|Winter floods;? Apax Global Alpha was launched in June last year, when it raised £218.2m (equivalent to 300m) through anoversubscribed IPO. Immediately prior to admission the fund acquired PCV Lux SCA and its subsidiaries, whichwas formed in 2008 as an investment vehicle for certain partners and employees of Apax Partners LLP. The IPOprice of 119.2p was set at a 13% discount to the NAV of the initial portfolio and, at admission, Apax GlobalAlpha therefore had a market capitalisation of £585m. Previous investors in PCV Lux SCA are subject to various'lock?up' arrangements and the fund currently has a free float of 45%. In total 30% of shares are subject to 5year arrangements and a further 25% are subject to 10 year arrangements. The latest annual process saw 37mshares come out of lock?up, but only 2.5m shares tendered and placed.? The portfolio includes investments in Apax Private Equity Funds as well as 'Derived' Investments. Thesecomprise both debt and listed equities and represent investment ideas that are generated by the team's day today investment activities and research, but that are not suitable for Apax's buyout funds. The long?term targetis 50% 'private equity' / 50% 'derived' investments.? The fund is targeting an annualised total shareholder return, across economic cycles, of 1215% (net of feesand expenses) including a dividend yield (paid semi?annually) equivalent to 5% p.a. of NAV, once fully invested.There is no double charging of management fees and no fees on cash.Performance, Portfolio & Outlook? In Euro terms the fund's NAV fell from 1.88 to 1.82 (?3.2%) in H1'16, although it rose in Sterling terms from138p to 152p (+10.1%). A second semi?annual dividend of 3.95p was declared, equivalent to 2.5% of NAV, whilethe first semi?annual dividend of 3.69p was paid in April and on a total return basis, the NAV return was ?0.6%in the period (+12.8% in Sterling terms). Since IPO the NAV total return is +5% in Euro terms.? Underlying portfolio performance was positive and on a constant currency basis the NAV would have been up1.2%. However, approximately 60% of the fund's investments are US Dollar denominated and the appreciationof the Euro against the US Dollar was therefore unhelpful. The Private Equity segment of the portfolio was up0.9% in the period as positive operational performance was offset by lower valuation multiples. DerivedInvestments were down 0.4% reflecting write?downs for debt investments.? At the period end the fund was 94% invested and had 48.5m of cash. The portfolio was split broadly evenlyacross Private Equity (52%) and Derived Investments (48%), while exposure was diversified across Apax's focusindustries of Tech & Telecom (37%), Services (28%), Consumer (19%) and Healthcare (5%).? The Private Equity portfolio companies continue to perform well, generating last twelve month revenuegrowth and EBITDA growth of 7.4% and 9.8% respectively. It is relatively young, with 57% of its valuerepresented by investments made during 2015 or 2016, reflecting activity by Apax VIII. There were four newprivate equity investments closed during the period, while AGA has also committed $350m to Apax IX, a globalbuy?out fund. There were a number of full and partial realisations and Apax funds returned 38.7m during thesix months to 30 June.? Within the derived portfolio, investments were made in the listed equity of five companies, including Sophos.A debt investment was also made in Ellucian, a provider of higher education technology. There were sixdivestments, all of which realised positive IRRs.? RG noted that only 2% of the portfolio is directly exposed to UK companies and as such he feels that the fundis well positioned to withstand any volatility associated with 'Brexit'.Winterflood ViewApax Partners is a long?established and well?regarded private equity manager and Apax Global Alpha isdifferentiated from its listed private equity peers by its hybrid portfolio, which provides exposure to bothprivate and publicly traded investments. This helps the fund avoid the cash drag often associated with listedprivate equity funds. In addition its ability to take advantage of opportunities that are uncovered as part of theinvestment team's work on particular sectors is attractive, in our opinion. The fund's portfolio is less maturethan the majority of its peers, although its prospective dividend yield of around 6% will appeal to certaininvestors and its ability to sustain this is helped by income generated from its debt investments. That so fewlocked?up shareholders, many of whom will have intimate knowledge of the portfolio's prospects, sold sharesat the first opportunity is also encouraging. Furthermore following the next release of shares from lock?up inJune next year we would expect Apax Global Alpha to become eligible for inclusion in the FTSE All Share Indexand this should provide a boost to demand. Taking all of this into account, we think that the current discount of18% looks like an attractive entry point.|
|Liberum doesn't mention that APAX isn't purely PE:
The portfolio has "Well balanced invested portfolio: Private Equity (52%) and Derived Investments (48%)" (at December 2015).
Derived instruments are quoted equity and quoted or unquoted debt. This probably goes some way to explaining the narrow discount compared with some in the PE sector.|
Apax Global Alpha (AGA) valued its Apax Funds in 30 June 2016 and the results are positive compared to prior valuations adjusting for calls and distributions (like-for-like).
AGA's largest commitments is in Apax VIII, a global buyout fund raised in 2012 and as at 31 March 2015 the majority of the top ten investments in AGA's portfolio where held under that fund.
