Tikehau Capital (TKO) Earnings Call Transcript & Summary

[Foreign Language] Good afternoon, everyone, and thank you for being here to attend this Annual General Meeting. I have next to me Mr. Antoine Flamarion and Mathieu Chabran, who are the management; Mr. Marcoux, who is Deputy CEO of Tikehau Capital; and Mr. Geoffroy Renard, who is the Secretary General; Vincent Roty, an auditor representing Ernst & Young and others that's part of Ernst & Young; and Mr. Gilles Magnan, also an auditor representing Forvis Mazars, both of them representing the auditors. I'd like to thank members of the Supervisory Board who are with us. And I should also like to welcome members of the Management Board of Tikehau Capital, who are here and who will be there for you if you have any questions for them after the meeting. Let me point out that this AGM is being broadcast live on the website of the company, and you'll be able to see it in replay on the same site. So it will be for me to chair this AGM and the tellers representing the largest number of votes who accept to do so, who will be in charge. So based on the list, provided by Societe Generale, the shareholder owning the largest number of shares directly or by proxy, Tikehau Capital Advisers who agreed to be a -- provide the teller in the person of Mrs. [ Pauline Gager ]. And the second largest shareholder is the French Fonds Stratégique de Participations, and they said they would agree to provide the scrutineer in the person of Mr. Andrea Beneventi. And for this meeting, I suggest we appoint Geoffroy Renard as Secretary.

Thank you, Chairman. So Societe Generale, which is -- which was in charge of organizing this AGM told us about the provisional quorum, including correspondent votes. I can confirm that based on this first count, this -- the meeting will be valid both for the ordinary and the extraordinary part because we've more than reached the 20% and 25% thresholds. We have, in fact, 92.6%. And so we're delighted to see that we can bring together a large quorum, reflecting the loyalty of our shareholders. When we move on to the votes, we will be calculating specifically the quorum for each resolution, but we will give you the final quorum just prior to the votes. And then I can confirm already that the AGM may now rule on all the resolutions on the agenda, speaking of which you may have read the agenda in the documents provided in the convening notice. And so therefore, I suggest not to read it out. We will, of course, reiterate the wording of the resolutions when it comes to the vote. And then, of course, you can ask about them during the Q&A. The documents are available on the website in accordance with regulations. And again, I propose not to go through the whole list of documents. As I said, it is there on the desk, but the documents and information provided by regulation was made available to shareholders in due time. And the universal registration document includes the agenda, the draft resolutions, the annual report and the report of the Supervisory Board, and this is also available to you. We have paper copies as well. You may ask for them at Societe Generale.

Well, thank you so very much, Geoffroy. And so this is how I propose we proceed, we will go through the company's business for the year 2024, the performance for 2024 and the outlook for the near future for Tikehau Capital. We haven't received any requests for additional items on the agenda nor have we received any written questions from shareholders in writing. So right after the presentations, we can move on directly to questions from the audience. And having been through all the questions, we will be in a position to vote on the draft resolutions. Now the year 2024 was marked by 2 major events. First, we celebrated 20 years. We've been around 20 years. And in March of 2025, this company actually reached and passed the EUR 50 billion AUM mark. So although it's a young company, it is doing quite well. The AUMs were multiplied fivefold ever since the IPO in 2017, which is, of course, a result of the fine work of your teams. These two steps were made in an ever more complex environment with geopolitical and macroeconomic changes, the resurgence of armed conflicts and tensions between states, trade wars, in particular, the new tariffs introduced by the President Trump or indeed an unstable political context not just in France, but around the world, has exacerbated the volatility of the market and the movement toward deglobalization itself exacerbated by the COVID crisis for companies in which we invest. This is reflected in lesser efficiency of supply and value chains. But in this very unpredictable context, your company was able to show it's -- the relevance of its position with a very specific strategy, well suited to the present environment. We're in a good position to seize on market opportunities. We're also taking advantage of renewed interest on the part of investors for Europe and resilient portfolios because they are little exposed to tariffs. I'll show you now a brief video showing this spirit in which we work, a constant quest for opportunities, our determination to channel global savings for sustainable value and our investment is directly to supporting investors. [Presentation]

Right, having seeing this very vivid and colorful video, we can make a few comments that directly result from the spirit of our company, which you saw in the film. Tikehau Capital is a key player in the financing of the economy. It's a powerful bridge between, on the one hand, global savings, which is growing constantly because of demographics and because of course, of population aging, but of course, savings need, areas of investment to generate return. And on the other hand, you have companies and the real economy looking for funds. And so we are the connection between supply and demand in this context, providing financing. We have 3 ways of doing this. The first thing we do is to raise funds with institutional investors such as insurance companies or pension funds that manage global savings, but also private individuals. And the savings thus mobilize are invested in their strategies, private debt, real assets, capital investment or specific projects that are very carefully selected. And then the third dimension of this activity, having supported companies throughout the investment, and you're talking here anywhere between 3 and 4 years, then we recover the investment through exits or repayment when it was a debt operation. And so then the amounts are redistributed to investors who may then reinvest and continue the cycle. We've had a very robust experience. And in 2024, gross net income was EUR 9.3 billion gross net new money, EUR 7 billion in net new money. The same year, we invested. We deployed EUR 5.6 billion through the various strategies. And in the third stage of the cycle, we divested that as we exited to the tune of EUR 2.1 billion. That enabled us to achieve a sound financial performance in 2024, including 9% growth of net income before tax. Since 2016, we looked at the growth of the company over the period. And it should be pointed out that on the whole, assets under management grew on average 23% a year to reach the EUR 50 billion mark I mentioned earlier. We're rather proud of that. Now income from that activity was up 31% per year. So if you compare the EUR 39 million in 2016 and EUR 351 million in 2024, and operating profit from asset management grew 57% per year from EUR 3 million to EUR 126 million in 2024, and we still have some ways to go. And so this, of course, is past performance, and it is not an indication of future performance. But I'll give the floor to Antoine Flamarion, who will tell us more about relevant value positions.

