 interim financial reporting as required
by DTR4.2.4R;
-- the Chairman's statement and Investment Manager's report
(together constituting the Interim Management report), together
with the statement of principal risks and uncertainties, include a
fair review of the information required by DTR4.2.7R, being an
indication of important events that have occurred during the period
and their impact on these condensed interim financial statements;
and a description of the principal risks and uncertainties for the
remaining six months of the year; and
-- the condensed interim financial statements provide a fair
review of the information required by DTR4.2.8R, being related
party transactions that have taken place in the first six months of
the current financial year and that have materially affected the
financial position or performance of the Company during that
period, and any changes in the related party transactions described
in the last annual report and accounts that could materially affect
the financial position or performance of the Company during that
period. Please refer to note 9 of the condensed interim financial
statements.
Signed on behalf of the Board of Directors
Tim Breedon CBE
Chairman
18 August 2021
Signed on behalf of the Audit Committee
Susie Farnon
Chairman of the Audit Committee
18 August 2021
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Company's website. Legislation in Guernsey governing the
preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
Independent Review Report
to Apax Global Alpha Limited
Conclusion
We have been engaged by Apax Global Alpha Limited (the
"Company") to review the condensed set of financial statements in
the half-yearly financial report for the six months ended 30 June
2021 of the Company which comprise the condensed statement of
financial position, the condensed statement of profit or loss and
other comprehensive income, the condensed statement of changes in
equity, the condensed statement of cash flows and the related
explanatory notes.
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2021 is not prepared, in all material respects, in accordance
with IAS 34 Interim Financial Reporting as adopted by the EU and
the Disclosure Guidance and Transparency Rules ("the DTR") of the
UK's Financial Conduct Authority ("the UK
FCA").
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. We read the other information contained in the
half-yearly financial report and consider whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
A review is substantially less in scope than an audit conducted
in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the DTR of the UK FCA.
As disclosed in note 2, the annual financial statements of the
Company are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The directors are
responsible for preparing the condensed set of financial statements
included in the half-yearly financial report in accordance with IAS
34 as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
The purpose of our review work and to whom we owe our
responsibilities
This report is made solely to the Company in accordance with the
terms of our engagement letter to assist the Company in meeting the
requirements of the DTR of the UK FCA. Our review has been
undertaken so that we might state to the Company those matters we
are required to state to it in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Company for our
review work, for this report, or for the conclusions we have
reached.
[add signature when approved]
Deborah Smith
for and on behalf of
KPMG Channel Islands Limited
Chartered Accountants, Guernsey
18 August 2021
CONDENSED Statement of financial position
At 30 June 2021 (Unaudited)
Notes 30 June 31 December
2021 2020
EUR'000 EUR'000
--------------------------------------------------- ----- --------- -----------
Assets
--------------------------------------------------- ----- --------- -----------
Financial assets held at fair value through profit
or loss ("FVTPL") 8(a) 1,355,786 1,107,723
--------------------------------------------------- ----- --------- -----------
Total non-current assets 1,355,786 1,107,723
--------------------------------------------------- ----- --------- -----------
Current assets
--------------------------------------------------- ----- --------- -----------
Cash and cash equivalents 78,415 124,569
--------------------------------------------------- ----- --------- -----------
Investment receivables 1,047 1,338
--------------------------------------------------- ----- --------- -----------
Other receivables - -
--------------------------------------------------- ----- --------- -----------
Total current assets 79,462 125,907
--------------------------------------------------- ----- --------- -----------
Total assets 1,435,248 1,233,630
--------------------------------------------------- ----- --------- -----------
Liabilities
--------------------------------------------------- ----- --------- -----------
Investment payables 48,630 30,965
--------------------------------------------------- ----- --------- -----------
Accrued expenses 1,811 1,481
--------------------------------------------------- ----- --------- -----------
Total current liabilities 50,441 32,446
--------------------------------------------------- ----- --------- -----------
Total liabilities 50,441 32,446
--------------------------------------------------- ----- --------- -----------
Capital and retained earnings
--------------------------------------------------- ----- --------- -----------
Shareholders' capital 14 873,804 873,804
--------------------------------------------------- ----- --------- -----------
Retained earnings 506,537 327,380
--------------------------------------------------- ----- --------- -----------
Total capital and retained earnings 1,380,341 1,201,184
--------------------------------------------------- ----- --------- -----------
Share-based payment performance fee reserve 10 4,466 -
--------------------------------------------------- ----- --------- -----------
Total equity 1,384,807 1,201,184
--------------------------------------------------- ----- --------- -----------
Total shareholders' equity and liabilities 1,435,248 1,233,630
--------------------------------------------------- ----- --------- -----------
On behalf of the Board of Directors
----------------------------------- -----------------------------
Tim Breedon Susie Farnon
Chairman Chair of the Audit Committee
18 August 2021 18 August 2021
30 June 30 June 31 December 31 December
2021 2021 2020 2020
EUR GBP equivalent1 EUR GBP equivalent1
------------------------------- --------- ---------------- ----------- ----------------
Net Asset Value ("NAV") ('000) 1,384,807 1,187,043 1,201,184 1,073,546
------------------------------- ----------- ----------------
Adjusted NAV ('000)2 1,380,341 1,183,215 1,201,184 1,073,546
------------------------------- ----------- ----------------
NAV per share 2.82 2.42 2.45 2.19
------------------------------- --------- ---------------- ----------- ----------------
Adjusted NAV per share2 2.81 2.41 2.45 2.19
------------------------------- --------- ---------------- ----------- ----------------
six months six months
ended ended
30 june 30 june
2021 2020
% %
------------------ ---------- ----------
Total NAV Return3 17.4% (0.5%)
------------------ ---------- ----------
1. The sterling equivalent has been calculated based on the
GBP/EUR exchange rate at 30 June 2021 and 31 December 2020,
respectively
2. Adjusted NAV represents NAV which is net of the share-based
payment performance fee reserve. Adjusted NAV per share is
calculated by dividing the Adjusted NAV by the total number of
shares
3. Total NAV Return for the period means the return on the
movement in the Adjusted NAV per share at the end of the period
together with all the dividends paid during the period, to the
Adjusted NAV per share at the beginning of the period. Adjusted NAV
per share used in the calculation is rounded to 5 decimal
places
The accompanying notes form an integral part of these condensed
interim financial statements.
CONDENSED STATEMENT of profit or loss AND OTHER COMPREHENSIVE
INCOME
Six months ended 30 June 2021 (Unaudited)
six months six months
ended ended
30 june 30 June
2021 2020
Notes EUR'000 EUR'000
-------------------------------------------------- ----- ---------- ----------
Income
-------------------------------------------------- ----- ---------- ----------
Investment income 9,426 8,964
-------------------------------------------------- ----- ---------- ----------
Net gains/(losses) on financial assets at FVTPL 8(b) 208,970 (6,259)
-------------------------------------------------- ----- ---------- ----------
Net losses on financial liabilities at FVTPL 8(c) - (2,188)
-------------------------------------------------- ----- ---------- ----------
Realised foreign currency (losses)/gains (640) 308
-------------------------------------------------- ----- ---------- ----------
Unrealised foreign currency gains/(losses) 779 (2,352)
-------------------------------------------------- ----- ---------- ----------
Total income 218,535 (1,527)
-------------------------------------------------- ----- ---------- ----------
Operating and other expenses
-------------------------------------------------- ----- ---------- ----------
Performance fee 10 (4,466) (46)
-------------------------------------------------- ----- ---------- ----------
Management fee 9 (1,980) (1,400)
---------- ----------
Administration and other operating expenses 6 (1,372) (1,158)
-------------------------------------------------- ----- ---------- ----------
Total operating expenses (7,818) (2,604)
-------------------------------------------------- ----- ---------- ----------
Total income less operating expenses 209,317 (4,131)
-------------------------------------------------- ----- ---------- ----------
Finance costs 11 (1,400) (860)
-------------------------------------------------- ----- ---------- ----------
Profit/(loss) before tax 209,205 (4,991)
-------------------------------------------------- ----- ---------- ----------
Tax charge 7 (154) (46)
-------------------------------------------------- ----- ---------- ----------
Profit/(loss) after tax for the period 209,163 (5,037)
-------------------------------------------------- ----- ---------- ----------
Other comprehensive income - -
-------------------------------------------------- ----- ---------- ----------
Total comprehensive income/(loss) attributable to
shareholders 209,163 (5,037)
-------------------------------------------------- ----- ---------- ----------
Earnings/(Loss) per share (cents) 15
-------------------------------------------------- ----- ---------- ----------
Basic and diluted 42.59 (1.03)
-------------------------------------------------- ----- ---------- ----------
Adjusted1 42.42 (1.03)
-------------------------------------------------- ----- ---------- ----------
1. The Adjusted earnings per share has been calculated based on
the profit attributable to ordinary shareholders adjusted for the
total accrued performance fee at 30 June 2021 and 30 June 2020
respectively as per note 15 and the weighted average number of
ordinary shares
The accompanying notes form an integral part of these condensed
interim financial statements.
