REG - Apax Global Alpha Ld - 2021 Final Results
02/03/2022 07:00
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RNS Number : 2917D Apax Global Alpha Limited 02 March 2022
(LSE: APAX)
Apax Global Alpha Limited
Annual results for the period ended 31 December 2021
Key highlights
· Total NAV Return(1) of 28.7% (22.8% constant currency), with
continued good momentum across the portfolio.
· Total Adjusted NAV(2) increased to c.€1.5bn (FY20: €1.2bn)
with Adjusted NAV per share increasing to €3.02 (£2.54) from €2.45
(£2.19) in the year to 31 December 2021.
· Operating improvements, earnings growth, and a supportive
valuation environment drove performance in the portfolio.
· Reflecting increased investment activity in Private Equity, AGA
received distributions of €275m from Private Equity exits during the period,
achieved at an average uplift of 50.2%(3). This was balanced against €200m
of calls for new investments.
· Capital not invested in Private Equity was deployed into Derived
Debt, with returns in debt driving steady performance in the Derived
Investments portfolio which achieved a 15.8% Total Return (9.3% constant
currency).
· AGA had a healthy liquidity position with €108m of available
cash at 31 December 2021. Derived Investments of €336m provide a further
source of capital flexibility.
· Dividend of 12.33p per share declared for the full year 2021, in
line with AGA's stated dividend policy of distributing 5% of NAV per annum.
Tim Breedon CBE, Chairman of Apax Global Alpha, said:
"Despite the emergence of new Covid-19 variants throughout the year, we saw
strong economic recovery in 2021 and we expect this to continue, albeit with
some inflationary pressures. In this environment, AGA's portfolio remained
robust with strong NAV growth. In particular, the Private Equity portfolio was
able to capitalise on the high valuation environment to exit companies that
had completed their transformation journeys or re-rated to very high levels,
particularly in technology. Looking ahead, AGA's portfolio remains well
positioned to continue delivering attractive value and income to investors."
Commenting on the results, Ralf Gruss, COO of Apax, said:
"AGA recorded another strong year in 2021, delivering Total NAV Return of over
28% for investors. The portfolio is benefitting from a sector-led strategy and
a focus on multiple levers of value creation and business transformation in
Private Equity. Operating performance in the portfolio remains strong and
there continues to be real momentum."
Financial highlights
· Adjusted NAV(2) grew to €1.5bn, compared to €1.2bn at 31
December 2020.
· Invested Portfolio weighted towards Private Equity (75%) vs.
Derived Investments (25%), and resilient sectors such as Tech and Digital
(40%), Services (24%) and Healthcare (22%).
· AGA was 90% invested as at 31 December 2021 and had outstanding
commitments to the Apax Funds (together with recallable distributions) of
€385m.
· In addition to future Private Equity distributions, funding
sources that can be accessed for Private Equity calls include Derived
Investments of €336m and available cash of €108m as at 31 December 2021.
This provides AGA with a healthy liquidity position to meet future calls from
the Apax Funds.
· AGA also has an undrawn evergreen revolving credit facility(4) of
€140.0m.
FY 2021 FY 2021 FY 2020 FY 2020
Adjusted NAV(2) EUR 1,482m GBP 1,247m EUR 1,201m GBP 1,074m
Adjusted NAV(2) per share EUR 3.02 GBP 2.54 EUR 2.45 GBP 2.19
NAV(2) per share EUR 3.03 GBP 2.55 EUR 2.45 GBP 2.19
Exposure FY 2021 FY 2021
constant currency
Total NAV Return(1) 28.7% 22.8%
Total Return(1) - Private Equity 68% 41.0% 34.6%
Total Return(1) - Derived Debt 20% 13.4% 6.9%
Total Return(1) - Derived Equity 2% 37.5% 30.2%
Cash & Others 10%
Private Equity portfolio highlights
· The Private Equity portfolio performed strongly, delivering a
Total Return of 41.0% (34.6% constant currency) in the year.
· Exit activity reflected Apax's investment strategy of "mining
hidden gems" within sub-sectors of expertise, focusing on companies where a
significant re-rating opportunity existed based on business quality
improvement.
· Average uplift on exits of 50.2% compared to Unaffected
Valuations(3), reflecting the quality of the portfolio.
· Aggregate Gross IRR(5) and Gross MOIC(5) on Private Equity
exits(6) and IPOs in FY 2021 were 54.1% and 4.5x respectively.
· On a look-through basis, AGA invested c.€207.2m in 19 new
investments that closed in the year, primarily in Tech & Digital and
Services.
· Continued strong operating performance from portfolio companies:
LTM Revenue and EBITDA growth of 20.2%(7) and 35.3%(7) respectively across the
Private Equity portfolio.
· The Enterprise Value/EBITDA valuation multiple was broadly flat
on the previous quarter at 23.2x(7) at the end of December 2021, but higher
than that of 31 December 2020 (16.9x). This increase over the year was
primarily driven by a re-rating of public markets, particularly in tech.
· The share of publicly listed companies in the Private Equity
portfolio increased to 25% in the year.
· AGA made a commitment of $90m to Apax Digital Fund II which
closed at $1.9bn in the period.