Thank you, and good afternoon. We'll have first slide on our various lines of business. We are present on all sides of mid-market, private debt, including property, real estate, private equity and tactical strategies, real assets and capital market strategies. The main thing here is that we are diversifying our activities. We don't want to add additional lines of business. But in these 5 verticals, we keep adding new lines of activity basing ourselves on our own and our team's track record. How does this reflect in 2024? Well, we have 3 pillars. I mean, fundraising. We raised EUR 7 billion, which is a record year following another bumper year the year before. And so we are raising significant funds on what is after all a rather challenging markets, and you will see looking at the -- well, if you look at the various distribution channels, they have indeed a number of channels, and we are present in multiple geographies, which is what we were able to raise EUR 5 billion in net new money over EUR 7 billion in gross new money. We've invested EUR 5.6 billion, mostly in credit solutions because we believe this is a complex cycle. So to a large extent, a lot was invested in direct credit, which is less risky, lower return, but almost 76% was in this. And regarding exits, we divested about EUR 2.7 billion in assets. Well, of course, the portfolio is less mature. We believe that there should be more exits as early as 2025, but there was a sustained pace of exits in 2024. The most important thing is, of course, to deliver performance throughout our cycles. And again, in all our segments, we are extremely conservative. All our offices, all our teams made it possible for us to seize on the right opportunities. I'll give you one example. There are 9,000 real estate assets, so a fine granularity on housing, hotels, commercial property. We will keep being selective and diversified. This is how we can absorb shocks when there are geopolitical macroeconomic or sectorial shocks. So large amounts of new money, great diversification, and we expect some acceleration this year.

Well, thank you. Let me give the floor to Nina Majstorovic, who is in charge of the fundamentals underlying our liquid strategies and present them to our customers so she can share with you our expectations -- our take on 2024 and our expectations in the face of such a complex environment as we have today. Nina?

Thank you. Good afternoon, everyone. I'm delighted to be with you today and to see so many of you in the audience. My name is Nina Majstorovic. I'm product specialist in -- as part of our Capital Market Strategies. This is that activity dedicated to listed assets exclusively. So we have open-ended funds with daily liquidity. But before getting into the details of the Capital Market Strategies, let's take a look at the market and take stock on 2024. 2024 was an outstanding year for financial markets, an excellent year for high-risk assets with remarkable performances on the equity market. As you can see on the left-hand side, especially American securities that enjoyed great performances of tech giants in the U.S. In particular, there was a great enthusiasm on artificial intelligence. But this was also a good year for the direct credit market. And you can see this on the right-hand side of the chart in Europe as well as in the U.S., both on investment grade, which encompasses the best graded bonds on the market, but also fine performances in high yield that is bonds with lower ratings. But there are 4 main factors explaining the good performance of high-risk assets in 2024. The first thing was the continuous disinflation throughout the year on both sides of the Atlantic. And that, of course, indicated there would be lower rates in central banks. Of course, the macroeconomic environment turned out to be rather resilient, especially in the U.S. The third aspect that should be considered is more to do with the companies themselves. In 2024, there were fine performances by private companies. For some of them, they are getting back to more usual levels, but still, by and large, very good performances. And the fourth reason why high-risk assets performed so well last year, there was the monetary and fiscal stimulus around the world in a rather coordinated fashion. So all in all, a very good year in 2024, but because there's always a but the year 2025 is starting on a rather different note, there is, of course, a new momentum, especially since the election of Donald Trump in the U.S. And the big issue, of course, right now is about the trade tariffs in the United States. And maybe we can move on to the next slide. So of course, earlier this month, you may remember the Liberation Day that caused a shock wave on the financial markets, revealing a regime change. At least we expect more uncertainty, more announcements, more surprises, good as well as bad surprises at a time where interest rates remain extremely high. As you can see on the left-hand side, you can see sovereign rates, 10-year rates in blue for U.S. rates and orange for German long rates. And of course, the safe havens for U.S. treasury bonds and the U.S. dollar are both now being challenged. So we expect a more volatile year. And indeed, the past few weeks were a case in point. This is not necessarily bad news because in any market environment where there's more dispersion, that brings about more investment opportunities provided you can identify them and you have to be highly selective, and that requires a lot of sound homework and therefore, you need to have a very rigorous investment process. And of course, we try and do this on a global scale at Tikehau Capital throughout all our verticals, especially as regards to capital market strategies. All right. So where we? Yes, capital market strategies. As I said, this we are only investing in listed assets. We're looking at about EUR 6 billion in AUMs with a dual expertise, bond funds and we invest in the European high yield, so investment grade as well, but also financial bonds. Financial bonds are issued by banks, of course. We are conducting a conviction strategy. I mean, at the heart of our reasoning, we have a very thorough analysis conducted by credit analysts, and this is what enabled us to raise significant funds in our capital market strategies. There were fine performances from our various funds, including, of course, the flagship funds, Tikehau short duration, but also the dated funds, those that contributed to new money. There was Tikehau 2027, which now has more than EUR 1 billion in AUM. So we have a know-how in terms of flexible equity funds. We have Tikehau international cross assets that invest both in equity, but also in direct credit. So this is wealth management and asset management in various market configurations. And let me introduce the latest Tikehau European Sovereignty fund. This was launched at the end of 2023, and that considers only listed European shares, European equity. This revolving around the European sovereignty. This is a theme we have been very loyal to over the past few years through our private strategies. And so that involves our know-how, we've extended this to listed assets with this new fund.

Well, thank you so very much, Nina. And I'll ask Mathieu Chabran to tell us about the group's strategy and the outlook.

