www.apax.com
RATE
2
Sector focus
Annual Review 2012
1
Strategy overview
Releasing
potential
RATE
How we are run
3
0.5
4.3
2.1
% % %
4.3
2.1
% % %
4
Our investors
0.5
Apax Partners Annual Report 2012
01
Table of contents
Strategic overview
08
Support: Portfolio Support Group
10
Support: Value screening programme
12
Realise
14
Generating returns
16
Activities in 2012
Our Funds made two
significant global investments
in 2012 and successfully exited
a number of others. You can
find more details in these
sections .
Garda
18
Paradigm
22
How we are run
Apax has put in place the
governance structures
and policies necessary to
maintain the very highest
business standards across
all its operations.
Governance & compliance
30
Core values
32
The wider community
34
36
Current portfolio
International offices
inside back cover
Our values
Integrity
Stewardship
Community
Relationships
People
How?
Our mission is to release the potential of companies,
management teams and portfolio company employees
and thereby generate superior returns for our investors –
the millions of individuals, corporates and sovereign wealth
funds whose pension funds and investment plans commit to
funds advised by Apax (‘Apax Funds’).
We have a proven track record of delivering returns that
significantly exceed public markets and are amongst the
best in our industry. We believe that the team, strategy and
governance that we have put in place over the last 30 years
positions us well to continue to deliver strong returns in future.
Over the next few pages we explain how this works...
1
Strategy overview
04
Identify
2
Sector focus
Our global portfolio
3
How we are run
02
4
Our investors
We look for opportunities to
invest in large companies
around the world and our funds
provide the long-term capital
and expertise to help
accelerate their growth.
Introduction to Apax Partners A strategic overview
Financial highlights
Apax Partners Annual Report 2012
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03
Strategic Overview
€2.4
For every € that Apax Funds have invested
in buyouts since 1993, we returned €2.4.
€1.0
6.0%
4.1%
4.2x
Total amount invested
€8.7bn
Over 5 years
2012
Strategy overview
19.4%
17.7%
11.1%
13.2%
13.0%
14.3%
12.7%
7.5%
5.4%
(3.4)%
3
(3.7)%
4
Net IRR – Buyouts
in Apax Funds
2011
2
Over 20 years
29.4%
€8.0bn
2012
Over 15 years
Total amount realised
3.7x
2011
Over 10 years
Sector focus
Total portfolio EBITDA
growth
Long-term returns for our investors
How we are run
Debt reduction across
the portfolio (leverage
multiple)
Amount invested and realised
over the last five years
All global buyouts top
quartile benchmark
All figures, as at 31 December 2012
STOXX 1200 Returns
Our investors
Driving portfolio growth and
reducing debt
1
Returned
We generate superior
returns for investors
2.4x
Invested
02
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Strategic overview continued
In 2012, Apax Funds added two companies
to its global portfolio.
From strong
global investments
Paradigm: Oil & gas exploration software
($)
0.9bn
enterprise value
at entry
1
Strategy overview
Our portfolio by geography
TECH & TELECOM
Total invested by sector in buyouts
2
Europe
Sector focus
53%
North America
39%
RoW
London
Munich
Canada
New York
Geographically, in the last couple of years we have moved
from being a firm that is largely focused on investments in
Europe and the US, to the firm we are today, which analyses
opportunities on a truly global basis. The companies in which
Apax Funds invested in 2012 reflect this shift and the portfolio
today is spread across our network in Asia, Europe and the US.
48 16
Portfolio
companies
Countries
worldwide
300,000
Employees
worldwide (approx)
All figures, as at 31 December 2012
3
Barcelona
Tel Aviv
Financial & Business Services
€2.0bn
Shanghai
Hong Kong
Healthcare
Mumbai
€3.0bn
Media
4
€4.5bn
Retail & Consumer
€5.4bn
Tech & Telecom
€5.5bn
How we are run
8%
Our investors
04
FINANCIAL & BUSINESS SERVICES
Garda: Security solutions company
Key
(C$)
1.1bn
enterprise value
at entry
Apax Partners offices
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Strategic overview continued
See p10
The large sector teams work
closely with management
throughout the period of the
investment to transform the
company. This is supplemented
by the specific functional
expertise of the in-house
Portfolio Support Group.
Realise
1
2
Apax Funds have a proven strategy of investing in large
companies operating in five chosen sectors: Financial &
Business Services, Healthcare, Media, Retail & Consumer,
and Tech & Telecom.
We look for opportunities where capital, experience and
insight can release the potential of businesses and lead to
significant growth. We have the office network and
flexibility to apply this strategy globally.
See p14
Once the growth objectives
have been achieved, we begin
discussions about the most
appropriate next owner of the
business. The average length
of an investment is around
five years.
