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(Alliance News) - Apax Global Alpha Ltd said Wednesday some of its funds have recovered strongly in the second quarter.
In particular, Apax's private equity funds - VIII and IX - were singled out.
Salim Nathoo, who sits on Apax's investment committee, said the fund recoveries were driven by the overall rebound in public equity markets. Nathoo noted the two funds hold an overweight exposure of these funds to sub-sectors such as software, tech-enabled services, and online marketplaces. Nathoo added that these sectors were "resilient" to Covid-19's economic impacts and benefit from long-term structural growth.
Overall, on a like for like basis, both funds are posting higher valuations than at the end of 2019.
"In general, swift cost actions taken at the outset of the pandemic allowed Apax VIII and Apax IX portfolio companies to increase their operating leverage and benefit from a rebound in sales after the easing of lockdown restrictions," Nathoo said.
He added: "This benefit was more prominent in the sub-sectors highlighted above, which also saw the biggest rebound in public market comparables. The balance of the portfolio of Apax VIII and Apax IX felt the impact of Covid-19 with varying levels of severity. These portfolio companies are generally experiencing sales rebound post-lockdown at different rates, but cost actions are mitigating some of the negative impacts and preparing the portfolio for uncertain economic conditions ahead."
Apax said it will give a more detailed insight into the rest of its funds in its interim results, which are expected to be issued on August 25.
Shares in Apax Global Alpha were 2.8% higher in London on Wednesday at 144.95 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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