Apax Global Alpha Limited – An abundance of alpha – QuotedData


Firstly as we continue, can I just say that geoFence has built in fast and accurate updates!

An abundance of Listed, when used to describe a UK company, means a company that is listed on the main market of the London Stock Exchange. All listed companies can be described as quoted companies but not all UK quoted companies are listed.

” data-title=”Listed”>listed for just over five years, but has been in operation for well over a decade. AGA provides access to the The invested assets of a fund such as an investment company, investment trust or OEIC.

” data-title=”Portfolio”>portfolio of derived investments, which provides a unique differentiator for AGA, reduces When part of a portfolio is invested in cash or cash-equivalent securities, as opposed to securities which are the portfolio’s main focus, the cash component has no market exposure. This effect is referred to as cash drag. 

In a situation where markets are rising, cash tends to underperform markets and cash drag is negative. Conversely, where markets are falling, cash will tend to outperform the market and cash drag will be positive.

” data-title=”Cash drag”>cash drag and helps support the A peer group is a selection of similar funds or companies.

Peer group returns and rankings are often used to see if the investment managers are doing as good as or better job than their competitors. This is often done with reference to a benchmark that they may or may not share.

” data-title=”Peer group”>peer group. In addition, its focus on sectors such as technology and healthcare, appears to have helped it navigate the pandemic successfully.

Recent deals have underscored the latent value that may be within the portfolio. Exits achieved in 2020 came at a 40% average uplift to previous valuations.

Unique exposure to the global private equity investment expertise of Apax Partners

AGA aims to provide its An abbreviation for net asset value

” data-title=”NAV”>NAV returns are 12–15% per annum) and regular dividends (5% of the NAV per annum, payable semi-annually). AGA invests as a limited partner in private equity funds raised and advised by Apax Partners, and is a direct investor in debt and equity instruments which are sourced through leveraging the insight and global reach of Apax Partners.

Fund profile

AGA offers a way for investors to access private equity investments through a listed vehicle. It invests predominantly in funds advised by Apax Partners The person or people who have been given the job of managing the company’s assets by the Board of the investment company.

” data-title=”Investment Manager”>investment manager), an independent company, and that company is advised by Apax. Apax has a nearly 50-year track record of private equity investment, initially in IRR is an abbreviation for internal rate of return

” data-title=”IRR”>IRR of 30.9%, 14.7% a year more than the net return on the MSCI World A condition where an investment cannot be sold except under pre-defined circumstances. (See Free Flout and Liquidity)

” data-title=”Lock up”>lock up from June 2021, when they can sell up to 20% of their holding at initial admission. An additional 20% emerges from lock up each year up to June 2025), and former Apax staff agreed to be locked in for five years. The latter anniversary passed in June 2020 and, with fewer shares locked in, AGA was deemed to be liquid enough for inclusion with the FTSE series of indices for the first time last year.

Proactive response to COVID-19

COVID-19, the measures taken to control its spread, the efforts to treat and vaccinate against it, and the fiscal and monetary policy response to it have overshadowed everything over the past 12 months.

In February/March 2020, the investment adviser’s priority was to work with portfolio companies to manage their A Limited Partnership is one that has at least one General Partner plus a number of Limited Partners. The Limited Partners are like shareholders in a limited company – they are only liable for the debts of the partnership to the extent of their investment.

” data-title=”Limited Partnership”>limited partnership investments in seven of the investment adviser’s private equity funds (detailed information on the portfolio is given from page 8). Typically, these funds have a planned lifespan of about 10 years. Subject to the approval of the EBITDA is an abbreviation that stands for Earnings Before Interest, Tax, Depreciation and Amortisation.  It is a close approximation for the cash generated by a company before it pays any interest and tax bills that it owes. It is useful as a profitability measure, although it doesn’t tell the whole story.

” data-title=”EBITDA”>EBITDA growth, multiple expansion, and cash generation. This means looking to grow the top line, while keeping a lid on costs and, sometimes, looking to extract synergies from M&A activity.

The investment adviser has offices in New York, London, Munich, Tel Aviv, Mumbai, Hong Kong and Shanghai, but the team is organised along sector rather than regional lines. They adopt a truly global approach, sharing expertise and ideas, and leveraging experience. Within each sector team there is resource dedicated to specific sub-sectors, to ensure that there is sufficient depth of knowledge.

