Eurazeo SE (RF) Earnings Call Transcript & Summary

Hello and welcome to the Eurazeo 2020 Full Year Results. My name is Judy, and I will be your coordinator for today's event. Please note that the call is being recorded. [Operator Instructions] Thank you for standing by. The presentation will begin shortly.

Good morning. Good morning, everyone. It is my pleasure with Philippe Audouin to welcome you all to Eurazeo's 2020 full year results. Remember -- remember it was almost exactly 1 year ago that we met physically, just as we were all going into lockdown. What a year it's been. An exceptional year for everyone, a very difficult year for many, quite a remarkable year for us, Eurazeo. The most amazing thing for me has been to see how our teams and our companies have stepped up to the challenge. It's been a real source of pride to see how mobilized they've all been, how our team rallied together. And our companies have been fantastic as they seized the opportunities to transform the way they work, accelerating their digitalization, proving again how privileged we are to be their partners. All of this has paid off. Our NAV, net asset value, at EUR 85.4 per share is at an all-time high. We raised more funds from third parties than ever before to reach EUR 22 billion in assets under management. So as you'll see over the next half hour, 2020 has really confirmed that we are on the right trajectory to meet all our targets. And this gives us confidence for the future. So let's start. Last year, we accelerated our strategy on every front, developing asset management, keeping ESG at the very heart of everything we do and focusing intently on the most promising sectors, especially tech and health care. Let me take those 3 points in order. First, we have developed predictable recurring revenues and scale from asset management. Our AUM have tripled in the last 3 years. Second, our decision to put ESG at the heart of our strategy is proving decisive today. Our new O+ program launched last September is the most ambitious ESG program, reducing the risk in our business and positioning us to create significant value for our stakeholders. And third, in our investment choices, we have successfully anticipated long-term trends and thus position Eurazeo as ultra relevant in the current environment. Tech and health care now represents 60% of our private equity AUM. And the rest of the portfolio has also been steered into growing segments, like consumer premium product or financial and business services. What our successes last year showed is one very important thing: The right choices pay off over time. As you know, over the last few years, we've been concentrating a lot of our firepower, on building up our strengths in certain sectors, notably tech digital and health, and look at the numbers now. In only 3 years, we've multiplied by 15 our digital assets and by 5 the health-related asset in our AUM, while AUM itself grew threefold from EUR 5 billion to EUR 15 billion. That very strong grounding in digital and health meant that we were exceptionally well positioned when the pandemic hit. Looking forward, we know that this focus will continue to be the right strategy as we prepare to navigate the post-COVID world. Our key figures for 2020 are a real endorsement of the medium-term trajectory we laid out during our latest Capital Market Day. 2020, Assets Under Management grew another 16% organically to EUR 21.8 billion, with a record EUR 2.9 billion in new funds raised over the course of the year. Our recurring revenues grew by 13%, and our fee-related earnings margin improved again, thanks to our operating leverage. We also created substantial value for our shareholders in the second half. Our NAV rose more than 20% and was up overall 6.3% over the full year. Finally, we continue to have a healthy asset rotation, both in acquisition and exits, with a very strong rebound in activity during the second half. Our growth rate has been strong because our foundations are stronger than ever. With 300 people in 10 offices around the world, we now operate through dedicated investment teams, each focused on their markets. Representing about 73% of our AUM, we are one of the most prominent private equity investment managers in Europe and one of the few to operate across the full spectrum from venture to upper mid-cap. Our expertise in private debt is well recognized, with a solid positioning in the profitable, small mid-cap space. And we have been ceding our activities in real assets. For a few years now, the team has created an outstanding track record, with some very successful exits, as you saw. As I said earlier, 2020 was a remarkable year of growth for Eurazeo. We are on track to double our assets under management within 5 to 7 years, depending on market conditions and cycles. In 2020, our AUM continued to grow organically at a brisk space, with another year of 16% growth just like last year. What's more? We think this trend will continue because of the positive market outlook, our strong fundraising ability and momentum and the scaling of our investment division. That makes us very confident. The growth of our AUM has been supported by record fundraising, EUR 2.9 billion, I said, in 2020. This is up 19%. This is all third-party money, and it's a real and very tangible endorsement of our strategy from our investment partner. We thank them for that. All the Eurazeo funds currently being raised contributed to this excellent momentum. So what did we do in 2020? The capital raise in Venture and Growth exceeded EUR 700 million in 2020, almost 3x more than in 2019, thanks to the successful launch of Eurazeo Growth III. Eurazeo has been chosen by the French insurers to manage EUR 0.5 billion fund as the go-to