Derived Investments portfolio highlights
· Steady performance in line with expectations across the portfolio
with Derived Investments delivering a Total Return of 15.8% (9.3% constant
currency) in the year to 31 December 2021, driven primarily by good
performance in the Derived Debt portfolio and also benefitting from the
appreciation of the US dollar against the Euro.
· Continued focus on investments in first and second lien loans in
target sub-sectors in expectation of additional investments in the Private
Equity portfolio in the next 12 months - €244m deployed across new debt
positions in 2021. There were no new investments in Derived Equity.
· Reflecting the increased share of first lien loans in the
portfolio, the average yield to maturity of the portfolio was 6.2% at 31
December 2021.
· Healthy credit portfolio with strong operating performance from
underlying Derived Debt portfolio companies: 22.2% LTM EBITDA growth to 31
December 2021.
· Derived Debt delivered a Total Return of 13.4% (6.9% constant
currency) and Derived Equity delivered a Total Return of 37.5% (30.2% constant
currency) in the year.
For further information regarding the announcement of AGA's 2021 Annual
Results, including the annual report and 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 (0)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(8) Total
Adjusted NAV at 31.12.20 788.3 319.4 124.6 - - (31.1) 1,201.2
+ Investments 199.9 243.5 (474.3) - - 30.9 -
- Distributions/ divestments (275.1) (263.7) 505.6 - - 33.2 -
+ Interest and dividend income - - 26.5 - - 0.7 27.2
+/- Gains/(losses) 252.6 13.6 - - - - 266.2
+/- FX gains/(losses)(9) 47.2 22.8 0.8 - - - 70.8
+/- Costs and other movements - - (10.1) - - (0.6) (10.7)
- Dividends paid - - (64.6) - - - (64.6)
+/- Performance fee reserve(10) - (8.4) - - - - (8.4)
+/- Shares purchased - - - - - - -
+/- Revolving credit facility - - - - - - -
drawn/repaid
Adjusted NAV at 31.12.21 1,012.9 327.2 108.5 - - 33.1 1,481.7
Private Equity - operational metrics
Private Equity - operational metrics 31 December 2021 31 December 2020
Portfolio year-over-year LTM revenue growth(7) 20.2% 6.6%
Portfolio year-over-year LTM EBITDA growth(7) 35.3% 20.8%
Enterprise Value / EBITDA valuation multiple(7) 23.2x 16.9x
Net debt / EBITDA multiple(7) 4.2x 3.9x
Derived Investments - operational metrics
Derived Investments - operational metrics 31 December 2021 31 December 2020
Debt year-over-year LTM EBITDA growth(11) 22.2% 26.2%
Debt average income yield to maturity(11) 6.21% 8.1%
Debt average years to maturity 6.1 5.7
Debt average income yield(12) 5.4% 7.3%
Other Invested Portfolio highlights
Invested Portfolio analysis(13) €m €m % %
- AMI 28.7 2%
- AEVI 7.1 1%
- AEVII 24.7 1%
- AVIII 143.9 11%
- AIX 537.0 40%
- ADF 40.4 3%
- ADF II (1.1) 0%
- AX 232.2 17%
Private Equity 1,012.9 75%
- Derived Debt 304.6 23%
- Derived Equity 30.9 2%
Derived Investments 335.6 25%
Total 1,349.6 100%
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 €1,490.1m, after performance fee reserve
of €8.4m
3. 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). Average uplift of partial exits and IPO's includes proceeds
received and the closing fair value at 31 December 2021
4. Either party is required to give 2 years notice to terminate the agreement
5. 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 IPO'd in the year. Gross IRR represents concurrent Gross IRR.
6. The Apax funds made 15 full and significant partial exits including IPOs.
7. 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 excluded companies where EBITDA is not meaningful such as
financial services or high growth business valued on a revenue basis.
8. Other reflects net current assets at 31 December 2021 of which €33.0m due
related to debt investments that were sold but had yet to settle at year end.
9. FX on cash includes the revaluation of cash balances and net losses arising
from the differences in exchange rates between transaction dates and
settlement dates, and unrealised net losses arising from the translation into
euro of assets and liabilities (other than investments) which are not
denominated in euro
10. Movement in the performance fee reserve of €8.4m reflects the performance
fee reserve accrued by the Company's at year end. This does not represent the
underlying Private Equity portfolio's carried interest.
11. Gross Asset Value weighted average of the respective metric across the Derived
Debt portfolio. Mindbody was excluded from LTM EBIDTA growth
12. Gross Asset Value weighted average of the current full year income (annual
coupon/clean price as at the respective date) for each debt position in the
Derived Debt portfolio as at the respective date
13. Invested Portfolio excludes cash and cash equivalents, revolving credit
facility drawn and net current assets, including these the NAV is €1,490.1
and Adjusted NAV is €1,481.7. The performance fee reserve was €8.4m at 31
December 2021
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 collective investment scheme
incorporated as a non-cellular company that listed on the London Stock
Exchange on 15 June 2015. 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 investment policy of the Company is to make Private Equity investments in
Apax Funds, and Derived Investments which are investments in equities and debt
derived from the insights gained via Apax Partners' 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 nearly 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 $60 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 Partners is authorised and regulated by the Financial Conduct Authority
in the UK.
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