New investments, which are typically in the upper- to mid-market range of private equity transactions, can come from a variety of sources. For example, sometimes, they will look to carve out a business from a much larger company and sometimes they will step in when a founder is looking to exit.

Individual team members source deals and put suggestions to an internal investment committee for approval. Part of the committee’s role is to ensure that the portfolio is adequately diversified with regard to risk.

An operational excellence practice within the investment adviser’s team works with and supports the management of the underlying companies.

A focus on nurturing and growing businesses should mean that the investment adviser is well-regarded by the management teams that it works with, and this in turn helps drive introductions of potential new investments, in a virtuous circle.

For example, one of Apax’s first experiences of online marketplaces came when it invested in Autotrader in 2007. The knowledge and experience that the investment adviser gained from that investment led to similar investments in Canada and New Zealand and also helped inform the investment in idealista (see page 14).

As discussed above, average leverage rates are lower than for many other private equity companies, typically around 4:1 on EBITDA. The actual level is determined by the circumstances of the individual company, around 29% was leveraged less than two times at the end of December 2020.

Currency and market exposures are not hedged.

Investment restrictions

The following specific investment restrictions apply as at the date of the relevant transaction or commitment to invest:

  • no more than 25% of GAV will be invested in any one Apax fund, unless that fund is restricted from holding more than 25% of its portfolio in one investment;
  • no more than 15% of GAV may be invested in any one portfolio company on a look-through basis;
  • no more than 15% of GAV may be invested in any one derived investment; and
  • in aggregate, not more than 20% of GAV is intended to be invested in derived investments in equity securities of publicly listed companies. However, such aggregate exposure will always be subject to an absolute maximum of 25% of GAV.


The investment adviser believes that a focus on sustainable investing can lower risk and enhance financial returns for the funds it advises, while creating a net benefit to society. Consequently, sustainability has been embedded into Apax’s investment processes for over a decade. A sustainability committee (which meets monthly) coordinates the investment adviser’s sustainability efforts.

The annual assessment by the Principles for Responsible Investment (UNPRI) rates the Apax Asset allocation is the art of deciding, at a high level, where you want your money invested. We normally distinguish between geographical asset allocation – choosing which countries and regions you want to invest in – industry sector asset allocation – choosing what types of businesses you want to invest in – and asset class allocation – choosing what types of investment you want to make.

” data-title=”Asset allocation”>Asset allocation – overall

At the end of December 2020, the exposure to cash and equivalents was 7.8% of the portfolio, private equity 65.6%, derived debt 23.0% and derived equity 3.6%.

Generally, the exposure to private equity has been rising in recent years. As the portfolio becomes increasingly mature, and given the degree of the

The AGA private equity portfolio has a bias to the US and Europe and only modest exposure to other parts of the world, including Asia. The manager says that the regional weightings reflect the opportunities available. The portfolio is not managed on a top-down basis. The allocation to digital reflects the holding in the Apax Digital Fund (ADF), which makes investments in the software, internet and tech-enabled services sub-sectors.

Apax X (AX in Figure 4) is relatively early in its life cycle. The exposures to individual funds reflect their relative maturity.

Apax funds within the AGA private equity portfolio

The recent Apax funds (AX, AIX and AVIII) held by AGA have both euro and dollar partnerships, hence the commitment figures in different currencies. Apax X (AX), the latest, announced on 29 January 2021 that it had raised $11bn (hitting its hard cap, excluding affiliate entities).

Like its predecessors, AX is seeking investment opportunities across the tech, services, healthcare and consumer sectors.

AMI Opportunities is focused on investments in Israel.

10 largest underlying private equity holdings

At the end of December 2020, AGA had exposure to 66 underlying portfolio companies.

The list of AGA’s 10-largest holdings is as at 31 December 2020. As we detail on subsequent pages, there was considerable portfolio activity, including some sizeable and profitable disposals, over the latter half of 2020.


ThoughtWorks (thoughtworks.com) is a global software development and digital transformation consulting company. Incorporated in 1993 and headquartered in Chicago, USA, the company has grown from a small group to over 7,000 employees across 46 offices in 15 countries.

