Tikehau Capital

Thank you very much. Good evening, everyone. Thank you to attend our first semester results presentation. We'll try to be brief. We have 32 slides and we'll be happy to answer all of your questions. I will probably start with a brief description of the environments. The landscape we are facing today is marked by complexity. But for entrepreneurial companies, it creates a lot of opportunities, both in terms of fundraising, Europe is becoming more and more attractive, but also in terms of investment. Geopolitical development continues to drive market uncertainty, requiring vigilance and adaptability. At the same time, macroeconomic trends are encouraging a cautious stance as investor weight risk and reward carefully. We also noticed across sector increasing divergence in dynamics, highlighting the importance of understanding specific industry trends and major movements. For instance, in real estate, complexity is there. It's a rebalancing phase, and we decided that TKO2 took advantage of that. Finally, market dispersion reinforce the need for selectivity as identifying the right opportunities becomes more critical than ever. Our global footprint and our 17 offices across the world enable us to seize the right opportunities at this particular moment in the cycle.

I move to the next slide.

This first semester has been exceptional in terms of operating and financial performance. It's the first time in our 21-year history that we have over 10 billion gross inflows in the last 12 months, which translates into 5 billion gross for this semester and 4 billion net. Reflecting the growing investor confidence in our brand, in our track record, but also our differentiated and high conviction investment strategies. We remain well positioned in this cycle with a very strong footprint in private credit and in specialized private equity with, for instance, our very strong defense and sovereignty practice. Robust progress in private equity with a record inflow in the first semester, 1.3 billion raised, doubling our AUM in just three years. Our global and diversified client base continues to expand with more and more appetite across geographies and promising opportunities in Asia.

I move to the next slide.

Just to highlight a few achievements in this first semester. First of all, we conducted a landmark $1 billion transaction for one of our portfolio companies. It's the first time we bring on board a very strong international LP, bringing over a billion of equity in this very successful Aegis company. Adya, Apollo, and Neuberger & Berman invested over a billion of equity to help the company grow. It illustrates what we mentioned just before, our AUM in private equity doubled. Very important for the firm to continue to expand in our specialized private equity to create more margin for the firm. The second example we'd like to highlight in this first semester achievement is on the fundraising side. We continue to be ahead of the curve with more than 30% coming from retail investors. We launched a second unit-linked product for sovereignty and defense. As you remember, we launched that on private credit, and our unit-linked in private credit raised over $1 billion and continues to attract money. So it's part of our retailization effort across our strategies. And the third thing I'd like to highlight, we decided to tap the capital market just before the tariff, and we successfully issued a 500 million bond, enabling us to raise more money and more important, to extend our average debt maturity for the firm. After this introduction and to look more into the detail, I pass it over to Thomas. We'll take you through our fundraising achievement for the first half of the year.

