Tikehau Capital Aktie

Good evening, ladies and gentlemen. Thank you for joining us today for our H1 results. I will start with the first couple of slides -- 4 slides and hand over to Henri. First slide, market environment remain volatile and selective. Geopolitical development continue to weigh on visibility, financing conditions remain relatively tight and investors remain highly selective in their capital allocation decision. In that context, discipline matters more than ever, discipline in deployment, underwriting, capital allocation and cost management. This environment is challenging, but it also creates opportunities for experienced professionals.

Importantly, we are also seeing encouraging signs of improvement in exit activity, particularly in part of private equity and real estate. So the environment remains challenging, but it is supportive of differentiated platform that can execute with discipline, innovation, entrepreneurship and agility.

Next slide. H1 2026 marks a clear step-up for Tikehau and in our view, a major first step in our harvesting phase. What we are seeing now is the translation of execution into profitability and earnings. For Tikehau Asset Management, we delivered a strong increase in profitability, supported by continued operational momentum, client base expansion and strong operating leverage. On the investment portfolio side, we delivered active portfolio rotation and value crystallization as a consequence.

The combination of these 2 enzymes results in a doubling of net results group share year-on-year. More fundamentally, this semester confirms that our model is becoming more scalable, more visible in its earnings power. Now a few key figures for H1. We reached EUR 53.5 billion of AUM, up 5% year-on-year, reflecting continued franchise momentum in a still selective fundraising environment.

For Tikehau Asset Management, management fees increased by 13% and more important, core FRE increased by 32%, bringing core FRE margin above 40% to 42% -- this is an important milestone. It shows that the operating leverage embedded in the platform is now materializing clearly in our profitability. On the balance sheet, we generated EUR 310 million of realized revenue and EUR 220 million of total portfolio revenue in H1, reflecting active portfolio rotation and value crystallization in this challenging environment. All that translates into EUR 165 million of net results group share, which is double of H1 2025.

So the key point here is that we are seeing both stronger recurring earnings from asset management profitability and meaningful contribution from the balance sheet. A few takeaway for today. First, on Tikehau Asset Management. Our first key takeaway is that the profitability inflection in Asset Management is now clearly visible and will accelerate. We now have a more focused, robust and streamlined platform, better positioned to convert operating leverage into earnings growth. At the same time, our franchise continues to demonstrate strong momentum as illustrated by the successful closing of the 6 direct lending vintage, for instance, at EUR 5.2 billion, around 60% larger than its predecessor.

More broadly, we are pursuing a more selective approach to growth focused on strategies and initiatives that are scalable, profitable and aligned with our long-term model. Now on the balance sheet side, second takeaway is that the balance sheet is delivering value crystallization and benefits from greater financial flexibility.

We have been actively rotating the portfolio in the first half. At the same time, we have materially strengthened our financial flexibility with now $1.6 billion of available short-term resources, EUR 500 million of cash and EUR 1.1 billion in our RCF and no debt maturity before 2029 following redemption that will take place in August. Our investment-grade rating was reaffirmed by both S&P Global and Fitch Rating. This stronger balance sheet provides both resilience and optionality as we move into the next phase of development. I'll now hand over to Henri for a detailed look at our operating highlights.

Thanks, Antoine. Good evening, everyone. Nice to be here with you tonight for this H1 call. I'm now moving to Page 10, and I'll start maybe with our transaction and commercial activity for the last 12 months end of June 26. So as said by Antoine, but I think that overall, in a market environment that remains highly selective. The Tikehau platform has continued to show resilience across deployment, realization and fundraising.

So starting with deployment over the last 12 months to June 26, as you can see, deployment has reached EUR 7 billion, moving from EUR 5.7 billion to the last 12 months of June '25. H1 '26 was marked by the slower pace of deployment in credit, mainly due to our CLO activity, translating once again here our cautious approach in the current context. As far as realizations are concerned, so they rose to EUR 3.7 billion from EUR 2.7 billion last year, showing once again here our ability to crystallize value across all our strategies. This has actually translated into EUR 3.3 billion of return of capital distribution to our LPs, reinforcing here the strength of our asset management flywheel.

On the right part of the page, our commercial momentum translated into EUR 5.7 billion of net inflows over the last 12 months. H1 '26 fundraising activity at EUR 1.7 billion as here to be compared to H1 '25. As a reminder, H1 '25 benefited from a high comparison basis as it was notably linked to the [ Aegis ] continuation vehicle, and we also had for the first semester of last year, our master fund in credit, Tikehau Direct Lending #6; and secondaries #2. We are ending end of June with a position of EUR 7.2 billion of dry powder, giving us once again here flexibility entering into H2. So overall, despite, I would say, a more demanding market backdrop, last 12 months view shows continued scale, strong realization activity and solid capital formation.

We are now going to provide you a few explanation on our main business unit, starting by private credit, Page 11. Here, once again, the platform has remained both resilient and highly selective in the first half. Starting with a few data points on our portfolio quality. First, our discipline has remained unchanged. For the direct lending funds, 100% of our investments are covenant attached and annualized default rate has remained stable at 1.5%.

We just announced that our sixth vintage of direct lending strategies at EUR 5.2 billion. And here, average leverage at closing stood at 4.3%, so remaining quite secured. At the same time, we have maintained a high very high degree of selectivity, as you can see on this page, with a 98% rejection rate for H1. Just a few data points on activity. We completed 43 investments in the first half, representing EUR 1.3 billion deployed. Around 50% of deployment came actually from add-on financing in direct lending, which reflects our focus on supporting existing portfolio company here once again in a more selective market. We remain also active but prudent in the CLO market with issuance reflecting a disciplined pace and less clearly supportive environment than last year in '25.

As far as the exits are concerned, we completed 24 exits in H1 '26, corresponding to EUR 0.6 billion of realization and realized performance remains here, once again solid with an average MOIC of 1.2 for direct lending and special opportunity. So overall, as far as private credit is concerned, I think that we are reflecting here what we've always been focusing on strong underwriting discipline, resilient portfolio quality and continued actively focused on attractive risk-adjusted opportunities.

Providing you now a few data points on our real estate business, Page 12. We have maintained a dynamic transaction activity in a market that has here once again remains relatively limited and muted -- we actually deployed EUR 0.7 billion in H1 '26, supported by attractive opportunities across our platform. To be noted, we completed 2 co-investment transactions, representing an aggregate value of EUR 400 million, allowing us to onboard here new clients, new funds and co-investment opportunity. One of the key transaction in the period was actually the acquisition alongside co-investors of the Spanish portfolio of around 5,000 residential units valued approximately EUR 300 million.

We have also remained focused on attractive entry condition and here specifically in our core and core+ strategies, where we have the overall acquisition yield during the H1 has reached 9.6%. On the portfolio quality side, a few data points. Our real estate platform represent more than 9,000 units with an average LTV of around 30% here, again, illustrating our conservative use of leverage. On exits, EUR 0.3 billion during the first semester. This disposal were actually mainly primary granular assets in Spain, in Iberia, in France completed with an average MOIC of 2.2% for our value-add strategies and 1.2 for our core plus strategy.

More broadly, as far as real estate is concerned, as a conclusion, market backdrop remains selective, but we continue to see attractive deployment opportunities, and we have a robust pipeline in terms of identified exit opportunity for H2. I will now move to private equity business, Page 13. Here, the first half was characterized by continued value crystallization while deployment has remained deliberately selective. We have deployed EUR 0.3 billion across 3 investments.

The approach remains conviction-led focused on dedicated vertical and also focusing on sourcing larger transactions, enabling us to generate co-investment. That being said, the number of transactions have been signed at the end of June, not yet closed, and they will benefit to our second half. A few data points on our portfolio quality side. Average leverage stood at 3.xx and the average EV to EBITDA multiple at entry overall for all our strategy now stands at 11.3x in the current environment.

As far as exits are concerned, we completed on private equity 3 exits during the first semester, representing EUR 0.3 billion realized an average MOIC of 1.7x. This exit actually came from our cybersecurity, aerospace, defense and growth equity strategies. Here, once again, we continue to benefit from a healthy pipeline in terms of identified exits opportunity, which give us confidence in our ability to further crystallize value for our LP going forward during the second semester. Overall, I would tend to say that PE remains a clear strategy where discipline on entry and strong thematic positioning continue to support the attractive exit outcomes.

Jumping into Page 14 and providing you a few data points on our capital market strategy. '26 fundraising was slower than last year, but overall performance remains solid. Net inflows were clearly affected by outflows during the first quarter, but the picture improved in the second quarter with renewed positive net inflows.

Investor demand has remained supported by the resilience of our short duration strategy in a context where clients continue to look definitely for yield with controlled duration risk. The quality of the platform is also reflected in external recognition. And here, we have provided you a few data points on that. Several of our strategies continue to benefit from strong ratings from Morningstar, including notably Tikehau Short Duration, Tikehau Credit Court Theme, Tikehau Listed Real Estate. We also continue to broaden our international distribution footprint with particular focus in the U.K., Switzerland, Italy and Germany, on which our team have been working strongly since the last quarter. So overall, while fundraising was slower in the first half, CMS remains an important contributor to the diversification of the group, visibility and international reach of our platform.

Now we've gone through the 4 business units. Maybe one quick focus on Page 15 and the solid fundraising for our flagship strategies. In direct lending, we completed the fundraising of our sixth vintage with EUR 5.2 billion in H1 '26, which is around 60% larger than the predecessor fund. This is once again here, a major milestone for our platform and a strong sign of continued investor confidence in our European mid-market direct lending franchise, new LP coming from new geographies, so benefiting and here demonstrating the track record that we've been building in direct lending now for more than 15 years.

In private equity fundraising also continued to progress well. A few data points on our flagship thematics. First one on decarbonization strategy, which has now reached EUR 2.6 billion, progressing towards a target of more than EUR 3 billion with a fundraising period that will end in Q4 2026. On aerospace and defense strategy overall has reached EUR 700 million for Vintage #2 and co-investment vehicle.

So progressing towards here a target of EUR 1.4 billion and fundraising will be running until end of the year 2026. Across this strategy, we continue to see strong interest, specifically in the current geopolitical and economical environment that we're going through since the beginning of the year. So taken together, I would say that these dynamics confirm the relevance of our flagship strategies and the continued depth of demand from our client base. That's it for Tikehau Asset Management optional KPI. I will now hand over the mic to Vincent for the financial highlights. Vincent, the floor is yours.

Thank you, Henri. Good evening, everyone. Very happy to be here with you today. So a few data points and metrics around our Tikehau Asset Management platform. So H1 2026 marked a clear step-up in the profitability of Tikehau Asset Management. We delivered across all key operating metrics, reflecting clearly the embedded scalability of our model. First, fee-paying AUM increased by 7% year-over-year, supporting the continued expansion of our recurring revenue base. As regards management fees, they increased by 13% year-on-year, reflecting both asset growth and a resilient revenue margin. But most importantly, as disclosed on the right-hand side, this growth translated into a significant increase in profitability. Core FRE increased by 32% year-on-year with a 42% core FRE margin.

As regards Asset Management EBIT, it grew by 22% year-on-year with a 39% EBIT margin. So this is exactly the operating leverage we have been building towards larger platform, disciplined cost management and a stronger conversion of revenues into earnings. So in short, H1 confirms that the Asset Management business is not only growing, it is becoming materially more profitable.

On the next slide, a few data points on fee-paying AUM. Fee paying AUM continued to grow, reaching EUR 43.5 billion at end June 2026, which compares to EUR 40.8 billion 1 year earlier. So that represents a 7% year-on-year growth. This progression is significant because fee-paying AUM is the foundation of our recurring management fee generation. And on the other side, in correlation, revenue increased in terms of management fees by 13% year-on-year from EUR 169 million to EUR 190 million.

So as a consequence, total asset management revenues reached EUR 198 million, which includes EUR 8 million of performance-related earnings. As regard the quality of these revenues, it remains pretty high, 96% of the H1 AM revenues came from management fees. with an average revenue margin, which remained resilient at 90 bps, reinforcing the stability and predictability of our fee base. The message here is really clear. Our platform is generating larger, more recurring and more resilient management fees, which creates a strong base for long-term earnings growth.

On Slide 19, let's now focus on profitability specifically. And as mentioned by Antoine, this is one of the most important messages we have for H1 2026 as core FRE increased by 32% year-on-year from EUR 60 million to EUR 80 million. At the same time, the core FRE margin in percentage points increased and expanded significantly from 36% to 42%, which is a 6-point improvement year-on-year. This shows clearly an operating leverage, which is embedded in our platform as revenue grows, a greater share is converting into earnings. As regards Asset Management EBIT, it also increased significantly, as I mentioned, 22% year-on-year to EUR 78 million. The EBIT margin also increased from 35% to 39%, which is a 4-point improvement year-on-year. So overall, this performance was driven by solid revenue growth, disciplined execution and continued cost management.

Moving now to performance-related earnings on Slide 20. Beyond recurring management fees, performance-related earnings represent a meaningful future profit driver for the group. As we disclosed it on the left-hand side, AUM eligible to carried interest increased by 5% year-on-year to EUR 25.2 billion. Our approach remains the same. We are disciplined, shareholder-friendly. We allocate carry in a way that aligns shareholders, teams and clients. We also apply cautious P&L recognition. And in addition, we view this performance-related earnings as a material midterm profitability driver and carry not a short-term accounting exercise. On the right-hand side, we show the embedded unrealized performance-related revenues, which stands at approximately EUR 207 million. Out of this amount, around EUR 160 million is expected to mature by 2029. So this creates tangible visibility on potential future value crystallization in this regard. Our profitability is not only improving today as a platform has also clear embedded earnings potential for the coming years.

Slide 21, I move to our investment portfolio. So the investment portfolio remains a key pillar of our business model. We have at the end of June 2026, a portfolio which remains granular with 318 positions and which stood at around EUR 4 billion, which compares to EUR 4.4 billion at end 2025. The decrease is primarily attributable to an active rotation and also value crystallization, which includes EUR 637 million of exits and return of capital.

At the same time, we continue to invest selectively with EUR 261 million of new investments, which includes EUR 218 million invested in our asset management strategies. Also, market effects reached minus EUR 61 million, mainly linked to the fair value changes related to some direct legacy and listed investments, and we also have some currency effects amounting to a positive EUR 10 million, which is linked to the appreciation of the U.S. dollars against the euro.

The portfolio remains strongly aligned with our asset management platform. 76% is invested in secure capital strategies and the remainder, 24% relates to ecosystem and direct investments. Our investment portfolio is an active growth compounding engine that supports our strategies, and it clearly reinforces the alignment with our clients, and it creates value over time, which brings us on Slide 20 --22 to a snapshot on portfolio revenues.

So H1 2026 was a period of value crystallization for the investment portfolio. They stood and they doubled year-on-year, reaching EUR 222 million. This performance was driven primarily by realized revenues and notably because of the disposal of the Schroder stake earlier this year. That transaction, in particular, with Schroder generated a EUR 217 million capital gain with a 64% gross IRR and a 1.65x gross MOIC, which is a clear example of our ability to create and crystallize value from the balance sheet.

This period also included positive value changes in private equity strategies and also in our co-investment in a leading U.S. radiology service provider. These positives were partly offset by negative fair value changes, which are linked to certain direct legacy and listed investments, which I just mentioned earlier. And in addition, currency effects were also favorable in H1 2026, contributing to a positive EUR 10 million.

If we now turn on the P&L. On the following slide, H1 2026 demonstrates the strength of Tikehau Capital's 2 growth engines, asset management and also of the investment portfolio. The core FRE increased by 32%, reaching EUR 80 million with a core FRE margin of 42%. Asset Management EBIT rose by 22%, reaching EUR 78 million with a margin of 39%. At the same time, investment portfolio revenues doubled to EUR 222 million. This combination drove net results to EUR 165 million, close to the double of the level of the H1 2025.

So as a conclusion, profitability has materially increased, supported by a more efficient asset management platform and also a balance sheet now actively crystallizing value. Last but not least, to finalize this financial review, a snapshot on the balance sheet before handing over to Antoine. So our model is supported by strong financial means with EUR 3.2 billion of shareholders' equity and short-term financial resources of EUR 1.6 billion. Our financial debt reached EUR 1.5 billion at the end of June 2026. And we've got an early redemption of our 2026 bonds, which is expected in August '26, and it will further simplify debt profile, giving us greater financial flexibility to pursue our growth. Fitch ratings reaffirmed our investment grade, BBB- rating with a stable outlook earlier this month in addition to S&P Global, who also confirmed it earlier in Q2.

Overall, we have the financial resources, flexibility and credit profile needed to support disciplined growth and continued value creation. Thank you for your attention, and I will hand over to Antoine for the concluding remarks and outlook.

Thank you, Vincent. A few slides to conclude. First of all, as you noticed, a key priority for us has been to simplify and streamline the organization to concentrate resources on our core growth platform. We have successfully grouped our real estate activity into one unified platform, and we are very enthusiastic about the growth and the profitability in this real estate market. It's an important step for us in terms of scalability and operating efficiency and asset sourcing.

We also announced the disposal of 80% stake in Homunity and Opale, our digital subsidiary, while remaining a noncore shareholder in order to give these businesses greater autonomy after helping them reach profitability and scale. In parallel, we signed a separation agreement with Duke Street, 2013 investment, consistent with our focus on simplifying the group structure and concentrating resources on core activities.

The logic behind all this action is clear. We are sharpening the focus of the platform to support the continued growth and more important, the profitability of our asset management. In an entrepreneurial journey, it takes time to build, to scale, and we think that now it's time to harvest and be much more efficient if we can say that.

Moving now to the next and last slide. Looking ahead, we enter the next stage of our development with confidence, focus and ambition. On Tikehau Asset Management, we now benefit from a more streamlined organization, a more integrated operating model, which should continue to support profitability and earnings growth. As in prior years, FRE generation is expected to be more weighted towards the second half and private equity fundraising could reinforce this pattern in 2026 with potential catch-up fees. We also have a healthy private equity and real estate exit pipeline, which supports visibility on future value crystallization and monetization for our LP.

The balance sheet is stronger than ever with EUR 1.6 billion, as Vincent highlighted, of short-term resources and no debt maturity before 2029. Taken together, this element give us a strong confidence in our ability to accelerate profitability growth while continuing to create long-term value for our shareholders and also for our LP and investor. As you know, we are an investment firm and our core focus is to deliver strong and robust performances across the cycle for investor and LP, and that would translate into more shareholder value creation. Thank you for your attention. We'll be happy now to take your questions.

[Operator Instructions] The first question is from Dawid Pych of RBC.

Dawid Pych, RBC Capital Markets. The first one on the net new [indiscernible]. While you have cited a high comparison base, I guess, stripping the positive one-offs out, the underlying run rate also appears to be slowing. I guess how much of that reflects softer LP appetite versus simply just digestion period following some of the 2025 closings? And with the decarbonization [ RFPs ] and defense flagship still in fundraising mode, how confident are you in the last 12 month run rate being the reasonable anchor going forward? And then second question on capital deployment and some of the strategic priorities. With the available resources that you've got and no debt maturities until 2029 and healthy leverage ratio as well, I guess, how are you thinking about further balance sheet reductions and also returning more capital to shareholders potentially through some buyback programs?

So maybe on the first part of your question on the run rate on fundraising. Well, as just explained, I mean, 2025, we had a finalization of secondaries # 2 in private credit and then direct planning #6, which affected mostly H2 '25 and the beginning of 2026. Then as we said, on our CLO business, we have clearly and voluntarily reduced the pace of launching new you say CLO vehicles. So this is roughly the main effect that we've gone through over the first semester. Now as you said, obviously, on private equity, we have our 2 flagship on the road. They are currently investing, divesting. We will be fundraising. So Vintage #2 for decarbonization and energy transition and Vintage #2 for aerospace and defense.

We think that more than ever, these 2 thematics are clearly in the center of what's going on as we speak. We've been talking about the geopolitical tension, economical tension. And these 2 thematics are clearly at the center of what's going on all over the world. And to illustrate that and as well to illustrate our confidence in the coming fundraising, we've just announced on our Aerospace and Defense Vintage #1, our fifth exit, which means that with an average duration of roughly 4 years, we have a DPI, which is close to 1.

So we've been able to create value to bring back capital to our LP. And as a consequence of that, our new vintage on aerospace and defense is currently in fundraising mode, deployment mode as well. As far as your question on deployment is concerned as well, we've been announcing significant investments, notably on our aerospace and defense recently. These deployments are currently signed, but not yet closed. This is why we actually see for H2 as well a strong deployment pace in the context of a strong fundraising for RFP.

You had a second question on our capacity to enhance shareholder return. I think that what is key here is that, as we said back in February during our Capital Market Day in London, we are clearly now entering this harvesting mode, accelerating our portfolio rotation, notably accelerating on this several pillars, key driver of value creation. On one side, our asset management business, increasing FRE capacity to generate more carried interest. And then the second leg with the portfolio, accelerating the rotation of our portfolio. And obviously, effectively, this potential acceleration and value creation from our portfolio will drive dividend-wise for the coming years.

As far I think you had also a question on the share buyback. Our share buyback is still active with a size of EUR 190 billion. We still have a capacity of close to EUR 50 billion still open. So still very active in the market.

The next question is from Nicholas Herman, Citi.

A couple, please. Firstly, I've not seen any mention of the targets you set at the start of this year for 2026 in the FRE, net profit and AUM target. So where are we on those, please? Secondly, could you just talk about what you're seeing in terms of retail appetite for real estate? Certainly, it seems like on the institutional side, that demand has notably picked up. Are you starting to see that turn on the retail side? And then finally, on Duke Street, what proportion of your management fees is that with about 15% be a reasonable proxy and also a proportion of FRE?

So maybe I will start with question #3 about Duke Street. We were not consolidating Duke Street neither in our AUM, neither in our FRE, neither in our management fees. It was consolidated by specific means within the line of our profit and loss. So it will not below our FRE, below result of the portfolio. So the fact that we are exiting Duke Street will not affect our AUM. We were not -- we had a minority stake in Duke Street. So this will not affect our AM, and this will not neither affect our FRE or performance related earnings.

Coming back to your question #1 on our target. Well, clearly, here, we see that we see the path to this milestone as being driven by the trend that we have already seen visible in H1. As we said in our press release, FRE generation is typically more weighted towards the second half, and that could be reinforced this year by our private equity fund. So the main building blocks for FRE are really continued growth fee growth on our larger base, combined with a more integrated and streamlined platform, notably from our real estate business.

On the net results, to come back to your question on targets, beyond FRE, key driver here is once again value crystallization from our investment portfolio. Here, once again, I think that in H1, we already saw active portfolio rotation, strong realized revenue, significant contribution from exits. Looking ahead, we clearly have a healthy private equity and real estate pipeline, which here once again gives us further visibility on value creation. So I think that combined with enhanced financial flexibility and stronger balance sheet, these elements support confidence on our ability here once again to progress towards continued earnings growth. And I will turn maybe also to come back. But since February, clearly, a global backdrop has become more uncertain, weaker macro, fiscal, geopolitical volatility, slower fundraising environment.

Some discussion may clearly take longer. But from a long-term business like ours, this may create timing effects, but it does not change our trajectory. And clearly, what remains crucial is once again our ability to keep accelerating profitability generation as reflected in the 2029 guidance we gave. We are not -- once again, important to hear, but we are not pursuing growth for growth's sake. We remain highly selective across deployment, realization, AUM growth with a clear focus on profitable AUM. You had a question on retail and real estate. Antoine, you may want to come back on this question. But clearly, here, real estate, retail market has been suffering now for quite a few years.

We still see this market as quite muted us as far as investment now it's been 18 months to 2 years that we came back on deployment on real estate. We see more and more good investment opportunity, and we provide the opportunity to our LP to come back in the real estate market through this transaction. We mentioned residential opportunity in Spain. We have similar one in France recently. And through co-investment vehicle, we've been able to attract new co-investors. But as far as retail is concerned on real estate, we still see the market quite muted.

And maybe if I add one thing on that. As you know, we have 34% of our AUM is coming from what we call retail, but it's really several components into that. We have, on one hand, high net worth and ultra-high net worth individual, which has been clearly the DNA of Tikehau back 20 years ago. And we add, thanks to Sofidy, more retail channel through IFAs, unit-linked product in France. And we have really these 2 components. What we can say is that in the U.S. the market probably retrenched a little bit and you see all the noise with private credit and all that. But thanks to our 2 components, we are still very active on one of them, which is ultra-high net worth and high net worth individual.

And by the way, it's for real estate, but not only for real estate. And then it's probably much more calm when it comes to pure retail. But despite that, we continue to fundraise in our real estate, probably less spectacular than in the year 2020. But the 2 engine within the retail are still working.

The next question is from Philippe [indiscernible].

Maria, we have some questions that came through the webcast. So if I'm regrouping some of them, maybe on the investment portfolio side of things. How should investors think about the revenues for our investment portfolio? And also how to think about the future value crystallization from the remaining EUR 4 billion of investment portfolio going forward?

Okay. I will take this one. So first, just to reiterate what we said at the strategic update. Portfolio rotation is a clear part of how we want to manage the balance sheet going forward, and that's what we did with the exit of Schroders in H1. So the overall idea is to be more active to increase the portfolio velocity and to crystallize value. So overall, we are taking a very pragmatic approach, including, of course, in H2 with one key objective in mind, which is to improve profitability generation. So that said, we have a granular more than 300 investment lines, which is well diversified across asset classes, which helps mitigate the impact of isolated valuation movements. I think it's worth mentioning that we see some positive contributions from our aerospace and defense strategy as well as decarbonization, where portfolio companies have delivered very strong profitability growth over the past quarters, and we hope it will continue to do so in the next quarters.

So on H2, to answer specifically the question, I would be a little bit cautious about guiding specifically on marks because it depends upon market conditions and company level developments. But more broadly, and as we said in the press release, we do have a healthy private equity and real estate exit pipeline, which supports visibility on future value crystallization.

Maria, do you want to try again with the group on the line?

Sure.

The next question is from Philippe [indiscernible].

I had my headset on mute. Three questions, if I may, this afternoon. The first one, there was a few days ago, an announcement from Revolut that they had struck a deal with a couple of private equity and private credit funds in the U.S. to try to kind of kickstart the democratization of private equity and private credit. Do you expect that could have an impact over time on your platform as well? Do you have any ideas to participate in a potential democratization of the private asset class in Europe? Any initial thoughts maybe?

We think there is a big trend there coming from various players. It probably started to be frank, in the U.S. with iCapital, and we are a small shareholder alongside a large alternative U.S. manager into iCapital and they build the platform to democratize that. It's been much more active in the U.S., if I may say. It's close to EUR 200 billion at iCapital. You had initiatives in Europe, which are between EUR 1 billion and EUR 3 billion, let's say. So Revolut announced an agreement to commercialize 6 alternative asset managers, mainly U.S. plus one in Europe.

We are obviously talking to them. This trend will probably take some time, but private assets will be democratized. There is no doubt about that. But as you know, we are a little bit cautious overall, especially on the liquidity side. We did not build private debt Evergreen was mostly liquidity fund because we feel like it's probably a little bit early for pure retail investor to access that because the liquidity is not there yet. But going back to your question, it's a long-term trend. It's happening. Tikehau will take its share of that.

We are -- we have various initiatives, if I may say. So everybody should expect that there will be some democratization around private market, and it will be probably private equity, private debt, infrastructure because on the real estate side, we can say that in Europe, it's already democratized. For instance, some of our funds are accessible on Boursorama for a few hundred euros. So the trend is there, and we want to make sure we have our share into that. Is that answering your question?

Yes, absolutely. My second question is, you sounded cautiously optimistic that we might see a little bit of a pickup in terms of exits on the private equity side. To really kick it off, what would be required according to you? Is it a more robust IPO market? Is it more visibility in terms of -- or a more stable geopolitical environment? And then the types of exits that you're seeing right now in what type of form are you seeing them? Is it IPOs? Is it industrial players that are picking up assets? Or is it sales amongst private equity firms in the form of secondary trades?

