REG - Apax Global Alpha Ld - Quarterly Results to 31 March 2024
02/05/2024 07:00
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RNS Number : 9090M Apax Global Alpha Limited 02 May 2024
(LSE:
APAX)
Apax Global Alpha Limited
Quarterly results for the period ended 31 March 2024
Apax Global Alpha (LON:APAX), the closed-ended investment company providing
access to the Apax Private Equity Funds, today announced its first quarter
results for the period ended 31 March 2024.
Key highlights
· AGA's Adjusted NAV(1) was €1.25bn (FY23 €1.29bn) at the end of Q1 2024,
equivalent to an Adjusted NAV per share of €2.54/£2.17.
· Total NAV Return(2) declined in Q1 2024 and was (0.5)% ((1.9%) constant
currency) in the three months to 31 March 2024, with performance impacted by
negative developments in one of the Private Equity Portfolio companies in the
quarter.
· Solid operating performance across the Private Equity portfolio with Last
Twelve Months ("LTM") EBITDA(3) growth of c.18.0% (FY23 18.0%). However, the
contribution of earnings to Q1 Private Equity returns slowed driven by a small
number of portfolio companies, including Vyaire.
· Following materially deteriorating trading at Vyaire during Q1, AGA has taken
a €24m writedown on its value across the Private Equity and Debt portfolios,
reducing AGA's Private Equity exposure to Vyaire to c.€5m and Debt exposure
to Vyaire's first lien loan to €12m.
· AGA deployed c.€23m in Private Equity investments on a look-through basis in
Q1 2024 with a further €62m deployed since quarter-end. There were four new
investments as well as transformational add-on acquisitions for Private Equity
portfolio companies Oncourse Home Solutions and Palex.
· The Debt portfolio, a unique feature of AGA, continued to show good
performance achieving a Total Return of 3.5% (1.8% constant currency) in the
quarter.
· The Board is reassessing the Company's capital allocation policy and will
update on progress of the review at the Capital Markets Day on 26 June 2024.
Ralf Gruss, Partner at Apax and a member of the AGA investment committee,
said:
"While Q1 performance was negatively impacted by developments in one of the
Private Equity portfolio companies, we believe AGA's overall portfolio remains
in good shape, offering solid value growth for shareholders. We are seeing
continued momentum with several new private equity investments since the
beginning of the year and there is a good pipeline of both new investments and
exits. We believe the current share price significantly undervalues the
Company's Private Equity holdings."
Financial highlights
· AGA was 94% invested as at 31 March 2024 and had unfunded commitments to the
Apax Funds (together with recallable distributions) of €908m.
· At 31 March 2024, AGA's invested portfolio was split 76% in Private Equity and
22% in Debt Investments, with the remaining 2% invested across three Derived
Equity positions.
· At the period end, AGA had €72m in cash (including net current assets) in
light of expected calls from the Private Equity Funds in the second half of
2024.
Q1 2024 (EUR) Q1 2024 (GBP) FY 2023 (EUR) FY 2023 (GBP)
Adjusted NAV(1) 1,249m 1,068m 1,288m 1,116m
Adjusted NAV(1) per share 2.54 2.17 2.62 2.27
NAV(1) per share 2.55 2.18 2.64 2.28
% of NAV Q1 2024 Q1 2024
constant currency
Total NAV Return(2) (0.5%) (1.9%)
Total Return(2) - Private Equity 72% (1.7%) (3.2%)
Total Return(2) - Debt Investments 21% 3.5% 1.8%
Total Return(2) - Derived Equity 1% 13.6% 11.8%
Cash & Others 6%
Portfolio highlights
· AGA offers access to a global portfolio of mostly private companies that are
not available to public market investors elsewhere.
· The Private Equity portfolio is balanced across Apax Fund vintages, with 40%
in the investing phase, 38% in the maturity phase, and 22% in the harvesting
phase.
· Main drivers of growth came from Apax X portfolio companies, demonstrating the
maturity of that portfolio.
