Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tikehau Capital SCA (FRA:7TI, Financial) achieved a record year in 2024 with EUR7 billion of net new money, marking the third consecutive year of record fundraising.
- The company's fee-related earnings (FRE) increased significantly from EUR3 million at the time of IPO to EUR132 million in 2024, demonstrating strong growth in asset management profitability.
- Tikehau Capital SCA's assets under management (AuM) have grown from EUR9 billion at IPO to EUR49 billion, with a notable acceleration in fundraising across geographies and client segments.
- The company has maintained a strong FRE margin close to 40%, with expectations for improvement in 2025 due to growth in private equity and expense reductions.
- Tikehau Capital SCA has made significant progress in sustainability, with AuM in SFDR Article 8 and Article 9 reaching close to EUR33 billion, and a 37% increase in sustainability-focused AuM compared to the previous year.
Negative Points
- The deployment of EUR5.6 billion in 2024 was less than the previous year, reflecting a cautious investment approach in a challenging environment.
- Real estate fundraising was notably softer in 2024, with the sector facing significant challenges due to rising interest rates and reduced transaction levels.
- The company's average revenue margin decreased from 94 bps to 90 bps, influenced by cyclical effects and a fundraising mix that included lower-fee CLOs and CMS.
- Tikehau Capital SCA's net profit growth was impacted by higher financial interests linked to sustainable bonds issued in 2023 and the drawing of a revolving credit facility in 2024.
- The company faces increased competition in the private credit space, with many large players entering the market and raising substantial funds, which could pressure margins and deployment opportunities.
Q & A Highlights
Q: Can you provide an indication of ongoing fundraising and any new strategies for the current year?
A: We are finalizing three flagship strategies: Direct Lending, Decarbonization Fund, and Special Situations Fund. We aim to grow our Direct Lending fund to between EUR4 billion and EUR5 billion and our Decarbonization Fund to between EUR2 billion and EUR3 billion. We also plan to launch new initiatives in private credit, potentially in mid-market CLOs.
Q: What is the rationale behind acquiring a 4% stake in Schroders? Is it purely financial or strategic?
A: The investment in Schroders is primarily financial, recognizing its strong global brand and attractive valuation. However, there may be potential for future commercial collaborations.
Q: Can you update us on the 2026 outlook and areas of progress?
A: We have made significant progress since our 2022 outlook, despite challenges in the real estate sector impacting revenue. We remain confident in achieving our targets, supported by our global platform and strong joint venture pipeline.
Q: How do you expect the wealth management momentum to develop in 2025, and are there pressures from larger peers?
A: We have a strong foundation in wealth management, having started with private investors. We plan to expand our efforts, particularly in the US, and leverage our Opale platform to capture more of the wealth management market.
Q: Could you elaborate on real estate inflows for 2025 and the global sector outlook?
A: The real estate sector is challenging due to rising interest rates, but we see significant opportunities, especially in contrarian investments. We are focusing on high-yield opportunities and leveraging our strong in-house team to manage and reposition assets effectively.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
