AP Alternative Assets Releases Its Financial Results Relating to the Quarter Ended March 31, 2007
AP Alternative Assets, L.P. (Euronext Amsterdam: AAA) today
released its financial results for the quarter ended March 31, 2007,
prior to the opening of trading on May 30, 2007 on Euronext Amsterdam
N.V.'s Eurolist by Euronext.
AAA invests its capital through, and is the sole limited partner
of, AAA Investments, L.P., which is referred to as the Investment
Partnership. At March 31, 2007, the Investment Partnership's portfolio
was allocated to private equity and capital markets investments as
follows: 18% in co-investments alongside Apollo Investment Fund VI,
L.P. ("Apollo Investment Fund VI"); 49% in the Apollo Strategic Value
Offshore Fund, Ltd. ("Apollo Strategic Value Fund"); 28% in AP
Investment Europe Limited ("Apollo Investment Europe"); and 5% in
Apollo Asia Opportunity Offshore Fund, Ltd. ("Apollo Asia Opportunity
Fund").
Results of Operations
As of March 31, 2007, the net asset value of AAA approximated
$2,005 million, or $20.77 per common unit, compared to $1,917 million
or $19.86 per common unit as of December 31, 2006.
Operating results for AAA were highlighted by the following:
-- Net unrealized appreciation of AAA's limited partner interests
in the Investment Partnership was $74.7 million resulting from
the increase in net assets of the Investment Partnership. This
increase in net assets was primarily driven by the net
underlying increase in the unrealized value of investments
held by the Investment Partnership.
-- Investment income was $15.7 million, which represented
interest income from cash management activities, dividend
income from portfolio investments and realized gains from
sales.
-- General and administrative expenses were $1.1 million, which
included both direct and allocated expenses for professional
services, fees and other administrative costs.
-- The net increase in net assets resulting from operations was
$89.2 million for the quarter ended March 31, 2007.
Operating results for the Investment Partnership were highlighted
by the following:
-- At March 31, 2007, investments were recorded at fair value
which resulted in net unrealized appreciation totaling
approximately $86.8 million, with our capital market
investments increasing $42.6 million and our private equity
investments increasing $44.2 million. The unrealized
appreciation from our capital market investments is due to
increases in the Investment Partnership's positions in the
Apollo Strategic Value Fund of $28.7 million, Apollo
Investment Europe of $12.7 million, and Apollo Asia
Opportunity Fund of $1.2 million.
-- Investment income was $16.1 million, which represented
interest income from cash management activities, dividend
income from portfolio investments and realized gains from
sales.
-- General and administrative expenses were $0.5 million, which
primarily relates to professional fees and other
administrative costs.
-- The net increase in net assets resulting from operations was
$102.5 million for the quarter ended March 31, 2007.
Investments
As of March 31, 2007, AAA's investments consist of $2.0 billion
invested in AAA Investments, L.P., which underlying portfolio consists
of temporary investments of $755 million and portfolio investments
approximating $1,265 million as follows:
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-- Investments aggregating $1,043.7 million in Apollo-sponsored funds:
-- $623.8 million in Apollo Strategic Value Fund
-- $353.6 million in Apollo Investment Europe
-- $66.3 million in Apollo Asia Opportunity Fund
-- Co-investments alongside Apollo Investment Fund VI aggregating
$221.8 million as follows:
-- $56.6 million in Momentive Performance Materials Holdings, Inc.
-- $54.7 million in Rexnord Corporation
-- $43.2 million in Berry Plastics Group, Inc.
-- $41.9 million in CEVA Logistics
-- $13.4 million in Jacuzzi Brands
-- $12.0 million in Verso Paper Holdings LLC
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Subsequent to March 31, 2007 and through May 18, 2007, the
Investment Partnership made additional co-investments in four
portfolio companies, aggregating $228.3 million as follows:
-- A co-investment of approximately $131.2 million in Realogy
Corporation ("Realogy"), a leading provider of residential
real estate and relocation services in the world. Through its
portfolio of leading brands (Coldwell Banker, Century 21,
Sotheby's International Realty, ERA, Corcoran Group and
Coldwell Banker Commercial), Realogy is the world's largest
real estate brokerage franchisor and the largest U.S.
residential real estate brokerage firm. Realogy is also the
largest U.S. provider and a leading global provider of
outsourced employee relocation services and a provider of
title and settlement services.