investor in French health care, a role we already play in French tech, as you know. The Eurazeo China Acceleration Fund, in partnership with CIC, Chinese Investment Corporation, and BNP Paribas, raised the first tranche of EUR 200 million. Finally, Private Funds continue to grow 75% increase in the amount that we raised in 2020. These are just a few examples of our strong momentum. And it's only the beginning because for 2021, 2022, we will be raising our sights even higher with several ambitious flagship funds and many bespoke funds on the road. So as you see, we have the right strategies, the right products and a very powerful organization, strengthened by the acquisition of the remaining 30% of Idinvest. We are all set to deliver as we move forward. So how have we achieved this? Most importantly, we've made some clear choices in key sectors over the last years, like financial services, consumer premium, asset management, insurance and, of course, tech and health care. Today, we are one of the leading tech investor in France and in Europe. This track record explains the success of our current fundraising in this segment with Eurazeo Growth Funds III on track to reach its targets by the end of the first half of EUR 1 billion, hopefully, even more. It's a similar story in health care with skills and know-how built across several segments of the market from biotech to larger, more established companies and a great track record. So let me remind you. It's been EUR 1.2 billion, EUR 1.2 billion invested over the last decade, a bit more, 12, 15 years in more than 70 companies with great returns, just in health care. This all means that we are now the right player in Europe to invest in the right sectors in the years to come. So on the next slide, another long-term factor that has been very central to our strategy is ESG, and you know that, because we've been pioneers here ever since our first ESG report 20 years ago. And we are still acting as pioneers today, thanks to O+, our ambitious, science-based new plan. Above all, we are different. This is because ESG for us is not a matter of setting up an isolated impact fund alongside our more traditional strategies. It's exactly the opposite. At Eurazeo, we have put ESG at the very heart of everything we do, both in terms of our investment targets and in terms of our investment processes. Our leadership in this has been recognized by specialists in the ESG world, and I'm very proud of this. In 2020, we received the highest honor, A+, in all the relevant categories for UN PRI. And we are the only private market listed company included in the top 5 ESG index families. Now we are aiming even higher. I'm proud to say that O+ has no equivalent in our industry in 2 of its key components: fighting climate change through achieving net zero-emission by 2040 with a science-based target approach that we are the only one in the financial industry to have embraced; and second, promoting a more inclusive economy, which benefits all our stakeholders. If fundraising is our fuel and, ESG, our road map, the deal activity has been our engine, and that has been racing ahead, especially in the second half. In Private Equity, our focus on tech and growth continues. So 50% of our new investment in 2020 were focused on tech or tech-enabled companies. They ranged across the spectrum from venture through growth to buyouts. And they drew on our know-how, especially on payments and SaaS, software-as-a-service businesses. You can see this on the slide. In that, we recorded very strong deal activity in H2, building a high-quality portfolio. This fast pace of deployment means that we should see an acceleration of the next fundraising cycle for private debt. And in real assets, we seized some value opportunities, aiming high, notably in France and in the U.K. We've seen some good asset rotation, very successful exits last year, on the next slide, representing EUR 1.4 billion of exits in 2020. But as you can see here, the performance has been extremely good, with topnotch IRR between 20% and 70%, annual IRR returns on those exits. This means that we are fully in line with our exit plan announced during our Capital Market Day in November and further evidence the quality and the maturity of our portfolio in each of our division. This momentum is set to continue in 2021, with an ambitious exit plan for several of the group's assets. Let me take 2 examples of recent exits. Iberchem for Eurazeo Capital, the upper mid-cap; and C2S for Eurazeo real assets. As you can see, the value creation year mainly came from our ability to transform and accelerate our companies. We are a value-add partner, attracting the best entrepreneurs by helping them go from good to great, bringing more capabilities, operating resources, networks and a global footprint across 4 continents. Take Iberchem, an investment of only 3 years. It was mainly through strong execution, delivering organic growth in emerging markets and, of course, selling at the right time to a strategic buyer that we made the returns that you can see here. With C2S, we built a fantastic platform of clinics in France. One on top of the organic growth that we had, the team added enormous value through acquisition and turnaround and significant investment in equipment in those clinics. So enormous work on the operation which led to an exit to strategic buyer with very strong return. In both cases, it was basically a case of making the right investment choices for good assets at inception, picking up the pace for transformation and growth, this is essential; and finally, taking advantage of market momentum to make the strategic decision to exit. I'll now hand over to Philippe, who is going to take you through our financials for 2020.