Strategy overview
Support
Sector focus
By having a
clear strategy
See p08
Apax has a well-established
investment selection process
based on identifying companies
requiring an equity investment
of €200 – 500m with the
potential for significant future
growth.
We explain this strategy over the next few pages
3
How we are run
Identify
4
Our investors
06
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Strategic overview continued
Only a few of these will ever reach the investment stage due to the
stringent internal approval processes. This strategy is designed to produce
investment opportunities that are thoroughly tested and are unique to Apax.
We identify the
right businesses
Apax investment criteria
400
companies globally being
assessed for investment
In five sectors
Will the company benefit
from equity investment and
a change of ownership?
Is it in a sector where
Apax has the experience
to add value?
2
Sector focus
Capital investment
1
Strategy overview
The Apax sector teams research the investment landscape for sub-sectors
that they believe will continue to grow irrespective of the wider economic
environment. Within our €200 – 500m equity investment size range, we
have identified around 400 companies globally, with which we are actively
developing relationships.
Focus on
transformation
€200–500m
equity investment
Can Apax’s investment have
a transformative effect?
Is the business in a size
range where Apax has the
experience to drive growth?
How we are run
3
4
Our investors
08
50%
of all our deals are proprietary
Unique opportunities
Global
Sustainable
Can Apax bring unique
value-enhancing insight
or skills?
Can Apax help the firm
expand beyond its home
market through leveraging
its global network?
Will added value be created
by focusing on sustainability?
Does it meet our responsible
investment criteria?
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Strategic overview continued
Recruitment
Purchasing
The Apax recruitment centre
provides the PSG team with
access to international
leadership talent and
specialists which they can
then recommend to portfolio
company management.
Online &
e-commerce
Driving growth via website
optimisation, traffic acquisition
and mobile applications.
The team is on hand to advise
on negotiations with suppliers
and recommend the best
firms to work with.
Business intelligence
Specialist expertise in mining
data within the company to
create actionable analytics
and key performance metrics.
1
Strategy overview
Watch our Portfolio Support Group
film in the news section at
www.apax.com/news/video-library
We provide
effective support
Sector focus
3
Information
technology
Enables managers to unlock
potential from their investments
in IT infrastructure and
organisation.
100 day planning
Operational finance
Capital markets
Provide expertise in budgeting,
cash management, and capital
spending optimisation.
The team are able to
provide management
and the deal teams with
access to specialist
knowledge on debt
structures and financing.
The team assist the deal
teams with analysing the
prospects for a new
business and potential
areas for improvement.
How we are run
The Portfolio Support Group is designed to complement the deal teams
by bringing different skills and expertise to the table. It comprises a group
of operating professionals who have both general management experience
as well as functional expertise in areas such as information technology,
recruitment and financing.
2
Portfolio
Support
Group
At the heart of Apax’s value creation strategy is the combination of our
investment team’s sector insights and the internal Portfolio Support
Group’s operational expertise. The investment team advises on key
strategic and operational initiatives within portfolio companies through
their deep view of their respective industries.
4
Our investors
10
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Strategic overview continued
We scrutinise the
sustainability of all
new investments
Environment
The efficiency of the property
Energy consumption
Waste/Recycling
Apax works to leave the companies in which the
Apax Funds invest in a better position.
With this in mind, all of the investments are
independently assessed by PricewaterhouseCoopers
to evaluate their performance against environmental,
social and governance criteria.
In each case the entire value chain of the business
is reviewed to identify savings in areas such as
the reduction of transportation, waste and pollution
costs. Cutting out waste not only makes the company
more efficient, it also benefits the environment,
employees and the communities in which it operates.
Strategy overview
Governance
Ethical conduct/Codes
of Practice
Social
Health & safety, risk
management arrangements
Employee engagement/
incentivisation or social/
community programmes
Freedom of association/
workers’ unions
Minimum age/minimum
wage restrictions
Gender/diversity/antidiscrimination
Benefits/health insurance
Part-time workers
Immigration
2
Sector focus
Travel/Video conferencing
Bribery/Anti-corruption
Responsible marketing
and sales policies
Contracting policies and
procedures
Business partnerships/supply
chain due diligence policies
Personnel – background
checks/screening processes
Internal audit functions
3
How we are run
And we make
businesses more
sustainable
1
Procurement/supply chain
4
Our investors
12
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Strategic overview continued
2.4x
For every € that our funds have invested
in buyouts since 1993, we returned €2.4.
Strategy overview
Assessment
Completion
Once the initial investment
thesis has been realised, an
exit committee is called to
begin discussions about the
future ownership of the
business in question.
The Exit Committee measures
progress against the original
investment criteria, and
considers the most appropriate
route; IPO, sale to an industry
buyer or sale to another private
equity fund.
