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Apax Global Alpha Ltd on Friday said its net asset value fell over the first half of the year, due to a downturn in private equity.
Apax Global is a closed-ended investment company that invests in a portfolio of private equity funds advised by private equity firm Apax Partners LLP.
In the first half of 2022, it reported a net asset value return of negative 3.5%, as net asset value dropped 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 makes up 71% of the whole, returned minus 5.7%. ‘The decline [was] driven primarily by valuation multiples used to value the portfolio together with lower share prices of the publicly quoted portfolio companies, which offset strong underlying earnings growth,’ the firm explained.
Derived Investments brought in a return of 2.2%, proving resilient when compared to debt and equity markets, which registered ‘significant declines’.
It swung to a total loss of €46.9 million in the first half from total income of €218.5 million a year prior, and swung to a pretax loss of €52.0 million compared to €209.2 million profit.
The company declared an interim dividend of 6.00p, which is in line with its dividend policy of distributing 5% of net asset value annually.
‘The resilience of these results demonstrates that AGA's diversified portfolio is well-positioned to weather the current macroeconomic headwinds. Historically, private equity as an asset class has shown the highest levels of outperformance following periods of market volatility, and against this backdrop, we believe the Apax Partners' sector-based investment strategy focused on fundamental business improvement is ideally suited to take advantage of opportunities going forward,’ commented Chair Tim Breedon.
Shares in Apax Global were down 0.7% to 186.86p each in London on Friday morning.
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