Well, thank you, sir, and good afternoon, everyone. I'll just repeat what you saw in the video, starting with our multi-geography platform, as you can see on this map. And this is quintessential in this asset management business. This platform is becoming more and more international. We've invested local offices first in Europe, but everywhere in Western Europe. We also have offices in Asia, North America and more recently, in Israel and the Middle East. In 2024, 2 new offices, the 16th office in Montreal, Canada and our 17th office in Hong Kong to reinforce our position in Asia. And this is, of course, our entry point to China. So our teams are more and more international. We have as many as -- as much as 54% of our professionals located outside France. This global platform, of course, supports our fundraising activities, our customer relations, but also new sources for new investment opportunities. In 2024, 2/3 of net new money was raised with international investors. End of '24, we had 44% of our assets, about EUR 22 billion coming from abroad. For the fourth year running, half of the funds came from international clients, and that reflects on this international expansion, not just in Europe for the past 12 years, but also, as I said, in Middle East, North America and Asia. Likewise, and if you look at our customer base, we have significant -- made significant inroads to meet the demand of private clients, and we will discuss this with Célia and Margaux. We'll focus on that. This is private wealth services. In 2024, 1/3 of the funds were raised with private investors with custom-made solutions and partnerships in all our solutions in direct credit. We have EUR 1.3 billion were raised since these were introduced. Our digital platform, Opale Capital was very successful. Almost EUR 240 million were raised in a matter of quarters in a few months and about 1/3 of our assets come from high wealth private customers. The other driver is our investment portfolio. And that if you look at our own funds invested in our own strategies alongside our customers. As you can see, this is a key strategic assets. This is, of course -- we invest in our own strategies, and that is what makes us so special. And so we invest alongside our customers. So we have an alignment of interest. This is rather unique in this industry, not just in Europe but worldwide as much as 10%, I mean we account for more than 10% of all our assets under management. At the end of 2024, 75% of the investment portfolio was in our own credit and private equity strategies, but also real assets and capital market strategies. So we're looking at EUR 3 billion almost. You can see on the right-hand side, a fairly balanced distribution in the various asset classes. And as I was saying earlier, we are the first clients of our own investment strategies. Of course, the quality of investment is quintessential because we're not just a broker acting on behalf of our customers, it is your own equity and of course, value creation for our shareholders that is at stake here. I said the alignment of interest. And of course, we have skin in the game, and this is a differentiating factor of this company. This is a unique alignment with our customers, and that's part of our own DNA. So you find this on 3 levels, top management itself, but shareholders, but also clients see eye to eye, but that's because we invest in priority in our own strategies. And as I said, management is the largest shareholder of the company. We are building a relationship of trust with our shareholders and our customers. And of course, that meets very stringent requirements of loyalty, trust and in all the criteria investments, these values are forefront. Prior to closing and giving the floor to Margaux and Célia, a few words about our achievements in terms of sustainability. That is also part and parcel of our value-creating model. There have been political and geopolitical upheavals. And just because there's a new administration in the U.S., doesn't mean we've given up on one of our priorities of which we were pioneers as early as 2014. So we invest in funds rated under Article 8 and 9. They were up 15% to reach EUR 33 billion almost. A few indicators of the sustainability of our portfolios at the end of 2024, 50% of all companies in our portfolio in private equity have a road map for sustainability and throughout the year, 65% of new direct lending operations and corporate lending. So that's the lending to companies involved an ESG ratchet mechanism that if you reach certain levels of nonfinancial criteria, you have a preferential treatment. Regarding direct impact, we have EUR 4.1 billion AUM allocated to climate and biodiversity, so up 37% in 1 year. So at the beginning of 2025, we're in a good position to go past the target of EUR 5 billion for the year. That performance in sustainability has been recognized by this industry by our own peers. Sustainalytics rated us amongst the best players in this field, and we've received several rewards, awards in direct lending, private equity and direct credit. In any case, we have several items left in our strategy. We want to develop our flagship strategies. We want to ratchet up innovation worldwide. And of course, we are becoming more and more international. We have a very mature platform and every euro, every dollar raised has a direct effect on our P&L. So we want to become more profitable, but our objectives remain relevant in spite of recent developments, and we believe that this is only one stage along our own long-term strategy.

Well, thank you, Mathieu. And as Mathieu explained earlier on, the high wealth or private wealth solutions is now a very promising segment and I'll ask Célia Hamoum and Margaux Buridant, who in charge of this, to give you a presentation. Célia, take it away.

Thank you very much, and good afternoon. Thank you very much for giving me this opportunity to share with you what we do every day for our private wealth customers. I'm in charge of Private Wealth Solutions at Tikehau Capital, and I'm going to walk you through how we support and innovate for our private wealth clients. We work with them directly, but also through intermediates through banks or digital platforms. And we do that across 17 geographies in Europe. We do that also in America, the U.S. as well as in Asia and the Middle East. Regularly, we organize events, and we have communication events to keep the relationship going with our private wealth clients. We've got a platform that brings together different areas of the group. First of all, we've got the approaches -- our approach with an intermediary like private banks, for example, who cover our clients. And to meet a demand for alternative products, we've designed account units like products so that we can have private debt in life insurance products. We've launched a referenced fund at Suravenir. This year, we've created a new unit of account for private debt, but for our direct approach where people can invest from EUR 40,000 upwards. And we are also going to be launching a new unit of account for security, cybersecurity for defense so that we can contribute to the resilience of local economies. We also have Sofidy, who cover banks, especially for real estate, and they offer SCPI and such products. There is, for example, [indiscernible], one of our historical SCPI, which has more than EUR 4 billion under management. So this is really a testimony to our robust know-how. And then there's our direct approach where clients can directly invest into our funds, into our private equity. They've got an access also to our club deals and co-investments. And the idea is that we can build tailored funds depending on their criteria with special mandates for families, for example. We also offer a dedicated management through Sofidy. So here, we support companies and families in putting, structuring their wealth, so we can help them with tax-related issues, help them with investment and such like. So this is what we do for our clients on a face-to-face basis, so to speak. And then there's the digital pillar of what we do. We launched Opale Capital. It's a structure for financial advisers and for our clients so that investment is easier to understand, especially for private equity for debt. It's very simple actually. It's a website where you can go and check some investments and you can select some funds from EUR 100,000 upwards. For example, there are some funds devoted to aeronautics, and that's easily accessible through the platform. You can also find some open architecture funds like Goldman Sachs, Lexington, and others. So we have many initiatives underway at Tikehau to serve our ambition to become a reference for private wealth clients and by using all the different parts and areas of the group. Thank you very much. And now over to Margaux for the end of this presentation.

