Tikehau Capital Sca · EURONEXT:TKO
Tikehau Capital Sca — Tikehau Capital — FY2022 Earnings Presentation
53 slides from Tikehau Capital Sca's earnings presentation, Feb 16, 2023
Slide 1: Tikehau Capital FY22 Earnings Presentation
TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 16 FEBRUARY 2023
Slide 2: Key Highlights of 2022
01 KEY HIGHLIGHTS OF 2022 TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 2
Slide 3: 2022 key milestones
2022 key milestones AGILE AND DISCIPLINED EXECUTION ROBUST & SELECTIVE DEPLOYMENT HIGH LEVEL OF CLIENT NEW INITIATIVES FOR PRIVATE CLIENTS STRONG FRANCHISE DEMAND RECOGNITION GLOBALLY €6.9bn 97% Deployed by Tikehau Capital’s closed-end funds Selectivity rate on screened opportunities €7.0 bn 22% of
Slide 4: 2022 key figures
2022 key figures AN NEW STEP IN OUR LONG-TERM PROFITABLE GROWTH JOURNEY Asset Management AuM AM revenues Fee-Related Earnings Net Income (Group share) CAGR 2016-22 +28% +41% +81% +17% 38 320 304 Target: >€37bn 97 33% 10% 125 10 FRE 7% 39 margin RoE 8% 3 €bn €m €m €m 2016 2022 2016 2022 2016 2022 201
Slide 5: Diversified investment strategies offering complementary risk-adjusted returns
Diversified investment strategies offering complementary risk-adjusted returns Diversified and complementary asset classes Relevant value proposition for clients Direct Direct Investments Investments €6.4bn €6.4bn Capital Markets 0.9 Strategies 11% (“CMS”) Value-Add Yield 23% 4.1 Private Debt 21% 79
Slide 6: Our priorities in capital allocation
Our priorities in capital allocation SYNERGETIC, DISCIPLINED AND VALUE-CREATING USE OF CAPITAL Invest in priority in own asset management strategies 79% of €3.5bn portfolio Compounding invested in TKO strategies balance sheet, Carry out investments in the alternatives’ ecosystem funding organic & €3
Slide 7: 2022 Operating Review
02 2022 OPERATING REVIEW TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 7
Slide 8: Key operating figures in 2022
Key operating figures in 2022 3 DYNAMIC FUNDRAISING 1 SELECTIVE DEPLOYMENT €6.4bn NNM in 2022 €6.9bn deployed in 2022 €7.0bn NNM for private markets strategies 63% in Private Debt +27% in NNM for private markets strategies 97% selectivity rate in 2022 2 STEP-UP IN REALIZATIONS €1.8bn realized in 202
Slide 9: Strong sourcing capabilities, no compromise on discipline
Strong sourcing capabilities, no compromise on discipline 1 Multi-local platform in place Step-up in deployment in line with the platform’s expansion 2022 examples 97%(2) 14 offices Selectivity rate 95% 6.9 PE cybersecurity Direct Lending Industrial partners PE Growth Impact 5.5 3.6 €6.1bn 2.7 2.8 D
Slide 10: Highly granular and diversified exposure by sector & geography
Highly granular and diversified exposure by sector & geography 1 AM AuM breakdown by sector AM Assets breakdown by geography RoW North America 2% Other Dry Powder 8% Dry Powder 8% 16% UK 16% 5% €37.8bn €37.8bn of AM AuM at 31.12.22 of AM AuM at 31.12.22 Real Estate Continental 30% Europe Top 15 28%
Slide 11: Focus on Real Assets: granular and resilient portfolios
Focus on Real Assets: granular and resilient portfolios 1 DEFENSIVE GEOGRAPHICAL ASSET SPLIT USA RoW UK Dry powder Continental Europe 22% €14bn Strong AuM Compelling High 53% France granularity stickiness track record BREAKDOWN BY VEHICLE TYPE Focus on Liquid funds €8.7bn €1.5bn & others Permanent 9
Slide 12: Defensive portfolios of assets offering downside protection
Defensive portfolios of assets offering downside protection 1 PRIVATE DEBT REAL ESTATE PRIVATE EQUITY 100% Floating rates instruments, >8,500 Real Estate assets held 9.8x Average EV/EBITDA secured with covenants(1) across portfolios(4) entry multiple(5) Conservative use of leverage across asset clas
Slide 13: Acceleration in realizations in 2022
Acceleration in realizations in 2022 2 STRONG VALUE-CREATION FROM SELECTIVELY-SOURCED QUALITY ASSETS Level of realization Strong performance on realized exits in 2022 +20% 1.8 Growth Equity II Energy Transition I Energy Transition I Private Equity 1.5 Disposal to an industrial player Partial disposa
Slide 14: Case study on EuroGroup IPO
