Apax Global Alpha Reports Challenging 2024 Results Amid Market Headwinds
Why we think this is bad
The 2024 results for Apax Global Alpha reveal a concerning picture. The Total NAV Return of 0.8% (or -3.0% in constant currency) indicates stagnant growth, while the Private Equity portfolio's negative return of -0.5% (-4.6% constant currency) is particularly worrying. The decline in portfolio companies' average LTM EBITDA growth from 16.5% to 14.1% suggests a slowdown in underlying performance. While the company maintains a reasonable cash position, the overall trend points to deteriorating conditions across several key metrics. The writedown of the Vyaire investment and challenges in healthcare and retail sectors further compound these issues. Despite some positive performance in the debt portfolio, the broader market headwinds and economic uncertainties cast a shadow over the company's near-term prospects.
Key Points
- Total NAV Return of 0.8% (-3.0% constant currency) for FY2024
- Private Equity portfolio had a negative Total Return of -0.5% (-4.6% constant currency)
- Portfolio companies' average LTM EBITDA growth declined to 14.1% from 16.5% in FY2023
- Cash position of €48m at year-end, with calls for next 12 months covered 2.4x
- Writedown of Vyaire investment impacted performance
- Challenges noted in healthcare and retail investments
- Debt portfolio achieved a Total Return of 7.5% (2.9% constant currency)
- New capital allocation framework announced, including regular dividends and share buybacks
- €69m returned to shareholders through dividends and share buybacks in 2024
- Company facing headwinds in consumer and cyclically exposed businesses
Summary
Apax Global Alpha's 2024 results reveal a challenging year marked by stagnant growth and market headwinds. Total NAV Return was just 0.8% (or -3.0% in constant currency), while the Private Equity portfolio saw a negative return of -0.5% (-4.6% constant currency). Portfolio companies' average LTM EBITDA growth declined from 16.5% to 14.1%, indicating a broader slowdown. The company maintained a cash position of €48m and was well-capitalized, but faced significant challenges in healthcare and retail investments, including a writedown of Vyaire. Despite some positive performance in the debt portfolio, the overall outlook remains cautious due to economic uncertainties and market pressures across various sectors.