Well, thanks for that. Clearly, overall exits depend on portfolio performance. So if you have a company on which you've been building the performance, starting with the top line, EBITDA evolution, gain of market share during many years, you do have a good portfolio company. So now it's both a question of valuation. And as far as you remain highly confident on the portfolio performance of your company, you can obviously see some exits coming. IPO -- we could have some IPO opportunities. It's a question of size.

We've seen that, obviously, mid-market remains quite sometimes blocked for IPOs. But clearly, what we see is strong appetite on decarbonation, on aerospace and defense from all the deployments. We've been investing in decarbonation and aerospace and defense since 2018, 2019. So all our Vintage #1 for these 2 strategies are seeing good pipeline of exits, once again focusing on the underlying performance. And as of such, we've chosen since 2020 to be -- not to be LBO generalist, but to be focused with 2 clearly dedicated thematics, and we have a strong backbone setup teams, dedicated operating partners, which have helped us to on value creation focusing.

We see appetite for exits, both coming from industrial, most coming from funds, which actually during many years have not -- we are not investing in aerospace and defense. Things have changed. And now we see also on top of that new generalist funds coming to invest in aerospace and defense.

I Okay. And then my final question, if I may, a follow-up on the earlier question from Nicholas. For the outlook 2026, I was reading Page 8 again of your press release. I did not see a reiteration of the earlier objectives to reach EUR 60 billion AUM and FRE of between EUR 175 million and EUR 225 million. Are you not restating or reiterating that? Or you're a little bit more cautious given the uncertain geopolitical environment?

I can just repeat the answer I provided earlier is that clearly, we see the path to these milestones as being driven by the trends we've seen during H1 and that we think will continue in H2 with one caveat, which is we want a profitable AUM, and we are pursuing growth. We are not pursuing growth for growth's sake. We clearly -- we want to accelerate profitability generation, both on FRE and the figures we provided you earlier this year, both on net results.

And maybe to summarize and to conclude, it's very clear that our 2 priorities are: one, profitability of both engine, the asset management and the balance sheet. So when it comes to asset management, as Henri stated, we want to protect our margin, and you see our management fees on average is increasing a little bit, and we are back at 94 bps when it comes to management fees plus performance fees, and it's critical to us.

The profitability of the balance sheet will come with some exits. And as Henri said, if you have a good portfolio company, we will have good exits, and we have a very healthy pipeline, especially when it comes to aerospace and defense. So our 2 priorities are: one, profitability of the asset management and the balance sheet; and two, performance of the fund because all these businesses, traditional asset management or alternative asset management, you can scale, develop, expand if you deliver robust performances across cycle, across vintages to your investor. To raise money, you need to make sure you deliver the right performances and it's clearly for us, our priority moving forward.

Thank you very much, everybody. There's no additional questions neither on the line or on the webcast. So Antoine, over to you to concluding remarks.

Thank you, Theo. Thanks all of you for attending this H1 results pre-summer break for some of you, I guess. We are very enthusiastic about the milestone we reached in terms of profitability of our asset management. Overall, net income has been multiplied by 2. We are very enthusiastic despite the challenging geopolitical, political monetary environment that will continue to scale, upgrade the platform, continue to streamline and some of you had questions on streamlining and simplification. For the first 20 years as an entrepreneurial journey, we put the foundation, we innovate, we put it piece-by-piece. And now it's really the time of harvesting, streamlining and accelerating profitability. Thanks for all of you, and we look forward to in-person meetings or calls or discussion. Thanks to all of you.

Have a good night.

Ladies and gentlemen, good afternoon, dear shareholders, good afternoon. I'm delighted and honored to chair this Annual General Meeting of Tikehau Capital. During this general meeting, of course, we will report on our activity during the fiscal year 2025. We'll also try to shed light on the first few months of 2026. And to do that, we will ask our co-managers, Antoine Flamarion and Mathieu Chabran to help. They are sitting by my side. We also have Henri Marcoux, Deputy CEO of Tikehau Capital, and I will be helped in my task by Geoffroy Renard, who is Company Secretary of Tikehau Capital. Of course, we have with us several members of our Board of Directors.

I would like to thank them for their presence. Good afternoon. We will also rely on the help of our auditors with Mr. Vincent Roti representing Ernst & Young and Gilles Magnan representing Forvis Mazar. I would also like to welcome several members of Tikehau Capital's management. Of course, they can take part in the session by answering the questions you might have after the meeting, and they will stay on with shareholders to continue the conversation after that. The general meeting that we are organizing today is broadcast on the company's website. Any person who can go to the website will therefore be able to follow our proceedings. And I'll also mention that we will also have the whole recording available on the website in the next few days.

Now it beholds us to appoint the bureau, and we need to choose as scrutineers the 2 members of the general meeting who have the largest number of votes based on the tally provided by Societe Generale. These are Tikehau Capital Advisers represented here by Ms. [indiscernible] and the Strategic Participation represented here by Ms. [indiscernible]. Since they mentioned that they were ready to accept the task of scrutineers, we now have a bureau and the Chair of the bureau should be Mr. Geoffroy Renard, and I'll give him the floor for the quorum.

Societe Generale, which is centralizing all the shares and organizing the general meeting sent us the temporary quorum, which is 90.945% of shares. With this temporary quorum, the meeting can be validly organized for both the ordinary and the extraordinary parts. And we'll also have the final quorum for each resolution. And before the vote, we will give you the final quorum figure.

I suggest that we move on to the agenda of the meeting, which -- about which you'll have many, many details during the general meeting. We will please dispense with an exhaustive reading of the agenda. But of course, we are here to answer any questions you might have regarding the agenda. The meeting documents are available on the company website pursuant to the law. They were made available to shareholders, and I also suggest that we dispense with reading all of these documents, which are on the desk. And for those who wish, they were -- we have examples -- copies of the universal registration document for the fiscal year 2025 available. The company hasn't received any request to put any further items or written questions on the agenda. So after the following presentation and questions from the room, you'll be able to vote on the resolutions that will be submitted to you.

Thank you, Geoffroy. Before we give the floor to Mathieu and Antoine, maybe we can look at a quick video, which summarizes the spirit in which the Tikehau Capital Company is working.

[Presentation]

Let's see the results of the strategies and commitments that you've just seen in 2025. I'll give the floor to Mathieu Chabran.

Thank you. Thank you, Mr. Chairman. Ladies and gentlemen, dear shareholders, we are delighted to welcome you for this general meeting for the fiscal year 2025 for your company after a particularly robust 2025. 2025 was a year of acceleration for the group. Tikehau's franchise kept growing stronger. Business broke records for all of our asset management platform, and we had a noteworthy increase in our profitability. This momentum is concretely reflected in our figures. We deployed EUR 7.6 billion, a 35% increase over year in bigger and bigger and more and more international transactions.

We also strongly accelerated our divestments, our realizations, especially in private equity and credit with EUR 4 billion realized, so twice the level of 2024. Regarding inflows, fundraising, 2025 marked a fourth consecutive record year for Tikehau Capital with EUR 10.5 billion of gross fundraising and EUR 8 billion of net fundraising. This performance illustrates the growing relevance of our model. It's also based on an ever more international investor base. Last year, over 80% of funds raised came from international clients. And finally, at the end of December, at the end of the year, we reported EUR 52.8 billion of AUM or an average annual growth of 22% since the IPO.

Financially, our model kept delivering profitable growth. Our asset management business accelerated with 8% growth for revenues and 18% for operating income. It was driven both by the commercial dynamics and our execution discipline. At the same time, our investment portfolio delivered solid performance with realized revenues up by 19% and total revenues up 33%, excluding ForEx. In total, that results into a net income group share reaching EUR 136 million, an increase of 51%, excluding ForEx. We will propose to share this value creation with a dividend of EUR 0.8 per share that we'll put to a vote when we vote on the resolutions.

I'll now give the floor to Antoine to talk about our strategies.

Thank you, Mathieu. Good afternoon, ladies and gentlemen. Maybe we can continue with 3 slides about our beliefs. First of all, as you know, we're investing in the entire segment that we call mid-market, where our beliefs are. So we have 4 business areas: private debt, about 50%, 46% of our AUM, real assets, real estate and infrastructure, private equity, which is a bit more recent and which is specialized. As I said earlier, we have fairly strong beliefs about decarbonization, aero and defense and regenerative agriculture. And finally, our liquid strategies with beliefs because on these liquid markets, we decided to be present where we had expertise, credit, financial subordinates and derivatives.

For instance, our business is to invest since we created Tikehau. We've strived to be selective in order to deliver high risk-adjusted returns for investors. Here on our 3 core businesses, you've got some KPIs, some figures illustrating the way we invest. Looking at direct lending, first, our associate, our partner, Cecile, will explain how private credit works with more detail because there's a lot of noise around that. On direct lending, what is interesting is that all our investment is accompanied by covenants. We have an average leverage of 4.2x EBITDA, which is lower than the market and which seems reasonable.

We started this business in 2009. So we were pioneers in Europe and the default -- the annualized default rate is only 1.3%. And then when as happens sometimes, a company defaults, well, the recovery rate, how much do we lose? We can see that the loss rate -- loss ratio is fairly low at 0.1%. Private equity, we decided to disclose 3 indicators here. EBITDA growth for the company, 13% over the last 12 months, which on a fairly difficult markets is a good performance. The leverage that we invest, sometimes we are a borrower, we have an average leverage of 3.2x EBITDA, which is much lower than the market. And on average, we buy companies for less than 10x the EBITDA for the companies that we invest in. And for real estate, we have extremely granular portfolios because we have over 9,000 assets that are both residential, housing, hotels, logistics, data centers and office space.

So we have an extremely granular and diversified real estate portfolio, both in terms of assets and geographies and the average leverage for real estate is 26%, which is relatively low. And I'll dwell on that. Our business is to invest. And in any cycle, we need to be able to deliver robust performance in all weathers as we are fond of saying with more and more complex markets, Tikehau's team strives to deliver such performance. And finally, since we were created, alignment of interest is core to the company's DNA. First of all, partners and employees control 56% of the group's capital. We are the #1 shareholder with the other shareholders, you included. Then carried interest, 53% of carried interest, which are the performance fees that are retained by the listed company.

If you look at peer groups, the highest ratios for Carlyle and Apollo, 30% to 40% of the carried interest goes into the listed company. Our company is much more generous. Equity is around 20% to 25% and you have TPG, which is at 20%. So we keep feeding our shareholders with this carried interest, which is fairly significant. And finally, we fully align our interest with that of our clients in our funds because most of the funds that Tikehau invests in, we have a presence of 5% to 20%. So every time Tikehau starts a new fund, your balance sheet is invested fairly significantly so that we can fully align our interests. We were at 80% at the end of 2024. 80% of Tikehau Capital's balance sheet is invested in our funds. We are gradually moving towards 70%, which is quite significant.

I will now give the floor to Cecile, who will talk about the private credit market to illustrate somewhat what is going on there.

Good afternoon, ladies and gentlemen. I'm Cecile Mayer-Levi from the credit team with a more marked focus on what we call private debt. In those days when the term private credit has made their headlines and burst on to the media scene, now the day goes by without us seeing a tsunami of press articles, analysis, podcasts and LinkedIn posts talking about very doom and gloom news that has cast a shadow on the asset class, which used to be celebrated and then went through a golden age. So we thought it was relevant to try and explain to give you a quick overview, a snapshot to understand the reasons that led to this tsunami of fairly negative news. And then at a later stage, I'll share a few indicators with you, although Antoine has already illustrated them to share the main risks, the main opportunities and lessons we can learn from the current sequence.

As a reminder, everything started with iconic and highly covered defaults in October '25, in particular, if you're interested in the matter, you might have heard of names like Fast Brands, [ Strikolar ], Renova Home in the U.S. and more recently in the U.K., a company called MFS Market Financial Solutions that were, in fact, major cases of default, reaching sometimes very significant amounts of over EUR 1 billion or EUR 1.5 billion that were mostly explained by issues of fraud and accounting manipulation. The immediate response came fairly quickly and classified these problems and showed them as isolated risks, idiosyncratic risks as they are called, but actual risks that may materialize. And more seriously, the trigger for these problems was that valuations did not transparently reflect already proven problems that existed. Three main themes are amplifying the discussion now.

I'll start with the first one. The first one in a way, there is a proliferation of ambient noise about what is called a significant exposure for private debt portfolios to software companies with a SaaS model. Very often, you have private debt funds that were heavily invested that deployed significant amounts of money in these transactions, sometimes for up to 20% or 30% of their portfolios. So that was a catalyst for enhanced risk, especially when you're talking about transactional companies that were called ARR with annual rating revenues, which is only an elegant way of mentioning companies that were not yet profitable, but that used debt to finance themselves without generating any cash flows. So that phenomenon was called SaaSpocalypse by Jefferies analyst and the announcement by Anthropic of one of their models Claude Cowork that triggered a major panic. And so everybody focused on that and saying that the inevitable rise of artificial intelligence would lead to a reassessment of risk parameters, especially visibility over revenues, which is what drove these software companies for years.

You had huge cohorts of users in the past, but the valuation levels that were used in these financial structures had to be revalued. So that tended to propagate the risk that was very marked in private credit, whereas naturally, it goes without saying the private equity part that goes with these companies is also highly at risk. A second theme that was mentioned about the U.S. was a mismatch, an imbalance between the assets and liabilities parts of these fund structures. There was a major acceleration in fundraising for so-called semi-liquid structures.

The flip side of that is to call them semi-illiquid. That was the second catalyst and this mismatch between funds deployed into private assets, which by nature are illiquid and structured liabilities based on the promise of liquidity, that was another mark on this asset class, mostly driven by the success of very big asset managers in the U.S. that were able to capture attention and to have some market depth with so-called retail investors attracted by BDC structures, another acronym that means business development corporations that fed a lot of growth at first, but that was another accelerator when redemption requests occurred and these BDC formats are the subject of a lot of requests for redemption when there were gates -- exit gates in their contractual obligations.

So it goes without saying that when a retail investor understands that it's a liquid format, they expect to be able to exit at any time and for every request to be respected, which is no longer possible now given the very significant amounts covered by these requests. So the second problem, as you have understood, comes from this mismatch, although in a general way, most funds raised in these private debt vehicles come from institutional investors. That's over 80% or even more in Europe -- so investors by nature -- institutional investors by nature are more patient, more rational, more rational. So they didn't behave the same way, but that was a bit of a disruption.

And maybe the last spark, as I would call it, that caused also some pressure. There's deployment pressure on a fast-growing market. Generically, it is reckoned that corporate access is about EUR 1.8 trillion, about 1/3 in Europe, EUR 500 billion for private credits. So those are significant amounts with an acceleration of over 10% annually that occurred in the last few years. So that led to a sort of availability of an overabundance of liquidity compared to the deployment abilities, especially in an environment, and Nina will come back to that in a minute in an environment where things have slowed down because of the geopolitical environment, the war in Iran and its very expected volatile effects.

However, there is exacerbated competition now, whereas business has slowed down somewhat. So this leads to potential transactions where spreads are under pressure, where covenants are maybe less robust and where adjustments on financial aggregates can be very big. It's also noteworthy that at this stage, we're not anticipating, and this is what most market players are saying, we're not expecting any systemic risk, although very often that was mentioned in some press articles. But it's also worth mentioning that regulators in various countries, central banks and financial stability bodies are taking a look at the matter. And as I mentioned, given the very significant size of flows generated by this asset class, the amounts at stake are more visible and current concerns are mostly about the necessary transparency around these companies' indicators and also interconnectedness with the banking system, especially for banks that use leverage themselves to increase their intervention size.

Now let's take a closer look at the context around Secure, which is positioned, as we mentioned, as a key player, particularly in Europe, one of the pioneers in the asset management world and in the credit world. Now our platform relies on a EUR 24.5 billion in terms of assets under management, and this is deployed through a number of sub strategies. That's why it's important to have additional expertise, which cover not just direct and corporate lending, but also in Europe and in Asia, but also a CLO platform, which operates in Europe and in the United States. We have tactical strategies, which cover specials. And there is an emphasis here on debt real estate and digital infrastructure and also secondary private debt. The indicators, which were mentioned by Antoine, but just to remind you of them quickly.

So the first point that I highlighted related to software exposure. With our direct lending strategy, we believe that we have 12% for the last fund, which specializes in this particular field. It's also worth noting the structuring of our funding with 100% committed investments and an average leverage, which is relatively moderate around 4.1%. And another important indicator, and this also drives performance, an annualized default rate, which is fairly well managed. And here, default does not mean loss and that is why it's important to be selective and to have very active management.

In conclusion, the debt market remains, of course, high performing. We currently have a software, which is currently being reinvented, and we have highlighted long-term players who will be able to perform over time. For us, this is a unique opportunity to drive this complementarity in terms of our special strategies and tactical strategies, credit ops. The TSO funds have been emphasized the digital infrastructure component, there's a need of hundreds of billions of euros. There's lots of potential there and our strategy, which is currently presented and for which Tikehau has been a pioneer with our PTD asset fund, which enables us to provide liquidity solutions on private debt funds for specific players, in particular, our international investors.

That's it. Thank you very much for your attention. I'm now going to give the floor to Nina, who is the CMS strategist and who will talk to you about her point of view of the current market and the geopolitical challenges.

Thank you very much, Cecile. Good afternoon, everyone. Ladies and gentlemen, I'm very pleased to be here with you today. My name is Nina Majstorovic, and I am a strategist at Tikehau Capital. We wanted to cease this opportunity to give you an update on the situation in the Middle East, the idea being to share our reading, our understanding of the events and their impact on the market with -- obviously, we do this with much humility because everything that I'm saying today may change tomorrow given the frequency at which news changes and the frequency at which the various heads of state position changes. So if that happens, please don't hold me to it.

Now so what are the market saying? It is true that since the announcement of a ceasefire, there was some optimism over financial markets. As you can see here on the slide on the screen. On your left-hand side, you can see the performance of the equity markets. And on the right-hand side, you see the credit market. As you can observe on the equity markets, we see there's a significant drop and sometimes all -- there has been a reversal in terms of -- due to the conflict in the Middle East, whereas for the credit market, the observation is similar. There has been a bounce back since the [ Seaspire ] was announced, a drop which is more sustained, particularly over much -- this is fairly organic. That's what we expect from credit markets in this type of market with a bounce -- progressive bounce back since the announcement of the [ Seaspire ]. And this enables the credit markets to do away with the accumulated fall since the end of February. So very impressive movements, some increases, some decreases.

Now this is like deja vu because throughout the same period last year, I was very pleased to be able to present to you then and to give you an update on Liberation Day. Today, the context is very different. But it's true that this V-shaped movement on the market does remind us of the movement that we observed at the same time last year. So some optimism over markets, but this optimism is very conditional because investors seem to be choosing between kind of deescalation outlook and persistent pessimism given that the possibilities of an agreement today remains very strong. And that is exactly what we read from the energy market and the sovereign rates market because if you take a look at the glass here on the left-hand side, you can see the change in the price per barrel.

So we're roughly at $115 currently. It is true that even after the announcement of a cease fire, the price of oil did fall, but it remains around $100 per barrel, so very high levels, much higher than levels prior to the conflict and prior to the end of February. So this has led to inflationist fears. As you can see on the right-hand side, we see the swap inflation in the United States and in Europe. So what does this graph tell us specifically? It tells us that the market is anticipating inflation on both sides of the Atlantic to be around 3.5%, and that will be the rate over the next 12 months. And so this means that there has been a change when it comes to the monetary policy, outlook on financial markets because in the United States and for the Fed in the United States, the market was at the beginning of the year, expecting rate drops by the end of the year.

And now the market is anticipating a similar thing on the side of the United States, whereas in the Eurozone, the market was anticipating a status quo for the ECB and now is expecting a 3 point fall by the end of 2026. So this movement is fairly impressive. There's a lot of uncertainties, which remains a level of nervousness, which is very palpable when it comes to financial markets. One could think that high oil prices for a sustained period amount of time in the run up to the midterm is not a very comfortable situation for the U.S. President. This being said, it is true that the perspectives of a resolution remain very unclear. And even if an is reached, this may undermine the energy shock, but there will be impacts on inflation and on growth. That is to say that this may take some time to stabilize.

Now to conclude, what does this all mean for us as an investor here at Tikehau Capital? Well, it means that we have to be prudent. We have to be very selective when it comes to our investments. We have to target businesses which are able to navigate these higher rates and that are able to defend their margins in a potentially increasingly inflationist context. And it's true that this event strengthens our conviction when it comes to European sovereignty, which is something that we hold here at Tikehau, where we invest through the platform, whether it be within on the capital markets or the private debt and more specifically through our private equity business with, in particular, decarbonization, which is a recurring theme.

Thank you very much for your attention. I will now give the floor back to Mr. Antoine Flamarion, who will explain to us how we have created value since the IPO.

Thank you. Thank you very much, Cecile, and thank you, Nina, also. So your company continues to evolve and develop according to exogenous factors. And you just heard a report on what happened on the private debt market, and we think that this is a way to redeploy good funding in good conditions. Nina mentioned the listed market and what drives that market, particularly on the last slides where we saw inflation, there is inflation, and this obviously has an impact on the entire business. But what's interesting is when we take a closer look at what enabled us to create value over the last 6 years -- excuse me, since 2016, so over the last 10 years, since the IPO, we have drawn up 6 slides with different KPIs.

First of all, when we take a look at the financial indicators, we went from EUR 9 billion to EUR 53 billion. assets under management that we [indiscernible] Now we have almost EUR 2 billion which [indiscernible]. Access to private investors. This is something which we have held since the IPO. 1/3 of our investors currently are private investors either from retail, which is a bit more granular, and we have a number of [indiscernible] units of accounts, which make it possible for private investors to access private markets such as defense and sovereignty with 3 French insurers and there are more to come.

So these private investors also enable us to diversify and to increase our client base. And something which is extremely differentiating for us, we have significant equity, which continues to grow. So from EUR 3.1 billion in equity. So this follows our growth trajectory because Tikehau is a growth business with significant figures when it comes to this growth. However, what's more important is the profitability of this growth, and we've included here a slide just on the profitability of asset management. Now what's interesting here is that we were at EUR 39 million at the IPO. We've duplicated this by EUR 10 million because we're at EUR 300 million, EUR 400 million in terms of asset management revenue, and we've timed profitability by 37% because in the past, we were at 4 million in terms of asset management.

And now we are at EUR 150 million for 2025. And you will often hear us say, and in particular, since the Capital Market Day that took place in February in London, Tikehau is actually 2 businesses. We have the equity, EUR 3.1 billion invested in our funds. But then we are also an asset management business, and this is critical because EUR 53 billion is significant in Europe, and this is extremely profitable. And therefore, Tikehau really has these 2 pillars.

Now for shareholders and in addition to our capital market profits, we have strived to distribute high dividends to our shareholders. And since our IPO, we've distributed EUR 1 billion in dividends to our shareholders, and we are committed to distributing 80% of asset management results, as you saw on the last slide, is increasing and continues to increase. And in accordance with the added value, we may actually distribute further dividends. Now I mentioned this on the first slide, we've also globalized our client base. So regardless of your business, if you want to globalize your client base, you have to do the same with your assets. So we've implemented a sizable infrastructure because we now operate in 17 countries. And the work -- the painstaking work and the commitment of the teams made it possible to diversify our client base in a very significant manner.

If you take a look, for example, at what happened in 2025, you can see that France, which is still a sizable proportion, but only a part. But the way that this should be looked at is that our desire is to continue to diversify, to continue to be present on the French market, but we also have to be present on European markets and markets that are further afield that are more complex and volatile. Will the Middle East be very active over the next 3 to 9 months? That's doubtful. However, we believe it's important to be present in North America. Initially, we were working in the United States. Mathieu has been here since 2018. We know how -- now have an office in Canada, which is already producing very positive results.

So the trajectory over the last few years is explained by this significant rate in terms of globalization. We've also tried to make these private markets accessible to broader client base of private investors. We are currently at 25%, but we'll continue to increase, and we'll do this through direct and indirect channels. We have our own team that is responsible for large European and Asian families. So we're able to sell products directly to private investors. We also do this in an intermediary fashion. I mentioned the units of account. We do CGP. We also work with private banks, and we also work with Opel Capital, which raised more than EUR 440 million was created 3 years ago and is significant. So we have to diversify geographically speaking.

We have to diversify in terms of our client base. And within the client base, we have to ensure that we have a number of drivers. And I think this demonstrates the way in which we will continue to develop. And finally, as we've always said, we are going to stick to our convictions, if I may say so. Sustainability has always been at the heart of our DNA. This is not something that just fell from the sky that was a whim. So fairly early on, we ensured that all of our processes and all of our funds were able -- we're able to follow this sustainability road map, which is really at the heart of our DNA. And as you will have noticed, given everything that is happening in the world, there can be about turns as we've seen in a number of countries.

We stick to our convictions. We believe that this is important that we continue to pursue this. And for each challenge, we need to ensure that sustainability is at the heart of that challenge and that commitment.

And I'll give the floor now to Mathieu, who is going to give you some further outlook since we've spoken a lot about 2025. So we'll look at the perspectives.

A few of us are just coming back from Asia and after the events that Nina talked about, you'd be surprised how quickly decarbonization themes come back on the table after a few years of the Trump administration putting them on the back burner. Our friends in Asia, in Japan realized that strong dependency. So you saw the announcements we made in Japan with [ Mikko Amoa ] management, and you'll see this theme making a great comeback on the front of the stage. Antoine talked about how far we've come and how much value we've created since 2017. And now we are strongly looking towards the future, maybe taking stock of the interim results for 2026.

This is an intermediate stage, but an important one in the company's growth. We are aiming for over EUR 60 billion in AUM and FRE, so the equivalent of our operating income in asset management between EUR 175 million and EUR 225 million. Net income, Antoine reminded you how important it is to have -- generate net income to serve dividends to our shareholders between EUR 420 million and EUR 520 million and return on equity of 13% to 16%. So we are tackling the next stage in Tikehau's journey with visibility, discipline and ambition.

Looking to the medium term at the end of January on our Capital Market Day, we'll give you more details about the figures, but we are projecting net cumulative fundraising of over EUR 34 billion for the period 2026, 2029. Then an improvement in our core FRE margin, but you should see that as our operating margin with a goal of 45% to 50% by 2029 versus 41% at the end of the year 2025, thanks to the operational leverage that we have in the structure. A very important thing that we were talking about credit. Cecile talked about credit at length. We want to preserve our investment-grade rating, which is a powerful asset to be able to raise debt and roll over our debt on the markets and not to depend on the banks only, which is an indicator of this company's financial robustness.

And we also wanted to focus on the payout policy. We want to have a dividend at over 80% of the operating income from asset management paid out to our shareholders. So our goals are clear, reconciling growth, financial discipline and sustainable value creation for the company. Tikehau, our company hasn't changed. It's really standing on 2 legs for growth, which are complementary and which feed each other. First, asset management that Antoine talked about. We are gradually going from a building rationale, building a presence in 17 countries. This is what we've been doing for about 15 years since we became international.

Now we want to optimize with more operational leverage and with a growing contribution from performance-related income, the carried interest, which feeds into the operating statements. And then our balance sheet, the most important thing in the company, which is here to accelerate growth with better capital velocity and also enhanced selectivity and more strategic allocation to improve the return on equity.

One last thing before I give the floor to Henri, you saw -- well, we talked about it during the Capital Market Day and in our financial disclosure last week for the quarterly accounts. There is a new organizational structural step with a unified asset management hub with Tikehau Investment Management. The aim is clear and simple to improve efficiency, to strengthen synergies between the team with the operational leverage and give us more flexibility to forge industrial partnerships at this level of asset management, especially with minority stakes that we would acquire. And with that, we could go faster. We would be more easily understandable by the market and that could better support our next phase of growth in the ambitions that we've just explained.