CONDENSED Statement of changes in equity
Six months ended 30 June 2021 (Unaudited)
FOR THE SIX MONTHSED 30 JUNE Notes Shareholders' Retained Total Share-based Total
2021 capital earnings Capital payment EUR'000
EUR'000 EUR'000 and Retained performance
earnings fee reserve
EUR'000 EUR'000
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Balance at 1 January 2021 873,804 327,380 1,201,184 - 1,201,184
---------------------------------------- -----
Total comprehensive income attributable
to shareholders - 209,163 209,163 - 209,163
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Share-based payment performance
fee reserve movement 10 - - - 4,466 4,466
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Dividends paid 16 - (30,006) (30,006) - (30,006)
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Balance at 30 June 2021 873,804 506,537 1,380,341 4,466 1,384,807
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
For the year ended 31 December Notes Shareholders' Retained Total Share-based Total
2020 capital earnings Capital payment EUR'000
EUR'000 EUR'000 and Retained performance
earnings fee reserve
EUR'000 EUR'000
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Balance at 1 January 2020 873,804 218,272 1,092,076 6,893 1,098,969
---------------------------------------- -----
Total comprehensive income attributable
to shareholders - (5,037) (5,037) - (5,037)
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Share-based payment performance
fee reserve movement 10 - - - (6,893) (6,893)
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Dividends paid 16 - (26,353) (26,353) - (26,353)
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Balance at 30 June 2020 873,804 186,882 1,060,686 - 1,060,686
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Total comprehensive income attributable
to shareholders - 167,020 167,020 - 167,020
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Share-based payment performance
fee reserve movement 10 - - - - -
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Dividends paid - (26,522) (26,522) - (26,522)
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
Balance at 31 December 2020 873,804 327,380 1,201,184 - 1,201,184
---------------------------------------- ----- ------------- --------- ------------- ------------ ---------
The accompanying notes form an integral part of these condensed
financial statements.
CONDENSED Statement of cash flows
Six months ended 30 June 2021 (Unaudited)
six months six months
ended ended
30 June 30 June
2021 2020
NOTEs EUR'000 EUR'000
----------------------------------------------------- ----- ---------- ----------
Cash flows from operating activities
----------------------------------------------------- ----- ---------- ----------
Interest received 9,582 9,388
----------------------------------------------------- ----- ---------- ----------
Interest paid (372) (43)
----------------------------------------------------- ----- ---------- ----------
Dividends received 230 72
----------------------------------------------------- ----- ---------- ----------
Operating expenses paid (2,954) (2,859)
----------------------------------------------------- ----- ---------- ----------
Capital calls paid to Private Equity Investments (78,682) (20,671)
----------------------------------------------------- ----- ---------- ----------
Capital distributions received from Private Equity
Investments 131,122 61,795
----------------------------------------------------- ----- ---------- ----------
Purchase of Derived Investments (139,873) (29,112)
Sale of Derived Investments 65,688 47,819
----------------------------------------------------- ----- ---------- ----------
Net cash from operating activities (15,259) 66,389
----------------------------------------------------- ----- ---------- ----------
Cash flows used in financing activities
----------------------------------------------------- ----- ---------- ----------
Financing costs paid (1,402) (848)
----------------------------------------------------- ----- ---------- ----------
Dividends paid (30,272) (25,715)
----------------------------------------------------- ----- ---------- ----------
Purchase of own shares 10 - (6,970)
----------------------------------------------------- ----- ---------- ----------
Revolving credit facility drawn - 6,106
----------------------------------------------------- ----- ---------- ----------
Revolving credit facility repaid - (6,106)
----------------------------------------------------- ----- ---------- ----------
Net cash used in financing activities (31,674) (33,533)
----------------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at the beginning of the
period 124,569 3,277
---------- ----------
Net (decrease)/increase in cash and cash equivalents (46,933) 32,856
Effect of foreign currency fluctuations on cash
and cash equivalents 779 (2,352)
----------------------------------------------------- ----- ---------- ----------
Cash and cash equivalents at the end of the period 78,415 33,781
----------------------------------------------------- ----- ---------- ----------
The accompanying notes form an integral part of these condensed
financial statements.
Notes to the CONDENSED INTERIM financial statements
1 Reporting entity
Apax Global Alpha Limited (the "Company" or "AGA") is a limited
liability Guernsey company that was incorporated on 2 March 2015.
The address of the Company's registered office is PO Box 656, East
Wing, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1
3PP. The Company invests in Private Equity funds, listed and
unlisted securities including debt instruments.
The Company's main corporate objective is to provide
shareholders with capital appreciation from its investment
portfolio and regular dividends. The Company's operating activities
are managed by its Board of Directors and its investment activities
are managed by Apax Guernsey Managers Limited (the "Investment
Manager") under a discretionary investment management agreement.
The Investment Manager obtains investment advice from Apax Partners
LLP (the "Investment Advisor").
2 Basis of preparation
Statement of compliance
These condensed interim financial statements have been prepared
in accordance with IAS 34 "Interim Financial Reporting" as adopted
by the European Union and should be read in conjunction with the
Annual Report and Accounts 2020 which were prepared in accordance
with International Financial Reporting Standards, as adopted by the
European Union ("IFRS"). They do not include all the information
required for a complete set of IFRS financial statements. However,
selected explanatory notes are included to explain events and
transactions that are significant to an understanding of changes in
the Company's financial position and performance since the last
annual financial statements.
These condensed interim financial statements were authorised for
issue by the Company's Board of Directors on 18 August 2021.
Basis of measurement
The financial statements have been prepared on the historic cost
basis except for financial assets and financial liabilities, which
are measured at FVTPL.
Going concern
The Directors consider that it is appropriate to adopt the going
concern basis of accounting in preparing the financial statements.
In reaching this assessment, the Directors have considered a wide
range of information relating to present and future conditions (for
at least 12 months from 18 August 2021, the authorisation date of
these financial statements), including the statement of financial
position, future projections (which include highly stressed
scenarios), cash flows, revolving credit facility available, net
current assets and the longer-term strategy of the Company. The
impact of Covid-19 was also considered by the Directors; and whilst
the long-term effect remains to be seen, it was noted that the
impact on the Company has been limited to date, as the underlying
portfolio is invested in sectors, such as Tech, which have been
relatively less affected. The Directors are satisfied, based on
their assessment of reasonably possible outcomes, that the Company
has sufficient liquidity, including the undrawn revolving credit
facility, to meet current and expected obligations up to the going
concern horizon.
3 Accounting policies
There are no new standards or changes to standards since the
Annual Report and Accounts 2020 which significantly impact these
condensed interim financial statements. The accounting policies
applied by the Company in these condensed interim financial
statements are consistent with those set out on pages 76 to 79 of
the Annual Report and Accounts 2020.
4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In preparing these condensed interim financial statements, the
Company makes judgements and estimates that affect the reported
amounts of assets, liabilities, income and expenses. Actual results
could differ from those estimates. Estimates and judgements are
continually evaluated and are based on the Board of Directors and
Investment Manager's experience and their expectations of future
events. Revisions to estimates are recognised prospectively.
(i) Judgements
The judgement that has the most significant effect on the
amounts recognised in the Company's condensed interim financial
statements relates to investment assets and liabilities. These have
been determined to be financial assets and liabilities held at
FVTPL and have been accounted for accordingly.
(ii) Estimates
The estimate that has the most significant effect on the amounts
recognised in the Company's financial statements relates to
financial assets and financial liabilities held at FVTPL other than
those traded in an active market
The Investment Manager is responsible for the preparation of the
Company's valuations and meets quarterly to approve and discuss the
key valuation assumptions. The meetings are open to the Board of
Directors and the Investment Advisor to enable them to challenge
the valuation assumptions and the proposed valuation estimates and
for the external auditors to observe. On a quarterly basis, the
Board of Directors review and approve the final NAV calculation
before it is announced to the market.
The Investment Manager also makes estimates and assumptions
concerning the future and the resulting accounting estimates, will
by definition, seldom equal the related actual results. The
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities are
outlined in note 13.
5 Segmental analysis
The segmental analysis of the Company's results and financial
position is set out below. There have been no changes to reportable
segments since those presented in the Annual Report and Accounts
2020.