Thank you, Virginie. Good morning, ladies and gentlemen. Let me first summarize the highlights of 2020. Eurazeo's performance was very robust in 2020 in an extremely challenging environment. Our asset management activity continues to thrive, bringing more firepower and more recurring revenues for the group. The investment activity benefited from the sharp rebound in H2. Our portfolio companies proved to be very resilient, excluding the travel and leisure sector, with our tech companies performing particularly well. These elements resulted in a significant growth of our net asset value in H2 and for the full year 2020. And finally, our balance sheet remains very robust. Let's start first with asset management, which pursued this rapid expansion in 2020. Thanks to our all-time high fundraising levels over the last 2 years, management fees grew 13% to reach EUR 234 million in 2020. As we announced during our Capital Market Day last November, the profitability on fee-related earnings is rising, thanks to our improved operating leverage, which is up 4 points over the last 4 years. We expect this trend to continue and that our FRE margin will eventually reach a benchmark level of 35% to 40%. However, please bear in mind that this margin improvement will be primarily driven by fundraising cycles and thus will not be linear. Annual performance fees were mainly driven by the accelerated exits in H2, amounting to EUR 48 million. Significant performance fees should kick in, in the near future, thanks to our important exit pipelines for 2021 and 2022. The value of our asset management activity now stands at EUR 1.4 billion. This figure results primarily from a healthy 23% value creation in 2020, driven by, on one hand, the substantial increase in AUM and FRE we just talked about and, on the other hand, the revaluation of our stake in the platform iM Global, in line with the partial sale we announced a few weeks ago, which valued our 72% stake in iM Global at EUR 250 million. The value of our asset management activity also reflects the acquisition of the remaining 30% stake in Idinvest, which is now fully integrated. The investment activity enjoyed a sharp rebound in H2 with a contribution of plus EUR 580 million. This was due to the successful exit Virginie highlighted earlier, notably Iberchem and Farfetch, as well as a change in fair value of our tech growth companies. H2 also saw a reversal of some negative impact recorded in H1 following the successful agreement on WorldStrides' debt restructuring. As a result, our investment activity delivered a positive result, a positive contribution of EUR 191 million in 2020, up from EUR 100 million the previous year. Taking a closer look at our portfolio, you'll see a very good performance in 2020 against a challenging environment. Last year, we split our companies into 4 groups, ranking them from those least impacted by the pandemic category 1, 2 and 3, altogether, representing 90% of our total net asset value, to the most severely hit, category 4. Our tech growth companies, which are mostly digital-native, performed particularly well in 2020. On average, their revenues grew plus 45%, with some companies even recording triple-digit increases. The other companies in the first 3 category saw their economic EBITDA increased overall by plus 5% in 2020 and even rising plus 8% in H2, which thanks to the strength of the company themselves, but also thanks to the hard work and commitment of both the company's management teams and Eurazeo's teams. The fourth category, more exposed to travel and leisure, saw revenue drop hitting their EBITDA. Despite this, the cash situation in the remaining assets in this category is adequate at the moment and we consider there is a real potential for rebound when the health situation improves. On the next slide, an important point that I'd like to make here is that the top 3 category, those least exposed to the pandemic, represent about 90% of our total net asset value and delivered a combined 30% increase in net asset value over the year. Concerning our valuation methodology, we have remained consistent and have applied the IPEV guidelines. For the growth tech companies, where applicable, we have aligned the valuations based on the last financing round. For the other companies from category 1 to 3, as recommended by the IPEV guidelines, we have applied multiples on recurring earnings in most cases. Part of the value creation also stems from the exit we made at the end of 2020, Farfetch, Iberchem and C2S. These 3 exits have been done at higher valuation than what we had in our last published NAV and brought an additional EUR 4.6 per share of value or 1/3 of the total value creation we recorded in H2. On top of that, we've been very conservative in our valuation for category 4 assets, which we cut by more than 50%. Europcar has been fully written down and we sold the entire remaining stake in Europcar 3 months ago. For WorldStrides, we have fully written down our initial investment of EUR 215 million, and only kept in our net asset value the EUR 41 million additional investment we made last summer. Grape and Planet have also been cautiously valued. As always, these valuations have been reviewed by our auditors, PWC and Mazars, for the process and by 2 independent appraisal firms, SolGen and For the value itself. All these figures leave significant upside potential for the future. Looking at our portfolio from a different angle. I'd like to highlight that all of our business units across the board grew significantly in value in 2020. Growth was an obvious winner in the pandemic. Driven by the global shift to digital, it delivered the most outstanding performance this year with a plus 37% increase in net asset value following an already strong plus 30% in 2019. Real assets saw a strong uplift of 26%, notably thanks to the sale of C2S at the end of the year, which boosted its NAV. The other divisions also turned in very good performance, especially in H2. Looking at the overall P&L, our net result is down at minus EUR 160 million for the full year. But after our publication of minus EUR 390 million in H1, H2 was very strong, showing a positive plus EUR 230 million net profit. I'd like to point out that without Europcar and WorldStrides, our annual net result would have been positive at plus EUR 217 million, more than 2x our 2019 result. This reflects how well the rest of the portfolio has held up through the COVID-19 pandemic. On a more global view, net asset value, Eurazeo's key indicator, increased significantly last year, driven by a plus 21% surge in H2, resulting in a plus 6.3% gain for the full year. As Virginie highlighted, this results in a new all-time high of EUR 85.4 Eurazeo per share. Our NAV maybe at a new high, but we are nonetheless remaining cautious in calculating such a figure. As you know, our valuation methodology has always been conservative and so exits tend to crystallize [hidden] value in our net asset value. On average, exits have resulted in an uplift of around 32% to the previously posted NAV over the last 5 years. This held true in 2020. As I said earlier, the 4 successful exit added EUR 4.6 per share to the last published NAV. These exits at the end of 2020 are just the first steps of the ambitious exit program we announced at our Capital Market Day last November. This exit path will support value creation for the coming 2 years. As you can see, there are a number of profoundly positive factor driving our long-term outlook, the steady increase in net asset value, the growing share of our recurring revenues and the prospect for our current exit program. Despite this, the pandemic has closed our share price discount to NAV to widen again at the last -- at last for the moment. Based on yesterday's share price, the discount to NAV was 29%. That's a sharp diversion from the favorable long-term trend, which has seen its steadily decline on a 3-year average from 31% in 2011 to 12% in 2019. What is important to note here is that the factors driving these long-term trends of discount reduction remain as relevant as ever for Eurazeo, a more diversified portfolio geared towards high-growth companies, a very consistent track record and fast-growing recurring revenues from the asset management activity. And we can notice that in 2020, our third-party revenues already covered close to 90% of our OpEx. Turning now to our balance sheet. In the current volatile context, we have maintained a very solid financial position which gives us significant headroom going forward. Our current net cash position stands at EUR 345 million at the beginning of March and our EUR 1.5 billion revolving credit facility is fully undrawn and, therefore, fully available. On top of that, we expect in the coming months about EUR 360 million of cash, notably from the sale of C2S and the stake in iM Global. These 2 operations have both been signed but not yet closed. Note that in line with our ESG commitment, our revolving credit facility was the first financing in Europe to include ESG clause. And more recently, we also secured the first unitranche ESG, [ Albeo ] financing. On top of this, financial capacity, we have also the benefit of EUR 4 billion in dry powder, our undrawn commitment from our limited partners, allowing us to seize investment opportunities. To finish a word on dividend. Eurazeo has always distributed dividends to its shareholders, with the distribution rising on average 7% per year from 2003 to 2018. Last year, as you know, following the French government's recommendation, we suspended the payout. However, this year, it is our intention to resume distribution, and we will propose a dividend of the same amount as was proposed last year, EUR 1.5 per share, a 20% increase over the last dividend paid. Finally, all this has materialized into a strong year for Eurazeo, and this coming year is going to be also exciting. Thank you for your attention, and I will now hand back to Virginie.