-- A co-investment of approximately $34.4 million in Oceania
Cruise Lines ("Oceania"), a leading cruise line focused on the
destination-oriented, upper premium cruise market. Oceania
owns three 684-berth vessels and offers itineraries in the
Mediterranean, Far East, South America, the Caribbean,
Australia and New Zealand. An additional co-investment of $6.2
million is scheduled in the future.
-- A co-investment of approximately $35.9 million in Countrywide
Plc ("Countrywide"), the leading provider of residential real
estate services in the UK. Countrywide has a leading market
position in all of its business areas in the UK with the
number one market share in residential property sales,
residential property lettings and property management,
arranging mortgages, insurance and related financial products,
surveying and valuation services for mortgage lenders and
prospective homebuyers, and residential property conveyance
services.
-- A co-investment of approximately $26.8 million in Noranda
Aluminum Holdings Corporation ("Noranda"), a leading
integrated producer of value-added primary aluminum products
as well as high quality rolled aluminum coils. Noranda
provides 10% of North America's primary aluminum production
and produces 22% of North America's tin foil and lightweight
sheet through four world-class rolling mills.
Additionally, subsequent to March 31, 2007 and through May 18,
2007, the Investment Partnership made an investment of $70.0 million
in Apollo Asia Opportunity Fund by way of partial draw down of its
aggregate commitment of $200.0 million.
Subsequent to March 31, 2007 and through May 18, 2007, the
Investment Partnership entered into a $400 million commitment to
Apollo European Principal Finance Fund ("EPF"). EPF is an investment
vehicle that seeks to generate attractive risk-adjusted returns by
capitalizing on opportunities in the non-performing loans ("NPLs")
sector in Europe with a focus on Germany. The team will capitalize on
the opportunities created by new regulations for banks on NPLs and by
sourcing transactions from the investment team's network of
relationships with financial institutions. This local expertise and
knowledge complements Apollo's background in distressed and private
equity investing.
Whether this commitment will be consummated depends on the
satisfaction of a number of conditions, some or all of which may not
be in our control. No assurances can be made as to whether or when
this commitment will be consummated, if at all.
Tax Distributions
The Board of Directors of AAA's general partner declared a
distribution of $0.19 per unit payable on or about June 28, 2007 to
unitholders of record immediately prior to the opening of business in
Amsterdam on June 12, 2007. Because the distribution was declared
subsequent to March 31, 2007, the aggregate distribution payable of
$18.5 million is not yet reflected in AAA's' net asset value as of
March 31, 2007.
Information for Investors - Teleconference and Webcast
The company will discuss its financial results during a conference
call on Wednesday, May 30, 2007, at 2:30 p.m. CET (Amsterdam) / 1:30
p.m. GMT (London) / 8:30 a.m. EST (New York). All interested parties
are welcome to participate. You can access this call by dialing 20 717
6857 within The Netherlands or 31 20 717 6857 outside of The
Netherlands. Please dial-in approximately 5 to 10 minutes prior to the
call. When prompted, callers should reference "AAA Earnings Call". An
archived replay of the conference call will also be available through
June 15, 2007, via the company's website at
www.apolloalternativeassets.com.
About AAA
AP Alternative Assets was established by Apollo and is a
closed-end limited partnership established under the laws of Guernsey.
Apollo is a leading private equity, debt and capital markets investor
with 17 years of experience investing across the capital structure of
leveraged companies. AP Alternative Assets is managed by Apollo
Alternative Assets and invests in, and co-invests with, Apollo's
private-equity and capital markets investment funds.