Case study on EuroGroup IPO 2 Successful IPO of Strong financial & strategic support from Tikehau Capital Investment date Strategy September 2020 European energy on Euronext Milan transition fund Strengthened >3x >3x ✓ 2,800 12 ✓ organization Increased focus Order book EBITDA growth on operational e
Slide 15: Robust client demand for Tikehau Capital's strategies
Robust client demand for Tikehau Capital’s strategies 3 +27% INCREASE IN NET NEW MONEY FOR PRIVATE MARKETS STRATEGIES IN 2022 Asset Management Net New Money Evolution of Net New Money for private markets strategies +27% +€1.5bn 7.0 6.4 6.4 6.4 (0.6) 6.4 Fundraising acceleration 5.5 0.8 despite a com
Slide 16: Strong franchise recognition globally
Strong franchise recognition globally 3 TIKEHAU CAPITAL REAPS THE BENEFITS OF ITS MULTI-LOCAL EXPANSION AM AuM breakdown by geography at 31.12.22 AuM from foreign investors evolution Foreign investors 3% 14.2 +17% €14.2bn 5% 11% 7% 12.1 37% Tikehau Capital France of AM AuM at 31.12.22 23% €37.8bn Eu
Slide 17: Continued growth with private clients
Continued growth with private clients 3 A LARGE OPPORTUNITY ADDRESSED IN AN ORDERLY FASHION AM AuM breakdown by client type at 31.12.22 Key partners Insurance companies Private investors €8.4bn 4% 7% 11% 22% 15% Tikehau Capital of AM AuM at AM, Banks, Instit. 31.12.22 €37.8bn HNWI, Retail, Private B
Slide 18: Sustainability fully embedded within our business model
Sustainability fully embedded within our business model Sustainability at Tikehau Capital 2022 recognition 60% 20% 65% of AuM in SFDR Article 8 & 9 funds of variable compensation linked to people & climate goal of Group’s debt linked to sustainability criteria 11.6 Low risk rating Thematic and impac
Slide 19: Proven track record and acceleration of our impact strategies
Proven track record and acceleration of our impact strategies STRATEGIES Private Equity Private Debt Private Equity ADDRESSING Cybersecurity Impact Lending Growth Impact III RESILIENCE 2018-2021 2022 2023 CLIMATE & BIODIVERSITY Private Equity Capital Markets Private Equity Real Assets Private Equity
Slide 20: 2022 Financial Review
03 2022 FINANCIAL REVIEW TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 20
Slide 21: Continued increase in Fee-Paying AuM
Continued increase in Fee-Paying AuM AM SECURING LONG-TERM MANAGEMENT FEE GENERATION €35.4bn 94% 37.8 33.0 +14% 4.0 2.8 of AM AuM of fee-paying AuM in 27.3 Non fee-paying which are or closed-end funds have durations will become fee-generating above 3 years Future fee-paying 3.0 28.4 31.4 Fee-paying
Slide 22: Management fees represent 97% of total AM revenues
Management fees represent 97% of total AM revenues AM +11% YOY GROWTH IN MANAGEMENT FEES DESPITE HIGH COMPARISON BASE 304 283 294 +11% 205 +11% AM revenues 264 2022 increase in line Performance fees & carried interest with FPAUM growth 199 vs 2021 High comparison Management fees and others(1) base i
Slide 23: Structural improvement in average management fee rate
Structural improvement in average management fee rate AM AVERAGE WEIGHTED MANAGEMENT FEE RATE RESILIENT IN 2022 102 98 Structural management fee rate improvement since IPO thanks 92 92 to business mix evolution +27 bps Resilient management fee rate 81 in 2022 on a high basis of comparison 71 Calenda
Slide 24: FRE and FRE margin evolution
FRE and FRE margin evolution AM SIGNIFICANT FRE MARGIN PICK-UP IN H2 2022 FRE 70.2 94.9 96.5 Strong FRE margin pick up in H2 2022 FRE margin 35.3% 36.0% 32.9% 36.7% 35.4% 36.2% 29.2% +7pts 293.5 FRE margin growth in Management fees 263.6 H2 22 vs. H1 22 and others(1) 198.6 H1 H2 H1 H2 €m 2021 2022 A
Slide 25: Performance-related earnings potential
Performance-related earnings potential AM 16.9 +21% 14.0 11.2 12.1 +21% +31% 9.2 AuM eligible to carried interest AuM eligible to carried growth vs. 2021 interest, currently invested and above hurdle rate 7.1 growth yoy 6.3 5.5 Tikehau Capital’s approach to carried interest 3.0 Shareholder- Cautious
Slide 26: Investment portfolio at 31 December 2022
Investment portfolio at 31 December 2022 INVEST 79% OF THE INVESTMENT PORTFOLIO IS INVESTED IN TIKEHAU CAPITAL OWN STRATEGIES +€1.4bn €(0.6)bn +€0.1bn €3.5bn 209 Other direct investments 726 (21%) 516 Ecosystem investments €2.7bn SPAC sponsoring (€42m) 264 Ecosystem & Alongside TKO strategies 570 10
