ALTAMIR_REGISTRATION_DOCUMENT_2017

1

PRESENTATION OF THE COMPANY AND ITS ACTIVITIES

Description of risk factors and their management

FINANCIAL RISKS

B)

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. 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. 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. Listed companies as of 31 December 2017 made up 19.8% of the portfolio (26% at 31 December 2016). A 10% drop in the market prices of these listed securities would have an impact of €15.2m on the valuation of the portfolio as of 31 December 2017. 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.

It is not Altamir’s primary objective to invest in the shares of listed companies.

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.

As Altamir now invests via funds, it is no longer subject to direct margin calls on its new investments. 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.

A Debt Director joined the investment teams of Apax Partners SAS 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 2017, Altamir’s statutory financial statements showed a net cash balance of €7.3m. The Company also subscribed in 2013 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 €0 in 2017. The sale of negotiable debt securities and time deposits generated a capital gain in 2017 of €253,251.

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 €60m 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. The credit lines are only occasionally used.

78 REGISTRATION DOCUMENT

• ALTAMIR 2017

www.altamir.fr