TIDMAPAX
RNS Number : 8452S
Apax Global Alpha Limited
09 November 2023
(LSE: APAX)
Apax Global Alpha Limited
Quarterly results for the period ended 30 September 2023
Apax Global Alpha (LON:APAX), the closed-ended investment
company providing access to the Apax Private Equity Funds, today
announced its third quarter results for the period ended 30
September 2023.
Key highlights
-- AGA achieved a Total NAV Return(1) of (0.1%) ((1.9%) constant
currency) in the three months ended 30 September 2023. Adjusted
NAV(2) was largely unchanged at EUR1.3bn (30 June 2023: EUR1.3bn),
equivalent to a NAV per share of EUR2.57/GBP2.23.
-- Performance from the Debt portfolio helped offset multiple driven
declines in Private Equity in Q3 2023.
-- The Private Equity portfolio remained resilient in the face
of an uncertain market environment and earnings growth continued
to be the main driver of NAV returns with portfolio companies
achieving an average LTM EBITDA growth of 16.4%(3) to the end
of September.
-- AGA received EUR35m in distributions from the Apax Funds, including
from two full exits achieved at an average uplift of 11%(4)
.
-- There was continued momentum in the Private Equity portfolio
with AGA deploying EUR28m(5) across two new Private Equity investments
in the quarter with a further five investments post quarter
end.
-- The Debt portfolio, which primarily consists of first and second
lien loans, achieved a Total Return (1) of 5.6% in the quarter.
Ralf Gruss, Partner at Apax and a member of the AGA investment
committee, said:
"Despite a more challenging market backdrop, AGA is well
positioned as seen by the resilience of the Private Equity
portfolio and returns achieved by the Company's debt investments.
Over the past five years AGA has delivered an average Total NAV
Return of c. 12% and returned more than EUR300m in dividends to
shareholders. In the last quarter we have seen a step-up in
activity across the Private Equity portfolio and we believe that
Apax's focus on operating value creation is highly relevant in
current markets."
Financial highlights
-- AGA was 90% invested as at 30 September 2023 and had unfunded
commitments to the Apax Funds (together with recallable distributions)
of EUR988m (30 June 23: EUR985m).
-- At 30 September 2023, AGA's invested portfolio was split
74% in Private Equity and 25% in Debt investments, with the
remaining 1% invested across three Equity positions.
-- At the period end, AGA had EUR119m in cash in anticipation
of calls from the Private Equity portfolio in Q4 2023.
-- On 5 September 2023, AGA entered into a new multi-currency
revolving credit facility of EUR250m with SMBC Bank International
plc and JPMorgan Chase, N.A., London Branch. The new facility
remained undrawn as at 30 September 2023.
Q3 2023 Q3 2023 H1 2023 H1 2023 (GBP)
(EUR) (GBP) (EUR)
Adjusted NAV (2) 1,264m 1,096m 1,299m 1,116m
-------- -------- -------- --------------
Adjusted NAV (2)
per share 2.57 2.23 2.64 2.27
-------- -------- -------- --------------
NAV (2) per share 2.59 2.24 2.65 2.28
-------- -------- -------- --------------
% Q3 2023 Q3 2023
of constant currency
NAV
Total NAV Return(1) (0.1%) (1.9%)
----- -------- -------------------
Total Return(1) - Private
Equity 67 (1.7%) (3.6%)
----- -------- -------------------
Total Return(1) - Debt Investments 22 5.6% 3.4%
----- -------- -------------------
Total Return(1) - Derived
Equity 1 (3.4%) (3.8%)
----- -------- -------------------
Cash & Others 10
----- -------- -------------------
Portfolio highlights
-- AGA offers shareholders access to a global portfolio of mostly
private companies that are not available to them elsewhere.
-- At 30 September 2023, the invested portfolio was split across
the four core Apax sectors: Tech & Digital (39%), Services (28%),
Healthcare (17%), and Internet/Consumer ( 16%).
-- In Private Equity, earnings growth remained a key driver of performance
with average LTM EBITDA growth to 30 September 2023 of 16.4%(3)
across portfolio companies (30 June 2023: 14.1%). The increase
was largely driven by M&A, notably EcoOnline's acquisition of
Ecometrica and Ole Smoky's acquisition of Tanteo.
-- LTM Revenue growth to 30 September 2023 was 14.7% (30 June 2023:
16.0%) and the weighted average valuation multiple across the
portfolio reduced slightly to 16.2x(3) (30 June 2023: 16.3x).
-- Leverage across the Apax Funds' portfolio was 4.5x(3) at 30 September
2023 (30 June 2023: 4.4x), at the lower end of the peer average.
-- AGA's Debt portfolio continued to provide attractive returns,
achieving a 42.3% cumulative constant currency Total Return over
the past five years compared to the S&P/LSTA leveraged loan index
(6) return of 24.4% in the same 5-year period.
-- The Debt portfolio absorbs cash not invested in Private Equity,
enhances the robustness of AGA's balance sheet, provides a steady
flow of income to support dividends, and additional returns.
-- There was one new investment in Debt in Q3 2023 and six realisations.
There were no new investments or exits in Derived Equity.
