REG - Apax Global Alpha Ld - Quarterly Results to 30 September 2023
09/11/2023 07:00
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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
€1.3bn (30 June 2023: €1.3bn), equivalent to a NAV per share of
€2.57/£2.23.
· 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 €35m 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 €28m(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 €300m 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 €988m (30 June
23: €985m).
· 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 €119m 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 €250m with SMBC Bank International plc and JPMorgan Chase, N.A.,
London Branch. The new facility remained undrawn as at 30 September 2023.
Q3 2023 (EUR) Q3 2023 (GBP) H1 2023 (EUR) H1 2023 (GBP)
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
% of NAV Q3 2023 Q3 2023
constant currency
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
(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 NAV
Adjusted NAV movements (€m) Private Equity Derived Investments Cash Treasury Shares Facility drawn Other(7) Q3 2023
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) €m €m % %
- 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 €1,269.9m less performance fee reserve of
€5.7m
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 €1,269.9m
and Adjusted NAV was €1,264.2m reflecting adjustment of €5.7m 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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