Reportable segments
CONDENSED Statement of profit or loss and Private Derived Central Total
other comprehensive income Equity Investments functions(1) EUR'000
for the six months ended 30 June 2021 Investments EUR'000 EUR'000
EUR'000
----------------------------------------------- ------------ ------------ ------------- --------
Investment income - 9,426 - 9,426
----------------------------------------------- ------------ ------------ ------------- --------
Net gains/(losses) on financial assets at
FVTPL 180,697 28,273 - 208,970
----------------------------------------------- ------------ ------------ ------------- --------
Realised foreign exchange (losses)/gains - (376) (264) (640)
----------------------------------------------- ------------ ------------ ------------- --------
Unrealised foreign currency losses - - 779 779
----------------------------------------------- ------------ ------------ ------------- --------
Total income 180,697 37,323 515 218,535
----------------------------------------------- ------------ ------------ ------------- --------
Performance fees2 - (4,466) - (4,466)
----------------------------------------------- ------------ ------------ ------------- --------
Management fees (80) (1,900) - (1,980)
----------------------------------------------- ------------ ------------ ------------- --------
Administration and other operating expenses - (86) (1,286) (1,372)
----------------------------------------------- ------------ ------------ ------------- --------
Total operating expenses (80) (6,452) (1,286) (7,818)
----------------------------------------------- ------------ ------------ ------------- --------
Total income less operating expenses 180,617 30,871 (771) 210,717
----------------------------------------------- ------------ ------------ ------------- --------
Finance costs - - (1,400) (1,400)
----------------------------------------------- ------------ ------------ ------------- --------
Profit/(loss) before tax 180,617 30,871 (2,171) 209,317
----------------------------------------------- ------------ ------------ ------------- --------
Tax charge - (154) - (154)
----------------------------------------------- ------------ ------------ ------------- --------
Total comprehensive income/(loss) attributable
to shareholders 180,617 30,717 (2,171) 209,163
----------------------------------------------- ------------ ------------ ------------- --------
Private Cash and
Equity Derived other
CONDENSED Statement of financial position Investments Investments NCAs (3) Total
at 30 June 2021 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------------------ ------------ ------------ --------- ----------
Total assets 916,548 440,285 78,415 1,435,248
------------------------------------------ ------------ ------------ --------- ----------
Total liabilities - (48,630) (1,811) (50,441)
------------------------------------------ ------------ ------------ --------- ----------
NAV 916,548 391,655 76,604 1,384,807
------------------------------------------ ------------ ------------ --------- ----------
Private
CONDENSED Statement of profit or loss and Equity Derived Central
other comprehensive income Investments Investments functions(1) Total
for the six months ended 30 June 2020 EUR'000 EUR'000 EUR'000 EUR'000
----------------------------------------------- ------------ ------------ ------------- --------
Investment income - 9,001 (37) 8,964
----------------------------------------------- ------------ ------------ ------------- --------
Net gains/(losses) on financial assets at
FVTPL 19,557 (25,816) - (6,259)
----------------------------------------------- ------------ ------------ ------------- --------
Net losses on financial liabilities at FVTPL (2,188) - - (2,188)
----------------------------------------------- ------------ ------------ ------------- --------
Realised foreign exchange (losses)/gains - (277) 585 308
----------------------------------------------- ------------ ------------ ------------- --------
Unrealised foreign currency losses - - (2,352) (2,352)
----------------------------------------------- ------------ ------------ ------------- --------
Total income 17,369 (17,092) (1,804) (1,527)
----------------------------------------------- ------------ ------------ ------------- --------
Performance fees2 (46) - - (46)
----------------------------------------------- ------------ ------------ ------------- --------
Management fees (91) (1,309) - (1,400)
----------------------------------------------- ------------ ------------ ------------- --------
Administration and other operating expenses - (145) (1,013) (1,158)
----------------------------------------------- ------------ ------------ ------------- --------
Total operating expenses (137) (1,454) (1,013) (2,604)
----------------------------------------------- ------------ ------------ ------------- --------
Total income less operating expenses 17,232 (18,546) (2,817) (4,131)
----------------------------------------------- ------------ ------------ ------------- --------
Finance costs - - (860) (860)
----------------------------------------------- ------------ ------------ ------------- --------
Profit/(loss) before tax 17,232 (18,546) (3,677) (4,991)
----------------------------------------------- ------------ ------------ ------------- --------
Tax charge - (46) - (46)
----------------------------------------------- ------------ ------------ ------------- --------
Total comprehensive income/(loss) attributable
to shareholders 17,232 (18,592) (3,677) (5,037)
----------------------------------------------- ------------ ------------ ------------- --------
Private Cash and
Equity Derived other
CONDENSED Statement of financial position Investments Investments NCAs (3) Total
at 31 December 2020 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------------------ ------------ ------------ --------- ---------
Total assets 788,307 320,754 124,569 1,233,630
------------------------------------------ ------------ ------------ --------- ---------
Total liabilities - (32,446) - (32,446)
------------------------------------------ ------------ ------------ --------- ---------
NAV 788,307 288,308 124,569 1,201,184
------------------------------------------ ------------ ------------ --------- ---------
1. Central functions represents interest income earned on cash
balances and general administration and finance costs that cannot
be allocated to investment segments
2. Represents the movement in each respective portfolio's overall performance fee reserve
3. NCAs refers to net current assets of the Company
6 Administration and other operating expenses
Six months SIX MONTHS
ended ended
30 June 30 JUNE
2021 2020
EUR'000 EUR'000
-------------------------------------------------- ---------- ----------
Directors' fees 184 163
-------------------------------------------------- ---------- ----------
Administration and other fees 329 313
-------------------------------------------------- ---------- ----------
Corporate and investor relations services fee 9 256 185
-------------------------------------------------- ---------- ----------
Deal transaction, custody and research costs 86 146
-------------------------------------------------- ---------- ----------
General expenses 471 305
-------------------------------------------------- ---------- ----------
Auditors' remuneration
-------------------------------------------------- ---------- ----------
Statutory audit - -
-------------------------------------------------- ---------- ----------
Other assurance services - interim review 46 46
-------------------------------------------------- ---------- ----------
Total administration and other operating expenses 1,372 1,158
-------------------------------------------------- ---------- ----------
The Company has no employees and there were no pension or staff
cost liabilities incurred during the period.
7 Taxation
The Company is exempt from taxation in Guernsey under the
provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance,
1989 and is charged an annual exemption fee of GBP1,200 (30 June
2020: GBP1,200).
The Company may be required, at times, to pay tax in other
jurisdictions as a result of specific trades in its investment
portfolio. During the period ended 30 June 2021, the Company had a
net tax expense of EUR154k (30 June 2020: EUR46k), mainly related
to the sale of listed equities in India and tax incurred on debt
interest in the United Kingdom. No deferred income taxes were
recorded as there are no timing differences.
8 Investments
(a) Financial instruments held at FVTPL
Six months Year
ended ended
30 June 31 December
2021 2020
EUR'000 EUR'000
------------------------------------- ---------- ------------
Private Equity Investments 916,548 788,307
------------------------------------- ---------- ------------
Private Equity financial assets 916,548 788,307
------------------------------------- ---------- ------------
Private Equity financial liabilities - -
------------------------------------- ---------- ------------
Derived Investments 439,238 319,416
------------------------------------- ---------- ------------
Debt 388,591 275,739
------------------------------------- ---------- ------------
Equities 50,647 43,677
------------------------------------- ---------- ------------
Closing fair value 1,355,786 1,107,723
------------------------------------- ---------- ------------
Financial assets held at FVTPL 1,355,786 1,107,723
Financial liabilities held at FVTPL - -
------------------------------------- ---------- ------------
Six months Year Six months
ended ended ended
30 June 31 December 30 June
2021 2020 2020
EUR'000 EUR'000 EUR'000
----------------------------------------------------- ---------- ------------ ----------
Opening fair value 1,107,723 1,108,477 1,108,477
----------------------------------------------------- ---------- ------------ ----------
Calls 78,679 55,651 20,671
----------------------------------------------------- ---------- ------------ ----------
Distributions (131,135) (207,280) (61,815)
----------------------------------------------------- ---------- ------------ ----------
Purchases 161,337 87,400 15,733
----------------------------------------------------- ---------- ------------ ----------
Sales (69,788) (90,043) (50,591)
----------------------------------------------------- ---------- ------------ ----------
Net gains/(losses) on fair value on financial assets 208,970 153,518 (6,259)
----------------------------------------------------- ---------- ------------ ----------
Net losses on fair value on financial liabilities - - (2,188)
----------------------------------------------------- ---------- ------------ ----------
Closing fair value 1,355,786 1,107,723 1,024,028
----------------------------------------------------- ---------- ------------ ----------
Financial assets held at FVTPL 1,355,786 1,107,723 1,028,957
Financial liabilities held at FVTPL - - (4,929)
----------------------------------------------------- ---------- ------------ ----------
(b) Net gains/(losses) on financial assets at FVTPL
Six months Six months
ended ended
30 June 30 June
2021 2020
EUR'000 EUR'00
-------------------------------------------------------- ---------- ----------
Private Equity financial assets
-------------------------------------------------------- ---------- ----------
Gross unrealised gains 176,650 48,988
-------------------------------------------------------- ---------- ----------
Gross unrealised losses (14,716) (29,431)
-------------------------------------------------------- ---------- ----------
Net unrealised gains on Private Equity financial assets 161,934 19,557
-------------------------------------------------------- ---------- ----------
Gross realised gains 18,763 -
-------------------------------------------------------- ---------- ----------
Net realised gains on Private Equity financial assets 18,763 -
-------------------------------------------------------- ---------- ----------
Net gains on Private Equity financial assets 180,697 19,557
-------------------------------------------------------- ---------- ----------
Derived Investments
-------------------------------------------------------- ---------- ----------
Gross unrealised gains 35,010 15,485
-------------------------------------------------------- ---------- ----------
Gross unrealised losses (527) (44,063)
-------------------------------------------------------- ---------- ----------
Net unrealised gains/(losses) on Derived Investments 34,483 (28,578)
-------------------------------------------------------- ---------- ----------
Gross realised gains 297 11,296
-------------------------------------------------------- ---------- ----------
Gross realised losses (6,507) (8,534)
-------------------------------------------------------- ---------- ----------
Net realised (losses)/gains on Derived Investments (6,210) 2,762
-------------------------------------------------------- ---------- ----------
Net gains/(losses) on Derived Investments 28,273 (25,816)
-------------------------------------------------------- ---------- ----------
Net gains/(losses) on financial assets at FVTPL 208,970 (6,259)
-------------------------------------------------------- ---------- ----------
(c) Net losses on financial liabilities at FVTPL
Six months Six months
ended ended
30 June 30 June
2021 2020
EUR'000 EUR'00
-------------------------------------------------------------- ---------- ----------
Private Equity financial liabilities
-------------------------------------------------------------- ---------- ----------
Gross unrealised losses - (2,188)
-------------------------------------------------------------- ---------- ----------
Net unrealised losses on Private Equity financial liabilities - (2,188)
-------------------------------------------------------------- ---------- ----------
Net losses on financial liabilities at FVTPL - (2,188)
-------------------------------------------------------------- ---------- ----------
(d) Involvement with unconsolidated structured entities
The Company's investments in Private Equity funds are considered
to be unconsolidated structured entities. Their nature and purpose
is to invest capital on behalf of their limited partners. The funds
pursue sector-focused strategies, investing in four key sectors:
Tech, Services, Healthcare and Internet/Consumer. The Company
commits to a fixed amount of capital, which may be drawn (and
returned) over the life of the fund. The Company pays capital calls
when due and receives distributions from the funds, once an asset
has been sold. Note 12 summarises current outstanding commitments
and recallable distributions to the seven underlying Private Equity
Investments held. The fair value of these was EUR916.6m at 30 June
2021 (30 June 2020: EUR742.5m), whereas the total value of the
Private Equity funds was EUR21.9bn (30 June 2020: EUR17.1bn).
