Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Eurazeo SE (EUZOF, Financial) reported a 23% increase in fundraising, reaching EUR4.3 billion, surpassing their guidance of EUR4 billion.
- Fee-paying assets under management (AUM) from third parties increased by 12%, and management fees from third parties rose by 14%.
- The company improved its operational efficiency, with the FRE margin gaining 110 basis points to reach 35.5%, aligning with their medium-term guidance.
- Eurazeo SE (EUZOF) increased its ordinary dividend by 10% to EUR2.42 per share and significantly expanded its share buyback program to EUR400 million for 2025.
- The company maintained top rankings in sustainability benchmarks and strengthened its line of impact funds, with the Eurazeo transition infrastructure fund closing 40% above its initial targets.
Negative Points
- The net value of Eurazeo SE (EUZOF)'s portfolio decreased by 5% in 2024, with a negative contribution of EUR544 million from the investment company.
- The company faced a write-off of two legacy assets, WorldStrides and Tori, impacting the portfolio's value by EUR320 million.
- Despite strong earnings growth, there was a compression in valuation multiples for some assets, particularly in the second half of 2024.
- The growth equity portfolio required further adjustments, with significant markdowns on smaller legacy lines.
- The company's real estate value creation was limited to 1% in 2024, with adjustments in the office segment affecting overall performance.
Q & A Highlights
Q: Could you elaborate on the multiple compression in H2 2024, particularly regarding WorldStrides?
A: William Kadouch-Chassaing, Co-CEO, explained that while earnings growth was strong, certain assets like WorldStrides faced valuation adjustments due to capital structure issues. WorldStrides, affected by COVID-19, did not meet its business plan, leading to a tense capital situation and a significant markdown of EUR275 million.
Q: What is the outlook for fundraising in 2025, and how does it compare to 2024?
A: Christophe Baviere, Co-CEO, stated that Eurazeo has a robust and diversified fundraising pipeline for 2025, benefiting from a strong track record. The firm is focusing on internationalizing its institutional LP base and expanding its wealth management offerings, including new products with Luxembourg legal structures.
Q: Will there be follow-up vintages for the brands and venture strategies?
A: William Kadouch-Chassaing noted that the US brands strategy will not have a follow-up due to limited fundraising scope and mixed performance. Christophe Baviere added that Eurazeo is finalizing fundraising for Eurazeo Digital Fund 4 and preparing for Eurazeo Growth 4, targeting a similar size to the previous fund.
Q: What is the potential for performance fees in 2025, and what about the IM Global Partner stake?
A: William Kadouch-Chassaing expects an increase in performance fees due to a strong exit pipeline, though not immediately reaching midterm targets. Eurazeo plans to retain its stake in IM Global Partner, which performs well and offers strategic options for product development.
Q: What is the potential of the new wealth management funds, particularly the Prime Line?
A: Christophe Baviere explained that the Prime Line aims to replicate the success of existing blockbusters by targeting the mass affluent market with evergreen vehicles. The new funds will have Luxembourg structures to better serve the European market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