· Continued reduction of listed exposure in the Private Equity portfolio via
share sell downs. Listed exposure in Private Equity portfolio was 4% at end of
March 2024 compared to 6% at 31 December 2023.
· 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.
· AGA invested €9.6m across two new Debt positions and received €44.7m
mainly from four full Debt exits.
· AGA still has a small exposure to Derived Equity, and following the sale of
two positions in 2023, AGA currently holds three positions valued at €18.1m.
For further information regarding the announcement of AGA's Q1 2024 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
(http://www.apaxglobalalpha.com/shareholder-information/results-and-publications)
.
Contact details
Katarina Sallerfors, Investor Relations - AGA
Telephone: +44 207 666 6526
Email: Katarina.sallerfors@apax.com
APPENDIX
Movements in Adjusted NAV
Adjusted NAV movements (€m) Private Equity Debt Investments Derived Equity Cash Treasury Shares/ Facility drawn Other(4) Q1 24 Total
Adjusted NAV at 31.12.23 890.7 288.2 15.0 101.4 - (7.7) 1,287.6
+ Investments 27.2 9.6 - (40.6) - 3.8 -
- Distributions/ divestments (3.8) (44.7) - 35.1 - 13.4 -
+ Interest and dividend income - - - 7.8 - - 7.8
+/- Gains/(losses) (29.7) (0.6) 2.3 - - - (28.0)
+/- FX gains/(losses)(5) 13.9 4.6 0.2 0.1 - - 18.8
+/- Costs and other movements - - - (2.6) - - (2.6)
- Dividends paid - - - (32.4) - - (32.4)
+/- Performance fee reserve(6) - 4.5 0.1 - (6.6) - (2.0)
+/- Shares purchased - - - (6.6) 6.6 - -
+/- Revolving credit facility - - - - - - -
drawn/repaid
Adjusted NAV at 31.03.24 898.3 261.6 17.6 62.2 - 9.5 1,249.2
Private Equity - operational metrics
Private Equity - operational metrics 31 March 2024 31 December 2023
Portfolio year-over-year LTM revenue growth(3) 10.7% 12.1%
Portfolio year-over-year LTM EBITDA growth(3) 18.0% 18.0%
Enterprise Value / EBITDA valuation multiple(3) 16.8x 16.6x
Net debt / EBITDA multiple(3) 4.4x 4.6x
Debt Investments - operational metrics
Debt Investments - operational metrics 31 March 2024 31 December 2023
Debt average yield to maturity 12.9% 12.0%
Debt average years to maturity 4.4 4.4
Debt average income yield 10.2% 10.4%
Other Invested Portfolio highlights
Invested Portfolio analysis(7) €m €m % %
- AEVI 2.3 0%
- AEVII 22.2 2%
- AVIII 40.7 3%
- AIX 255.0 22%
- AX 462.6 39%
- AXI 14.1 1%
- AMI 16.3 1%
- AMI II 1.9 0%
- ADF 56.5 5%
- ADF II 19.4 2%
- AGI 7.3 1%
Private Equity 898.3 76%
Debt Investments 263.1 22%
Derived Equity 18.1 2%
Total 1,179.5 100%
Footnotes
1 Adjusted NAV reflects Total NAV of €1,251.2m less performance fee reserve of
€2.0m
2 "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
3 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 89% of AGA's Private Equity portfolio
NAV, Net Debt / EBITDA Multiple and Enterprise Value / EBITDA Valuation
Multiple represents 80% of AGA's Private Equity portfolio NAV
4 Other reflects net current assets.
5 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
6 Movement in the performance fee reserve reflects the performance fee reserve
accrued by the Company's at 31 March 24 adjusted for performance fee paid in
the period. This does not represent the underlying Private Equity portfolio's
carried interest.
7 Invested Portfolio excludes cash and cash equivalents, revolving credit
facility drawn and net current assets, including these the NAV was €1,251.2m
and Adjusted NAV was €1,249.2m reflecting adjustment of €2.0m 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 $77 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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