Apax Global Alpha : 2023 Annual Report and Accounts

OVERVIEW	01 STRATEGIC	02 INVESTMENT MANAGER'S	03 GOVERNANCE &	04 FINANCIAL STATEMENTS	GLOSSARY
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1 | Apax Global Alpha | Annual Report and Accounts | 2023

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2 | Apax Global Alpha | Annual Report and Accounts | 2023

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About AGA

Public market access to private equity

A share in AGA gives public market investors access to a portfolio of mostly private companies, owned by the Apax Private Equity Funds, which public market investors cannot buy elsewhere. This is combined with a smaller portfolio of predominantly debt instruments which represents an additional source of alpha and provides income to investors.

AGA has a premium listing on the London Stock Exchange and is a constituent of the FTSE 250 index (LSE: APAX). The Company is actively managed and is overseen by

an independent Board of Directors.

AGA uses the Alternative Performance Measures ("APMs") of Adjusted NAV and Total NAV Return to enhance transparency for shareholders. Adjusted NAV represents total NAV (€1,294.2m) reduced by the performance fee accrued in the period (€6.6m). Total NAV Return re ects the movement in Adjusted NAV including dividends paid. The de nition and reconciliation to IFRS of the APMs is shown on p.73.

FY 2023 Highlights

FY 2023 Total NAV Return1

FY 2023 dividends

4.1% 11.34p

Public access to private companies

Adjusted NAV2 at 31 December 2023

Share price

€1,288m £1.61

at 29 December 2023

Adjusted NAV2 per share

Adjusted NAV2 per share

€2.62 £2.27

at 31 December 2023

at 31 December 2023

AGA invests as a Limited Partner into Apax Funds

Private Equity

Portfolio

companies

1. Total NAV Return is an Alternative Performance Measure ("APM"). It means the return on the movement in the Adjusted NAV per share over the period plus any dividends. Further details can be seen on p.73 and p.119
2. Adjusted NAV re ects Total NAV of €1,294.2m, net of performance fee reserve of €6.6m at 31 December 2023. Further details can be seen on p.73 and p.118

Portfolio of

predominantly

Debt

instruments

3 | Apax Global Alpha | Annual Report and Accounts | 2023

OVERVIEW	01 STRATEGIC	02 INVESTMENT MANAGER'S	03 GOVERNANCE &	04 FINANCIAL STATEMENTS	GLOSSARY
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About AGA

Why AGA?

See p.23 for an overview of AGA's top 30 private equity investments.

Access to a portfolio of 'hidden gems', mostly private companies which shareholders can't buy elsewhere

• Exposure to high-quality companies, the majority of which were acquired by the Apax Funds in control buyout transactions.
• Mostly companies that operate in the mid-market and in parts of the economy where there are strong economic fundamentals.

See p.22 for an overview of Apax's investment strategy.

"All-weather" investment strategy well-suited to generate alpha

• Focus on business improvement with earnings growth rather than market tailwinds driving value creation across Private Equity portfolio companies.
• Sector-ledstrategy providing access to a globally diversi ed portfolio across Tech & Digital, Services, Healthcare, and Internet/Consumer.

12.8%

Five-year annualised

Cumulative Return1

€304m

Dividends paid to investors

in last ve years

Robust balance sheet, strengthened by portfolio of debt investments

Capital allocation - attractive dividend policy

See p.36 and p.37 for more information about AGA's debt investments.

• Capital not invested in Private Equity is deployed into a smaller portfolio of predominantly debt instruments to generate additional returns and income. Debt positions are identi ed leveraging the insights gained by Private Equity sector teams.
• AGA also has a Revolving Credit Facility ("RCF") which can be drawn to provide additional liquidity.

See p.5 for more information about AGA's capital allocation.

• The Board aims to create signi cant exposure to private equity investments by committing to Apax Funds.
• The Board recognises the importance of returning

cash to shareholders and in the last ve years, AGA has paid out €304m in dividends.

• Strategy overseen by an independent Board.