Thank you, Antoine. Good day, everyone, and thank you for being with us. Over the past months, Ticker Capital has achieved record inflows, reflecting the strength of our platform and the growing confidence of our investors. As such, as Antoine mentioned, growth inflows reached for the first time 10.1 billion euros over the last 12 months, This is a 15% increase compared to the previous period. The growing highlights, this growth highlights the relevance of our strategies positioned on long-term megatrends. It also highlights a more global and diversified client base. And obviously, this would not have been possible without a solid track record. Net inflows, which correspond to growth inflows, less redemptions and outflows, totaled 7.7 billion euros over the same period, representing a 17% increase year on year. These results underscore our ability to deliver value to our clients while expanding our global reach. Now entering into more details on slide 10. In the first half of 2025, we also achieved a record level of net inflows driven by credit strategies and record inflows also for our private equity expertise. 5.2 billion in growth inflows and 4 billion in net inflows for H1 2025. All our asset classes contributed to this performance. First, credit strategies were one of the drivers of inflows, with additional commitments to the sixth vintage of our direct lending strategy, reaching €3.5 billion in assets under management, and the second vintage of our credit secondary strategy. We also continue to see strong momentum in our CLO business, with €8.5 billion in assets under management as of end of June 2025. Additionally, we launched our first semi-liquid private debt fund, TKO European Private Credit, to capture opportunities in the growing private wealth segments. Second, in private equity, we saw strong demand for high-conviction thematic strategies, including the second vintage of our decarbonisation strategy, reaching €2.1 billion in total commitments. As a key highlight, the successful capital raise for Aegis, Antoine mentioned, to our first private equity continuation vehicle, exceeding 1 billion euros of assets and backed by a consortium of leading global investors. We also registered additional commitments in our aerospace and defense and cybersecurity strategies that are topical themes on sector encompassing high growth. Third, on real assets. So real assets also contributed to our success with, among other things, the oversubscribed placement of IREIT's inaugural green notes raising approximately 60 million euros to finance the Berlin campus transformation. Looking ahead, we anticipate executing several large club deals in the coming quarters in real estate. And finally, capital market strategies continue to deliver strong performance, supported by a consistent five-year track record of hot performance relative to benchmark. With regards to geographical split of this fundraising effort on slide 11, We continue to witness a globalization of our client base, reflecting the growth of the international attractiveness of TKO Capital's investment strategies. Those inflows highlight the strengths of our multi-local and diversified platform, also the partnership with Amova Asset Management in Asia, the new name of Nikko Asset Management, and also our ability to deepen our relationship with existing clients, as well as our success in onboarding new investors globally. We spent a lot of time over the last couple of years developing those relationships, explaining what we do, why we do it, how we do it, and those efforts are starting to pay off. 80% of net inflows came from international investors, with the most represented nationalities being the United States, United Kingdom, Spain, UAE, Japan, Israel, and Luxembourg, showcasing the truly global reach of our platform. The share of international clients within our AUMs keeps increasing to 45% of our total assets under management, growing by 20% year on year and reaching 23 billion euros. For the quarters to come, TECO Capital is ideally positioned in a context where Europe is regaining appeal among global investors. thanks to attractive valuations, reasonable levels of leverage, and renewed policy focus on industrial resilience, energy transition, and defense. These results underscore our success in expanding our global footprint, diversifying our client base, and building a brand name in more geographies, reinforcing TECO Capital's position as a trusted partner for investors worldwide. Now let's focus on private investors. Slide 12. In the first half, Tico Capital accelerated on making private markets accessible to a larger audience through targeted new product launches, tapping into the significant growth potential of private investors while remaining highly disciplined and conservative, and this is important, in how these products are structured and distributed. As you can see on the left-hand side of the chart, private markets are expected to double in size by 2030, with the share of private investors projected to grow even faster, reaching $5.8 trillion. This reflects a market opportunity estimated at $3 trillion by 2030, just for private investors. So in H1 2025, approximately 30% of third-party net inflows for TKO were raised from private investors, totaling 1.1 billion euros. This reflects the increasing engagement of private investors in our strategy with successful fundraising for our private debt unit link products and for Opal Capital. As Antoine mentioned earlier, we continue to broaden our offering to private clients with the launch of a semi-liquid fund in credit designed to finance the growth of profitable mid-sized European companies. also in private equity we introduced a new uniting product dedicated to european defense and security available through life insurance this initiative highlights our commitment to expanding access to private markets for individual investors offering innovative products to meet their evolving needs and preferences moving to slide 13 about some of our flagships In the first half, we continued to make solid progress in fundraising for flagship strategies. In European direct lending, we have successfully scaled our vintages, as you can see, with vintage number three raising 610 million euros a couple of years ago, vintage four reaching 2.2 billion, and vintage five achieving 3.3 billion. For vintage six, we are targeting 4 to 5 billion euros of assets, with 3.5 billion already raised, supported by a further internationalization of our client base and a robust fundraising pipeline. Notably, investor demands from Asia continue to grow with a clear acceleration of their interest for highly performing European strategies in the current macroeconomic context. In private equity decarbonisation, Vintage 1, for the record, raised 1.4 billion euros, including co-investments, while Vintage 2 is progressing strongly towards its 2 to 3 billion target, with 2.1 billion already secured. This success is reflecting, on the one hand, the success of HG's continuation fund, but also on the other end, an intense commercial effort across approximately 38 countries, resulting in a robust pipeline of LPs currently in due diligence phase. Importantly, the scaling of our flagship strategies enable us to source larger transactions, which in turn supports the attraction of larger investors and further strengthens our market positioning. Slide 14, as a practical example of this, we are proud to highlight a landmark €1 billion transaction for our portfolio company Aegis, a global leader in architecture, consulting, engineering, construction and mobility services. This transaction underscores our ability to perform exits in a complex environment, delivering significant value for our investors. Since 2022, Aegis has achieved a remarkable growth, doubling its EBITDA, with revenues exceeding 2.2 billion euros in 2024. So this exit generated significant returns, 2.7 times growth MOIC and 34% growth IRR. These results showcase our strategy of driving operational excellence and unlocking growth potential in our portfolio companies. Importantly, This transaction has enhanced distributions for our clients with approximately 450 million euros to be distributed to LPs in H2 2025. Finally, the success was backed by global co-lead investors, including Apollo, Adya and Neuburger Bergman, demonstrating the confidence of leading institutional investors in our strategies. This transaction is a clear example of how we create value deliver strong returns, and maintain our leadership in the private equity decarbonization space. I'll now hand over to Henry, who will discuss our thematic positioning in private equity and provide insights into our transaction activity in H1 2025. Thank you.

