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FINANCIAL AND LEGAL INFORMATION
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Risk factors
Nature of the risk
Risk mitigation
Listed companies as of 31 December 2016 made up 26% of the
portfolio (40% at 31 December 2015). A 1
0
% drop in the market
prices of these listed securities would have an impact of €22.7m
on the valuation of the portfolio as of 31 December 2016.
In addition, most unlisted securities are valued in part on the basis
of peer-group multiples, and in part on multiples of recent private
transactions.
A change in the market prices of the comparable companies does
not represent a risk, because although these comparables provide
an element for calculating the fair value at a given date, the final
value of the investments will be based on private transactions,
unlisted by definition, in which the strategic position of the
companies or their ability to generate cash flow takes precedence
over the market comparables.
2) Interest rate risks
Risks related to lbo transactions
In the context of leveraged transactions, Altamir is indirectly
subject to the risk of an increase in the cost of debt and the risk
of not obtaining financing or being unable to finance the planned
new transactions at terms that ensure a satisfactory return.
In 2015, the debt markets remained very open, and debt funds
regained prominence. A debt manager joined Apax Partners
MidMarket’s investment team in 2015. Apax Partners LLP has
a dedicated debt team split between London and New York.
Risks related to short-term cash investments
As of 31 December 2016, Altamir’s statutory financial statements
showed a net cash balance of €67.3m. It also subscribed to a €15m
tax-efficient capitalisation fund whose capital is guaranteed.
Money-market mutual funds are valued at historical cost. Capital
gains on divestments are calculated based on the difference
between the sale price and the weighted average purchase price.
The Company recognises unrealised capital gains solely in its
consolidated financial statements. The nature of the securities
does not justify any impairment.
If the need for cash requires the Company to terminate its time
deposits, the penalty would be a reduction in the interest earned.
There is no risk of a loss of capital.
The sale of marketable securities and revenue therefrom resulted
in a profit of €6 in 2016. The sale of negotiable debt securities and
time deposits generated a capital gain in 2016 of €1,135,629.
Risks related to other financial assets and liabilities
Financial assets tied to an interest rate include shareholder loans
or securities such as corporate bonds classified and held as
portfolio investments or receivables related to equity investments.
Altamir has €39m in lines of credit at variable rates on standard
market terms. An interest rate rise would increase the cost of
financing.
These financial assets are assumed to be redeemed or converted
at maturity. As a result, they do not present any interest rate risk
per se.
As of 31 December 2016, the credit lines were undrawn. They are
only occasionally used.
3) Currency risk
Existing shares in Altamir or shares to be created are denominated in euros. Accordingly, profitability for investors who bought Altamir
shares using currencies other than the euro may be affected by fluctuations of that currency against the euro.
Altamir aims to invest, either directly or indirectly through the
Apax France VIII and Apax France IX private equity funds, at
least 75% in France. The operating currency of the majority of the
companies in the portfolio is the euro. However, some investments
made by Altamir to date are denominated in foreign currencies,
and consequently their value may vary according to exchange
rates.
Shares of the Apax VIII LP and Apax IX LP funds are denominated
in euros. The funds themselves have a global investment strategy.
Exchange rate fluctuations might affect the valuation of some of
their investments at the closing date or at the date they are sold.
As of 31 December 2016, the only assets denominated in foreign
currencies were the securities and receivables of ten portfolio
companies, which represented €55.7m or 5.83% of total assets.
Altamir does not have the information necessary to measure
the sensitivity of the investments of these funds to fluctuations
in exchange rates.
The portfolio’s exposure by currency is presented in the notes
to the consolidated financial statements.
Altamir does not use firm or conditional forward instruments to
hedge or to gain exposure to market risks (equity markets, interest
rates, exchange and credit risks).
Altamir does not hedge against currency fluctuations.
The foreign exchange impact is not material with respect to
the expected gains on the securities in absolute value
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REGISTRATION DOCUMENT
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ALTAMIR 2016