Good afternoon, one and all. Thank you very much, Célia. My name is Margaux Buridant. So I'm also in charge of Private Wealth Solutions, and I'm based in New York and very happy to continue with this presentation. Now as we've just heard, Tikehau Capital is a global platform or a multi-local platform, as we often call it, with a desire to be as close to the needs of our clients as possible with the right products and the right mix. One of the objectives of Private Wealth Solutions is to make accessible our quality investment strategies to our private wealth clients. Currently, half of the world's wealth is in the hands of private wealth clients. What does that mean for Tikehau? Well, as you can see, at the end of 2024, private investors make up EUR 14.9 billion or 30% of our AUM. And I recognize some investors in the room here today. We also see that there is a strong uptick over the last 5 years, plus 143% of AUM from private wealth clients. And that's because we've been able to innovate at Tikehau Capital. We started out with very strong convictions and beliefs. We've been pioneers in energy transition, for example, in defense or European sovereignty. So we're very much ahead of the curve on that. But we also are able to innovate when it comes to finding channels for new inflows of money. Now for example, we have unit of account products for private debt. So we were very much ahead of the pack here. But also, we work with insurance companies like CNP Assurance or MACSF, and they raised more than EUR 1.3 billion in commitment since we started working together. We also have strategic partnerships with international players, large international players, which allowed us to build a global distribution ecosystem and to grow the Tikehau franchise abroad. There's Fideuram, for example, in Europe, with whom we launched a dedicated product for private debt and real estate, which raised more than EUR 400 million in commitment from the Fideuram client base. And there's also Banca March, a good example in Spain. In 2024, for Asia, we also launched very strong partnerships like Nikko Asset Management. They are one of the leading asset managers in Japan with more than EUR 240 billion AUM. So a partnership on distribution, on joint ventures and also UOB with whom we launched an Asia Pacific private debt fund. They're one of the biggest brokers in Southeast Asia, UOB Kay Hian that is. For the U.S., we're very happy to say that we are under discussion with BNY for a distribution agreement via their wealth management network. This strategic partnership will allow us to plug into a broad and deep network of private wealth clients across the U.S., and that would increase our footprint in the United States. Then we have also the support of family-led holdings like SFI, for example, Financière Agache or Vasgos with whom in 2024, we launched a co-investment fund, Tikehau's Partners. To keep you up to date, we continue to innovate and launch new initiatives with a unit of account dedicated to defense because this is a strong belief of Tikehau for a long time now. And as Célia mentioned earlier, there will be a European private credit fund, semi-liquid that can be accessed from EUR 40,000 onwards, which is going to be very useful for clients who need some flexibility. So Tikehau, to wrap up, continues to support and to innovate in the private market, be it through the platform or through these strategic partnerships that I've mentioned and also via innovation. So thank you very much for your kind attention, and back to Mr. Labriffe.

Thank you very much, Margaux. We're now going to ask Henri Marcoux to walk you through the financial accounts for 2024.

Thank you very much, Mr. Chairman. Dear shareholders, good afternoon. I'm very happy to be with you this afternoon. I suggest that we take a look at our financial results for 2024. And I suggest that like Mathieu, we start off with our asset management business. First of all, I'd like to take a look at the trajectory of our growth. First of all, we've got the management fees, which is dependent or reliant on our AUM. Since we have more AUM, we also have more management fees. And you can see it on the screen here. They reached EUR 337 million for 2024, up 8% compared to 2023. If you look at it over a longer period of time between 2016 and 2024, it's an average annual growth rate of 31%. Second driver of revenue for our company is the performance-related fees and overperformance fees. They are pegged to the performance of the fund that we manage. And there's also the overperformance fees that are particularly attractive. These fees made up EUR 40 million in 2024 in keeping with the performance of the underlying funds. So more AUM, better performing funds equals more revenue overall for 2024. Now let's take a look at profitability for asset management. Can we maybe go back one slide? Here we go. So profitability of asset management. Now profitability is the operating result. So all of the income that I've just outlined, the management fees minus the operational costs. As I said earlier, our income went up plus 8% compared to the previous year with a good control of operational costs, which allowed us to grow our core FRE of more than 7% and it actually reached in 2024, EUR 132 million. That's for the operating result. Now compared to our income, we have a 39% margin, which is stable to -- compared to 2023 in spite of the ups and downs of 2024. Now moving on to our investment portfolio. Mathieu earlier walked you through the investment portfolio with EUR 4 billion, majority of that invested in the Tikehau strategies. Here, you've got the income from that portfolio for 2024. You can see that the revenue for 2024 reached EUR 207 million, a strong increase compared to 2023, up 16% because we were at EUR 190 million in 2023. And that increase is driven by the better performance of funds, credit CLO, private equity as well, which then translated to a positive impact on the balance sheet. Additionally, this income comes in 2 different categories. There's, in blue, EUR 202 million, that's what we distribute. And then the non-realized income, which is fair value for the different assets on our balance sheet under the IFRS standards is about EUR 5 million for 2024. It's important because that EUR 5 million is there in spite of our funds, those that had a negative impact on our performance for 2024. So a good performance overall and great stability in spite of the unrealized events. Now looking at the numbers, you can see that we have continued to grow. Our operational results stand out at EUR 126 million. The portfolio performed well, EUR 207 million and a net result before tax, which is up 9% compared to 2023 and stands at EUR 209 million. Net result group share reaches EUR 156 million, with a higher tax rate, which stands at 25% currently. So good operational performance and plus 9% for the net results before tax. For the consolidated balance sheet, a total of EUR 5.2 billion, equity to the tune of EUR 3.2 billion, which captures the very unique model of Tikehau Capital. Short-term financial resources to the tune of EUR 1 billion. 78% of our debt is linked to CSR criteria. And then a financial rating for Tikehau Capital that's our investment grade, BBB- and a stable outlook. Now just to continue with this presentation, we've talked about the good operational performance of your company for asset management, for the financial balance sheet. And here, you can see that the dividend has grown, and we're actually proposing a EUR 0.80 dividend per share, up 7% compared to 2023. And here again, it is higher than our commitment that was made by the company after the IPO. Now to conclude this presentation, I'd just like to say that the dialogue that we have today is very important. It allows us to share our vision about the future in 2024. There were 3 moments of such discussion in Nice. There was the Investor Day in November 2024. So we'll be repeating such initiatives. We'll come and see you. We'll come and answer your questions and keep the relation going. And we'll have a shareholders' meeting also in Bordeaux in June.

