Tikehau Capital Sca · EURONEXT:TKO
Tikehau Capital Sca — Tikehau Capital — H1 2023 Earnings Presentation
45 slides from Tikehau Capital Sca's earnings presentation, Jul 27, 2023
Slide 1: H1 2023 Results Presentation
H1 2023 RESULTS PRESENTATION 27 JULY 2023
Slide 2: Today's Speakers
Today’s Speakers Mathieu Chabran Henri Marcoux Frederic Giovansili Co-founder Deputy CEO, Deputy CEO, France, Finance, Operations Franchise, Clients, Solutions TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 2
Slide 3: H1 2023 Key Highlights
01 H1 2023 KEY HIGHLIGHTS TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 3
Slide 4: Robust start of the year
Robust start of the year SOLID POSITIVE FLYWHEEL EFFECTS CONTINUED EXPANSION OF THE FRANCHISE Selective Deployment 1 2 Value-creating exits 60% 15 of 3rd party net new money from offices globally non-domestic investors(1) to date €2.5bn €0.8bn deployed in H1 2023 realized in H1 2023 98% +33% Israel
Slide 5: Delivering solid growth in the first half
Delivering solid growth in the first half Asset Management AuM AM revenues Fee-Related Earnings Realized portfolio revenues YoY growth +14% +11% +20% +5% 160 49 82 41 36 144 31% 78 41 FRE margin 29% €bn €m €m €m H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 H1 2022 H1 2023 TIKEHAU CAPITAL H1 2023
Slide 6: Continued achievements on sustainability
Continued achievements on sustainability H1 2023 sustainability initiatives Thematic & impact platform External recognition 4 areas of focus Tikehau Capital commitment since 2021 Decarbo- Nature & Top 4% Cyber Resilience out of the 910 companies nization Biodiversity in the peer group Finalization o
Slide 7: H1 2023 Operating Highlights
02 H1 2023 OPERATING HIGHLIGHTS TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 7
Slide 8: Selective and prudent capital deployment
1 Solid flywheel effect Selective and prudent capital deployment 2 3 Selectivity 98% 97% 98% rate(1) • Strong multi-local platform allowing to source compelling opportunities • Dynamic deal flow in Direct Lending coupled with high selectivity H1 21-22 average • Good momentum for CLOs issuance (€2.6b
Slide 9: Good realizations momentum
1 Solid flywheel effect 2 Good realizations momentum 3 €0.8bn Examples since January 2023 Private Equity H1 21-22 PE average Energy Transition Private Equity Secondaries (€0.7bn) RA (1) 0.8 0.6 PD 3.1x 55% 2.0x 21% Multiple IRR Multiple IRR H1 2021 H1 2022 H1 2023 H1 2023 H1 2023 Real Assets Private
Slide 10: Robust fundraising momentum maintained in Q2
1 Solid flywheel effect 2 Robust fundraising momentum maintained in Q2 3 Record fundraising for a first-half €3.3bn €3.3bn • Dynamic fundraising momentum for “Yield” strategies 0.1 Capital Markets Strat. over the first half: • Strengthening of European and US CLO platform 0.7 Private Equity H1 2021
Slide 11: Continued expansion of our client base globally
1 Solid flywheel effect 2 Continued expansion of our client base globally 3 AM AuM breakdown by investors nationalities at 30 June 2023 Most represented nationalities in AuM at 30 June 2023(2) 1% Office Opening Year Non-domestic investors €15.6bn 7% 10% 1 United States 2018 7% 2 Italy 2015 +16% 3 Un
Slide 12: Strong progress in franchise internationalization
1 Solid flywheel effect Strong progress in franchise internationalization 2 3 MIDDLE EAST 15 offices c.€700m of AuM(2) from Israeli Insurers €200m multi-asset mandate from a major To date Emirati Sovereign Wealth Fund 2018 2017 2022 2019 2023 ASIA NORTH AMERICA Large South Korean (c.€550m AuM(2)) an
Slide 13: Continued progress in the democratization of private markets
1 Solid flywheel effect Continued progress in the democratization of 2 private markets 3 AM AuM breakdown by client type at 30 June 2023 Key partners Insurance Private banks Distribution Private investors companies platform €11.4bn 3% 10% 6% 28% 22% of AM AuM at 30 June 2023 €40.5bn AM AuM at 30 Jun
Slide 14: Diversified investment strategies providing LPs with a relevant value proposition
1 Diversified investment strategies providing LPs with 2 Differentiating expertise a relevant value proposition 3 A balanced exposure to capture client demand across cycles Investment Activity Investment Activity Capital Markets 0.6 0.6 Value-Add Capital gain-driven returns, Strategies 4.3 22% on ta
Slide 15: High-quality portfolio of companies and assets
1 2 High-quality portfolio of companies and assets 3 High-quality assets LTM REVENUE GROWTH LTM EBITDA GROWTH EBITDA MARGIN AVERAGE LEVERAGE PRIVATE DEBT(1) +14% +13% 19% 4.4x (2) PRIVATE EQUITY(3) +44% +22% 20% 3.9x AVERAGE RENT COLLECTION RATE AVERAGE OCCUPANCY RATE AVERAGE LTV REAL ESTATE(4) 95%