If the exit is approved, the
legal teams will ensure that
all due diligence matters
are addressed and that all
contractual obligations are
satisfied. On completion,
the handover process ceases,
and the Apax Partners team
report on the performance
of the investment.
ESG savings
quantified
Following the sale of the
business, we also assess the
value added by focusing on
environmental, social and
governance factors.
2
Sector focus
The average length of an investment by the Apax Funds
is around five years. Once the firm is fulfilling its true
potential, discussions begin about the most appropriate
owner to take the business on to the next stage.
Exit Committee
3
How we are run
To release their
full potential
1
4
Our investors
14
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Strategic overview continued
27% 18%
10% 17%
1
Our investors by geography
2
Middle Oceania
East
1%
Asia
Strategy overview
Our investors by type
The investors in the Apax Funds are our clients and the relationship
with them is at the heart of our business. The history of Apax Partners
is interwoven with the development of the private equity asset
class on both sides of the Atlantic. Throughout its 30-year history,
Apax Funds have successfully invested across all investment
stages and through several complete economic cycles.
Sector focus
And generate returns
for our investors
3%
9%
Fund of funds
High net worth
individuals
Private pension
funds
Europe
Canada
9%
10% 9%
4%
3%
37%
Investors in all active funds under management
As at 31 December 2012
Insurance
Banks
Endowments
3
4
US
Sovereign
wealth funds
27%
How we are run
Public pension
funds
UK
14%
Our investors
16
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Financial & Business Services: Garda
C$1.1bn
Global security
services...
1
Strategy overview
Enterprise value at entry
Garda is a global provider of security and cash
logistics solutions. With headquarters in Montreal,
Canada, the firm’s 45,000 dedicated professionals,
among the most highly qualified and best-trained in
the industry, serve clients in countries throughout
North America, Europe, Latin America, Africa, Asia
and the Middle East.
2
Sector focus
Global security logistics
3
How we are run
Investment
4
Our investors
18
20
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Financial & Business Services: Garda
Founded originally in 1995 with a
$25,000 investment from former
professional baseball umpire Stéphan
Crétier, Garda World Security
Corporation has grown into one of the
world’s top five cash logistics and
security services providers. The
Montreal-based business, which
employs some 45,000 staff globally,
took its current trading name when it
acquired a larger competitor and went
public in 1999 on a regional Canadian
exchange; it secured a full listing on the
Toronto Exchange four years later.
Greater growth prospects as a private
business
Garda’s highly-motivated and
entrepreneurial management team has
been able to grow the business at such
an impressive rate by following an
aggressive build-up strategy: it has
completed no fewer than 22 acquisitions
worth around $700m since 2004. The
business first expanded into the
important US market in 2006, before
targeting international markets the
following year with the creation of its
Global Risk Consulting Group
(GardaWorld).
However, as many other high-growth,
mid-cap companies have discovered,
appetite for M&A-led strategies on the
public markets waned significantly since
A stand-out player
Garda generates similar levels of
revenues from each of its two main
segments - cash logistics and security
services. On the cash logistics side, it
provides a wide range of services, from
armoured transportation and air cargo, to
deposit processing, cash vault services
and in-store cash control systems; it also
offers ATM cash replenishment and
servicing. On the security services side
Garda supplies personnel to over 4,500
clients for the protection of important or
sensitive installations, from industrial
facilities to embassies. The company
also provides airport security and
pre-employment screening services.
Boasting a highly-qualified workforce
and one of the newest fleets of vehicles
in the industry, Garda has built up strong
customer loyalty. It has never lost a
major client and generates renewal rates
of over 90%. The company’s client base
is highly diversified, including financial
institutions, retailers, construction
businesses and oil & gas companies, as
well as hospitals, governments and
NGOs.
1
Strategy overview
Although the well-developed North
American market is unlikely to offer
headline-grabbing growth rates, the
industry is predicted to expand steadily,
especially as it has yet to go as far down
the outsourcing model as its European
counterpart. However, there are
certainly major opportunities for Garda
to continue its expansion via M&A
markets: not only is the North American
security market highly fragmented, but
there are a number of potential targets
that could fundamentally alter the
competitive landscape in the industry.
And Apax’s expertise in this field will
support the newly-privatised company’s
ambitions in this area.
But, perhaps more than anything, it is
our understanding and appreciation of
Garda’s entrepreneurial DNA that will
form the basis of a strong partnership
looking ahead.
2
Sector focus
Identify
Domestic stability plus potential for
consolidation
As it stands today, Garda generates
around 90% of its annual revenues from
the North American market. It ranks as
one of the top three operators in most of
the domestic niches where it is present,
with its scale and long-term contracts
providing major barriers to entry.
RATE
BANK
RATE
From start-up to leading
global provider of
security solutions, cash
logistics and risk
consulting in under two
decades.