For further information regarding the announcement of AGA's
Interim 2023 Results, including the 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: +44 207 666 6526
Email: Katarina.sallerfors@apax.com
APPIX
Movements in NAV
Adjusted NAV movements Private Derived Treasury Facility Q3 2023
(EURm) Equity Investments Cash Shares drawn Other(7) Total
-------- ---------------- ----- --------- --------- --------- --------
Adjusted NAV at
30.06.23 858.9 352.4 86.4 - - 1.0 1,298.7
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+ Investments 39.3 4.8 (44.1) - - - -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
- Distributions/
divestments (34.7) (73.5) 100.7 - - 7.5 -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+ Interest and dividend
income - - 9.3 - - 0.8 10.1
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Gains/(losses) (29.8) 3.0 - - - - (26.8)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- FX gains/(losses)(8) 15.8 6.5 0.1 - - - 22.4
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Costs and other
movements - - (0.4) - - (4.4) (4.8)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
- Dividends paid - - (32.8) - - - (32.8)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Performance fee
reserve(9) - (2.6) - - - - (2.6)
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Shares purchased - - - - - - -
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
+/- Revolving credit - - - - - - -
facility
drawn/repaid
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
Adjusted NAV at
30.09.23 849.5 290.6 119.2 - - 4.9 1,264.2
-------------------------- -------- ----------- --------- ---------- --------- --------- --------
Private Equity - operational metrics
Private Equity - operational metrics 30 September 23 30 June 23
---------------
Portfolio year-over-year LTM revenue growth(3) 14.7% 16.0%
================================================ ================ ==============
Portfolio year-over-year LTM EBITDA growth(3) 16.4% 14.1%
================================================ ================ ==============
Enterprise Value / EBITDA valuation multiple(3) 16.2x 16.3x
================================================ ================ ==============
Net debt / EBITDA multiple (3) 4.5x 4.4x
------------------------------------------------ ---------------- --------------
Derived Investments - operational metrics
Derived Investments - operational metrics 30 September 23 30 June 23
---------------
Debt average yield to maturity 12% 13.3%
=========================================== =============== ==========
Debt average years to maturity 4.6 4.6
=========================================== =============== ==========
Debt average income yield 10% 11.4%
------------------------------------------- --------------- ----------
Other Invested Portfolio highlights
Invested Portfolio analysis(10) EURm EURm % %
------ ------- ----
* AEVI 2.2 0%
================================ ====== ======= ==== ====
* AEVII 23.7 3%
================================ ====== ======= ==== ====
* AVIII 60.4 5%
================================ ====== ======= ==== ====
* AIX 286.8 25%
================================ ====== ======= ==== ====
* AX 410.8 36%
================================ ====== ======= ==== ====
* AXI (11.3) (1%)
================================ ====== ======= ==== ====
* AMI 14.7 1%
================================ ====== ======= ==== ====
* AMI II (1.4) (0%)
================================ ====== ======= ==== ====
* ADF 52.0 5%
================================ ====== ======= ==== ====
* ADF II 5.7 0%
================================ ====== ======= ==== ====
* AGI 5.9 0%
================================ ====== ======= ==== ====
Private Equity 849.5 74%
================================ ====== ======= ==== ====
* Derived Debt 283.1 25%
================================ ====== ======= ==== ====
* Derived Equity 13.1 1%
================================ ====== ======= ==== ====
Derived Investments 296.2 26%
-------------------------------- ------ ------- ---- ----
Total 1,145.7 100%
-------------------------------- ------ ------- ---- ----
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 EUR1,269.9m less performance
fee reserve of EUR5.7m
3 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 relating to portfolio company debt excluded
companies where EBITDA is not meaningful such as financial
services or high growth business valued on a revenue basis.
4 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). Where applicable, average uplifts of partial
exits and IPO's includes proceeds received and the closing
fair value at period end. 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/or IPO'd in the period. Gross IRR represents concurrent
Gross IRR.
5 Represents AGA's look-through cost to investments acquired
by the Apax Funds during Q3 2023. For Apax Funds which
are yet to hold their final close, these amounts remain
subject to change due to equalisation adjustments
6 Derived Debt constant currency returns and S&P LSTA leveraged
loan index rebased to 100 and compounded on a quarterly
basis. Bloomberg source for S&P LSTA leveraged loan index
7 Other reflects net current assets.
8 FX on cash includes the revaluation of cash balances and
net gain or losses arising from the differences in exchange
rates between transaction dates and settlement dates, and
unrealised net gains or losses arising from the translation
into euro of assets and liabilities (other than investments)
which are not denominated in euro
9 Movement in the performance fee reserve reflects the performance
fee reserve accrued by the Company's at 30 September 23.
This does not represent the underlying Private Equity portfolio's
carried interest.
10 Invested Portfolio excludes cash and cash equivalents,
revolving credit facility drawn and net current assets,
including these the NAV was EUR1,269.9m and Adjusted NAV
was EUR1,264.2m reflecting adjustment of EUR5.7m 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" 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 investment Company
listed on the London Stock Exchange. 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 Company makes Private Equity investments in Apax Funds, and
has a portfolio of primarily Debt Investments, derived from the
insights gained via Apax's 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 over 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 $65 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 is authorised and regulated by the Financial Conduct
Authority in the UK.
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