We believe the 30 June 2016 valuation of the Apax Funds is reflecting AGA's portfolio that includes new investments (12 - 18 months) in value creation phase. AGA will be reporting the results of the financial half year ended 30th June 2016 on 17 August 2016, and given the numbers above we expect a small uplift in NAV. AGA is trading at 18.7% discount, much narrower than its peer group average of 31.4% (excl. 3i), and its current yield is 3%.|
|Liberum 15 Jun
Lock-up release of the first tranche of ordinary shares
Apax Global Alpha (AGA) announced that the lock-up agreed with certain of its existing shareholders in respect to their shareholdings at the time of the Company's IPO partially expires today, 15 June 2016. 20% of the ordinary shares in lock-up are released today.
AGA is trading at a 17.3% discount, tighter than the peer average of 30.8% (excl. 3i) and has a current yield of 3.1%.|
|Q1 results. Slight fall in NAV (1.8% after dividend payment adjustment) largely down to Euro appreciation. Not too bothering, as NAV of 31/03 was 143p.
Annual dividends 5% of NAV look sustainable. Current yield about 5.8%:
|Apax signs insurance joint venture with Accenture:
This looks promising.|
|There's a holdings RNS on SOPH here from 13 July. perhaps the IRR and MOIC are as yet unrealised numbers?
|Surprised it does not say they hold or may be below 3 % in Sophos ?
Need to check this.|
|H1 results, first since float:
NAV of 127p at 30 June, up 8% over period. And:
The Company's investment objective is to provide shareholders with capital appreciation from its investment portfolio and regular dividends. The Company is targeting an annualised total shareholder return across economic cycles of 12-15%, net of fees and expenses. Once fully invested, the Company is targeting an annualised dividend yield of 5% of Net Asset Value per annum.
So implied yield at current NAV is around 5.2%.
Only one mention of Sophos:
Sophos, a security software business, successfully listed in London during June 2015 in the largest-ever IPO of a technology business in the UK. The issue was significantly oversubscribed. The IPO valuation represented a MOIC of 2.7x and 24% IRR. A key driver of Sophos' investment performance was its transformation from an end point security provider to a strategy of providing 'Complete Security' and focusing on network security, mobile security and security solutions delivered via the cloud.|
|Re the SOPH ipo.Not sure how much this APAX fund has in Sophos.
From the Telegraph
Oxford graduates Jan Hruska and Peter Lammer will continue to own 18.9pc of the business, putting them on a paper fortune of over £180m, while private equity firm Apax will own 40.1pc of the business after listing.
The company’s directors also own 1.7pc of London’s biggest listed software company.
Apax bought a 70pc stake in Sophos in 2010 for £372m following Mr Hruska and Mr Lammer’s failed attempt to take the company public in New York in 2009.
|soph started today now 235 .will hear soon how much they made on this sale|
|Same here with you invest scaled back|
Just checked my account too and yes the commission charge has been removed.|
I'm sure they were inundated with complaints.|
|my commission has disappeared.:-)|
I too bought these through Youinvest and 3i, got 5427 shares in each. Have been charged £29.95 commission by Youinvest, but nothing with 3i. I too will query the charge, let me know how you get on?|
|Thanks..yes I certainly will be taking it up with them. Yes scaled back unfortunately. Really unimpressed with youinvest|
|Sarah - this is in the prospectus (page 108, or pdf p114):
Intermediaries may charge retail investors a fee for buying or holding the allocated Ordinary Shares for them (including any fees relating to the opening of an individual savings account or a self-invested personal pension for that purpose) provided that the Intermediary has disclosed the fees and terms and conditions of providing those services to the retail investor prior to the underlying application being made
I'd take this up with them and quote from the prospectus!
You were probably scaled down to 64.7% of what you wanted?|
|Question to anyone.. I applied for these through Youinvest (AJBELL) and looks like I have been scaled down to 1411 shares. However, AJBell have charged me a £29.95 commission - when in their email states no commission payable, as per usual IPO. Any one else in same boat?... especially as normal commission only £9.95|
|Not had chance to read it yet, but there's a 2 page article in this week's Shares Mag re: 'Apax-backed' Sophos, which is expected to go straight into the FTSE 250, apparently...|
|Shauney - yes, I understand Apax Partners are one of the owners, and this PE Fund has a stake in Apax Partners.
I was told Sophos would be institutions only, including US ones, and that there would be "a fight for stock".|
I take it Apax are the same as the company behind software security company Sophos who are due to float on the main market in July.|
|Not really surprised, considering the discount offered:
"TD Direct Investing has allocated shares on a
pro-rata basis across all customer applications
in line with the allocation it received from Apax
Global Alpha Limited. Customers will receive
approximately 64.7% of the amount applied for,
rounded down to the nearest whole share"
But ... they could have closed it early instead!
Offer price is approx. 119.2p.|
I've been waiting for this for some time, but PIs may not be able to apply.
However, Apax should be big winners!
|Thanks jonwig. Yeah, seems very fair to offer at a discount to NAV and then to also set the dividend against NAV too (rather than the issue price, as most IPO's seem to do). They look to have a decent track record in diversified investments and I'm reassured to see that Witan Investment Trust have committed to a 4% stake. An initial yield of around 5.7% is also a nice starting point, which hopefully will grow over time. I've applied for some this afternoon via selftrade.|