Apax Global Alpha : Quarterly Results for 30 September 2019

RNS Number : 3792S

Apax Global Alpha Limited

06 November 2019

(LSE: APAX)

Apax Global Alpha Limited

Quarterly results for the period ended 30 September 2019

For further information regarding the announcement of AGA's 2019 third quarter results, including the details for today's analyst and investor webcast at 9.30am(UK time), please visit www.apaxglobalalpha.com.

Key highlights

• 3Q19 Total NAV Return1 was +4.9%. LTM2 Total NAV Return1 was +18.0% reflecting the Private Equity portfolio's strong performance and FX gains
• 3Q19 Total NAV Return1 of +4.9% contributed by:

• • Private Equity +3.1%
  • Derived Debt +0.6%
  • Derived Equity -0.6%
  • FX+2.3%
  • Costs and other movements -0.3%
  • Performance fee adjustment -0.2%
• 3Q19 Total Return1 of Private Equity was +6.9%. Derived Debt delivered Total Return1 of +6.0%. Derived Equity had a Total Return1 of -3.5%
• AGA was 96% invested with net cash after liabilities of €38.8m3

Private Equity portfolio highlights

• Private Equity portfolio delivered a strong performance with 3Q19 Total Return1 of +6.9%:

• • Unrealised gains +5.5%
  • Performance fee adjustment -0.7%
  • FX+2.1%
• On a look-through basis, AGA invested or committed c.€14.1min three new investments
• Calls of €27.4mwere paid to AIX
• Distributions totalled €6.8m; €6.3mdividends fromAVIII in relation to AssuredPartners and Exact Software, €0.5mfromAEVII in relation to Electro Stocks Group
• Private Equity exited two small positions8 (Electro Stocks Group and Neobpo) during the quarter. Their total proceeds to AGA are expected to be €0.5m

1. Total NAVReturn means the movement in the Adjusted NAVper share over the quarter plus any dividends paid. Total Return reflects the sub-portfolio performance on a stand-alone basis. It excludes items at overall AGA level such as cash, management fees and costs
2. LTM = Last Twelve Months to 30 September 2019
3. Net cash after liabilities of €38.8m calculated by takingcash of €41.3m less net current liabilities of €2.5m at 30 September 2019
4. Movement of €17.6m in other investments was due to the settlement of investments traded in the prior quarter that settled in the current period
5. FX on cash includes the revaluation of cash balances and net losses arisingfrom the differences in exchange rates between transaction dates and settlement dates, and unrealised net losses arisingfrom the translation into euro of assets and liabilities (other than investments) which are not denominated in euro
6. Movement in the Private Equity performance fee reserve of €2.1m was mainly driven by an increase in the value of AGA's carried interest holdings in AEVI and AEVII. This does not represent the underlyingPrivate Equity portfolio's carried interest.
7. Adjusted NAVrepresents NAVof €1,055.8m adjusted for the performance fee reserve of €4.6m at 30 September 2019
8. Private Equity Aggregate Gross IRR was not meaningful and Gross MOIC was 0.3xon full exits in 3Q19. These were calculated based on the expected aggregate cash flows in euro across all funds for the deals transacted in the period Electro Stocks Group and Neobpo. Gross IRR represents concurrent Gross IRR. Total proceeds consists of AEVII distribution for Electro Stocks Group for €0.5m received in 3Q19 and proceeds of less than €0.1m expected from Neobpo in 4Q19
9. Gross Asset Value weighted average of the respective metric across the portfolio. At June 2019 and September 2019, 14 and 17 investments were respectively excluded as these are financial services companies often valued on book value or for which earnings financials are not available e.g. complexcarve-outs or growth investments. For EV/EBITDA and Net Debt / EBITDA figures exclude MatchesFashion and Vyaire Medical due to low EBITDA from opexinvestments and short-term fluctuations in EBITDA respectively
10. Private Equity investments closed in the first nine months of 2019. Fractal Analytics closed in February 2019; Trade Me and AssuredPartners closed in May 2019, Huayue Education closed in June 2019 and Baltics Classifieds Group, Signavio and MetaMetrics closed in Sept 2019
11. Represents Private Equity exits which were closed or signed but not yet closed in the first nine months of 2019. Both AssuredPartners and Exact Software closed in May 2019 and Electro Stocks Group closed in August 2019. Acelity signed in May 2019 and closed in Oct 2019, whilst Neobpo signed in September 2019 and is expected to close in 4Q19
12. Derived Investments new investments in the nine months to 30 September 2019 of €105.7m consists of €90.5m from eight new debt investments and one add-on, €15.3m from two equity positions (€13.3m in one new position Airtel Africa and €1.5m add-on to existingposition QAD) and €2.0m related to debt and equity received as part of the restructuringof FullBeauty in February 2019
13. Derived Investments divestments in the nine months to 30 September 2019, of €58.7m consists of €22.6m from four debt positions exited, €36.1m from sixequity positions, and €2.0m in relation to realisation of FullBeauty debt which restructured in February 2019
14. Derived Investments Gross IRR and Gross MOIC calculated based on aggregate euro cash flows since inception for deals fully exited during3Q19; Servpro (Debt) and ERM (Debt). There were no Derived Equity investments fully exited in the period.
15. Derived Investments Gross IRR and Gross MOIC calculated based on aggregate euro cash flows since Gross Asset Value weighted average of the respective metric across the Derived Investments Debt portfolio. (Paycor was excluded from LTM EBITDA growth)
16. Gross Asset Value weighted average of the current full year income (annual coupon/clean price as at the respective date) for each debt position in the Derived Debt portfolio as at the respective date
17. Gross Asset Value weighted average of the respective metric across the Derived Investments Equity portfolio. (Answers, Airtel Africa, QAD and Cengage were excluded from both LTM earnings growth and P/E ratio)
18. Invested Portfolio excludes cash and cash equivalents, revolvingcredit facility drawn and net current liabilities; including these, the NAVis €1,060.4m. Adjusted NAVexcludes the performance fee reserve of €4.6m and is €1,055.8m at 30 September 2019