And before I give the floor to Henri, we want to maximize growth and profitability in this collection phase for the company. Henri, over to you.

Thank you, Mathieu. Dear shareholders, good afternoon. Maybe we can come back over the management accounts for the fiscal year 2025, explaining the main aggregates. To refer to what was mentioned a moment ago, the 2 pillars creating value for your company are asset management and the operating income associated to that and the balance sheet.

Let's start with asset management, talking about the profitability of asset management speaking to you about core FRE, which is the operating income. These are revenues from asset management. The more AUM you have, the more income you have minus the operating costs for asset management, which are the platform costs, mostly headcount and offices. You can see that core FRE, the operating income for asset management grew by 12%, standing at EUR 148 million for the FY. As a percentage, it's also grown. It went from 39% to 41% for the year. The same asset management pillar, which is the biggest value creator for the company can also be looked at with the EBIT of asset management, where you add core FRE with performance fees, carried interest, which was just mentioned by Antoine and Mathieu, which was at 53% for the company.

So the fiscal year 2025 had a record amount over EUR 20 million in performance-related earnings and carried interest. And so the EBIT growth for asset management -- well, the EBIT was EUR 150 million, plus 18% compared to FY '24. Also as a percentage, if you look at the change, we went from 36% to 39% for the FY. The second pillar, the second value creation engine for the company is the portfolio revenues connected to the financial assets on the balance sheet, EUR 4.4 billion. You can see that all revenues for the fiscal year 2025 related to the portfolio on the balance sheet were EUR 166 million versus EUR 207 million for the previous year.

But if you exclude ForEx effects, mostly with dollar and sterling exposures, the growth was 33%. If you precisely look at how revenues changed between '24 and '25, revenues are twofold. In dark blue on screen, you have realized revenues, distributions related to coupons related to balance sheet investments, they went from EUR 202 million to EUR million, plus 19%. And then you have unrealized revenues. This is the fair value valuation of these investments, and they were negative compared to mostly ForEx impacts, so minus EUR 52 million currency effects. And so if you exclude ForEx effects, the growth for portfolio revenues were 33%.

The consolidated P&L. And now the management accounts for the company for 2025. You have the various aggregates starting from the top, the first value creation pillar, asset management that generated an operating income of EUR 149.6 million, as was mentioned. The second pillar the investment EBIT, EUR 65.8 million. Net pretax profit, EUR 186.3 million, net income group share, EUR 136.4 million. Once again, if you exclude currency impacts, talking about the dollar and pound exposure, the growth was 51% compared to the previous year 2024. Talking about the consolidated balance sheet for the management accounts, as was mentioned by Mathieu and Antoine, our balance sheet is a key asset in our model and the way Tikehau is present on its market.

On the asset side, you've got the investment portfolio, EUR 4.4 billion. close to 70% of that is invested in group strategies so that we have a very strong interest alignment with clients and partners on all our businesses. Equity was stable at EUR 3.1 billion. Financial debt at EUR 1.9 billion. Your company is rated. We are a quality debt issuer. We were rated investment grade with renewed ratings at the beginning of the year by the 2 rating agencies, S&P and Fitch ratings. And finally, we will submit to a vote a dividend proposal for this AGM with a dividend per share of EUR 0.80 per share more than our commitment. Our commitment is to distribute over 80% of the operating income from asset management. And so EUR 0.80, that's higher than our payout commitments so that we can share value with the amounts mentioned a moment ago by Antoine, over EUR 1 billion paid out since the IPO in dividends.

Mr. Chairman, you have the floor.

Well, thank you. I think we can now give the floor to the auditors who will present their report.

Thank you, Mr. Chairman. Ladies and gentlemen, dear shareholders, good afternoon. We are happy to make a presentation on behalf of the Board of Statutory Auditors about the various reports issued on the 18th of March 2026 by EY and Forvis Mazar made available to your company and that are found in the 2025 universal registration document available on the Tikehau Capital website.

With your agreement, we will not read out these reports in full. We will instead provide a summary in relation to the resolutions put to the vote. Well, for the year 2025, we've issued 3 reports related to the Ordinary General Meeting and 5 special reports on proposed capital transactions as well as a sustainability report. On Slide 3, firstly, the first resolution related to the annual accounts, we certified that the annual accounts are in accordance with French accounting rules and principles, regular and true and that they give a true and fair view of the results for the past financial year as well as of the financial position and assets of the company at the end of the financial year.

Our report highlights the valuation, a technical observation related to Note 7.1.5 of the annexes regarding the impact of the change in accounting policy resulting from the first-time application of ENC Rule 2022.06.

Second resolution on the consolidated financial statements of Tikehau Capital Group, we certified that given the IFRS as adopted by the European Union that they are regular and sincere and give a true and fair view of the group's results, financial position and assets at the end of the financial year. Our report also includes a comment regarding changes to the consolidation methods for intermediate investment holding companies as set out in Note 5 of the financial statements.

I'll give the floor to my colleague for the special reports.

Regarding the fourth resolution concerning regulated agreements and commitments, we note that no new regulated agreements were entered into during the past financial year and that no previously approved agreements remained in force during the period. The next slides are about the extraordinary part of the meeting for which we've issued 5 reports regarding the following transactions on the share capital. These are the issue of shares and various securities with the maintenance and/or waiver of preemptive subscription rights as provided for in the 20th, 21st, 22nd, 23rd, 24th and 26th resolutions.

The second report is on the issuance of shares and/or securities of the company reserved for members of the company savings scheme as provided for in the 27th resolution. The third report is for the extraordinary part of the meeting is the authorization to grant share subscription or purchase options as provided for in the 28th resolution. Fourth report issued on the authorization to grant existing or future bonus shares as provided for in the 29th resolution. And finally, the fifth report is on the capital reduction as provided for in the 30th resolution. The various reports we've issued contain no specific comments or observations regarding these transactions, which comply with the conditions set out in the commercial code.

Finally, we've prepared a certification report on sustainability-related information. Based on the work carried out, we have not identified any material errors, emissions or inconsistencies regarding the compliance of the process implemented by Tikehau Capital with the ESRS standards nor regarding the compliance of the published information with Article L 22233-28-4 of the French Commercial Code and Article 8 of EU Regulation 2022 202852.

Ladies and gentlemen, thank you for your attention. Thank you. Now Geoffroy will present the resolutions that you'll be asked to vote on.

Thank you, Mr. Chairman. We have a fairly busy agenda this year because we are renewing financial delegations. So there are 32 resolutions on the agenda this year. I'll try to give you a summary and dwell on the most salient features. The first 4 resolutions are the usual ones that you see in every company, annual accounts, statutory accounts as they are called consolidated accounts, dividend, which was presented by Henri and regulated third-party agreements that we've just heard about from the auditors.

There are 6 resolutions this year regarding the composition of the Supervisory Board. The first one is about the ratification of the co-opting of Mr. Xavier Musca as a member of the Board, who joined us in May 2025. He joined the Supervisory Board in May 2025. And we also have 4 reappointments put to the vote. the mandates of Mr. Musk, Mr. [indiscernible] for 4 years each, Ms. [indiscernible] for 2 years. And finally, we suggested that you appoint Mr. Jean-Pierre Denis as a member of the Board of the Supervisory Board to replace Mr. Francois Pauly to replace Mr. Jean-Pierre Denis, who is a nonvoting director on the Board. Mr. [indiscernible] would not be new, but I don't want to interrupt the presentation.

I simply wanted to say that Francois Pauly, who is a member of our Supervisory Board, have been since 2024, said that he did not want to be reappointed, first of all, because he will spend more time in his family company and also because he was just appointed Chairman of the Supervisory Board of the prestigious [indiscernible] institution. And so he wants to be fully devoted to this new task. So on behalf of the management and the entire Board, I wanted to thank Mr. Francois Pauly, who unfortunately cannot be with us today. We wanted to thank him for his valuable contribution. He was very experienced, very wise, and we wish him the best for his new responsibilities.

Thank you. I'll get back to the presentation regarding the draft resolutions. As we have to, by law, there are a number of resolutions on compensation matters this year as part of the Governance and Sustainable Development Committee, which also serves as a compensation committee in the company, given the major work done on setting compensation for the management, which has changed compared to previous years, well, with fixed pay, which is the same with an amount of EUR 1.265 million per year and per manager. Annual variable pay does not change either this year with a maximum amount sent as set at EUR 4.2 million, but immediately financial and nonfinancial criteria were revised and aligned with group goals by the end of 2026.

I'll say a few words in a minute. And also, we wanted to revise this compensation downwards gradually in the next few years based on the introduction of a multiyear variable pay, what is usually called LTI, long-term incentive plan, which will start for the years 2026 to 2029. Why this period? Because this is also in line with the midterm road map that was announced by the company during the annual results presentation, and Mathieu explained the goals. The maximum amount for the LTIP would be EUR 12 million per manager for a period of 4 years.

Regarding the goals associated to each of these 2 parts of variable pay, for annual variable pay, you have to begin with what we call total shareholder return. So a 42% weight based on the share price performance, which here reflects the fact that now the managers do not get free shares or stock options. So the committee and the Board proposed that a strong share of this variable pay be indexed on the share price performance. The other financial performance criteria are based on net fundraising in asset management, FRE, fee-related earnings when it comes to remunerating performance.

And finally, net income. And these goals are aligned on the goals announced for 2026 by the company and 15% for nonfinancial criteria, which are mentioned in the company's financing, more specifically, this is in the revolving credit facility for the company. So that's for annual variable pay that will apply for 2026. And now talking about multiyear variable pay, the LTIP for the fiscal years 2026 to '29 with the options will be exercised in 2030 based on performance achieved over these 4 years. Once again, you have total shareholder return with a weight of 35%. Once again, this is the share price performance, 3 financial criteria, which are taken over from the 2026-'29 road map, net fundraising for asset management, an arithmetic mean on the core FRE margin.

So results from asset management minus performance remuneration, minus the impact of free shares given to employees. And finally, a return on equity ROE criterion, that is the profitability on shareholders' equity. And then you've got 20% of, once again, 3 nonfinancial criteria, ESG criteria that are included in our revolving credit facility that I was talking about when it comes to annual variable pay. So that was the new compensation policy applicable to the management, which is a change from last year.

Following that, you have all of the resolutions relating to the remuneration policy, which is to be applied throughout the company. So as part of the say on pay, so to present the review of remunerations to shareholders for company directors. So under Resolution 12, we have an amendment of the remuneration policy applicable to the Supervisory Board.

For the fourth resolution, we have the implementation of the remuneration policy for the Supervisory Board for the upcoming financial year. Then under Resolution 14, as is required by law, we will be providing information that's featured in the company's governance report. For the 15th and 16th resolutions, you will have to give your opinion on remuneration paid to -- or attributed to managers in 2025. Just to outline that the variable remuneration for 2025 for both the managers is EUR 1,280 and the final resolution pertains to remuneration paid to Chairman of the Supervisory Board during the 2025 financial year since there were 2 Chairmans of the Supervisory Board in 2025.

This brings to conclusion the aspects pertaining to governance. As with each year, we propose to renew authorization to be given to the managers to make transactions in Tikehau Capital shares. This is called the share buyback program. This was submitted and has been in identically last year with a very small modification. We've reduced the maximum share price from EUR 40 to EUR 30. And now the treasury stocks, so the proportion of capital held by the company itself is 76% of the share capital as of 31st of December 2025.

Now I'd like to present the financial delegations. So resolutions 20 to 23. These resolutions are being submitted almost completely unchanged compared to 2 years ago. I will later on go over a number of notable areas. But what we suggest here is to renew under identical terms, the financial delegations for managers maintaining the right subscription and to waiver it in the framework of an IPO with in a private investment, there's also an increase of capital without preferential right in favor of persons names. I will come back to this later on. And then in the 24th to the 29th resolutions, you have the usual set of resolutions that enabled us to increase capital and whether we come back to the general meeting, profit reserves, increase of capital increase.

And then finally, resolutions that enabled us to increase the capital for employees either as part of a savings plan or through providing bonus shares or performance-related shares for employees and for company directors. So I said that I would come back very briefly to the modifications that have been made compared to 2 years ago because we have the same cap, which was approved 2 years ago. Just a few differences. We've increased the applicable threshold for payments in kind because the law has changed, and this is part of the attractiveness law. So to increase this -- the legal cap from 10% to 20%, and we've taken this into consideration when it comes to contributions in nature in kind.

We have not put forward a resolution related to setting issuance prices because the law has removed the minimum -- the legal minimum price for capital increases without preferential subscription rights. And we have also introduced a new financial delegation required by law, which enables us to increase the capital for designated persons to designated by managers with a cap of 30% of the share capital. We also propose authorization to be given to managers to reduce the share capital by canceling treasury shares, and this is Resolution 30. That's 10% of share capital. Now most of these authorizations will be valid for 26 months, and therefore, they will be renewed every 2 years, apart from a few exceptions.

And finally, we also propose a modification of Article 11.1 to take account of changes from a recent February published decree, which changes what we call the record date, the date on which shares are recorded. In the past, this deadline was 3 days before the general meeting. And now that has been moved to 5 working days preceding the general meeting. And that brings me to the end of that presentation.

Thank you very much, Geoffroy. We are now able to answer any questions that you may have. Just to indicate that we have not received any written questions prior to this session, you may ask your questions. I'd invite you to be brief to allow the management to answer in the most comprehensive fashion possible. Please also state clearly your name so that we may include it in the minutes. Are there any questions?

My name is [indiscernible] I'm a private shareholder. I have a few questions. There's a shareholders pack, which is valid and which was renewed in 2022, which should run to 2027. Management holds 56%. What is the advantage of keeping that pack? I have other questions. Should I ask them now?

Go ahead.

Just a few words about Schroder. Could you talk to us about the dividend because this year, you have distributed EUR 0.80 of dividends, and there's a notable profit, which you've also included in the report. Can you explain the reason behind this? And then on Slide 25 for 2026, you mentioned the net revenue of EUR 420 million. Does that mean that the dividend will potentially be tripled because EUR 0.80, that's EUR 140 million that will be distributed. And those were my questions overall. I have others.

Thank you very much. Thank you for those 4 questions. Indeed, we have a shareholder pack, which is fairly historical, if I may say so, with a few shareholders, MSF AKA, amongst others. It is quite possible that this not be renewed because as you said, indeed, there is perhaps less need because Tikehau holds 56% of the capital. We did this at the time of the IPO. And therefore, this is perhaps not as relevant today. And there has been a buyout by Cardiff as well.

The next question, Schroder. We have provided our stake for Nine, and this happened just over a year ago. And this was a liquid asset manager that wanted to develop private assets. And so we took a look at this idea, and we discussed it last year. We sought to develop partnerships for private assets, which we haven't managed to do in an effective manner. And so following the OPA for Navin, which is an American asset manager, we were able to provide shares, which led to a significant increase in value, a little in 2024 and much more in 2026 since the increase is EUR 179 million. We also decided not to change the dividend. So it's EUR 0.80 of Europe since we have a lot of reserves.

Our guidance is that we will distribute 80% of the asset management revenue. And so that's a little bit more than what Mathieu mentioned. The general idea is to increase the dividend in a way that's in line with the revenue of the asset management business. So this went from EUR 4 million to EUR 150 million. That was prior to taxes. So there's EUR 76 million of shares in action. So EUR 1 per share, that's EUR 176 million as a net income. And I mentioned this earlier on, but gradually, as there is a greater value, we will undoubtedly distribute a little more. And then we'll have to take a look at what we do for this financial year.

Do we distribute a little bit more because we already have this increase in value linked to Schroder? Obviously, we won't be tripling the dividend, not at this stage in any case. But the general trend is to increase the dividend Currently, we have a yield, which is at 4.6%, and that's a fairly reasonable yield. But our desire is to increase this and to increase it in line with the results of the management business, which are recurring.

Fabrice, I'm an investor through a company. Can you perhaps just talk to us about the real estate activity? Is this corporate real estate? And how will all of this work overall?

I'll begin. In fact, we have always worked on real estate at Tikehau for those who remember, the first operation in 2004 was a real estate operation, and we have always wanted to pursue this. This is a very important asset class. Among all of the assets, we've always been relatively careful because real estate can be very cyclical, but it's also linked to interest rates. And there are also company changes because remote work impacts offices, e-commerce also impacts retail, but also impacts logistics. We were fairly pioneering when it came to data centers. So currently, our real estate portfolio is EUR 14.3 billion, and this is through a number of different funds across different areas, different funds.

We have a listed real estate company in France and that has a very granular portfolio. We have SPIs, which are fairly different, one which is more commercial real estate. We have other offices. And then we have funds where we can have higher yields. So for example, we're currently concluding an operation in Spain, where we will be investing in thousands of apartments. We've already done this in Spain and in Portugal. So that's residential. So these are just examples, but this is EUR 14.3 billion that's extremely diversified, both when it comes to the type of real estate. We have a very large player out of that EUR 14.3 billion, which represents a number of hundreds of millions of euros, that's EDF.

Otherwise, it's extremely granular, and we have roughly EUR 200 million, which is attributed to Decathlon. That's another French example. So we really wish to have a diversified portfolio. We have, as you saw, more than 9,000 players here, and we're going to continue to diversify this portfolio because we -- you can always have a poor payer, for example, or to have a specific region, which doesn't work very well. have hospitality in the Emirates. Will that be the case in the future? We'll see. We didn't have any real estate in the United States over the recent years. I should have perhaps started with this, but the real estate market is under pressure in Los Angeles, in Shanghai, in London.

We see this as a very appealing opportunity and all of the recent transactions that we've executed and that we have reported on, we've just reported that we bought a significant building -- office building just outside of Paris, and that was at 9.5% yield and the building is currently full. So this is a real estate market, which is extremely complex because there are structural changes in companies, and we have a very bullish approach. I gave you the example of the offices. We have residential buildings in Spain. We have some investments that have been -- that we use our equity for some using private debt. We have a large American development company, building that was offices that will now be housing.

We also have 2 real estate debt funds based in France with Altera, which is the biggest French developer. We've launched one in the United States with the Brodsky family, again, another one of the biggest promoters -- developers in the -- on the West Coast. So real estate is extremely diversified for us. We don't have too many levers since we have 26% of loan-to-value debt as it relates to our assets. It's extremely granular, but we're extremely optimistic. And many years ago, 4 or 5 years ago, we had a number of real estate players. So we believe that this is a good opportunity for those are players who can adopt a more bullish approach and who are fairly agile. We've also 2 platforms, the Sofidy platform and the Tikehau platform, and we've decided to merge this so that we have one real estate platform that can source different opportunities that can manage them because that's also essential.

And so we're very enthusiastic about this when it comes to real estate, whereas real estate is going through a very complex phase. However, what's interesting here is for the first time, we have a phenomenon which is global from Los Angeles all the way to Paris, including London. So it's a fairly challenging context right across the board. And so we have to find different opportunities.

Another question, sir. I'm an individual shareholder. Given the good results that you presented earlier, what would explain the fact that the share price is not so high, hasn't been since the beginning of the year?

Well, as we explained, there are things that we did relatively well or at least decently. And for the moment, we haven't really been able to unlock the share value of Tikehau. That's why since February, we've tried to explain better that we have 2 businesses. We have our own equity investments, EUR 3.1 billion at 31st December, which is roughly our market cap, give or take a few thousand euros as we speak. And we also have an asset management business that didn't exist previously and now that delivers EUR 150 million in results.

There are a lot of transactions on alternative asset management companies with multiples between 12 and 25x this income that gives you an idea of the valuation of our asset management. And we think that one of the ways to have a stock market profile that will be better, that will be first to explain that and also be open potentially to -- there's a slide on that to bringing in shareholders into our asset management because if you've got a third party getting into your asset management and takes a small minority stake that helps you unlock value.

So we're working a lot on that. We think that the dividend increase should also help somewhat. And we've talked about it also. We are trying to improve liquidity. And when you look at the stocks, liquidity tends to improve, although on the European mid-cap market, liquidity is not a great strength. So I hope I've answered your question.

So maybe for the last question. No, I only have one left. Your own equity is relatively stable. It's declined somewhat between December 2024 and December '25, EUR 3.2 billion to EUR 3.1 billion. How is it that it's not increasing? Could you explain the reasons?

Well, normally, it should increase by the net income for the fiscal year. But since there's part, I mean, Henri will correct me if I'm wrong. But there's a currency part that went directly into equity. That's why equity declined a little bit, partly also because of the dividend as well. Yes, the dividend as well.

All right. Well, I think that this concludes the Q&A. Thank you for being extremely clear in your questions that contributed to the debate greatly. Now we will move on to a vote on resolutions. And of course, I'll give the floor to Geoffroy. And I'll ask him not to read the full text of resolutions. I think that he introduced them earlier. So I think that we can now be fairly quick about it.

Yes, this is the text that is in the packs that you were provided with. We received the final quorum, which is 91.308%. Once again, we are glad that we have such a strong turnout from our shareholders at this general meeting. Now when it comes to voting, I'll simply ask you to take your admission card so that Societe Generale Securities Services can be able to follow the vote, which will be done by show of hands like every year. So please follow instructions to the letter. And when necessary, please raise your hand.

Here we go. First resolution, approval of the annual financial statements for the financial year ended 31st December 2025. Are there any abstentions or votes against? Abstentions? The resolution is approved.

Second resolution, approval of the consolidated financial statements for the financial year. Any votes against? Any abstentions? The resolution is approved.

Third resolution, allocation of results for the financial year. Any votes against? Abstentions? The resolution is adopted.

Fourth resolution, review and authorization of agreements governed by Article L 226-10 of the French Commercial Code. Any votes against, abstentions adopted. Fifth resolution, I'll let Geoffroy read it.

Ratification of the co-opting of Mr. Xavier Musca as member of the Supervisory Board. Votes against? Abstentions? Adopted.

Thank you to the shareholders for your trust. I'm quite sensitive to it. Sixth resolution. Go ahead.

Renewal of my term of office, renewal of the term of office of Mr. Xavier Musca as member of the Supervisory Board. Any votes against? Abstentions? Adopted. Seventh resolution, reappointment of Mr. Roger Cagnard as member of the Supervisory Board. Votes against? Abstentions? Approved.

Eighth resolution, renewal of the term of office of Ms. Fanny Picard as member of the Supervisory Board. Votes against? Abstentions? Approved. Well, I welcome this appointment and congratulations to Fanny, who is with us today.

Ninth resolution, reappointment of Ms. Constance de Poncins as member of the Supervisory Board. Votes against? Abstentions? Approved. Congratulations to Constance as well. Thank you, Constance.

10th resolution, appointment of Mr. Jean-Pierre Denis as member of the Supervisory Board to replace Mr. Francois Pauly. Any votes against? Any abstentions? Approved.

11th resolution, approval of the components of the remuneration policy applicable to the managers. They were explained in detail earlier by Geoffroy. So any nays or abstentions approved.

12th resolution, approval of the amendment of the components of the remuneration policy applicable to the Supervisory Board for the 2025 financial year for the period from 15 May to 31st December. Any votes against? Abstentions? Approved.

13th resolution, approval of the components of the remuneration policy applicable to the Supervisory Board. Any votes against? Abstentions? Approved.

14th resolution, approval of information referred to in Article L22109 Paragraph 1 of the French Commercial Code and presented in the corporate governance report. Any votes against? Any abstentions? Approved.

15th resolution, approval of the components of remuneration paid during the fiscal year 2025 or awarded in respect of the 2025 financial year to AF&Co Management, manager. Any votes against? Any abstentions? Approved.

16th resolution, approval of the components of remuneration paid to -- for the fiscal year 2025 or awarded in respect of 2025 to NCH Management, Manager. Votes against? Abstentions? Approved.

17th resolution, approval of the components of remuneration paid for the fiscal year -- during the fiscal year 2025 are awarded for that year to Mr. Christian de Labriffe as Chairman of the Supervisory Board from January 1 to May 15. Any votes against? Any abstentions? Adopted.

18th resolution, approval of the components of remuneration, the same resolution, but for Mr. Xavier Musca's remuneration as Chairman of the Supervisory Board from the 15th of May 2025 onwards to the 31st of December. Any votes against? Any abstentions? Approved.

19th resolution, authorization to the managers to trade in the company's shares. Any votes against? Abstentions? Approved.

20th resolution, delegation of authority to be given to the managers to increase capital with preferential subscription rights. Any votes against or abstentions? Approved.

21st resolution, delegation of authority to the managers for capital increases without preferential subscription rights via a public offering. Any votes against? 2 votes against. Is that it? Okay. We will record your votes. Any abstentions? Approved.

22nd resolution, delegation of authority to be given to the managers to increase capital without preferential rights via public offering as defined by the first paragraph of Article L411-2 of the French Monetary and Financial Code. Any votes against? 2 votes against, which are recorded. Any abstentions? Approved.

23rd resolution. Delegation of authority to the managers to increase share capital without preferential rights for the benefit of one or several named persons. Votes against? SGSS recorded that vote against. Any abstentions? Approved.

24th resolution, authorization to the managers to issue shares and/or securities as compensation for contributions in kind consisting in equity securities or securities given access to the share capital. Any votes against? Is it recorded? Yes. Abstentions? Approved.

25th resolution, delegation of authority to the managers to decide to increase the share capital by incorporation of premiums, reserves, profits or any other amounts. Any votes against? Abstentions? Approved.

26th resolution, delegation of authority to the managers to increase the number of shares to be issued in the event of a share capital increase with or without preferential subscription rights. Votes against? Abstentions? Approved.

27th resolution, delegation of authority to the managers to decide to increase the share capital through capital increases reserved for company savings scheme. Any votes against? Madam, could you record that vote? Very well. Any abstentions? Approved.

28th resolution, delegation of authority to grant share subscription or purchase options for the group's salaried employees or corporate officers. Any votes against? Any abstentions? Approved.

29th resolution, delegation of authority to be given to the managers to grant existing free shares or shares to be issued for the group's salaried employees or corporate officers. Any votes against? All right. Any abstentions? Approved.

30th resolution, authorization to the managers to reduce the share capital by canceling treasury shares. Any votes against? Any abstentions? Approved.

31st resolution, amendment of Article 11 of the Articles of Association. Any votes against? Any abstentions? Approved.

32nd resolution, powers to carry out legal formalities. Any votes against? Any abstentions? Approved.

Very well. Well, I think that this is the end of our voting on all resolutions. Thank you for attending this meeting. Thank you also for the very clear debate and the high-quality questions that you asked. And thank you for your renewed trust into the Supervisory Board and of course, the managers of the company. Thank you, ladies and gentlemen.

Good morning, ladies and gentlemen. Thank you for being with us today. Today is about 3 words: acceleration, profitability and value creation. And everything we'll discuss this morning will connect back to these 3 priorities.

I'm Theodora Xu, Head of Investor Relations for Tikehau Capital, and I'm delighted to be hosting today's full year results and strategic update. So today, you'll hear from our 2 co-founders, Antoine Flamarion and Mathieu Chabran; our Deputy CEOs, Henri Marcoux, Thomas Friedberger and Maxime Laurent-Bellue; and our Group CFO, Vincent Picot.

So a little bit of housekeeping element on the flow of this session. So we'll first start with a look on Tikehau Capital key achievements for 2025 and then open the floor for a first session of Q&A dedicated to our annual results. We'll then take a short break to allow everybody to refresh, to grab coffee before moving into our strategic update.

Then you'll hear first from Thomas, who will share his perspectives on opportunities shaping the next decade. Then we'll have Maxime hosting a fireside chat with our co-founders, discussing accelerating profitability across asset management. Then we'll have our co-founders and Henri provide insights on our evolving approach to balance sheet allocation before taking us through the harvesting phase Tikehau Capital is now entering and providing more details on profitability drivers and value creation framework. We'll then host a second session of Q&A dedicated to our strategic update.

