Strong fundraising
and investment momentum, strong outlook confirmed
Regulatory News:
During the third quarter of 2021, Tikehau Capital (Paris:TKO)
accelerated capital deployment across its closed-end funds, while
remaining highly selective and disciplined. After a strong
performance during the first half of the year, the Group maintained
a solid fundraising momentum over the period. In addition, Tikehau
Capital further strengthened its commitment to address climate
change with the ambition to formalize science-based targets for its
private equity business within the next 24 months. Tikehau Capital
confirms its 2021 and 2022 targets and remains particularly
well-placed to deliver sustainable and profitable long-term
growth.
Key highlights
- Dynamic fund deployment with €3.7bn invested by the
firm’s closed-end funds over the first nine months of 2021
(compared to €1.2bn over the same period last year), driven by a
strong acceleration in Q3 with €1.8bn (vs. €0.4bn in Q3
2020) deployed during the quarter, while maintaining a high level
of discipline and selectivity, and a healthy pipeline ahead;
- Strong fundraising momentum throughout 2021 with year-to-date
net new money for the asset management business reaching
€3.8bn (of which €1.4bn in Q3), a solid 47%
increase compared to the same period last year;
- As of 30 September 2021, assets under management1 (AuM) for the
Group stood at €31.8bn, up 16.7% yoy. AuM for the
asset management business reached €30.5bn, up 17.8%
yoy;
- Investment portfolio reached €3.2bn with €143m of
new capital committed by Tikehau Capital in its own strategies
during Q3 2021, bringing total new capital commitments in own
strategies to €364m year-to-date;
- Launch of Tikehau Capital’s CLO activity in North
America, leveraging its expertise of the European market to
expand the firm’s brand presence in the region and strengthen
relationships with local institutions;
- Strengthening of Tikehau Capital’s commitment to address
climate change, targeting at least €5bn of climate-dedicated
AuM by 2025, with the commitment to define science-based
targets for its private equity business within the next 24
months;
- Confirmation of 2021 and 2022 targets:
- Reach at least €33bn in Group AuM by 31 December
20212
- Reach more than €35bn for Group’s AuM and generate more
than €100m of fee-related earnings3 (FRE) in 2022.
AuM at 30-Sept-2021
YoY change
QoQ change
In €m
Amount (€m)
Weight (%)
In %
In €m
In %
In €m
Private debt
10,182
32%
+14.8%
+1,309
+3.2%
+317
Real assets
11,254
35%
+10.3%
+1,051
+2.9%
+320
Capital markets strategies
5,090
16%
+31.8%
+1,227
+8.8%
+411
Private equity
3,995
13%
+34.3%
+1,021
+1.5%
+58
Asset Management
30,521
96%
+17.8%
+4,609
+3.8%
+1,106
Direct investment
1,276
4%
(4.3)%
(57)
(14.7)%
(219)
Total AuM
31,796
100%
+16.7%
+4,552
+2.9%
+887
1. ASSET MANAGEMENT BUSINESS: ACCELERATION IN FUND DEPLOYMENT
AND STRONG FUNDRAISING MOMENTUM
High level of deployment in Q3 2021
with strong selectivity
In Q3 2021, the closed-end funds managed by Tikehau Capital
selectively deployed €1.8bn, a record high level in a
quarter, compared to €1.9bn invested over the first half of 2021.
This takes total capital deployments since 31 December 2020 to
€3.7bn. This acceleration stems from Tikehau Capital’s
multi-local platform, which leverages the firm’s strong
local presence and deal sourcing capabilities, alongside its strong
investment discipline and focus on ESG across asset
classes.
Over the quarter, the firm’s private debt strategies
represented c.65% of total deployment, driven by investments made
by Tikehau Capital’s 5th vintage of direct lending flagship
strategy (TDL V), reiterating the firm’s key role as a bridge
between global savings and the financing of the real economy. The
level of deployment has been driven by an overall supportive market
with an increasing number of mid-market companies looking for
alternative sources of financing. As an illustration, there has
been a significant uplift in investments carried out by non-bank
players since the beginning of the year, with a 72% of market share
of European mid-market direct lending transactions over the first
half of 20214. Looking forward, the mid-market, core focus of
Tikehau Capital, continues to offer ample opportunities for the
firm.
On the private equity side, Tikehau Capital actively
deployed its flagship strategy dedicated to energy transition (T2)
while increasing the size of its investments. The firm recently
announced it had entered into exclusive negotiations to acquire a
42% stake in Egis, a specialist in smart engineering,
infrastructure and mobility services, as well as a majority stake
in Sterne Group, a specialist in sustainable transport and
logistics.
Looking ahead, the Group has a very healthy deployment pipeline
across asset classes. At end-September 2021, Tikehau Capital had
€5.4bn of dry powder within the funds it manages,
enabling them to capture attractive investment opportunities. This
compares to €6.4bn at 30 June 2021 and €6.2bn at 31 December
2020.
