Why has Altamir exclusively invested with Apax Partners ?
To date, Altamir has invested alongside or in Apax Partners funds via four successive and concurrent investment mechanisms, as follows:
What is the rationale for the stated objective of growing AuM to €1Bn?
How is the investment portfolio valued?
Portfolio companies are valued by the Funds’ investment managers, reviewed by the Funds’ auditors, and agreed upon by the Board of Advisers of the Funds.
Methods of valuation
Altamir’s investment managers – Apax Partners SA and Apax Partners SAS in France, and Apax Partners LLP in the UK – use valuation methods that comply with the International Private Equity Valuation (IPEV) guidelines. Valuations made by the Apax Funds’ managers have always been conservative, as evidenced by consistent uplifts when portfolio companies are exited.
Apax’s valuation of unlisted investments:
Apax’s valuation of listed investments:
Structure and Governance
What is the legal structure for Altamir?
Altamir is a Société en Commandite par Actions (French Limited Partnership by Shares), and from a tax perspective has opted for the tax status of “Société de Capital Risque” or SCR (translated as venture capital company).
What is a “Société en Commandite par Actions” (French Limited Partnership by shares)?
A Société en Commandite par Actions (SCA) is a French legal structure with two types of partners:
In the case of Altamir, the General Partner appoints the management company, which in turn is overseen by a Supervisory Board, made up of ordinary shareholders of the company.
What are the management fees paid by Altamir to Altamir Gérance (the management company) and Amboise Partners SA, the investment adviser?
1% excl. tax (1.2% incl. VAT) semi-annually on statutory shareholders’equity. 95% of the fees are paid to Amboise Partners SA under the investment advisory agreement and 5% are paid to the management company Altamir Gérance.
Does Altamir pay fees to the Apax France funds VI, VII and VIII to co-invest in their portfolio companies?
What fees are paid to the managers of the Apax Funds?
As a Limited Partner in the Apax France VIII, Apax France IX, Apax VIII LP and Apax IX LP funds, Altamir pays the same management fee as all other investors in those funds. It is the same for the carried interest.
Is there a double fee structure?
In order to avoid a double fee structure on the investments made through the Apax Funds, a fraction of the management fee paid by those Funds to their managers (Apax Partners SAS and Apax Partners LLP) is deducted from the management fee due by Altamir. However, there is ultimately an additional layer on the management fee, since the Apax Funds charge fees on committed capital while the amount of the fee which is deducted is only computed on the amount of equity actually invested by Altamir in those funds. No performance fee (carried interest) is paid at the Altamir level for the investments made through the Apax Funds.
Dividend policy / share buybacks
Why is the payment of a dividend included within Altamir’s objectives?
Altamir’s primary objective is to maximize total Shareholder Return (TSR). A mechanism for achieving this is the payment of an annual dividend. While yield is not a priority for larger investors, it is regarded as an important component of shareholder return for many other investors (both institutional and private). Please see below for further details on the dividend policy and the rationale behind it.
What is Altamir’s dividend policy? What is the rationale for this policy?
In March 2013, Altamir’s Supervisory Board established a new dividend policy, defined as a range of 2% to 3% of year-end NAV, to be paid annually. The new policy is expected to provide an annual dividend which is:
Does Altamir have a share buyback program in place?
Altamir’s Manager does not believe that it would serve the best interest of the company or its shareholders to carry out a share buyback program in order to cancel its own shares. In effect, the outcome of such a program would be to further reduce liquidity of the shares. Most importantly, after studying the issue in great detail, there is no evidence to suggest that share buyback programs carried out by listed private equity players have any long-term effect in reducing the share price discount to NAV.
What are the tax advantages of a SCR (Société Capital Risque)?
Under French law, SCRs have full tax exemption for all income received and capital gains realized by the SCR. Consequently, as an SCR, Altamir does not pay corporate taxes.
What is the advantage of the SCR status for investors?
The shareholders of a company with SCR status may be exempt from tax under certain conditions. Individual investors who reside in France and commit to hold their shares and re-invest the dividends for five years, do not pay capital gains taxes on dividends, nor do they pay capital gains taxes when they sell their shares, assuming they comply with the five-year commitment. Individual shareholders who reside outside France and make the same commitments, will not be subject to withholding tax. Legal entities residing in France are exempt from tax on capital gains on disposal of Altamir shares held for at least 5 years, and exempt from tax on dividends which are derived from capital gains on sale of equity investments.
Further information regarding the tax benefits of SCR and the impact on French resident or non-resident shareholders are available in Altamir’s Registration Document.
What are the eligibility requirements for the SCR tax status ?
The main rules and restrictions that apply to SCRs are the following: