A glance at its share price chart quickly reveals why. With the stock taking a 25% tumble over the last 12 months and dividends actually getting cut, this high yield is seemingly being driven entirely by downward momentum. Usually, that’s a sign to stay away even more, considering the firm’s cash flows have been seesawing.

However, some of the best bargains are often found in places most investors aren’t willing to look. With that in mind, let’s take a deeper dive into this enterprise and try to uncover whether an opportunity might exist here.

Why’s the Apax share price falling?

To understand what’s going on with this stock, it’s important to know what this business actually does. In oversimplified terms, it’s essentially an investment fund that provides retail investors indirect access to the private equity market. The business manages a portfolio of public and private investments seeking to deliver robust returns and a steady stream of dividends.

Sadly, despite the underlying companies within its portfolio growing earnings, weaker investor sentiment has crushed multiples. Consequently, the Apax net asset value’s (NAV) been getting hit. This has only been exacerbated by the continued payout of dividends, which further drag down NAV. And since the group’s historical dividend policy was to pay 5% of NAV each year, the income for shareholders has been shrinking since 2022.

Needless to say, this isn’t a great position to be in. And it’s understandable why some investors have decided to jump ship, even more so now that currency headwinds from a strengthening euro have thrown another spanner in the works.

However, despite the pessimism, an interesting opportunity may exist here.

A potential inflection point?

A handful of institutional analysts like Edison Group and Hardman & Co have highlighted 2025 as potentially the start of a comeback story. Management’s begun refocusing its portfolios towards technology, services, and internet investments while exiting underperforming healthcare positions.

The firm has also cut back its public market holdings, reducing exposure to volatile valuation fluctuations. At the same time, the dividend policy has been revised to a flat 11p rather than a percentage of NAV, translating into a more disciplined approach to capital allocation.

Combined, these analyst teams have concluded that management’s hit the reset button, restoring balance sheet strength and readying itself for a NAV recovery. Execution risk is definitely something investors need to consider here. But with the stock trading at a 40% discount to its NAV paired with a 9.6% dividend yield, I think it seems silly not to take a closer look.

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Right now, I’m looking for investment ideas that can deliver a market-beating income and future capital gains. I think I’ve found two stocks that could fit my requirements.

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Big dividends from supermarkets

My first choice is FTSE 250 property specialist Supermarket Income REIT (LSE: SUPR). As the name suggests, this investment trust owns supermarkets sites and leases them to big retailers.

Tesco and J Sainsbury are this REIT’s largest tenants, and the risk of them failing to pay rent on time seems pretty low.

Despite this, Supermarket Income’s share price has fallen by around 40% over the last two years. This slump is mainly due to the impact of higher interest rates.

Investors are worried that when Supermarket Income refinances its loans, higher interest rates could wipe out profits (and dividends).

That’s certainly a risk for some REITs, but I don’t think it’s very likely here.

Supermarket Income’s debt costs look comfortable to me, and its properties are usually on long leases. Rents are often linked to inflation, too.

Large supermarkets rarely close or change location, so I don’t expect many empty properties.

This two-year slump has left Supermarket Income trading at a 15% discount to its 88p book value, with an 8% dividend yield.

If interest rates fall, then I’d expect Supermarket Income’s share price to move closer to its book value. In the meantime, I think this stock offers a relatively low-risk opportunity to lock in an 8% income.

Private equity with a 7% yield

As a private investor, I can’t easily invest directly in private companies. That rules out a whole chunk of the global economy – including many smaller and faster-growing businesses.

Fortunately, there are a number of investment trusts that allow small investors like me to get exposure to private companies. One example is Apax Global Alpha (LSE: APAX). This FTSE 250 investment trust gives investors access to funds run by leading private equity firm Apax Partners.

The trusts’ investments are focused on four sectors – tech, services, healthcare, and internet/consumer. In my view, these are all attractive areas for long-term growth.

Right now, the trust’s stock is trading around 25% below its March 2024 book value of 217p per share.

Admittedly, this discount reflects some risks about the outlook for private equity. Rising interest rates mean it’s more expensive to borrow money to fund new investments. At the same time, potential sale prices for some current investments may be under pressure.

Even so, I think this gap is likely to narrow over time, especially if interest rates fall. That could generate a tidy capital gain for patient shareholders.

