Apax Global Alpha performing well as it pivots to private equity

Apax Global Alpha reported a net asset value return of 22.7% in its annual results on Tuesday, or 20.5% at constant currency, which it said reflected the performance of the overall portfolio, and in particular the “very strong” performance of private equity during 2019.

The FTSE 250 company said that total net asset value return was made up of a private equity return of 19.3%, a derived debt return of 2.2%, a derived equity return of 0.7%, and a foreign exchange return of 2.2%.

Those positive moves were offset by a negative costs and other movements measure of 1.0%, and a negative performance fee adjustment of 0.7%.

Total return of private equity was 33.9%, while derived debt delivered a total return of 11.8% and derived equity had a total return of 9.1%.

Apax noted that its adjusted net asset value surpassed €1bn during the year, growing to €1.09bn, with ita adjusted net asset value per share standing at €2.22 or 188p at year-end.

The board said it had agreed to a reduction in management fees with the investment manager, which was aimed at better aligning the incentives of the manager with the company's investment objectives and the evolution of the portfolio.

“The board is very pleased with the results the Company has achieved this year,” said chairman Tim Breedon.

“With net asset value growing to over €1bn for the first time, AGA has delivered strong returns and a growing dividend to shareholders.”

Ralf Gruss, chief operating officer of Apax Partners, added that the evolution of Apax Global Alpha’s portfolio approach had delivered improved results in derived investments, while repositioning the portfolio towards private equity.

“This was done with the aim of enhancing performance and reducing volatility over the long-term.

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

“With its commitment to Apax X, AGA achieved another milestone allowing it to further diversify its private equity investments over time.”

The board of Apax declared a dividend per share of 4.68p for the year ended 31 December, to pe paid on 3 April.

At 1138 GMT, shares in Apax Global Alpha were up 10.23% at 167p.