Notes

1. Note that references in this announcement to ApaxGlobal Alpha Limited have been abbreviated to "AGA" or "the Company". References to ApaxPartners LLP have been abbreviated to "ApaxPartners" or "the Investment Adviser"
2. Please be advised that this announcement may contain inside information as stipulated under the Market Abuse Regulations (EU) NO. 596/2014 ("MAR")
3. This announcement is not for release, publication or distribution, directly or indirectly, in whole or in part, into or within the United States or to "US persons" (as defined in Regulation S under the United States Securities Act of 1933, as amended (the "Securities Act")) or into or within Australia, Canada, South Africa or Japan. Recipients of this

announcement in jurisdictions outside the UK should inform themselves about and observe any applicable legal requirements in their jurisdictions. In particular, the distribution of the announcement may be restricted by law in certain jurisdictions

1. securities of ApaxGlobal Alpha Limited ("AGA"). AGA has not been and will not be registered under the US Investment Company Act of 1940, as amended (the "Investment Company Act"). In addition, AGA's shares (the "Shares") have not been and will not be registered under the Securities Act or any other applicable law of the United States. Consequently, the Shares may not be offered or sold or otherwise transferred within the United States, or to, or for the account or benefit of, US Persons, except pursuant to an exemption from the registration requirements of the Securities Act and under circumstances which will not require AGA to register under the Investment Company Act. No public offeringof the Shares is beingmade in the United States
2. This announcement may include forward-lookingstatements. The words "expect", "anticipate", "intends", "plan", "estimate", "aim", "forecast", "project" and similar expressions (or their negative) identify certain of these forward-looking statements. These forward-lookingstatements are statements regardingAGA's intentions, beliefs or current expectations concerning, amongother things, AGA's results of operations, financial condition, liquidity, prospects, growth and strategies. The forward-lookingstatements in this presentation are based on numerous assumptions regardingAGA's present and future business strategies and the environment in which AGA will operate in the future. Forward-looking statements involve inherent known and unknown risks, uncertainties and contingencies because they relate to events and depend on circumstances that may or may not occur in the future and may cause the actual results, performance or achievements of AGA to be materially different from those expressed or implied by such forward lookingstatements. Many of these risks and uncertainties relate to factors that are beyond AGA's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of regulators and other factors such as AGA's ability to continue to obtain financingto meet its liquidity needs, changes in the political, social and regulatory framework in which AGA operates or in economic or technological trends or conditions. Past performance should not be taken as an indication or guarantee of future results, and no representation or warranty, express or implied, is made regardingfuture performance. AGA expressly disclaims any obligation or undertakingto release any updates or revisions to these forward-lookingstatements to reflect any change in AGA's expectations with regard thereto or any change in events, conditions or circumstances on which any statement is based after the date of this announcement, or to update or to keep current any other information contained in this announcement. Accordingly, undue reliance should not be placed on the forward-lookingstatements, which speak only as of the date of this announcement

About Apax Global Alpha Limited

AGA is a Guernsey registered closed-ended collective investment scheme incorporated as a non-cellular company that listed on the London Stock Exchange on 15 June 2015. It is regulated by the Guernsey Financial Services Commission.

AGA's objective is to provide shareholders with capital appreciation from its investment portfolio and regular dividends. The Company is targetingan annualised Total Return, across economic cycles, of 12-15% (net of fees and expenses) includinga dividend yield of 5% of Net Asset Value.

The investment policy of the Company is to make Private Equity investments in ApaxFunds, and Derived Investments which are investments in equities and debt derived from the insights gained via ApaxPartners' Private Equity activities. The Company's portfolio is expected to be allocated in approximately equal proportions between Private Equity and Derived Investments, although the investment mixwill fluctuate over time due to market conditions, investment opportunities, cash flow requirements, the dividend policy and other factors. Further information regardingthe Company and its publications are available on the Company's website at www.apaxglobalalpha.com.

About Apax Partners LLP

ApaxPartners is a leadingglobal private equity advisory firm and over its more than 40-year history, ApaxPartners has raised and advised funds with aggregate commitments of c.€40 billion. Funds advised by ApaxPartners invest in companies across four global sectors of Tech & Telco, Services, Healthcare and

Consumer. These funds provide long-term equity financingto build and strengthen world-class companies. For further information about ApaxPartners, please

visit www.apax.com. ApaxPartners is authorised and regulated by the Financial Conduct Authority in the UK.

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