Thank you very much, Henri. I'm now going to ask Mr. Gilles Magnan from Forvis Mazars to take the floor on behalf of the statutory auditors.

Dear shareholders, good afternoon. I'm going to walk you through the reports that we produced for 2024. This year, we published 4 reports, one on annual accounts, consolidated accounts, a report -- sorry, a new report on sustainability that what is the first for your company. Now regarding the annual accounts, we had a certification report with no particular comments or observations and likewise, for the consolidated accounts. So we have certified these accounts without reservations. Regarding the other issues, there is nothing to report. And finally, regarding the new report, it's a certification report on sustainability metrics and publication of information under Article 8 of the EU Rule 2020/852. That flows from European law. Our report has got 3 parts to it. In the first part, we said that there were no mistakes, emissions or anything, inconsistent with the ESRS. That means essentially that the rules set out to follow a number of processes, and these processes were indeed abided by Tikehau. On the basis of the verification that we've made, we haven't noticed any mistake, omissions or inconsistency regarding sustainability in the sustainability report. That means that we have checked the quality of the information produced by Tikehau in their report, and we haven't seen any mistake or omission. And then finally, on the basis of the verifications that we performed, we haven't seen any mistakes, omissions or inconsistencies. Regarding the rules under Article 8, it's the rules about the taxonomy and the CapEx and OpEx alignment with the regulation. And there, once again, we have no comments to make. Thank you very much.

Well, thank you very much. I'm now going to ask Mr. Geoffroy Renard to share with us the resolutions that we'll be voting on at the end of today's proceedings.

Now regarding the draft resolutions that we'll be voting on later on, I'd just like to say that there are 4 usual resolutions that flow from the presentation you just heard from the statutory auditors. And there will be the approval of consolidated accounts, then the approval of the dividend that Henri spoke about earlier with the EUR 0.80 dividend and then fourth resolution on the authorization of agreements governed by Article L.226-10 of the French Commercial Code. So that's it for the first 4 resolutions. Now regarding the lineup of the Supervisory Board, we have 3 resolutions that are proposed this year. First of all, the appointment of Mr. Pierre-Henri Flamand as member of the Supervisory Board to replace Mr. Jean Charest. That's Resolution #5. Unfortunately, Mr. Flamand can't make it today since he is abroad, but he'd like to thank you in advance for voting for his candidacy. Then there will be 2 terms that are up for renewal. That's Resolution 6 and 7. The term of office of Mr. Maximilien de Limburg Stirum and the renewal of the term of office for the Fonds Stratégique de Participations, they're scrutineers for -- or tellers rather for this meeting and Ms. Florence Lustman. A word now on the governance of Tikehau Capital. It's a company with an executive management with Mr. Flamarion and Mr. Chabran who are with me here this afternoon. Under the supervision of a Supervisory Board made up of 11 members. You have 50% of independent members, which is much more than set out in law, 40% of women in keeping with legal requirements. And in addition to that, in 2024, the participation rate at the Supervisory Board meeting was higher than 95%. So very high presence rate for our members at the Board. We have got 2 committees. We've got a Risk and Audit Committee with 3 members, 2 of which are independent and a sustainable and governance committee and an appointment and compensation committee that also do some supervisory work and that's made up of 3 members, 2 of which are independent. That's pretty much it for the lineup of the Board. You've got them up here on the screen with the 11 members. You have Mr. Charest, whose term comes to an end today, and we suggest to have Pierre-Henri Flamand to replace him going forward. And maybe we could also add that a lot of these members or all of these members are experts in financial matters as you will have understood by reading the background information on their experience to date. Moving on, on the draft resolutions. So for resolution #8, you asked to vote on the compensation policy for managers. And so what is on offer here is basically the same compensation policy as we had last year approved at the previous AGM that was fully endorsed. We have a fixed part of the compensation, EUR 1.265 million per manager per year and a variable part, and that is exactly the same structure as last year. The target amount is EUR 4.2 million per year. So that's a maximum amount. There are rules to -- for that compensation to be vested. There are a number of performance objectives that have been set, including you have additional carried interest provisions as well. You have 47% of -- well, 40% is based on financial criteria, 40% based on the share price going in the current year and 3 operational criteria, one on the net new inflows, the level of fee-related earnings to the tune of 10% and one last criteria on the return on equity to the tune of 10%. So then the remaining 25% are nonfinancial criteria. You have 3 items, equivalent items. You have assets under management with a biodiversity and climate component. You have a ratio based on the number of companies that have an ESG ratchet, as Mathieu mentioned earlier on. And then you have the ratio of women in investment teams. If you then pursue resolutions 9 to 13, especially for executive officers, you have the compensation for members of the Supervisory Board. That's resolution #9 that was approved last year. This remains unchanged compared to last year. You will be asked to vote on items of compensation included in the report on corporate governance, and you'll find this in the URD, that's resolution #10. You have 2 resolutions to do with the compensation either allocated or indeed paid to each of the managers in the year 2024. So these are resolutions 11 and 12. Let me just remind you that for the variable compensation of 2024, you have EUR 810,000 for each of the 2 managers. And this, of course, well, all the criteria were considered for the year 2024 before this bonus was allocated. And then there are 2 items of compensation either paid or allocated for the year 2024 to the Chair of the Supervisory Board, that is Resolution #13. For Resolution #14, you will be asked to allow management to buy back the company's own shares. You will be asked to vote on delegation of authority on terms unchanged compared with last year. So I won't go through the details because we have the same terms and conditions. And then at 31 December 2024, the company owned 2% of its own capital in treasury shares. Such shares may be used to implement the buyback program for the year 2024 and 2025 for the granting of free shares either to employees, executive officers or for external growth operations or indeed with a view to canceling them altogether. And then you have one final resolution for this AGM for the extraordinary part, we propose to change Article 10 of the articles to make it consistent with recent legal developments. There's an Act of Parliament of 13 June 2024, allowing the Board of -- the Supervisory Board to make decisions using a written procedure. And so this decision-making process is on the vote.