With that, it's my pleasure to welcome to the stage, Mathieu Chabran, Co-Founder, for opening remarks.

Thank you. Thank you, Theo. Welcome. Welcome, everyone, here in London, and welcome for all the people who dialed in on the webinar or the webcast. I hope that you can hear us okay. You got all the documents and that you will be enjoying this presentation with us. So very happy to be back in London, not only for our 2025 full year earnings, but also for this new Capital Market Day, as we call it, and very excited with -- on behalf of all the team to host you at Tikehau and give you a little bit of the forward-looking, which is really what we would like to focus on today.

But first, let's start with our '25 earnings that were released this morning. I like to call it a record year because the numbers stand. But before we get into the numbers, I would like to tell you and witness how strongly the franchise has evolved over the past few years and the acceleration, as Theo was rightly saying that we benefited from in 2025.

It's been a record year on the deployment despite if you look back and think about what 2025 was as a year and as markets to operate in, that was a record year on the deployment. On the realization, we come back to that on exiting some of our portfolio companies and distributing back to LPs and as well as the fundraising, the gross and net inflows, we'll get back to that.

We told you in 2022 that the focus was to develop, grow the profitability of the asset management. Remember that when we went public 9 years ago, we were barely doing EUR 5 million of EBIT. It's close to EUR 150 million this year. And you will see that this growth and expansion in asset management profitability is here to stand and we'll give you some guidance where we think we can go.

And then finally, on the portfolio, you've got these 2 engines at Tikehau, right, the asset management, the principal, our balance sheet, we saw some strong contribution, albeit this year impacted by some ForEx, and we'll come back to that.

So as I was saying, record in deployment, realization inflows. On the deployment, it's EUR 7.6 billion that we put at work at Tikehau, which is an increase of 35% compared to 2024. On the realization, on the exit, we like to say at Tikehau that you have to give back so that people keep giving. And you keep hearing about investors not getting money back. What we tried to do last year is to demonstrate that, yes, you can exit some portfolio company, give back to your investors so that, that keeps fueling the next cycle of growth. And that was twice what we did in 2024.

On the capital formation, it's EUR 10.5 billion of gross inflows, and that's the fourth consecutive year of a record year in fundraising. It's EUR 8 billion in net inflows. And what we are very encouraged by is that the whole investments we made in the platform over the past few years globally, remember, we went public, we had 5 offices. When we saw you in 2022 for the Capital Market Day, we had 7 offices. It's now 17 offices we've got across the world.

And from Asia, including Japan, Middle East, across Europe today, North America, even South America now, we've got all these new customer base that are fueling the fundraising at Tikehau. So 80% last year came from new customer base, new geographies outside of our domestic market, taking our overall AUM to EUR 52.8 billion.

So as I was saying, we've been focusing on larger transactions with a more global portfolio, not only in Europe, domestic market, but in Asia, in North America. And that has enabled us to raise additionally more than EUR 1 billion, EUR 1.2 billion of co-investments on some of those larger transactions. You'll have some examples later on that you may have picked up over the past year, but that has been a strong driver.

On the capital formation, as I was saying, a few elements. In Asia and Middle East, it's EUR 1 billion that was contributed. We hit the EUR 1 billion of inventories of clients in Korea that we had opened 6 years ago. And just I'll give you an example that we kind of like just last year, out of the EUR 10.5 billion gross inflow we had, 4 investors -- 4 new investors actually accounted for 20% of our fundraising, and they were all new relationships of ours, bigger commitments.

I mean, they came from some very complicated to penetrate markets. I'm thinking about Japan, thinking about Germany. I'm thinking about the U.S. I'm thinking about Middle East, GCC, Abu Dhabi. This is a strong illustration that the investment we made in the platform is now paying off, and we're harvesting all this investment that we had made.

And so as I was saying, giving back capital to RPs EUR 4.1 billion that we returned to our LP last year. And just as a data point because people have been talking a lot about private equity last year, and I'm sure we'll have plenty of questions about private credit as well, and we're looking forward to addressing them. But it's a 2.6x that we returned to our investors on the realized transaction.

So where does that leave us on the financial? I mean, we issued this morning all the numbers in the details, we'll come back. But if I look at the first pillar of our business, our asset management business, it's an 8% growth of our revenues, converting into 18% growth on the -- at the EBIT level. We grew by 12% our core FRE, this fee-related earnings. And for the first time, as we told you a few years ago, we passed the 40% core FRE margin, and you may have picked up, and we will come back to that, that we're giving an improved guidance on this very important profitability element.

On the second pillar, on the portfolio, it's a 19% growth in our realized revenue for the balance sheet, our investment portfolios and a 33% revenue growth if we exclude once again these currency effects that Vincent will be detailing. So finally, it's EUR 136 million net income that we are reporting for 2025, which is 51% growth if you exclude this currency effect.

And so we will be -- we propose EUR 0.80 dividend that we'll be voting at the next AGM. So that's for the key element. There will be plenty of details on the session. Once again, thank you very much. We look forward to an interactive session. Thank you, and I will hand over to Henri for more details.

Good morning, everyone. Thanks, Mathieu, for this introduction. So let's jump into our asset management flywheel. Maybe we'll start with deployment. As you have seen, deployment has clearly stepped up during the year '26. We've reached EUR 7.6 billion of deployment. So that's an additional EUR 2 billion, 35% compared to the year '24.

Starting with private equity maybe, with a EUR 2 billion compared to EUR 600 million the year before. Clearly, we've accelerated deployment, notably on aerospace and defense, cybersecurity, decarbonation in Spain, Belgium, Germany and in U.S. through our flagship strategy, but as well through our co-investment vehicle.

Real assets represented EUR 1.4 billion of investments compared to EUR 1 billion during the year '24. Here again, discipline has remained paramount. We continue to focus on high-quality, well-located assets, notably to be noticed during the year '24, big residential portfolio units in France as well as a big investment, first investment in real estate in the U.S. and notably several additional investments in the Netherlands.

As far as credit is concerned, so that's clearly a stable deployment versus '24. We are standing at EUR 4 billion, very well diversified allocation through Spain, Italy, Netherlands, Belgium, U.K., very strong momentum as well on our CLO issuance business. And so we are ending the year with more than EUR 7.6 billion of dry powder end of '25 to be ready to capture new investment during the year '26.

We've been talking about executing larger transaction. That's a very key important point that we wanted to mention today. So out of this EUR 7.6 billion of deployment during the year, we had EUR 1.2 billion that were deployed through dedicated co-investment vehicle. That has been the case on the private equity business, such as the Egis transaction we've been commenting for a few months. EYSA in Spain, that has been the case for as well ScioTeq aerospace and defense deal in Belgium.

That has been the case as well for real assets through this residential deal. That has been the case as well for private debt, where we had several deals where we have welcomed co-investor. So that's clearly a new feature here, creating adjacencies, creating new funds alongside our flagship and welcoming co-investors. What does that mean? That means that through this creation of new vehicle, we are bringing into the platform additional fee paying. So management fees that are going to fuel our fee-related earnings and additional performance fees, which will depend on the exits, of course, but which will fuel as well our asset management EBIT.

So looking at what happened in '25 over those co-investments, that's roughly more than EUR 1.2 billion of additional co-investment, bringing more than EUR 150 million of asset management EBIT for the coming year. Realization, clearly here, once again, a strong increase. It's almost double figure as what was exited in '24, so reaching EUR 4 billion of exits.

Here, again, private equity has been increasing significantly. That's EUR 1 billion of exits for 5 positions that were exiting during the year, reaching 2.6x of multiple. So clearly in line with our fund expectation. As far as real estate is concerned, we remain stable, EUR 500 million of exits. Multiple on real estate achieved has been 1.6x. That's at asset level, unlevered and those exits are mainly residential and light industrial.

As far as private credit is concerned here, clearly, very strong increase. Realization have reached a record that's almost EUR 2.7 billion. As far as direct lending and corporate lending are concerned, those are repayments. The average MOIC reached has been 1.4. As far as our specials business is concerned here, we've been exiting several positions as well at our initiative, achieving a gross MOIC of 1.6x.

I want to insist on that because clearly, in '25, I think that the global macro environment as far as exit is concerned, has been challenging. In that context, we've been able to deliver EUR 4 billion of exits. So we are sending back money to our LP. we are increasing the DPI, which is key. We are increasing the performance and all the average gross MOIC that have been realized on all of our exits are clearly either in line or above our fund expectation.

Fundraising. So here again, we've been mentioning EUR 10.5 billion of gross inflows, record year. As far as net inflows is concerned, that's EUR 8 billion of net inflows, so a 13% increase during the year. Looking at this fundraising a little bit more in detail. You can see that as far as private equity is concerned, we've reached EUR 2 billion. I'll come back on that. Notably, those inflows have been driven by the cybersecurity final close, regenerative agriculture as well.

Our specialist fund being decarbonization fund #2, aerospace and defense fund #2 have been benefiting obviously from strong inflows in the current environment. As far as real estate is concerned here, it's a performance of EUR 1.3 billion of net inflows, focusing on value-add and Core and Core+. This is including the previous transaction I was mentioning, notably residential in France, the one in the Netherlands as well.

Strong contribution from credit, EUR 4.4 billion, stable versus last year. As we just announced a few days ago, we've been closing our credit secondary fund #2, $1 billion, which is almost double the size versus previous vintage. As far as direct lending, vintage #6 is concerned, which is still open as we speak, we are close to EUR 5 billion. And here, we have secured the 2 largest individual LP commitments in our history from Germany and in U.S. Demand as far as direct lending is concerned, remained quite strong.

So as you can see over here, diversified strategy, larger tickets, co-investment, client conviction, bringing us into this record EUR 8 billion for the year '25. So just a snapshot here on where we stand on our flagship. So I was mentioning special opportunity fund number -- vintage # 3, EUR 1.2 billion, which is almost the double versus the previous vintage. Credit secondary, $1 billion. As far as private equity is concerned, regenerative agriculture, vintage #1, EUR 600 million; cybersecurity fourth vintage, almost doubling the size versus the previous vintage. As far as '26 is concerned, lots of ongoing fundraising as we speak.

Obviously, direct lending #6 still open as we speak and benefiting from strong inflows. This year will be as well a strong year as far as private equity is concerned, we are still open during all the year, Aerospace and defense fund #2 and decarbonization fund #2.

So you have here on the screen the evolution of our AUM during the year. So it started at end December '24 at EUR 49 billion, ending at EUR 52.8 billion. Different movements of the year have been impacted by the inflows I was mentioning, EUR 8 billion and the distribution standing at EUR 4.1 billion. You have on the right side of the page, the diversified and complementary asset class, the split by business unit.

Client base, as far as client base is concerned, one important feature, Mathieu was mentioning the number of offices we are operating, namely 17 offices as we speak. Important to notice that as far as inflows are concerned, that's more than 80% of net new money that has been raised from international clients. You have here the biggest contributors for the year '25 being U.S. investors, U.K., Spain, Germany.

To be noticed during the year '25, strong contribution from Asia, namely from Korea and Japan. Korea has gone over the EUR 2 billion mark for the year '25. Contribution as well from Israel, where we are approaching the EUR 2 billion mark as far as the LP commitments are concerned. So those are the most represented nationalities in '25.

On the right part of the page, you do have actually the split, which means that international clients have increased from 44% '24 to 46%. So that's a 13% increase, representing EUR 24 billion at end of '25. Private market is an important feature. We've been focusing significantly over the past year over the strong growth, era of growth. That has been the case as well for '25. That's 25% of third-party inflows that were raised through private clients. That's actually notably all the initiatives we've been launching on private debt, private credit, unit-linked products have now reached more than EUR 1.5 billion at end of December.

As far as AUM are concerned, that means private customer clients are now representing more than 34% of our AUM. That's actually more than EUR 18 billion. Two dedicated initiatives that have been launched during the year '25, one on private credit, namely TEPC, European private credit, semi-liquid fund, focusing on midsized European company.

And second important initiative that was launched during the summer, which is a unit-linked dedicated to defense, security, aerospace. This unit linked is currently distributed through partnership that we're having with big insurance company. We are currently sending over EUR 200 million for this product, which -- where the distribution has started end of '25, focusing on our aerospace and defense practice and notably the track record that we are benefiting on that practice, aerospace and defense practice that was launched back in 2018.

Last point on sustainability. A few years ago, we had set a target on AUM dedicated to climate and biodiversity. Our target was to achieve at least EUR 5 billion of AUM dedicated to that practice. End of '25, we are standing at EUR 5.8 billion, notably thanks to our decarbonization practice, Fund #2. So that means continued sustainability integration across the several pillars that we are benefiting through the WL platform.

I will now leave the floor to Vincent for the financial review. Thanks.

Thank you, Henri. So I'll start the financial highlights with our fee-paying AUM and the revenue generation in terms of revenues. So first, fee paying AUM grew by 6% compared to 2024. It was driven by net money on our private equity practice, capital markets and also by a very dynamic fundraising and deployment activity for direct lending and CLO business.

In addition, it's worth mentioning that future fee-paying AUM grew by 24%, and it was supported by solid net money in direct lending strategies. We charge management fees on invested capital. So together, fee-paying AUM and future fee-paying AUM increased by 8% year-on-year. So that's a sign of securing future management fee generation.

Also and the impact it has on management fees is that management fees increased by 8%, reaching EUR 358 million. That's an acceleration that we have noticed specifically in H2. Average revenue margin stood at 88 bps, which remains resilient.

And worth noting that we record a clear performance-related earnings level of EUR 22 million, which is a record. On the following slide, a few data points on performance-related earnings. So at end 2025, AUM eligible to carried interest grew by 10% to EUR 24.8 billion. In addition, at end September 2025, we had EUR 220 million of annualized performance-related revenues, which are actually accrued at fund level and such level is based on the current performance at portfolio level.

This amount is not crystallized yet. It is not yet accounted for in our P&L, and it will be recognized as funds approach maturity. In terms of asset management profitability and as Mathieu mentioned, we grew our asset management EBIT by 18% year-over-year, reaching for the first time EUR 150 million. This growth reflects specifically the increase in the core fee-related earnings with a notable acceleration in H2.

This is mostly due to an increase in management fees in this period. Overall, Core fee-related earnings increased to 41% in terms of margin, exceeding so for the first time, the 40%, and it reached exactly 46% in H2. Overall and looking now at the cost base, we remained very disciplined because the operating cost base only grew by a mere 3% year-over-year. So that's a testament of an efficient resource allocation.

Moving now to our investment portfolio. So at end 2025, the total fair value reached EUR 4.4 billion, very -- and still very granular with a bit more than 300 investments. Approximately EUR 3 billion of this amount is invested in our own management strategies. So it ensures an alignment of interest with our client investors. The remainder of this amount, EUR 1.3 billion is invested in our direct investment ecosystem. As you can see on the right-hand side, we've got a pretty well diversified portfolio in terms of asset classes.

Now looking at the flows and what happened over the year, investments reached EUR 1.3 billion, of which EUR 951 million of capital calls in our own strategies, CLO, credit secondaries, private equity strategies mostly, but we also invested EUR 370 million in our ecosystem, and it was mostly driven last year by our investment in Schroders. 2025, so we carried out close to EUR 800 million of exits.

Returns of capital were from various asset classes, CLOs, special opportunities, but also decarbonization and aerospace strategies that Henri mentioned when talking about distributions to our LPs.

Market effects, minus EUR 18 million, reflecting mixed effects, positive fair value changes for our Schroders stake, also positive regulations in some of our private equity strategies, mostly aerospace and defense and also decarbonization, but it was offset by negative market effects in some very specific credit and real estate situations.

And finally, currency effects amounted to minus EUR 161 million, and it's mostly linked to the sterling euro exchange rate. Slide 20 -- next slide. So in terms of portfolio revenues. So in 2025, portfolio revenues reached EUR 166 million. That compares to EUR 207 million in 2024. But as mentioned also by Mathieu, realized revenues actually grew very significantly by 19% year-over-year, reaching EUR 239 million. So that's worth highlighting.

It's composed primarily of coupon, dividend and distribution from our whole spectrum of credit strategies, listed REITs and also ecosystem investments. As regards unrealized revenue of minus EUR 73 million, we've got a P&L impact of foreign exchange for minus EUR 52 million, mostly linked to the euro-sterling exchange rate.

And as I explained in the slide earlier, also around minus EUR 20 million of unrealized negative changes in fair value. So excluding currency effects, our portfolio revenues grew by 33% year-over-year. If I have to wrap up our 2025 financial performance, strong performance in our asset management platform, as explained on the asset management EBIT growth. It was offset to some extent by currency effects and also by unrealized fair value changes on our investment portfolio.

Looking now in a bit more detail, nonrecurring items and other of EUR 13 million. It's mostly linked to positive ForEx impacts on our U.S. financings. Tax expenses, EUR 51 million in 2025, in line with our net result before tax and a tax rate of around 25%. So overall, our net result group share amounts to EUR 136 million. And if we exclude main currency effects, our net result grew by 51% year-over-year.

In terms of balance sheet metrics, our model is strong, supported by means of EUR 3.1 billion of shareholders' equity group share and also by short-term financial resources of EUR 1.2 billion. As regard our financial debt, which stood at EUR 1.9 billion, it encompasses a EUR 500 million new bond issue, a renewed and upsized RCF line of EUR 1.15 billion. And at end of December 2025, we had drawn EUR 150 million of our revolving credit facility.

And as of today, we have fully reimbursed our RCF. In terms of -- so based on this -- so building on what I disclosed and building on our 2025 performance, we're also pleased to formulate a new 2026 vision that is disclosed on the screen. We will be laser focused on reaching an AUM of at least EUR 60 billion by end 2026, reaching FRE between EUR 175 million and EUR 225 million and the net result group share between EUR 420 million and EUR 520 million, excluding ForEx effects.

Worth noting that approximately EUR 180 million of net result comes from the full disposal of our stake in Schroders that happened earlier this year. And also, we also disclosed a return on equity between 13% and 16%. So all those metrics show improvement compared to 2025 and are above market expectations.

2026 has to be seen as a step in our journey towards a long-term profitable growth that will be disclosed and presented just after. And we will be providing, of course, more details on our targets later this morning.

Thank you very much for your attention. I will let Antoine for the concluding remarks.

Thank you, gentlemen, for this very thorough presentation. We'll now open the floor to questions. [Operator Instructions]

And we will address in priority questions from the room, obviously, and also take questions from the webcast. So one question from Sharath Kumar from Deutsche Bank.

Very impressive presentation. So congratulations. I have 2 questions, if that is okay. So first one is while I totally understand your investment story, but I think it will be much simpler with an asset-light business, although I kind of understand where you're coming from in terms of your balance sheet, funding your strategies.

But ultimately, I think it is very hard to deny that this has been hugely dilutive to your valuation. So has there been discussions to eye off the investment activity outside the listed entity so that it can improve your valuation? So that is the first one. And I want to come back to the usual topic on your share price valuation, low free float. A couple of years ago is when you disclosed your 2026 targets, at least on the asset management side, you have been mostly on track, while on the investment activity side, is there, I think consensus is widely divergent from your targets. Just been a very painful wait for the sector to rerate and you have not been alone in that. So -- but when it comes to increasing the free float, what is the latest update that you can give you?

I know it's been a chicken and egg situation for the valuation to increase or the free float to increase, but what is the latest update that we can?

Thank you for your question. That's a usual relevant question we had on balance sheet and asset light. As you all know, we started the firm just as an investment company in 2004. In 2007, we launched the asset management. So our asset management is 19 years old. We are celebrating next year our 20-year anniversary for the asset management.

So we decided from day 1 that having a balance sheet will help fuel grow the asset management. And as we discuss a little bit later during our strategic update, we'll be more precise into that. But the truth is that we've been using the balance sheet to seed sponsor new initiative. Without the balance sheet, it would have been impossible to launch CLO in 2012, direct lending in 2009, decarb in 2018, aerospace and defense in 2020.

Needless to say that nobody will even answer our phone. So we used the balance sheet to seed sponsor that. As a result, we have this balance sheet, a EUR 5 billion balance sheet and now a EUR 53 billion AUM business. We are clearly unhappy with the valuation. The sum of the part is miles away of what we should be. So clearly, we don't get the credit of having both the balance sheet and the asset management.

For all of you who are very familiar, you just saw the latest M&A transaction announced, which is the Coller purchase for EUR 3.2 billion. Coller is making EUR 145 million of EBIT, let's say. So we just announced EUR 150 million. So that tells you more or less the valuation we should get on the asset management.

And on top of that, we've got EUR 3.1 billion of equity. So we've been growing the firm using the balance sheet to seed sponsor, launch new initiative. As we enter now a new chapter, and we'll discuss that during the strategic update, we are committing less amounts to our funds. We don't really need now to seed sponsor with large amount of money. And as you see for the first year in 2015, the commitment we had in our fund declined.

So we started the year with EUR 1.6 billion of commitment in our fund. At the end of the year, it's EUR 1.3 billion. So that's telling you that we don't really need as much capital as we needed before. So moving forward, we'll have really the 2 businesses, the principal investing, which will still remain invested in our funds. Skin in the game is critical for us.

And we have the asset management business, which is now profitable. When we leased the firm, if you remember, we are making EUR 4 million EBIT, so no profitability at all. In 9 years, we grew from EUR 4 million to EUR 150 million. As you saw on the 2026 guidance and vision, we are targeting between EUR 175 million and EUR 225 million of FRE.

So now asset management is profitable. The balance sheet, we think, is really back on track to be profitable. Vincent mentioned, for instance, Schroders, we will detail that, but Schroders has been a 64% IRR and a EUR 240 million net income. So that's why we are highly confident on the 2026 net income.

So it's a very long answer to your question. People have very clear view on asset-light versus non-asset-light. Blackstone is really asset light. KKR is not asset-light. KKR is not compounding at a strong pace, the balance sheet. And at the end of the day, for the shareholder, I think what matters the most is the net income and to increase the net income, having the 2 engine, the balance sheet and the asset management will probably lead into more net income, more dividend and share price appreciation at the end.

Thank you. Two more questions in the room from Arnaud Palliez from CIC.

Two questions related to currency impact. The first one is, can you give us the breakdown of your AUM by currency in order to forecast what could be currency impact on these assets? Then do you intend to put in place any hedging policy? I think all your debt is in euro. So do you intend also on the liability side to have a diversification by currencies? And the last one is regarding the net profit guidance for 2026. Is it at constant currency? Or do you make any assumption at this level?

Okay. Thank you for your question. So as regards assets under management and the part of the share in foreign currency, so it's about 10% and mostly in U.S. dollars. We're exposed to the U.S. dollars around and through our U.S. CLO and private debt strategies mostly.

As regard to your question around hedging, so we've got a hybrid approach at Tikehau. Like other actors in the sector, we have decided to put in place a natural hedging with financing in dollars. So it's $180 million private placement put in place in 2022. And we also put in place some forward contracts on some sterling on our sterling exposure to some extent.

So we've got this hybrid approach using these options at our hand. And regarding your last question around our 2026 guidance in terms of net results, which we mentioned is between EUR 420 million to EUR 550 million. We mentioned very specifically that it's excluding foreign impacts. So basically at constant currency December 2025.

And what we'll do moving forward when it comes to currency, when we have been issuing bonds, we've been initially only raising money denominated in euro. A few years ago, 3 years ago, we raised for the first time a USPP, dollar-denominated.

So moving forward, we will probably match our non-European currency exposure, matching with the right liabilities, so probably issuing more USPP rather than euro if we need. We consider that it's probably the best way to hedge having a proper asset and liability match. It costs less money. It's much more efficient. And this hedging currency are always complex because you can hedge the amount of money you invest.

So let's say you invest $100 million, GBP 100 million, you hedge that. But if you end up making 3x multiple having just the nominal hedge, your capital gain is not hedged. So we think that moving forward, we're going to issue more in other currency, if I may say.

One question from Nicolas Vaysselier from Exane BNP.

The first one is on Schroders. I mean, you have a big windfall coming your way. That's a great problem to have, right? I'd like to know how you think about reallocating those proceeds between reinvestments or potentially payout to shareholders through share buybacks, exceptional dividends?

Second question on your 2026 new FRE guidance. I'd like you to help us understand a bit how we bridge from where we are in '25 to get to the bottom end or even the top end of this guidance. So I'm wondering if you bake in some lumpier items like catch-up fees that you're expecting for this year, expecting some recovery at Sofidy in the subscription fees because they are meaningfully accretive to the margin. And what you expect in terms of evolution of the cost base next year?

And then finally, my third question, you mentioned some negative mark-to-market effects on the credit portfolio. We've seen some of your peers actually suffering quite a bit. So I'm interested in any comments about your credit portfolio, balance sheet exposure, how it's performing and on the equity CLOs notably.

Thank you for your question. Maybe I take the first 2 one. On reallocation or reinvestment, as mentioned before, we still have EUR 1.3 billion of commitment into our funds. So first of all, for instance, the Schroders proceeds is close to EUR 600 million. As Vincent mentioned, we are going to -- we reimburse already our RCF, which was EUR 150 million drawn. So that means that we have excess cash on the balance sheet.

We're going to probably use that for our capital call, EUR 1.3 billion. Also it's over the next few years. So it takes time. We're going to continue to invest the balance sheet alongside our strategies. So we have commitment in our funds, but the balance sheet is now doing 2 things, co-investing within our strategy. So I suspect we're going to probably deploy more money into aerospace and defense, where we are clearly ahead of the curve.

Same thing for decarb. And we start seeing more and more credit opportunities as the cycle is becoming more complex. You probably read a few days ago that we closed our secondary -- second vintage of private debt above EUR 1 billion, so twice the previous vintage.

We are the only firm having such track record when it comes to secondary private debt. So I suspect that we're going to allocate the balance sheet more into secondary private credit. Maybe I start on the -- your question on 2026, and I will let Henri comment.

So we have 4 metrics in our 2026. One is our return on equity between 13% and 16%, which is mid-teen double digit, as mentioned before. We are fairly convinced that we should reach between EUR 420 million and EUR 520 million of net income for 2026. Part of that is obviously the Schroders disposal. And as disclosed in the market, we decided to sell in the market our stake rather than waiting the end of the offer, which could happen in Q4, but could happen maybe in Q1 2027.

You never know. So we are fairly convinced that we're going to reach this level of net income and as a consequence, this return on equity. Your question specifically on catch-up fees and FRE we have several vintage of private equity currently raised, namely AAP2, which is aerospace and defense and decarb 2. There is potentially a very large amount of catch-up fees as stated in the bylaws. So within this range of EUR 175 million to EUR 225 million, there is some amount of catch-up fees, and we are fairly convinced of -- when we look at our pipeline right now coming from LP, there is a very strong demand, obviously, for aerospace and defense, and there is still many European appetite for decarb.

Yes. Maybe in summary on that, there are many 3 drivers on that. First of all, you may have seen that future fee paying have been increasing significantly end of '25. So all these future fee paying will obviously be transformed into fee-paying when we will be deploying these funds. So this is the first driver for our evolution of fee-related earnings in '26.

Second one is a mix effect. Obviously, as just described on the pipeline within our funds, we are now on the road investing and fundraising on our 2 big platform PE funds, namely decarbonization Fund #2, aerospace and defense Fund #2. Yes, there will be catch-up fees. But namely out of the -- maybe excluding even the catch-up fees, there's a mix effect with these 2 private equity funds and the track record we have benefiting on these 2 area.

And maybe the third driver to increase effectively the FRE in '26 is obviously cost control. We started to be more -- to take carefully more of the issue around cost already back in '25, and we will be keeping in that area for '26.

No, I just want to address the third question on private credit. I mean, I wish we had 2 hours to discuss private credit since so many things have been written over the past few weeks or a few months. But more specifically, we happen to have our CLO business within private credit. So just to answer specifically on the U.S. side beyond the ForEx that Vincent elaborated on, obviously, last year was a volatile year. And as you know, the CLOs or some arbitrage vehicle with some liabilities issued and that can be reset.

