Apax Global Alpha sees 'continued momentum' in third quarter

Apax Global Alpha updated the market on its performance for the third quarter on Wednesday, reporting total net asset value return of 4.9%, with last 12 months total net asset value return standing at 18.0%, which it said reflected the private equity portfolio's strong performance, and currency gains.

The London-listed firm said its net asset value performance for the quarter ended 30 September consisted of 3.1% growth in private equity, 0.6% growth in derived debt and a 2.3% foreign exchange gain, offset by growth of -0.3% in derived equity, a movement of -0.3% in costs and other movements, and a performance fee adjustment of -0.2%.

It said its total returns for the third quarter were 6.9% in private equity, 6% for derived debt, and -3.5% for derived equity.

Apax Global Alpha said it was 96% invested, with net cash after liabilities of €38.8m (£32.97m).

Looking at its private equity portfolio, the company said it delivered a “strong performance” in the period, with unrealised gains of 5.5%, a performance fee adjustment of -0.7%, and currency movements of 2.1%.

On a look-through basis, Apax Global Alpha said it invested or committed around €14.1m in three new investments, while calls of €27.4m were paid to AIX.

It said distributions totalled €6.8m, consisting of €6.3m in dividends from AVIII in relation to AssuredPartners and Exact Software, and €0.5m from AEVII in relation to Electro Stocks Group.

The private equity portfolio exited two small positions - Electro Stocks Group and Neobpo - during the quarter, with total proceeds to Apax Global Alpha expected to be €0.5m.

In its derived investments portfolio, the board reported a “strong” derived debt performance, while derived equity remained negative, resulting in a third quarter total return for derived investments of 2.7%.

That consisted of 1.9% from income, nil from realised gains, -2% from unrealised losses, and a currency movement of 2.8%.

New investments of €23.4m in the period were all debt positions, with two new investments being Domestic & General and EverCommerce, and one add-on investment in ECi Software Solutions.

Apax Global Alpha fully exited two debt investments, and partially exited one debt investment and two equity investments during the quarter, with proceeds of €8.3m.

It said its gross internal rate of return and gross multiple on invested capital on derived investments full exits in the third quarter were 15.9% and 1.1x, respectively.

“The results for the September quarter reflect the continued momentum of Apax Global Alpha seen throughout the year,” said Apax Partners chief operating officer Ralf Gruss.

“Excellent performance in private equity reflects mainly value creation from the Apax VIII and Apax IX fund portfolio companies.

“Returns from derived debt were strong, and weighting of derived equity in the portfolio was further reduced.”

As at 1813 GMT, shares in Apax Global Alpha were down 1.32% at 164.8p.