1. 5-year annualised Cumulative Return represents

IRR return. Further details on p.118 of the glossary

4 | Apax Global Alpha | Annual Report and Accounts | 2023

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About AGA

Capital allocation

AGA invests as a Limited Partner in the Apax Private Equity Funds. Capital not invested in Private Equity is deployed into a portfolio of predominantly debt investments. When the Funds sell or re nance portfolio companies AGA receives distributions from the Private Equity Funds (net of fees and carried interest). AGA also receives income from its Debt portfolio and the Company has a RCF which provides a further source of capital.

AGA uses liquidity that is not reinvested in Private Equity (after paying for fees and expenses, including nancing costs relating to the RCF) to distribute dividends to shareholders in line with AGA's dividend policy of paying 5% of NAV p.a. Since IPO, the Company has returned a total

of €444m in dividends, equivalent of c.50% of the original IPO NAV, to shareholders.

Any excess liquidity is invested in a portfolio of predominantly Debt instruments. This portfolio generates additional returns and income for AGA. It also enables the Company to be fully invested and to make substantial commitments to new Apax Private Equity Funds whilst remaining within its liquidity risk appetite.

During 2023, and in light of the increasing share price discount to NAV, the Board undertook a detailed review of the Company's capital allocation policy in the context of future Private Equity

calls and the capacity of AGA's RCF and Debt portfolio. It was concluded that returning capital to shareholders via the existing dividend policy remains appropriate and that any additional mechanism of returning capital to shareholders should be kept under review in the context of the Company's available liquid resources.

Capital Management Lifecycle - amounts represent totals from last 5 years

s	RCF	h
€706m		€567m

Out ow	Apax Private	1
In ow	Equity Funds
	Income received

€126m

€984m€603m

n

a

€304m

Dividends

Debt

Portfolio2

1. AGA also pays fees, nancing costs: and other expenses

2. Includes three Derived Equity positions

5 | Apax Global Alpha | Annual Report and Accounts | 2023

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Principal strategic objectives

Adding value for shareholders

Strategic objective

Deliver over-the-cycle target Total NAV Return of 12-15%

Target annual dividend of 5% of NAV

Invest in Apax Private Equity Funds for long-term growth

Manage Debt portfolio to generate additional returns on capital not invested in Private Equity

Remain fully invested

What we have achieved

AGA has delivered a ve-year annualised Cumulative Return of 12.8%

In the last ve years AGA has returned €304m to shareholders, equivalent to 24% of the

31 December 2023 NAV and in line with the dividend policy of paying 5% of NAV p.a.

Focus for 2024 and beyond

Continue to manage liquidity in anticipation of capital calls from the Apax Funds. AGA will also continue to provide shareholders with exposure to future Apax Private Equity Funds as they come to market

Maintain AGA's dividend policy of paying 5% of NAV p.a.

Principal risks1

A continued di cult market environment and the underperformance of individual portfolio companies in the Apax Funds could impact overall investment performance

The principal test for AGA to pay a dividend is su cient liquidity (rather than income) and therefore risk of not meeting the dividend policy is considered low

Over the last ve years, AGA made new	Following signi cant commitments made in
commitments of $1.3bn to ve Apax Funds,	2022, AGA will continue to manage liquidity
including two global buyout funds, Apax	in anticipation of capital calls from the Apax
Digital Fund II, AMI II, and Apax Global Impact	Funds. AGA will also continue to provide
	shareholders with exposure to future Apax
	Private Equity Funds as they come to market

Low investment rate of the Apax Funds to which AGA has made commitments resulting in new Fund launches being delayed

Debt portfolio has delivered a ve- year annualised return of 9.2%

2.7% outperformance per annum against the S&P/LSTA Leveraged Loan Index in the last ve years

93% invested at 31 December 2023

Continue to evaluate debt investment opportunities to ensure liquidity of the instruments are appropriate in the context of AGA's Private Equity commitments and expected future calls

Remain fully or close to fully invested whilst maintaining liquidity within risk appetite

