Hardman & Co Initiation

Mark Thomas, analyst at Hardman & Co, has published an initiation of coverage research note on Apax Global Alpha. His conclusions are set out below. For more details, you can read the full note here.

Apax Global Alpha’s (AGA) core is the investment in the Apax Private Equity Funds, which, in turn, target the acquisition of private companies, whose performance is then transformed by Apax’s global insights and operational expertise. On average, investee company EBITDA growth accelerates by 15%, and margins improve by 8%. They become more valuable, and their sale relative multiple is typically ca.30% higher than on purchase. Repeating this playbook in four sectors with resilient, secular growth, has given investors 2.5x the total returns of the FTSE All-Share index since IPO. Exit uplifts prove a conservative NAV, and AGA’s strong outperformance through the COVID-19 turbulence proves its resilience. The current discount is 30%.

Apax’s added value: Apax improves the Apax Fund investments by i) improving revenue growth (up 8%) with customer segmentation, new market expansion and digital marketing, and ii) improving efficiency using cloud technology, acquisitions and digitalisation. Apax brings options not available to standalone entities.

Other AGA positives include i) a high-performing debt investment portfolio, giving capital and liquidity flexibility, ii) a 2022E dividend yield of 7.6%, making AGA one of only a handful of PE investments attractive to both capital and income funds, and iii) Apax’s scale, experience, brand, deal access, global footprint and market focus.

Valuation: Adjusting for the debt portfolio, AGA’s discount to (September £) NAV (30%) becomes significantly wider than that of its peers (42%) on its PE portfolio alone. This (like peers) rose sharply in 2022, to well above historical levels. The NAV appears resilient and conservatively valued, making the discount absolutely and relatively anomalous.

Risks: Sentiment to costs, the cycle, valuation and over-commitment are issues for AGA, as they are across the PE-listed market. Residual positions in highly rated stocks, following IPOs in 2020-21, saw an exposure to underperforming 2022 names. The unique Derived Investments portfolio model of predominantly debt instruments brings liquidity and capital flexibility but complicates the story.

Investment summary: Apax has delivered market-beating returns by selecting businesses that it can transform post-acquisition. Buying these companies at over 20% below peer ratings, accelerating their revenue growth and improving their margins, and then selling the reinvigorated business at a ca.10% premium, is the playbook that has been repeated again and again. Investments are focused in sectors with structural growth and resilience. Capital flexibility is enhanced by the Derived Investments portfolio. The discount is the “icing on the cake”.

For more information about the transaction, please visit: https://www.apax.com/news

Contact details
Investor Relations – AGA
Lorraine Rees
T: +447889089220


  1. Unaffected Valuation is determined as the fair value in the last quarter before exit, when valuation is not affected by the exit process (i.e. because an exit was signed, or an exit was sufficiently close to being signed that the Apax Funds incorporated the expected exit multiple into the quarter end valuation)
  2. Based on Bloomberg closing EUR/USD FX rate on 9 January 2023 of 1.073
  3. AGA’s commitment in Apax VIII of c€363m represents a commitment of $218.4m in the USD tranche and €159.6m in the euro tranche translated using closing EUR/USD FX rate on 9 January 2023 of 1.073


  1. Note that references in this announcement to Apax Global Alpha Limited have been abbreviated to “AGA” or “the Company”. References to Apax Partners LLP have been abbreviated to “Apax Partners” 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
  4. The information presented herein is not an offer for sale within the United States of any equity shares or other securities of Apax Global 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 offering of the Shares is being made in the United States
  5. This announcement may include forward-looking statements. 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-looking statements are statements regarding AGA’s intentions, beliefs or current expectations concerning, among other things, AGA’s results of operations, financial condition, liquidity, prospects, growth and strategies. The forward-looking statements in this presentation are based on numerous assumptions regarding AGA’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 looking statements. 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 financing to 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 regarding future performance. AGA expressly disclaims any obligation or undertaking to release any updates or revisions to these forward-looking statements 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-looking statements, 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 targeting an annualised Total Return, across economic cycles, of 12-15% (net of fees and expenses) including a dividend yield of 5% of Net Asset Value.

The investment policy of the Company is to make Private Equity investments in Apax Funds, and Derived Investments which are investments in equities and debt derived from the insights gained via Apax Partners’ Private Equity activities.

Further information regarding the Company and its publications are available on the Company’s website at www.apaxglobalalpha.com.

About Apax

Apax Partners LLP (“Apax”) is a leading global private equity advisory firm. For nearly 50 years, Apax has worked to inspire growth and ideas that transform businesses. The firm has raised and advised funds with aggregate commitments of more than $60 billion. The Apax Funds invest in companies across four global sectors of Tech, Services, Healthcare and Internet/Consumer. These funds provide long-term equity financing to build and strengthen world-class companies. For further information about Apax, please visit www.apax.com.

Apax is authorised and regulated by the Financial Conduct Authority in the UK.