Continued strong momentum with €1.4bn
in net new money in Q3 2021
Tikehau Capital’s fundraising momentum in 2021 remains very
robust across all of the Group’s asset classes. Net new money5 for
the asset management business over the first 9 months of the year
amounts to a solid €3.8bn, a 47% increase compared to
net new money recorded during the first 9 months of 2020. Q3 2020
offered a high basis for comparison due to the first closing of Ace
Aero Partenaires6 (€630m).
After a very strong first half, fundraising remained buoyant in
Q3 2021, with net new money reaching €1.4bn over the
quarter. The fundraising mix over the quarter reflects the ongoing
fundraising schedule across strategies and asset classes:
- Private Debt was the leading contributor of fundraising
in Q3 2021 with net new money reaching €554m driven by new
commitments for TDL V, the Group’s flagship strategy in direct
lending (with AuM at 30 September 2021 of €1.2bn). Fundraising in
Q3 2021 also includes the successful reset and upsizing of European
CLO I, as well as net new money resulting from the launch of
Tikehau Capital’s first CLO in the US, which is currently in
its warehousing phase. This launch is a new positive development
for Tikehau Capital in North America. It will enable the firm to
expand its brand presence in the region and strengthen
relationships with local institutions, leveraging its long-standing
expertise on the European CLO market. The US CLO team plans on
launching several vehicles over the coming years, taking advantage
of attractive market conditions. The team, based in New York, will
be reinforced by the appointment of Frances Ning as a Senior Credit
Analyst. Frances brings over 14 years of experience within the
fixed income industry, including roles at Citigroup, Hartford
Investment Management and more recently at Credit Suisse where she
spent 6 years as a credit analyst. The launch of the US CLO
strategy is a testament to Tikehau Capital’s growth ambitions in
the structured credit space, which will be supported at the global
scale by the recently-announced appointment of John Fraser
as Partner and Chairman of Global Structured Credit Strategies. In
this newly created role, John will advise senior Tikehau Capital
team members in growing the firm’s existing structured credit
businesses including its U.S. and European CLO platforms. John will
also help develop and launch new business lines within the
structured credit space. His entrepreneurial and institutional
experience will support Tikehau Capital’s structured credit
strategies and overall company brand building and product marketing
including interaction with investors.
- Net new money for Real Assets amounted to €416m in Q3
2021, driven by continued good fundraising momentum for Sofidy’s
strategies (AuM for Sofidy reached €7.2bn at 30 September 2021, up
+8% year-to-date) as well as the completion of the acquisition by
IREIT Global, the Group’s listed REIT in Singapore, of a
27-property portfolio in France let by Decathlon. This transaction
enables IREIT Global to strengthen its lease profile and add scale
and diversification to its portfolio.
- The Capital Markets Strategies benefited from very
positive demand from investor-clients both for fixed income
strategies as well as equity and flexible strategies. Total net new
money for the strategy reached €404m in Q3 2021, bringing
year-to-date fundraising to €802m, which represents more than twice
the level of net new money for the full-year 2020. The Tikehau
Short Duration fund (formerly known as Tikehau Taux Variables) was
the main contributor to Q3 net new money for that business, which
was also driven by the launch of the Tikehau Impact Credit
strategy, the firm’s high yield impact credit liquid fund.
- Private Equity contributed €41m to the firm’s net new
money in Q3 2021, reflecting the fundraising seasonality for that
business line. The quarter was marked by the final closings of the
firm’s second vintage of European Special Opportunities Strategy
(TSO II) which exceeded expectations, and of the Group’s third
vintage of cybersecurity and digital trust fund (Brienne III)
respectively with €617m and €175m7 of total commitments.
As a consequence of these achievements across all asset classes,
AuM for the asset management business stood at €30.5bn at 30
September 2021, up €4.6bn or 17.8% over the last twelve
months.
2. INVESTMENT PORTFOLIO: INCREASING ALIGNMENT OF INTERESTS
WITH INVESTOR-CLIENTS
During Q3 2021, Tikehau Capital committed €143m of new
capital in its own strategies further increasing its alignment
of interests with those of its investor-clients. This brings total
Tikehau Capital balance sheet commitments in its own strategies to
€364m for the 9-month period to 30 September 2021.
The firm’s investment portfolio came in at €3.2bn at 30
September 2021 (€2.9bn at 30 June 2021 and €2.4bn at 31 December
2020), of which:
- €2.1bninvested in the asset management strategies
developed and managed by the firm (65% of total portfolio), a 30%
increase compared to 31 December 2020. In addition, Tikehau Capital
has €1.0bn of undrawn commitments in its own funds, which
will be progressively called as they deploy capital. Therefore, the
total of drawn and undrawn commitments from Tikehau Capital’s
balance sheet in its own funds and strategies amounted to
€3.1bn at 30 September 2021, highlighting the firm’s strong
alignment with its investor-clients.
