Apax Global Alpha goes from strength to strength – Apax Global Alpha’s results for the first six months of 2021 are impressive. Highlights are:
- Total NAV return of 17.4% – driven by returns of 24.5% from the private equity portfolio and 9.8% from the derived investment portfolio (debt and equity positions in companies that Apax knows well as a result of its private equity investment activities).
- NAV adjusted for accrued performance fees increased to about €1.4bn or €2.81 (£2.41) per share from €2.45 (£2.19)
- Apax’s four target sectors – technology/digital, services, healthcare and internet/consumer – and a “good-to-great” strategy meant it was well-positioned for the environment in which we find ourselves.
- Strength of the private equity portfolio demonstrated by average 22.3% revenue growth and 42.7% EBITDA growth for the underlying companies.
- The Apax Funds were able to identify attractive opportunities to invest, with AGA deploying €85m across eleven new private equity investments (seven in Apax X, two in the Apax Digital Fund, one in the AMI Opportunities Fund, and one joint investment by the AMI Opportunities Fund and the Apax Digital Fund).
- Record distributions of €131.1m received from full and significant partial private equity exits.
- Exits achieved at a 25.7% average uplift to undisturbed valuation
- Net cash freed from the private equity was redeployed into 13 new derived debt positions. Using its excess liquidity in this way is designed to increase the return to investors.
- Apax Global Alpha made a new $90m commitment to the Apax Digital Fund II, which will invest in minority equity and growth buyout opportunities in mid-market technology companies.
- Apax Global Alpha has ample resources to meet its commitments to private equity funds as they fall due. Cash after net liabilities of €29m, an undrawn evergreen revolving credit facility of €140m and derived Investments of €439m sit against commitments of €419.2m at the end of June.
- Interim dividend of 5.97 pence per share declared, in line with the stated policy to distribute 5% of NAV each year.
[Over the past 18 months or so, trends towards things like working from home, online shopping and cloud computing have been accelerated by the pandemic. Technological advances are disrupting many industries – bad for sleepy incumbents but great for the exciting new growth stocks nipping at their heels. Apax Global Alpha backs these new businesses; finding great management teams with great business models and funding them to grow their companies. Its portfolio is sitting pretty – as evidenced by the impressive revenue and profit growth numbers it is generating. Record exits have been helped by more buoyant markets. Significantly, the extensive network of relationships that the management team has is enabling it to find new opportunities to redeploy the cash that the portfolio is throwing off.]