3
How we are run
Global security logistics
Conversely, the desire shown by Garda’s
management to target growth via major,
transformational M&A activity was a
major attraction for Apax. The Apax
team has followed the global security
market for a number of years, carrying
out detailed evaluations on several
leading businesses in the cash logistics
and security services markets. This
expertise was ultimately instrumental in
helping Apax to secure exclusivity in the
negotiations to take Garda private. The
deal, announced in September 2012,
valued the business at C$1.1 billion and
involved the founder and other key
shareholders re-investing 100% of their
proceeds into the new entity.
Support
Emerging markets to drive future growth
Similarly, Apax’s global presence and
network will also provide an invaluable
resource for Garda as it looks to increase
its overseas presence. This is an
important strategy for the business:
much of the growth in the global security
market is being driven by increasing
demand for security services in
emerging markets. By 2019, the likes of
Latin America, Asia Pacific, Africa and
Eastern Europe will jointly account for
some 48% of a global security market
expected to be worth over $230 billion
(up from 33% in 2004).
4
Our investors
...from a world
leading firm
the beginning of the global downturn.
As a result, although Garda has
successfully generated revenue growth
each year since 2009, the ability of its
management to maintain the pre-crisis
growth trajectory had been materially
affected.
0.5
4.3
2.1
% % %
0.5
4.3
2.1
% % %
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Tech & Telecom: Paradigm
US$0.9bn
Offshore energy
software solutions...
1
Strategy overview
Enterprise value at entry
For a number of years our global Tech & Telecom
team has paid close attention to the software and
IT sector, and has extensive experience through
previous investments including Epicor Software
Corporation/Activant Solutions, Sophos, The TriZetto
Group, RealPage, IntraLinks, Princeton Softech,
Planview and Autonomy.
2
Sector focus
Enterprise software
3
How we are run
Investment
4
Our investors
22
24
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Tech & Telecom: Paradigm
Enterprise software
Identify
It is already widely understood that the
world’s fossil resources are being
depleted rapidly. What’s more, strong
demand from emerging market
economies is only serving to accelerate
this process. Yet, despite our
appreciation of this issue, the statistics
still serve as a powerful reminder of its
scale and importance: the reserves in
existing oil and gas fields are declining at
almost 5% per annum and, at this rate,
some two thirds of fossil fuels being
consumed in 2035 will have to come
from reserves as yet undiscovered or
undeveloped.
After extensive due diligence in the
sector and a long history of successful
software investment, in June 2012,
Apax funds announced the acquisition of
Paradigm Ltd. (‘Paradigm’) for
approximately c.$0.9 billion.
Paradigm: strong position, growing
market share
Paradigm is the largest independent
multi-national software company
focused exclusively on the delivery of
mission critical software solutions for
the discovery and extraction of
subsurface natural resources. Along
with two other businesses – both small
subsidiaries of major oil services
companies – Paradigm controls around
80% of the global market spend for E&P
software. With over 25 years of
experience, the business has built up a
Leader in seismic processing & imaging
Paradigm’s origins are in seismic
processing and imaging - effectively the
first phase of an E&P process - and it
remains the clear leader in this niche,
attracting a third of the global market
spend. Its seismic processing and
imaging technologies are designed to
improve seismic signal quality,
positioning and content. Using
proprietary algorithms, the company’s
software is able to translate hugely
complex seismic data into an accurate,
high-quality picture of the subsurface.
The company also leads in the more
niche area of formation evaluation (the
third E&P phase), where its products are
seen as the industry standard and
control a market share of almost 50%.
It is precisely Paradigm’s superior ability
to handle the most complex E&P
Support
Expansion opportunities
Overall Paradigm’s prospects are already
very encouraging: the changing nature
of the oil and gas sector is creating very
favourable tail winds for a business with
such solid technological expertise.
There exist real opportunities for the
company to lead consolidation in the
sector, and to expand further into China
and the new emerging economies.
1
Strategy overview
As Apax’s sector teams have come to
understand well through their analysis in
this space, E&P software has become a
critical tool in the unlocking of new fossil
reserves. Indeed, geoscientists
typically use such software packages for
approximately 70% of their working day.
And it is an area that is likely to see
robust growth in the longer term.
Thanks to its heavy R&D investment
($270m over the last decade) Paradigm’s
suite of products is widely recognised
for its top quality scientific content,
superior functionality and ability to
handle the most complex situations.
This reputation, as well as the quality of
its research output, also allows the firm
to attract and retain the top scientists in
the field. Unsurprisingly, Paradigm’s
products enjoy especially strong brand
loyalty among clients, with renewal rates
of around 95%.
situations that will allow it to continue to
eat into the market leader’s share as oil
and gas exploration is increasingly
forced to target the harder-to-reach
reserves.
