Apax Global Alpha, a fund established by London-based private equity firm Apax Partners, has closed its initial public offering of new shares at £218.2 million (equivalent to €300 million), according to a company statement.
The total represents a 20 percent increase on the IPO’s initial target of the sterling equivalent of €250 million. The offer was increased to accommodate additional demand from public investors, it is understood.
London-based investors Investec Wealth & Investments and Witan Investment Trust, New York-based Lexington Partners and Hong Kong's Silverhorn acquired £98 million (equivalent to €135 million) of the shares as cornerstone investors.
The new shares were sold at £1.192, representing a 13 percent discount to the net asset value as of March 2015 of the underlying fund’s portfolio of €611.1 million, according to the statement and AGA’s intention to float notice.
AGA is the first Apax fund to list and will have a total market capitalisation of £584.4 million when shares begin trading on the London Stock Exchange on 15 June. London is understood to be an attractive market for listed private equity funds because of its size and investor base.
The primary offering represents 37 percent of the capital of the listed fund, which will acquire PCV Lux, an investment vehicle set up in 2008 for Apax Partners employees. That fund has invested in four Apax private equity funds, as well as public equities and debt, and has reported an annual IRR of around 30%, according to the notice.
PCV is fully invested with little cash, it is understood. The new capital will fund a similar strategy of investing 50:50 in private equity and ‘derived investments’, such as listed companies and debt, which sit outside the investment mandate of Apax’s other funds. It has a pipeline of investments that it is considering, it is understood.
The new company will invest in future Apax private equity funds but not third-party vehicles and will be advised by Apax Guernsey Managers, the notice states.
The majority of its shareholders include former Apax employees and current staff, who are subject to varying lock-in agreements starting at one year.
There is no immediate intention to raise further capital, it is understood.