A new Guernsey-based investment trust advised by Apax Partners is targeting the sterling equivalent of €250 million (£183.5 million; $281.7 million) from a London listing. It will invest in the private equity firm’s funds and derived investments including debt.
The initial public offering of Apax Global Alpha Limited (AGA) closes tomorrow (10 June) and it is scheduled to trade on the main market of the London Stock Exchange from 15 June. Cornerstone investors have already committed €135 million to the trust, according to the intention to float published by the company. The new vehicle will acquire the PCV Group, which was formed in 2008 as an investment vehicle for certain partners and employees of Apax Partners. PCV’s investments had a net asset value of €611 million, as of 31 March, and included investments into four Apax private equity funds as well as other debt and equity assets.
Alongside private equity investments, the vehicle will invest in opportunities that Apax derives from its private equity business including the debt of Apax portfolio companies. Debt investments will be made and managed by Apax’s existing internal capital markets team, a source familiar with the situation told PDI.
In the document declaring its intention to list, AGA’s definition of derived investments comprises: direct and indirect investments in equity and debt instruments which may include subinvestment grade or unrated debt; co-investments with Apax private equity funds or third parties and investments in equity or debt instruments of Apax portfolio companies (including instruments not invested in by Apax private equity funds).
AGA will target annualised total shareholder return of between 12 and 15 percent including a dividend yield of five percent of net asset value once fully invested. The offer price was calculated to include a 13 percent discount on the estimated net asset value of the PCV portfolio the vehicle has acquired.
“It is a great privilege to lead Apax Global Alpha onto the stock market. The vehicle presents a unique opportunity for stock market investors to benefit from exposure to Apax’s excellent investment track record, in addition to the attractive investment opportunities that Apax has identified in asset classes that are not accessible to a traditional buyout fund,” said Tim Breedon, AGA’s chairman.
AGA is the latest listed vehicle to offer equity investors access to illiquid investments. Two investment trusts focused on marketplace lending strategies listed in the first half of 2015; VPC Speciality Lending and Ranger Direct Lending. On the corporate side, CVC Credit Partners European Opportunities Limited is a listed vehicle that offers access to the firm’s private credit investments.
Credit Suisse Securities and Jefferies International are joint global coordinators and joint bookrunners on the offer. Scott Harris UK is the placement agent and intermediaries offer adviser.
This story was updated on 10 June to clarify that Apax Partners will advise the new vehicle and that non-equity investments will be derived from (not derivatives of) Apax's private equity activities.