Thank you, Thomas. Good afternoon, everyone. Let me spend a few minutes maybe on a couple of megatrends we are focusing on. As far as our private equity business is concerned, I'll start with a focus on decarbonization. For over a decade, we've been actually pioneering decarbonization-focused private equity. And at the end of June this year, we have €3.3 billion of AUM dedicated to decarbonization and regenerative agriculture, where we are currently supporting 27 portfolio companies in this area. Our PE decarbonization strategy is focusing on three pillars. First, addressing the accelerating global energy demand through electrification, then investing in low-carbon solutions to decarbonize our economy, and third, leveraging Europe as a global lab for decarbonizing business models. Meanwhile, a few words on our regenerative agriculture strategy, which has around 500 million euros of AUM at the end of June, This business is driven by solid macro tailwinds with a sector expected to grow approximately 10 times by 2030, a projected 70% increase in food production required to feed the population by 2050, and supporting the paradigm shift towards a resilient and sustainable agri-food sector. On this business, our value-creating exits have actually returned €1.1 billion in capital to investors, achieving a 2.6% gross moic and 35% gross IRR for realized exits. We definitely want to be the capital provider to finance the transition to a low-carbon economy, and we have the capacity to actually identify the best player in those fields. Jumping to the second focus on slide 16, private equity, business with aerospace, defense, and cybersecurity. Here again, building on nearly two decades of experience in the aerospace sector, TKO Capital continues to invest in economic resilience and technological innovation through its aerospace, defense, and cybersecurity private equity strategies. And of June 2025, we have approximately 2 billion euros of AUM dedicated to these strategies, supported by a team of 22 dedicated professionals, 16 operating partners. Our portfolio includes 65 companies. As one of the most established private equity investors in European defense and security, we invest in scaling up Europe's industrial base, supporting sovereign manufacturing capabilities and capitalizing on long-term growth in air traffic. As far as cybersecurity is concerned, we are focusing on protecting critical infrastructure from escalating cyber threats driven by data proliferation. In H125, more specifically, We entered into exclusive discussion for the acquisition of Sciotech that will be completed in the second half of the year. This will actually mark the first investment under the second vintage of aerospace and defense strategies and the 15th portfolio investment since the strategy was launched back in 2020. On the exit side, we have carried out our first exit in these strategies with strong value creation, achieving a 2.7 gross MOIC and 45% gross IR for aerospace and defense and 35% gross IR as far as cybersecurity is concerned. Now, maybe I will take you through our transaction activity, jumping to the next slide. Starting with the deployment, we have been remaining focused on our commitment to disciplined deployment, leveraging on our proprietary sourcing of transaction. In H1, we deployed 2.9 billion euros across our closed-end funds, and that representing a total of 5.7 billion euros deployed over the last 12 months. To be noticed here, we've been mentioning a high selectivity rate of 99%, underscoring our rigorous investment approach. To provide you a few data points, maybe by asset class, starting with direct lending, where momentum actually has remained robust. leveraging our pioneer position in the European market. We've been focusing on supporting portfolio companies through add-on financing, full-on transaction, while maintaining stringent documentation standards and carefully managing leverage levels. Additionally, here, we've been diversifying investments, to be noticed, across geographies, including Spain, Belgium, Italy, and our first investment in the Asia-Pacific region through our partnership with UB Cayenne. On the CLO side, we maintain an opportunistic and cautious stance issuing new CLOs, but as well, you know, resetting older vintage to capture more attractive financing terms and enhance return. This approach actually reflects our ability to adapt to market dynamic while delivering value for our investors. A few words on private equity, which has accounted for 100 million euros of deployments across notably Germany with FTP, TTSP as well in Germany, and in Spain with Juan Navarro Garcia investment. Once again, this investment reflects our conviction-led approach across Germany. strategies, and dedicated verticals. Would like to add here maybe an initial point is that we actually have a strong pipeline for H2, several large deals in the pipeline. Some of them were announced, Sciatech in Belgium, EISA in Spain for our decarbonization fund. And once again here, this strong pipeline demonstrates our ability to capitalize on long-term structural thematics. A few words on real assets, which has contributed €600 million, supported by our pan-European platform, Local Expertise. Here again, we target high-quality, well-located assets, conservative use of leverage, sourcing compelling off-market opportunities, To be noticed, here we completed the acquisition during the first semester of one of the largest shopping malls in the Netherlands, located in Zottermeur through our Sofili activity. Looking ahead here, TK Capital is well positioned to capture attractive investment opportunity with more than 7.8 billion euros of dry powder end of June. Shifting to the next page and to provide you a few data points on realization, we've been achieving a robust level of value creating exits in H1. Here again, reflecting our discipline approach to portfolio management. In H1-25, we realized 1.5 billion euros, bringing the total to 2.7 billion euros over the last 12 months. Our capacity here, once again, to realize assets allow us not only to create crystallized value creation, but also, you know, to return capital to our client. Here, we've been distributing 1.8 billion euros in H125, setting up a solid foundation for the next fundraising cycle. A few words on the exits by asset class. Credit strategies led the way, accounting for 83% of total exits, with 1.2 billion euros realized. This has been driven by financing repayments across direct lending, corporate lending, tactical strategies, as well as activity for our CLO platform, including the liquidation of European CLO number one. Real Assets has contributed 200 million euros, representing 15% of total exits. We strategically disposed granular assets, including retail park, residential assets in Iberia, and individual sales of light industrial assets in France. And finally, private equity, which has represented 2% of total exits for H1. To be noticed, the completion of the disposal of Enzo, a leading bioenergy platform in Spain, for our decarbonization strategy. While the AGES transaction is set to be accounted for H225, we are benefiting from a healthy pipeline of planned exits, positioning ourselves for further realization in the coming quarter. A few words maybe on our portfolio metrics and our defensive portfolio. Our private equity and real estate strategies continue to deliver attractive portfolio metrics with amended downside protection, showcasing the strengths of our asset selection and value creation approach. I will obviously not go into all the details which are on this side, but just want to say that these solid metrics you are here are actually reflecting our commitment to investment discipline, reinforced by our strong skin in the game. We remain conservative on valuation, leverage, ensuring robust downside protection, while being offensively positioned to invest in high-growth companies aligned with thematics supported by the powerful megatrends I just mentioned a few minutes ago. This dual approach allows us to capitalize on transforming opportunities in sectors driven by long-term structural shift while maintaining a prudent and disciplined framework that safeguards actually value creation for all investors. That being said, I will now hand over it to Vincent who will take you through the financial review for the first semester.