There’s no certainty of this, of course. But the trust’s dividend does seem quite safe. Management recently fixed the payout at 11p per share, giving a yield of just over 7% at the time of writing.

Equity investments always carry some risk of losses. But Apax has a long track record and I like the trust’s balanced approach to shareholder returns. Overall, I think the shares look good value at the moment and could be a good way to diversify a UK share portfolio.

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Pivoting the business

I recently wrote about British American Tobacco (LSE:BATS) as a stock that I feel could do well from a value perspective. The stock is down 19% over the past year, with a price-to-earnings ratio of 6.28.

I think it’ll be popular with US investors who feel US stocks are becoming overvalued and are looking to allocate their money to familiar names this side of the pond.

There’s good reason for thinking about doing this. The business is pushing hard on the pivot to alternatives to traditional combustible tobacco products. This line, known as New Categories, is growing fast. Last year, organic revenue for this area jumped by 21%. It now makes up 16.5% of total group revenue.

In terms of dividend yield, the stock has one of the highest yields in the FTSE 100 right now at 10.2%. The fall in the share price has helped to push this higher. Yet I’m not massively concerned about the risks going forward.

The settlement with Philip Morris International regarding patent infringement litigation isn’t great. More headaches as the tobacco giants slog it out for market share could be seen in the future. But it doesn’t stop me thinking the stock is getting very cheap.

Aiming for more alpha

The other option I like is Apax Global Alpha (LSE:APAX). The firm invests in non-public companies, either buying equity in the businesses or providing debt facilities. The aim is to profit after helping the individual companies to grow and become more efficient.

Down 15% over the past year, the stock looks cheap when I compare the share price to the net asset value (NAV) of the underlying investment holdings. Even though the latest NAV reading was at the end of last year, the share price is at a 37% discount!

Part of this I think is driven by negative sentiment. The private equity sector has endured a wobble over the past year. A lot of this is due to concerns about the impact of high interest rates on businesses. If a company underperforms, it’s much harder to sell to someone else if the firm isn’t listed on the stock exchange.

But I think this is just a blip, especially if interest rates do fall later this summer. Further, even though the dividend per share over the past year is slightly lower than the previous year, the yield is still a generous 8.07%

I’m considering buying both dividend shares shortly and feel income investors should take a look too.

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Getting exposure to private equity

Recently, the share price of Apax Gobal Alpha (LSE:APAX) hit 151p, a level not seen since 2020. The trust is down 14% over the past year and trades at a 31% discount from the latest net asset value (NAV) reading. For reference, the NAV refers to the value of the assets held within the trust.

Apax Gobal Alpha invests in private equity. In other words, the managers put money into firms that aren’t publicly traded. It targets companies in a variety of sectors, such as tech and healthcare. The aim is that the investment will grow in value, which Apax can sell either to another shareholder or by taking the firm public.

I think the stock is cheap for two main reasons. One is the fact that there’s a large discount between the latest NAV and the share price. Granted, the current NAV is from Q4 last year, so it needs to be updated, but I still expect it to be significant.

Another reason is that investors have become more concerned about private equity of late, given that most investments take several years to mature. I think this reflects broader uncertainty about the market in general. This is a risk. Yet over time, I expect this to improve when economic growth/boom period hits the UK and the world in general.

Hunting for more gems

The second stock is the Blackrock World Mining Trust (LSE:BRWM). The stock has dumped 30% over the past year.

Unlike Apax, the share price only trades at a modest 6% discount to the NAV. But it’s the large share price fall that makes the stock look cheap to me. Some of the largest holdings in the trust are Rio Tinto, Glencore and BHP Group.

I recently wrote about Glencore specifically, detailing how the lower output and realised prices for metals have dragged the stock lower. Yet from a long-term perspective, I think the fundamentals of the business are sound.

We’re in a normal commodity cycle. I expect demand for precious metals to pick up again if the Chinese economy starts to outperform (a huge consumer). This should help Glencore and similar stocks to rally. As a result, it should push the mining trust higher with it too.

I like the fact that the trust has a diversified spread of holdings across different mined products.

Of course, a risk is that natural disasters and other supply shocks negatively impact output going forward. Yet this is a risk inherent in mined goods and can’t be reduced, unfortunately.

Both trusts look cheap to me right now and I think investors should take a deeper look at both.

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