Thank you, Philippe. Exciting year ahead of us is predicting, Philippe. 2020 has confirmed [ with ] success despite very volatile complex environment, our ability to reach our ambition and follow on our trajectory. We demonstrated the resilience and the strength of the portfolio in a year of intense crisis. We confirmed our ability to raise funds year after year. We created value through successful exits. And we invested in the right sectors to create value for the years to come. We're exactly where we wanted to be when we launched our diversification strategy several years ago. And now all the lines are green for further growth. So now what's next? What are we looking at? Our intention is to roll out high-potential investment strategies, and I'll name a few, just a few examples, but -- where we're really concentrating our energy. The green economy, all sizes and shapes, including sustainable infrastructure, smart cities and decarbonation. We already have 3 funds on the road and dedicated team for that. Tech and health care will continue to be a very important focus for us as we've built it over the last 10 years, and we'll continue to work on building the future European champions in those sectors. And we will continue to leverage -- accelerate even our European fertile landscape of SMEs, identifying and building tomorrow's leaders with real international potential. That's what we like to do. That's what we've proven to be able to do as well. On all these fronts, we have a head start with the expertise and the maturity required to really make the difference. We have a strong fundraising program for the next 2 years. We've explained this in detail at the last Capital Market Day. But for some of the main highlights, this includes the tail of existing programs in growth, debt and private funds. Then successor funds in lower mid-cap and upper mid-cap investment strategy. And the first third-party funds in real estate brands and our newly formed sustainable infrastructure team. Our strategic plan on fundraising is now to extend our leadership in France, expanding Europe, build the franchise in the U.S. and sign key partnerships in Asia. What's more, the accelerated acquisition of the remaining 30% of Idinvest this year has really allowed us to simplify, strengthen the organization, meaning that we can now invest ahead of the curve as one team. The beginning of the year is very promising. During the first 3 months, and in some cases, just the first 2 months, we delivered on all aspects of our 2021 road map. We are accelerating our disposal plan. I think you get that with nearly EUR 1 billion already sold, notably in growth, venture and real assets at the beginning of the year. We will continue the fundraising momentum. At the end of February, early March, it's been EUR 600 million raised year-to-date in 2 months. And we will continue to build scalable expertise, thanks to the success of our past investments and the reputation of our teams. So we were strong during the crisis. We have, we believe, everything it takes to be even stronger, with strong tailwinds in the future. Our anticipated trajectory of doubling AUM over 5 to 7 years is confirmed. Fundraising has already accelerated in 2020, and there's more to come, a good start of the year for 2021. We have a high-quality portfolio, which means you should soon expect to see some significant exits that will crystallize value and accelerate our asset rotation. We're going for growth like this because we have one overriding objective: We aim to create value for our shareholders through the combination of growing, recurring, long-term revenue streams; stronger capital gain linked to bigger, better and more international deal flow; and a dynamic distribution policy, with the firm intention to raise the dividend in the next years and increase shareholder remuneration. Thank you for your careful listening, and we'll now, with Philippe, very much open to your question. Thank you.

