Regulatory News:
Tikehau Capital (Paris:TKO) is hosting today its second
Capital Markets Day, in London, during which its founders and
executive team will outline the Group’s next growth chapter.
Powered by its strong balance sheet and unique corporate culture,
the Group will materially accelerate its expansion and profit
generation with the ambition to:
- Reach more than €65bn of AuM for its asset management
business by 2026, thus doubling the size of its AuM.
- Generate more than €250m of fee-related earnings
by 2026, a 2.6x progression vs 2021.
- Drive its return on equity to mid-teens level by
2026.
In addition to this strong outlook, Tikehau Capital announces
the following milestones recorded during the first months of
2022:
- The launch of an innovative impact fund focused on green
assets within its private equity business;
- The completion of a landmark $500m transaction in the credit
secondaries space;
- The opening of an office in Israel, the firm’s 13th
office worldwide;
- The gain of two large mandates with (i) a €100m impact
lending mandate in the Netherlands and (ii) Tikehau Capital’s
first ever corporate co-investment mandate in real estate
for €250m.
Finally, on 21 March 2022, Tikehau Capital has been assigned an
investment grade credit rating by Standard & Poor’s at BBB-
with stable outlook, a further act of acknowledgement of the
strength of both its business model and financial structure. In
January 2022, Fitch Ratings had re-affirmed Tikehau Capital’s
credit rating at BBB-, outlook stable.
A virtuous compounding model, fuelling a strong outlook for
2026
Scalability
>€65bn
x2
Asset Management AuM
vs. 2021 AM AuM
Operating leverage
>€250m
x2.6
Fee-related earnings (FRE)
vs. 2021 FRE
Value creation
Mid-teens
vs. 10%
Return on Equity by 2026
In 2021
Antoine Flamarion and Mathieu Chabran, co-founders of
Tikehau Capital, said: “Since its IPO in 2017, Tikehau Capital
has delivered significant growth, more than tripling its assets
under management and consistently outperforming its targets. This
amazing journey is first and foremost a credit to our talented and
dedicated teams. Today we embark on a new chapter of accelerated
growth and profitability, setting ambitious new targets for 2026.
We aim to double the size of our AuM, scaling up our platform and
pursuing the expansion of our geographical footprint, while
maintaining our performance and generating value for our investors
and shareholders. Tikehau Capital builds its future success on its
unique entrepreneurial culture and strong balance sheet, which
serves as a powerful growth compounder. Thanks to our diverse
talent base, constant ability to innovate and strong commitment to
sustainability, Tikehau Capital will continue to stand out as a
strong value-creation generator for all its stakeholders.”
The Group’s Capital Markets Day will start at
13:00 pm GMT (14:00 pm CET) and will be broadcasted live. To watch
the presentation, please connect to our website:
https://www.tikehaucapital.com/en/finance/capital-markets-day. A
replay will be available after the live presentation.
A second to none European track
record of profitable growth
- Tikehau Capital has built a solid track record of profitable
growth since IPO. The firm’s differentiating business model,
powered by its strong growth-compounding balance sheet, has powered
an outstanding 31% AuM CAGR since 2016, coupled with a 104% FRE1
CAGR over the same period.
- In addition, the firm has demonstrated consistent
over-achievement of targets set since IPO, delivering 2 years
ahead the 2020 AuM target communicated in March 2017 and achieving
in 2021 over 95% of each of its 2022 guidance, which had been
communicated in 2019.
- The Group’s outstanding growth since IPO has been supported by
its entrepreneurial culture, placing alignment of interests,
innovation and performance at its core. The firm has also built a
unique and differentiating platform with:
- A robust balance sheet, allowing Tikehau Capital to fuel
its asset management business growth, maintaining a high level of
alignment of interests with its shareholders and investor-clients
as well as carrying out accretive acquisitions, and
- Top talents across the firm, with complementary
expertise and backgrounds, a key asset to source investment
opportunities and drive investment performance.
- Those two strategic enablers will continue to be at the
heart of the Group’s growth trajectory by 2026.
Powerful secular trends underpinning the alternative industry
growth
- Tikehau Capital is positioned on a fast-growing market
benefiting from strong structural tailwinds. The alternative
asset management space has indeed grown by a 11% CAGR over
2015-20202 and is expected to keep growing at a fast pace by 2025.
Investors in search for diversification and high
risk-adjusted returns are set to keep allocating to the private
markets.
- While the alternative assets will represent 16% of global AuM
by 2025, they will account for the largest pool of revenues (46%).
The Group is therefore positioned on the most profitable
segment of the asset management market.
