TIDMAPAX
RNS Number : 2917D
Apax Global Alpha Limited
02 March 2022
(LSE: APAX)
Apax Global Alpha Limited
Annual results for the period ended 31 December 2021
Key highlights
-- Total NAV Return(1) of 28.7% (22.8% constant currency), with
continued good momentum across the portfolio.
-- Total Adjusted NAV(2) increased to c.EUR1.5bn (FY20:
EUR1.2bn) with Adjusted NAV per share increasing to EUR3.02
(GBP2.54) from EUR2.45 (GBP2.19) in the year to 31 December
2021.
-- Operating improvements, earnings growth, and a supportive
valuation environment drove performance in the portfolio.
-- Reflecting increased investment activity in Private Equity,
AGA received distributions of EUR275m from Private Equity exits
during the period, achieved at an average uplift of 50.2%(3) . This
was balanced against EUR200m of calls for new investments.
-- Capital not invested in Private Equity was deployed into
Derived Debt, with returns in debt driving steady performance in
the Derived Investments portfolio which achieved a 15.8% Total
Return (9.3% constant currency).
-- AGA had a healthy liquidity position with EUR108m of
available cash at 31 December 2021. Derived Investments of EUR336m
provide a further source of capital flexibility.
-- Dividend of 12.33p per share declared for the full year 2021,
in line with AGA's stated dividend policy of distributing 5% of NAV
per annum.
Tim Breedon CBE, Chairman of Apax Global Alpha, said:
"Despite the emergence of new Covid-19 variants throughout the
year, we saw strong economic recovery in 2021 and we expect this to
continue, albeit with some inflationary pressures. In this
environment, AGA's portfolio remained robust with strong NAV
growth. In particular, the Private Equity portfolio was able to
capitalise on the high valuation environment to exit companies that
had completed their transformation journeys or re-rated to very
high levels, particularly in technology. Looking ahead, AGA's
portfolio remains well positioned to continue delivering attractive
value and income to investors."
Commenting on the results, Ralf Gruss, COO of Apax, said:
"AGA recorded another strong year in 2021, delivering Total NAV
Return of over 28% for investors. The portfolio is benefitting from
a sector-led strategy and a focus on multiple levers of value
creation and business transformation in Private Equity. Operating
performance in the portfolio remains strong and there continues to
be real momentum."
Financial highlights
-- Adjusted NAV(2) grew to EUR1.5bn, compared to EUR1.2bn at 31 December 2020.
-- Invested Portfolio weighted towards Private Equity (75%) vs.
Derived Investments (25%), and resilient sectors such as Tech and
Digital (40%), Services (24%) and Healthcare (22%).
-- AGA was 90% invested as at 31 December 2021 and had
outstanding commitments to the Apax Funds (together with recallable
distributions) of EUR385m.
-- In addition to future Private Equity distributions, funding
sources that can be accessed for Private Equity calls include
Derived Investments of EUR336m and available cash of EUR108m as at
31 December 2021. This provides AGA with a healthy liquidity
position to meet future calls from the Apax Funds.
-- AGA also has an undrawn evergreen revolving credit facility(4) of EUR140.0m.
FY 2021 FY 2021 FY 2020 FY 2020
Adjusted NAV (2) EUR 1,482m GBP 1,247m EUR 1,201m GBP 1,074m
----------- ----------- ----------- -----------
Adjusted NAV (2)
per share EUR 3.02 GBP 2.54 EUR 2.45 GBP 2.19
----------- ----------- ----------- -----------
NAV (2) per share EUR 3.03 GBP 2.55 EUR 2.45 GBP 2.19
----------- ----------- ----------- -----------
Exposure FY 2021 FY 2021
constant currency
Total NAV Return(1) 28.7% 22.8%
--------- -------- -------------------
Total Return(1) -
Private Equity 68% 41.0% 34.6%
--------- -------- -------------------
Total Return(1) -
Derived Debt 20% 13.4% 6.9%
--------- -------- -------------------
Total Return(1) -
Derived Equity 2% 37.5% 30.2%
--------- -------- -------------------
Cash & Others 10%
--------- -------- -------------------
Private Equity portfolio highlights
-- The Private Equity portfolio performed strongly, delivering a
Total Return of 41.0% (34.6% constant currency) in the year.