[Operator Instructions] The first question is coming from the line of Christoph Greulich from Berenberg.

Yes. Thank you very much for your presentation. And two questions from my side, please. The first one with regard to the Idinvest transaction, where you bought the remaining shares. So could you give us an idea how much this has added to your NAV and asset management? And how this compares to the price you paid for the transaction? And then the second question with regard to your Eurazeo capital. So when we look at the -- yes, the most impacted assets from the crisis WorldStrides and Planet, you have taken there very significant markdowns for these assets in the first half of the year. So how do the valuations of these assets in December compared to the value in June? Have you already implemented some recovery there in the valuation? Or do they still remain at the end of June value?

Maybe I start with your last question. And so as Philippe explained, on WorldStrides, we wrote down both in our accounts and our net asset value the full investment that we made initially, a bit more than EUR 200 million, as you saw, EUR 250 million in terms of investment. And we kept both accounts and net asset value. Remaining value for our stake in WorldStrides of EUR 41 million for our stake on the balance sheet. We're certainly hoping that with the very major vaccination program in the U.S. notably, which is certainly fast pace in the U.S., where 20% already of the population is vaccinated, we are hoping that the 2021 season, which really starts in June, end of May, June, July for WorldStrides will show some rebound in terms of activity and revenues. And what we already see is very positive, what we call intake, so basically reservation booking for 2022 already. What we call 2022 is July 2021 to June 2022, because the fiscal year of WorldStrides end at the end of June. So we see some promising signs of activity for WorldStrides. That's to your first question on WorldStrides. The other one on Planet is about valuation during the year. So we took it down significantly at the end of June. We're slightly up at the end of December, but we're significantly down compared to first of January. So down first half, significantly up at the end of December, but still significant markdown in the net asset value, not in the account, because the value of Planet at inception that we have in our account do not justify, necessitate an impairment in our accounts because the entry price cost is much lower than the value that we have even after markdown of COVID. Maybe Philippe, on the first question?