95%
2
Sector focus
Of course this dynamic is having a major
impact on the oil and gas industry, with a
massive focus on investment in
exploration and production (E&P)
capabilities. As the existing fields are
depleted, the industry is forced to turn
its attention to more expensive reserves
– those that are harder to find and more
complex to develop.
portfolio of some 700 customers,
including 47 of the top 50 oil and gas
companies.
Paradigm’s significant
R&D investment over the
last decade ($270m) has
produced superior, critical
tools for companies
involved in unlocking fuel
reserves. Brand loyalty
among its clients has led
to renewal rates of
approximately 95%.
3
How we are run
...driving growth
through innovation
Unlocking new fossil reserves
80%
Paradigm, together with
two other operators,
controls around 80% of
the global market spend
for exploration and
production software and
counts 47 of the top 50
oil and gas companies
among its customers.
Our investors
4
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Governance & compliance
We operate to the
highest standards
The business of Apax Partners is
operated and managed through a
small number of committees whose
respective terms of reference clearly
define responsibilities and
accountability.
Executive Committee
The Executive Committee is responsible
for the day-to-day management of Apax
Partners worldwide. The group meets
on a monthly basis to discuss matters
Sub-committees
Below the Executive Committee are
a further four sub-committees that
oversee the investment process from
initial idea through due diligence and
throughout the life of the investment to
its eventual exit. At every stage in the
process, the investment is subject to
a rigorous process of scrutiny by these
committees.
Fund advisory boards
As well as the internal corporate
governance bodies, Apax Partners has
a well-established structure of external
advisory boards. Each of the funds
advised by Apax Partners has a Board
of Advisers. Representatives of up to
15 of the relevant Apax Fund’s investors
are invited to become members of the
Board. The independence of the Board
of recent Apax Funds is maintained
because it is chaired by an investor,
who will be appointed every two years.
Sector focus
of strategic importance. It is also
responsible for setting standards on
remuneration and recruitment and
oversees the governance of the firm
in each of the countries in which
it operates.
2
Executive committee
Debt
Apax Funds are managed with zero fund
level leverage. At the portfolio company
level, average leverage is 3.7x.
Compliance
Compliance reports periodically to the
Executive Committee on results of
monitoring and other issues and on
an ad hoc basis as necessary.
The Executive Committee has ultimate
responsibility for the oversight of Apax
Partners’ compliance.
3
Martin Halusa
Worldwide CEO
London
John Megrue
New York
Michael Phillips
Munich
Andrew Sillitoe
London
Christian Stahl
London
Mitch Truwit
New York
For full team details, go to apax.com
Sub-committees
How we are run
Apax Partners LLP (‘Apax Partners’) is
the holding company for the worldwide
Apax partnership and is the lead
investment adviser to the most recent
funds that are advised by Apax Partners
(‘Apax Funds’). In the UK, it is regulated
by the Financial Conduct Authority (FCA)
and advises Apax Partners Europe
Managers Ltd (APEM) or the general
partner of the relevant Apax Fund.
Apax Partners and its US adviser Apax
Partners L.P. are both registered with the
Securities and Exchange Commission
(SEC) in the US.
1
Strategy overview
Apax has consistently sought to demonstrate best practice in
corporate governance and transparency within the private equity
sector, and is committed to maintaining the highest business
standards across all of its offices. Although the firm is only subject to
formal registration and regulations in some of the markets in which it
operates, it is nonetheless governed on a global basis. The firm
applies the same business principles and compliance procedures to
all of its operations, while striving to make a positive contribution to
the wider communities that surround it.
4
Approval Committee
Chair, Nico Hansen
Investment Committee
Chair, Martin Halusa
Portfolio Review Committee
Chair, Nico Hansen
Exit Committee
Chair, Martin Halusa
Source of guidance to investment
teams. Approval of investment
expense budgets. Provision of
advice to Investment Committee.
Provide investment
recommendations
to the General Partner or
manager of the relevant fund.
Review of all aspects of a portfolio
company’s performance
Provide investment
recommendations to the
General Partner or manager
of the relevant fund.
Our investors
26
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29
Our values
Our values are built into every aspect of our business.
Because private equity is such a long-term business, and
depends on the trust it receives from investors, business
owners and management teams, the values of integrity and
stewardship are crucial in everything Apax does. We apply
these values equally across our business in all of the
countries in which we operate.
Integrity
Apply the highest standards of integrity in
dealings with all stakeholders.
