REG - Apax Global Alpha Ld - Quarterly results for 31 March 2023
04/05/2023 07:00
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RNS Number : 3445Y Apax Global Alpha Limited 04 May 2023
(LSE: APAX)
Apax Global Alpha Limited
Quarterly results for the period ended 31 March 2023
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 2023.
Key highlights
· AGA achieved a Total NAV Return(1) of 1.9% (2.8% constant currency) in the
quarter ended 31 March 2023. Adjusted NAV remained stable at €1.3bn (31 Dec
2022: €1.3bn).
· The largest driver of Total NAV Return was earnings growth from the Private
Equity portfolio companies with LTM EBITDA growth of 15.6%(2).
· The debt portfolio delivered a Total Return of 2.8% in Q1 2023 (3.9% constant
currency).
· Despite a challenging market backdrop, the Apax Funds continued to focus on
opportunities where value creation can be achieved through operational
improvement. The Apax Funds completed two new Private Equity investments in
the period in which, on a look-through basis, AGA deployed €10.1m.
· In Private Equity, two full exits were completed during the period at an
average uplift(3) of 25%, a Gross IRR(3) and Gross MOIC(3) of 19% and 2.2x
respectively.
· Good pipeline of new investments offers value creation opportunities for
shareholders.
Ralf Gruss, Partner at Apax and a member of the AGA investment committee,
said:
"Despite the market backdrop, AGA has had a good start to the year, and we've
seen continued good operating performance across the portfolio companies.
Whilst the macro environment remains volatile, the private equity pipeline
looks promising. The Apax Funds continue to focus on opportunities to invest
in good companies, in target sectors where operational improvement can help
transform businesses and achieve a re-rating on exit."
Financial highlights
· AGA was 97% invested as at 31 March 2023 and had unfunded commitments to the
Apax Funds (together with recallable distributions) of €1.0bn.
· At 31 March 2023, AGA's invested portfolio consisted of €887.7m in Private
Equity (71%) and €368.0m in Derived Investments (29%).
· In early 2023, AGA received formal notice that the RCF will revert to a
conventional fixed-term arrangement with an expiry date of 10 January 2025.
Q1 2023 Q1 2023 FY 2022 FY 2022
€ £ € £
Adjusted NAV(4) 1,291m 1,135m 1,299m 1,150m
Adjusted NAV(4) per share 2.63 2.31 2.65 2.34
NAV(4) per share 2.63 2.31 2.65 2.34
% of NAV Q1 2023 Q1 2023
constant currency
Total NAV Return(1) 1.9% 2.8%
Total Return(1) - Private Equity 69% 1.8% 2.6%
Total Return(1) - Derived Investments 29% 2.9% 4.0%
o Total Return(1) - Derived Debt 27% 2.8% 3.9%
o Total Return(1) - Derived Equity 2% 4.3% 4.9%
Cash & Others 2%
Portfolio highlights
· Invested portfolio split across four key sectors: Tech & Digital (38%),
Services (28%), Healthcare (18%), and Internet/Consumer (16%).
· In Private Equity, the portfolio is well diversified across vintages: 11%
invested before 2017, 38% were acquired in the 2017-2019 period, and 51% of
investments are from 2020 and later.
· The Private Equity portfolio delivered a Total Return(1) of 1.8% (2.6%
constant currency) in the period. This reflected resilient trading performance
with LTM Revenue and EBITDA growth of 18.6%(2) and 15.6%(2) respectively
across the Private Equity portfolio companies, demonstrating the robustness of
their business models and the benefit of the Apax Funds' investment approach.
· AGA's debt portfolio, which makes up 93% of Derived Investments, delivered a
Total NAV Return(1) of 2.8% in Q1 2023.
· 99% of the Derived Debt investments are invested in floating rate loans. With
increasing base rates, the portfolio generates a 9.8% income yield.
· The average yield to maturity of the portfolio increased to 11.8% at 31 March
2023 (FY22: 12.1%).
· The Derived Debt portfolio has outperformed the S&P/LSTA leveraged loan
index(5) with a five-year cumulative return on a constant currency basis of
38.8% compared to 19.5%.
· The Derived 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 Derived Debt in Q1 2023 and one full exit in
Derived Equity.
For further information regarding the announcement of AGA's Q1 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(6) Q1 2023
Total
Adjusted NAV at 31.12.22 871.0 364.2 68.0 - - (3.8) 1,299.4
+ Investments 4.0 5.8 (13.9) - - 4.1 -
- Distributions/ divestments (2.5) (5.8) 5.7 - - 2.6 -
+ Interest and dividend income - - 7.7 - - 0.7 8.4
+/- Gains/(losses) 22.6 7.8 - - - - 30.4
+/- FX gains/(losses)(7) (7.4) (4.0) 0.9 - - - (10.5)
+/- Costs and other movements - - (1.6) - - (0.6) (2.2)
- Dividends paid - - (32.5) - - - (32.5)
+/- Performance fee reserve(8) - (1.6) - - - - (1.6)
+/- Shares purchased - - - - - - -
+/- Revolving credit facility - - 55.0 - (55.0) - -
drawn/repaid
Adjusted NAV at 31.03.23 887.7 366.4 89.3 - (55.0) 3.0 1,291.4
Private Equity - operational metrics
Private Equity - operational metrics 31 March 23 31 December 22
Portfolio year-over-year LTM revenue growth(2) 18.6% 21.5%
Portfolio year-over-year LTM EBITDA growth(2) 15.6% 18.5%
Enterprise Value / EBITDA valuation multiple(2) 17.0x 17.2x
Net debt / EBITDA multiple(2) 4.7x 4.8x
Derived Investments - operational metrics
Derived Investments - operational metrics 31 March 23 31 December 22
Debt average yield to maturity(4) 11.8% 12.1%
Debt average years to maturity 4.8 5.1
Debt average income yield(4) 9.8% 9.9%
Other Invested Portfolio highlights
Invested Portfolio analysis(9) €m €m % %
- AEVI 2.2 0%
- AEVII 23.1 2%
- AVIII 93.3 7%
- AIX 313.7 25%
- AX 387.7 31%
- AXI (5.7) 0%
- AMI 26.7 2%
- AMI II (0.9) 0%
- ADF 48.9 4%
- ADF II 0.6 0%
- AGI (1.9) 0%
Private Equity 887.7 71%
- Derived Debt 343.6 27%
- Derived Equity 24.4 2%
Derived Investments 368.0 29%
Total 1,255.7 100%
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 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.
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). 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.
4 Adjusted NAV reflects Total NAV of €1,293.0, before performance fee reserve
of €1.6m
5 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
6 Other reflects net current assets.
7 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
8 Movement in the performance fee reserve reflects the performance fee reserve
accrued by the Company's at 31 March 23. This does not represent the
underlying Private Equity portfolio's carried interest.
9 Invested Portfolio excludes cash and cash equivalents, revolving credit
facility drawn and net current assets, including these the NAV was €1,293.0m
and Adjusted NAV was €1,291.4m reflecting adjustment of €1.6m 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 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'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 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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