Paris, 17 April Summary note on Altamir's Management fees

Transcription

1 Paris, 17 April 2015 Summary note on Altamir's Management fees The analysis of management fees paid by Altamir reveals on the whole high charges and a significant increase since This increase stems from the company's new method of operating as from that date: created to be a quoted investment vehicle pari passu with Apax France funds (investments in companies), it became a feeder fund of Apax funds (investments in funds). This leads to an accumulation and thus an increase in management fees. A consequence of which was not presented to Altamir's shareholders and company's Supervisory Board in 2008, when the company changed its object (see annex 3). Moreover, we now have a situation where the level of management fees, excluding carried interest, charged on Altamir is significantly higher than in similar companies and the calculation of carried interest does not benefit its shareholders either. These differences are justified neither by the size of the quoted fund which Altamir is and which remains within the upper limits of similar companies nor, unfortunately, by its performance over a longer period of time, which is significantly lower than the average of similar companies. A. Management fees excluding Altamir carried interest have significantly increased Management fees excluding carried interest that are charged on the company are the sum of: Management fixed fees, defined in Art. 17 of the Articles of Association (or about 2% excl. of all taxes of the company's equity) ; Other fees and costs (including administrative, accountancy and legal costs relating to transactions that were not conclusive etc.) Indirect costs (fees charged by Apax Partners Midmarket and Apax LP in Apax VIII B and Apax VIII LP funds in which Altamir invests).

2 The evolution since 2007 of the ratio between fees excluding carried interest and the average NAV of the year (NAV of n-1 / 2 + NAV n/2) reveals a very important increase since 2011: Eur m Management fees (net) 4,0 4,6 6,1 7,4 5,8 8,0 8,5 8,4 Other fees 4,4 3,8 2,7 1,5 1,6 1,5 2,2 1,9 Direct fees 8,4 8,5 8,8 8,9 7,4 9,5 10,7 10,3 Apax VIII-B and VIII-LP 4,0 6,6 5,5 6,8 Indirect fees 0,0 0,0 0,0 0,0 4,0 6,6 5,5 6,8 Total of direct and indirect fees 8,4 8,5 8,8 8,9 11,4 16,1 16,2 17,1 NAV 448,7 357,8 402,7 423,1 441,8 491,8 542,6 585,8 Average NAV 359,0 403,3 380,3 412,9 432,5 466,8 517,2 564,2 Total fees / average NAV 2,3% 2,1% 2,3% 2,2% 2,6% 3,4% 3,1% 3,0% Average Average ,2% 3,1% From an average NAV level of 1.9% between 2007 and 2009 (see a similar level since 1998 in annex 2), they averaged 2.9% as from that date to exceed 3% since This increase was largely a result of fees linked to commitments in Apax VIIIB and Apax VIII LP funds and an increase of administrative costs charged on the company trough regulated agreement or service contracts. This data is calculated on the basis of Altamir reference documents from 2007 to 2014 (see example for 2014 fees in annex 1). B. Altamir compares unfavourably with similar listed companies

3 1. Management fees excluding carried interest are higher for Altamir than for other similar companies We have identified three listed companies in Europe similar to Altamir : HG Capital, Dunedin and Oakley. A common feature of these three private equity companies (like Altamir) is investing in funds of a single external manager (Apax in the case of Altamir): these funds are called «feeders». Since 2011, their management fees, excluding carried, reported to NAV have remained fairly stable and are significantly lower than those of Altamir: Total management fees excluding carried interest / average NAV Average HGCapital nd nd 2,4% 2,4% 2,4% Dunedin 1,9% 1,6% 2,4% 2,7% 2,2% Oakley 2,8% 2,5% 2,5% nd 2,6% Moyenne 2,3% 2,1% 2,3% 2,6% 2,4% Altamir 2,6% 3,4% 3,1% 3,0% 3,1% Altamir vs average 14% 66% 34% 18% 30% 2. Altamir's calculation method of carried interest is the least favourable for the shareholders The amount of carried depends of course on the performance. Thus, our analysis covers its calculation method: For Altamir the costs represent 20% of the year-end result, that is up to 20% of the net capital gains after management fees. Or 20% of the net performance, from the first Euro earned. Similar companies levy a part of the capital gains only at a given performance level («hurdle») : HGCapital 20% of carried, «hurdle» of 8%. Dunedin not specified percentage of carried, «hurdle rate» present. Oakley 20% of carried, «hurdle» of 8%.

4 Thus, each of the components of Altamir's performance and management fees is higher than the one in the similar companies. However, it is exactly the opposite that would be justified: Altamir has been much less performant than the similar companies. Failure to perform, its size, which is in the high range of all these companies, should have enabled the shareholders to benefit of these quoted funds of the economies of scale: IRR of NAV per share(*) Average published NAV (2014) m HGCapital 13.0% , published 573 Dunedin 8.0% , published 140 Oakley 12.4% , published 297 (2013) Moyenne 11.1% Altamir 7.6% , estimated Altamir vs average -32% Sources: companies, and Moneta calculations for Altamir IRR

5 Annex 1 A detailed breakdown of fees published by Altamir, example of 2014 (Reference document 2014, p. 91): A detailed breakdown of Altamir Gérance management fees (Reference document 2014, p. 39) Annex 2

6 Details since the beginning of the management fees in 1998 (sources: the reference documents of the company). Note: Altamir's merger with Amboise in Eur m Management fees (net) 0,6 0,5 1,1 1,4 1,2 1,1 1,0 0,6 1,1 4,0 4,6 6,1 7,4 5,8 8,0 8,5 8,4 Other fees 0,8 0,6 0,7 0,6 1,0 0,5 0,4 0,7 0,9 4,4 3,8 2,7 1,5 1,6 1,5 2,2 1,9 Direct fees 1,5 1,1 1,8 2,0 2,2 1,6 1,5 1,3 2,0 8,4 8,5 8,8 8,9 7,4 9,5 10,7 10,3 Apax VIII-B and VIII-LP 4,0 6,6 5,5 6,8 Indirect fees 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 4,0 6,6 5,5 6,8 Total of direct and indirect fees 1,5 1,1 1,8 2,0 2,2 1,6 1,5 1,3 2,0 8,4 8,5 8,8 8,9 11,4 16,1 16,2 17,1 NAV 51,1 69,1 100,2 71,1 49,9 55,3 77,6 94,4 121,7 448,7 357,8 402,7 423,1 441,8 491,8 542,6 585,8 Average NAV 60,1 84,6 85,7 60,5 52,6 66,5 86,0 108,1 359,0 403,3 380,3 412,9 432,5 466,8 517,2 564,2 Total fees / average NAV 1,8% 2,1% 2,3% 3,7% 3,0% 2,2% 1,6% 1,8% 2,3% 2,1% 2,3% 2,2% 2,6% 3,4% 3,1% 3,0% Average Average Average ,3% 2,2% 3,1%

7 Annex 3. The company's presentation of its new method of operating Reference document 2008 p. 126

8 Reference document 2009 p. 107