Our values are built into every aspect of
our business. Because private equity is
such a long-term business, and depends
on the trust it receives from investors,
business owners and management
teams, the values of integrity and
stewardship are crucial in everything
Apax does. We apply these values
equally across our business in all of the
countries in which we operate. They
inform our interactions with employees,
suppliers and the local communities in
which we operate, as well as the Apax
Funds’ investors and portfolio
companies. Apax Funds are long-term
stewards of over US$35bn of investors’
capital, which has been entrusted to
them on the basis of Apax’s values and
uncompromising integrity. Apax Funds
predominantly invest in growth
companies within Apax Partners’ five
sectors of expertise. The Apax Funds do
not invest in companies involved in
firearms, pornography or that derive
significant revenues from the production
or sale of tobacco.
Shaping our industry’s values
Apax Funds are long-term investors
with the aim of building robust and
sustainable businesses. All new
investments undergo an external
screening process, which includes
an assessment of the environmental,
ethical and social impact of that
business. These aspects of the business
are then assessed on an ongoing basis
as part of the portfolio review process.
Portfolio companies are encouraged to
take an active lead in terms of corporate
social responsibility, because we
believe that sustainably run businesses
ultimately help drive better returns for
our investors.
We are committed to working with
the industry on corporate responsibility
issues including environmental, social
and governance best practice, as well
as raising the standard of transparency
and disclosure to all our stakeholders.
As such, we were engaged from the
earliest stages in the development of
the Walker Guidelines on Transparency
and Disclosure in the UK, and are
involved with industry associations
in other countries in their creation of
similar codes.
We are proud of what we do: backing
management to release the full potential
of their businesses through insight and
patient long-term investment. We are
very aware of our responsibilities and
at all times are guided by our values.
We are proud signatories of the UN’s
Principles on Responsible Investment
(UNPRI) and to the Private Equity
Growth Capital Council’s Guidelines
for Responsible Investment.
See the UNPRI website for full details
at www.unpri.org
See the Private Equity Growth Capital
Council website for the full list at
www.pegcc.org
Community
Act with respect and consideration for the
communities in which we operate.
2
Relationships
Create long-term relationships founded on
mutual advantage.
3
People
Treat people with dignity and respect. Do
not discriminate on any grounds.
4
Sector focus
Strategy overview
1
How we are run
Guided by our
core values
Stewardship
Act in the long-term interests of the
companies and the environment in which
our funds invest.
Our investors
28
Apax Partners Annual Report 2012
Apax Partners Annual Report 2012
31
Our communities
Social entrepreneurship portfolio
£1.03m
Grants made during 2012
£1.36m
Matching scheme
donations since inception
Social entrepreneurship is the focus for
the Apax Foundation’s major grant giving
as it is the natural extension of what
Apax does commercially and builds on
the Firm’s history of support in that area,
most notably as one of the founders of
Bridges Ventures. It is also an area
where some of the Foundation’s
Trustees have significant experience.
This provides us with a steady flow of
introductions to leading charities in the
field, both from within the firm and from
our wider network.
The Apax Foundation has also continued
its commitment to our staff ‘matching’
scheme and the private equity
community’s collective charity,
the Private Equity Foundation.
The Apax Foundation is chaired by
Sir Ronald Cohen and its Trustees are:
Peter Englander (CEO of the Apax
Foundation), Simon Cresswell, Irina
Hemmers, Martin Halusa, David Marks,
John Megrue (Chairman of the Apax
US Foundation), Michael Phillips and
Mitch Truwit.
Social entrepreneurship
Social entrepreneurship is a wide
field covering all enterprises that have
a social purpose rather than being purely
profit-driven. The Apax Foundation
and Apax US Foundation focus their
grant-giving on organisations whose
work stimulates entrepreneurship
and employment in disadvantaged
communities. Our portfolio covers
all the regions in which the firm has
a presence.
Apax Foundation ‘matching’ scheme
The Apax Foundation’s matching
scheme is designed to encourage the
active participation of members of the
Apax Partners team in charitable work.
Under the scheme, the Apax Foundation
makes a grant to every charity that
benefits from the active, ongoing
involvement of any member of the Apax
Partners team in any of our regions.
Since the matching scheme’s inception
in 2007, the Foundation has made
donations totalling £1.36m in support of
charities to which members of the Apax
team give their time and skills.
The Private Equity Foundation (PEF)
The Private Equity Foundation (PEF) is
the collective charity for the European
private equity community. It focuses on
the issue of NEETs (young people not in
education, employment or training) and
invests both money and expertise from
the private equity community to help
charities working in this area achieve a
step-change in their impact.
As well as backing the Private Equity
Foundation financially, Apax Partners
staff play an active role in the work of
the charity.
Charity Casa do Zezinho
Casa do Zezinho is a non-governmental
organisation located in São Paulo, Brazil.
Founded in 1994, it currently assists over
1,200 Zezinhos aged between 6 and 21 years
old, who are enrolled in the region’s public
schools. Their mission is, through education,
to enable children and young adults from
low-income families, vulnerable settings and
in social risk to develop critical thinking to give
them the confidence to make their own
decisions in life.
Charity Emmaus
Emmaus is an international movement which
creates communities for the homeless,
offering them a home, work and the chance to
rebuild their lives in a supportive family
environment.
The communities aim to be self-sustaining
through their on-site enterprises, such as
restoring and re-selling used furniture and
electrical goods.
Charity Trickle Up
Trickle Up provides seed capital grants to
impoverished women in the developing world.
Its economic development programme helps
women succeed in becoming self-sufficient by
providing business training and education in
financial literacy alongside the seed capital
grants.
www.trickleup.org
www.emmaus.org.uk
www.casadozezinho.org.br
Social investments portfolio
The Grameen concept, which specifically aims
to help the poorest, is new to the US and the
Apax Foundation was one of its early backers.
Charity Joblinge
Joblinge is a six-month programme targeting
challenged youths in Germany who have left
high school and are having difficulty securing
a full-time job. The programme rests on two
key pillars: providing them with practical,
applicable real-world experience and
one-on-one mentoring. The goal of the
programme is to make a measurable
contribution to the sustainable reduction
of youth unemployment in Germany.
www.grameenamerica.org
www.joblinge.de
Charity Millennium Promise
Millennium Promise’s goal is to halve extreme
poverty in Africa by 2015. Its flagship initiative
is the Millennium Villages project which
operates in 80 villages across ten countries
in sub-Saharan Africa, reaching over 500,000
people. The Apax US Foundation’s donation
funds the new post of Director of Business
Development, whose remit is to help create
sustainable enterprises in the villages to
secure a stable future for the inhabitants.
Charity Non Profit Incubator
Non Profit Incubator is a non-profit, nongovernmental organisation which gives
early-stage support to NGOs and social
enterprises in China, including training and help
with issues such as fundraising and capacitybuilding, as well as financial support. This
thorough engagement in developing the
enterprises increases their chances of
success.
Charity Grameen America
Grameen America is a not-for-profit
microfinance organisation founded by Nobel
Laureate Prof. Muhammad Yunus, providing
small loans to people of limited means in the
US to enable them to start up their own small
businesses.
www.millenniumpromise.org
Charity Shivia
Shivia is a UK-based microfinance charity
which works with local partners in India and
Nepal to enable the rural poor in those areas
to create sustainable social enterprises and lift
themselves out of poverty.
www.shivia.com
1
Strategy overview
Apax Foundation
total investments
The Apax Foundation and Apax US
Foundation are the channels for Apax
Partners’ corporate giving globally. In the
2011/12 financial year, the Foundations
together made grants of over £1m.
Social investments
We are steadily building an endowment
for our Foundation to provide it with a
permanent source of funding into the
future. The Trustees decided that a
proportion of our assets should be
devoted to social investments – in other
words, investments that generate a
positive social impact as well as a
financial return.
2
Sector focus
£17.4m
The Apax Foundation
www.npi.org.cn
Social investment Finance in Motion
In March 2010, the Apax Foundation made its
first social investment, through the purchase
of a 20% stake in Finance in Motion. Finance
in Motion is an asset management firm
exclusively focused on development finance.
It offers specialised investment advisory
services in the management of investment
vehicles that have a positive social impact
in developing countries and emerging
economies and generate a financial return
for investors.
Charity Social Finance
Social Finance was set up in 2007 to help
build a social investment market in the UK.
The organisation helps to develop financial
products that marry the ambitions of investors
and the goals of the charitable sector. It
supports social organisations to raise and
deploy capital; works with government to
deliver social change; and develops social
investment markets and opportunities.
Social investment East London Bond
In July 2010, we made our second social
investment, in the East London Bond. The
East London Bond uses the mechanism of a
charitable bond to deliver positive change for
communities in East London, while preserving
the capital of investors in the bond. The East
London Bond is offered by Citylife, a national
charity that issues Social Investment Bonds
as a unique way to raise funds for charities.
3
How we are run
Investment in our communities
4
Our investors
30
www.socialfinance.org.uk
Apax Partners Annual Report 2012
Apax Partners Annual Report 2012
Apax around
the world
Year of
initial
investment
2007
2006
2006
Media
ALM
Cengage – Nelson
Cengage Learning
CME Enterprises
Dealer.com
SouFun
Top Right Group
Trader Corp
Trader Media Group
2008
2007
All of our UK buyouts comply with
Walker guidelines
Top Right Group (formerly Emap)
Top Right Group is the UK’s leading business
information provider formerly serving five
professional end markets: retail/fashion, public
services, construction, media and automotive.
The company provides information through a variety
of formats: print and online magazines, exhibitions
and festivals, digital information services,
and conferences.
