In This Article:
Release Date: May 02, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Apax Global Alpha Ltd (LSE:APAX) declared a dividend of 5.5p per share, equating to a dividend yield of 9.4% against the March 31, 2025 share price.
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The private equity portfolio demonstrated steady growth with an average last 12 months EBITDA growth of 16%.
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The take private of Paycor closed post quarter end, resulting in a 21% uplift to the December valuation and a total gross money multiple of 3.1 times.
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AGA's balance sheet remains robust with liquidity requirements for the next 12 months well covered, and expected capital calls covered 1.8 times.
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The portfolio is relatively insulated from the recently announced US tariffs, with no first order impact expected on 90% of NAV.
Negative Points
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Total NAV return per share for the quarter was down 2.5% in euro terms, impacted by the weakening US dollar.
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The Board expressed concern over the weak share price performance and is prioritizing addressing the discount to ensure shareholder benefit.
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The debt investments were affected by the depreciating US dollar, resulting in a total return of minus 0.8% despite strong returns on a constant currency basis.
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The private equity transaction momentum remains below the peak seen in 2020 and 2021, with 2025 expected to be a slower year for market deal activity.
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Second and third order impacts of the US tariffs, which could be more significant, remain uncertain and are being actively monitored.
Q & A Highlights
Q: Can you elaborate on the impact of the weakening US dollar on AGA's financial performance? A: Ralf Gruss, Chief Operating Officer, explained that the weakening US dollar negatively impacted euro returns, with a total NAV return per share down 2.5% for the quarter. However, on a constant currency basis, the return was positive at 0.5%. The depreciation of the US dollar affected both the private equity and debt investments, but the portfolio achieved strong returns on a constant currency basis.
Q: How is AGA addressing the weak share price performance and discount to NAV? A: The Board is prioritizing addressing the discount to ensure shareholders benefit from the intrinsic value of AGA's investment portfolio. AGA continues to return significant amounts to shareholders through dividends and share buybacks, with EUR36 million returned during the quarter.
Q: What is the impact of the recently announced US tariffs on AGA's portfolio? A: Approximately 90% of the Private Equity portfolio is not expected to have any first-order impact from the tariffs, as most portfolio companies are services or tech-oriented. However, a small portion, representing about 7% of NAV, may see limited impacts, with Cole Haan and Candela being the most affected, though they only represent 3% of NAV.