During the year, the Company did not provide financial support and
has no intention of providing financial or other support to these
unconsolidated structured entities.
9 Related party transactions
The Investment Manager was appointed by the Board of Directors
under a discretionary Investment Management Agreement ("IMA") dated
22 May 2015 and amendments dated 22 August 2016 and 2 March 2020,
which sets out the basis for the calculation and payment of the
management fee.
Management fees earned by the Investment Manager increased in
the period to EUR2.0m (30 June 2020: EUR1.4m), of which EUR0.8m was
included in accruals at 30 June 2021. Following the amendment
approved by the Board on 2 March 2020, the revised management fee
is calculated in arrears at a rate of 0.5% per annum on the fair
value of non-fee paying private equity investments and equity
investments and 1.0% per annum on the fair value of debt
investments. The Investment Manager is also entitled to a
performance fee. The revised performance fee is calculated based on
the overall gains or losses net of management fees and Direct Deal
costs (being costs directly attributable to due diligence and
execution of investments) in each financial year. When the
Portfolio Total Return hurdle is met a performance fee is payable.
Further details are included in note 10.
The IMA has an initial term of six years and automatically
continues for a further three additional years unless prior to the
fifth anniversary the Investment Manager or the Company (by a
special resolution) serves written notice to terminate the IMA. The
Company is required to pay the Investment Manager all fees and
expenses accrued and payable for the notice period through to the
termination date.
The Investment Advisor has been engaged by the Investment
Manager to provide advice on the investment strategy of the
Company. An Investment Advisory Agreement ("IAA"), dated 22 May
2015 and an amendment dated 22 August 2016, exists between the two
parties. Though not legally related to the Company, the Investment
Advisor has been determined to be a related party. The Company paid
no fees and had no transactions with the Investment Advisor during
the period (30 June 2020: EURNil).
The Company has an Administration Agreement with Aztec Financial
Services (Guernsey) Limited ("Aztec") dated 22 May 2015. Under the
terms of the agreement, Aztec has delegated some of the Company's
accounting and bookkeeping to Apax Partners Fund Services Limited
("APFS"), a related party of the Investment Advisor, under a
sub-administration agreement dated 22 May 2015. A fee of EUR0.2m
(30 June 2020: EUR0.3m) was paid by the Company in respect of
administration fees and expenses, of which EUR0.1m (30 June 2020:
EUR0.2m) was paid to APFS. Additionally, following the approval of
the amended fee structure on 2 March 2020, with an effective date
from 1 January 2020, the Company entered into a new service
agreement with Apax Partners LLP and its affiliate, APFS, with a
fee calculated as 0.04% of the Invested Portfolio per annum for
corporate and investor services. During the period a fee of EUR0.3m
(30 June 2020: EUR0.2m) was paid by the Company to APFS.
The table below summarises shares held by Directors:
% of total % of total
30 June shares 31 December shares
2021 in issue 2020 in issue
---------------- ------- ---------- ----------- ----------
Tim Breedon 70,000 0.014% 70,000 0.014%
---------------- ------- ---------- ----------- ----------
Susie Farnon 43,600 0.009% 43,600 0.009%
---------------- ------- ---------- ----------- ----------
Chris Ambler 27,191 0.006% 27,191 0.006%
---------------- ------- ---------- ----------- ----------
Mike Bane 18,749 0.004% 18,749 0.004%
---------------- ------- ---------- ----------- ----------
Stephanie Coxon 10,000 0.002% 10,000 0.002%
---------------- ------- ---------- ----------- ----------
10 Performance fee
30 June 31 December 30 June
2021 2020 2020
EUR'000 EUR'000 EUR'000
-------------------------------------------------- -------- ----------- --------
Opening performance fee reserve - 6,893 6,893
-------------------------------------------------- -------- ----------- --------
Performance fee charged to statement of profit or
loss and other comprehensive income 4,466 46 46
-------------------------------------------------- -------- ----------- --------
Performance fee paid - (6,939) (6,939)
-------------------------------------------------- -------- ----------- --------
Closing performance fee reserve 4,466 - -
-------------------------------------------------- -------- ----------- --------
The performance fee is payable on an annual basis once the
respective hurdle thresholds are met by eligible portfolios.
Performance fees are only payable to the extent they do not dilute
the returns below the required benchmark for each respective
portfolio as detailed in the table below. Additionally net losses
are carried forward and netted against future gains.
net portfolio
total
return Performance
Summary hurdle1 fee rate
------------------------ ------------- -----------
Derived Debt 6% 15%
------------------------ ------------- -----------
Derived Equity 8% 20%
------------------------ ------------- -----------
Eligible Private Equity 8% 20%
------------------------ ------------- -----------
1. Net Portfolio Total Return means the sub-portfolio
performance in a given period, is calculated by taking total gains
or losses and dividing them by the sum of gross asset value at the
beginning of the period and the time-weighted net invested capital.
The time-weighted net invested capital is the sum of investments
made during the period less realised proceeds received during the
period, both weighted by the number of days the capital was at work
in the portfolio. Net Portfolio Total Return is gross of
performance fees but net of management fees and relevant Direct
Deal costs
The performance fee is payable to the Investment Manager by way
of ordinary shares of the Company. The mechanics of the payment of
the performance fee are explained in the prospectus. In accordance
with IFRS 2 "Share-based Payment", performance fee expenses are
charged through the statement of profit or loss and other
comprehensive income and allocated to a share-based payment
performance fee reserve in equity.
In the six months ended 30 June 2021, no performance fee was
paid as the closing reserve was nil at 31 December 2020 (30 June
2020: EUR6.9m).
At 30 June 2021, management's best estimate of the expected
performance fee was calculated on the eligible portfolio on a
liquidation basis.
11 revolving Credit facility and finance costs
On 19 January 2021, AGA amended the terms of its Revolving
Credit Facility ("RCF") agreement with Credit Suisse AG, London
Branch. The revised agreement converts the previous facility, which
was due to expire on 5 November 2021, to an evergreen structure
whereby either party is required to give 2 years notice to
terminate the agreement. The amended revolving credit facility
remains at EUR140.0m with the margin increasing from 210 bps to 230
bps (over Euribor or Libor depending on the currency drawn) and the
non-utilisation fee decreasing to c.100 bps per annum on an initial
blended basis from 120 bps per annum. Additionally, there was a
one-off commitment fee of EUR0.7m incurred related to this
refinancing.
Summary of finance costs are detailed below:
Six months Six months
ended ended
30 June 30 June
2021 2020
EUR'000 EUR'000
-------------------- ---------- ----------
Interest paid - 6
-------------------- ---------- ----------
Non-utilisation fee 699 854
-------------------- ---------- ----------
Commitment fee 701 -
-------------------- ---------- ----------
Total finance costs 1,400 860
-------------------- ---------- ----------
Under the Loan Agreement, the Company is required to provide
Private Equity Investments as collateral for each utilisation. The
loan-to-value must not exceed 35% of the eligible Private Equity
NAV. As at 30 June 2021 the facility was unutilised.
12 Financial risk management
The Company holds a variety of financial instruments under IFRS
7 in accordance with its Investment Management strategy. The
investment portfolio comprises Private Equity Investments and
Derived Investments as shown in the table below:
30 June 31 December
2021 2020
---------------------------------------- ------- -----------
Private Equity Investments 68% 71%
---------------------------------------- ------- -----------
Private Equity financial assets 68% 71%
Private Equity financial liabilities 0% 0%
---------------------------------------- ------- -----------
Derived Investments 32% 29%
---------------------------------------- ------- -----------
Debt 29% 25%
Equities 3% 4%
---------------------------------------- ------- -----------
Total 100% 100%
---------------------------------------- ------- -----------
The Company's activities expose it to a variety of financial
risks: liquidity risk, credit risk and market risk. There have been
no material changes in the Company's exposure to liquidity risk or
credit risk, whilst market risk changes were limited to changes in
price risk component in the period since 31 December 2020.
Market risk
The Company summarises market risk into four main components;
price risk, currency risk, interest rate risk and concentration
risk. Currency movements were in favour of the Company during the
period and though interest rates remained low, this had a limited
impact on the Company, as the majority of the debt portfolio is
held in floating rate notes with interest rate floors. The Invested
Portfolio's concentration was in line with year end and remains
diversified across four main sectors (Tech, Services, Healthcare
and Internet/Consumer).
The Company is exposed to price risk on both its Private Equity
Investments and Derived Investments and this exposure to price risk
is actively monitored by the Investment Manager. The table below
reflects the blended sensitivity of this price risk and the impact
on NAV.
Bull case Bear case
Base case (+20%) (-20%)
30 June 2021 EUR'000 EUR'000 EUR'000
-------------------------------- ---------- ---------- ----------
Financial assets 1,355,786 1,626,943 1,084,629
-------------------------------- ---------- ---------- ----------
Change in NAV and profit 271,157 (271,157)
-------------------------------- ---------- ---------- ----------
Change in NAV (%) 20% -20%
-------------------------------- ---------- ---------- ----------
Change in total income 124% -124%
-------------------------------- ---------- ---------- ----------
Change in profit for the period 130% -130%
-------------------------------- ---------- ---------- ----------
Bull case Bear case
Base case (+20%) (-20%)
31 december 2020 EUR'000 EUR'000 EUR'000
-------------------------------- --------- --------- ---------
Financial assets 1,107,723 1,329,268 886,178
-------------------------------- --------- --------- ---------
Change in NAV and profit 221,545 (221,545)
-------------------------------- --------- --------- ---------
Change in NAV (%) 18% -18%
-------------------------------- --------- --------- ---------
Change in total income 131% -131%
-------------------------------- --------- --------- ---------
Change in profit for the period 137% -137%
-------------------------------- --------- --------- ---------
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due. Such obligations
are met through a combination of liquidity from the sale of
investments, revolving credit facility as well as cash resources.
