Apax Global Alpha Ld - 2024 Interim Results Highlights
05/09/2024 07:00
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RNS Number : 9580C Apax Global Alpha Limited 05 September 2024
(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
· 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.
· Total NAV Return(1) 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).
· 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") EBITDA(2) growth of 15.6% (FY23(3) 16.5%).
· 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.
· 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.
· 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.
· 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.
· 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.
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
· AGA was well-capitalised at the end of June 2024, with calls in the next 12
months covered 3.9x.
· AGA was 91% invested as at 30 June 2024 and had unfunded commitments to the
Apax Funds (together with recallable distributions) of €903m.
· 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.
· 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.
H1 2024 (EUR) H1 2024 (GBP) FY 2023 (EUR) FY 2023 (GBP)
NAV/Adjusted NAV(4) 1,237m 1,048m 1,288m 1,116m
NAV/Adjusted NAV(4) per share 2.52 2.13 2.62 2.27
NAV(1) per share 2.52 2.13 2.64 2.28
% of NAV H1 2024 H1 2024
constant currency
Total NAV Return(1) (1.4%) (3.3%)
Total Return(1) - Private Equity 73% (2.5%) (4.4%)
Total Return(1) - Debt Investments 18% 2.1% (0.1%)
Total Return(1) - Derived Equity 0% 17.1% 14.1%
Cash & Others 9%
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 well diversified across the private equity
lifecycle, with 40% in the investment phase, 23% in the maturity phase, and
37% in the harvesting phase.
· 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 investment(5), 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.
· 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.
· 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.
· The Debt portfolio maintained a strong income yield(6) of c.10% and average
yield to maturity(6) of c.11.3% at 30 June 2024, with 56% of the Debt
Investments invested in more readily tradeable first lien loans.
· 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.
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
(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(4)
NAV movements (€m) Private Equity Debt Investments Derived Equity Cash Treasury Shares/ Facility drawn Other(7) 1H 24 Total
Adjusted NAV at 31.12.23 890.7 288.2 15.0 101.4 - (7.7) 1,287.6
+ Investments 38.1 24.1 - (73.0) - 10.8 -
- Distributions/ divestments (5.0) (85.7) (12.5) 103.2 - - -
+ Interest and dividend income - - - 15.7 - (0.6) 15.1
+/- Gains/(losses) (40.4) (13.7) 1.3 - - - (52.8)
+/- FX gains/(losses)(8) 17.7 5.6 0.3 - - - 23.6
+/- Costs and other movements - - - (4.4) - 0.2 (4.2)
- Dividends paid - - - (32.4) - - (32.4)
+/- Performance fee reserve(9) - 6.0 0.5 - (6.6) - (0.1)
+/- Shares purchased - - - (6.6) 6.6 - -
+/- Revolving credit facility - - - - - - -
drawn/repaid
NAV at 30.06.24 901.1 224.5 4.6 103.9 - 2.7 1,236.8
Private Equity - operational metrics
Private Equity - operational metrics 30 June 2024 31 December 2023(3)
Portfolio year-over-year LTM revenue growth(2) 8.7% 11.5%
Portfolio year-over-year LTM EBITDA growth(2) 15.6% 16.5%
Enterprise Value / EBITDA valuation multiple(2) 17.1x 16.6x
Net debt / EBITDA multiple(2) 4.3x 4.4x
Debt Investments - operational metrics
Debt Investments - operational metrics(6) 30 June 2024 31 December 2023
Debt average yield to maturity 11.3% 12.0%
Debt average years to maturity 4.3 4.4
Debt average income yield 10.0% 10.4%
Other Invested Portfolio highlights
Invested Portfolio analysis(10) €m €m % %
- AEVI 2.3 0%
- AEVII 21.1 2%
- AVIII 36.3 3%
- AIX 252.7 22%
- AX 464.3 41%
- AXI 17.5 2%
- AMI 17.2 2%
- AMI II 2.6 0%
- ADF 59.6 5%
- ADF II 21.3 2%
- AGI 6.2 1%
Private Equity 901.1 80%
Debt Investments 224.5 20%
Derived Equity 4.7 0%
Total 1,130.3 100%
Footnotes
1 "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.
2 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
3 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
4 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
5 Gross MOIC calculated based on return in the Funds underlying currency or
where AGA invests in two currency sleeves it represents the EUR return
6 Debt operational metrics at 30 June 2024 excludes Vyaire following write down
during the period
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 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.
10 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.
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).
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
(http://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 (http://www.apax.com) .
Apax is authorised and regulated by the Financial Conduct Authority in the UK.
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