And so what we had last year was effectively on this specific part, some kind of a lag between the end of September, end of December valuation at the asset side and the reset on the refinancing. So we're expecting to catch up on this side when we reprice and reset the CLO.

Now more specifically on the private credit, I think there are as Antoine said, that's a big opportunity for secondary private debt, but we've never been as bullish on the opportunities to keep deploying with the same underwriting discipline when it comes to direct lending.

The issue we've been facing, there are 2 comments. One is cyclical. The other is structural. On the cyclical aspect, what we've experienced partly in the U.S. is this massive growth and fundraise on credit where many managers and not being judgmental whatsoever have started to have to deploy resilient raise.

And as you know, when some of our competitors raise $50 billion a quarter, it takes some time to keep the same discipline underwriting. We're still, I think -- and our partner, Cecile is in the room, I think we have 5% to 7% selection rate on our private credit deployment.

So that has been driven effectively a lot of talk around the direct lending. The other thing that in the U.S., the bulk of all the noise you've been hearing was coming from the U.S. You've got the mid-market direct lending, which is on average, 6 to 7x now level.

In Europe, it's more like 5 to 5.5. Our portfolio is 4.4. So as always, with credit, because the only thing you're getting is par, it's how do you underwrite and how do you structure going in. So it's a much more defensive portfolio that we've been having, and we just closed the sixth vintage of our strategy.

We started in 2007. So it's a 19 years track record when, as I'm sure you know, 92% of the private credit managers were launched post GFC. So I think that here, it's important to -- I mean, we have our share of situation of negative watch where we're working. A lot of the cyclical aspect is effectively all the credits that were originated in 2021, the 0 interest rate environment, the Central Bank very accommodating policy and when people -- you had a base rate at 0 and spreads at 300, obviously, fast forward 5 years and you got a base rate at 4 or 5 and the spreads may be at 4 or 5, obviously, your cost of refinancing is much higher, and then you have to effectively recapitalize part of them.

Now the silver lining, as Antoine alluded to, is that we're entering the golden age of the secondary private credit, and we are best positioned to tackle that.

Well, thank you so much. I'm sorry, I'm conscious of time. We'll address more questions later on during the second Q&A session. So let's take a short break. We'll resume in 10 minutes. Thank you very much.

[Break]

Welcome back, everyone. So before moving into the strategic update, we would like to take a few moments to step back and revisit who we are and how we have built our platform. So we're going to show you a short video that retraces our journey, highlighting the evolution of our platform and the areas of expertise that position us as a differentiated asset management. Let's watch.

[Presentation]

We hope you enjoy this video that really captures our journey. So today is not only about looking back, it's about what our platform is capable of delivering. We would like you to leave today's session with 3 key messages. First, we're exiting our build-out phase in asset management to move into a harvesting phase with accelerating profitability. Second, we're entering a new phase characterized by a greater strategic allocation of our balance sheet. It has been used since IPO as a great growth enabler. And now looking ahead, it will be used as a more strategic allocator.

Finally, as Antoine mentioned a bit earlier, those 2 distinct and complementary growth engines will offer significant optionality for us to close the valuation gap and also maximize value creation for our shareholders. Aligned with our '26-'29 road map, we'll be focused on delivering the following objectives. First, deliver cumulative net inflows of over EUR 34 billion, representing a 22% growth compared to the EUR 28 billion we have raised over the last fundraising cycle. This is first one. And the second one is that we aim to generate core fee-related earnings margin of between 45% and 50% by 2029 compared to 41% achieved in '25. On top of those objectives, we have formulated 2 commitments. Those are to maintain our investment-grade rating and continue to distribute over 80% of our asset management EBIT to our shareholders. So now let's start with the first section of this new chapter. And please join me in welcoming on stage Thomas Friedberger to share his perspective on opportunities shaping the next decade.

Thank you.

So Thomas, first question for you, and thank you for being here with us today. What would you characterize -- how, sorry, would you characterize the evolution of global markets today? And what do you see as the most impactful trend shaping the industry today?

Thank you, Teo. So if we look at the size of the private markets, they were estimated at $26 trillion in 2022. They are expected to grow at $61 trillion in 2032. Those are not small numbers. It's approximately 50% of the current global GDP. And if you want to compare that to other markets, let's say, you have a global market cap today in listed equities of $140 trillion. So this number of $61 trillion expected in a couple of years is not small at all.

It means that the private markets are converging with liquid markets and the convergence doesn't stop there. Let me take the example of private credit. Private credit has converged in size with the high-yield corporate bond market and with the leveraged loan market, both in the U.S. and in Europe. That's done already. As a consequence, the fixed income markets are more and more integrated with private credit spreading to investment grade to asset-backed lending. And this will offer a full range of new options to issuers going forward. We also think that, by the way, having a strong expertise in liquid credit through our capital market strategies is a strong advantage in that perspective of convergence.

I would also say that in a complex world where uncertainty, volatility, dispersion are increasing, where asset allocators need to deploy large amounts of capital on the back of a strong growth in savings, the one-stop shop model is appealing. Why? Because platforms benefit from clear processes, from clear risk management methodologies, compliance, conflict of interest management, better client servicing, better reporting capabilities.

Platforms also are able to source larger transactions, allowing co-investors to deploy large amounts of capital quickly. And they also can afford the multi-local approach, which we think is absolutely essential in the generation of performance. So the message here is that the convergence between public markets and private markets creates value. It creates value for companies and issuers. The increase in size -- in deal size in private equity and private debt provide more options for companies issuing debt. They can allow company to be taken private, for example, or to remain private for longer. It also creates value for LPs. We said that it's allowing asset allocators, large asset allocators to deploy large amounts of capital in private markets.

It also gives access to private markets for private investors, which is kind of new. And also, it will bring the best practice of liquid markets to the private markets in terms of conflict of interest management, reporting and risk management. So all of that is positive.

Thank you, Thomas, for those very interesting insights. We've seen increasing sophistication, sorry, in private markets. What investor behavior shifts are most material? And what capabilities must managers build to truly differentiate and capture growth?

So if I start with the institutional world, we noticed a sharp increase in demand for co-investments, for SMAs, for bespoke solutions. And that requires from us robust origination capabilities. I mean, capability to originate locally but at scale, which is the challenge. Also solid fund structuring and tailor-made solution to address all the specific demand from all over the world and also robust processes in terms of allocation, valuations, reporting.

So that's on the institutional side. And so hence, the importance of the strength of the platform. If I now go to the democratization of private assets, so addressing private investors, it requires from us global distribution channels, so the necessity to talk to a large number of distributors or global distributors all around the world and also digitalization to deliver data-driven client experience and reporting, which we are addressing partially through our Opale platform.

So as we look to the future now, what structural themes do you see defining the next decade? And where do you see the most compelling opportunities emerging?

So complex question to answer in a couple of minutes, but I'll try to do my best. We -- so there will be growth in 2026, 2027. But we think we have the conviction that this growth is going to be led by investments more than consumption. So CapEx-led growth, meaning that growth will be probably more concentrated on the sectors that are the priorities of the government.

So the famous 4 Ds of McKinsey, Decarbonation, Defense, Digitalization, Deglobalization. We think that the growth will be concentrated with the companies able to enable this to happen. So the sellers of picks and shovels of the resilience, if you will. So aerospace and defense, energy transition, cybersecurity are among those sectors, and that's the reason why we are focusing on them. But let me also consider deglobalization.

There is a need in Europe to create European champions also at the SME level. And that is addressed through direct lending because private equity players use 3x more direct lending than capital markets or leverage loans to finance those transactions. And so we think there is a strong opportunity also in European direct lending to build those European champions.

Number two, we think that the economic value creation is in the world is switching from efficiency to resilience and resilience has a cost. The cost of producing closer to the consumer, the cost of getting insurance against climate risk, against cyber risk; the cost of operating with higher equity buffers and less debt to cope with COVID-like situations; the cost of having more robust supply chains.

So we expect lower growth in the world with high growth concentrated on the sectors I mentioned. It will also probably change the way to invest in private equity. Companies are becoming more asset heavy than before. Even in the tech sector, you look at some companies now own data centers. They were asset-light before their own data centers. Some of them are now building their own electricity production capabilities to feed those data centers.

So it will be more asset heavy and probably that the way to invest in private equity will switch towards more what Warren Buffett was doing, which is invest in more asset-heavy sectors, looking more at return on invested capital. And it will not be easy because the best CapEx are done by the best management teams, but you can expect a lot of misallocation of capital also when there is a lot of CapEx in the sector.

So probably less reliance on multiple expansion and the investors will need to use less leverage. And if you look at what we've been doing for the last 15 years at Tikehau, it's exactly that. We've invested in sectors that are more asset heavy, aerospace and defense, for example, with less leverage than the average.

Third theme is we are entering into a war economy, which doesn't mean hopefully that we will go to war, but which means that all economic agents are put at the service of the priorities of a given government. And that means probably accommodative monetary policies going forward, starting probably in May in the U.S., but also massive fiscal expansion, which means probably lower short-term interest rates and higher long-term interest rates, so steeper yield curve, which is good for banks, which drives the strong conviction that we've been having at Tikehau for years, saying that we prefer credit risk to duration risk.

And so from that perspective, we think that direct lending, which is 100% floating rate is very well adapted to this environment, but also, for example, short duration credit in our credit capital markets activities. And last but not least, we think there is a strong opportunity in Europe because Europe is accumulating accommodative monetary policy, massive fiscal expansion in Germany, which will have consequences all over Europe, lower valuations compared to the U.S., lower levels of leverage in the corporate world and the end of the deleveraging of Southern European banks, which probably provides appetite to finance the economy from those banks, not only in Southern Europe, but in the whole of Europe.

So a very benign investment environment despite all the European bashing that we see. And so with the condition of being disciplined, there is a very strong opportunity in Europe, where we deploy 80% of our AUMs right now.

Very insightful. Thank you, Thomas. Last question. In that context, what are the implications for our different asset classes if we go through each of our strategies? And what aspects of our value proposition best position us to capture these opportunities?

So of course, I mean, it will be all about performance. Performance will drive fundraising. So performance will be key. And for that, we will continue to rely on, one, local sourcing, which is absolutely essential to the generation of performance, but also in terms of risk management, addressing tricky situations locally. Strong corporate culture of alignment of interest and as such, strong investment discipline, which we think we have by DNA and also partnerships to benefit from superior expertise and avoid crowded areas, partnership with corporates, partnership with partners in regions where we are less developed with why not other asset managers. So that's the create, don't compete angle of what we do.

Now in terms of opportunities, there are a lot. I will regroup them in 3 categories: growth, value and niches. So in terms of growth, as I said, in private equity, the solution providers through the sovereignty, through the resilience will continue to experience strong growth in a world that will grow at a slower pace. So Aerospace & Defense and decarbonation are 2 strong convictions, and we are really confident there that by allocating our capital well, we can generate a lot of value for investors.

In liquid strategies, we are very excited by anything related to the building of European sovereignty, which is a theme which is connected to what I just said on private equity. And on European direct lending, of course, this opportunity to build European champions in the credit space that is growing and is going also more towards larger cap financing with the condition, of course, to have the right allocation geographically and by sector is also a strong growth opportunity.

Now value, value being benefiting from low valuations, but also liquidity gaps. We think that here, real estate is the obvious candidate, both in equity and financing, very strong opportunity in real estate with depressed valuations and volumes that are starting to pick up. Private debt secondary is also addressing this opportunity, buying LP interest or GP and LP interest at a discount, being selective is a strong opportunity.

Special situations, which we define as financing good companies or good assets with a bad capital structure, so having a problem at a certain moment of their development. There is a lot of things to do in Europe. And with regards to niches, I would mention financial subordinated bonds. Those 3 yield curves will continue to favor banks. It's very European-centric opportunity, but we have a very strong expertise there in capital markets. Asia credit is also something that we want to be involved in. We launched a fund recently, and we think it will be a high-growth area in the coming decades.

Okay. Very interesting discussion. Thank you, Thomas, for your time. Well, to explore these themes further, we'll now be joined on stage by our 2 co-founders and Maxime Laurent-Bellue, our Deputy CEO, for a fireside chat on accelerating growth across asset management. Thank you, Thomas.

Good morning, everyone. Thanks for being here today. It's a real pleasure for me to have this chat with our 2 co-founders gathered in the same place, which is not every day. Today, we will talk about the firm. We'll talk about the industry. We'll talk about the perspective. I want to talk -- I want to start with Antoine maybe -- and I know -- CEO said that we would not do too much history, and we'd rather look forward, but just a quick question to start. It's been a 20 years-plus entrepreneurial journey, which was quite incredible. And I must say I took part of -- a decent part of it, probably around 19 years today and I've seen the firm changing, improving, growing from the startup I joined in '07 to global asset management and investment company with 17 offices globally. So obviously, a lot has happened, and Antoine, in your own words, I'd like to understand what are the sort of key strengths or the key defining features that have been shaping or positioning?

Thank you, Max. Let's try to capture the secret sauce. The truth is that as all of you know there is no secret sauce, it is a lot of conviction, ambition entrepreneurship, innovation and may be I start with that, we are entrepreneurs, as Max said, as Teo said, the plan is to look forward for the next 20 years. But the truth is that we started, as you know, with EUR 4 million as real entrepreneurs. And the journey has been colorful, complex. There is not a single day when you have (sic) [ haven't ] something new coming up, someone resigning, someone you're trying to hire, a deal going not in the right direction, a financing not in place at the right time, a historical shareholder willing to sell shares.

So that's what's happening all the time. But because we are entrepreneurs, and I think a lot of people at the firm became entrepreneurs, maybe some in a different manner. But everybody is putting a lot of energy to make sure we keep the drive, we keep the energy and we innovate all the time. Financial industry is boring. As I keep saying, we used to have banks, insurance company. Now one of the largest European financial institution is probably Revolut, if you look at least on the valuation, $75 billion. Now the banks are trading up, and you've got several banks above $100 billion market cap.

But this is what's happening. Revolut was nowhere, now it's $75 billion. Everybody wants to make sure that they put their funds on the Revolut platform. As Thomas mentioned, we create our own digital platform called Opale. It's been a record year last year. So we sell Tikehau funds and other GP on the platform. It's a greenfield. We've started with 0. Hopefully, in a few years, it's going to be several billions. And we started that again from scratch.

So part of the secret sauce has been innovation. And you can innovate in this boring industry either on the way you raise money or the way you invest. We discussed earlier, Mathieu mentioned secondary private credit. We've been the first firm to launch secondary private credit in 2020 in the U.S. Secondary private equity was everywhere, but secondary private credit was really new.

Now we raised our second vintage. We are accelerating on this front. And we've been doing that all the time. When we launched direct lending in 2009 in Europe, it was popular and well known in the U.S., but nobody was doing that in Europe. Defense is a very good example. And I think there were a question online we did not answer earlier about the deal flow when it comes to Aerospace & Defense. It's multibillions coming, and we launched that in 2020. So I think part of the journey, and I don't know if it's the success or not, but we've been innovating all the time. We're going to keep innovating. And you can innovate, as I said, on the asset or the liability side.

When you partner with corporation, nobody in the industry has been partnering with corporation. When it comes to Aerospace & Defense, you know our partners, Airbus, Dassault, Thales, Safran, they put money, they sit on some of the committee. They help us analyze some of the company. And as a result, since 2020, we own 35 companies in the sector. We exited already 3 of them, reaching on average 2.7x multiple. You partner with these guys, you're probably ahead of the curve.

When you launch decarb with Total and we launched already the second generation, again, you partner with Total that gives you an edge of understanding the sector, the trend. Does it make sense to look at hydrogen? Yes, no. Battery storage? Yes, no. And we've been doing that all the time. Max has been part of the team, who a few years ago, start investing and financing data center. We've done that a while ago. We sold one in the Netherlands in December. Because we are born in France, everybody know Mistral, the French AI company. We've been the one financing their data center.

And I think it's been all the time for more than 20 years. So we're going to continue to innovate. Hopefully, that will generate more businesses. We will create more partnership with financial institution, with corporation. And it's a very long answer because as I said, there is no secret sauce. We are entrepreneur. We innovate. We keep the same pace. As some of you know, we put a lot of energy, we being the 715 employees are putting a lot of energy to make sure we make things happening. And that's going to be the same thing. But if you look now for the next 20 years, now we have 17 offices, a very strong platform, a very talented pool of people, and we see a big acceleration coming.

And so it's interesting because innovation and partnerships have been at the foundation of our journey and sort of interconnected together. Should we expect obviously more innovation and more partnership?

Yes. I think it's we've been -- I don't know if it's good, but we always find, Thomas mentioned, niche, a very specific thing because when we launched Decarb, it was a niche in Europe, frankly. When we launched Aerospace & Defense, now it's super popular, but it was not even a niche. It was -- nobody wanted to touch that. And I think we are looking all the time at what's happening in the financial service industry, and we look at traditional asset manager, Schroders is a good example. We look at alternative asset manager. We look at insurance company. We look at digital company. And you could expect more innovation, more partnership because that's how we build the firm. And I think now the partnership we can achieve are probably much bigger in terms of size than what we've done before.

Thanks, Antoine. Mathieu, I'd like to move on the more the industry. In the same period of time, obviously, the industry has transformed rapidly tremendously. Thomas touched on the growth of the market, how the market and participants have been increasingly sophisticated, more players coming in, more competition, I guess, more strategies. So it's in constant movement. I'm not even mentioning the backdrop, which is obviously quite complex right now with geopolitics, tax and so on and so on. But how do we prepare for the next growth phase of the firm in that context? And how do we define our approach in this fast-moving environment and fast-transforming industry? It is a long question, sorry?

It's a great question. First of all, congratulations for coping 19 years with us. I must say I did not realize, but that certainly illustrates that it's an entrepreneurial and it's a people business journey. But I mean, think about where we started and what -- when you joined us in 2007, what the -- I don't even think that alternative asset management was defined as a term. We barely talked about private credit that really was born on the ashes of the GFC, I mean, certainly in Europe.

We were still very much in the GPLP world. I mean, if you look at the -- we were born in Europe, as Antoine said, not to mention France. And the market was extremely defined. It was the GPLP, you were doing mid-market European buyout. We were barely talking about private credit, as I said. You had some real estate managers for sure, but even real estate was not really perceived as, I think, an alternative asset class. That was probably certainly in Europe, the most advanced and most developed asset class that was -- that people could address and not to mention infrastructure, et cetera.

Fast forward 2026, the name of the game every day, you read in the press, you see in the media are these juggernaut platforms. I mean, I can name them because they've been modeled in our development, the Blackstones, the Apollos, the KKRs managing more than $1 trillion. I mean we like to use this anecdote with Antoine. When we started in 2004, TKO with EUR 4 million of assets under management, Blackstone was managing $40 billion. And he was sitting at Goldman Sachs. I was at Merrill Lynch over there, and we were like, well, $40 billion.

Fast forward today, it's $1.5 trillion, $1.6 trillion, the getting or something, and it's only starting. So this transformation of the industry which has accelerated over the past 5 years, it's complicated to date that. But you see that there is this massive transformation of increased savings on the one hand, private savings, bank, insurance, regulation, which is now very different in Europe than it is in the U.S., interest rate structure in some part of the world, I can think of Japan, I can think of others.

And this globalization phase, which all of a sudden enter a deglobalization phase because maybe there is this cyclical moment with the U.S., where you're constantly on the edge. It's like being on a rugby playfield, right, and waiting for the information and seeing where the ball is going to be coming from, where we're going to have to play defense, to play attack.

And that has been extremely exciting as far as I am concerned, we are concerned. And we've only been able to do that because we were lean, agile, that obviously, our team, our people were fully embarked in this dynamic. And that's why we're so -- I am certainly, I guess, we are, Antoine and I, are so excited about what's ahead because I can tell you that when people ask us what have you done differently? Well, maybe starting with $50 billion and not $4 billion with 17 offices and not just sitting in our seller in Paris.

So we're at this crossroad now where we can tackle an industry that has been, as we said, changing dramatically, which I must say, has been somehow dominated by American brands, platform franchise, which once again, I respect greatly, but the world is in a different place now. And I think you cannot have some limitation on goods with tariffs. You cannot have some limitation on people movement with immigration and not have at some point some limitation on the most liquid assets, which is capital. And what we're seeing right now, which is rightly the point that Thomas made about sovereignty and the real defining investment that needs to happen right now, there will be a massive opportunity for platform like us.

We've been seeing all along that you have to be multi-local, which means that when you're addressing Europe, and we're all seeing in London today, but I can see in the room, many people coming from different places. And we all know that doing business in Madrid, in Milan, in Frankfurt, in Paris, in London, it's different.

The culture is different. The rural -- I mean, the legal environment is different. The networks are different. And we've been making this investment for the past 20 years. When we're talking about harvesting, that's what we are referring to, that TKO today is deeply rooted in every single market to be able to size, to execute, to monitor, to -- sometimes to restructure this situation. And that's what investors or certainly the 80% of the investors we've been referring to that we are now trusting us, that's what they are looking for.

I'll give you an anecdote. When we started talking to Korean investors 7 years ago, -- and you spent a lot of time there. We all spent a lot of time there. I remember 7 years ago that some of them in our direct lending, for example, strategy, they were asking specifically to carve out Spain and Italy because back then, we were coming out of the euro crisis, the peaks, the whatever. Over the past 12 months, all the capital we raised in the region has been for private equity investment in Madrid and in Milan because it's moving so fast. And what those people are expecting from us is to be the local guide with the skin in the game, not just selling them the product of the months, but effectively promoting some investment strategy where there are some strong conviction at heart, but with capital aligned to them.

And so here, again, a long answer, but I've never been as excited because the platform we have to tackle this new chapter in the market where effectively there is a dominance like in many other sectors by some of our U.S. friends, there is this, I guess, once in a lifetime for us opportunity to be this next-gen native European alternative asset managers, which has grown organically across asset classes with capital fully aligned. We might discuss later on M&A or something, but not trying to build artificially a one-size-fits-all platform, but to have a real bespoke and hopefully relevant, performing, as Thomas said, offering for those investors.

So long answer, but I think we're best -- that's why we wanted to have this discussion with you now because I think the platform now is mature. It's mature to be harvesting these opportunities.

Thanks, Mathieu. Shorter question now for Antoine maybe. We've -- I think we've sort of outlined a bit of the road map for the next few years earlier today. I want to be very specific, Antoine, on what would you -- and if you could elaborate on our key priorities. We mentioned scale. We've mentioned profitability. I'm sure underwriting is one of them as well. But could you give us your vision on that?

Thanks, Max. Maybe I will start using what Mathieu described as harvesting. We've been investing for the last 20 years, building the platform. And we consider that the platform, which is multi-local, 17 countries, strong local investment team is fairly unique, meaning that we can source a lot of local opportunities. And when it comes to private assets, you're not buying assets behind your Bloomberg. You need to be local.

So we started doing, I don't know, a lot of residential, for instance, in Portugal, in Spain, in Germany. And as you know, real estate market is very difficult, now we start seeing really big guys, almost all the sovereign wealth fund coming, knocking at the door to say, we want to co-invest with you in your residential expertise.

And I think that's exactly the illustration of harvesting. We invest in the platform. We can source fairly unique assets with a very strong risk-reward profile. And that's about now the time to make sure we do -- we deliver a larger transaction. We keep the same investment discipline. And at the end of the day, it's not about growing the AUM. The most important thing is making sure you deliver performance for your LP, for your investor and as a consequence for the balance sheet and your shareholder.

And I think now for this chapter, we're going to be focusing on more profitability at the fund level, at the firm level because we've been investing for 20 years. So now the operating leverage is much higher. We reached EUR 150 million of EBIT 19 years after launching the asset management. The asset management has been launched in 2007. After 19 years, now we reached EUR 150 million, and it's exponential. So I think now it's about time to harvest to make sure we increase the profitability. We need to be very selective in a very changing world.

The example of Mathieu is clearly what's happening. 7 years ago, people will tell you, please, no Spain, no Italy. And now people will tell you, you're doing too much France. We want to do really Italy and Spain. And it's changing all the time. When it comes to real estate, people have been obsessed by buying retail real estate, office real estate. Needless to say, what the office market looks like now. So we need to continue to adapt. So I will say to answer and summarize what I say, scale, operating leverage, profitability, investment discipline and keep the same ambition, and that's the plan.

What about M&A, Mathieu? -- we are -- as we discussed, we are well capitalized. So we are a potential buyer for not anything, but for many objects. The industry has been consolidating recently. How do you -- do you think we'll be active? And how do we assess the right match essentially?

Yes. That goes back to what we were saying. I mean there is this imperative of scale right now, be in terms of footprint, size, assets and strategies, platform. And whilst there will always be the great and perfect investors very focused either locally or by industry. Clearly, the trend that we've been seeing over the past few years is accelerating and we'll be -- I think we'll be even more impacted by the cost of doing business, from a regulation standpoint, from a -- as I said, the footprint you need to have.

And we are very well positioned. I mean, it's going back to some of the question we had earlier on about the balance sheet. The balance sheet has been a huge enabler for the asset management business, as Antoine addressed. It's always been as entrepreneur, you're never overcapitalized. It's quite often very the opposite. And so having this opportunity to be able to buy, seed, merge, sponsor, we've become the partner of choice for many bankers, some of you in the room, and I'd like to call on you to give you some evidence.

But I mean, I think today, we've got 85 names in our spreadsheet in the pipeline of situation that we are looking at, small single strategy, single country platform all the way to some of the large platform that traded recently. And we have become partners of choice because of this balance sheet. I mean if people just want to sell, cash in and move on, that's not the type of things we're looking at.

But people say, okay, now we need to have a stronger partner that can seed anchor the next phase of fundraising, the next fund to be fully aligned in the mindset and the culture and see the cross synergy we can have in the distribution, then the discussion becomes highly interested.

Obviously, the -- I mean, the starting point is that there needs to be -- I think the first and foremost is the cultural fit. I think it goes past the financial merits. And now that we are 5, 7 years into some structuring M&A., I think that some of them will demonstrate that the cultural fit was not there, and there could be some issue there. So I will always put culture first. Then it has to be about the complementarity, obviously, because there will be little merit for us to be doubling up on some strategies where we are already a market leader in a market or in a strategy.

And then it has to be financially accretive, right? The last thing we want to become is an asset aggregator because that comes back to the discussion we are making about -- we are having about the -- our earnings. It has to be a profitable growth. And so that -- when you put all that as a filter, it leaves from 100, it gets you maybe 10 situations, right? And from 10 situation, there's maybe only 3 you want to do and maybe one that will conclude.

But we believe that M&A will keep -- as a general comment, M&A will keep developing, certainly in Europe, where some platforms are subscales, partly for some investors. We also discussed the fact that many asset owners, they are reducing the number of relationships that they're working with, but they are increasing the amount of capital they are allocating to.

And that's something that we can benefit from now that we are at scale. And the other thing, I don't think we commented on this KPI and Vincent tell me if I'm off beat here, but I think we're still at 2/3 of our investors, LPs are invested into more than 2 strategies. So they will be into credit and private equity, into infrastructure and real estate. And that's something this cross-selling and the upscaling that you can have with your LP, that's where you can make obviously a big difference. So it's about being very selective.

And on that, Mathieu, I was actually thinking probably even more selective than in any of our strategy, right? Because you certainly don't want to misunderwrite an investment in credit, in PE, real estate, but you, for sure, don't want to misunderwrite an M&A opportunity, right? Because...

100%. 100%, it's -- it's a people business. You have not seen us entering into transformative M&A that with all due respect from our investment bankers friends in the room, what I call sometimes the bankers idea, which is on paper, on XL, it's always perfect.

It always works on XL. And then you've got this people business component that needs to be factoring. But as the industry mature, as some people get into some succession challenges, as some platform may be struggling to raise the next fund, those discussions are becoming very interesting.