In accordance with the Company's policy, the Investment Manager
monitors the Company's liquidity position on a regular basis; the
Board of Directors also reviews it, at a minimum, on a quarterly
basis.
The Company invests in two portfolios, Private Equity
Investments and Derived Investments. Each portfolio has a different
liquidity profile.
Derived Investments in the form of listed securities are
considered to be liquid investments that the Company may realise on
short notice. These are determined to be readily realisable, as the
majority are listed on major global stock exchanges. Derived
Investments in the form of debt and unlisted equity have a mixed
liquidity profile as some positions may not be readily realisable
due to an inactive market or due to other factors such as
restricted trading windows during the year. Debt investments held
in actively traded bonds are considered to be readily
realisable.
The Company's Private Equity Investments are not readily
realisable although, in some circumstances, they could be sold in
the secondary market, potentially at a discounted price. The timing
and quantum of Private Equity distributions is difficult to
predict, however, the Company has some visibility on capital calls
as the majority of the underlying funds operate capital call
facilities. These are typically drawn by the underlying funds for
periods of c.12 months to fund investments and fund operating
expenses, and provide the Company with reasonable visibility of
calls for this period.
The table below summarises the maturity profile of the Company's
financial liabilities at 30 June 2021 based on contractual
undiscounted repayment obligations. The contractual maturities of
most financial liabilities are less than three months, with the
exception of the revolving credit facility and commitments to
Private Equity Investments, where their expected cash flow dates
are summarised in the tables below.
The Company does not manage liquidity risk on the basis of
contractual maturity, instead the Company manages liquidity risk
based on expected cash flows.
30 June 2021
Up to
3 months 3-12 months 1-5 years Total
EUR'000 EUR'000 EUR'000 EUR'000
--------------------------------------------------- --------- ----------- --------- --------
Investment payables 48,630 - - 48,630
Accrued expenses 1,811 - - 1,811
Private Equity Investments outstanding commitments
and recallable distributions 33,861 125,159 260,175 419,195
Derived Investments commitments(1) - 12,289 - 12,289
--------------------------------------------------- --------- ----------- --------- --------
Total 84,302 137,448 260,175 481,925
--------------------------------------------------- --------- ----------- --------- --------
1. Represents the undrawn amount outstanding on a number of
delayed draw debt commitments and a revolving credit facility
position
31 December 2020
Up to
3 months 3-12 months 1-5 years Total
EUR'000 EUR'000 EUR'000 EUR'000
--------------------------------------------------- --------- ----------- --------- --------
Investment payables 30,965 - - 30,965
--------- ----------- --------- --------
Accrued expenses 1,481 - - 1,481
Private Equity Investments outstanding commitments
and recallable distributions 53,543 60,590 344,698 458,831
--------------------------------------------------- --------- ----------- --------- --------
Total 85,989 60,590 344,698 491,277
--------------------------------------------------- --------- ----------- --------- --------
The Company's outstanding commitments and recallable
distributions to Private Equity Investments are summarised
below:
30 June 31 December
2021 2020
EUR'000 EUR'000
------------------ -------- -----------
Apax Europe VI 225 225
------------------ -------- -----------
Apax Europe VII 1,030 1,030
------------------ -------- -----------
Apax VIII 19,800 20,440
------------------ -------- -----------
Apax IX 32,283 25,870
------------------ -------- -----------
Apax X 331,222 379,355
------------------ -------- -----------
AMI Opportunities 11,844 11,457
------------------ -------- -----------
Apax Digital Fund 22,791 20,454
------------------ -------- -----------
Total 419,195 458,831
------------------ -------- -----------
At 30 June 2021, the Company had undrawn Private Equity
commitments and recallable distributions of EUR419.2m (31 December
2020: EUR458.8m), of which EUR159.0m (31 December 2020: EUR114.1m)
is expected to be drawn within 12 months. The increase in expected
calls due within 12 months is mainly due to Apax X, which closed 7
investments in the six months to 30 June 2021. Additionally, the
Company expects draw downs of EUR12.3m from Derived Investments in
the next 12 months for delayed draw and revolving credit facility
debt positions held.
The Company has access to a short-term revolving credit facility
upon which it can draw up to EUR140.0m. The Company may utilise
this facility in the short term to bridge Private Equity calls and
ensure that it can realise the Derived Investments at the best
price available. At 30 June 2021, the facility remained undrawn (31
December 2020: EURNil).
At period end, the Company's investments are recorded at fair
value. The remaining assets and liabilities are of a short-term
nature and their fair values approximate their carrying values.
13 Fair value estimation
(a) Financial instruments measured at fair value
IFRS 13 "Fair Value Measurement" ("IFRS 13") requires the
Company to classify fair value measurements using a fair value
hierarchy that reflects the significance of the inputs used to make
those measurements. The fair value hierarchy has the following
levels:
-- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
-- Valuation techniques based on observable inputs (other than
quoted prices included within level 1), that are observable for the
asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices). This category includes
instruments valued using: quoted market prices in active markets
for similar but not identical instruments; quoted prices for
identical instruments in markets that are not considered to be
active; and, other valuation techniques where all the significant
inputs are directly or indirectly observable from market data
(level 2).
-- Valuation techniques for the asset or liability that are not
based on observable market data (that is, unobservable inputs)
(level 3).
The level in the fair value hierarchy within which the fair
value measurement is categorised in its entirety is determined on
the basis of the lowest level input that is significant to the fair
value measurement in its entirety. If a fair value measurement uses
observable inputs that require significant adjustment based on
unobservable inputs, that measurement is a level 3 measurement.
Assessing the significance of a particular input to the fair value
measurement in its entirety requires judgement, considering factors
specific to the asset or liability.
The determination of what constitutes "observable" requires
significant judgement by the Company. The Company considers
observable data to be market data that is readily available,
regularly distributed or updated, reliable and verifiable, not
proprietary, and provided by independent sources that are actively
involved in the relevant market. The Company also determines if
there is a transfer between each respective level at the end of
each reporting period based on the valuation information
available.
The following table analyses within the fair value hierarchy the
Company's financial assets and liabilities (by class) measured at
fair value at 30 June 2021:
Level Level Level
1 2 3 Total
Assets EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------- -------- -------- -------- ----------
Private Equity financial assets - - 916,548 916,548
-------------------------------- -------- -------- -------- ----------
Derived Investments 41,207 388,591 9,440 439,238
-------------------------------- -------- -------- -------- ----------
Debt - 388,591 - 388,591
-------------------------------- -------- -------- -------- ----------
Equities 41,207 - 9,440 50,647
-------------------------------- -------- -------- -------- ----------
Total 41,207 388,591 925,988 1,355,786
-------------------------------- -------- -------- -------- ----------
The following table analyses within the fair value hierarchy the
Company's financial assets and liabilities (by class) measured at
fair value at 31 December 2020:
Level Level Level
1 2 3 Total
Assets EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------- -------- -------- -------- ---------
Private Equity financial assets - - 788,307 788,307
-------------------------------- -------- -------- -------- ---------
Derived Investments 39,480 275,739 4,197 319,416
-------------------------------- -------- -------- -------- ---------
Debt - 275,739 - 275,739
-------------------------------- -------- -------- -------- ---------
Equities 39,480 - 4,197 43,677
-------------------------------- -------- -------- -------- ---------
Total 39,480 275,739 792,504 1,107,723
-------------------------------- -------- -------- -------- ---------
IFRS13 requires the Company to describe movements in and
transfers between levels of the fair value hierarchy. The Company
determines if there is a transfer between each respective level at
the end of each reporting period based on the valuation information
available.
There were no transfers to or from level 1, level 2 or level 3
during the period.
Movements in level 3 investments are summarised in the table
below:
Six months ended Year ended
30 June 2021 31 December 2020
------------------------------ -------------------------------------- -------------------------------------
Private Private
Equity Derived Equity Derived
Investments Investments Total Investments Investments Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Opening fair value 788,307 4,197 792,504 766,278 2,554 768,832
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Additions 78,679 - 78,679 55,651 - 55,651
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Disposals and repayments (131,135) - (131,135) (207,280) - (207,280)
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Realised gains on financial
assets 18,763 - 18,763 100,142 _ 100,142
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Unrealised gains on financial
assets 161,934 5,243 167,177 73,516 1,643 75,159
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Transfers into level 3 - - - - - -
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
Closing fair value 916,548 9,440 925,988 788,307 4,197 792,504
------------------------------ ------------ ------------ ---------- ------------ ------------ ---------
The unrealised gains attributable to only assets and liabilities
held at 30 June 2021 were EUR167.2m (31 December 2020:
EUR75.2m).
The table below sets out information about significant
unobservable inputs used in measuring financial instruments
categorised as level 3 in the fair value hierarchy:
30 June 31 December
Significant Sensitivity to changes 2021 2020
unobservable in significant unobservable Valuation Valuation
Description Valuation technique inputs inputs EUR'000 EUR'000
--------------- ---------------------------- -------------- ------------------------------ ---------- -----------
The Company does not
apply further discount
or liquidity premiums
to the valuations as
these are already captured
in the underlying valuation.
This NAV is subject
to changes in the valuations
of the underlying portfolio
companies. These can
be exposed to a number
of risks, including
liquidity risk, price
risk, credit risk, currency
risk and interest rate
risk.