-- Exit activity reflected Apax's investment strategy of "mining
hidden gems" within sub-sectors of expertise, focusing on companies
where a significant re-rating opportunity existed based on business
quality improvement.
-- Average uplift on exits of 50.2% compared to Unaffected
Valuations(3) , reflecting the quality of the portfolio.
-- Aggregate Gross IRR(5) and Gross MOIC(5) on Private Equity
exits(6) and IPOs in FY 2021 were 54.1% and 4.5x respectively.
-- On a look-through basis, AGA invested c.EUR207.2m in 19 new
investments that closed in the year, primarily in Tech &
Digital and Services.
-- Continued strong operating performance from portfolio
companies: LTM Revenue and EBITDA growth of 20.2%(7) and 35.3%(7)
respectively across the Private Equity portfolio.
-- The Enterprise Value/EBITDA valuation multiple was broadly
flat on the previous quarter at 23.2x(7) at the end of December
2021, but higher than that of 31 December 2020 (16.9x). This
increase over the year was primarily driven by a re-rating of
public markets, particularly in tech.
-- The share of publicly listed companies in the Private Equity
portfolio increased to 25% in the year.
-- AGA made a commitment of $90m to Apax Digital Fund II which closed at $1.9bn in the period.
Derived Investments portfolio highlights
-- Steady performance in line with expectations across the
portfolio with Derived Investments delivering a Total Return of
15.8% (9.3% constant currency) in the year to 31 December 2021,
driven primarily by good performance in the Derived Debt portfolio
and also benefitting from the appreciation of the US dollar against
the Euro.
-- Continued focus on investments in first and second lien loans
in target sub-sectors in expectation of additional investments in
the Private Equity portfolio in the next 12 months - EUR244m
deployed across new debt positions in 2021. There were no new
investments in Derived Equity.
-- Reflecting the increased share of first lien loans in the
portfolio, the average yield to maturity of the portfolio was 6.2%
at 31 December 2021.
-- Healthy credit portfolio with strong operating performance
from underlying Derived Debt portfolio companies: 22.2% LTM EBITDA
growth to 31 December 2021.
-- Derived Debt delivered a Total Return of 13.4% (6.9% constant
currency) and Derived Equity delivered a Total Return of 37.5%
(30.2% constant currency) in the year.
For further information regarding the announcement of AGA's 2021
Annual Results, including the annual report and Company's results
presentation and details for today's analyst and investor webcast
at 9.30am (UK time), please visit www.apaxglobalalpha.com .
Contact details
Katarina Sallerfors
Investor Relations - AGA
Telephone: +44 (0)207 666 6526
Email: katarina.sallerfors@apax.com
APPIX
Movements in NAV
Adjusted NAV movements Private Derived Treasury Facility
(EURm) Equity Investments Cash Shares drawn Other(8) Total
-------- ----------------- ----- --------- --------- --------- --------
Adjusted NAV at 31.12.20 788.3 319.4 124.6 - - (31.1) 1,201.2
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+ Investments 199.9 243.5 (474.3) - - 30.9 -
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
- Distributions/
divestments (275.1) (263.7) 505.6 - - 33.2 -
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+ Interest and dividend
income - - 26.5 - - 0.7 27.2
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- Gains/(losses) 252.6 13.6 - - - - 266.2
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- FX gains/(losses)(9) 4 7.2 2 2.8 0.8 - - - 70.8
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- Costs and other
movements - - (10.1) - - (0.6) (10.7)
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
- Dividends paid - - (64.6) - - - (64.6)
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- Performance fee
reserve(10) - (8.4) - - - - (8.4)
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- Shares purchased - - - - - - -
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
+/- Revolving credit
facility
drawn/repaid - - - - - - -
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
Adjusted NAV at 31.12.21 1,012.9 327.2 108.5 - - 33.1 1,481.7
-------------------------- -------- ----------- ---------- ---------- --------- --------- --------
Private Equity - operational metrics
Private Equity - operational metrics 31 December 2021 31 December 2020
----------------
Portfolio year-over-year LTM revenue growth(7) 20.2% 6.6%
================================================ ================= ================
Portfolio year-over-year LTM EBITDA growth(7) 35.3% 20.8%
================================================ ================= ================
