Apax Global Alpha posts a negative return for net asset value

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Apax Global Alpha Ltd said on Friday that its net asset value fell in the first half of the year, due to a pullback in private equity.

Apax Global is a closed-end investment company investing in a portfolio of private equity funds advised by private equity firm Apax Partners LLP.

In the first half of 2022, it recorded a net asset value return of minus 3.5%, with the net asset value falling to €2.83 at the end of June from €3.03 at the end of December. This compares to a positive net asset value return of 17.4% in the first half of 2021.

Its Private Equity portfolio, which represents 71% of the total, recorded a return of minus 5.7%. ‘The decline [was] primarily due to the valuation multiples used to value the portfolio as well as lower share prices of publicly traded portfolio companies, which offset the strong growth in underlying earnings,” the company explained.

Derivative investments returned 2.2%, proving resilient against debt and equity markets, which recorded “significant declines”.

It went to a total loss of 46.9 million euros in the first half compared to a total income of 218.5 million euros the previous year, and a pre-tax loss of 52.0 million euros compared to a profit of 209.2 million euros.

The company declared an interim dividend of 6.00 pence, which is in line with its policy of distributing 5% of net asset value per annum.

“The resilience of these results demonstrates that AGA’s diversified portfolio is well positioned to withstand the current macroeconomic headwinds. Historically, private equity as an asset class has shown the highest levels of outperformance after periods of market volatility, and in this context, we believe that Apax Partners’ sector investment strategy focused on Fundamental improvement in the business is perfectly suited to take advantage of opportunities moving forward,” commented Chairman Tim Breedon.

Shares of Apax Global fell 0.7% to 186.86p apiece in London on Friday morning.

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