(LSE:
APAX)
Apax Global Alpha
Limited
Interim results for the period ended 30
June 2024
Apax Global Alpha (LON: APAX), the closed-ended
investment company providing access to the Apax Private Equity
Funds, today announced its interim results for the period ended 30
June 2024.
Key
highlights
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·
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AGA's Net Asset Value ("NAV") was
€1.24bn (FY23 €1.29bn) at 30 June 2024, equivalent to a NAV per
share of €2.52/£2.13. Movement in NAV was
mainly driven by a decrease in the Private Equity portfolio NAV and
the dividend payment to shareholders of c.€32m.
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·
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Total NAV Return1 was
(1.4%) ((3.3%) constant currency) for
the six months to 30 June 2024. Excluding the impact of Vyaire and
the drag from the listed Private Equity holdings, Total NAV return
would have been 4.2% (2.4% constant
currency). Total NAV Return for Q2 was (1.0%) ((1.5%) constant
currency).
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The Private Equity portfolio is
performing well overall with c.80% exposure to the three most
recent global buyout fund vintages. Portfolio companies reported
Last Twelve Months ("LTM") EBITDA2 growth of 15.6%
(FY233 16.5%).
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AGA expects to deploy c.€75m on a
look-through basis across four Private Equity investments as well
as portfolio company M&A. This includes Zellis which signed
during the period and closed in August '24.
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The Apax Funds saw an increased pace
of exits with five realisations signed in Q2 2024 and post
period-end including the full exits of Healthium, AffiniPay, and
idealista which are expected to close in the coming months. The
Apax Funds also sold their remaining stakes in Baltic Classifieds
Group and Genius Sports.
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The Debt portfolio, a unique feature
of AGA, achieved a Total Return of 2.1% ((0.1%)
constant currency). Excluding the impact of
Vyaire the Debt portfolio would have achieved a Total Return of
6.5% (4.3% constant
currency) in the six months to 30
June 2024.
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New capital allocation framework
announced in June. The new framework comprises regular dividends to
shareholders and the creation of a "Distribution Pool" which
earmarks funds for share buybacks. €30m was allocated to the
"Distribution Pool" immediately to take advantage of the investment
opportunity presented by the current wide discount and share
buybacks have commenced.
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To improve transparency and reduce
reliance on alternative performance metrics, such as Adjusted NAV,
the Board has agreed a change of the performance fee settlement
from shares in AGA to cash which means IFRS NAV reflects the NAV
due to investors. A reconciliation of NAV and Adjusted NAV for
prior periods is available in the 2024 Interim Report.
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Karl
Sternberg, Chairman of AGA, said:
"The first six months of 2024 have remained challenging as
performance was impacted by negative developments in one of the
portfolio companies and a continued drag from the listed holdings
in the Private Equity portfolio. However, we have seen a pickup in
the pace of realisations and the latest global buyout fund is off
to a good start, having now closed six investments. The Board
believes AGA's underlying portfolio is in good shape overall with
exposure to exciting opportunities. Additionally, the new capital
allocation framework allows us to drive further NAV accretion when
the discount is wide."
Financial highlights
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AGA was well-capitalised at the end
of June 2024, with calls in the next 12 months covered
3.9x.
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AGA was 91% invested as at 30 June
2024 and had unfunded commitments to the Apax Funds (together with
recallable distributions) of €903m.
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At 30 June 2024, AGA's invested portfolio was
split 80% in Private Equity and 20% in Debt Investments which
includes the remaining two Derived Equity positions.
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At the period end, AGA had €107m in cash
(including net current assets) in light of expected calls of
c.€104m from the Private Equity Funds in the second half of
2024.