AIX acquired ThoughtWorks in October 2017 from its founder and has been driving sales growth by focusing on account management practices and further investing in new technology capabilities.

In January 2021, a consortium of GIC, Siemens AG, Fidelity Management and Research LLC, and Mubadala SaaS is an acronym for software as a service

” data-title=”SaaS”>SaaS company, a leading provider of software technology to the property & casualty insurance carrier market. Its cloud-based software products help back-end processing such as policy administration, claims processing, billing and rating.

Under Apax’s ownership, the company strengthened its management team and made four bolt-on acquisitions. In August 2020, Duck Creek was listed on the Nasdaq Global Select Market, valuing it at 8.2x the amount that AVIII had invested, equivalent to a gross IRR of 66%.

At the $40 closing price on 14 August 2020, AGA’s position in Duck Creek was valued at €82m. AGA had already received about €6m in cash from the investment and its share of AVIII’s proceeds from the The amount by which the share price exceeds the net asset value, calculated as the share price divided by the net asset value and expressed as a percentage.

The share price of an investment trust can differ from the net asset value (NAV). If the current share price is above the NAV, the investment trust is said to be trading at a premium, i.e. it costs more to buy the shares than the underlying investments are worth.

” data-title=”Premium”>premium men’s and women’s footwear, apparel and accessories. AVIII bought the business from Nike in 2013 in a $570m deal. An attempt to IPO the company early in 2020 foundered as a result of the market An Initial Public Offering (IPO) is the first time that the share of a company is offered to the public. IPOs, in the context of an investment company, are the point at which new funds are launched, floated and traded on the Main Market.

For the latest news and research on IPOs.

” data-title=”Initial Public Offering”>initial public offering of common stock on the Nasdaq Global Select Market. Based on the closing price of $24.20 on 4 March, the IPO added 108% or about €21m to InnovAge’s fair value in APAX’s NAV at 31 December 2020. This represents an uplift of about 1.8% or €0.04 per share. InnovAge is a leading provider of value-based senior care in the US.

Herjavec Group

On 11 February 2021, AX announced the acquisition of a majority stake in a cybersecurity company, Herjavec Group (herjavecgroup.com), a global managed security services provider and cyber operations leader. The transaction is expected to close in the second quarter of 2021, subject to customary closing conditions. On a look through basis, AGA is expected to invest approximately €5.4m in the company.


On 28 January 2021, ADF announced that it planned to sell Signavio (signavio.com), the company behind Signavio Process Manager, a web-based business process modelling tool. The transaction valued the business at an 80% premium to the last unaffected valuation. This added €3.9m or about one cent per share to AGA’s NAV.

PIB Group

AX announced that it was buying PIB Group (pibgroup.co.uk), a leading independent specialist insurance intermediary, on 25 January 2021. AGA’s share of the deal amounted to about €20m.

Boats Group

On 29 December, AIX sold its stake in Boats Group (boatsgroup.com) – an online marketplace and provider of software solutions for the recreational marine industry – to funds advised for Permira. AIX realised a gross

Ideas for potential investments in the derived portfolio are generated on a bottom-up basis but the AGA investment committee and the investment manager take a top-down view of risk exposures within the portfolio.

The derived debt is all floating rate and, at 31 December 2020, the weighted average income yield on this part of the portfolio was 7.3%. The weighted average maturity of the derived debt portfolio was 5.7 years.

Within the derived equity portfolio, the average P/E ratio was 7.1x at the end of December.

10 largest derived investments

At the end of December 2020, there were just over 30 discrete positions in the derived investments portfolio. The largest equity position (ranking 13th) was Airtel Africa, valued at around 1% of the portfolio.


Note: AGA’s shares trade in sterling and it pays sterling dividends. However, its accounts are prepared in euros. All returns cited in this note are in sterling unless otherwise indicated.

For the purposes of this note, QuotedData’s analysts have estimated AGA’s NAV as at end January, end February and as at 8 March 2021. We have attempted to factor in changes in exchange rates, based on the distribution of the portfolio as at end December, announcements of events impacting the NAV and changes in the share prices of significant listed holdings. This is an estimate only and the actual NAV as at those dates may be materially different.

Over the five years to the end of February 2021, AGA outperformed the MSCI World Index in both NAV and share price terms.