Enterprise Value / EBITDA valuation multiple(7) 23.2x 16.9x
================================================ ================= ================
Net debt / EBITDA multiple (7) 4.2x 3.9x
------------------------------------------------ ----------------- ----------------
Derived Investments - operational metrics
Derived Investments - operational metrics 31 December 2021 31 December 2020
----------------
Debt year-over-year LTM EBITDA growth(11) 22.2% 26.2%
=========================================== ================ ================
Debt average income yield to maturity(11) 6.21% 8.1%
=========================================== ================ ================
Debt average years to maturity 6.1 5.7
=========================================== ================ ================
Debt average income yield(12) 5.4% 7.3%
------------------------------------------- ---------------- ----------------
Other Invested Portfolio highlights
Invested Portfolio analysis(13) EURm EURm % %
----- ------- ---
* AMI 28.7 2%
================================ ===== ======= === ====
* AEVI 7.1 1%
================================ ===== ======= === ====
* AEVII 24.7 1%
================================ ===== ======= === ====
* AVIII 143.9 11%
================================ ===== ======= === ====
* AIX 537.0 40%
================================ ===== ======= === ====
* ADF 40.4 3%
================================ ===== ======= === ====
* ADF II (1.1) 0%
================================ ===== ======= === ====
* AX 232.2 17%
================================ ===== ======= === ====
Private Equity 1,012.9 75%
================================ ===== ======= === ====
* Derived Debt 304.6 23%
================================ ===== ======= === ====
* Derived Equity 30.9 2%
================================ ===== ======= === ====
Derived Investments 335.6 25%
-------------------------------- ----- ------- --- ----
Total 1,349.6 100%
-------------------------------- ----- ------- --- ----
Footnotes
1. "Total NAV Return" means the movement in the Adjusted NAV
per share over the quarter plus any dividends paid. "Total
Return" reflects the sub-portfolio performance on a stand-alone
basis. It excludes items at the overall AGA level such as
cash, management fees, and costs
2. Adjusted NAV reflects Total NAV of EUR1,490.1m, after performance
fee reserve of EUR8.4m
3. Valuation uplifts on exits are calculated based on the total
actual or estimated sales proceeds and income as appropriate
since the last Unaffected Valuation. 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).
Average uplift of partial exits and IPO's includes proceeds
received and the closing fair value at 31 December 2021
4. Either party is required to give 2 years notice to terminate
the agreement
5. Private Equity Aggregate Gross IRR and Gross MOIC calculated
based on the expected aggregate cash flows in euro across
all funds for the deals signed and IPO'd in the year. Gross
IRR represents concurrent Gross IRR.
6. The Apax funds made 15 full and significant partial exits
including IPOs.
7. Gross Asset Value weighted average of the respective metric
across the portfolio. LTM Revenue growth and LTM EBITDA
growth rates exclude companies where EBITDA is not meaningful
such as financial services or high growth business with
fluctuations in EBITDA. Net debt/EBITDA multiple and EV/EBITDA
valuation multiple excluded companies where EBITDA is not
meaningful such as financial services or high growth business
valued on a revenue basis.
8. Other reflects net current assets at 31 December 2021 of
which EUR33.0m due related to debt investments that were
sold but had yet to settle at year end.
9. FX on cash includes the revaluation of cash balances and
net losses arising from the differences in exchange rates
between transaction dates and settlement dates, and unrealised
net losses arising from the translation into euro of assets
and liabilities (other than investments) which are not denominated
in euro
10. Movement in the performance fee reserve of EUR8.4m reflects
the performance fee reserve accrued by the Company's at
year end. This does not represent the underlying Private
Equity portfolio's carried interest.
11. Gross Asset Value weighted average of the respective metric
across the Derived Debt portfolio. Mindbody was excluded
from LTM EBIDTA growth
12. Gross Asset Value weighted average of the current full year
income (annual coupon/clean price as at the respective date)
for each debt position in the Derived Debt portfolio as
at the respective date
13. Invested Portfolio excludes cash and cash equivalents, revolving
credit facility drawn and net current assets, including
these the NAV is EUR1,490.1 and Adjusted NAV is EUR1,481.7.