- In addition to these strong secular trends, Tikehau Capital
will leverage its differentiating investment approach to
seize attractive growth opportunities, especially in a world
currently in transition. The investment areas on which the Group
has built a growing exposure over the recent years, such as energy
transition, digitalization, cybersecurity or real estate asset
reconversion have proven to be resilient through cycles. The Group
is convinced that these investment focus will keep driving
long-term value creation.
An increasingly profitable growth momentum in asset
management
- Tikehau Capital is on track to accelerate its asset management
business growth based on two main pillars:
- Keep growing and scaling its “Yield” strategies, which
offer predictable, inflation-hedged regular returns as well as high
operating leverage and strong potential for adjacencies. Those
strategies include the firm’s private debt, European Core / Core+
Real Estate and fixed income strategies.
- Accelerate the transition of its “Value-Add” strategies to
the next level. Tikehau Capital’s Value-Add strategies, which
are less mature, generate higher returns derived from asset
transformation, higher management fees and offer strong potential
for scalability ahead. Those strategies include the firm’s private
equity, value-add real estate and infrastructure as well as equity
and flexible strategies.
- Scalability will be a powerful growth driver for all
Tikehau Capital strategies. The different phases of maturity for
the firm’s strategies offer multiple scalability drivers across the
platform, be it by launching large successor vintages poised to
scale thanks to strong performance, by maintaining a regular flow
of funds in market to capture client demand, by expanding LP base
globally in existing and new geographies or by leveraging existing
core expertise to launch adjacent initiatives, among others.
- Tikehau Capital’s financial model within its asset management
business is increasingly profitable. On the one hand, platform
scalability will drive strong operating leverage going
forward for both Yield and Value-Add strategies and, on the other
hand, performance fees are poised to represent a growing part of
the Group’s profits as its funds approach their respective
maturities.
- Building on strong scalability and operating leverage
prospects, Tikehau Capital targets to:
- Reach over €65bn of Asset Management AuM by 20263, i.e 2
times the level of AM AuM at 31 December 2021. While the Group has
grown its AM AuM by +€24bn over the past 5 years, this new guidance
implies a +€32bn growth of that metric over the next 5 years
- Generate over €250m of Fee-related earnings (FRE) by
20263, representing a +21% CAGR over 2022-2026, and a FRE
margin in the mid-forties area, compared to 36% of FRE margin
at 31 December 2021
Object omitted.
A synergetic, profitable and
disciplined portfolio allocation
- At 31 December 2021, Tikehau Capital’s investment portfolio
reached €2.7bn, off which 75% invested in its own strategies. The
Group has therefore achieved, one year ahead, the upper-range of
its 2022 target. This compares to 33% of investment portfolio
exposed to own strategies at 31 December 2017.
- Going forward, Tikehau Capital will keep leveraging on its
strong balance sheet to continue to:
- Invest in priority in its own strategies, generating
significant skin in the game and therefore compounding third-party
fundraising. It will also allow the firm to provide sponsor capital
to new or existing strategies, helping to accelerate time to
market. Between 2017 and 2021, Tikehau Capital has committed
approximately €0.5bn per year in its own asset management
strategies, which are now on the way to scale up and increasingly
contribute to Group’s profits. Tikehau Capital expects to keep
committing on average an equivalent amount within its own
strategies annually from 2022 to 2026. Such commitments shall
be called and cashed out over a longer time horizon, in line with
funds deployment pace.
- Carry out ecosystem investments, aiming at serving
Tikehau Capital’s asset management franchise by complementing the
firm’s expertise and geography, generating ancillary business as
well as developing long-term strategic partnerships.
- The returns, capital gains and capital recycling from by the
Group’s portfolio investments represent sizeable financial
means to fund future organic and inorganic growth
opportunities.
Object omitted.
A financial model on the way to
deliver its full potential
Since its IPO in 2017, Tikehau Capital delivered compelling
profitable growth while consistently overachieving its targets from
top to bottom line. As such, between 2017 and 2021, the Group
has been doubling its fee-related earnings on average every year,
demonstrating the relevance of its profitable growth model in the
alternative asset management space.
Going forward, Tikehau Capital’s financial model is on track
to deliver its full capacity, since investments in the Group’s
platform and funds are yet to crystallize all their potential, on
top of the firm’s strong future growth prospects.
- The strong AuM growth journey on which Tikehau Capital is
embarking, coupled with a growing operating leverage resulting from
the platform’s scalability, is expected to allow the Group to
multiply its FRE by more than 2.6 times over the next 5
years, with the target to reach more than €250m by 2026.
- Furthermore, since Tikehau Capital has expanded rapidly in
strategies eligible to performance fees, and given that such
strategies are delivering compelling returns, the contribution of
performance-related revenues to the Group’s earnings is
expected to rise materially in the medium-term.