A movement of 10% in
the value of Private
Equity Investments would
Private Equity move the NAV at the
financial NAV adjusted for carried period end by 7.0% (31
assets interest NAV December 2020: 6.6%). 916,548 788,307
--------------- ---------------------------- -------------- ------------------------------ ---------- -----------
The Company held 3 equity
positions (31 December
2020: 3) of which 2
positions (31 December
2020: 3) were valued
using comparable company
multiples. The average
multiple was 8.8x (31
December 2020: 9.0x).
A movement of 10% in
Comparable company the multiple applied
earnings Comparable would move the NAV at
multiples and/or precedent company period end by 0.1% (31
Equities transaction analysis multiples December 2020: 0.1%). 9,440 4,197
--------------- ---------------------------- -------------- ------------------------------ ---------- -----------
14 Shareholders' capital
At 30 June 2021, the Company had 491,100,768 ordinary shares
fully paid with no par value in issue (31 December 2020:
491,100,768 shares). All ordinary shares rank pari passu with each
other, including voting rights and there has been no change since
31 December 2020.
The Company has one share class; however, a number of investors
are subject to lock-up periods between five and ten years, which
restricts them from disposing of ordinary shares issued at
admission. For investors with five-year lock-up periods, 20% of
ordinary shares are released from lock-up each year from the first
anniversary of admission, 15 June 2016. As at 30 June 2021, all of
these shares have been released following the fifth anniversary on
the 15 June 2020. For investors with ten-year lock-up periods, 20%
of ordinary shares were released from lock-up this year on 15 June
2021 with a further 20% being released annually until 15 June
2025.
15 Earnings and NAV per share
six months SIX MONTHS
endedED
Earnings 30 June 2021 30 JUNE 2020
----------------------------------------------------------------- ------------- -------------
Profit or loss for the year attributable to equity shareholders:
EUR'000 209,163 (5,037)
----------------------------------------------------------------- ------------- -------------
Weighted average number of shares in issue
----------------------------------------------------------------- ------------- -------------
Ordinary shares at end of year 491,100,768 491,100,768
----------------------------------------------------------------- ------------- -------------
Shares issued in respect of performance fee - -
----------------------------------------------------------------- ------------- -------------
Total weighted ordinary shares 491,100,768 491,100,768
----------------------------------------------------------------- ------------- -------------
Dilutive adjustments - -
----------------------------------------------------------------- ------------- -------------
Total diluted weighted ordinary shares 491,100,768 491,100,768
----------------------------------------------------------------- ------------- -------------
Effect of performance fee adjustment on ordinary shares
-----------------------------------------------------------------
Performance shares to be awarded based on a liquidation 1,943,385 -
basis1
----------------------------------------------------------------- ------------- -------------
Adjusted shares 2 493,044,153 491,100,768
----------------------------------------------------------------- ------------- -------------
Earnings per share (cents)
-----------------------------------------------------------------
Basic 42.59 (1.03)
-----------------------------------------------------------------
Diluted 42.59 (1.03)
-----------------------------------------------------------------
Adjusted 42.42 (1.03)
----------------------------------------------------------------- ------------- -------------
31 December
30 June 2021 2020
----------------------- ------------ -----------
NAV EUR'000
----------------------- ------------ -----------
NAV at end of period 1,384,807 1,201,184
----------------------- ------------ -----------
NAV per share (EUR)
----------------------- ------------ -----------
NAV per share 2.82 2.45
----------------------- ------------ -----------
Adjusted NAV per share 2.81 2.45
----------------------- ------------ -----------
1. The number of performance shares is calculated inclusive of
deemed realised performance shares that would be issued utilising
the theoretical performance fee payable calculated on a liquidation
basis
2. The calculation of Adjusted Shares above assumes that new
shares were issued by the Company to the Investment Manager in lieu
of the performance fee. As per the prospectus, the Company may also
purchase shares from the market if the Company is trading at a
discount to its NAV per share. In such a case, the Adjusted NAV per
share would be calculated by taking the NAV at the period adjusted
for the performance fee reserve and then divided by the current
number of ordinary shares in issue. At 30 June 2021, the Adjusted
NAV per share for both methodologies resulted in an Adjusted NAV
per share of EUR2.81 (31 December 2020: EUR2.45) respectively
At 30 June 2021, there were no items that would cause a dilutive
effect on earnings per share. The adjusted earnings per share has
been calculated based on the profit attributable to shareholders
adjusted for the total accrued performance fee at year end over the
weighted average number of ordinary shares. This has been
calculated on a full liquidation basis inclusive of performance fee
attributable to realised investments. Performance shares to be
issued are calculated based on the trading price of shares and
foreign exchange rate at close of business on 30 June 2021.
16 Dividends
Dividends paid to shareholders SIX MONTHSED SIX MONTHS ended
30 JUNE 2021 30 JUNE 2020
-------------------------------------------------------------- ------------------ ------------------
EUR'000 GBP'000 EUR'000 GBP'000
-------------------------------------------------------------- -------- -------- -------- --------
Final dividend paid - 5.28 pence per share (31 December 2020:
6.11 cents per share) 30,006 25,930 26,353 22,983
-------------------------------------------------------------- -------- -------- -------- --------
Total 30,006 25,930 26,353 22,983
-------------------------------------------------------------- -------- -------- -------- --------
Dividends proposed Six months ended Year ended
30 June 2021 31 December
2020
--------------------------- ------------------ --------------
EUR GBP EUR GBP
--------------------------- -------- -------- ------ ------
Interim dividend per share 7.05c 5.97p 6.11c 5.28p
--------------------------- -------- -------- ------ ------
On 2 March 2021, the Board approved the final dividend for 2020,
5.28 pence per share (6.11 cents euro equivalent). This represents
2.5% of the Company's euro NAV at 31 December 2020 and was paid on
2 April 2021.
On 18 August 2021, the Board approved an interim dividend for
the six months ended 30 June 2021, 5.97 pence per share (7.05 cents
euro equivalent). This represents 2.5% of the Company's euro NAV at
30 June 2021 and will be paid on 17 September 2021. The Board
considered the Company's future liquidity position and ability to
pay dividends and deemed it appropriate to maintain payment of the
interim dividend.
17 SUBSEQUENT EVENTS
On 18 August 2021, the Board approved an interim dividend for
the six months ended 30 June 2021, 5.97 pence per share (7.05 cents
euro equivalent). This represents 2.5% of the Company's euro NAV at
30 June 2021 and will be paid on 17 September 2021.
Administration
Directors (all Non-Executive)
Tim Breedon CBE (Chairman)
Susie Farnon (Chair of the Audit Committee)
Chris Ambler
Mike Bane
Stephanie Coxon
Registered Office of the Company
PO Box 656
East Wing
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3PP
Channel Islands
Investment Manager
Apax Guernsey Managers Limited
Third Floor, Royal Bank Place
1 Glategny Esplanade
St Peter Port
Guernsey GY1 2HJ
Channel Islands
Investment AdvisOr
Apax Partners LLP
33 Jermyn Street
London SW1Y 6DN
United Kingdom
www.apax.com
Administrator, Company Secretary and Depositary
Aztec Financial Services (Guernsey) Limited
PO Box 656
East Wing
Trafalgar Court
Les Banques
St Peter Port
Guernsey GY1 3PP
Channel Islands
Tel: +44 (0)1481 749 700
AGA-admin@aztecgroup.co.uk
www.aztecgroup.co.uk
Corporate Broker
Jefferies International Limited
100 Bishopsgate
London EC2N 4JL
United Kingdom
Registrar
Link Asset Services
Mont Crevelt House
Bulwer Avenue
St Sampson
Guernsey GY2 4LH
Channel Islands
Tel: +44 (0) 871 664 0300
enquiries@linkgroup.co.uk
www.linkassetservices.com
Independent Auditor
KPMG Channel Islands Limited
Glategny Court
St Peter Port
Guernsey GY1 1WR
Channel Islands
Association of Investment Companies - AIC
The AIC is the trade body for closed-ended investment companies.
It helps its member companies deliver better returns for their
investors through lobbying, media engagement, technical advice,
training, and events.
www.theaic.co.uk
Dividend timetable
Announcement: 19 August 2021
Ex-dividend date: 26 August 2021
Record date: 27 August 2021
Payment date: 17 September 2021
EARNINGS RELEASES
Q3 2021 earnings release is expected to be issued on or
around
4 November 2021.
Stock symbol
London Stock Exchange: APAX
Enquiries
Any enquiries relating to shareholdings on the share register
(for example, transfers of shares, changes of name or address, lost
share certificates or dividend cheques) should be sent to the
Registrars at the address given above. The Registrars offer an
online facility at www.signalshares.com which enables shareholders
to manage their shareholding electronically.
Investor Relations
Enquiries relating to AGA's strategy and results or if you would
like to arrange a meeting, please contact:
Katarina Sallerfors
Investor Relations - AGA
Apax Partners LLP
33 Jermyn Street
London SW1Y 6DN
United Kingdom
Tel: +44 (0)20 7872 6300
investor.relations@apaxglobalalpha.com
Investment policy
The Company's investment policy is to make (i) Private Equity
Investments, which are primary and secondary commitments to, and
investments in, existing and future Apax Funds and (ii) Derived
Investments, which Apax will typically identify as a result of the
process that Apax Partners undertakes in its private equity
activities and which will comprise direct or indirect investments
other than Private Equity Investments, including primarily
investments in public and private debt, as well as limited
investments in equity, primarily in listed companies. For the
foreseeable future, the Board believes that market conditions and
the relative attractiveness of investment opportunities in Private
Equity will cause the Company to hold the majority of its
investments in Private Equity assets. The investment mix will
fluctuate over time due to market conditions and other factors,
including calls for and distributions from Private Equity
Investments, the timing of making and exiting Derived Investments
and the Company's ability to invest in future Apax Funds. The
actual allocation may therefore fluctuate according to market
conditions, investment opportunities and their relative
attractiveness, the cash flow requirements of the Company, its
dividend policy and other factors.