Thank you, Henry. Good evening, everyone. Let's go to slide 21, and let's have a look at the continued growth in fee-paying AUM, which remains a key KPI to assess our long-term management fee generation. As of June 2025, fee-paying AUM combined with future fee-paying AUM has achieved an 11% growth. This performance reflects the strength of our dynamic fundraising and deployment across credit funds, as well as additional inflows into our private equity and capital market strategies. Furthermore, our direct lending strategies, which charge management fees on invested capital, have been a key contributor to this growth. On the revenue side, asset management revenues have increased by 13%, reaching €182 million in H1-25. This increase is driven by an 8% growth in management fees with a resilient average revenue margin of 90 basis points. Performance fees and carried interest grew to 13 million euros with contribution from the third vintage of our direct lending fund, EGS co-investment vehicles, and capital market strategies fixed in concerns. These results highlight TKO Capital's ability to scale shipping AUM while maintaining a resilient and diversified revenue base and showing long-term value creation for our stakeholders. Next slide. A few data points on performance-related earnings, which are set to become a material profit driver in the years ahead. notably when first generation of flagship funds mature. At end June 2025, AOM eligible to carried interest grew 17%, reaching 24.1 billion euros. In addition, at end March 2025, we had close to 215 million euros of unrealized performance-related revenues accrued within the group's funds. This level illustrates the performance of our funds over this period. This amount is not yet accounted for in our P&L and will be recognized as funds approach maturity and crystallize their performance. I also would like to remind you that our shareholders are the main beneficiaries of performance fees as reflected in how they are allocated and as per our dividend policy. Let's now focus on page 23 on the strong performance of our asset management EBIT, which grew by 24%. year-over-year reaching 63.7 million euros in H1-25. This growth reflects an 8% increase in core fee-related earnings, showcasing ongoing profitability improvements. At the same time, we maintain discipline in platform investments, with operating costs growing by 8% year-over-year, but only 3% compared to H2-24, ensuring efficient resource allocation. These results... highlight TKO Capital's ability to drive profitability while balancing growth and operational discipline. Moving on now to next slide on investment portfolio, slide 24, a balance sheet investment portfolio reached 4.4 billion euros at the end of June, 2025, still very granular with close to 300 investments. Approximately 3 billion euros are invested within our asset management strategies, ensuring alignment of interest with our clients with the remainder being invested in our ecosystem and direct investments. As you can see, we have a well-balanced exposure across our credit, real assets, and private equity strategies. Now, let's have a look at the moving parts of our investment portfolio over the first half. Investments reached 730 million euros, of which 380 million euros of capital calls and investments in our own strategies, in particular our private equity, CLOs, and real asset strategies. We also invested 349 million euros in our ecosystem. During the period, we acquired additional shares in Schroeder and crossed the 5% threshold end February 25. We also partnered with our longstanding partner, JC Flowers to carry out an investment with them, co-investment in NSTAR, a leading global reinsurance group. Also, in the first half, the portfolio carried out 209 million euros of divestments and returns of capital. Returns of capital driven by several of the firm's CLOs and credit secondary strategies. On the asset exits and disposals, we continued to carry out granular asset exits. And finally, market effects and Forex contributed a negative €110 million, supported by €38 million of positive fair value changes across private equity, real estate and CLOs, as well as minus €148 million of Forex impacts linked to the USD, pound and think dollar, which have limited impacts on the P&L. Now moving on to portfolio revenue generation. In H1-25, portfolio revenues grew by 43%, reaching 111 million euros despite unfavorable forex effects, which reached minus 39 million euros compared to a positive 21 million euros of ethics in H1-24. All in all, there is a 60 million euros delta in revenues generation if we remove the effects of foreign exchanges. This growth was driven by TKO capital strategies, which saw revenues increase 2.6 times year-over-year and contributing 73 million euros and accounting for around 70% of total realized revenues. Key contributors included private equities, aerospace and growth equity strategies, but as well as CLO and value-added real estate. Ecosystem and direct investment added 38 million euros, further reinforcing the diversified revenue base. So now, let me take a moment to highlight a transaction that perfectly showcases the strength of our integrated investment approach, combining both balance sheet investments and also funds investments. Since 2016, we have been a key partner to Daedalus, a leading European healthcare IT provider, providing €180 million in financing to fuel its rapid growth and internal expansion. This funding played a pivotal role in enabling strategic acquisitions that transformed Daedalus into a global player. Over the investment period, Daedalus achieved remarkable growth, with revenues increasing sixfold. In 2025, the refinancing, which was led by KKR and Killer Lake, marked a successful conclusion to this partnership, delivering outstanding returns for both our direct lending funds and balance sheets. All in all, the transaction achieved a net MOIC of 1.9 times and a net IIR of 14.2%. This is a prime example of how our disciplined, partnership-driven investing creates value and underscores the power of our synergetic investment model. Next slide. If you look at our first half performance, well, we achieved strong operating performance for both asset management and investment portfolio activities. Net results before tax grew by a solid 55 year-on-year, in spite of higher financial interest linked to the 500 million euros bond we issued in April and the RCF drawdown in the first half. Non-recurring items grew to 10 million euros, many leaked to positive Forex impacts on the USPP. And tax expenses reached 29 million euros in 2024 in line with net result before tax evolution and the normative tax rate of around 25%. Other results, net profit group share grew 50% compared to H1-24. Before handing over to Antoine, let me wrap up on our balance sheet, which has supported the growth of our firm and will continue to do so in the coming years. Our model is supported by strong financial means, with €3.1 billion of equity, short-term financial resources of €700 million. Also, our financial debt increased to €2.1 billion following the bond issue I just mentioned and the drawdown of RSCF. Thank you for your attention. I will now pass the mic back to Antoine for the outlook and concluding remarks.

