Other positive changes are afoot. First has been the appointment of Karl Sternberg, Apax’s former investment manager, as the fund’s new chair, who Mr Hart said is “laser focused” on improving shareholder returns.
Mr Sternberg, who also chairs Questor tip Monks, a global growth investment trust managed by Baillie Gifford, has jumped into action, announcing a plan to ramp up payouts.
Under this, €30m (£25m) has gone into a “distribution pool” from which the company can buy back its shares – if they trade on a discount of 23pc or more – or pay special, additional dividends.
Each year, surplus cash from investments will fund the pool up to 5pc of assets. That’s currently €62.5m (£52m), close to what the company paid in dividends last year with income from a separate loan portfolio. In the future, dividends will be fixed at 11p per share, which at the current share price gives an 8pc yield, the highest in its peer group.
Since the announcement the company has repeatedly purchased its cheap shares, which boosts investors’ stakes by mopping up the “money left on the table”, as Mr Sternberg describes the wide discount.
Meanwhile, an improving private equity market has seen a string of deals by Apax Partners. The fund has invested €75m in the first half in seven new companies and sold five others at three times their original investment. This includes Idealista, a Spanish real estate listings website, which Apax first backed in 2015.
Lastly, the Government’s planned reform of flawed cost disclosure rules should mean the company will no longer have to say on its key information document that its expenses reduce investment returns by 4.3pc a year. The company views this as a harmful exaggeration that discourages investors, given its ongoing charges are in fact published in its annual report as 1.8pc.
Questor says: buy
Ticker: APAX.L
Closing price: 137p
Gavin Lumsden is editor of Citywire’s Investment Trust Insider website
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