Private Equity Investments
The Company expects that it will seek to invest in any new Apax
Funds that are raised in the future. Private Equity Investments may
be made into Apax Funds with any target sectors and geographic
focus and may be made directly or indirectly. The Company will not
invest in third-party managed funds.
Derived Investments
The Company will typically follow the Apax Group's core sector
and geographical focus in making Derived Investments, which may be
made globally. Derived Investments may include among others: (i)
direct and indirect investments in equity and debt instruments,
including equity in private and public companies, as well as in
private and public debt which may include sub-investment grade and
unrated debt instruments; (ii) co-investments with Apax Funds or
third-parties; (iii) investments in the same or different types of
equity or debt instruments in portfolio companies as the Apax Funds
and may potentially include; (iv) acquisitions of Derived
Investments from Apax Funds or third-parties; (v) investments in
restructurings; and (vi) controlling stakes in companies.
Investment restrictions
The following specific investment restrictions apply to the
Company's investment policy:
-- no investment or commitment to invest shall be made in any
Apax Fund which would cause the total amounts invested by the
Company in, together with all amounts committed by the Company to,
such Apax Fund to exceed, at the time of investment or commitment,
25% of the Gross Asset Value; this restriction does not apply to
any investments in or commitments to invest made to any Apax Fund
that has investment restrictions restricting it from investing or
committing to invest more than 25% of its total commitments in any
one underlying portfolio company;
-- not more than 15% of the Gross Asset Value may be invested in
any one portfolio company of an Apax Fund on a look-through
basis;
-- not more than 15% of the Gross Asset Value may be invested in any one Derived Investment; and
-- in aggregate, not more than 20% of the Gross Asset Value is
intended to be invested in Derived Investments in equity securities
of publicly listed companies. However, such aggregate exposure will
always be subject to an absolute maximum of 25% of the Gross Asset
Value.
The aforementioned restrictions apply as at the date of the
relevant transaction or commitment to invest. Hence, the Company
would not be required to effect changes in its investments owing to
appreciations or depreciations in value, distributions or calls
from existing commitments to Apax Funds, redemptions or the receipt
of, or subscription for, any rights, bonuses or benefits in the
nature of capital or of any acquisition or merger or scheme of
arrangement for amalgamation, reconstruction, conversion or
exchange or any redemption, but regard shall be had to these
restrictions when considering changes or additions to the Company's
investments (other than where these investments are due to
commitments made by the Company earlier).
The Company may borrow in aggregate up to 25% of Gross Asset
Value at the time of borrowing to be used for financing or
refinancing (directly or indirectly) its general corporate purposes
(including without limitation, any general liquidity requirements
as permitted under its Articles of Incorporation), which may
include financing short-term investments and/or buybacks of
ordinary shares. The Company does not intend to introduce long-term
structural gearing.
Quarterly returns since 1Q18
Total Return1 (euro) Return attribution
---- ------------------------- -------------------------------------------------------------
Private Derived Derived Private Derived Derived Performance Total
Equity Debt Equity Equity Debt Equity fee Other2 NAV Return
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
1Q18 0.0% (1.7%) (0.2%) (0.3%) 0.0% (0.1%) 0.2% (0.4%) (0.7%)
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2Q18 11.0% 2.5% (1.8%) 6.9% 0.7% (0.2%) (0.3%) (0.1%) 6.9%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
3Q18 5.4% 1.5% (10.4%) 3.5% 0.2% (1.8%) 0.1% (0.2%) 1.8%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
4Q18 (0.0%) 2.3% (3.9%) (0.0%) 0.2% (0.7%) (0.2%) 0.1% (0.7%)
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
1Q19 12.3% 4.8% 1.2% 7.9% 0.9% 0.1% 0.0% (0.2%) 8.7%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2Q19 7.1% 0.9% (0.4%) 4.8% 0.2% 0.0% (0.3%) (0.2%) 4.4%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
3Q19 6.9% 6.0% (3.5%) 4.3% 1.4% (0.4%) (0.2%) (0.2%) 4.9%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
4Q19 3.0% 1.8% 14.9% 2.5% 0.1% 1.3% (0.5%) 0.0% 3.4%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
1Q20 (11.6%) (7.7%) (25.1%) (8.0%) (1.8%) (1.8%) 0.0% (0.3%) (11.9%)
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2Q20 16.0% 7.0% 14.8% 11.1% 1.6% 0.7% 0.0% (0.2%) 13.3%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
3Q20 12.4% 2.1% (2.4%) 8.4% 0.4% (0.1%) 0.0% (0.3%) 8.5%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
4Q20 8.7% (0.1%) 36.1% 6.0% 0.0% 1.0% 0.0% (0.1%) 6.9%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
1Q21 13.7% 6.4% 18.3% 8.5% 1.6% 0.7% (0.2%) (0.2%) 10.4%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2Q21 9.6% 1.4% 8.2% 6.1% 0.4% 0.3% (0.6%) 0.2% 6.5%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2018 17.4% 4.5% (17.6%) 10.1% 1.2% (3.0%) 0.2% (1.4%) 7.1%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2019 33.9% 11.8% 9.1% 20.2% 2.7% 1.1% (1.0%) (0.3%) 22.7%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
2020 25.4% 0.2% (3.8%) 15.9% 0.0% (0.2%) 0.0% (0.9%) 14.8%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
1H21 24.5% 7.3% 28.6% 15.0% 2.1% 1.1% (0.4%) 0.0% 17.4%
---- ------- ------- ------- ------- ------- ------- ----------- ------ -----------
Total Return1 (Constant Return attribution
currency)
---- --------------------------- -------------------------------------------------------------------
Private Derived Derived Private Derived Derived Performance Other2 FX3 Total
Equity Debt Equity Equity Debt Equity fee NAV Return
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
1Q18 1.3% 0.6% 2.4% 0.4% 0.4% 0.2% 0.3% (0.3%) (1.7%) (0.7%)
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2Q18 8.9% (2.6%) (3.9%) 5.8% (0.2%) (0.6%) (0.3%) (0.5%) 2.7% 6.9%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
3Q18 5.5% 1.0% (9.5%) 3.5% 0.1% (1.7%) 0.2% (0.2%) (0.1%) 1.8%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
4Q18 (0.3%) 1.3% (4.9%) (0.2%) 0.1% (0.8%) (0.3%) 0.0% 0.5% (0.7%)
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
1Q19 10.0% 2.5% (1.5%) 6.4% 0.5% (0.2%) 0.0% (0.2%) 2.2% 8.7%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2Q19 8.0% 2.3% 0.8% 5.3% 0.5% 0.1% (0.3%) (0.2%) (1.0%) 4.4%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
3Q19 4.8% 2.5% (5.1%) 3.1% 0.6% (0.6%) (0.2%) (0.3%) 2.3% 4.9%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
4Q19 4.1% 3.7% 15.2% 3.2% 0.6% 1.3% (0.5%) 0.0% (1.2%) 3.4%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
1Q20 (11.6%) (8.6%) (23.5%) (7.9%) (2.0%) (1.7%) 0.0% (0.2%) (0.1%) (11.9%)
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2Q20 16.3% 8.4% 16.2% 11.4% 2.0% 0.8% 0.0% (0.2%) (0.6%) 13.3%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
3Q20 15.9% 5.7% (1.0%) 10.7% 1.2% 0.0% 0.0% (0.2%) (3.2%) 8.5%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
4Q20 11.0% 3.0% 37.2% 7.6% 0.7% 1.1% 0.0% (0.1%) (2.4%) 6.9%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
1Q21 9.6% 2.5% 14.1% 6.0% 0.7% 0.6% (0.2%) (0.2%) (0.2%) 10.4%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2Q21 10.3% 1.9% 9.2% 6.6% 0.5% 0.4% (0.7%) (0.6%) 0.2% 6.5%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2018 15.9% 0.3% (17.4%) 9.2% 0.4% (2.9%) 0.2% (1.5%) 1.7% 7.1%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2019 31.7% 9.6% 5.5% 19.3% 2.2% 0.7% (0.7%) (1.0%) (2.2%) 22.7%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
2020 32.6% 7.4% 2.5% 20.6% 1.7% 0.1% 0.0% (0.8%) (6.8%) 14.8%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
1H21 21.9% 4.5% 25.1% 13.4% 1.3% 1.0% 2.5% (0.4%) 2.5% 17.4%
---- -------- -------- ------- ------- ------- ------- ----------- ------ ------ -----------
NOTE: All quarterly information included in the tables above is
unaudited
1. Total Return for each respective sub-portfolio has been
calculated by taking total gains or losses and dividing them by the
sum of Adjusted NAV at the beginning of the period and the
time-weighted net invested capital. The time-weighted net
invested capital is the sum of investments made during the period
less realised proceeds received during the period, both
weighted by the number of days the capital was at work in the
portfolio
2. Includes management fees and other general costs. It also
includes FX on the euro returns table only
3. Includes the impact of FX movements on investments and FX on
cash held during each respective period
Portfolio allocation since 1Q18
Portfolio Allocation1 Portfolio NAV (EURo) NAV (EURO)
---- ------------------------------------ ------------------------------------ ------------------
Private Derived Derived Net cash Private Derived Derived Net cash Total Total
Equity Debt Equity and NCAs Equity Debt Equity and NCAs NAV Adjusted
NAV
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1Q18 65% 15% 17% 3% 572.5 136.2 152.6 22.1 883.3 883.3
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2Q18 67% 19% 17% (4%) 638.8 184.3 160.6 (35.8) 947.8 943.9
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
3Q18 68% 17% 17% (2%) 638.9 158.1 159.0 (16.3) 939.7 937.3
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
4Q18 64% 19% 15% 2% 591.5 178.3 142.3 18.7 930.8 930.8
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1Q19 68% 18% 11% 3% 669.5 178.9 112 28.1 988.5 988.2
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2Q19 56% 22% 12% 9% 582.9 232.1 123.3 96.2 1,034.5 1,031.9
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
3Q19 61% 24% 11% 4% 648.1 257.4 116.0 38.9 1,060.4 1,055.8
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
4Q19 70% 23% 8% (1%) 766.3 252.5 89.7 (9.5) 1,099.0 1,092.1
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1Q20 69% 23% 5% 3% 643.0 221.4 44.3 27.4 936.1 936.1
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2Q20 70% 22% 5% 3% 742.5 230.8 50.7 36.7 1,060.7 1,060.7
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
3Q20 70% 22% 3% 5% 784.1 243.4 32.3 64.3 1,124.1 1,124.1
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
4Q20 66% 23% 3% 8% 788.3 275.7 43.7 93.5 1,201.2 1,201.2
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1Q21 64% 25% 4% 7% 830.7 322.8 46.1 99.9 1,299.5 1,296.6
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2Q21 66% 28% 4% 2% 916.6 388.6 50.6 29.0 1,384.8 1,380.3
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2018 66% 18% 16% 0% 610.4 164.2 153.6 (2.8) 925.4 923.8
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2019 64% 22% 11% 4% 666.7 230.3 110.2 38.4 1,045.6 1,042.0
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
2020 69% 23% 4% 5% 739.5 242.8 42.8 55.5 1,080.6 1,080.6
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1H21 65% 26% 4% 4% 873.6 355.7 48.4 64.5 1,342.2 1,338.5
---- ------- ------- ------- --------- ------- ------- ------- --------- ------- ---------
1. For annual periods the average weighting over four quarters used
Glossary
ADF means the limited partnerships that constitute the Apax
Digital Private Equity fund.