Slide 27: Portfolio revenues (1/2)
Portfolio revenues (1/2) INVEST INCREASED CONTRIBUTION FROM TIKEHAU CAPITAL STRATEGIES 387 125 43% Main contributors Revenues from 298 Eurazeo & DWS +14% disposals of portfolio revenues vs. 58% in 2021 127 Ecosystem & 99 direct investments Strong performance of TKO strategies 171 +5% 57% +5% YoY gro
Slide 28: Portfolio revenues (2/2)
Portfolio revenues (2/2) INVEST 2/3 OF REALIZED REVENUES IN 2022 387 125 Revenues from 298 Eurazeo & DWS +14% disposals Includes positive change in fair value from Univision, Tikehau Capital funds, and positive €/$ exchange rate effects 104 Unrealized revenues 142 12 Realized portfolio Driven by rev
Slide 29: Simplified consolidated P&L
Simplified consolidated P&L GROUP €m FY 2021 FY 2022 Management fees & other revenues 263.6 293.5 Operating costs (168.7) (196.9) Fee-Related Earnings (FRE) 94.9 96.5 FRE improvement despite acceleration in investments in AM platform & high comparison base FRE margin 36.0% 32.9% Realized PRE 19.2 10
Slide 30: Consolidated balance sheet
Consolidated balance sheet GROUP €m FY 2021 FY 2022 Robust financial structure supporting the business model Investment portfolio 2,685 3,527 Cash & cash equivalents €3.1bn €1.3bn 65% 1,117 522 Other current & non-current assets 811 844 Total assets 4,614 4,893 Shareholders’ Equity, Short-term finan
Slide 31: Shareholder returns
Shareholder returns +17% PROPOSED INCREASE IN ORDINARY DIVIDEND 0.50 0.40 0.70 +17% ordinary dividend growth vs 2021 +17% Linked to the strong value creation across the Group’s business lines 0.60 0.50 0.50 0.50 >80% of Asset Management EBIT 0.25 € 2017 2018 2019 2020 2021 2022 (1) Ordinary Special
Slide 32: Outlook
04 OUTLOOK TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 32
Slide 33: Our key strengths
Our key strengths Mid-market expertise, on thriving verticals Strong Impact platform scaling up Offensive differentiation Enhanced private clients offering for future growth Growing multi-local footprint Asset class diversification Defensive Meaningful skin in the game Embedded profile Low leverage
Slide 34: Outlook: staying the course to deliver on our objectives
Outlook: staying the course to deliver on our objectives CONFIRMATION OF MID-TERM OUTLOOK Structural tailwinds Complementary & well- Strong balance sheet, > positioned strategies a critical asset Cyclical headwinds Favorable long-term allocations Mid-market expertise Greatly aligns interests LPs mor
Slide 35: Strategic partnership with SFI
Strategic partnership with SFI A REINFORCED SHAREHOLDER BASE FOR TIKEHAU CAPITAL Strong addition to Tikehau Capital’s platform Illustrative simplified organisation chart (post-transaction)(1) SFI commits to invest €400m in Tikehau Capital Advisors (“TCA”), Tikehau Capital’s main shareholder Founders
Slide 36: Appendix
05 APPENDIX TIKEHAU CAPITAL FY22 EARNINGS PRESENTATION 36
Slide 37: 2023 fundraising priorities
2023 fundraising priorities Emerging Scaling Established strategies strategies strategies Regenerative Agriculture fund Decarbonization II Cybersecurity IV Green Assets fund Special Opportunities III Value-Add Growth Impact III Value-Add Real Estate II Tikehau 2025 Private Debt Secondaries II Direct
Slide 38: Our conviction-based thematic investments
Our conviction-based thematic investments Long-lasting expertise in mid-market financing across asset classes and strategies Capital Markets Private Debt Real Assets Private Equity Tactical Strategies Strategies Mid-market financing Asset transformation Growth Special financing Conviction-based and
Slide 39: Strong execution in 2022
Strong execution in 2022 MAJOR PROGRESS ON EACH PILLAR OF OUR OPERATING MODEL 1 Strong deal flow, selective execution 2 Step-up in realizations 3 High level of client demand Private Equity Private Equity Private Equity Private Debt 18% Private Debt 18% 16% Private Debt Real Assets €6.9bn €1.8bn €6.4
Slide 40: Private Debt
Private Debt PRIVATE DEBT Including Multi-Asset Solutions €4.3bn €14.8bn deployed • Final closing at €3.3bn for Direct Lending V AuM at 31.12.22 (+57% vs vintage IV) • 4 CLO issuances (2 in Europe, 2 in the US), total NNM of €1.5bn €1.0bn realized • Success of secondaries strategy with €0.6bn AuM €3