The initial investment in this company was made by
the Apax Europe VII fund in 2008.
Revenue (year to 31 December 2012)
£251.7m
Number of employees
1,700
General Healthcare Group
General Healthcare Group is the leading provider
of independent health care services in the UK.
Its primary business is the acute private hospital
division, BMI Healthcare. The company is also
a major shareholder in CARE Fertility, the UK’s
leading independent fertility specialist.
Number of employees
Retail & Consumer
Advantage Sales and Marketing
Ale House Holdings
Bob’s Discount Furniture
Comark
Golden Jaguar
LR International
Netrada Holdings
New Look
Norcraft
Plantasjen
rue21
S.B. Restaurant
Sisal
Spyder Active Sports
Takko
Tnuva
Tommy Hilfiger/Philips Van Heusen
Other
Contech
Electro – Stocks Grup
Xerium
2011
2011
2006
2011
2012
2007
2010
2005
2010
Revenue (year to 31 March 2012)
Number of employees
£1,447.5m
22,605
The initial investment in this company was made
by the Apax Europe V, Apax Europe VI and Apax
Excelsior VI funds in 2005.
Revenue (year to 31 December 2012)
Trader Media Group
Number of employees
Trader Media Group provides market-leading
automotive classified websites and over 70 leading
classified titles, the most well-known of which is
the flagship Auto Trader publication and website:
www.autotrader.co.uk.
£257.2m
1,514
offices
UK
Apax Partners UK LLP
33 Jermyn Street
London SW1Y 6DN
United Kingdom
T +44 (0)20 7872 6300
Germany
Apax Partners
Beteiligungsberatung
GmbH
Möhlstraße 10
81675 Munich
Germany
T +49 89 998 9090
China: Shanghai
Apax Investment (Shanghai)
Company Ltd
65th floor
Shanghai World
Financial Center
100 Century Avenue
Pudong New District
200120, Shanghai
People’s Republic of China
T +86 21 5198 5656
2006
2007
1999
The Group’s principal activities are organised into
three divisions: the Global Business Payments
division is the world’s largest non-bank provider
of cross-border payment services for small and
medium sized enterprises, the Currency Services
division provides travellers with foreign exchange
services, and the Cards and Mobile Payments
division focuses on new payment technologies,
primarily pre-paid cards.
The initial investment in this company was made by
the Apax Europe IV and Apax Europe V funds in 2004.
9
US
Apax Partners, L.P.
601 Lexington Avenue
53rd Floor
New York
NY 10022
USA
T +1 212 753 6300
Year of
initial
investment
New Look is a retailer of value fashion clothing.
It is the second-largest womenswear retailer in the
UK with nearly 600 stores, and has a fast growing
international business including 300 stores trading
under the MIM format in France. There are also New
Look fascia stores trading in Ireland, France, Belgium,
Russia and the Middle East.
Number of employees
7,449
Tech & Telecom
Epicor
iGATE
NXP
Orange Communications
Paradigm
SMART Technologies
Sophos
TDC
TIVIT
Travelex
Revenue (year to 31 March 2012)
£834m
2010
2004
2005
2005
2011
2004
2008
2004
2003
2007
1998
2000
2006
2004
2011
2008
2010
New Look
The initial investment in this company was made
by the Apax Europe VII fund in 2007.
The initial investment in this company was made
by the Apax Europe VI fund in 2006.
Revenue (year to 30 September 2012)
2007
2007
2007
2006
2012
2010
2008
2011
2007
Year of
initial
investment
£630.4m
6,536
1
Strategy overview
Healthcare
Apollo Hospitals
Capio AB
General Healthcare Group
KCI
The TriZetto Group
Unilabs
2009
2006
2012
2007
2010
2005
Year of
initial
investment
2
35
Sector focus
Financial & Business Services
Bankrate
Farmafactoring
Garda World Security
HUB International
Psagot
Travelex
Year of
initial
investment
partners
worldwide
11
years average
partner
experience
in private
equity
Spain: Barcelona
Apax Partners España S.L.
Diagonal, 640, 5º F
08017 Barcelona
Spain
T +34 93 545 6500
Israel
Apax Partners (Israel) Ltd
Museum Tower
4 Berkowitz Street
Tel Aviv 64238
Israel
T +972 3 777 4400
India
Apax Partners India
Advisers Private Limited
2nd Floor
Devchand House
Shivsager Estate
Dr Annie Besant Road
Worli
Mumbai – 400018
India
T +91 22 4050 8400
3
China: Hong Kong
Apax Partners Hong Kong Ltd
16th Floor
Nexxus Building
41 Connaught Road
Central Hong Kong
People’s Republic of China
T +852 2200 5813
How we are run
Our current
portfolio
Year of
initial
investment
33
4
Our investors
32