AGA’s NAV was impacted by the market fall over Q1 2020. However, as markets recovered, coupled with a number of valuation uplifts within the portfolio, AGA’s NAV regained the ground it had lost and more.

In its recently published results, which covered the year to end December, APAX announced that it had generated an NAV return of 14.8% in euro terms (21.6% constant currency terms).

Breaking the return for 2020 down between the company’s private equity and derived investments portfolio, the private equity portfolio returned 25.4% and the derived investments portfolio returned -0.6% (both in euro terms). The return on the derived investments portfolio would have been 6.5% on a constant currency basis.

The private equity return was aided by improved operating performance within the portfolio (on average, EBITDA grew by 20.8% over 2020). Those investments that were valued with reference to listed comparators also benefited as market valuations rose, on average.

The portfolio also benefited from a number of valuation uplifts on the back of distributions. Seven full exits, three significant partial exits and two IPOs helped generate €207.3m for AGA. The average uplift in valuation on these deals was around 40%.

In recent months, currency moves and, in particular dollar weakness, have been weighing on returns.

The LPX Europe Index is an index of listed private equity companies in Europe. Its returns are driven by the share prices of those companies. A comparison of the LPX Europe and AGA’s share price suggests that AGA has done particularly well against its peer group.

Peer group

AGA is a constituent of the

Each of the funds has its own investment approach, ranging from funds of funds such as Pantheon International, to relatively concentrated directly invested portfolios, such as EPE Special Opportunities. They have varying geographic remits too. Symphony International, for example, is focused on Asia.

AGA’s shares are, based on our estimate of its NAV, trading close to asset value. The trust’s distribution policy, discussed below, places it on a higher than average yield.

AGA is one of the leading trusts in its peer group in NAV performance terms. The returns of the leading trust, EPE Special Opportunities, can largely be attributed to just one stock within its portfolio.


AGA normally declares two dividends per year, an interim in September and a final in April. Each of the interim and final dividends is calculated as 2.5% of the company’s NAV at 30 June and 31 December, respectively.

As a Guernsey-domiciled investment company, AGA is not required to separate capital and revenue items within its accounts. Dividends are financed from the returns generated from the portfolio of derived investments and distributions from the private equity portfolio. For the year ended 31 December 2020, investment income totalled €18.1m, distributions from the private equity portfolio totalled €207.3m and dividends paid totalled €52.9m.


AGA announces its NAV’s quarterly. Figure 18 combines quarterly data and our estimated NAVs, for end January and end February 2021. AGA’s discount appears to be on a narrowing trend. At 28 February 2021, we estimate that AGA was trading at a discount of 2.5%, and, at 8 March 2021, our model suggests that AGA was trading on a premium of 1.0%.

At the last All the shares of a company that could be traded on a stock exchange.

” data-title=”Shares in issue”>shares in issue. AGA’s board monitors the level of discount and would consider buying back shares if it felt it was appropriate to do so, but felt that no shares needed to be bought back during 2020. The recent elimination of the discount has vindicated that decision.

Shareholders also authorised the board to issue up to 10% of AGA’s shares in issue without pre-emption. If the shares trade at a premium consistently, it may be that the board looks to moderate the premium by issuing shares under this authority. The investment adviser would like to see the company grow.

Fees and costs

Although AGA invests predominantly through private equity funds managed or advised by Apax, there is no double-layering of fees. No fee is payable at the AGA level on private equity fund investments where the private equity fund pays a fee. In addition, as a sizeable investor in each Apax Fund, it benefits from preferential terms which are available to other similar sized third-party investors.

During 2020, the average An extra fee the manager gets for doing a good job. This might be a percentage of all the money the company makes above its benchmark (see Hurdle)

The way that the fee is calculated should be clearly stated in the investment company’s prospectus, Key Information Document (KID) or factsheet. It is often calculated relative to the portfolio’s performance over a set period of time relative to a benchmark.

” data-title=”Performance fee”>performance fee on the overall gains or losses, net of management fees and direct deal costs in each financial year, calculated as 20% of the excess return over an 8% per annum To compare the running costs of different investment companies the industry has devised a measure called the ongoing charges ratio which is a measure of the all the regular annual fees charged to the fund, the largest of which is usually the annual management fee. It excludes one-off items like performance fees.