- Finally, Tikehau Capital’s balance sheet is a critical
asset in the Group’s model. This perpetual capital base, which
is invested with discipline in priority within the Group’s asset
management strategies, is on track to generate growing and
increasingly predictable returns.
Thanks to these powerful profit engines, Tikehau Capital is
targeting to generate a return on equity at mid-teens level by 2026
(vs 10% in 2021).
Tikehau Capital is committed to strong shareholder value
creation, as evidenced also by its guidance to distribute more
than 80% of its asset management EBIT4 to shareholders as
ordinary dividend.
At 31 December 2021, Tikehau Capital relied on €3.0bn of
shareholders’ equity and €1.1bn of consolidated cash position,
as well as an undrawn revolving credit facility of €725m.
Furthermore, the Group’s investment portfolio amounted to
€2.7bn at 31 December 2021, of which 75% was invested in the
Group’s asset management strategies. The Group therefore has
significant financial resources to fund its growth
trajectory over the medium term in order (i) to remain at forefront
in innovation through regular funds launches (ii) to continue to
support its scaling asset management strategies and (iii) seize
inorganic growth opportunities.
Tikehau Capital has been assigned an investment grade credit
rating (BBB-, stable outlook) by Fitch Ratings in 2019
(confirmed in January 2022), and by Standard & Poor’s in March
2022, thus acknowledging the strength of both Tikehau Capital’s
business model and financial structure.
Sustainability at the service of
resilience and value creation
- The uncertain geopolitical context that characterizes the
beginning of 2022 is set to undoubtedly accelerate some of the
megatrends on which the Group has built a growing exposure
over the recent years, in particular energy transition,
cybersecurity and the broad range of impact-dedicated strategies
which aim at providing sustainable growth and resilience.
- Acting as a pioneer, Tikehau Capital initiated thematic and
impact investing as early as 2018 as part of the creation of a
European Energy Transition fund in private equity. Since then, the
firm has been driven by a strong dedication to accelerate in that
field and has developed an innovative platform dedicated to impact
around four key themes: (i) climate and biodiversity, (ii)
innovation, (iii) economic development and social inclusion, and
(iv) health.
- The Group’s responsible investment policy covers the full
spectrum of responsible investing through four pillars ranging from
exclusions to the development of products dedicated to sustainable
themes. At end-December 2021, c.70% of AuM and over 80% of
Private Equity AuM were classified SFDR Article 8 & 9
funds5. Tikehau Capital intends to keep launching
impact-dedicated strategies going forward, as evidenced in 2022 for
example by the launch of a decarbonization private equity fund in
North America or a green assets private equity strategy.
Key achievements in 2022 to date
Over the first months of 2022, Tikehau Capital has been very
active in delivering further progress across its strategies and
launching new promising initiatives. In particular, the Group
announces the following achievements:
- Tikehau Capital launches a new impact fund within the
Group’s private equity business
Focused on green assets, this fund is an impact fund as defined
by Article 9 of the SFDR and follows the firm’s ambition to
accelerate in its contribution to address the climate urgency. This
fund supports companies promoting decarbonising solutions or
companies engaged in ambitious decarbonisation plans. This fund
buys, finances, builds, owns and operates small decentralised
assets that enable to reduce the carbon footprint of their
end-users.
As such, the fund contributes to the acceleration of adoption of
green assets in the real economy in order to meet the 2030
objectives of the European Union and will participate to accelerate
the adoption of the European Fit For 55 & REPowerEU packages
aiming respectively at reducing by 55% the CO2 by 2030 and ensuring
energy security in Europe. The fund focuses on energy efficiency of
building and industrial sites, low carbon mobility, sustainable
agriculture, circular economy and clean energy generation. Total
commitments of the first closing of the fund reached more than
€100m.
- Tikehau Capital completes a landmark $500m transaction in
the credit secondaries space
Tikehau Capital announces the acquisition of approximately $500
million of Limited Partnership interest from a leading Asian
financial institution via its Private Debt Secondaries business, in
a direct lending fund managed by a leading US alternative asset
manager.
The transaction, which has been sourced and negotiated
bilaterally, is an LP-led secondary transaction involving a single
private debt fund focusing on the upper mid-market. To date, this
transaction represents one of the largest private debt secondaries
deal in the market.
The underlying portfolio is comprised of 30+ performing,
high-quality borrowers, diversified across geographies and sectors,
and backed by blue-chip equity sponsors. This represents the 8th
private debt secondaries investment completed by Tikehau Capital’s
private debt secondaries team.
- Tikehau Capital opens an office in Israel, the firm’s 13th
office worldwide
The Israeli market has significant untapped growth potential for
Tikehau Capital. Its dynamic and high-growth OECD economy has
accelerated its position as a global innovation hub with
sophisticated institutional and business communities.
