AP Alternative Assets, L.P. (Euronext Amsterdam: AAA) today
released its financial results for the three and six months ended June
30, 2007, after closing of trading 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 June 30, 2007, the Investment Partnership's investment
portfolio was allocated to private equity and capital markets
investments as follows: 32% in co-investments alongside Apollo
Investment Fund VI, L.P. ("Apollo Investment Fund VI"); 38% in the
Apollo Strategic Value Offshore Fund, Ltd. ("Apollo Strategic Value
Fund"); 22% in AP Investment Europe Limited ("Apollo Investment
Europe"); and 8% in Apollo Asia Opportunity Offshore Fund, Ltd.
("Apollo Asia Opportunity Fund").
Results of Operations
As of June 30, 2007, the net asset value of AAA approximated
$2,068 million, or $21.41 per common unit. This compares to $2,005
million, or $20.77 per common unit, as of March 31, 2007, and $1,917
million or $19.86 per common unit as of December 31, 2006.
Operating results for AAA for the three and six months ended June
30, 2007, were highlighted by the following:
-- Net unrealized appreciation of AAA's limited partner interests
in the Investment Partnership was $65.1 million and $139.8
million, respectively, 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 $17.8 million and $33.5 million,
respectively, which represented interest income from cash
management activities, dividend income from portfolio
investments and realized gains from sales.
-- Investment expense and general and administrative expenses
were $2.9 million and $4.1 million, which included direct
expenses as well as fees allocated from the Investment
Partnership for professional services, fees and expenses of
our Managing General Partner's board of directors and other
administrative costs.
-- The net increase in net assets resulting from operations was
$80.0 million and $169.2 million, respectively.
Operating results for the Investment Partnership for the three and
six months ended June 30, 2007, were highlighted by the following:
-- At June 30, 2007, investments were recorded at fair value.
This resulted in total net unrealized appreciation for the
three and six months ended June 30, 2007, of approximately
$75.7 million and $162.6 million, respectively. Our capital
market investments appreciated in value $33.6 million and
$76.2 million, respectively, and our private equity
investments appreciated $42.1 million and $86.4 million in
value, respectively. 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 $17.7 million and $46.3 million, Apollo
Investment Europe of $8.9 million and $21.6 million, and
Apollo Asia Opportunity Fund of $7.0 million and $8.3 million,
respectively.
-- Investment income was $17.8 million and $33.9 million,
respectively, which represented interest income from cash
management activities, dividend income from portfolio
investments and realized gains from sales.
-- Expenses were $2.2 million and $2.7 million, respectively,
which primarily relates to management fees, professional fees
and other administrative costs.
-- The net increase in net assets resulting from operations was
$91.4 million and $193.8 million, respectively, for the three
and six months ended June 30, 2007.
Investments
As of June 30, 2007, AAA's investments consist of $2.1 billion
invested in AAA Investments, L.P. The underlying portfolio of AAA
Investments, L.P. consists of temporary investments of $384.1 million
and portfolio investments approximating $1,704.2 million as follows:
-- Investments aggregating $1,160.6 million in Apollo-sponsored
funds:
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-- $641.4 million in Apollo Strategic Value Fund
-- $376.0 million in Apollo Investment Europe
-- $143.2 million in Apollo Asia Opportunity Fund
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-- Co-investments alongside Apollo Investment Fund VI aggregating
$543.6 million as follows:
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-- $131.2 million in Realogy Corporation
-- $62.3 million in Claire's Stores Inc.
-- $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
-- $41.6 million in Oceania Cruise Lines
-- $35.4 million in Countrywide PLC
-- $32.8 million in Smart & Final Inc.
-- $17.1 million in Noranda Aluminum Holding Corporation
-- $13.4 million in Verso Paper Holdings LLC
-- $13.4 million in Jacuzzi Brands
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On July 9, 2007, the Investment Partnership committed an
additional $200.0 million to the Apollo Asia Opportunity Fund for an
aggregate commitment of $400.0 million. Subsequent to June 30, 2007
and through August 10, 2007, the Investment Partnership made
investments of $83.0 million in Apollo Asia Opportunity Fund by way of
partial draw downs of its aggregate commitment of which $182.0 million
is currently undrawn.
Subsequent to June 30, 2007 and through August 10, 2007, the
Investment Partnership made investments totaling $45.8 million in
Apollo European Principal Finance Fund by way of partial draw downs of
its aggregate commitment of $400.0 million, of which $354.2 million is
currently undrawn.
On August 2, 2007, the Investment Partnership made an additional
co-investment in CEVA Logistics for $11.3 million.
Also subsequent to June 30, 2007, the Investment Partnership
committed $172.1 million for a co-investment in Hexion Specialty
Chemicals Inc ("Hexion"). The Investment Partnership, along with
Apollo Investment Fund VI, committed to purchase an interest in Hexion
from related Apollo funds in connection with Hexion's acquisition of
Huntsman Corporation. This will create one of the world's largest
specialty chemical companies. Additional commitments may be made in
the future to Hexion.
Whether these commitments 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
these commitments will be consummated, if at all.
Tax Distributions
On June 28, 2007, AAA paid a distribution of $0.19 per unit to
unitholders of record after the close of business in Amsterdam on June
11, 2007. The Partnership distributed approximately $18.4 million on
behalf of the unitholders during the quarter ended June 30, 2007 or
approximately $0.19 per common unit. The Partnership distributed
approximately $19.7 million on behalf of the unitholders during the
six months ended June 30, 2007 or approximately $0.20 per common unit.