Maybe I'm adding a comment on M&A. All the transactions you've seen in the sector, all the comments are about how many times what's the multiple on FRE, okay? BlackRock is buying HPS on whatever, 17x. Collier has been purchased on 17x and so on and so on.

Our view is that we should be focusing on the underlying fund and not the FRE multiple at the management company at the GP. Because at the end of the day, the value of an asset management business is the underlying performance. And I think people have been a little bit distracted in the last 15 years. So people have been buying a lot. As you noticed, we bought nothing. And we are in a position whereby we will be the one consolidating. But as long as we make sure that we are buying a very strong team, the same DNA and culture and very strong performances at the fund level because if you start having good performances, the value of your business is probably close to 0.

So we're going to remain disciplined. We look at a lot of situation. And thanks to the balance sheet and our shareholder base, we can -- if we want, if it makes sense, be acquisitive. But no doubt that we're going to be very, very cautious. And we see -- we start seeing more and more opportunities coming. And as the cycle change, which is the case, for instance, in private credit in the U.S., there are more and more people knocking at the door. So we are really well positioned if we want, if it makes sense.

And an extension to your question, Max, is it doesn't just have to be an M&A deal. It can be all these partnerships where we've been, as Antoine pointed out, I think, pretty good at with some corporates, with some financial partners, with some asset managers. I think that, that's going to be increasing.

And when we were detailing the fact that moving forward, you have this asset management pillar, this balance sheet pillar on the asset management level, we become a partner of choice for those partnerships, partly with more traditional insurance companies, I can think of, with some other asset owners who are looking for some ways to deploy more into certain strategies. And that's also a step forward where our track record of having this partnership will certainly resonate well with this at this time in the cycle.

Thanks. I'm conscious of time. So maybe before wrapping up, 2 questions, 2 final questions on each. Maybe starting with Mathieu. What would you say -- what would you like to preserve the most? Or what would you like to never change within the firm regardless of where we go, how we grow?

Yes. Well, Put this little movie there. And obviously, we're in a particular seat on [indiscernible] because it was the 2 of us and now it's 700-plus people, we are working with. It was in a small office in Paris, and now we're on the road all the time, meeting with all our teams and colleagues and partners locally.

I think it's close to 50 nationality we've got across the platform now. And this -- I no longer want to use the word DNA, but I think this culture, the singularity that we tried to develop over the years and still maintain that makes effectively hopefully, a small difference between similar platforms is certainly what we need to be focusing on.

And when I look at the breadth, the expertise, the wealth of the people working around us, I mean, that makes a huge difference. Because at the end of the day, as Antoine said, what we do is not rocket science. But for as long as you are fully aligned, that you are fully embarked in terms of the people that are working to, then you can make effectively a difference in good and bad times.

And you will know very, very well, you personally and many of our people that sometimes sitting at an investment committee, sometimes we don't even have to talk looking at each other, people because having been through all these cycles together and that might be the benefit of now time and experience, it makes a huge difference in the way you're approaching what is at core, as Antoine said, the investment, the risk underwriting, the fact not to be forced to doing something or -- I mean, each time we did something wrong was when we got to live into the former. And for as long as we can resist that because the people, we've been in the locker room together. We've been on the pitch together. We had the fight, the win, the losses sometimes, but we came back, that's what we need to preserve for sure.

Is it difficult...

For sure. For sure, I said.

Is it difficult something to combine ambition, growth with maintaining entrepreneurial spirit, nimbleness?

Just to share maybe with the audience, I mean, where I'm really, really happy is that today, our team, our senior leadership team, our partners, they're spread across all our offices from Singapore to New York, obviously, here in London. And that is something that has also been a key differentiating aspect where you need to obviously hire locally, but you need to maintain this backbone, this what is the culture of Tikehau and hopefully, the discipline too.

Antoine, you opened, you closed. Any key message, any key commitment maybe for our partner, shareholders, investors?

Talking about commitment, we've been committed to this business with our 715 people. We are very committed. We remain entrepreneurs. Mathieu mentioned DNA. It's still the same company with the same drive, the same energy, a more global platform, a longer track record because when you start, you have not a real track record. Now we can claim that in several strategies, we have a strong track record, a solid track record.

The world is becoming more and more complex, and we mentioned sovereignty, technological changes, geopolitics, politics. It's going to continue to be like that. So we're going to keep diversifying our business from a geographical point of view, from a sector point of view. We need to adapt the firm. I mentioned Revolut, our own platform, Opale.

We launched several initiatives called either Retina or Lagoon, which is our own AI tools. So we need to adapt all the time because we are not really AI or tech native. So we had to spend time. We hire younger people specialized in this area.

So it's going to be the same. We still have a lot of appetite. We are not going to do stupid things. We discussed briefly M&A. We've got very strong conviction globally. We could be -- and I don't want to be arrogant, but we could be discussing U.S. asset management for 2 hours is there. We spend a lot of time there. I'm not telling you that we are announcing in the next 10 minutes something in the U.S., but we are looking at all of our options.

We've got these 2 very solid businesses, the balance sheet with permanent capital that everybody is looking at. 10 years ago, you talked to some people in the GP industry, they said, we're going to enter permanent capital. And we said we have a EUR 5 billion balance sheet. And we've got this now profitable asset manager. So we're going to have the 2 businesses, making sure they are both highly profitable. And we're going to keep doing the same thing with the same drive, same energy with a very strong group of talented people internally and a very -- and I finish here, a very unique set of partners, corporate partners, financial partners.

We did not really discuss today. But as you know, some of the largest families around the globe are invested with us from the U.S., from Greece, from France, from Italy, from Netherlands. And that's also part of our cloud. So more or less the same. with a little bit of new innovation coming.

23 seconds over time, I think that's fine. Thank you so much.

Thanks Max.

Thank you very much, gentlemen, for this very interesting insight. Before delving into our final sections, beyond strategy and expertise, what truly defines us is the way we operate. Our entrepreneurial spirit is not confined to our offices. It shapes how we think, how we collaborate and how we challenge ourselves. So we'd like now to share a short video that captures this spirit in action.

[Presentation]

We just do cycling, FRE, net income, that's the real Tikehau. It's a cycling and sport company.

Just got down from my bicycle. Good morning again. Yes. So we'll be finalizing this presentation, starting maybe a quick introduction in terms of compounding effect and velocity focus. We wanted to remind you a few data points.

First one, there was a question earlier this morning on our balance sheet, asset-light. We wanted to remind you a little bit the way we've been using our balance sheet, how have we been operating over the last years. Here, a quick snapshot once again on our investment portfolio. A few take away. First one, a significant increase of our investment portfolio went up from EUR 1.6 billion back in 2017 to EUR 4.4 billion as we speak.

Second takeaway, the way we've been rebalancing this investment portfolio. Earlier back in 2017, it was allocated 33% through our strategies. It has gone up roughly to 80% in '23. End of '25, the allocation to our own strategy stands at 69%. And that's actually a direction we want to keep on going, which means actually having lower intensive allocation to our investment strategies.

So what have we been doing with our balance sheet? A few examples have been given this morning. But obviously, investment in our own strategy, we've been mentioning that. We put our own capital at work. We invest alongside our LP, alongside our partner that enables us to effectively have a compounding third-party fundraising, accelerate international expansion. On the other way, investment in all our ecosystem, as we've been doing in the past, to forge partnership, complement our expertise and structure co-investment.

We'll be coming back on the 2 first pillar. So first one, Tikehau Capital strategies. EUR 4.3 billion have been committed in our own strategy. As you can see, credit has represented most of this allocation up until now, 48% out of that 18% in our CLO platform, which, by the way, has enabled us to launch effectively 24 European and U.S. CLO since we started the business.

Alongside that, launch as well vintage and new flagship and adjacencies. Another 17% of allocation has been done through real estate and a significant part of our allocation of this EUR 4.3 billion has been carried out in private equity, roughly 36%. And all the initiatives that we've been talking about up until this morning, decarbonization cyber security, aerospace and defense, all these initiatives that were launched back in 2018 have been done, thanks to the allocation initially made by the balance sheet.

One important point. We've been talking about this kind of third-party fundraising compounder. You can see here, each time from 2018 to 2021, that we were putting EUR 1 from the balance sheet, we had a kind of a multiple of by 7 of third-party inflows. Since '22, so during the last -- latest fundraising cycle from '22 to 25, this multiple has increased to 13. Several aspects to that. First, it's true that once the flagship are becoming bigger, once vintage are more advanced, for example, which is the case on vintage on direct lending, the multiple is higher. So clearly, we've been demonstrating that this fundraising companying effect was very efficient.

Other key priorities already that was announced this morning as well as co-investment the use of the balance sheet is a key asset for effectively in this co-investment opportunity. We are using the balance sheet to warehouse partially some of these co-investments. That was the case back in '22 on this first private debt secondary initiative, more than EUR 500 million. It has been the case last year on several co-investment deals in real estate, in private equity, in private debt. We mentioned the deal in Spain, EYSA. So here, clearly, you can see that this warehousing capacity and use of the benefit is clearly playing a strong role in our business model.

Now switching to ecosystem and direct investment. I won't come back -- won't belong on that, EUR 1.4 billion. But once again, here, it's a kind of full ecosystem, which clearly this full network is expanding deal flow. It is deepening expertise, and it is clearly enhancing market intelligence. So we are partnering here with 56 GP, 60 LP interest and it's providing a huge diversity around investment type, geography coverage or sector coverage.

Antoine, do you want to provide a comment on that as far as our GP relationships are concerned?

One thing we -- thank you, Henri. One thing we try to do is build relationships around the globe and long-term relationship across asset classes, geographies, sector. And we've been using this balance sheet in what we call ecosystem to generate opportunities. It could be co-investment opportunities when it comes to private equity, to private debt, to real estate. It could be financing, and you've got 2 examples here. We co-invested 5x with J.C. Flowers doing financial services all around the globe.

So for instance, when they invested into BTG Pactual a while ago, when the bank was private in Brazil, we co-invested with them alongside GIC. More recently, we invested with them in Jefferson Capital. We just conducted an IPO. And for us, it's 2x realization, but the multiple is close to 8x now after the IPO.

And so we generate within our ecosystem long-term relationship with families, with financial institution with very strong GP. And that's part also of what I described earlier as the cloud. Tikehau is not only 17 countries, 715 people. It's several families, several really big and smart investors. And I think when I keep doing that, that will generate more opportunities and also that's avoid you to do mistakes.

When you partner with some of the smartest investor in the financial service sector, it could be Flowers, but we've done things with Stone Point, which is the other big investor in the financial industry in the U.S. Then you're a little bit smarter, if you look at a leasing company, at a private equity company, at an insurance company and so on and so on. And that really illustrates the DNA of Tikehau. It's not only one firm, one culture, one P&L., it's a cloud of partners all around the globe, which enable you to find smarter opportunities, avoid mistake and accelerate when it times to accelerate.

And what's the takeaway you're going to tell me? So here, we've provided a few data points, both from listed ecosystem investments. Realized proceeds now are amounting above EUR 1.5 billion, net MOIC 1.4x, that's a 13.2% net IRR. And as far as exited investment -- co-investments are concerned, that's more than EUR 270 million of realized profit and 2.3x net MOIC. So once again, here, you're demonstrating quite demonstration of what we've been achieving over the last cycles have clearly demonstrated strong returns within our business model. Do you want to provide a comment or we can...

Yes. No. We had the opportunity to discuss a little bit earlier our investment in Schroder. But as you know, we've been using our balance sheet to invest in the financial services. Back in 2012, we bought Salvepar from Societe Generale. In 2017, we were the second largest shareholder of Eurazeo with a 9.5%. So we are always screening the entire financial services industry. When it comes to Schroder, which is probably -- which was the best name in the city of London with a very unique business, size, very strong track record. The company has been under some pressure and as a consequence, valuation was very bad.

So we decided to do 2 things: one, to become a relevant shareholder falling more than 5.4% of Schroder, but also building a relationship with them, trying to be able to create products, increase our distribution channel and we are still discussing with them on opportunities. And suddenly, a U.S. investor came almost 2 years after we made the initial investment, decided to launch a takeover. And that's, for us, is generated close to EUR 240 million of P&L, a very strong return. And we use the balance sheet to really do 2 things: deliver good investment and generate business. And that's part -- that illustrates perfectly what we've been doing for 22 years.

So now moving forward and looking at the next 4 years, the next chapter, what are going to be our allocation policy to -- as far as balance sheet is concerned. We are now exiting this phase where, as we mentioned, balance sheet was a growth enabler. We are entering into this next phase where our balance sheet will be strategic allocator. Our priority will be now probably to deploy less, rotate faster, target higher velocity and more value-add opportunities.

So what -- no change here. Balance sheet allocation will be gearing forward Tikehau Capital strategies and ecosystem. As far as Tikehau Capital strategies are concerned, obviously, we will keep on going and we will have still strong skin in the game alongside our partners, but a focus will be reinforced on value-add strategies in PE, in real estate and in credit, with expected returns over 15%. And as I mentioned previously as well, greater flexibility, notably on co-investment. On ecosystem, similar pattern, strategic transaction, focus on high-performing investment and ancillary business. Three main objectives, very clear: improved portfolio velocity, generate increasing profitability and grow shareholder return.

I mentioned lower capital intensity into the funds. If you have a look at the 2 previous cycles from 2018 to 2021, average yearly allocation in the funds was roughly 450 million a year. Since last cycle from '22 to 25, it was roughly 450 million, but including co-investment, the allocation will still be -- keep on going within co-investment and secured capital fund. But once again, lower capital intensity expected on this new cycle coming.

We mentioned profitability and this next phase with a strong objective. Clearly, 3 main pillars will be enhancing our profitability them for the coming years. First one, operating leverage, and I'll be giving you in a minute the details of that. Performance-related earnings will be the second pillar on which we will be relying and investment portfolio.

Operating leverage, we are exiting this cycle '22-'25, where we have reached EUR 28 billion. We are now targeting more than EUR 35 billion for this next chapter in the coming years. So clearly, here, more selectively adding -- we will be more selective in adding adjacencies and target new initiatives. We will be more focused clearly on scaling existing strategies. How are we going to achieve that? Once again, by deepening institutional relationship, high-growth region such as APAC, Middle East, North America, and we will also broaden our distribution, like was mentioned before by Antoine and Mathieu, notably to capture more private wealth demand.

What will be the growth driver? You have them here, but clearly, all of them will be clearly used and all the structure that was developed over the last 20 years, the 17 offices and the setup in place will be clear in this new target to once again achieve more than EUR 35 billion -- EUR 34 billion of fundraising for this new cycle.

Operating leverage once again here, I think that we have demonstrated that over the latest 2 fundraising cycle, operating leverage has already taken place. So Asset Management EBIT moving from EUR 4 million to EUR 114 million at the time of the latest Capital Market Day back in '22. Since then, reaching EUR 150 million, as we have described this morning. So that's a 52% CAGR since IPO. And once again, this sustainable growth has been supported by mix improvement and scale efficiencies. In that context, new chapter will be focused on reinforcement of this operating leverage, and we will be harvesting in this new phase. We are now targeting both between 45% and 50% of core FRE margin by the year 2029.

Second pillar of this new phase of profitability of this new phase of development will be performance-related earnings. We've been repeating that for many years, strong value embedded within the underlying value, the underlying funds, shareholder allocation, more than 54% of allocation of this carried interest to the balance sheet, significant profitability driver. We've seen that during the year '25, by the way, it was the highest year in terms of performance-related earnings, EUR 22 million.

So we mentioned this morning, this EUR 220 million of unrealized performance-related earnings. That's the picture -- how the picture looks like at end of September '25. So that's the underlying carried interest, which are being valued at fund level. We are expecting more than EUR 160 million to be maturing before the year '29. So we are here providing you a kind of a data point where we think the timing of this EUR 220 million where we think it will be realized. By the way, that does not include any additional value creation that can be created between '25 and the next coming 4 years, which will potentially create additional carried interest.

Third pillar of this new chapter. We mentioned operating leverage. We mentioned performance-related earnings. Third one will be investment portfolio. And here, we wanted to provide you a data point. Sorry to be a bit technical on that. But in terms of how do we recognize within our P&L, the return of the fund. So up until now, all of our funds in which the balance sheet was invested have obviously been realizing capital gains. They have been disclosed underlying stake and cash has been returned to the balance sheet. However, we want to assess that up until the DPI is below 1, it does not create any P&L impact at our balance sheet level.

So up until now, we have effectively some cash flow, but no P&L impact. As we are exiting the G-curve (sic) [ J-curve ] of most of our flagship and as we will be entering over -- DPI over 1, we are expecting significant P&L effect from our balance sheet and thus the new -- the kind of new forward looking that we are providing today as far as net result profitability is concerned.

I was mentioning this G-curve (sic) [ J-curve ] effect once again here, 2 key decisions, 2 new allocations that are being discussed today. First, allocation in new investments which are allowing higher velocity. And second one, exiting J-curve for existing investments. These 2 elements will clearly drive this third pillar of the investment portfolio.

Important data point as well on investment portfolio. Since the IPO, 2 clear cycle, 2018, 2021, '22, '25, these 2 cycles have so far returned -- have generated more than EUR 1.6 billion of capital return to the balance sheet. The next cycle that we are facing from '26 to '29, we are expecting an increasing return of capital for the balance sheet roughly above EUR 2 billion for the next 4 years. So which means that all the investments, once again, the investment portfolio that we have been describing together a few minutes ago, will generate more than EUR 4 billion of return of capital for the balance sheet. But how we're going to use this EUR 4 billion and we had the question earlier today, new investment within our fund, balance sheet optimization and shareholder return.

Talking about shareholder return here, providing you a few data points, our historical dividend distribution history since IPO. We are reiterating today our guidance, which is effectively a strong commitment to distribute more than 80% of our Asset Management EBIT per year. And meanwhile, we are providing you this new guidance on Asset Management EBIT for '26 and as well for -- up until '29, notably reaching this 55% to -- 45% to 50% core FRE margin. So I hope that all this point, once again, are illustrating this next phase of development, once again, based on these 3 pillars clearly identified and described together.

Antoine, Mathieu, maybe I will let you the floor for any conclusion remarks, if any, or otherwise, we can open Q&A.

Thank you, Henri. Just commenting on the last slide on the dividend. As you noticed, we've been 2x since the IPO paying exceptional dividend. If we continue to deliver strongly on the balance sheet return, we'll probably have excess capital because as Henri described, we need to put less money into our asset management funds. So we could expect probably in the next cycle to make sure that we improve the return for shareholders. Shall we take some questions? Yes.

Let's take some questions. So several questions from the room. Question from RBC.

[indiscernible], RBC Capital Markets. The first one on fee-related earnings margin development. Can you share more color on what sort of cost discipline assumption underpin margin expansion as you continue to scale? Second is on secondaries. Perhaps you could expand on what is your longer-term ambition for these funds?

And how competitive do you expect the secondary space to be over the next few years as your listed peers -- well, some of your listed peers are actively pushing to accelerate growth there. And then lastly, on AI and specifically, if you observed any material impact on your cybersecurity mandates? Also interested to know how you distinguish between AI winners and AI losers within your investment process?

Thank you for your question. Maybe I take the first one on operational margin. I think we have a slide on basis points per management fees per asset class, if you can show that. As everybody know, there is a strong pressure from management fees in the traditional asset manager, which get totally disrupted by the ETF business. When it comes to private assets, we continue to preserve the management fees, if I may say. And if we can get the slide, you will get a sense. But overall, our management fees remain a little bit stable, declined a little bit, but we have our private equity increasing in terms of size.

And as you will see on the slide, the private equity management fees is improving. We're at [ EUR 177 million ]. So 1.77 percentage management fee last year. We are above 1.85% management fees. So when it comes to revenues, we think that revenue will increase because of the private equity is increasing at TKO in terms of size and businesses. When we look at credit, there is some -- it's not pressure, but our average management fee is declining because we are issuing more CLOs and CLOs, the management fees is lower than the direct lending of the secondary private debt. But overall, we managed to keep the same management fees.

As Henri pointed, we have more performance fees. We noticed that in 2005, with a 5.4 basis points. So when it comes to revenue, to answer your question, revenues will continue to increase. We are fairly convinced of that. Henri mentioned it, we start managing the cost. The first phase was really the growth phase. We open offices. We hire people. Now we are becoming much more cost conscious. So that means that operating expense will probably be managed in a better way. And as a result, that will lead to an increase in the margin of our Asset Management business.

Yes, I'm happy to take the one on the secondaries. So when we decided to launch the private credit secondaries, which is what we are focusing on right now, that was in the context of our opening in North America in New York. And when we discuss with our partners, with Cecile here who's leading our direct lending practice, we say, okay, I mean, what would be the differentiating angle for us to be another direct lender in the U.S., which is already highly populated market, and that was 7 years ago. That was even before what's going on right now.

And we came to the conclusion that after this very solid and robust cycle of primary allocation to private credit over the past 10, 15 years, similar to what had happened to private equities and the development of secondaries private equity, there will be a natural opportunity to provide liquidity to some LPs allocated to the asset class, we would be willing to rebalance their portfolios.

And we thought that we were best positioned to do that because we were not a secondary solution provider like many of our competitors can be and that's their positioning. But we were credit investors at heart. And so we could demonstrate the merits of doing the underwriting, using our balance sheet as Henri just told you, and that's how we launched this practice. And what was perceived in 2020, like a very cyclical opportunity that was right in the middle of COVID, people were throwing away their financial assets became very quickly a structural strategy. And today, as some of our competitors and some more established names started to develop there in a matter of 4 years, it has become an asset class on its own.

As Antoine said, we just closed our second vintage. So we now have more track record than some of our competitors to demonstrate the merits of the strategy. We've been allocating a lot of our own balance sheet. We've been using the balance sheet. The example that Henri was saying earlier, I can elaborate on that. Our first fund was shy of $500 million. And then came an opportunity to buy a portfolio, actually a single asset, but a portfolio from a Taiwanese insurance company was getting out of a Goldman Sachs mezzanine fund, a very large $15 billion trend, which we're already an LP with. And we knew the credit and we knew that in order to do that, we could not do that with the fund. Or by the time we would go and pitch our LPs, "Oh, are you interested with this co-invest?" The opportunity would be gone.

So that's where the balance sheet is the most differentiating asset. And that's why today, we're trying to once again convince you that it's not a burden. It's our most valuable assets, enabled us to underwrite that, get these assets at some very attractive financial terms. And then once you have secured this opportunity, bring on some LPs, including some Hong Kong-based insurance companies, European insurance companies and turn this balance sheet capital into third-party fee-paying asset management.

And so today, as we close the second vintage at $1 billion in our capital, we are convinced, as I said earlier, that not only it's a natural evolution when you're in the private market to find some liquidity and add on top of that, the little noise that we've been having for the past few weeks, we would expect this to increase. And today, when you look at all the competitive landscape of our friends, all the managers, it's probably $20 billion that has been raised by way of funds or SMAs and the opportunity set in front that is $100 billion. And those are public private pension funds, insurance companies, family offices, who are rebalancing the portfolio. And we like the situation where the supply demand is totally unbalanced because that's where you become a little bit of a price setter.

And as a consequence, I mean, today, we saw public numbers where we're disclosing our fundraising, the close to $2 billion that we have deployed there have been both at $0.84, $0.85 a dollar which on an average, 3, 3.5 years remaining portfolio, you're creating a 500 basis point pickup for this illiquidity.

If you remember, in secondary private equity during COVID, when interest rates were at 0, the secondary market was trading at a premium to NAV, because that's when people were like, if I can deploy overnight some capital instead of having -- we had some negative interest rates, if you remember, having some cash at the bank was costing me some money.

So obviously, in some more defensive downside protected credit investment that we can underwrite in a bottom up, we like the risk reward and that we can generate effectively some mid-teens return. That's the return that we've been generating so far, which ticks exactly the type of return on equity we're going to have for the balance sheet.

You had a question on AI and impact on our cybersecurity business. Difficult for me to comment on. I'm a bit puzzled to say the list on AI winners and AI losers. I've seen some companies that are dealing with food premises and so on being AI losers and suddenly having decreasing value. So trying to understand that. I will not provide further comments.

All I can tell is that our cybersecurity business, we are currently operating the fourth vintage. We had strong demand from investors and the size of fund #4 has roughly doubled. And by the way, meanwhile, something is currently happening over the last years, notably since '22, which is clearly called sovereignty. And I think that there's a clear here, a new environment, new paradigm where people are realizing that it's key. And I can tell you that within our portfolio, we are the biggest venture cybersecurity business with this fund in Europe.

We are a shareholder of a company called ChapsVision. It's a global data treatment. All its systems are being used by the European government. Some may call it the European Palantir, but clearly, this company is growing significantly. We are a shareholder of Memority, which is a company providing data access to local information system locally or at distance. And I can tell you what we are seeing is strong business growth in all this company because major -- many companies in Europe are trying to replace and to be less dependent from the U.S. on all these sectors.

[ Isabel ] from Autonomous.

[ Isabel ] from Autonomous Research. So I have 2, please. My first question within the context that I understood from the full year '25 results session that you expect FRE operating expenses to be broadly flat year-on-year. So first of all, correct me if I misunderstood there. But given this, we are seeing a number of your global peers move aggressively into Europe, both institutional fundraising and on the private wealth side, including lots of hiring of dedicated sales teams to push distribution. So how are you thinking about reconciling the need for operating cost control against maintaining or expanding your competitive positioning and market share?

And then my second question is on PRE. Thank you for the color on when you think it's going to mature. On the EUR 160 million that you expect to mature before 2029, should we expect that to be more back-end loaded towards 2029? Or could we see a substantial share come through this year, please? I appreciate that might be hard to predict, but maybe if you could set out some parameters, do we need a certain fund to do very well or a couple of disposals should trigger that first recognition?

So -- go ahead...

You know that performance-related earnings. I don't have an Excel spreadsheet with every month for the -- it will obviously depend on from value creation and exits. So obviously, internally, we are -- we have all of our underlying EUR 600 million position that we are hosting on PE private debt. We are working on some kind of forecast, but difficult effectively to provide you data, strong data sets, either by year or by quarter by quarter.

But maybe what we can say is that the figure you saw here, the EUR 220 million, it was the same figure 2 years ago, if you recollect. And we had in between for the 2 years, EUR 40 million. So we'll receive EUR 40 million, EUR 22 million this year and a little bit less in 2023. So we still have the same EUR 220 million. So that means that our AUM base is growing. Our eligible AUM base to carry interest is growing. As you know, we try to be conservative on that because you cannot really predict PRE. What we can say is that we are building more and more private equity exposure, which will generate probably more carried interest than traditional real estate or credit.

When Henri and Vincent highlighted 2.6x multiple on exit on private equity is generating more carried. So I think we are very optimistic, very difficult to predict because it depends on the market, on your asset where you're going to exit. But we are fairly confident that, one, it's growing, and it's highly diversified because secondary private debt is another example where we're going to get carried interest as well. So that means that we are diversifying our pool of carried interest, difficult to predict, but it's improving, and we are very confident on that.

And if I make co-investment carried interest are obviously quicker than fund carried interest.

And maybe if you go back to your first question on -- regarding retail, one of the firm motto is create, don't compete. 30% of the money we manage is coming from retail investors directly or indirectly. So we've been pioneer in France with unit-linked product. We launched with our partner, Intesa 4 years ago, a very big program. We've done the same thing with our partner in Abu Dhabi, First Abu Dhabi Bank. We just signed something with the largest bank in Singapore. So my comment is that we still have 30% of AUM coming from retail investor. I mentioned large family offices that are investing directly with us.

So do we need -- to go back to your question, do we need to build a giant sales force to tackle the retail? We are not convinced, and that's not what we're going to do. We see our peer group in the U.S. hiring hundreds of people to cover IFAs, banks and so on. We are fairly convinced that we can keep growing there without adding gigantic cost, number one.