As an early mover among global alternative asset managers,
Tikehau Capital wants to build a strong local presence in Israel in
order to capture the growing demand for alternative assets from
local investors, driven by structural market shifts. With this new
permanent presence, the Group has the ambition to accelerate its
expansion in the region, drawing on its expertise, resources, and
global network across its various asset classes (private debt, real
assets, private equity, and capital markets strategies), and direct
investment activities.
- Tikehau Capital wins a €100m impact lending mandate in The
Netherlands
Tikehau Capital has been entrusted by Pensioenfonds
Detailhandel, the pension fund for the retail sector in The
Netherlands, to manage a €100m impact private debt mandate, through
its Impact Lending strategy.
The investment mandate issued follows Pensioenfonds
Detailhandel’s decision to allocate c.1% of their total assets to
three managers active in the impact investing space. Tikehau
Capital was selected for its pan-European capabilities combined
with its highly regarded impact investing platform and
expertise.
Launched in December 2020, Tikehau Capital’s Impact Lending
strategy seeks to contribute to a sustainable European economy
while providing investors with competitive returns. It primarily
invests in SMEs which contribute to the sustainable economic
transition through their product offering, resource management, or
processes.
- Tikehau Capital wins its first ever corporate co-investment
mandate in real estate for €250m
In March 2022, Tikehau Capital was awarded a €250m real-estate
evergreen investment mandate by a leading global industrial company
for its German pension fund. Tikehau Capital has leveraged its
broad Real Estate platform, by proposing a fully dedicated fund
that would combine direct investments in Core / Core + assets as
well as indirect investments in Value-Add assets through the
Group’s real estate value-add strategy. This is a key milestone for
Tikehau Capital’s German footprint, following the opening of the
Group’s Frankfurt office in 2021.
CALENDAR
21 April 2022
Q1 2022 announcement (after market
close)
28 July 2022
2022 first half results (after market
close)
ABOUT TIKEHAU CAPITAL
Tikehau Capital is a global alternative asset management group
with €34.3 billion of assets under management (at 31 December
2021).
Tikehau Capital has developed a wide range of expertise across
four asset classes (private debt, real assets, private equity and
capital markets strategies) as well as multi-asset and special
opportunities strategies.
Tikehau Capital is a founder-led team with a differentiated
business model, a strong balance sheet, proprietary global deal
flow and a track record of backing high quality companies and
executives.
Deeply rooted in the real economy, Tikehau Capital provides
bespoke and innovative alternative financing solutions to companies
it invests in and seeks to create long-term value for its
investors, while generating positive impacts on society. Leveraging
its strong equity base (€3.0 billion of shareholders’ equity at 31
December 2021), the firm invests its own capital alongside its
investor-clients within each of its strategies.
Controlled by its managers alongside leading institutional
partners, Tikehau Capital is guided by a strong entrepreneurial
spirit and DNA, shared by its 683 employees (at 31 December 2021)
across its 13 offices in Europe, Asia and North America.
Tikehau Capital is listed in compartment A of the regulated
Euronext Paris market (ISIN code: FR0013230612; Ticker: TKO.FP).
For more information, please visit: www.tikehaucapital.com
DISCLAIMER:
This document does not constitute an offer of securities for
sale or investment advisory services. It contains general
information only and is not intended to provide general or specific
investment advice. Past performance is not a reliable indicator of
future earnings and profit, and targets are not guaranteed.
Certain statements and forecasted data are based on current
forecasts, prevailing market and economic conditions, estimates,
projections and opinions of Tikehau Capital and/or its affiliates.
Due to various risks and uncertainties. actual results may differ
materially from those reflected or expected in such forward-looking
statements or in any of the case studies or forecasts. All
references to Tikehau Capital’s advisory activities in the US or
with respect to US persons relate to Tikehau Capital North
America.
_____________________ 1 Fee-Related earnings 2 Source: BCG
Global Asset Management 2021. 3 Excluding potential acquisitions. 4
Defined as Fee-Related earnings + Performance-Related Earnings 5
Excluding Real Assets AuM - European Sustainable Finance Disclosure
Regulation (SFDR) is a set of EU rules which aim to make the
sustainability profile of funds more comparable and better
understood by end-investors
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version on businesswire.com: https://www.businesswire.com/news/home/20220321005929/en/
PRESS: Tikehau Capital: Valérie Sueur – +33 1 40 06 39 30
UK – Prosek Partners: Henrietta Dehn – +44 7717 281 665 USA –
Prosek Partners: Trevor Gibbons – +1 646 818 9238
press@tikehaucapital.com
SHAREHOLDERS AND INVESTORS: Louis Igonet – +33 1 40 06 11
11 Théodora Xu – +33 1 40 06 18 56
shareholders@tikehaucapital.com
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