Write up on #APAX by Oak Bloke |
Apax carves out S&W accountants from Evelyn wealth managers -
Apax Global Alpha contributes £23.4m of a reported £700m price tag for Smith & Williamson, the accountancy arm spinning off from Evelyn Partners... |
Apax Funds to acquire Evelyn Partners - |
Thanks speedsgh. I suppose once sentiment changes it may accelerate potential gains with less shares in issue. Just a speculative holding for me, but (the whole sector?) seems to be very out of favour at the moment. |
 @Mister MD - That's because actions speak louder than words and the APAX buyback programme is being implemented in such a half-hearted manner that it is unlikely to have any meaningful effect.
The first buyback was undertaken on 27 June. The terms of the programme are as voted for at the most recent AGM (1/5/24) and limit buybacks to 14.99% of the Company's issued capital (73,616,005 shares). The Distribution Pool which earmarks funds available for buybacks was seeded with EUR 30m.
To date APAX have bought back 2,136,021 shares (at a cost of approx EUR 3.67m) which represents just 2.90% of the maximum 73m+ shares that can be purchased. That is since 27 June, so over nearly 5 months.
Purchases are being undertaken by Jefferies independent of the company but within parameters set by the company in the agreement with Jefferies. AFAIAA these parameters have not been disclosed to shareholders but are likely the reason behind the scheme's relative ineffectiveness.
To be fair, it should also be noted that many other trusts/companies have been buying back shares over the same period and even in cases where buyback programmes have been implemented more rigourously, it has tended to have limited effect on the share price. |
The share buybacks don't seem to be having much effect on the shareprice ? |
@makinbucks There are different kinds of PE strategies. Not all of them require "significantly grow revenue and EBITDA" or indeed high levels of debt.
What shouldn't be a debate is that an investment trust is required to distribute a high % of the income it declares - I believe it's 85%. So if Apax is making capital gains and receiving dividends, then these must be mostly distributed to shareholders. That doesn't preclude an IT from having uncovered dividends, but even then that's a sign of confidence as no company or IT wants to reduce dividends.
And for a fund targetting mid-teens returns, a 8% "natural yield" is certainly the minimum to be expected from a mature, cash-generating portfolio. |
@SKYSHIP - Have replied to your DM |
craigso, I think that is misguided. PE investors look for companies that can significantly grow revenue and EBITA. To allow that to happen they gear the investee companies. Cash flow generated services the debt and funds the growth, dividends restrict the growth opportunity. After a period of growth the PE investor sells the asset for a capital gain. If a PE IT is paying a dividend it is doing so to smooth the distribution of the capital gains. Whether this is good practice or not is a debate.
Apax is different, unique in fact, in that alongside the PE it has the debt and equity
derivatives portfolio which is there to provide liquidity and income. That gives it a natural yield which other PE IT's don't have but lets not kid ourselves that there is an 8% natural yield |
Message for speedsgh.
--------------------
Hi there - a request. Would you mind updating the Header of your ASLI thread.
You seem to have moved on; and perhaps now have no interest.
If so, I will start a new thread with updated Header info re the wind-up and showing 27/09 Interims.
Would prefer you update; or provide permission for me to proceed. |
Another I've been watching for a while and bought in today. Think we will see quite a move once we break the downtrend and happy to receive the very attractive dividend in the meantime :) |
There are many private equity type investment trusts trading on these sorts of discounts. Sooner or later the discounts will narrow.
I'm not really able to judge which PE ITs are better than others - I'm certainly not going to chase recent winners under the assumption that they are "better" - but the one confident enough to give me an 8% yield (+ more via buyback) is certainly worth holding. |
speedsgh, same as yourself. I have it as a diversifier within a balanced portfolio. With the share buybacks, the discount should narrow and an 11p fixed dividend provides a good yield. Personally, I can't fully explain why the share price has been sliding over the past 3 years but am happy to have had the opportunity to buy at current levels. |
Performance the last 3 years has been disappointing but prior to that performance since listing wasn't bad. I'm inclined to think the share price is nearer the bottom and am therefore happy to stick with them and collect the dividends until their performance & rating have improved. |
Very interesting, thanks. They could be sat on it for a long time tho, APAX been a serial underperformer. |
"That’s left them [APAX] on a 33% discount to their net asset value of 213p in June, which has ‘disappointed’ long-standing backer James Hart. As the former investment director of Witan Investment Trust, Hart admired Apax Partners and took a cornerstone stake when the investment company floated.
Following Witan’s merger this month with rival Alliance Trust, Hart has joined its fund manager Willis Towers Watson. The 5% stake in Apax has transferred to the now £5bn Alliance Witan (ALW) and although it does not fit its investment strategy, Hart said it ‘will not be sold until we have realised full value for Alliance Witan shareholders.’
That’s good for Apax. If Alliance Witan is not a forced seller, it should remove any ‘overhang̵7; weighing on the shares." |
Private equity is picking up: Buy this ‘hidden gem’ -
This is a version of an article published today in the Telegraph’s Questor column... |
Tipped by Questor in the Telegraph today. |
24m shares could only be sold off via a placing, even if the combined group wanted to do so, which is unlikely IMO. |
Doing some research today... Picked up that Witan Investment Trust owns more than 5% of Apax Global Alpha.
Now that Witan is merging with Alliance Trust, there may be some concern that Witan's Investment Trust holdings will be sold off. |
Looking at the chart, there has been an almost continuous slide over the last 3 years. When the rest of the market has been growing, that suggests deep issues. I can't spot anything significant. What am I missing? |
Nice dividend received today at least ... |
Like an ingenu, waiting to be fleeced, I took a few at just under 136p. Looks reasonable value assuming there's no nasties in the offing that we're unaware of(imagine that!)) |
Frustrating to see this trickle downwards...
But we're still getting our 8% yield and the cheaper the share price, the more NAV accretive the share buybacks. It's just one of those ITs we need to be patient with and ignore the day-to-day... |
Well it's divi day tomorrow so may rise a bit on reinvestments? |
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