Number two, we'll try to be more digital. So we create our own platform, Opale, which is already fully operational. It's not gigantic. But in 2025, we raised EUR 260 million through this channel, and it's a greenfield. So we don't think we need to add a lot of resources. Our competition is doing the other way around, and they have larger brands than us, the U.S. guys, not the European guys. But we are fairly convinced that it will not destroy the profitability of the asset management.

Maybe to preempt a follow-on question, which is all this retail focus by many, we've been fairly constant and public on that. We thought that there might have been a bit of misselling in trying to address this market with open-ended evergreen structure. And I'm not only reacting to the headlines over the past few days, but there's been -- I don't want to name anybody, but there's been some things on the real estate happening, how can you have some daily liquidity when you're owning 25 building a city of London, how do you want to offer the liquidity to your clients?

On the private equity, the same thing and some of the Boost funds have grown exponentially because obviously, you had a very good brand, a good track record. And some people may have said, and it's not about the managers, sometimes the distribution saying, "Oh, you can buy this private equity or have a debt fund, it's like buying European equity usage". Well, it's not the same thing when it comes to liquidity.

And our conviction is that you rarely die of your assets, but very often of your liabilities. And that's a risk that is now in the market that don't want to be overreacting to some news flow. But part of what we show you, we have out of the EUR 52.8 billion, we've got EUR 200 million in an open-ended structure with a targeted return of 7% to 8%, when the other people are showing a low teens because of the leverage, [indiscernible]. So we are looking at the technology. We want to make sure that we can address and tackle the opportunity, but there will never be -- that we will never compromise with the asset liability matching that we believe is what we owe to our customers.

And there are some products whereby you don't really need a specific sales force. So we have -- we launched one unit-linked product with our French partner, Societe Generale. It's a unit-linked product dedicated to aerospace and defense. And for the first 2 months, it's been EUR 1 million per day more or less. And it's not our sales force. It's really the sales force of the bank. So we don't need to add extra people to market that.

Question from Nicolas Payen from Kepler.

Nicolas Payen from Kepler Cheuvreux. First one on net inflows. Just wondering, what kind of environment assumption have you baked in, in your in your planning when you set up your net inflow targets? And also, if you could give us a bit of color regarding the kind of asset class mix you're expecting regarding net inflows until 2029. That's the first question.

Then the second one will be on balance sheet investment returns. Thank you very much for your comments regarding the acceleration on the G-curve (sic) [ J-curve ]. Just wondering what kind of return shall we expect on the -- in the balance sheet? If I remember well, last time, you mentioned something like 10% to 15% return on balance sheet investments. So wondering if that still holds.

So maybe when -- I start with net inflows. As Mathieu, when he started, highlighted its fourth year in a row record year when it comes to fundraising. If you look at the net new money, the EUR 8 billion we get or the EUR 10.5 million gross, it's now really coming from all around the world and still 50% is going into private credit. But within private credit, it's highly diversified between secondary private debt, direct lending, CLO and so on.

So my point here is that we try to diversify as much as possible. As business owner, you want to build a very diversified business. So now that the platform is fully operating, we're going to expect net inflows coming from all around the globe. For the first time, we had a reinsurance company invested EUR 500 million with us in 2025. 12 months ago, we never came across this investor.

We had a German reinsurer company investing EUR 350 million with us in 2025, first time. Large Japanese insurance company invested EUR 200 million in 2025 in a direct lend fund. So to illustrate that, the net inflows will come from all around the globe. We will probably benefit from the geopolitic at some point. So I'll give you one of our favorite topic Canadian pension fund, which are by far the largest, probably similar to the super annuities in Australia. They used to put all their money with the large U.S. GPs.

Now they want to find European and Asian GP. So going back to your question, the net inflows will really come broadly from all the geographies, number one. When you look at institutional investor and retail, we commented a little bit earlier, but we keep build the infrastructure, the technology to attract retail investor. It will also come on specific asset classes.

So as everybody know, real estate has been very difficult for a lot of people around the globe. We've been very acquisitive in 2024 and 2025. So we start reinvesting in real estate because we see very good opportunities. So I suspect we're going to be the one benefiting from this shift back to real estate. We are not commenting and giving the exact breakdown of the 2029 in terms of asset classes breakdown. So that would be my question -- sorry, my answer on net inflows, maybe, Mathieu?

There's one -- it's an anecdote, but I kind of like it. Q2 '25, so a year ago, we raised more in Latin America than we raised in France. And for me, it was an interesting anecdote because I've never been there. Antoine has never been there. We've got our colleagues covering Peru, Chile, Mexico from Madrid. And by working this market over the past 2 years, now we're starting harvesting at a time with some -- our domestic market. So that's where this complementary comes. And this harvesting concept we've been reinforcing all morning, it's really about that, that we made the investments because our CapEx, our OpEx, and now you're starting to have the investment payback.

Maybe your second question on balance sheet return. Our goal is to make sure we continue to deliver mid-teen returns. We've been a little bit trapped into J-curve, as Henri described. So the way we are allocating the balance sheet moving forward is probably in a much more cautious manner. We have still the same target. And by the way, we build the firm being good investor at building the balance sheet. I like saying that, but we started Tikehau as an investment company in 2004.

And it's only 3 years after that we launched the asset management. And the asset management has been able to grow from EUR 4 million EBIT to EUR 150 million of EBIT because we've been seeding the strategy and investing. And we are investor before being asset manager, and I think we're going to be very disciplined and probably much more disciplined than when we were before.

I'm not saying that we are not disciplined. But now it's really the time of harvesting and the investment committee managing the balance sheet called the Capital Allocation Committee is becoming much more difficult, for instance, when internal teams are knocking at the door to say, yes, we have a new strategy.

We want to -- we want -- sorry, to launch a new fund dedicating to cycling and we are targeting 7%, but the likelihood we take the piece of paper, and it's going directly in the shredder is 100%. So when it comes to balance sheet, investment and balance sheet return, we're going to stick to the same mid-teen return, which is going to be a mix of stuff because asset classes are different, but that's what we target. There's -- sorry go ahead.

Last point is going back to your first question. There's no dependence on one market -- sorry, on one geography or one asset owner type for a fundraising. Now it's really broaden. And the same thing you may have picked up this morning in the detailed report we issued. Last year, our real estate fundraising on our open-end trends and our CMS fundraising was actually very modest to say the least, which historically have been very strong engine of growth. So obviously, those are open-ended, but you should expect a significant pick up there, too.

He wanted to say engine.

Questions from Julian, ODDO BHF.

I have 2. Perhaps the first one is on the core FRE guidance that you gave. Just wondering if you could speak about the drivers for reaching the upper end of the range, so that will be the 50% kind of think about the building blocks. So what would be the step up from 45% to 50%? And the other one is, if you could also say something about the potential gaps that you've identified in the operation model, so perhaps strategies, niches and that you'd like to develop or I think using Antoine's words, innovate, as you enter in this new growth cycle.

On the core FRE margin, I provided earlier the 3 main drivers. Obviously, we have the mixed effect driving the core FRE margin. We have, in terms of revenue, the pace of co-investment as well as an important feature. The more we are able to structure co-investment with additional revenue will be as well impacting that.

And then you have on the other way around, obviously, all the cost initiatives. And here, we will be most -- we'll be more cautious, notably on extending any geography or extending any services. So difficult to assess in terms of timing, but we are clearly seeing something like 50% could be achieved depending on the pace on deployment on these 3 drivers.

And probably, it will depend, as you know, on the business mix. So if we have more private equity coming, obviously, the operating margin is improving and the plan is really to keep growing at a faster pace our private equity. If you think about it, at the IPO time, we had no private equity, a part of balance sheet investment. Now we are getting close to $10 million of private equity. So in a difficult market because nobody has been waiting for us, private equity is suffering a lot, but the margin will be depending also on the pace of our private equity expansion.

But if I may add on private equity, I think you mentioned it, but I think we are the only one to have such differentiating factors, notably this partnering with industrial. We are relying on these 2 vein transition -- energy transition, decarbonization on one hand, aerospace and defense on the other hand. And on both strategies, we've been partnering with the biggest knowledgeable people in the industry, and that provides a key differentiating factor.

Going back to your question on innovation, we really built the firm innovating, and it's been asset class. It just was Henri described, people doing private equity have been generalist. We decided to be specialized just because we said that we're not going to be another LBO shop.

So we decided to be vertical. We are studying various vertical right now. So you're going to see us innovating. We want to make sure while we innovate, we are doing stuff we understand. So we don't expect to be active in cryptocurrency or we're in a stick to what we are good at. Its sourcing good opportunities that we understand. We have a lot of idea and we keep having a lot of idea.

What changed probably is that we want to make sure that when we launch a new strategy, it needs to be really scalable. In the past, we thought that we had great ideas. So for instance, my colleague will kill me, but we launched something called Tikehau Green Assets, which was an amazing idea, an amazing team, and we have EUR 130 million into the fund. And I must say that EUR 130 million is totally subscale. So we want to make sure that while we innovate, it needs to be really scalable, above EUR 1 billion for sure and potentially make sure it's multibillion.

You should see, I guess, some extension or, let's say, adjacencies. So when launching, let's say, CLO, CLO is a very scalable, but commoditized product. When we launched in the U.S. 4 years ago, we had been operating in London since 2015. The CLO pool in the U.S. because of the nature of -- and the structure of the market is running twice as fast, and we're scaling. We're now pricing our CLO #8 in 4 years when we had 15 in London.

When we launched direct lending in Asia, that's because we think that we're getting to the point with the right partnership, the right shareholders the right investors to effectively have these adjacencies of a first fund, a first move that then we'll be able to scale. As Antoine said, our very first direct lending fund in 2007, so it's almost 20 years now, it was EUR 125 million. The last vintage, #6 that we just closed a couple of weeks ago is passed EUR 5 billion. So you get effectively -- all that is feeding of the operating leverage and the operating margin that we were talking about.

You should see us expanding in real estate in North America. We've got a 20 billion real estate platform in Europe. We're managing public REIT, private REITs, commingled funds, open-ended funds. There is an opportunity right now that the natural extension into real estate bid debt or equity is made, I wouldn't say, at marginal cost, but it made at a phase in our development that the drop-through is also feeding your bottom line. So that's where you would see some -- you will see some natural expansion of the platform.

Maybe I'm conscious of time. One last question from this gentleman from [indiscernible].

I have 2, if I may. First one is share price, very strong execution, very strong everything, but the share price does not reflect it. So how far is this management team willing to execute its tools in order that the market recognizes its intrinsic value because I think the market is not nearly recognizing the net asset value of its balance sheet.

And the second is strategies for risk mitigation for the first of the French government of taxing and everything. So what ideas when we see all competitors, sometimes they have other jurisdictions to make their tax not go higher and higher. So thank you very much, and thank you for the strong execution.

Thank you for your question. Share price, needless to say, not only because as we are the largest shareholder because we still control the employees still control 54% of the firm, we get very frustrated as some of our shareholders. So I think to cope with that, a few things. One, we need to make sure we keep executing and it's painful because you execute and your share price is not moving.

So if you look at the slide I like on the EBIT, you started when you lease the asset management was EUR 4 million EBIT. Now it's EUR 150 million. Let's forget everything, okay? I'm launching a new company. I give you a business plan, and I'm telling you that 9 years from now, I'm going to reach EUR 150 million of EBIT, everybody will tell, okay, this guy smoke something because you cannot move from 0 to EUR 150 million of EBIT. So we're going to keep delivering on the profitability of the asset management. And I think it's really accelerating, so that's number one.

Number two, the balance sheet, and that's why on purpose, I put this slide, we have really 2 businesses, which are very different. We use the balance sheet to launch the asset management to see to accelerate. But we are fairly convinced that the sum of the 2 balance sheets, the sum of the parts, if I may say, is probably twice at least where we trade now at EUR 16. So we're going to try to keep delivering.

But also at some point, if we are not able to move the share price, and it's not only, I think, hopefully, us, the sector, it's also mid-market stock market in Europe is a little bit broken. So at some point, it will come back, and we start seeing a lot of U.S. investors coming to buy European shares, not only doing takeover as Nuveen on Schroder, but we start more U.S. guys coming. So hopefully, it will change the market because we need the market to change.

But I must say that if we are not able to change the stock price just doing a regular job and probably increasing the payout for the shareholder, we may took more, I don't know, structural changes. And we already simplified the structure when we listed, as everybody remember, we had a [indiscernible] structure. We simplified the group.

So now we are clearly saying that we have 2 businesses. And I'm not telling you that we are going to split the company in 2 companies. But we want to make sure if you are listed that the stock price and the stock performance is working because when you travel the world, everybody is looking at your stock price, you pitch a Korean investor for your direct lending.

The first thing he's doing is Google, stock price, flat a little bit down. What these guys are telling me to deliver a lot of performances at their fund level. But -- so we are all on top of that. We are spending a fair amount of time. Now as the asset management is more profitable, I think it's going to be much more easy for us to change that.

There is plenty of structural optionality. I guess that's part of the message we wanted to convey today. I mean we've always been a long-term greedy in making sure we can demonstrate and execute because when you start from 0, 5, you have to show over a cycle, a few cycles that you're delivering, which I'm convinced we are doing. And the rest should follow. If it does not follow, there are some structural optionality.

Now your question on France is a key question. We're going to face election...

[Foreign Language]

In a few months, we are -- I mean, we are dealing with it. And -- but difficult to comment, but we are dealing with it.

And that's why, I think I mentioned it 2 times already, but we make sure we build a very diversified business in terms of asset classes, geographies, both on the asset and the liability side. So we want to make sure we raise money all around the globe, and we want to make sure we invest more or less everywhere in Europe, but also Mathieu mentioned North America, we start doing more and more real estate because real estate is a mess. So we took advantage of that being contrarian. And at the end of the day, we're going to build a global diversified business. And it's changing all the time.

The perspective, we discussed Spain and Italy, 10 years ago, when we opened -- so this year -- sorry, in 2025, it was the 10-year anniversary of our Italian opening in Milan, okay? People at the Board of Tikehau told us 10 years ago, "you're opening in Milan. Are you crazy?" And now everybody is going to Milan. So that's why, once again, create, don't compete. We have very strong conviction. France remain France. It's one of the largest countries in Europe when you look at economic footprint, innovation. And so we're going to continue to do stuff in France, but maybe the way we allocate is going to be more diversified.

Well, thank you so much, everybody. Thank you to the speakers, to the audience today for your engagement. We can continue our discussions in a more informal manner with a light cocktail. A big thank you to the IR team that works in the shadow. And thank you very much, and we look forward to build this next chapter together. Thank you.

Good afternoon, ladies and gentlemen, and thank you for joining us today. We are delighted to welcome you to the first edition of the Tikehau Capital series dedicated to our private credit platform today. I'm very pleased to introduce our speakers who will take you through today's presentation. Maxime Laurent-Bellue, Group Deputy CEO and Co-Head of Credit; and Martino Mauroner, Deputy Head of Private Debt. We'll be taking questions from the webcast during the Q&A session. So please do not hesitate to submit your questions in the box at any time.

With that, Maxime and Martino, over to you.

Thanks, Theo, and good afternoon, everyone. Thanks for attending today. Maybe as a quick start, we would start by giving you a short overview of Tikehau Capital. As some of you may know, Tikehau Capital is a global alternative asset management and investment company. It was founded 20 years ago by 2 entrepreneurs, Antoine Flamarion and Mathieu Chabran. And it has grown through an impressive journey from EUR 4 million to today EUR 51 billion total AUM. The group is organized with a dual model with essentially 2 growth engines. First one, which is the asset management business, where we operate and invest in 4 very complementary asset classes: Private credit; real assets; private equity; and capital market strategies.

The second one is our balance sheet. Obviously, our model is supported by a very solid equity base, which is invested in a EUR 4.5 billion investment portfolio. And that balance sheet is around 70% exposed to our own funds, which means that we invest alongside our LPs in all of our flagship strategies, essentially evidencing a very strong alignment of interest. So in effect, we are truly a principal as much as we are an asset manager. The platform today is a global platform. We have a global reach with 17 offices on 4 continents and around 700 employees. So in short, we are global and local in the same time. We have a very strong entrepreneurial spirit and DNA and skin in the game, our alignment of interest is at the -- again, at the core of our positioning.

Going now into the topic of the day, which is private credit and sort of trying to give you an overview of the credit platform of Tikehau Capital.

We'll detail all of our strategies and try to give you insights on the market trends and growth and where we are positioned, where we see value. But maybe starting with an overview of the journey of the platform that we've been building over the past 20 years. First comment I will make is that we are effectively a pioneer in Europe, and the platform grew at an average of 20% per year in terms of AUM. And today, credit -- the credit's business represents around EUR 23 billion of AUM, which is the largest business unit for the firm. We've been enjoying growth, which was a combination of vertical growth and horizontal growth. Vertical growth was essentially launching new vintages, which tend to be larger and larger. And horizontal, we've been expanding from a geographical standpoint, but also launching new products and new strategies along the way. Today, the platform is really multi-strategy spanning from corporate and direct lending to CLOs, credit secondaries and tactical strategies. And as I said, we'll be giving you more details on each of these products.

Skin in the game, I was mentioning earlier, our balance sheet is currently EUR 1.2 billion invested in our credit strategies. And that's something we -- again, we praise ourselves for in terms of ability to support our existing strategies, but also the growth of new strategies. So the platform was born on the back of the GFC. And today, we have a very established track record that goes back from the genesis of the asset classes effectively. The asset class in Europe was born quite recently, and we tend to say that our track record is as long as the asset class. And therefore, we've been investing through the cycles, thanks to the support of close to 90 people investment and support teams. We have financed a fairly large number of borrowers, more than 300 over the years, which illustrates the platform's reach and depth. So in short, it's a scaling strategy platform. We have diversified strategies that are very much synergistic and essentially enable us to be a one-stop shop, and this is something we will come back during the presentation. Our industry is very simple in a way. It's all about raising capital, deploying capital and ideally returning capital with a profit to our LPs. A few data points to illustrate the virtuous flywheel effect of our private credit platform over the years. We're starting from the IPO a few years ago, we've been able to raise almost EUR 30 billion of cumulative inflows, including EUR 3 billion over the 9 months of the year. And this is, we think, a testimony of the diversification of our distribution channels and also the relevance of our investment strategies. In terms of deployment, we are very selective and having a disciplined underwriting, we think, is at the essence of our industry. And that's illustrated by the selectivity rate, which is consistently higher than 95% across our various strategies. We always favor downside protection over upside risk, which we think is a proper approach whenever you manage a credit strategy. And obviously, exits are very important. DPI is probably the KPI that is currently under the most scrutiny from LPs around the world and for the right reasons. So since the IPO, we've been able to distribute EUR 9 billion to our LPs and realize EUR 2 billion year-to-date. So despite the environment, the uncertainties that we know and that we see every day, we are enjoying a strong exit momentum across the various strategies that we manage.

Maybe a few words on private credit, the merits of the asset class, why this is something that has been growing so fast recently. I think at the roots of the asset class, obviously, and the emergence of the asset class, there was a sort of supply-demand dynamic element that was very important. Post GFC, obviously, traditional lenders and banks, most importantly, retrench for the market -- from the market. And at the same time, large allocators were looking for diversification avenues from traditional fixed income. And so essentially looking for less volatility, higher returns with the same sort of core credit component, i.e., diversification, recurring cash yield and yielding strategies, but coming with a premium and also, to some extent, with a structure element, which is in search, again, for private credit, which is underlined by usually senior positioning in the capital structure, strong equity cushion and mostly a covenant protection in the documentation that we structure. So big focus on downside protection. And again, for any investors allocating to the space, a need and a target to generate a recurring cash yield.

The asset class has been enjoying, as you can see here, phenomenal growth over the past years. We estimate the market currently to be around $1.5 trillion. That's a multiple the size it was post GFC. And we think there are a few very structural long-term tailwinds that will keep supporting the growth of the asset class in the long term. First one, obviously, is the dry powder that's been piling up by PE. There are a substantial amount of dry powder in the market that will need to be deployed, and that will create a substantial financial needs that alternative lenders will contribute to fill. Secondly, Europe is still lagging behind as it usually is behind the U.S. in terms of penetration from the alternative lending segment. So we think there will be some catch-up effect and Europe will probably grow at a faster pace than the U.S. in the years to come. Thirdly, we expect the asset class to continue to expand. And by expanding, we think essentially some strategic sectors that are positioned at the core of Europe's need for sovereignty will benefit from that, but also new adjacencies. So defense, digital infrastructure and also real estate or real estate credit are all areas where we expect significant allocation and to contribute to drive further the growth of the asset class. overall, these tailwinds will translate into additional growth over the next 4 to 5 years for the asset class, where, again, estimations, but we think the potential is to grow to $2.6 trillion up to 2029. So in short, it's a growing market. It's a healthy market that we think is here to stay and has become a strategic component of any allocation exercise today.

So how do we capture the opportunity? I think at Tikehau Capital, we are essentially ideally positioned to capture this growth and the market tailwinds. First one, we've been building a comprehensive platform. As I said, it's a multi-strat platform. It's a global one today. which means that we are offering solutions to all sorts of needs, all sorts of context with also internal synergies and benefits across strategies from origination, intel underwriting standpoint. Secondly, we have a long and established track record. We've been navigating multiple cycles. And we've been doing that always maintaining a very high level of discipline in the underwriting. And as I said, we are truly a pioneer in the European market, which provides key origination edge. In short, these trends create a very relevant model for us in investing in the asset class, which is relying on strong origination capabilities, flexibility in the way we structure deals and also very much downside protected minded in the way we build our portfolio, but also underwrite the deals we do.

Going into more details on the platform, as I was saying -- so today, it's a fairly powerful platform in a sense that we are tackling several products and strategies. During the growth, we've been focusing on 2 core engines during the growth journey of the firm. Today, again, as I said, more than EUR 23 billion AUM. The 2 core engines were direct and corporate lending on the one end and CLOs on the other end. Today, these 2 businesses represent around slightly less than EUR 10 billion each, and they've been the most scalable and the key drivers of the growth of the asset class and the business for us, but also for the firm in terms of profitability. Around that, we've been adding new adjacencies, new products. We've been innovating over the years, which is, again, one of the core DNA of the firm. And so we've been stepping in, in more niche strategies. So tactical strategies is a good example where we provide a capital solution to more complex situations. And we've also stepped in real estate credit recently. And so here, the returns targets are usually higher. And same applies for credit secondaries, which is a market where we think there is a huge potential simply because it has to reflect the overall asset class growth and in which we've been, again, very much at the forefront of innovation, launching a first vintage 4 or 5 years ago and already investing our second vintage. So overall, as I said, we manage very different strategies that answers to very different needs and overall, providing to our LPs and clients a very different risk-reward investment propositions from 3% to 4% if you look at CLOs on the senior tranches, for instance, or corporate or direct lending, where we are a mid- to high single-digit target return to more double-digit types of strategies with tactical strategies and credit secondaries. A few words on the team to wrap up the platform presentation, but we've been building a very strong and sizable team over the years. Currently, our investment teams are located in 9 different offices, so which means that we have a multi-local presence, ensuring very strong local market intel and allowing to originate, structure and execute the transactions, we think, more effectively. I mean private markets are truly local markets. So the firm has taken a view very early in our development that we needed to be local. At the time 10 or 12 years ago when we opened our first office, it was -- I think it was a constrained move because most of our competitors were operating out of London. Today, it's more fashionable, but we -- I think we have a first-mover advantage in that respect in a sense that if you look at our core Western European markets, we have always local origination and execution teams, which provide an edge in building the ecosystem, building the relationships locally. And that's been making a huge difference in the way we've been deploying our funds over the past years.

On that, I'll hand over to Martino to deep dive the direct lending strategy in more details.

Thank you, Max. Good morning, and good afternoon to everyone. I'm going to provide you a description of our biggest strategy within our credit platform, which is corporate and direct lending. As you can see from this slide, the strategy has been growing almost 20% CAGR since 2015 and it's approximately EUR 10.6 billion AUM as of September '25. We closed our fifth vintage in '22 at approximately EUR 3.3 billion, and we plan to close the sixth one at the end of this year, and we are well on track with the original target fundraising between EUR 4 billion and EUR 5 billion. Our focus on this strategy is on sponsor financing. So essentially, this means that we support international sponsor for their buyouts and M&A growth. We focus mainly on core mid-market, which means a range in terms of EBITDA between EUR 20 million and EUR 40 million. And we focus here because we believe -- we truly believe that this is the best positioning in terms of mix between returns and downside protection. In terms of ticket range, it's quite large between EUR 10 million and EUR 300 million with a focus -- a sweet spot in the middle between EUR 100 million and EUR 200. We have a very solid and strong track record. We have executed 180 deals. And I think it's very interesting to note that for approximately half of them, we have already exited and with a very successful returns. In terms of sector, we -- our approach is sector agnostic, but we have identified 4 sectors for which we see very important megatrends that will drive deployment and will create market opportunities. And these sectors are namely digital transformation, health care and demography, defense and energy transition. Our funds are highly diversified. On average, we have approximately 60 borrowers per vintage. And this is very important because it gives an average concentration between 1% and 2% per borrower. And finally, in terms of seniority, most of our deals are senior. And indeed, between 80% and 85% of our deals are senior secured. I will now provide you an overview of how we source deals and how we select them. We have a very large pool of sponsors of partners with whom we have transacted in the past. We cover actively more than 130 financial sponsor, and we have, thanks to the multiple offices that we have, we have several entry points that are -- can allow us to strengthen the relationship with our partners. With most of them, we have transacted several times. For 56% of the deals we have transacted with repeating sponsors. And I think it's very important also to highlight that for most of the cases, we are the sole and lead arranger of the deals. This is very important because in this industry, we think it's fundamental to be in the driving seat, and this also represents a strong barrier to entry and a competitive advantage that Tikehau has in a competitive environment like private credit. And moving to the right part of the slide, this leads into a very high selectivity rate. We have, on average, 3% conversion. It means that out of the almost 5,000 opportunities that we have reviewed, we have converted only 3% of them.

I think this is a very important slide that explains how we are disciplined in our approach. Our priority is always to maintain a very strong downside protection while at the same time, delivering consistent returns for our LPs. If we look at the left part of the slide, we have shown a comparison between 2020 and '25 in terms of approach to leverage and returns. With regards to leverage, we -- the weighted-average of our deal has decreased to 3.9x in '25, which is a testimony of our prudent underwriting, also if we consider that on average, more than 60% of the capital structure is financed by equity provided by financial sponsor, which is a very important indicator of the quality of the asset and the skin in the game of our partners in the deals.

And with regards to the returns, despite the margin compression that we are observing on the market, we have been able to generate higher returns. And I believe that this is a key difference between the European and U.S. market, whereby in Europe, we have higher margin that can offset a lower base rate. And this normally coupled with a lower leverage in the structure. If we focus on the quality of our assets, we believe that are highly performing. We -- on average, our portfolio companies post double-digit revenue growth and 25% of average EBITDA margin. As we were saying before, we strongly believe in the importance of the documentation protection. Indeed, 100% of our deals have maintenance covenant. And as I was saying before, lever in terms of leverage and ICR, our structuring, our underwriting is very conservative. On average, 3.9x average leverage and 2.8x average ICR, which translate at the end in a very low default rate lower than 1.5% on an annualized basis and less than 0.1% in terms of loss rate.

Now we give you a couple of case studies that are quite different. In one case, it's a highly performing deal. In the other case, it's an underperforming situation, which is a good testimony, a good evidence of how we can generate returns also in complex environment. Starting from Dedalus, Dedalus is an Italian company, which is one of the European leader in health care software. We have been supporting Ardian in their buyout and also in their M&A story. We invested in 2020, EUR 180 million, of which EUR 155 million from our direct lending strategies and EUR 25 million from the balance sheet. And it's a good illustration of value creation through both our funds and our balance sheet. And upon refinancing in summer of this year, we have been able to deliver very good returns, more than 1.9 multiple of money and more than 14% IRR.