- €1.1bn invested in direct assets, of which around half
is invested in listed assets (mainly Eurazeo) and the other half in
unlisted assets, such as direct private equity investments,
co-investments or investments in third-party funds.
Tikehau Capital will continue to use its balance sheet, a
differentiating factor and enabler of growth, to strengthen its
platform by launching new families of products and vehicles, and
also maintain a high level of alignment of interests with its
shareholders and investor-clients.
3. STRENGTHENING OF TIKEHAU CAPITAL’S COMMITMENT TO ADDRESS
CLIMATE CHANGE
Since the beginning of the year, Tikehau Capital has
significantly strengthened its commitment to address climate
change, materialized across the firm’s asset management strategies
as well as Group’s financing. The firm has already attracted more
than €1.5bn in capital commitments across its investment
strategies which are classified “Article 9” as per the
European Sustainable Finance Disclosure Regulation (SFDR). Tikehau
Capital intends to continue launching in priority fund strategies
that support and accelerate sustainable business models and the
decarbonisation of economies.
Following the successful issuance of a €500m inaugural
sustainable bond in March 2021, the firm has integrated
ESG criteria to its €700m revolving credit facility.
In early October 20218, Tikehau Capital announced its ambition
to manage at least €5bn of assets by 2025 dedicated to the fight
against climate change. This significant commitment
demonstrates the continued ambition of the firm to invest global
savings towards a more resilient and inclusive economy, creating
sustainable value for all. At the same time, Tikehau Capital
announced the launch of a Climate Action Center, which is dedicated
to harness financial innovation and focus on decarbonization,
biodiversity, sustainable agriculture and food, the circular
economy and sustainable consumption.
Tikehau Capital joined early in 2021 the Net Zero Asset Managers
(NZAM) global initiative accredited by the United Nations Framework
Convention on Climate Change's (UNFCCC) "Race to Zero" campaign. To
demonstrate the robustness of the approach, Tikehau Capital
announces today its commitment to define science-based
targets (SBT) for its private equity business in the next 24
months.
Tikehau Capital is among the first alternative asset managers to
have submitted such commitments, demonstrating once more its
leading role in the fight against climate change. This initiative
will aim at reinforcing the firm’s climate engagement and at
promoting the definition of SBT across portfolios.
4. SHARE BUYBACK PROGRAMME
Tikehau Capital extended under the same conditions to 9 March
2022 (included), date of the Group’s 2021 annual results release,
the share buyback mandate, which was signed and announced on 19
March 2020 and extended on 15 September 2021 until today.
As of today, 3,097,714 shares were repurchased under the share
buyback programme. The description of the share buyback programme
(published in paragraph 8.3.4 of the Tikehau Capital Universal
Registration Document filed with the French financial markets
authority on 1 April 2021 under number D. 21-0246) is available on
the company’s website in the Regulatory Information section
(https://www.tikehaucapital.com/en/finance/regulatory-information).
5. STRONG OUTLOOK CONFIRMED
Since 30 September 2021, Tikehau Capital has maintained very
positive momentum across the board. In particular:
- Fund deployment activity remained elevated, with closed-end
funds managed by the firm continuing to deploy capital in a
selective and targeted manner.
- Fundraising momentum continued across the firm’s strategies
with promising new initiatives in the pipeline.
- Tikehau Capital proceeded to an active rotation of its direct
investment portfolio, in particular through the disposal of Eurazeo
shares in the market. As a consequence, as at 5 November 20219,
Tikehau Capital owned 3.86% of Eurazeo share capital and 4.31% of
voting rights.
Tikehau Capital reiterates its target of reaching over €33bn
in AuM at 31 December 202110 and confirms its core organic
objectives for 2022, aiming to exceed €35bn of Group AuM and
€100m of fee-related earnings (FRE).
Calendar
3 February 2022
Q4 2021 announcement (after market
close)
9 March 2022
2021 annual results (after market
close)
21 April 2022
Q1 2022 announcement (after market
close)
28 July 2022
2022 first half results (after market
close)
ABOUT TIKEHAU
CAPITAL
Tikehau Capital is a global alternative asset management group
with €31.8 billion of assets under management (as of 30 September
2021). Tikehau Capital has developed a wide range of expertise
across four asset classes (private debt, real assets, private
equity and capital markets strategies) as well as multi-asset and
special opportunities strategies.
Tikehau Capital is a founder led team with a differentiated
business model, a strong balance sheet, proprietary global deal
flow and a track record of backing high quality companies and
executives.