Right. Thank you, Geoffroy. And now I suggest we take on questions. This is a Q&A session for any questions that you might have. We will ask you to introduce yourselves before you put your questions so that we know who's talking to us. Yes, we have a very first question here.

Hello. My name is [ Pierre Gosba ]. I have 1,900 voting rights. Mr. Flamarion, if you get a phone call from [indiscernible] saying, "I'm prepared to buy back Tikehau at a price of so many euros per share. I keep you as a CEO and with Mathieu as Vice Chair." What's your answer? Yes, starting with amount? And the other question, why is Tikehau still being listed? I invested in a bond-backed fund at -- I got 30% and the other shares have almost nothing and 3/4 of the company are invested in your own strategies. So I'm wondering what's the point for shareholders, for the company to be listed even for yourselves because you are a shareholder as well. There's no market on mid-market companies, on mid-cap companies. They are -- it's not likely that things will change. For the past 40 years, we've been trying to develop a stock market for mid-cap companies. And for the past 40 years, we've been going from one failure to the next. So if you were to organize an LBO with funds or big families, you might as well come out of the listing at worthwhile price, and then we'll be happy to reinvest that money in funds. We'll be more successful.

Well, thank you for this question. Maybe top management may wish to answer. Well, thank you for these 2 questions. And they are connected, aren't they? The first question is in the financial universe, alternative management being developed by this company is becoming more and more attractive. Indeed, Larry Fink rather BlackRock bought GIP in infrastructure and HPS in private debt, but you have a number of transactions. There have never been so many transactions in alternative management. Wendel, close to here, bought 2 companies in 2024, Monroe in credit in the U.S. and IK in private equity in Europe. So the first thing and the good news is that alternative asset management is becoming more and more attractive. Europe is becoming attractive again. And so your company is attractive, and it does happen often that we get calls. I mean, these are just calls. But I can assure you that Tikehau's growth and the performance of its funds are highly attractive to many people. The second point is what's our price? Is there a price at which we would consider selling? Well, even if we are our own main shareholder, meaning not just top management, but employees, we have fiduciary duty. And if we have an offer, we'll consider this on behalf of all people in this room or people represented that is all shareholders. But as you know, we are entrepreneurs. And for now, what we propose to do is to keep growing. We started -- we went from EUR 4 million to EUR 50 billion. We started from 0 profit, EUR 3 million in asset management to EUR 133 million this year. So we're rather satisfied that our teams and our partners are going the right way. And we are very confident in the long and medium term that our company will end up being bigger. In terms of asset management, we have EUR 500 million target for profits, but I think we could reach EUR 1 billion in profits, so before we decide whether to sell a company. And for now, we are entrepreneurs and developers, and we propose to keep developing our company, growing our company and especially because we have shareholders and we have, as I said, a fiduciary duty, is there a price at which we would consider? And I'd answer your second question. Why are we listed at all? We decided to go public because in this business for reasons of transparency, of growth, it's best to be seen as a listed asset management rather than an unlisted boutique. So we have an entrepreneurial vision and a long-term vision. So of course, we're not happy to be worth EUR 18.94 per share when we listed ourselves at EUR 21. Of course, we will be paying a higher portion of dividends. But if you look at the valuation of Tikehau as a company, we have our own -- equities invested in our own funds, EUR 3.2 billion. And then our asset management business from 2016 to today generated from EUR 3 to EUR 126 million in profits. If you look at alternative asset management, listed assets -- I listed 4 examples, but say the companies were bought at a price anywhere between 15 and 25x their profits. So if your profit is EUR 130 million multiplied by 2, you're looking at EUR 2.6 billion, and that keeps growing. So the sum total of all the parts, the EUR 3 billion in equity plus 20x for the sake of the argument, the operating profit, we're looking at EUR 7 billion or EUR 8 billion, and that's EUR 40 to EUR 45 per share. So we know we are being undervalued. It is a bit unpleasant, but we are building over the long run. As some pointed out, we have to disclose purchases of management. And so at that low price, we are buying our own shares. We believe they are being undervalued. It takes time, but we have decided to be listed because this gives us access to the capital markets. When we announced -- when the tariffs were announced, we were able to issue a 6-year bond, which covers all our debt. And so we have -- we owe nothing for the next 6 years, and that helps our brand because being listed because if you go to Korea, Abu Dhabi, Tel Aviv or Montreal, it's much easier to say I'm -- we are listed. We're only worth EUR 3.2 billion on the stock exchange, but we have a brand. We compensate our employees to some extent with script -- with free shares. If we were dealing with a non-listed system, it would not be as attractive. Being listed is cumbersome admittedly. What is true about Europe. In the capital markets, if you are a company with less than EUR 10 billion in market value, not everybody will be interested in that, but things might change because, as I said, Europe has become attractive again. Mathieu can say a few words about that. He was in Asia just now and all Asian investors want to invest both in listed and unlisted companies. So we are patient. We keep working. We know that work pays off, and this is how we built Tikehau over the years, over 20 years.