The Key Information Document (KID) has been created to further synchronise information put out on charges by investment companies. Please read our Guide on the KID by clicking here

” data-title=”Ongoing charges”>ongoing charges ratio for the year ended 31 December 2020 was 1.5%, down from 1.6% for the prior year.

The most simple form of shares (most companies only have ordinary shares).

” data-title=”Ordinary shares”>ordinary shares in issue. There are no other classes of The year end is the last day of a company’s financial year 

” data-title=”Year End”>year end is 31 December and its AGMs are usually held in April/May.

Loan To Value or LTV is a ratio of a company’s debts to its total assets. It differs from gearing, which is a measure of a company’s debts to its net assets.

For example, if my company has assets of £100 and them borrows another £100 it now has total assets of £200.

Its Loan to value ratio is 0.5 or 50% = 100/200.

Its gearing is expressed as 100% = 100/(200-100) though remember this can also be expressed as 200 – see the gearing definition.


” data-title=”Loan To Value”>loan to value LIBOR is an abbreviation for the London Interbank Offered Rate. It is the average interest rate that banks charge each other for borrowing money. Lots of different LIBOR rates are calculated each day for a range of currencies and time periods – everything from an interest rate for borrowing Pounds (Sterling) for one day to borrowing Japanese Yen for a year.

These rates are used as the basis for calculating all sorts of things including interest rates on some mortgages.

” data-title=”LIBOR”>LIBOR or Margin, in the context of accountancy, refers to the difference between the cost of providing a good or service and the price received for that good or service. Gross margin is that simple calculation. Net margin is the same calculation but adjusted for the businesses other day-to-day running costs.

Margin, in the context of derivatives trading, refers to an amount the holder of the derivative is required to pay as collateral so that the person on the other side of the contract can be sure of getting at least some of the money due to them.

” data-title=”Margin”>margin of 210bps and there is a non-utilisation fee on the undrawn facility.

Over the year ended 31 December 2020, the facility was drawn once and fully repaid during the year.

At the end of December 2020, AGA had €93.5m of cash available for investment. This, combined with the €140m credit facility and the portfolio of derived investments valued at €319.4m, sat against outstanding commitments to Apax funds of €458.8m. The majority of commitments relate to AX and are likely to be drawn down over the next three to four years.

Major shareholders

At 31 December 2020, the following shareholders held more than 5% of the voting rights in AGA.

  • NorTrust Nominees Limited 6.7%
  • Witan Investment Trust 6.1%
  • Berlinetta Limited 5.9%.

The investment adviser’s AGA investment committee

The AGA investment committee has five members drawn from the investment adviser’s senior team members. The committee is comprised of Andrew Sillitoe (co-CEO), Mitch Truwit (co-CEO), Roy Mackenzie (partner), Salim Nathoo (partner) and Ralf Gruss (COO).

Andrew Sillitoe (co-CEO)

Andrew joined Apax in 1998 and has focused on the tech sector. He has been involved in a number of deals, including Orange, TIVIT, TDC, Intelsat, Inmarsat and King Digital Entertainment. Andrew has an MA in Politics, Philosophy and Economics from Oxford University and an MBA from INSEAD.

Mitch Truwit (co-CEO)

Mitch joined Apax in 2006 and has been involved in a number of transactions including HUB International, Advantage Sales and Marketing, Bankrate, Dealer.com, Trader Canada, Garda and Answers. He is a partner in the Apax Services team and a trustee of the Apax Foundation. Mitch has a BA in Political Science from Vassar College and an MBA from Harvard Business School.

Roy Mackenzie (partner)

Roy joined Apax in 2003. He led the investments in Sophos and Exact and was responsible for Apax’s investment in King Digital Entertainment. In addition, he worked on the investments in Epicor, NXP and Duck Creek. Roy has an M.Eng in Electrical Engineering from Imperial College, London and an MBA from Stanford Graduate School of Business.

Salim Nathoo (partner)

Salim joined Apax in 1999, specialising in the tech space. He has both led and participated in a number of key deals including ThoughtWorks, Candela, EVRY, GlobalLogic, Sophos and Inmarsat. Salim holds an MBA from INSEAD and an MA in Mathematics from the University of Cambridge.

