Apax funds see hefty gains over Q2 – Apax Global Alpha holds a portfolio of private equity funds and derived investments (equity and debt positions in companies that the Apax team knows well). This morning, Apax Global Alpha posted valuation statements for each of the underlying Apax funds that it holds. We think that there are some encouraging signs in these figures which spell good news for Apax Global Alpha’s own NAV.
Valuations for the Apax Funds to which AGA has an exposure, have reported the following movements for the period from 31 March 2021 to 30 June 2021:
The bulk of the portfolio is comprised of limited partnership investments in the investment adviser’s private equity funds. Typically, these funds have a planned lifespan of about 10 years. Subject to the approval of the board and the investment manager, Apax Global Alpha makes legally binding commitments to provide capital to new Apax funds as they are launched.
Over the ‘investment phase’ of a private equity fund, the money that investors, including Apax Global Alpha, have committed is drawn down and deployed into private equity investments. Typically, while predominantly all of the money committed will be drawn down, some money is held back to nurture the growth of the underlying companies where necessary. Over the next few years, the fund’s portfolio enters the ‘maturity phase’. Follow-on investments may be made and early distributions from the portfolio maybe reinvested. Consequently, the percentage invested may exceed 100% of monies raised. Finally, the private equity fund’s portfolio enters a ‘harvesting phase’. Investments are gradually turned into cash and money returned to investors, including Apax Global Alpha.
The recent Apax funds (AX, AIX and AVIII) held by Apax Global Alpha have both euro and dollar partnerships, hence the commitment figures in different currencies.
Apax X (AX), the latest, announced on 29 January 2021 that it had raised $11bn (hitting its hard cap, excluding affiliate entities).
Like its predecessors, AX is seeking investment opportunities across the tech, services, healthcare and consumer sectors. Apax Digital Fund (ADF) makes investments in the software, internet and tech-enabled services. AMI Opportunities is focused on investments in Israel.