Slide 16: Highly granular and diversified exposure by sector & geography
1 Highly granular and diversified exposure by sector 2 & geography 3 High-quality assets AM AuM breakdown by sector AM Assets breakdown by geography RoW Other North America 1% 9% 8% Dry Powder Dry Powder UK 16% 4% 16% €40.5bn Continental Europe(1) €40.5bn of AM AuM at 30.06.23 of AM AuM at 30.06.23
Slide 17: H1 2023 Financial Highlights
03 H1 2023 FINANCIAL HIGHLIGHTS TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 17
Slide 18: Continued growth in Fee-Paying AuM securing long-term management fee generation
Continued growth in Fee-Paying AuM securing long-term AM management fee generation 40.5 35.6 +51% 4.4 €33.3bn +9% 29.4 2.9 of fee-generating AuM Fee-generating Non fee-paying at 30 June 2023 YoY growth Future fee-paying 3.6 33.3 + 9% Fundraising on strategies +51% 30.5 charging fees on capital Fee-p
Slide 19: Double-digit management fees growth
Double-digit management fees growth AM 160 122 144 +12% 156 +12% H1 2023 increase in line with Fee-Paying AuM growth Performance fees & Management fees YoY growth carried interest 139 97% Strong visibility in Management fees of H1 2023 AM revenues are fee generation 121 and others(1) management fees
Slide 20: Average management fee rate maintained at a high level
Average management fee rate maintained at a high level AM Includes €4m of catch-up fees linked to the final close of the 1st vintage of Private Equity decarbonization fund in Q1 2021 102 98 97 Structural management fee rate improvement since IPO 92 92 81 +26 bps Resilient management fee rate in H1 2
Slide 21: 20% FRE growth year-over-year
20% FRE growth year-over-year AM FRE margin Adjusted FRE(2) margin 29.2% 33.5% 31.3% 36.8% +20% 156 FRE YoY growth 121 57 9 Strong increase in FRE generation Adjusted FRE(2) 47 107 over the LTM 99 Expenses linked to Expenses linked to 9 share-based payment share-based payment 6 49 6 transactions(1)
Slide 22: 78% of the Investment Portfolio invested in own strategies
78% of the Investment Portfolio invested in own strategies at INVEST 30 June 2023 +€469m €(386)m €(6)m €3,528m €3,604m 783 Ecosystem & 726 (22%) direct invest. Of which €387m Including returns of Value appreciation invested into the capital across portfolio Group’s own Asset assets offset by Managem
Slide 23: Realized revenues represent >95% of portfolio revenues
Realized revenues represent >95% of portfolio revenues INVEST 275 • High basis of comparison in H1 2022 • Growing share of realized revenues coming from Tikehau Capital strategies • Strong contribution from Growth Equity and Energy Transition funds to unrealized 129 revenues in H1 2023, reflecting f
Slide 24: Simplified consolidated P&L
Simplified consolidated P&L GROUP €m H1 2022 H1 2023 Management fees & other revenues 139.3 156.1 Operating costs (98.6) (107.3) • +20% FRE YoY growth Fee-Related Earnings (FRE) 40.7 48.9 • Adjusted FRE (excl. linked to share-based payment transactions(1)) of FRE margin 29.2% 31.3% €57m (+23% YoY) R
Slide 25: Consolidated balance sheet
Consolidated balance sheet GROUP €m FY 2022 H1 2023 Robust financial structure supporting the business model Investment portfolio 3,526 3,604 Cash & cash equivalents €3.1bn €1.1bn 65% 522 340 Other current & non-current assets 844 866 Total assets 4,893 4,810 Shareholders’ Equity, Short-term financi
Slide 26: Outlook
04 OUTLOOK TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 26
Slide 27: Fundraising pipeline
Fundraising pipeline Emerging Scaling Established strategies strategies strategies Regenerative Agriculture fund Decarbonization II Cybersecurity IV Green Assets fund Special Opportunities III Value-Add Growth Equity III Value-Add Real Estate II Tikehau 2029 Private Debt Secondaries II Direct Lendin
Slide 28: Flagship strategies to be launched in H2 2023
3 flagship strategies to be launched in H2 2023 Yield Yield Value-Add 2nd vintage of Private Equity 6th vintage of Direct Lending 2nd vintage of Secondaries debt Decarbonization European market leader Early mover Pioneer in decarbonization with solid track record Attractive features and risk-adjuste
Slide 29: Key differentiating strengths allowing us to keep delivering growth
Key differentiating strengths allowing us to keep delivering growth Diversified and High level of Focus on downside protection complementary asset classes alignment of interests and megatrends Continued focus on Compounding strong Synergetic multi-local platform internationalization & innovation bal
Slide 30: Q&A Session
05 Q&A SESSION TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 30
Slide 31: Appendix
06 APPENDIX TIKEHAU CAPITAL H1 2023 RESULTS PRESENTATION 31