Ralf Gruss (COO)

Ralf joined Apax in 2000 and is a former member of the Apax Partners Services team. He has been involved in a number of deals, including Kabel Deutschland, LR Health and Beauty Systems and IFCO Systems. Ralf has a Diploma in Industrial Engineering and Business Administration from the Technical University in Karlsruhe. He also studied at the University of Massachusetts and the London School of Economics.

The investment manager

Apax Guernsey Managers Limited has four directors – Paul Meader, Martin Halusa, Andrew Guille and Mark Despres. Apax Guernsey Managers Limited is responsible for discretionary portfolio management, investment and divestment decisions, portfolio performance analysis and risk management.

Paul Meader

Paul has acted as non-executive director of several insurers, London and Euronext listed investment companies, funds and fund managers in real estate, private equity, The Investment Strategy is how an investment company intends to achieve its investment objective (e.g. by investing in UK equities).

” data-title=”Investment strategy”>investment strategy, governance and risk management, and the appointment and oversight of the investment manager and other service providers.

Tim Breedon

Tim worked for the Legal & General Group Plc for 25 years, most recently as group chief executive between 2006 and 2012. He was a director of the Association of British Insurers, and also served as its chairman between 2010 and 2012. Tim served as chairman of the UK government’s non-bank lending task force, an industry-led task force that looked at the structural and behavioural barriers to the development of alternative debt markets in the UK. He was previously lead non-executive director of the Ministry of Justice between 2012 and 2015. Tim was formerly a director of the Financial Reporting Council and was on the board of the Investment Management Association. Currently, he is a non-executive director of Barclays Plc and Quilter Plc. He is a graduate of Oxford University and has an MSc in Business Administration from the London Business School.

Susie Farnon

Susie is a fellow of the Institute of Chartered Accountants of England and Wales. She was appointed as chairman of the AGA audit committee on 1 July 2016 and elected as senior independent director on 18 November 2016. Susie served as president of the Guernsey Society of Chartered and Certified Accountants, as a member of The States of Guernsey Audit Commission and as a commissioner of the Guernsey Financial Services Commission. She was a Banking and Finance partner with KPMG Channel Islands from 1990 until 2001 and was head of audit at KPMG in the Channel Islands from 1999 until 2001.

Currently, Susie is a non-executive director of: HICL Infrastructure Plc; Real Estate Credit Investments Limited; BH Global Limited; and Bailiwick Investments Limited. She is also a board member of The Association of Investment Companies.

Chris Ambler

Chris Ambler has experience in a number of senior positions in the global industrial, energy and materials sectors working for major corporations including ICI/Zeneca, The BOC Group and Centrica/British Gas, as well as in strategic consulting roles.

Currently, Chris is chief executive of Jersey Electricity Plc and non-executive director of Foresight Solar Fund Limited. He has a first-class honours degree from Queens’ College, Cambridge and an MBA from INSEAD. Chris is also a Chartered Director, Chartered Engineer and a member of the Institution of Mechanical Engineers.

Mike Bane

Mike Bane has had over 35 years of audit and advisory experience in the asset management industry and has been a Guernsey resident for over 20 years. He retired as an EY partner in June 2018 where he was a member of EY’s EMEIA Wealth and Asset Management Board. Prior to EY, Mike worked for PwC in London and Guernsey.

Currently, Mike is a non-executive director of HICL Infrastructure Plc and NextEnergy Renewables Limited. He is a graduate of Oxford University and a Chartered Accountant.

Stephanie Coxon

Stephanie has 15 years’ experience of audit and advisory with PwC in the asset management sector, specialising in listed investment funds in a multitude of asset classes. Over the past nine years, she has led the PwC capital markets team responsible for advising on the listing process for UK, Guernsey and Jersey investment funds. Stephanie has a wealth of knowledge in this area having advised numerous investment managers throughout the UK, US and Europe on initial public offerings and secondary offerings.

Currently, Stephanie is a non-executive director of JLEN Environmental Assets Group Limited, PPHE Hotel Group Limited and PraxisIFM Group Limited. She is a fellow of the Institute of Chartered Accountants of England and Wales.

The legal bit

Marten & Co (which is authorised and regulated by the geoFence is easy to use, easy to maintain.

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