Continue to adjust liquidity risk pro le of debt portfolio as appropriate depending on liquidity needs to meet new calls from Private Equity

Availability of attractive opportunities, credit spreads, base rates, and underperformance of investee companies

Signi cant slowdown in pace of deployment in Private Equity combined with reduced availability of attractive investment opportunities in debt in target sectors

1. Please refer to risk management framework on p.62 to p.65 for further details

6 | Apax Global Alpha | Annual Report and Accounts | 2023

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7 | Apax Global Alpha | Annual Report and Accounts | 2023

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Chairman''s statement

The global economy displayed remarkable resilience in 2023. As the year went on, fears of a widespread recession were replaced by a growing con dence that policymakers would achieve an economic soft landing. In the rst part of 2023, central banks continued to raise interest rates to levels not seen for many years. However, with in ation moderating, rates are now expected to have peaked. Looking ahead, growth remains slow, geopolitical tensions high, and rates are likely to stay elevated until signs are clearer that in ation is under control.

Against this backdrop, public equity markets have rebounded, closing what was widely perceived as a disconnect between private and public valuations in 2022. Whilst the drivers of market recovery remain narrow, the MSCI World Index (EUR) rallied and closed the year almost 20% above its January 2023 level. Not surprisingly, deal activity in Private Equity was more muted during the rst half of 2023, but we saw increased activity across our portfolio in the second half of the year as visibility on the economic outlook increased

and valuation expectations were adjusted.

Results

Apax Global Alpha achieved a Total NAV Return in 2023 of 4.1% (6.1% on a constant currency basis).

Performance was driven by a mix of earnings growth in Private Equity and strong returns from the Debt portfolio, partially o set by lower valuation multiples and negative currency movements.

Over the past ve years, AGA's investment strategy has delivered Cumulative Returns of 7 1.0% or 12.8% on an annualised basis. During this same period, the Company has paid out c.€304m, representing c.24% of its 31 December 2023 Adjusted NAV in dividends to shareholders.

Portfolio update

At 31 December 2023, AGA was 93% i nvested, with the invested portfolio split 74% in Private

Equity and 25% in Debt, with the remaining 1% invested across three listed equity pos itions.

The Private Equity portfolio performed well with average EBITDA growth across portfolio companies in the twelve months to 31 December 2023 of 18%, broadly in line with the prior year. Valuation multiples were up during Q4 2023 but fell slightly from 17.2x to 16.6x year-on-year, with negative movements from previously IPO'd portfolio companies in the Private Equity portfolio, particularly Thoughtworks, Viasat, and Paycor.

Despite continued economic uncertainty in 2023, AGA, through the Apax Funds deployed c.€95m across 10 new Private Equity investments, mostly in the second half as more compelling opportunities emerged. While the exit environment remained more challenging than in previous years, AGA received c.€90m in distributions from the Apax Funds.

Consistent with previous periods, AGA''s Debt portfolio maintained a greater exposure to rst lien loans which are more readily tradeable, and we believe the current proportion of rst lien loans vs debt instruments that are less liquid, is appropriate in the context of the Private Equity commitments made by AGA. At 31 December 2023, the Debt portfolio had a yield to maturity of 12.0% and consisted almost exclusively of oating rate instruments.

Liquidity, commitments and funding

Outstanding commitments to the Apax Funds (together with recallable distributions) reduced by c.€86m in the twelve months to 31 December 2023 to c.€919m at the end of the period.

The Board takes a prudent approach to liquidity and capital management with rigorous scenario modelling and stress testing being done prior to agreeing any new commitments to the Apax Funds. At the period-end, AGA h ad cash (including net current assets) of c.€94m in anticipation of capital calls from Apax XI, ADF, and AGI and the dividend payable in Q 1 2024.

In September 2023, AGA entered into a new multi-currency RCF of €250m with SM BC Bank International plc and JPMorgan Chase Bank, N.A., London Branch, replacing the facility held with Credit Suisse AG, London Branch. The RCF was undrawn at year-end.

8 | Apax Global Alpha | Annual Report and Accounts | 2023