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H1 2024
(EUR)
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H1 2024
(GBP)
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FY 2023
(EUR)
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FY 2023
(GBP)
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NAV/Adjusted
NAV4
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1,237m
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1,048m
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1,288m
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1,116m
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NAV/Adjusted
NAV4 per
share
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2.52
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2.13
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2.62
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2.27
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NAV1 per share
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2.52
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2.13
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2.64
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2.28
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% of NAV
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H1 2024
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H1
2024
constant
currency
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Total NAV
Return1
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(1.4%)
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(3.3%)
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Total Return1 - Private
Equity
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73%
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(2.5%)
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(4.4%)
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Total Return1 - Debt
Investments
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18%
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2.1%
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(0.1%)
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Total Return1 - Derived
Equity
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0%
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17.1%
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14.1%
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Cash & Others
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9%
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Portfolio highlights
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·
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AGA offers access to a global portfolio of
mostly private companies that are not available to public market
investors elsewhere.
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The Private Equity portfolio is well diversified
across the private equity lifecycle, with 40% in the investment
phase, 23% in the maturity phase, and 37% in the harvesting
phase.
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More than c.80% of the Private Equity portfolio
was made up of companies held by the three most recent buyout fund
vintages. This includes Apax IX which is currently marked at 2.5x
AGA's initial investment5, Apax X which is now reaching
maturity and has seen two exits signed in June, and Apax XI which
is off to a good start, having made six investments so
far.
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Three new Private Equity investments closed in
the period in WGSN, IANS Research, and IES with a further
investment in Zellis, a leading provider of payroll and HR software
solutions and an emerging leader in the global benefits
administration software market, signing in April 2024 and closing
in August 2024. At the same time the Private Equity portfolio saw
an increased pace of realisations in Q2 and post period-end with
five full exits agreed.
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Capital not invested
in Private Equity is primarily invested in Debt Investments to
absorb excess liquidity, thereby limiting cash drag, producing
additional returns, and enhancing the robustness of AGA's balance
sheet.
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The Debt portfolio
maintained a strong income yield6 of c.10% and average
yield to maturity6 of c.11.3% at 30 June 2024, with 56%
of the Debt Investments invested in more readily tradeable first
lien loans.
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After exiting one
position in H1 2024, AGA has two remaining Derived Equity positions
valued at €4.7m and representing less than 1% of the invested
portfolio at 30 June 2024.
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The
unaudited Interim Report and Accounts are available on the
Company's website at https://www.apaxglobalalpha.com/wp-content/uploads/2024/09/2024-AGA-Interim-Report.pdf
For further information regarding the
announcement of AGA's 2024 Interim 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
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Katarina Sallerfors,
Investor Relations - AGA
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Telephone:
+44 207 666 6526
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Email:
Katarina.sallerfors@apax.com
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APPENDIX
Movements in
NAV4
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NAV
movements (€m)
|
Private
Equity
|
Debt
Investments
|
Derived
Equity
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Cash
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Treasury Shares/ Facility
drawn
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Other7
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1H 24 Total
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Adjusted NAV at 31.12.23
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890.7
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288.2
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15.0
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101.4
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-
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(7.7)
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1,287.6
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+ Investments
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38.1
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24.1
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-
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(73.0)
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-
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10.8
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-
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- Distributions/
divestments
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(5.0)
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(85.7)
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(12.5)
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103.2
|
-
|
-
|
-
|
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+ Interest and dividend
income
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-
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-
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-
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15.7
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-
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(0.6)
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15.1
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+/- Gains/(losses)
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(40.4)
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(13.7)
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1.3
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-
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-
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-
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(52.8)
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+/- FX
gains/(losses)8
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17.7
|
5.6
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0.3
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-
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-
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-
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23.6
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+/- Costs and other
movements
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-
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-
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-
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(4.4)
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-
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0.2
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(4.2)
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- Dividends paid
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-
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-
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-
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(32.4)
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-
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-
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(32.4)
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+/- Performance fee
reserve9
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-
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6.0
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0.5