Thank you, Vincent. Two slides to conclude before answering your question. First of all, we consider that the firm is well positioned in the current cycle. As I said, initially, the world is becoming more and more complex from a geopolitical point of view, from a political point of view, from a macroeconomic point of view, from a sector point of view. We think that the platform we put together is really well positioned for the four themes which is going to be relevant for 2025 and beyond, which means, you know, if you look in detail, we are focusing on what we call the 4D, defense, deglobalization, digitalization, and decarbonization, which are both sector-specific strategies in PE, but also our direct lending is benefiting from that and is focused on some of this sector as well. I mentioned Real estate initially only highlighted the Zotomer shopping mall transaction that we did. As you know, real estate has been very difficult for the last few years following the increase in interest rates. We think that our real estate platform is well operating. We will probably announce in the coming weeks and months new deals to take advantage of the market, i.e. buying at very high cap rates. So the last two transactions we achieved were done at double digits, over 10% yield. So both in terms of specialized PE, private credit, real estate, the firm is well positioned. We discussed briefly fundraising. We had a record 12 months, a record six months fundraising. We see this momentum accelerating. Because of our track record, because of our footprint, and because, which is new and probably the first time we are coping with that, a very strong appetite for Europe, both from Asia, Canada, Middle East, which is fairly new, at least in our 21 year of history. We see that interest rate will remain high, at least long-term interest rate, due to government spending, and especially with a lot of spending in the defense sector, which means higher cost of capital and liquidity. And we are, again, well positioned. For instance, our secondary private debt fund offering liquidity is well positioned to take advantage of that. Maybe if I'm moving to the next slide. As you know, we've got both Engines, the asset management and the balance sheet. Initially, we used the balance sheet to seed and sponsor our asset management strategy. We went up to 75% invested in our fund. Since we start declining on that because our funds are now more and more mature And we probably need much less capital. So we are still highly committed, obviously, to our fund and investment team, since we consider they are very strong performer. We continue to invest in our ecosystem. Vincent highlighted, for instance, the case study, which was a fund investment and a balance sheet investment generating P&L for the firm. We had also an IPO with one of our partners, Jesse Flowers, in the U.S. on Jefferson Capital, which translates into a seven-time multiple. So the use of the balance sheet is very important for us, and in the next quarter semester, we'll put more interest into the balance sheet, and that will obviously generate more net income for the firm. And also now we think that having reached over $50 billion, the asset management profitability will increase. We still have over $7 billion of dry powder, which will translate into more management fees and more bottom line in the asset management. So the fact that we have these both engines and which probably set us apart in the alternative landscape will probably translate into more profitability in the coming quarters and years. Maybe I think I will stop here and we are happy to answer your several questions.