Deeply rooted in the real economy, Tikehau Capital provides
bespoke and innovative alternative financing solutions to companies
it invests in and seeks to create long-term value for its
investors, while generating positive impacts on society. Leveraging
its strong equity base (€2.9 billion of shareholders’ equity as of
30 June 2021), the firm invests its own capital alongside its
investor-clients within each of its strategies.
Controlled by its managers alongside leading institutional
partners, Tikehau Capital is guided by a strong entrepreneurial
spirit and DNA, shared by its 672 employees (as of 30 September
2021) across its 12 offices in Europe, Asia and North America.
Tikehau Capital is listed in compartment A of the regulated
Euronext Paris market (ISIN code: FR0013230612; Ticker:
TKO.FP).
For more information, please visit: www.tikehaucapital.com
DISCLAIMER:
This document does not constitute an offer of securities, fund
units or any financial instruments for sale or investment advisory
services. It contains general information only and is not intended
to provide general or specific investment advice. Past performance
is not a reliable indicator of future earnings and profit, and
targets are not guaranteed.
Certain statements and forecasted data are based on current
forecasts, prevailing market and economic conditions, estimates,
projections and opinions of Tikehau Capital and/or its affiliates.
Due to various risks and uncertainties, actual results may differ
materially from those reflected or expected in such forward-looking
statements or in any of the case studies or forecasts. In
particular, an investment in a fund is speculative and presents
risks, including a risk of loss of capital. All references to
Tikehau Capital’s advisory activities in the US or with respect to
US persons relate to Tikehau Capital North America.
Appendix
LTM evolution (in €m)
AuM at 30-09-2020
Net new
money
Distri-
butions
Market effects
Change in
scope
AuM at 30-09-2021
Change
(%)
Change
(€m)
Private debt
8,873
2,040
(915)
185
-
10,182
+14.8%
+1,309
Real assets
10,203
1,334
(355)
72
-
11,254
+10.3%
+1,051
Capital markets strategies
3,862
1,038
(9)
198
-
5,090
+31.8%
+1,227
Private equity
2,973
973
(42)
41
49
3,995
+34.3%
+1,021
Total Asset Management
25,912
5,385
(1,321)
495
49
30,521
+17.8%
+4,609
2021 YTD (in €m)
AuM at 31-12-2020
Net new
money
Distri-
butions
Market effects
Change in
scope
AuM at 30-09-2021
Change
(%)
Change
(€m)
Private debt
9,342
1,436
(739)
142
-
10,182
+9.0%
+840
Real assets
10,334
1,098
(257)
80
-
11,254
+8.9%
+921
Capital markets strategies
4,184
802
(8)
111
-
5,090
+21.6%
+905
Private equity
3,491
435
(33)
53
49
3,995
+14.4%
+504
Total Asset Management
27,351
3,772
(1,037)
386
49
30,521
+11.6%
+3,170
Q3 2021 (in €m)
AuM at 30-06-2021
Net new
money
Distri-
butions
Market effects
Change in
scope
AuM at 30-09-2021
Change
(%)
Change
(€m)
Private debt
9,865
554
(355)
117
-
10,182
+3.2%
+317
Real assets
10,934
416
(114)
17
-
11,254
+2.9%
+320
Capital markets strategies
4,679
404
(2)
8
-
5,090
+8.8%
+411
Private equity
3,936
41
-
17
-
3,995
+1.5%
+58
Total Asset Management
29,415
1,416
(470)
159
-
30,521
+3.8%
+1,106
_________________________________ 1 The Group’s assets under
management are not included in the audit process. Figures have been
rounded for presentation purposes, which in some cases may result
in rounding differences. 2 At constant AuM for the Capital Markets
Strategies versus 30 June 2021. 3 Fee-Related Earnings (FRE)
correspond to net operating profit from asset management less
performance fees and carried interest. 4 Source: AlixPartners
mid-market debt report (September 2021). 5 Total net new money
raised from third party investors and Tikehau Capital’s balance
sheet. 6 Tikehau Ace (formerly Ace Capital Partners) private equity
fund dedicated to support the aerospace industry. 7 Final closing
announced on 11 October 2021. 8 Please refer to press release dated
4 October 2021. 9 Refer to the declaration of crossing of threshold
published to the French stock market regulator (Autorité des
marchés financiers) on 8 November 2021 10 At constant AuM for the
Capital markets strategies versus 30 June 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211109006254/en/
PRESS: Tikehau Capital: Valérie Sueur – +33 1 40 06 39 30 UK –
Prosek Partners: Henrietta Dehn – +44 7717 281 665 USA – Prosek
Partners: Trevor Gibbons – +1 646 818 9238
press@tikehaucapital.com
SHAREHOLDERS AND INVESTORS: Louis Igonet – +33 1 40 06 11 11
shareholders@tikehaucapital.com
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