Adjusted NAV calculated by adjusting the NAV at reporting
periods, by the estimated performance fee reserves.
Adjusted NAV per share calculated by dividing the Adjusted NAV
by the number of shares in issue.
AEVI means the limited partnerships that constitute the Apax
Europe VI Private Equity fund.
AEVII means the limited partnerships that constitute the Apax
Europe VII Private Equity fund.
AGML or Investment Manager means Apax Guernsey Managers
Limited.
AIX means the limited partnerships that constitute the Apax IX
Private Equity fund.
AMI means the limited partnerships that constitute the AMI
Opportunities Fund focused on investing in Israel.
Apax Global Alpha or Company or AGA means Apax Global Alpha
Limited.
Apax Group means Apax Partners LLP and its affiliated entities,
including its sub-advisors, and their predecessors, as the context
may require.
Apax Partners or Apax or Investment Advisor means Apax Partners
LLP.
Apax Private Equity Funds or Apax Funds means Private Equity
funds managed, advised and/or operated by Apax Partners.
APFS means Apax Partners Fund Services Limited.
APG means Apax Partners Guernsey Limited.
AVIII means the limited partnerships that constitute the Apax
VIII Private Equity fund.
AX means the limited partnerships that constitute the Apax X
Private Equity fund.
Aztec means Aztec Financial Services (Guernsey) Limited
B2B means business to business.
Brexit refers to the exit of the UK from the EU following the
invocation of Article 50 of the Treaty on the European Union on 29
March 2017.
Capital Markets Practice or CMP consists of a dedicated team of
specialists within the Apax Partners Group having in-depth
experience of the leverage finance debt markets, including market
conditions, participants and opportunities. The CMP was initially
set up to support the investment advisory teams within the Apax
Group in structuring the debt component of a private equity
transaction. The CMP has over the years expanded its mandate to
working alongside the investment advisory teams to advise on
Derived Debt Investments.
CEE Central and Eastern Europe.
CSR Corporate social responsibility.
Custody risk is the risk of loss of securities held in custody
occasioned by the insolvency or negligence of the custodian.
Derived Debt Investments comprise debt investments held within
the Derived Investments portfolio.
Derived Equity Investments comprise equity investments held
within the Derived Investments portfolio.
Derived Investments comprise investments other than Private
Equity Investments, including primary investments in public and
private debt, with limited investments in equity, primarily in
listed companies. In each case, these are typically identified by
Apax Partners as part of its private equity activities.
Direct Deal costs means costs directly attributable to the due
diligence and execution of deals completed by the Company (such as
broker fees and deal research costs). For avoidance of doubt it
excludes taxes payables and general fund and administration
costs.
EBITDA Earnings before interest, tax, depreciation and
amortisation.
Eligible Portfolio means the Derived Debt, Derived Equity and
Eligible Private Equity portfolios.
Eligible Private Equity means the Private Equity portfolio
eligible for management fees and performance fee. It represents
interests in Private Equity investments held that do not pay fees
at the Apax Fund level.
ERP Enterprise resource planning.
ESG Environmental, social and governance.
EV Enterprise value.
FVTPL means fair value through profit or loss.
FX means foreign exchange.
Gross Asset Value or GAV means the Net Asset Value of the
Company plus all liabilities of the Company (current and
non-current).
Gross IRR or Internal Rate of Return means an aggregate, annual,
compound, internal rate of return calculated on the basis of cash
receipts and payments together with the valuation of unrealised
investments at the measurement date. Foreign currency cash flows
have been converted at the exchange rates applicable at the date of
receipt or payment. For Private Equity Investments, IRR is net of
all amounts paid to the underlying Investment Manager and/or
general partner of the relevant fund, including costs, fees and
carried interests. For Derived Investments, IRR does not reflect
expenses to be borne by the relevant investment vehicle or its
investors including, without limitation, performance fees,
management fees, taxes and organisational, partnership or
transaction expenses.
Invested Portfolio means the part of AGA's portfolio which is
invested in Private Equity and Derived Investments, however
excluding any other investments such as legacy hedge funds and
cash.
Investor relations team means such investor relations services
as are currently provided to AGA by the Investment Advisor.
IPO Initial public offering.
KPI Key performance indicator.
LSE London Stock Exchange.
LTM Last twelve months.
Market capitalisation is calculated by taking the share price at
the reporting period date multiplied by the number of shares in
issue. The euro equivalent is translated using the exchange rate at
the reporting period date.
MOIC Multiple of invested capital.
NBFC Non-bank financial company.
Net Asset Value or NAV means the value of the assets of the
Company less its liabilities as calculated in accordance with the
Company's valuation policy. NAV has no adjustments related to the
IPO proceeds or performance fee reserves.
NTM Next twelve months.
Operational Excellence Practice or OEP Professionals who support
the Apax Funds' investment strategy by providing assistance to
portfolio companies in specific areas such as devising strategies,
testing sales effectiveness and cutting costs.
OCI Other comprehensive income.
OTC Over-the-counter.
PCV means PCV Lux S.C.A.
PCV Group means PCV Lux S.C.A. and its subsidiaries. PCV Group
was established in August 2008. Irrespective of whether the text
refers to AGA or PCV Group, references to trading or performance
prior to the IPO on 15 June 2015 refer to trading as PCV Group.
P/E Price-to-earnings.
Performance fee reserve is the estimated performance fee reserve
which commenced accruing on 1 January 2015 in line with the
Investment Management Agreements of the PCV Group and AGA.
Portfolio Total Return means the sub-portfolio performance in a
given period, is calculated by taking total gains or losses and
dividing them by the sum of GAV at the beginning of the period and
the time-weighted net invested capital. The time-weighted net
invested capital is the sum of investments made during the period
less realised proceeds received during the period, both weighted by
the number of days the capital was at work in the portfolio.
Portfolio Total Return is gross of performance fees but net of
management fees and relevant Direct Deal costs.
Private Equity Investments or Private Equity means primary
commitments to, secondary purchases of commitments in, and
investments in, existing and future Apax Funds.
Reporting period means the period from 1 January 2021 to 30 June
2021.
SaaS Software as a service
SMEs Small and mid-sized enterprises.
Total NAV Return for a year/period means the return on the
movement in the Adjusted NAV per share at the end of the period
together with all the dividends paid during the period, to the
Adjusted NAV per share at the beginning of the period/year.
Adjusted NAV per share used in the calculation is rounded to five
decimal points.
Total Return under the Total Return calculation, sub-portfolio
performance in a given period can be evaluated by taking total net
gains in the period and dividing them by the sum of the Adjusted
NAV at the beginning of the period as well as the investments made
during the period. However, in situations where realised proceeds
are reinvested within the same period, performance under this
calculation is, via the denominator, impacted by the reinvestment.
Therefore, since 2017 the Investment Manager evaluates the
sub-portfolio performance using this amended methodology. The
revised methodology takes total gains or losses and divides them by
the sum of Adjusted NAV at the beginning of the period and the
time-weighted net invested capital. The time-weighted net invested
capital is the sum of investments made during the period less
realised proceeds received during the period, both weighted by the
number of days the capital was at work in the portfolio. This
provides a more reflective view of actual performance.
Total Shareholder Return or TSR for the period means the net
share price change together with all dividends paid during the
period.
Unaffected Valuation is determined as the fair value in the last
quarter before exit, when valuation is not affected by the exit
process (i.e. because an exit was signed, or an exit was
sufficiently close to being signed that the Apax Funds incorporated
the expected exit multiple into the quarter end valuation).
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