TIDMAPAX
RNS Number : 5313K
Apax Global Alpha Limited
06 May 2022
(LSE: APAX)
Apax Global Alpha Limited
Quarterly results for the period ended 31 March 2022
Key Q1 highlights
-- Despite volatile markets, the portfolio proved resilient
during the quarter with a Total NAV Return(1) of (1.7%) ((3.8%)
constant currency). Valuations in the period were primarily
affected by weakness in the listed investments within the PE
portfolio following IPOs.
-- 72% of the Invested Portfolio is in Private Equity and the
portfolio is well diversified across four key sectors and
vintages.
-- Transformation of the portfolio companies is integral to
delivering strong operational performance with LTM EBITDA growth(2)
and LTM revenue growth(2) of 21.6% and 18.7% respectively.
-- Deal activity in the period remained strong with the Apax
Funds completing one full exit (Unilabs) and four new investments
(Alcumus, YunZhangFang, T-Mobile, and Ole Smokey).
-- AGA continued its strategy to invest in funds advised by Apax
with a new $60m commitment to the Apax Global Impact fund in the
period.
-- AGA's liquidity position is healthy comprising EUR146m
available cash and an evergreen revolving credit facility (RCF) of
EUR140m which remains undrawn. The Derived Investments portfolio of
EUR358m provides a further source of capital flexibility. This
compares to total outstanding commitments (including recallable
distributions) to the Apax Funds of EUR441m.
Commenting on the results, Ralf Gruss, COO of Apax Partners,
said:
" Against a backdrop of volatile markets and macro conditions
impacted by inflationary pressures and geopolitical risks, the
established Apax Funds strategy of creating alpha through business
improvement, of investing in coveted sub-sectors of prior
expertise, and of buying selectively is well suited to the period
ahead. As a result, AGA's portfolio remains well positioned for
continued strong performance and to generate further value for
shareholders. "
Financial highlights
-- Adjusted NAV(3) was largely unchanged at EUR1.4 billion (FY21
EUR1.5 billion), including the dividend payment of EUR37.4m (6.36p
per share) during the quarter.
-- Invested portfolio weighted towards Private Equity (72%) vs. Derived Investments (28%).
-- Post period end, AGA committed $40m to AMI II fund.
Additionally, the evergreen RCF was increased to EUR250m (from
EUR140m) in keeping with the higher NAV and the greater proportion
of private equity in the portfolio today than on inception, with
the other key terms remaining unchanged. The RCF is available for
general corporate purposes, including short-term financing of
investments such as the drawdown on commitments to Apax Funds.
Q1 2022 (EUR) Q1 2022 (GBP)
Adjusted NAV (3) 1,419.6m 1,195.8m
-------------- --------------
Adjusted NAV (3) per
share 2.89 2.44
-------------- --------------
NAV (3) per share 2.90 2.44
-------------- --------------
Exposure Q1 2022 Q1 2022
constant currency
Total NAV Return(1) (1.7%) (3.8%)
--------- -------- -------------------
Total Return(1) -
Private Equity 65% (3.1%) (5.4%)
--------- -------- -------------------
Total Return(1) -
Derived Debt 23% 2.8% 0.3%
--------- -------- -------------------
Total Return(1) -
Derived Equity 2% (0.7%) (2.1%)
--------- -------- -------------------
Cash & Others 10%
--------- -------- -------------------
Private Equity portfolio highlights
-- The Private Equity Total Return(1) for the quarter was (3.1%)
((5.4%) constant currency), reflecting the current market
backdrop.
-- The portfolio focuses on four key sectors, with 42% in Tech
& Digital, 28% in Services, 13% in Healthcare, and 17% in
Internet/Consumer.
-- The portfolio remains well diversified across the fund
lifecycle with 27% in the investment phase, 55% in the maturity
phase, and 18% in the harvesting phase.
-- On a look-through basis, AGA invested c.EUR45.8m in four new
private equity investments which closed during the period.
-- Unilabs was fully exited in Q1 2022 with a Gross IRR(4) and Gross MOIC(4) of 25.3% and 3.1x respectively.
Derived Investments portfolio highlights
-- Steady performance of Derived Investments with a Total
Return(1) of 2.5% (0.1% constant currency) in Q1, primarily
reflecting FX tailwinds.
-- The portfolio remains weighted towards Tech and is
predominantly invested in debt instruments (91% of Derived
Investments), of which the majority are the lower risk first lien
tranches (61% of Derived Investments).
-- 96% of the Derived Debt portfolio is invested in floating
rate instruments minimising duration risk and providing return
upside in a rising interest environment
-- Continued deployment of excess liquidity into Derived Debt
with new investments of EUR22.4m(5) .
For further information regarding the announcement of AGA's 2022
first quarter results, including the Company's results presentation
and dial-in details for today's analyst and investor webcast at
9.30am (UK time), please visit www.apaxglobalalpha.com .