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements involve risks and uncertainties because
they relate to future events and circumstances. Such statements are
based on currently available operating, financial and competitive
information and are subject to various risks and uncertainties that
could cause actual results and developments to differ materially from
the historical experience and expressed or implied expectations of
AAA. Undue reliance should not be placed on such forward-looking
statements. Forward-looking statements speak only as of the date on
which they are made and AAA does not undertake to update its
forward-looking statements unless required by law.
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AP ALTERNATIVE ASSETS, L.P.
STATEMENT OF OPERATIONS
(In thousands)
For the Quarter Ended
March 31, 2007
(Unaudited)
-----------------------
NET INVESTMENT INCOME ALLOCATED FROM
AAA INVESTMENTS, L.P.
Interest and dividends $ 13,402
Net realized gains from sales 2,282
Expenses (472)
-----------------------
15,212
EXPENSES - General and administrative expenses (642)
-----------------------
NET INVESTMENT INCOME 14,570
NET CHANGE IN UNREALIZED APPRECIATION OF
INVESTMENT IN AAA INVESTMENTS, L.P. 74,674
-----------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 89,244
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AP ALTERNATIVE ASSETS, L.P.STATEMENT OF ASSETS AND LIABILITIES
(In thousands, except per unit amounts)
As of As of
March 31, 2007 December
(Unaudited) 31, 2006
-------------- -----------
ASSETS - Investment in AAA Investments, $ 2,007,283 $1,918,723
L.P. (cost of $1,822,816 in 2007 and
2006)
LIABILITIES - Accounts payable and accrued
liabilities 1,974 1,333
-------------- -----------
NET ASSETS $ 2,005,309 $1,917,390
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NET ASSETS CONSIST OF:
Partners' capital contribution, net $ 1,822,818 $1,822,818
(96,546,000 common units outstanding in
2007 and 2006)
Accumulated increase in assets resulting
from operations 185,023 95,779
Accumulated partners' capital
distributions (2,532) (1,207)
-------------- -----------
$ 2,005,309 $1,917,390
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Net asset value per common unit $ 20.77 $ 19.86
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Market price at March 31, 2007 $ 20.00 $ 18.50
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AAA INVESTMENTS, L.P.
STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands)
For the
Quarter Ended
March 31, 2007
--------------
INVESTMENT INCOME:
Interest, dividends and gains from short-term
investments $ 13,410
Net realized gains from sales 2,699
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16,109
EXPENSES - General and administrative expenses (473)
--------------
NET INVESTMENT INCOME 15,636
Net change in unrealized appreciation on investments 86,837
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 102,473
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AAA INVESTMENTS, L.P.
STATEMENT OF ASSETS AND LIABILITIES
(In thousands)
As of
March 31, 2007 December 31,
(Unaudited) 2006
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ASSETS:
Investments:
Investment in Apollo Strategic Value
Offshore Fund, Ltd. at fair value
(cost of $550,000 in 2007 and 2006) $ 623,751 $ 595,081
Investment in AP Investment Europe
Limited at fair value (cost of
$326,074 in 2007 and $238,674 in
2006) 353,627 253,549
Co-investments - Apollo Investment
Fund VI at fair value (cost of
$166,385 in 2007 and $228,385 in
2006) 221,821 239,590
Investment in Apollo Asia
Opportunity Offshore Fund, Ltd. at
fair value (cost of $65,000 in 2007
and $0 in 2006) 66,257 -
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1,265,456 1,088,220
Cash and cash equivalents 754,904 832,371
Other assets 877 868
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TOTAL ASSETS 2,021,237 1,921,459
LIABILITIES:
Accounts payable and accrued liabilities 314 1,684
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NET ASSETS $ 2,020,923 $ 1,919,775
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NET ASSETS CONSIST OF:
Partners' capital $ 1,821,283 $ 1,822,608
Accumulated increase in net assets
resulting from operations 199,640 97,167
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$ 2,020,923 $ 1,919,775
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