The performance fee reserve was EUR8.4m at 31 December 2021
Notes
1. Note that references in this announcement to Apax Global Alpha
Limited have been abbreviated to "AGA" or "the Company". References
to Apax Partners LLP have been abbreviated to "Apax" or "the
Investment Adviser"
2. Please be advised that this announcement may contain inside
information as stipulated under the Market Abuse Regulations
(EU) NO. 596/2014 ("MAR")
3. This announcement is not for release, publication or distribution,
directly or indirectly, in whole or in part, into or within
the United States or to "US persons" (as defined in Regulation
S under the United States Securities Act of 1933, as amended
(the "Securities Act")) or into or within Australia, Canada,
South Africa or Japan. Recipients of this announcement in jurisdictions
outside the UK should inform themselves about and observe any
applicable legal requirements in their jurisdictions. In particular,
the distribution of the announcement may be restricted by law
in certain jurisdictions
4. The information presented herein is not an offer for sale within
the United States of any equity shares or other securities
of Apax Global Alpha Limited ("AGA"). AGA has not been and
will not be registered under the US Investment Company Act
of 1940, as amended (the "Investment Company Act"). In addition,
AGA's shares (the "Shares") have not been and will not be registered
under the Securities Act or any other applicable law of the
United States. Consequently, the Shares may not be offered
or sold or otherwise transferred within the United States,
or to, or for the account or benefit of, US Persons, except
pursuant to an exemption from the registration requirements
of the Securities Act and under circumstances which will not
require AGA to register under the Investment Company Act. No
public offering of the Shares is being made in the United States
5. This announcement may include forward-looking statements. The
words "expect", "anticipate", "intends", "plan", "estimate",
"aim", "forecast", "project" and similar expressions (or their
negative) identify certain of these forward-looking statements.
These forward-looking statements are statements regarding AGA's
intentions, beliefs or current expectations concerning, among
other things, AGA's results of operations, financial condition,
liquidity, prospects, growth and strategies. The forward-looking
statements in this presentation are based on numerous assumptions
regarding AGA's present and future business strategies and
the environment in which AGA will operate in the future. Forward-looking
statements involve inherent known and unknown risks, uncertainties
and contingencies because they relate to events and depend
on circumstances that may or may not occur in the future and
may cause the actual results, performance or achievements of
AGA to be materially different from those expressed or implied
by such forward looking statements. Many of these risks and
uncertainties relate to factors that are beyond AGA's ability
to control or estimate precisely, such as future market conditions,
currency fluctuations, the behaviour of other market participants,
the actions of regulators and other factors such as AGA's ability
to continue to obtain financing to meet its liquidity needs,
changes in the political, social and regulatory framework in
which AGA operates or in economic or technological trends or
conditions. Past performance should not be taken as an indication
or guarantee of future results, and no representation or warranty,
express or implied, is made regarding future performance. AGA
expressly disclaims any obligation or undertaking to release
any updates or revisions to these forward-looking statements
to reflect any change in AGA's expectations with regard thereto
or any change in events, conditions or circumstances on which
any statement is based after the date of this announcement,
or to update or to keep current any other information contained
in this announcement. Accordingly, undue reliance should not
be placed on the forward-looking statements, which speak only
as of the date of this announcement.
About Apax Global Alpha Limited
AGA is a Guernsey registered closed-ended collective investment
scheme incorporated as a non-cellular company that listed on the
London Stock Exchange on 15 June 2015. It is regulated by the
Guernsey Financial Services Commission.
AGA's objective is to provide shareholders with capital
appreciation from its investment portfolio and regular dividends.
The Company is targeting an annualised Total Return, across
economic cycles, of 12-15% (net of fees and expenses) including a
dividend yield of 5% of Net Asset Value.
The investment policy of the Company is to make Private Equity
investments in Apax Funds, and Derived Investments which are
investments in equities and debt derived from the insights gained
via Apax Partners' Private Equity activities.
Further information regarding the Company and its publications
are available on the Company's website at
www.apaxglobalalpha.com.
About Apax Partners LLP
Apax Partners LLP ("Apax") is a leading global private equity
advisory firm. For nearly 50 years, Apax has worked to inspire
growth and
ideas that transform businesses. The firm has raised and advised
funds with aggregate commitments of more than $60 billion. The
Apax
Funds invest in companies across four global sectors of Tech,
Services, Healthcare, and Internet/Consumer. These funds provide
long-term equity financing to build and strengthen world-class
companies. For further information about Apax, please visit
www.apax.com.
Apax Partners is authorised and regulated by the Financial
Conduct Authority in the UK.
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