Yes. Thank you. Let me just add to what you just said, that as we said earlier, we really think that these 2 valuations are very conservative and that future exit, not yet, but future exit, should enable to unlock more value from these 2 assets.

Maybe -- sorry, I forgot something on Planet, which is very important. You remember when we bought Planet was essentially a [ detox ] operator. So of course had we not done all the diversification that we did by buying Planet in the U.S., that take-private that we did in -- at the end of 2017, early '18, to buy Planet Payment, which is way more of a payment company than a de-tax company. And then subsequently buying 3C in -- at the end of the summer 2020, so basically this year, which is another very strong payment operator in Europe, of course, the performance of Planet will be quite different today. So what we brought to the company in terms of vision of derisking from travel to and going really massively into payments, which we have a lot of trust into, has made also the performance of Planet very different than what it would have been.

Concerning your question relating to Idinvest acquisition, we invested about EUR 180 million for the remaining 30% stake in Idinvest. And of course, that has added to the total value of our asset management activity. Maybe we should link, there are some written questions from people, and particularly Geoffroy Michalet from ODDO, because some of the questions relate to what we just said. So Geoffroy, we'll read your question. First question on valuation of your NAV, especially in tech and health, would you say that the multiples have increased? Or is it mostly the EBITDA above budget and business plan that have been raised? On this question, I mean, we can make the link. We said that the tech sector, in value, grew by 37%, but the revenues grew by close to 50%. And most of these companies are based on multiple of revenues. So I think that the multiple not only have not increased, but to a certain extent, might be slightly lower if I take these 2 figures. Your second question, why didn't you propose a superior dividend since you had a great year but kept EUR 1.5, the same level as you would have distributed last year without COVID? Maybe I will leave this question to Virginie. And I will take the last one, which is on the third-party AUM -- asset management, sorry, valuation, could you give us the bridge by factor to reach EUR 1.4 billion from 2019? So that's quite simple. The bridge in value up to EUR 1.4 billion, a small EUR 200 million is a perimeter effect following the acquisition of the remaining 30% stake in Idinvest. Of course, that is not taken into account when I mentioned a 23% increase in valuation. What's in the 23% increase in valuation? Well, that's quite simple. which is the base for valuing that kind of activities grew by close to 20%. iM Global, which we're now present in a separate position, grew also by 20% just following the value at which we sold a minority stake at the beginning of this year. So it's fully consistent. And you could add to that, of course, some synergies following the acquisition of the remaining stake in Idinvest which has enabled us to build, for instance, a strong integrated fundraising team, which will enable us to address geographies where we had a strong potential to reinforce our presence, like, for instance, North America.

On the dividend, I mean, there's a few things I'd like to share. I mean, the first is, and of course, you will not forget that, it's been a first in last year that we didn't pay a dividend. Every year, since you've been following us and over the last 15, 20 years, we've been paying a dividend. So quite a first in the environment that you know. So what we thought is that we would confirm that dividend that we had announced like 1 year ago, day by day, 1 year ago. And more importantly, I think it's about our intention. We firmly intend, because we have more recurring and predictable revenues and because we hopefully will see great share price appreciation in the years to come, we will be trying to maintain, or even increase, but -- the yields that we have compared to our European peers. Today, we think our yield is around 2.3%, 2.4% on sort of yesterday's share price. Let's see what that take us in the next 6 months. Hopefully, the yield will decrease because share price will appreciate. But we are quite well in our benchmark of European alternative asset manager or even some of the U.S., but we do intend and we will do it progressively, but intently, to increase our dividend in the year to come. So that's longer question to your specific question about why not do it like right now? It was already, of course, a big increase, 20% increase. So that's what we are confirming for this year.

Now we have a question also of David Cerdan. Hello, David. First question, how much has been exited year-to-date? And how much could you achieve over 2021? And your second question regarding exits, have you delivered better value than what is booked into your NAV? I'll start with the second question. The exit that are either have been done or in the process to be done mostly from the balance sheet, the minority stake in iM Global or C2S, which is not fully finalized yet, signed but not closed. As these 2 operations were either signed already or in the making at the end of last year, we took the value of these 2 operations in our NAV as we published it. How much could we achieve over 2021? We cannot give you a clear figure right now. And you know that it's not -- are used to do it. But again, I think we can confirm that 2021 and 2022 should be, to say the least, close to the strongest year we have had in the past.