Terrates is a geotechnical engineering solution provider for large international projects. We supported initially buyout in 2017. After a couple of years of good performance, the company started to underperform after COVID, namely for delayed projects and the liquidity issues. Initially, we provided support. We capitalized interest, but then we decided to enforce our security package in '23 by appropriating the shares of the U.S. entity, which was the most performing one within the group. And after completing the restructuring, we launched the sale process, and we were able to exit the investment less than 16 months from the enforcement. So at the end, we recovered 100% of our exposure, and we were able to generate return 1.3x multiple of money. So I think here, the 3 main messages that I would like to convey are, first, the importance of a disciplined approach and having a very strong documentation protection; second, being proactive and very thorough in monitoring our investments; and third, having a clear method and a hands-on approach when issues arise.

Now a quick overview of our track record since 2012. I will not go through all the lines, but just 3 main elements. First, EUR 7.3 billion deployed since 2012. In terms of return, 9% gross IRR on average and 7.3% net IRR. And finally, DPI, as we were mentioning before, one of the most important indicator for our LPs. I think it's important to highlight that for TDL IV, we have recently overcome 1x of returned capital, which I think it's a very important indicator since this fund terminated the investment period in 2020. And with regards to TDL V, we stand at 0.35x. And for this vintage, we ended the investment period last year.

So we'll be now giving you a short illustration on our second large -- very large credit business, which is the CLO business. As I said, it's the second core engine of our credit platform. And CLOs are fundamentally a credit strategy with more financial engineering than traditional ones, let's say. As you can see, we are operating again in a fast-growing industry. The market has almost disappeared during the GFC because it was under a lot of scrutiny. And finally, CLO 2.0 starting in 2010, evidence a very -- have been evidencing a very strong growth, characterized by, I think, some catalysts, which were a more stringent regulation and less risky strategies. So here, it's a market where it's about building and managing a highly diversified portfolio of liquid loans that are usually syndicated by investment banks on the asset side. And on the liability side, investors usually buy different tranches of risk and return from the safer senior tranches to higher-yielding mezzanine and equity tranches. So overall, it's a very different product and strategy than direct lending that Martino just presented on pretty much all aspects, risk, reward, end markets, investors, ability to differentiate and value creation levers. Everything is very different, although it's still, again, at the end of the day, a credit instrument with coupon margin maturity. But we're talking about much larger companies. As I said, the loans that we buy are usually underwritten and arranged by investment banks. Company size for the loans to be liquid are usually a minimum of EUR 100 million EBITDA and sometimes significantly more. In terms of the skills that are required, it's essentially asset selection, which is more important than origination that Martino illustrates recently. It's all about asset selection. Liquid names enable active portfolio management. So it's also about having an active portfolio management to be able to exit situations when we think there is an issue down the line, be very proactive. It's also about liability management. Obviously, the liabilities, as I said, are tranched. And you have -- when you're managing a CLO, you have the ability to take advantage of potentially more supportive market windows to reset your liabilities and benefit from a much lower cost of capital, which ultimately will flow into the equity returns. So it's obviously, again, a very different product. Why do we invest in the space? I think there is, for sure, an element of scalability, which is very important for us as a firm. We have a big focus on strategies that we think are very profitable, very scalable, ideally both of them, but certainly not neither of these.

The equity returns that are illustrated by the product are also very much in line with our balance sheet cost of capital. We're talking about, I would say, for a bad vintage, probably 10% to 12% and for a good vintage, 15% and above. And lastly, the investor base that we address through the CLO industry is very, very different, much broader to some extent. And this is something that we think is also very interesting for us as a franchise. So the journey, as you can see here, has been, again, a fast growth journey. We launched the business 10 years ago when we issued our first European CLO. To that extent, we've been -- once more, we've been contrarian. Usually, asset managers and players start with a U.S. strategy and then they expand in Europe. We did it the other way around and first launched in Europe to then expand in the U.S. in '21. So today, we have currently EUR 8.7 billion in AUM, but should be closer to EUR 10 billion actually very soon. We have issued 14 CLOs in Europe and 7 in the U.S., but have currently also a couple of warehouses currently open. So overall, it was a 41% CAGR in terms of AUM growth. And we've been turning the franchise into a proper global franchise, where obviously, there is also a very large exposure to Tikehau balance sheet. We normally retain a large portion of the equity of any CLO that we issue, which means that currently, our balance sheet is exposed around EUR 500 million to our own equity CLO. As I said, we very much appreciate the returns target, but also the distribution profile with a strong velocity of cash income and distributions across the various vehicles. Today, we are among the most active and established players in Europe. Our U.S. operations are more recent and currently still scaling up. But I would say that after the sort of Chapter 1 of the business journey, which was us being an emerging European player between '14 and '21, we are now -- we are about to close Chapter 2 where we became a very much established European player. We've launched a U.S. presence. So we are a global platform. And we've been significantly increasing the issuance space of the strategy, as you can see directly in the AUM increase over the recent years. So we are about to enter Chapter 3, which I think will be about consolidating our existing positions, continue to accelerate the issuance space and also trying to lower the reliance on our own balance sheet down the line going forward. In terms of KPIs, there are all sorts of KPIs you can look at in the CLO industry. Again, these vehicles are very, very specific in the way you raise and manage them. You need to invest through the cycle, no doubt. You cannot afford to not being invested. You cannot afford to manage cash. And so usually, you have to invest on speed. What does it mean is that you have to rely on a very strong and very disciplined credit underwriting. And that's why we are relying on our global research team, which is based of -- which is composed of analysts in the U.S., in Europe and in Asia. They are all sector-based analysts with very strong sector intel and knowledge and that are on a daily basis, identifying the best sectors, the one we want to be overweight, the one we want to be underweight and within each sector, obviously, the best credit and the one we want to avoid. So it's about managing very actively the portfolios. It's about being able to be proactive and exiting positions that are starting to underperform or where we think there will be underperformance. And the result of that is obviously to avoid default as much as possible. Default is your worst enemy, considering that even if you have a crystallized loss, you are always able to recover from that with, again, active portfolio management and creating value by potentially buying loans with a discount. So the KPI we think is worth highlighting here is our average default rate, both sides in Europe and in the U.S., which is well below market average. And again, no secret sauce apart a very strong credit research team and disciplined credit underwriting and selection.

Thank you, Max. We'll give you a quick overview of this fast-growing strategy that we manage with our dedicated team based in New York. Credit secondaries is meant to deliver attractive risk-adjusted returns by essentially acquiring LP interest in private credit portfolios at discount. We started this strategy in 2019 by establishing the team in New York. We seeded the first vintage with our balance sheet and we started by leveraging our unique network with GPs, LPs and advisers. At the time, we were one of the first teams and funds ever set up, but we strongly believe in the market opportunity that was present and for the future. We have chosen to be focused on LP-led transaction mainly because we think that they represent a better mix in terms of risk-adjusted returns. As you can see, we have reviewed more than 600 opportunities since the beginning. We have invested in 30 for approximately $1.4 billion deployed with a selectivity rate that stands below 5%. And in short, I would say that the key benefits for our clients in -- by being invested in the strategy are, first, the recurring cash distribution that can be provided by the assets, considering that in most of the cases, we are invested in senior secured loans. Second, the downside protection that is provided by acquiring a discount. And third, the significant diversification, thanks to being exposed to multiple underlying funds. This is a picture that I think represents well the opportunity, where we started and where we are now and where the opportunity is. Secondaries are -- essentially, we can see them as a portion of the global private credit industry. As of today, we stand at about close to 2% of the private credit industry, and this compares to 0.3% when we started. For the future, we expect further acceleration, and we think this will be driven by essentially 2 factors. First, of course, the growth of the private credit industry, but this will be also boosted by stronger demand and stronger liquidity needs for our investor following an active portfolio management that they are following. So in essence, we think that the market present very attractive conditions for buyers to be exposed to good portfolios with very interesting upside potential, thanks to the discount. We will mainly -- we will remain mainly focused in the U.S. because we believe that in the U.S., there is a better mix in terms of liquidity and market opportunity.

Here, we can show you the performance and the track record of the 2 vintages that we currently manage. You can see how fast we are growing here. The first vintage was slightly more than $400 million. And the second is approximately at $800 million. So we are very close to double the size of the first vintage, and we are well on track to close the fundraising by the end of this year close to our target of $1 billion. Also here in terms of DPI and returns, we think that we are delivering very strong results, 0.7 DPI for the first vintage with approximately 13% net IRR. While for the second vintage, which is, of course, more recent, we started to invest in '23, we stand at 0.35x with a net IRR of 22%, which, of course, will normalize as we continue deploying the fund. If we look at the composition of our funds on a look-through basis, we have invested in 85 funds, partnered with 25 GPs for approximately 4,000 underlying borrowers, which represents the diversification of our exposure. And as I was saying, we prefer to be exposed on senior secured assets. And on average, our NAV discount at closing stands between 10% and 15%. I hand over to Max for tactical strategy.

So yes, so tactical strategies is, again, one of the more recent strategies that we've been operating in the credit space. And here, it's all about addressing more complex situations in the credit world, usually targeting double-digit returns. The strategy was set up in '16 when we launched our first special situation vehicle. And today, we have 2 core strategies, one is European special seat or special opportunities and the other one, which is real estate credit. Having said that, these, let's say, flexible or more opportunistic strategies are really at the core DNA of the firm again. We established our credit business just after the GFC. And among the first deals we ever did were actually private credit situations where we were moving into the special seat world and typically offloading significant positions from bank's balance sheet. So this is something we've always done in a way, but we've decided to really scale up the strategy back in '16. The common features of these strategies is, again, it's credit, no doubt, but it's centered around usually a broader investment scope. So more flexibility in the mandate that we manage. First, ability and willingness to navigate across the capital structure systematically. Secondly, and lastly, a strong versatility of the deal flow. So in essence, we provide financings anywhere in the cap stack from super senior all the way to deeply subordinated. Super senior usually more in underperforming context, and we go junior in the capital structure whenever there is a growth or performing situation. So we actually address both performing and underperforming or stressy types of situations. And we obviously target the relevant point in the cap stack where we want to be, depending on the context. We can look at any sort of situations or transactions. Right now, the most active underwriting or investment themes for us have probably been around acquisition or M&A financing. First, development loans and complex refinancing. So typically, complex refinancing is a big theme. And here, we are essentially addressing the large inventory of legacy loans that have been provided in the past few years where financing was very much available and very much cheap, right? Unfortunately, it's less broadly available, and it's not as cheap as it used to be. So sometimes creating some complex situations that needs to be addressed whenever a given borrower hasn't delevered as it should. In terms of underlying asset classes, again, we have a fairly broad investment scope, but we essentially look at a pure corporate type of financings, whether a sponsor-backed or sponsor less. We look at real estate, obviously, real estate and asset-backed lending. And more recently, we've been also very active in the digital infrastructure space. We've been one of the most active lenders in Europe, where we've been deploying close to EUR 500 million over the past 3 to 4 years.

The -- If you look more closely into the 2 strategies, the essence of tactical strategies is really to be positioned at the intersection of all the Tikehau Capital expertise. We touch on all the asset class in which the firm invests, but we usually do it with a broader, more flexible mandate, as I said. So it means in a way that any deal coming to our PE or direct lending or real estate colleagues that cannot find a home in their strategy usually can potentially find a home with us. So we greatly benefit from the firm's reach and capabilities and Intel at every step of our investment process. That's one of the key things for tactical strategies. Again. We are very, very much synergistic and complementary with everything we do at Tikehau. And from a sourcing, due diligence underwriting standpoint, all the way until investment decision, where we have senior people from pretty much everywhere in the firm sitting at our IC, we benefit from that platform effect. Special situations is a very good example. As you can see, we invest in -- we have the ability to invest in liquid credit when there is a dislocation. So whenever it happens, we work very closely with our research team globally to essentially make sure we don't start from scratch, and we are very quick in identifying the right sectors and the right issuers in each sector. For real estate, it's another very obvious example, but whenever we look at an asset-backed situation, we have very strong input from our equity real estate colleagues, which makes a huge difference in the way we appreciate the risk and structure our deals. More recently, we launched real estate credit as a strategy. We've been investing in the space for more than a decade. We used to invest through our balance sheet and through our special opportunities strategies. And I guess there was a dual catalyst for us to decide to step in with a dedicated strategy. The first point was the environment, which dramatically changed over the last 2 to 3 years, creating a funding gap we want to address. And the second one was the partnership we were able to cement with Altarea, which is one of the largest real estate investment group in Europe, and that is investing alongside us in the strategy. So as a conclusion, yes, very much synergetic strategies where we benefit considerably from our internal insights and local teams in everything we do. The track record is, I would say, less -- it's not as long as our direct lending business, for instance, but we -- it goes back around 10 years. We are currently investing the third vintage of special opportunities and the first vintage of our real estate credit business. what's interesting here is to see the scale-up of the strategy along the years. The first fund was obviously small and to some extent, subscaled. It also took us a bit of time to find the exact right strategy. And the second and third vintage is much larger, and we think at the right size to address the European opportunity. Overall, currently, we are about 1x DPI on the first vintage. We think we'll get to 1x for the second one somewhere in '26. We've been -- as I said before, we've been enjoying a very strong momentum on exits recently, and that's expected to continue. And overall, we expect the first vintage to land below target, while the second should be more or less on target. And the third vintage is starting very -- with a very strong momentum, enjoying a very active deal flow and also a decent underwriting environment. So we expect it to be above target. Handing over to Martino to discuss a bit the platform synergies.

Thank you, Max, again. So I think this is one of the topic that we discuss more frequently. So we try always to improve our integration, our go-to-market. And I think that the main synergies that we can identify, thanks to our multi-office and multi-strategy approach are 5. First, starting from the left, the sponsor coverage. Our setup allows for multiple entry points at different levels with the financial sponsor, and this allows us to continuously improve our relationship with our key partners. This leads to deal sourcing. Again, our local setup allows for a better, faster and stronger origination, thanks to our network. We are a one-stop shop provider. We are able to cover basically the entire spectrum of financing solutions. We always have a solution for our clients.

Third item is we spoke about it, our credit research team. We have a dedicated team of 18 professionals who are industry experts covering BSL and the high-yield market, and they constantly provide dedicated and focused analysis per sector with very relevant and important industry insights and intel sharing. Fund operation is another very important area of synergies and efficiency between especially our fund operation teams and client service as we have -- we will see later, but we have our investor are most of the time repeating investor in different strategies. And this allows for material synergies and sharing of the best practices.

And finally, another important point is the pooling of our resources. We have the flexibility to allocate junior and mid-level professional where it's more appropriate. And this leads to make a very efficient use of the time. This is a transition to our client overview. I think here, we have 2 main message. First, that we have a very large and diversified base of international clients. The top 20 clients in our credit platform represent EUR 15 billion of -- and of this EUR 15 billion, 55% are non-French client, which is another testimony of our international and global setup. The second point is the -- as I was mentioning before, the fact that most of our clients are repeating investor, and we are really grateful and proud of this. If you consider that 55% of our top 20 clients are invested in 2 or more credit strategy. So again, in a nutshell, we have clear synergies in the platform that allows our clients to be exposed to a very wide and comprehensive range of strategies that offer different risk-adjusted returns based on the appetite of our clients. Back to you, Max.

So yes, maybe before wrapping things up, we wanted to also highlight a few elements on where we think our priorities are, let's say, looking forward. And obviously, wealth and retail is a big thing currently in credit. It's one of the growth avenues that's been identified and we think will fuel future growth for the asset class. So interesting to see that. First, we are convinced that private credit is a very compelling product for private clients. It allows an access to private markets, which is more and more [ in search ] from private investors. Also a way to finance the real economy, which is what we do on a daily basis and gaining exposure to mid-market lending, for instance, which is normally historically was more reserved for larger institutions. we see and we hear that private clients are more and more convinced of the relevance to have downside protection and also benefit from a recurring and resilient income stream in their portfolio. So this is clearly a big avenue of growth. And we've been tackling that opportunity for quite some time now. We are obviously very constructive about the wealth opportunity in the market. And as you can see, we currently manage more than EUR 3 billion on behalf of private clients within our Private Credit platform. So essentially, it's 14% of our AUM in the space that has grown at almost 40% average over the past few years. We've been very, I think, very early and innovative in a way we wanted to position to be able to offer a solution to private investors. And we are operating currently with a multichannel approach, which is usually partnering up with distribution partners. So we've been having very successful unit-linked products with insurance companies, as you can see, some very large French insurance and pension groups where we currently manage more than EUR 1.5 billion. We've been also working with private banks, and to that extent, we have several partnerships, but one which is probably worth bringing up with an Italian private bank, Fideuram, where we've been raising more than EUR 400 million with more than 3,000 clients in Italy to be allocated across various strategies. And finally, we've recently launched a semi-liquid fund to invest in Europe and to also provide access to private investors to our direct lending business and special ops business essentially. We are, again, fully aware of the trend. We're trying to be very careful on asset and liability management, obviously, because there is a potential mismatch here, obviously. We don't leverage the fund that we manage in the space. And we think there is, again, huge merits to be very transparent in the way you market these strategies in order to avoid surprises or anything unpleasant if there was a potential downturn. But again, it's a space where we've been enjoying very good traction recently. We see that as a key component of the future growth, and we think we are very well positioned with these different channels and multichannel approach.

A few words on one of our also main priority here, which is about scaling up our flagship strategies. It's something where we've been actually quite successful recently. And you can see 3 examples, which are European direct lending, credit secondaries and special ops. We leave CLOs aside for that part because obviously, CLOs are, in essence, very scalable. But so for these 3 strategies, you can see that vintages after vintages, we've been able to significantly increase the size of the funds, thanks to a very -- I think, a very strong upgrade and improvement that we've been doing on the capital formation side. Our reach is now really global. And in terms of geographies and type of clients, we are now able to address a much, much broader range of institutions around the world. Obviously, performance is also a big driver for us to be able to scale. But as you can see here, the trend is really good across these 3 strategies. We think this is something we will be able to maintain over the years. We really want to focus on the strategies that are in demand on which we think we are relevant, and we have a good team, good track record, good positioning. And also our strong European positioning is also something that we see as a big enabler in the years to come. We benefit a lot from the digitalization trade that we hear about. And for instance, we have huge demand from Asia, from Asian investors in all of our strategies. We've recently reached the EUR 1 billion mark for commitments in South Korea, for instance, essentially allocated to our direct lending strategies. Even more recently, we had the largest ever commitment -- single commitment from institution coming to a direct lending fund as well from Germany. So our ability to address large global allocators is increasing every day. And that's the way forward for us as a firm. And that's why we are building this platform with 17 offices and people everywhere trying to raise capital and deploy capital.

A few words to wrap up before taking questions. I'm conscious of time. And so maybe I think the key messages are, first, we've been building a very large and comprehensive platform in the credit space over the past almost 20 years. We have very different and diversified strategies, all characterized by a very strong element of interest, EUR 1.2 billion of our own balance sheet currently invested in all of our strategies. We've also built a very strong origination capabilities, as we've discussed, with a presence in all the markets in which we want to deploy capital and ensuring that we have the right ecosystem and we see the right deals in time, and that's the key edge in the market in which we operate.

We -- finally, we will remain very agile in the way we see the opportunities because we want to grow, keep growing and to grow smart. So I think it's fair to say that we are very, again, very happy of the successful platform we've been building, but we constantly look forward for innovation, for improvements. And so in that effect, we will probably consider potential partnerships, potential new adjacencies, new products, new strategies to make sure that we are ahead of the curve and we systematically upgrade and improve the platform that we build every day. On that, I'm very happy to open for any potential questions.

Theo will tell us and we'll try to answer if there are any questions coming in.

So thank you. Thank you, Max, and thank you, Martino. We actually have received several questions, and please do not hesitate to continue submitting your questions in the Q&A box. So if I start with the first question, given the recent shock waves within the private credit space, how do you see the global backdrop and environment now? Are there any pockets of the market that you see is pressured? Do you have any kind of concerns? Do you see these U.S. bankruptcies as idiosyncratic issues? Or are there wider asset quality concerns?

Should I take it?

Yes.

Yes. So it's obviously something which is very topical. I'm surprised you're not bringing up cockroaches, which is something we've been hearing a lot about recently. So yes, some statements, punch lines recently and a lot of noise in the asset class. I think I would answer in 2 parts. I think, first, no doubt that there are more underperforming situations than 3 or 4, 5 years ago. And that's probably true across all asset classes. And so credit is one of them. We keep saying as a firm that we think dispersion is a key theme, and we see that every day. We see an increasing dispersion between sectors, sectors which are more resilient, sectors which are less resilient. And within each sector, there are winners and losers essentially. So it's not a big surprise, I would say. We are late cycle in a way. So yes, there is more underperforming situations. Having said that, we think the noise recently was probably -- has created a bit of confusion and certainly some misunderstanding as well. And typically, the big failures or bankruptcies that have been raised in the U.S., we think are pretty far from what we do. I would first state that as a firm, we're lucky and we praise ourselves for not having any exposure to these names, whether directly or indirectly. But more importantly, these were usually linked to fraud first and to off-balance sheet receivable financing secondly. So it's quite far from what we do on a daily basis, which is providing on-balance sheet acquisition finance or refinancings, mostly centered in the mid-market space. Again, these names were names that were arranged by investment banks, ultimately broadly syndicated loans that has little to do with private credit. I think that's the key point. So there was a bit of a shortcut that was made. And the second point I would make is that -- we think it's definitely not systemic. We think it's certainly idiosyncratic, but we don't see that as a major threat for the industry. But for sure, in the current environment, late cycle, we need to be very selective, probably more than ever and disciplined in the underwriting.

Perfect. Thank you, Max. So we have received several questions on European direct lending. Maybe regrouping some of them. First question on, can you explain what the doubling of the PIK margin suggests and what explains this? Should this be interpreted as lower cash flow returns on your direct lending strategies compared to 2020 levels? And the second question on European direct lending is the average leverage ratio has decreased from 5.2x to 3.9x over the last 5 years. Could you please explain why? Is it a market practice of TKO or a global thing that you have seen on the market?

Yes. Sure. So starting from the first question, yes, for sure, in the market, we have been observing a trend of allowing for partial [ protocols ] also on senior financing, which was something that I would say, especially after the COVID crisis has emerged as a consequence of certain borrowers being not always able to meet the deadlines. So this has been -- is something that we can see more and more in terms of requests from our sponsor and our borrowers. We -- despite this trend, we continue to remain very diligent. And we, for instance, allow for a very limited number of toggle options. So this part of the diligent approach and being very, I would say, conservative in the construction of our deals.

And with regards to the second question about leverage, I would say this is interesting because, first, it's something that we have been positively observing. So after the start of the interest increase in '22 and '23, of course, we have been observing average multiples on the market in terms of valuation stabilizing. As a consequence, leverage has been slightly decreasing, which is a positive. And we have seen sponsors providing more equity in the structure. In this context, we remain very, very conservative. And I would say that it's a consequence of how diligent we remain in constructing our portfolio.

Got it. Thank you, Martino. Next question is maybe on geographies and maybe Asia. So which geographies do you see as most attractive for private credit today? And also, could you please elaborate the plans to grow our direct lending practice in Asia and also give the market an update on the Amova Asset Management partnership.

Yes. I would say that 2 things. So first, indeed, we see a strong demand from Asian investors and not only also North America and the Middle East towards Europe, especially those that have been historically underallocated to European direct lending. On the other side, we -- on the asset side, indeed, we think Asia has a very interesting potential. If you consider that Asia represents more or less 1/3 of global GDP, but only less than 10% of the global market for private credit. So this means that there is an opportunity. And in this context, we have started to capture this opportunity. And we have recently closed 2 partnerships in Asia, one more related to the distribution with Amova Asset Management. And the other on the asset side, on the deployment side, we have created together with our partner, UOB Kay Hian, a dedicated team investing in Asian private credit, and we have started to deploy this during this year.

Got it. Thank you, Martino. Maybe turning to you, Max, on CLOs. So you have a target CLO returns over a wide range of 3.5% to 15%. Presumably, these are targets on different CLO tranches. So could you please walk us through this kind of range? And also, can you please offer more element and granularity on what kind of returns you would target for tranches or different seniority?

Yes. So obviously, yes, absolutely correct. The range is quite large. And by design because from the AAA tranche to the equity, there is a very different risk and reward profile. So what I can say basically recently, what we've seen, what we've done is from the most senior tranche, the AAA, we've been issuing both in the U.S. and in Europe around 130, 140 basis points over the reference rate. So yes, 1.3, 1.4 spread. And the mezzanine or the most junior tranches are anywhere between 800 to 900 over essentially. So that's the sort of detailed range in the credit tranches. And the equity is obviously the one tranche where we usually target returns that are anywhere between 13% and 16%.

Got it. Thank you, Max. Another question came up for European direct lending. So we said that we are oftentimes the sole and lead arranger for direct lending deals. Can you please explain Martino, who are the main competitors in the direct lending space, particularly capital? And how do we differentiate from them?

Sure. So we -- I think that as we were saying before, so the market has been observing an increasing competition especially from the U.S. So -- and I think this is a very good testimony of our vision in the long term. When we started investing, we were one of the few in Europe doing this job. And we are happy to see other people coming to the market because it confirms our view. Having said that, we do see, again, competition from European asset managers. And I would say that especially from America, we see most of the competition. And in this context, probably what we were saying before represents our competitive advantage because when you play in the mid-market, it means that you have to be very close to companies, to the specific local environment that is -- especially in Europe, is very different from country to country. That's why we think that First, our setup, our -- the network that we have built over the time is our -- one of the key pillar of our strategies and one of our differentiating factor. And second, our track record. We are the sixth vintage for direct lending. We are credible. We are a trusted and reliable partner for our sponsors.

Perfect. Thank you so much. I'm conscious of time. Maybe we should take 1 or 2 more questions from the line. So we've seen recent examples of partnerships between banks, traditional asset managers and alternative asset managers. Could you please speak about the likelihood of carrying out such partnerships?

Sure. I'll take this one. But yes, indeed, it's been topical recently again. We've seen and heard about a lot of these. I think we're completely -- as a firm, we're completely open to similar partnerships. I think as a general rule, we love partnerships. We've built the firm with partnerships along the years with families, with sovereign funds, with institutions. So this is something which is at the core DNA of the firm. So we're definitely open to something like that. We have discussions currently. And for the right partner and the right project, this is something we would completely consider.

Maybe one last question before wrapping up. What are the biggest challenges you see in scaling the private wealth channel? And how are we addressing them? And what are the most important enablers of success out of performance track record, brand and sales resource?

I think the enablers are -- yes, the recipe for success is certainly to have the right distribution channels because if you want to scale, you need to address the wholesale market and have, again, as we did some very successful partnerships with insurance groups, for instance, for unit-linked or for the semi-liquid fund that we are currently raising having selected distribution partners globally. That's, for me, the only way in order to scale and scale quick.

In terms of the challenges, I would say one thing which is something, again, we're very mindful about is reputation. Any time you touch or deal with retail investors, and we've seen all the noises in the U.S. with BREIT, for instance, it can get fairly damaging if it's not handled properly. So how do you handle it properly? Essentially by being very clear on what you sell, what are the terms and what are the -- what is the structure, how does it work? Because you want to avoid a situation where investors are buying something they expect to be liquid like that. And if there is a big downturn or some problems, suddenly, it's less liquid because you have the LM mismatch potentially that you have to handle. So it's all about communicating in a very transparent manner and ensuring that the product or the fund is rightly described and presented to potential clients.

Well, thank you so much. Thank you, Maxime. Thank you, Martino. Thank you all for joining us today for this session. The IR team remains available for any follow-up questions, and we look forward to seeing you at the next edition of Tikehau Capital Series. Thank you.

Thank you very much.

Thank you.