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FINANCIAL AND LEGAL INFORMATION
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Risk factors
Nature of the risk
Risk mitigation
8) Risks related to the departure of executives in the portfolio companies
The companies in which Altamir invests may be dependent
on the presence of one or more key people, whose departure
or unavailability would have a significant adverse effect.
Because of this, Altamir may need to postpone the sale of
the investment in question or to sell it on unfavourable terms.
Evaluating the senior management
(motivation, commitments,
performance, etc.)
is a critical factor in the investment process.
Private equity at its core depends on the interests of the managers
and investors being perfectly aligned. As a general rule, it is thus
in the managers’ interest to collaborate with the investor until
the investment is exited.
One of Apax Partners’ essential contributions is to constantly
strengthen the
management
teams of its portfolio companies.
9) Risks related to valuation of investments
The unlisted investments that Altamir holds or will hold are
periodically valued by the Company using the fair value method
explained in the notes to the financial statements. These periodic
valuations of Altamir’s investment portfolio are carried out to
determine Altamir’s net asset value per share, which is published
every quarter. Despite the care taken in performing these
valuations, no guarantee can be given that each of Altamir’s
investments could be sold for an amount at least equal to the value
determined by Altamir in this valuation.
Only equity investments held directly by Altamir are valued by
the Company. Valuation of the investments held via the funds
managed or advised by Apax Partners MidMarket and Apax
Partners LLP is the responsibility of those companies.
Altamir and the Apax funds apply the IPEV-recommended
(International Private Equity Valuation)
valuation rules,
which harmonises the approach across all valuations.
The valuations are reviewed by the Apax funds’ Statutory Auditors
and by Altamir’s Statutory Auditors.
Altamir may, via its management company and Supervisory Board,
challenge the valuations that have been submitted to it, or modify
them if it deems necessary (this has so far never occurred).
For over 10 years, Altamir has monitored and published an “Uplift”
indicator, which measures the spread between the price at which
it sold its investments and their values used to calculate NAV in
the preceding period. This indicator has always been positive,
demonstrating the Company’s conservative valuation approach.
B) FINANCIAL RISKS
Nature of the risk
Risk mitigation
1) Risks related to fluctuations in listed share prices
Altamir may hold listed shares, either because its unlisted
companies are floated on the stock exchange and Altamir
considers it appropriate to retain its shares for a certain period
of time with a view to obtaining a better valuation in the long-
term – an objective having no guarantee of results – or because
Altamir does not rule out investing directly or indirectly in the
capital of a company on the sole grounds that it is listed on the
stock exchange, provided that the Company falls within the scope
of its investment strategy.
Altamir may therefore be affected by a downturn in the market
prices of such securities.
Furthermore, Altamir may finance its investment in a listed
company via a special-purpose acquisition company that incurs
debt. In the majority of cases, this debt is guaranteed by listed
shares in underlying companies.
It is not Altamir’s primary objective to invest in the shares of listed
companies.
When the share price of these companies falls, and the average
share price over a given period drops below a certain threshold,
the holding companies become responsible for meeting collateral
or margin calls. In the event of default, banks may demand
repayment of all or part of the loan.
Conversely, when the share price of these companies rises,
all or part of the balance in escrow with respect to some
of these companies may be released.
The sensitivity calculations for margin calls in the event of a drop
in the market price are presented in the notes to the financial
statements.
As Altamir now invests via funds, it is no longer subject to direct
margin calls on its new investments.
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REGISTRATION DOCUMENT
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ALTAMIR 2016