Maybe I'll complement. On the EUR 1 billion of exits that I mentioned in my conclusion that we have realized or -- I mean realized not -- doesn't mean closed, but signed, during the first 2, 2.5 months, there's part of that amount, which Philippe referred to, which is about EUR 650 million, C2S and iM Global and the secondary sale our growth portfolio. And there's about EUR 400 million of disposal which will positively impact our funds, notably in Venture and Growth with significant exits either through IPOs or strategic sales, which were announced over the last 10 days, with very much significant value appreciation compared to what we had in our fund valuation. But they do not all relate to the balance sheet. So it's EUR 1 billion of disposal compared to the EUR 1.4 billion that we realized in 2020 balance sheet plus funds. And for the sort of forecast, we never give any forecast, but it's going to be a significant year of exit. When you look at us historically, it's sort of an average, but it gives a reference or a measure. On average, we've been selling over the last 10 years, about 14%, 15% of our NAV that we recently published. So let's say, December, how much do we sell during the following year? 14%, 15%. You might expect here a bigger year of exits relative to NAV.

So maybe we can take a question from the line now.

The next question in the queue is coming from the line of Mourad Lahmidi from Exane PNB Paribas.

Congratulations for these good results. I have one question on your asset management business. We've seen a sharp re-rating of alternative asset management in the past 6 months. Multiples have expanded significantly. So I was wondering whether you are using the same multiples as last year when you are valuing the asset management business. So this is the first part of the question. And the second part is, do you integrate the performance fees in the valuation? Or do you neutralize them? It seems they are mostly coming from the balance sheet.

So on your first question regarding the multiple, as I said earlier, Mourad, the FRE grew by roughly 20% and the value of our asset management business grew by 23%. So I think it answers the question. We are more or less in line. You know that we tend to remain cautious in our valuation. You are perfectly right when you say that on the market multiples have increased, but we are looking over the very long-term for that kind of asset. So we have remained very cautious in our valuation. And in terms of performance fees, we take into account third-party performance fees in the valuation. But of course, based on a totally different multiple than FREs, but not, so far, the internal performance fees.

Thank you for your encouragement on this year's results, we appreciate. Should we take the one that we have here, so online. Okay. So Alexandre Gérard. So will you keep on looking at opportunities like Aviva France in order to be more integrated? Or was it just a one-off opportunity? So maybe I'll start. Where we will be looking and aggressively pursuing is to increase the contribution in our inflow of funds from retail. You have the high net worth individual, you have what we call the mass affluent and then you have retail. I mean, these are very well sort of known and used wording to describe different type of retail investments. Today, there's some detail in our press release, we have about 10% of our AUM which comes from retail. We have amazing partnership with either insurance companies or banks that trust that Eurazeo products are to be trusted and are being deployed and offered to their own client base. But it's only 10%. It's also been 10% of our fundraising again in 2020. So out of the EUR 2.9 billion that we raised, about 10% comes from retail. So what's clear is we are definitely intending to pursue more aggressively retail investor in order to structure adapted products for their needs. And there's 2 reasons for that. The structural environment of where the interest rate are and will continue to be for euro funds, as an example, which you know is sort of the preferred saving instruments in France for our retail, is not going to produce return for much longer. So we have to find solution for the same French saving to be redeployed in higher-return products. And if we can achieve this by redeploying those savings into the real economy, which is really what our government is supporting in terms of trend and allowing us today through some regulation, including pact, then we can really kill 2 birds with just 1 stone. So that -- these are our conviction. And why does Eurazeo can do that? It's because of where we are. Out of the EUR 22 billion, that's one of the first slides that we have in our presentation, 73% of our AUM is private equity from Venture to Growth to smaller mid-cap, upper mid-cap. But also we have private debt and we have real assets. So we are the perfect sort of player to be -- to be constructing in an innovation way -- innovative way, should I say, adapted products for retail in search for returns, liquidity and also protecting their initial investment. If there are some other opportunity like [ Aviva ] France, yes, we will continue to investigate. But there are other ways to reach our goals that we're already working on.

On the other question of Alexandre Gérard concerning the diversification of our net asset value. With more than 50 direct investments, not mentioning all the investments in which we are through Idinvest and which would raise that figure to north of 300, the portfolio is now very diversified. Our largest asset stands around 5% of our NAV. So it's effectively a very diversified portfolio. Maybe now back on the line.