Information for Investors - Teleconference and Webcast
The company will discuss its financial results during a conference
call on Thursday, August 16, 2007, at 5:00 p.m. CET (Amsterdam) / 4:00
p.m. GMT (London) / 11:00 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". An
archived replay of the conference call will also be available through
August 31, 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 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. For more
information about AP Alternative Assets, please visit
www.apolloalternativeassets.com.
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.
Financial Schedules Follow
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AP ALTERNATIVE ASSETS, L.P.
STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands)
----------------------------------------------------------------------
For the Period
For the from June 15,
For the Six 2006
Three Months (Commencement
Months ended of
ended June Operations)
June 30, 30, to June 30,
2007 2007 2006
---------- -------- --------------
NET INVESTMENT INCOME ALLOCATED
FROM AAA INVESTMENTS, L.P.
Interest and dividends $ 17,367 $ 30,769 $ 2,607
Net realized gains from sales 421 2,703 -
Expenses (2,178) (2,650) (1,749)
---------- -------- --------------
15,610 30,822 858
EXPENSES - General and
administrative expenses (768) (1,410) (2)
---------- -------- --------------
NET INVESTMENT INCOME 14,842 29,412 856
---------- -------- --------------
NET CHANGE IN UNREALIZED
APPRECIATION OF INVESTMENT IN AAA
INVESTMENTS, L.P. 65,141 139,815 1,690
---------- -------- --------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 79,983 $169,227 $ 2,546
========== ======== ==============
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AP ALTERNATIVE ASSETS, L.P.
STATEMENT OF ASSETS AND LIABILITIES
(In thousands, except per unit amounts)
----------------------------------------------------------------------
As of June 30, As of
2007 December
(Unaudited) 31, 2006
-------------- ----------
ASSETS
Investment in AAA Investments, L.P. $ 2,071,214 $1,918,723
(cost of $1,824,355 and $1,822,816 at
June 30, 2007 and December 31, 2006,
respectively)
Other assets 600 -
-------------- ----------
TOTAL ASSETS 2,071,814 1,918,723
-------------- ----------
LIABILITIES - Accounts payable and accrued
liabilities 3,342 1,333
-------------- ----------
NET ASSETS $ 2,068,472 $1,917,390
-------------- ----------
NET ASSETS CONSIST OF:
Partners' capital contribution, net
(96,624,977 and 96,546,000 common units
outstanding at June 30, 2007 and
December 31, 2006, respectively) $ 1,824,357 $1,822,818
Accumulated increase in assets resulting
from operations 265,006 95,779
Accumulated partners' capital
distributions (20,891) (1,207)
-------------- ----------
$ 2,068,472 $1,917,390
============== ==========
Net asset value per common unit $ 21.41 $ 19.86
============== ==========
Market price $ 18.25 $ 18.50
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AAA INVESTMENTS, L.P.
STATEMENT OF OPERATIONS (UNAUDITED)
(In thousands)
----------------------------------------------------------------------
For the For the Period
For the Six from June 15,
Three Months 2006
Months ended (Commencement
ended June of Operations)
June 30, 30, to June 30,
2007 2007 2006
--------- -------- ----------------
INVESTMENT INCOME:
Interest, dividends and gains
from short- term investments $ 17,377 $ 30,786 $ 2,609
Net realized gains from sales 421 3,121 -
--------- -------- ----------------
17,798 33,907 2,609
EXPENSES :
Management fees (1,541) (1,541) -
General and administrative
expenses (637) (1,110) (1,750)
--------- -------- ----------------
NET INVESTMENT INCOME 15,620 31,256 859
Net change in unrealized
appreciation on investments 75,737 162,574 1,691
--------- -------- ----------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 91,357 $193,830 $ 2,550
--------- -------- ----------------
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AAA INVESTMENTS, L.P.
STATEMENT OF ASSETS AND LIABILITIES
(In thousands)
----------------------------------------------------------------------
As of
June 30, 2007 December 31,
(Unaudited) 2006
-------------- ------------
ASSETS:
Investments:
Investment in Apollo Strategic Value
Offshore Fund, Ltd.
at fair value (cost of $550,000 in 2007
and 2006) $ 641,408 $ 595,081
Co-investments - Apollo Investment Fund
VI
at fair value (cost of $445,977 in
2007 and $228,385 in 2006) 543,555 239,590
Investment in AP Investment Europe
Limited
at fair value (cost of $339,488 in
2007 and $238,674 in 2006) 375,968 253,549
Investment in Apollo Asia Opportunity
Offshore Fund, Ltd.
at fair value (cost of $135,000 in
2007 and $0 in 2006) 143,268 -
-------------- ------------
1,704,199 1,088,220
Cash and cash equivalents 384,100 832,371
Other assets 27,889 868
-------------- ------------
TOTAL ASSETS 2,116,188 1,921,459
-------------- ------------
LIABILITIES:
Accounts payable and accrued liabilities 2,785 1,684
-------------- ------------
NET ASSETS $2,113,403 $1,919,775
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NET ASSETS CONSIST OF:
Partners' capital $1,822,406 $1,822,608
Accumulated increase in net assets
resulting from operations 290,997 97,167
-------------- ------------
$2,113,403 $1,919,775
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