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-
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(6.6)
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-
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(0.1)
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+/- Shares purchased
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-
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-
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-
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(6.6)
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6.6
|
-
|
-
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+/- Revolving credit
facility
drawn/repaid
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-
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-
|
-
|
-
|
-
|
-
|
-
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|
NAV
at 30.06.24
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901.1
|
224.5
|
4.6
|
103.9
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-
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2.7
|
1,236.8
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Private Equity
- operational metrics
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Private Equity - operational
metrics
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30 June
2024
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31 December
20233
|
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Portfolio year-over-year LTM revenue
growth2
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8.7%
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11.5%
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Portfolio year-over-year LTM EBITDA
growth2
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15.6%
|
16.5%
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Enterprise Value / EBITDA valuation
multiple2
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17.1x
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16.6x
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Net debt / EBITDA
multiple2
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4.3x
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4.4x
|
|
|
|
|
| |
Debt
Investments - operational metrics
|
Debt Investments -
operational metrics6
|
|
30 June
2024
|
31 December
2023
|
|
Debt
average yield to maturity
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11.3%
|
12.0%
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|
Debt
average years to maturity
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4.3
|
4.4
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Debt
average income yield
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10.0%
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10.4%
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Other Invested
Portfolio highlights
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Invested Portfolio
analysis10
|
€m
|
€m
|
%
|
%
|
|
- AEVI
|
2.3
|
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0%
|
|
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- AEVII
|
21.1
|
|
2%
|
|
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- AVIII
|
36.3
|
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3%
|
|
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- AIX
|
252.7
|
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22%
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- AX
|
464.3
|
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41%
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- AXI
|
17.5
|
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2%
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|
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- AMI
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17.2
|
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2%
|
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- AMI II
|
2.6
|
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0%
|
|
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- ADF
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59.6
|
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5%
|
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- ADF II
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21.3
|
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2%
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- AGI
|
6.2
|
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1%
|
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Private Equity
|
|
901.1
|
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80%
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Debt Investments
|
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224.5
|
|
20%
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|
Derived Equity
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4.7
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|
0%
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Total
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1,130.3
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|
100%
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Footnotes
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1
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"Total NAV Return" means the movement
in the Adjusted NAV per share or 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.
Adjusted NAV is used for periods before 1 January
2024, whilst NAV is used for periods
thereafter.
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2
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Gross Asset Value weighted average of
the respective metrics across the portfolio. Investments can be
excluded for reasons such as: investments in the financial services
sector; companies with negative EBITDA (or moving from negative to
positive EBITDA in the case of growth metrics); investments that
are written off; companies where EBITDA is not meaningful for
company specific reasons. Due to these adjustments, the
comparatives may not be on a like for like basis. LTM EBITDA Growth
represents 88% of AGA's Private Equity portfolio NAV, Net Debt /
EBITDA Multiple and Enterprise Value / EBITDA Valuation Multiple
represents 82% of AGA's Private Equity portfolio NAV
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3
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December-23 Private Equity portfolio
operating metrics reweighted based on investments stated on a gross
basis, without accounting for the impact of the holdco facility.
For summary of restatements please refer to page 64 of the Interim
Report and Accounts 2024
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4
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For the period from 1 January 2024 to
30 June 2024, the NAV per share and Adjusted NAV per share are
equivalent as the performance fee accrues as a liability instead of
a share based equity reserve. For year ended 31 December 2023,
Adjusted NAV per share represents the Adjusted NAV divided by the
total number of shares
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5
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Gross MOIC calculated based on return
in the Funds underlying currency or where AGA invests in two
currency sleeves it represents the EUR return
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6
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Debt operational metrics at 30 June
2024 excludes Vyaire following write down during the
period
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7
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Other reflects net current
assets.
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8
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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
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9
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Movement in the performance fee
reserve reflects the performance fee accrued by the Company at 30
June 2024 adjusted for performance fee paid in the period. This
does not represent the underlying Private Equity portfolio's
carried interest.
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10
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Invested Portfolio excludes cash and
cash equivalents, revolving credit facility drawn, net current
assets, and performance fee accrued, including these the NAV was
€1,236.8m.
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Notes
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1.
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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"
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2.
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Please be advised that this
announcement may contain inside information as stipulated under the
Market Abuse Regulations (EU) NO. 596/2014 ("MAR")
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3.
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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
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4.
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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
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5.
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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.
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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).
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
nearly $80 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.