The next question in the queue is coming from the line of Pierre Bosset from HSBC.

I have some few questions regarding the fund raising activity. First of all, I would like to understand how you measure the performance of your fundraising team? Whether or not you -- how you look at the performance? Secondly, as analysts or investors, how can we know whether or not you have reached your targets in terms of fundraising? And thirdly, you have a rich program of fundraising over the next 2 years. What do you think will be the balance sheet commitment over these 2 years? And what will be the percentage of the fundraising activity which will come from the balance sheet?

Pierre, just one comment, and maybe I will leave Virginie comment on performance measures and targets. Just to emphasize a fact which is very important, all the figure that we have communicated regarding fundraising only include third-party money raised and not balance sheet commitments. So balance sheet commitment would come on top of the figure of the EUR 2.9 billion, for instance, on which we communicated for last year. That's only third-party money. Balance sheet commitment would come on top of that.

Yes. We've always communicated only on third-party. But okay, to your question, so how do we know we met our target? Well, I have to say you have to trust us on this one, meaning we don't communicate in anticipation our detailed targets. So basically, we don't communicate our budget, which I think is sort of quite classic. However, we do tend to tell you where we stand compared to what was our initial target. So 2020, we are above our targets, Pierre. We've raised more money in 2020 than what we had in our budget. And that budget was done at the end of '19, very early '20. And that budget wasn't even assuming anything close to the crisis that we had. But we are above targets or above budget, fundraising budget, for 2020. We do have, you understand that, very ambitious targets for '21, '22. We quite often look at 2 years together or like 18 months together because it takes time between the moment you start fundraising and you first close, you first market, then you dry close, then you first close. And it takes time to roll over months to finally final close. But over the next 24 months, we have very ambitious targets. And hopefully, we'll be able to tell you 12 months down the road where we stand compared to those targets. We do measure our fundraising activity. Many KPIs, Pierre. How many meetings? How many new meetings? How many re-ups in our existing funds? How many new investors? For what amount? After how many meetings? How many years of interaction with those new investors? So hit rates. Like any commercial team, you could think, how much are you interacting with your clients? How much transformation in your commercial coverage of your clients? Have we, as a group, but also individually, been able to succeed? So we're tracking very closely, what's the activity and the success rates of our individual team and as a group. You should expect for 2021 a very intense year of hiring and increasing our firepower in terms of people in that team that we called investment partner under the leadership of Christophe Baviere. So we'll put a lot of fuel and human resource in that team, both through significant hire outside of France, in the north of Europe, in the U.S. More commercial on the ground. And also a number of agents working with us hand-in-hand to fundraise for the program that we have for the year. You want to comment, Philippe, on balance sheet commitments? What could, sort of target.

Yes. I mean, it's outside of the figure, I would say, because we do not report on balance sheet commitment in the fundraising process. It's clear that on the more mature business unit of Eurazeo, Eurazeo Capital in the upper mid-cap, Eurazeo SMEs in the lower mid-cap, and as Virginie mentioned, for the future also Eurazeo Patrimoine, maybe Eurazeo and potentially next year, Eurazeo Brands , we both -- we combine balance sheet money with third-party money. So for this strategy, we can say that we have specific commitment, a sizable commitment. What I can say is that on the road, we have started the fundraising of Eurazeo PME IV Fund, which would be significantly larger than Eurazeo PME III that you know, which was about EUR 600 million combined balance sheet plus third-party money. And for the next one, possibly with the majority of third-party money. And we are starting this year the fundraising of Eurazeo Capital V which should also be larger than Eurazeo Capital IV, and with a balance between third-party money and balance sheet money, which should be roughly equivalent or slightly larger than for Eurazeo Capital IV.

Pierre? Pierre, it's your last earnings call and full year results call with us. And we wanted to thank you for your amazing support for a decade now and more and wish you -- 2 decades and wish you all the best for your future endeavor. Thank you, Pierre.

Thank you, Virginie. Thank you, Philippe. It has been a pleasure.

I think we are now at the end of this session. So again, thank you very much. Thank you for your questions. And if you have any further questions, we remain at your disposal to answer your questions. Virginie, you want to

No, perfect. we'll as usual, be your partners, to answer any additional ones that you have. Thank you for your great question today.