Thank you, Antoine. Mathieu, do you want to add something?

Regarding the markets in Europe. Your comment is quite accurate. And indeed, this has accelerated with passive management ETF or other index-linked funds. And so there is an anomaly here. I mean, what is available, most savings go to ETF funds because the management fees are 6 basis points. These are pro-cyclical. ETFs cannot be involved in IPOs, traditional funds as we knew them. And here, I speak under the supervision of our Head of Investor Relations, Théodora and Louis can correct me if I'm wrong, but this is drying up. And so the market, as you pointed out, is -- doesn't work properly. IPOs are essentially given to hedge funds that generate fast money. As a result of this, there's a worrisome figure the year 2024 for Euronext that is our listing markets. It's not just Paris, it's also Amsterdam, Oslo, Milan, Brussels. Anyway, you have EUR 4.9 billion that were raised over these 6 markets for 53 companies. So you work it out, you do the math. And so on the one hand, we find that, well, we have to consider this. As entrepreneurs, we are optimistic. With this in a way, it's good news for Tikehau's activity because we have to provide funding to these activities, either in debt or equity. And indeed, it could be something -- it may not be structural. It may be due to recent developments because over the past 5 years for every dollar you invest in the world, you had 80% -- $0.80 invested in the U.S. So for listed equity, where you had the max 7, but also because in private markets, it was the same thing. People wanted -- you see that the Chinese sovereign fund was selling private equities to the U.S. And so the tariff was an excuse to recognize that the U.S. was getting 3/4 of global flows, where they do not account for 3/4 of the global economy. And for Tikehau, we have reached the size and maturity. We talk to these people day after tomorrow, and normally we have a due diligence of a major Asian sovereign fund with the leader coming for the first time. We were talking to them. We've been talking with them for the past 10 years. And Célia can confirm this for our private debt business. We had another Asian sovereign fund that we met on 15 January 2015. I remember that and Célia saw them again a month ago. And 2 hours after the meeting, they want to meet us here on the 29th of May for due diligence purposes. So it's a long story, but this excuse of tariffs was a wake-up call for many investors and asset owners to consider that there should be a reallocation and Tikehau is well positioned to take advantage of that situation. And then, of course, I can't compare everything. But if you look at the best-in-class KKR in 2008 they were listed or [ NNR ] that were listed in 2012, it took them 8 or 10 years. I know it may take time, but for the market to understand the model and the 3 aspects, including the balance sheet, give some cap earnings. And just an anecdote on 7 March 2017, during -- on the day of our IPO, there was a trade paper that gave a beautiful story, and we're very happy to read this with Antoine. And at the end, they had our recommendation at the end and the recommendation was in the lack of comparables stay away, create, don't compete.

[indiscernible], individual shareholder. On Page 9 of your book on carried interest that is, you have 53% that went to the company. Do you expect that 53% figure -- sorry, it's in the annual report. This 53% of carried interest, is this going to change over time? And then last year, you had EUR 2.1 billion in realizations. Can you give us some idea on the annual return on equity? And then regarding capital, there was capital -- share capital you increased and reduced capital to pay for Sofidy plans and such like, how can you have both a capital increase and capital decrease? Why not use your treasury shares that would be simpler, wouldn't it?

If I may answer the first question on carried interest, that is the fee given to asset managers. We have the same rule. 53% goes to the listed company. That hasn't changed. And we don't propose to change this. And indeed, 100% of the performance fees on CMS are directed to the listed company. But Henri and Geoffroy can answer the 2 other questions. On the EUR 2.1 billion in realization, upwards of 70% were direct credit. So they were repayment. And so we were looking at anywhere between 6% and 10%, give or take, a few exceptions.

Well, yes, a significant and growing part out of the EUR 2.1 billion were realizations in private equity. Our fund Preligens and cybersecurity became Safran artificial intelligence. And there, the realization was 3x the amount invested in aeronautics defense. There were 2 major realizations, Brown Europe and [ Esco ], again, between 2.5 and 3x the capital initially invested. So the growth trajectories were quite significant in private equity.

And on question number three, it's a technical question. I quite agree. It is a bit odd to do -- to go through both capital increases and decreases. But in accounting terms, that creates less volatility in our income statement. That's why we do that.

All right. Another question in the middle.

[indiscernible], I'm an individual shareholder. You mentioned defense as an area of investment. Were you under pressure not to invest in that industry? And more specifically or more generally, are there other industries that you have ruled out?

Well, the defense industry and indeed, other themes like decarbonization are part of our beliefs. These are not new beliefs. They were developed as early as 2017, 2018. And these beliefs, these convictions were then supported by clear decisions that is recruiting teams, providing financial resources and on issues of sovereignty and defense. Our belief, our conviction in 2017, 2018 was reflected significantly with EUR 500 million on aeronautics, civil, cybersecurity. So a large amount was invested on these companies. And so the defense industry is a recurring theme, which is very -- of course, it's not very trendy because of recent developments where over the past 5 years, more than EUR 1 billion were invested in about 30 companies of which we have shares, 25,000 employees on all the defense industry value chain. And so of course, initially, we didn't start off on this, but now we keep investing and we keep believing in the defense industry. And in the near future, indeed, we have a unit-linked fund for private investors who can -- private individuals, they will be able to invest in time between July and September to invest through life insurance companies on these companies.