Slide 32: Deployment & realizations examples
Deployment & realizations examples Private Debt Real Assets Private Equity Investment Hotel California Investment Exit June 2023 January 2023 July 2023 Direct Lending Value-add Real Estate Private Equity Secondaries • Industry: MarTech Advisory • Asset: Prime hotel located in Paris • Industry: Renew
Slide 33: Complementary strategies focused on downside protection
Complementary strategies focused on downside protection PRIVATE DEBT REAL ASSETS PRIVATE EQUITY CAPITAL MARKETS STRAT. • Leadership position in • Diversified platform with • Patient capital and active • Conviction-based management European mid-market granular mid-sized assets management • Fundamenta
Slide 34: Solid track record in European mid-market lending
Private Debt Solid track record in European mid-market lending Breakdown of Private Debt AuM Secondaries • Leadership position in European mid-market lending allowing for selective (4%) deal sourcing • Attractive features and risk-adjusted returns thanks to floating rate instruments Direct Lending •
Slide 35: Solid performance track record in Private Debt (1/2)
Private Debt Solid performance track record in Private Debt (1/2) Direct Lending: from emerging to flagship strategy Private Debt Secondaries: future flagship in the making Net IRR(1) 7.0% 7.1% 7.7% €3.3bn • Early mover within the private debt secondaries space €2.1bn illustrating our innovation cap
Slide 36: Solid performance track record in Private Debt (2/2)
Private Debt Solid performance track record in Private Debt (2/2) Direct Lending: from emerging to flagship strategy Private Debt Secondaries: future flagship in the making €m Vintage III Vintage IV Vintage V €m 1st vintage Date of inception Dec. 2014 Jul. 2017 Oct. 2020 Date of inception Oct. 2020
Slide 37: A granular and diversified Real Assets platform
Real Assets A granular and diversified Real Assets platform • Diversified platform composed of granular small-sized assets in prime locations • • High-quality long-term tenants Embedded hedge against inflation (rent indexation) >8,500 25% €2.2bn • Prudent and targeted investment approach, while taki
Slide 38: Our value-creating approach in Private Equity & Special Opportunities
Private Equity Our value-creating approach in Private Equity & Special Opportunities Tikehau Capital Expertise • Disciplined investment on value-creating megatrends Others (2%) • Thematics approach with top-tier corporate partners • Conservative use of leverage Special Opportunities Aero & • Patient
Slide 39: Fee-paying AuM analysis at 30 June 2023
Fee-paying AuM analysis at 30 June 2023 AuM breakdown Fee-paying AuM by duration 6% 13% Permanent capital Fee-paying 7% 7y or + Future fee-paying 23% 3 to 6y Non fee-paying 11% €40.5bn 24% €33.3bn Less than 3y AuM 82% FPAUM Sofidy funds Capital Markets Strategies 7% Closed-end funds 26% 91% of AuM i
Slide 40: Performance-related earnings potential
Performance-related earnings potential 18.2 +15% 15.8 12.5 12.2 12.0 +15% +3% AuM eligible to carried interest AuM eligible to carried interest, growth vs. H1 2022 currently invested and above hurdle rate growth yoy 7.1 7.1 7.4 3.9 Tikehau Capital’s approach to carried interest Shareholder- Cautious
Slide 41: Fee-paying AuM and management fee rate by strategy
Fee-paying AuM and management fee rate by strategy in €m 2019 2020 2021 2022 30 June 2023 Real Assets 7,775 8,925 10,188 11,207 11,660 Private Debt 6,727 7,269 9,670 12,255 13,396 Capital Markets Strategies 3,810 4,184 5,124 4,078 4,299 Private Equity 1,637 2,866 3,383 3,877 3,979 Total fee-paying A
Slide 42: Portfolio revenues breakdown
Portfolio revenues breakdown in €m 30-Jun-2022 30-Jun-2023 in €m 30-Jun-2022 30-Jun-2023 TKO funds 116.9 84.8 Dividends, coupons & distributions 78.7 82.2 SPACs 1.5 (3.1) Realized change in fair value (0.3) 0.0 Investments alongside TKO funds 13.2 2.8 Realized portfolio revenues 78.4 82.2 TKO strate
Slide 43: AuM evolution
AuM evolution LTM evolution AuM at Net new Distri- Market Change in AuM at In €m 30-06-2022 money butions effects scope 30-06-2023 Private Debt 13,412 +3,593 (931) +130 - 16,205 Real Assets 13,223 +1,633 (476) (392) - 13,985 Capital Markets Strategies 4,535 (286) (6) +111 (32) 4,323 Private Equity 4
Slide 44: Our Investment portfolio is 78% exposed to our own asset management strategies
Our Investment portfolio is 78% exposed to our own asset 206 management strategies 129 3,604 3,604 206 Other direct investments Ecosystem and direct 797 577 Ecosystem investments investments SPAC sponsoring (€14m) 129 Alongside TKO Strategies 88 Capital Markets Strategies Fixed income & equity 718 R
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