Contact details
Lorraine Rees
Investor Relations - AGA
Telephone: +44 (0)7889 089 220
Email: lorraine.rees@apax.com
APPIX
Movements in NAV
Adjusted NAV movements Private Derived Treasury Facility 1Q 22
(EURm) Equity Investments Cash Shares drawn Other Total
-------- ------------- ------- --------- --------- ------- --------
Adjusted NAV at 31.12.21 1,012.9 327.2 108.5 - - 33.1 1,481.7
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+ Investments 5.1 22.4 (21.4) - - (6.1) -
-------------------------- -------- ------------- ------- --------- --------- ------- --------
- Distributions/
divestments (68.8) (5.2) 107.4 - - (33.4) -
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+ Interest and dividend
income - - 4.4 - - 0.2 4.6
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- Gains/(losses) (53.4) (2.9) - - - - (56.3)
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- FX gains/(losses)(6) 22.6 7.9 1.3 - - - 31.8
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- Costs and other
movements - - (2.6) - - 0.1 (2.5)
-------------------------- -------- ------------- ------- --------- --------- ------- --------
- Dividends paid - - (37.4) - - - (37.4)
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- Performance fee
reserve(7) (0.9) 7.0 - (8.4) - - (2.3)
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- Treasury shares - - (8.4) 8.4 - - -
-------------------------- -------- ------------- ------- --------- --------- ------- --------
+/- Revolving credit - - - - - - -
facility
drawn/repaid
-------------------------- -------- ------------- ------- --------- --------- ------- --------
Adjusted NAV at 31.3.22 917.5 356.4 151.8 - - (6.1) 1,419.6
-------------------------- -------- ------------- ------- --------- --------- ------- --------
Private Equity - operational metrics
Private Equity - operational metrics 31 March 2022 31 December 2021
-------------
Portfolio year-over-year LTM revenue growth(2) 18.7% 20.2%
================================================ ============== ================
Portfolio year-over-year LTM EBITDA growth(2) 21.6% 35.3%
================================================ ============== ================
Enterprise Value / EBITDA valuation multiple(2) 19.0x 23.2x
================================================ ============== ================
Net debt / EBITDA multiple (2) 4.5x 4.2x
------------------------------------------------ -------------- ----------------
Derived Investments - operational metrics
Derived Investments - operational metrics 31 March 2022 31 December 2021
-------------
Debt year-over-year LTM EBITDA growth(8) 21.4% 22.2%
=========================================== ============= ================
Debt average income yield to maturity(8) 6.7% 6.2%
=========================================== ============= ================
Debt average years to maturity 5.8 6.1
=========================================== ============= ================
Debt average income yield(9) 6.2% 5.4%
------------------------------------------- ------------- ----------------
Other Invested Portfolio highlights
Invested Portfolio analysis(11) EURm EURm % %
----- ------- ---
* AMI 25.3 2%
================================ ===== ======= === ====
* AEVI 7.7 1%
================================ ===== ======= === ====
* AEVII 29.5 2%
================================ ===== ======= === ====
* AVIII 127.6 10%
================================ ===== ======= === ====
* AIX 441.7 35%
================================ ===== ======= === ====
* ADF 40.9 3%
================================ ===== ======= === ====
* ADF II (1.5) 0%
================================ ===== ======= === ====
* AX 247.2 19%
================================ ===== ======= === ====
Private Equity 918.4 72%
================================ ===== ======= === ====
* Derived Debt 327.1 26%
================================ ===== ======= === ====
* Derived Equity 30.7 2%
================================ ===== ======= === ====
Derived Investments 357.8 28%
================================ ===== ======= === ====
Total 1,276.2 100%
-------------------------------- ----- ------- --- ----
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. 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.
3. Adjusted NAV reflects Total NAV of EUR1,421.9m, after performance
fee reserve of EUR2.3m.
4. Gross MOIC and Gross IRR calculated based on the expected
aggregate euro cash flows since inception for the AIX holding
only
5. Total invested of EUR22.4m includes EUR16.2m relates to
follow-on investments and delayed draws on existing positions
HelpSystems, Infogain RCF and Mitratech 1L and 2L during
the period.
6. 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.
7. Movement in the performance fee reserve reflects the performance
fee reserve accrued by the Company's at
period end. This does not represent the underlying Private
Equity portfolio's carried interest.
8. Gross Asset Value weighted average of the respective metric
across the Derived Debt portfolio
9. 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
10. Gross Asset Value weighted average of the respective metric
across the Derived Equity portfolio.
11. Invested Portfolio excludes cash and cash equivalents, revolving
credit facility drawn and net current assets, including
these the NAV was EUR1,421.9m and Adjusted NAV was EUR1,419.6m
reflecting adjustment of EUR2.3m for the estimated performance
fee reserve accrued
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 Partners"
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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