In our view, the most interesting new information from Apax Global Alpha Ltd (LON:APAX) 3Q results is the comment “a further five investments post quarter end” with a further one announced since. This six-week performance compares with two investments in the whole previous quarter. Market wide, there are comments about encouraging green shoots of activity, but Apax is now completing deals. We explore, here, what is unique about the “Hidden Gems” strategy and why it is creating these opportunities. Interestingly, the deals have a broad range of EBITDA growth options, giving comfort that unchanged target returns remain realistic despite the higher interest rate environment.
Successful strategy: In our view, the company’s recent new investment acceleration has been driven partially by market conditions but also its unique position. Focus is on improving the operational performance of investments, the mid-market, secular-growth, resilient sectors, and its scale, experience, brand and global offices.