Slide 41: Strong downside protection within private debt strategies
Strong downside protection within private debt strategies AuM breakdown by strategy High quality portfolio companies and strong investment discipline Secondaries Lev. Loans 8% Others 4% 4% ~20% Average EBITDA margins in +17% +32% LTM revenue growth (1) LTM EBITDA growth(1) portfolio companies(1) Dir
Slide 42: Real Assets
Real Assets REAL ASSETS €1.4bn €13.7bn deployed AuM at 31.12.22 − Record NNM for Sofidy (private investors) at − €1.4bn Gain of a €0.25bn real-estate evergreen €0.5bn mandate in Germany realized − Launch of 2nd vintage of European value-add fund with €0.4bn AuM at 31/21/22 €2.3bn net new money TIKEH
Slide 43: Capital Markets Strategies
Capital Markets Strategies CAPITAL MARKETS STRATEGIES €4.1bn AuM at 31.12.22 • Difficult market conditions in 2022 • €(651)m of NNM in 2022, with improving flow trends since Q4 2022 • Robust performance in 2022 versus peers • Ongoing work on product range bearing fruits TIKEHAU CAPITAL FY22 EARNINGS
Slide 44: A key component of Tikehau Capital's platform
A key component of Tikehau Capital’s platform CAPITAL MARKETS STRATEGIES Strong aum growth since ipo Strong performance recognition Key benefits for tko Public markets expertise valuable +14% for the broad TKO platform 2016-22 CAGR 4.1 AuM at 31.12.22 Overall Rating Global addressable client base (p
Slide 45: Private Equity
Private Equity PRIVATE EQUITY Including Special Opportunities €1.2bn €5.2bn deployed AuM at 31.12.22 • Launch of growth impact and regenerative • agriculture funds Active deployment in Aerospace and €0.3bn realized Cybersecurity funds €1.1bn • Value-creating exits in energy transition and growth equ
Slide 46: Value-creation in Private Equity
Value-creation in Private Equity DISCIPLINED INVESTMENT ON STRONG VERTICALS PRIVATE EQUITY OUR VERTICALS STRONG GROWTH TRAJECTORY STRONG REALIZED CONSERVATIVE ENTRY MULTIPLES PERFORMANCE Decarbonization Nature & Biodiversity +60% +47% LTM revenue growth(1) LTM EBITDA growth(1) 2.1x 9.8x Average EV/E
Slide 47: Tactical Strategies
Tactical Strategies TACTICAL STRATEGIES (1) €0.3bn €1.4bn deployed AuM at 31.12.22 • Strong start for 3rd vintage of special opportunities €0.1Bn • Healthy deployment pace on 2nd realized vintage of special opportunities €0.5Bn net new money TIKEHAU CAPITAL (1) Special Opportunities figures included
Slide 48: Focus on Tactical Strategies
Focus on Tactical Strategies LEVERAGING ON TKO’S PLATFORM TO OFFER DIFFERENTIATED INVESTMENT SOLUTIONS TACTICAL STRATEGIES INVESTMENT UNIVERSE 2 CONTRARIAN INVESTMENT PROPOSITIONS Broad investment scope providing multi-asset Special Opportunities Multi-Asset Solutions exposure and navigating across
Slide 49: Fee-paying AuM analysis at 31 December 2022
Fee-paying AuM analysis at 31 December 2022 AuM breakdown Fee-paying AuM by duration 6% 13% Permanent capital Fee-paying 6% 7y or + Future fee-paying 31% 3 to 6y Non fee-paying 10% €37.8bn 25% €31.4bn Less than 3y AuM 83% FPAUM Sofidy funds Capital Markets Strategies 6% Closed-end funds 19% 94% of A
Slide 50: A synergetic and diversified investment portfolio
A synergetic and diversified investment portfolio OUR BALANCE SHEET PORTFOLIO, A KEY STRATEGIC ADVANTAGE Complementary 3,527 exposure Ecosystem & 726 direct investments Market intelligence 2,685 & franchise expansion SPACs Co-invest. 2% Capital Markets A balanced Strategies 9% Private Debt 4% asset
Slide 51: Disclaimer
Disclaimer By viewing or receiving or reading this Presentation (as such term is defined herein) or attending any meeting where this Presentation is made, you agree to be bound by the limitations, qualifications and restrictions set out below: The existence and content of the presentation that follo
Slide 52: Disclaimer
Disclaimer This Presentation includes certain pro forma financial information about the Group. This pro forma financial information has been prepared on the basis of historical financial statements of the Company but has not been audited by the Group’s auditors. The pro forma financial information i
Slide 53: Thank You
THANK YOU FY22 EARNINGS PRESENTATION 53