And more specifically, are there -- well, we're under pressure. As Henri said, we have strong conviction as to where we want to invest your company's capital and where does it make sense in economic terms and where does it make sense in terms of sovereignty. Initially, our investors were not too keen on this or that kind of asset class. But likewise, with decarbonization, early in 2018, many investors said, why should we do this? We're not going to invest, then it became more fashionable. Likewise, in defense, there were -- we had very little traction. Few investors were interested. Now we have many. And this is how we built Tikehau as we innovate, we have beliefs and then we try to act out on them and provide performance to investors. And this is how we get our business growing.

Thank you. I can see another question. Sir, yes.

Sorry, in the annual report, I didn't see anything about cryptocurrencies. Is that one of your beliefs as well? One of your convictions. You also said you might be listed in the U.S. Can you tell us more about that?

Regarding cryptocurrencies, this is one of our non-beliefs. That is why it's not there in our annual report. There's no exposure to cryptocurrencies. Regarding being listed in the U.S., this is in line with what we said earlier on. This is a sort of thing we think about constantly. It is our fiduciary duty to maximize the value of the company. Of course, this is a much more mature market in the U.S. So we've been thinking about this. And in fact, at the end of last year, there was talk about this in the media. Things have changed since then. But after that paper was published, the Head of the London Stock Exchange called us up in a very proactive way. So the markets themselves are well, victims to illiquidity. So we're constantly thinking of the best ways, the best techniques we can use to maximize the company's value.

Well, I couldn't see you. I have the lights in my eyes. Yes. I'm an individual shareholder. I have a question about private equity. The valuations seem to be high. There have been acquisitions that were conducted at the high point of the market. So you have many companies that are stuck now because the market is volatile. What is your position at Tikehau?

Well, one point, the valuations in our businesses are regulated for private equity. We have international private equity valuation criteria. And so it's a multi-criteria assessment where we compare similar companies to see how they are valued with the transactions, with the listed companies, what are the multiples. We also use DCF, discounted cash flow methods, enabling us how we can expect the company to perform in the present macroeconomic circumstances. Now over the past 3 years, there have been changes in interest rates and inflation. The past 15 years have been more stable in terms of interest rates. But now value creation in private equity is changing for the past 10, 15 years, value creation was related to the use of leverage, which at Tikehau, we used -- we had less use of. Now we are looking at value creation for portfolios that is what you can provide to companies inside our portfolios, how we can support them, how can we help them grow. And so there's a change of paradigm on private equity. We are refocusing on our companies in the portfolio, and we're using less leverage in value creation. Now there are companies inside that carry funds and that want to disinvest and can't manage. But it's maybe to do with valuation, but it's also to do with the performance of the companies. If you want to dispose of a company, it has to be doing well. It has to have a positive outlook. I gave you 3 examples of realizations on private equity operations. When the company is doing well, it has a good performance, then you're in a good position to sell, to dispose of it.

Thank you, Henri. All right. Well, I believe the time has come for us to vote on the resolutions. So we will go through them one by one. We won't go through all of them. Geoffroy?

We can look at the final quorum, 92.674%, 333 shareholders. This vote is conducted on -- well, it's -- raise your hands to vote. So we will count your votes on a hand-raising mode. First resolution, approval of the annual financial statements for fiscal year ended 31st December 2024.

It is approved.

Second resolution, approval of the consolidated statements.

Anyone against? Abstentions? It's approved.

Third resolution, allocation of results for fiscal year 2024.

Against? Abstentions? Approved.

Fourth resolution, review and authorization of agreements governed by Article L.226-10 of the French Commercial Code.

Against? Abstentions? Approved.

Fifth resolution, appointment of Mr. Pierre-Henri Flamand as member of the Supervisory Board to replace Mr. Jean Charest.

Anyone against? Abstentions? It is therefore approved. And I would like to congratulate Mr. Flamand, who's probably watching from home.

Renewal of the term of Mr. Maximilien de Limburg Stirum as member of the Supervisory Board.

Anyone against? Abstentions? It is therefore approved. Congratulations to Maximilien.

Seventh resolution, renewal of the term of office of Fonds Stratégique de Participations with Ms. Florence Lustman as its permanent representative at the Supervisory Board.

Anyone against? Abstentions? It is therefore approved. Congratulations to Florence.

Eighth resolution, approval of the components of the compensation policy for managers.

Anyone against? Abstentions? It is therefore approved.

Ninth resolution, approval of the compensation policy applicable to the Supervisory Board.

Anyone against? Any abstentions? It is therefore approved.

10th resolution, approval of information referred to in Article L.22-10-9 Paragraph 1 of the French Commercial Code.

Anyone against? Abstentions? It is therefore approved.

11th resolution, approval of the components of compensation paid for financial year 2024 for AF&Co Management Manager.

Anyone against? Abstentions? It is therefore approved.

12th resolution, approval of the components of compensation paid to MCH Management Manager during the 2024 financial year.

Anyone against? Abstentions? It is therefore approved.

13th resolution, approval of the compensation for 2024 to the Chairman of the Supervisory Board.

Anyone against? Any abstentions? It is therefore approved.

14th resolution, authorization to be given to the managers to trade in the company's shares.

Anyone against? Any abstentions? It is therefore approved.

15th resolution, amendment of Article 10 of the statutes, amendments to the procedures for deliberation within the Supervisory Board.

Anyone against? Any abstentions? It is therefore approved.

And 16th and final resolution, powers to carry out legal formalities.

Anyone against? Any abstentions? It is therefore approved. Thank you very much, one and all, for your presence this afternoon. Thank you very much. [Statements in English on this transcript were spoken by an interpreter present on the live call.]