This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. To remove yourself from the question queue, Please press star and two. Please pick up the receiver when asking questions.

Hi operator, I think we don't have any questions yet on the conference code, but we have several questions on the webcast. So first question is around FRE margin. So while activity indicators are encouraging, we don't see this translating yet in improvement in FRE. Actually, FRE margin in H1-25 decreased to 30% versus H2-24 and is quite far from your 2026 target. Can you elaborate on the reasons for the same? And what is the outlook for H2-25 and 2026 for FRE margins? So this is the first question. The second question is on shorters. Can you clarify if the mark-to-market gains on shorter investment is included in investment income? Can you clarify the accounting methodology for accounting for this unrealized gain? And third question is on ecosystem investment. The proportion of ecosystem investments has increased in recent years, which seems like different from previous trends. Can you justify the reasons for this change in strategy? Thank you.

Thanks. Well, we'll start maybe with the first question on FRI. Maybe starting with the first comment on H224, where revenues had a high competition basis, if you remember well with catch-up, notably fees on PE, and also the direct landing deployment, which was definitely higher in H224. What we can say today as a We're currently end of July now. I mean, coupled with a discipline cost management, definitely we will have an acceleration in the management fee generation in H2-25, and that will result in core FRE acceleration and underlying margin expansion. If you remember well, our core FRE generation in 25 will be definitely skewed more towards H2. Historically, this has actually been the case. FRE has been higher in the second half, generally accounting for 25% to 60% of annual FRE. We are expecting a similar dynamic for the year 2025. Vincent, you want to take the question on Schroders?

Yes, so on Schroders, which is a listed equity stake. So we recognize the change in fair value according to the stock price in unrealized revenues in our portfolio line. And as regards dividends, they are recognized in realized revenues. So in H1 2025, if you include both dividends and value changes, the overall impact is positive and accretive on the P&L.

Antoine, you want to answer on the ecosystem investments and proportion?

Yes. So as pointed before, we invested our balance sheet in both our funds and in direct investments. More than 75% was invested in our funds, which was probably a good way to start and seed new activities. So if you remember, when we launched Energy Transition in 2018 in partnership with Total, we put $100 million from the balance sheet. Total invested $100 million. And as a consequence, we've been able to raise this DCARP fund and The Aegis transaction is part of that. Without having seeded this fund, probably more difficult to do. When we launched on the back of the pandemic in 2020, our aerospace and defense fund, we invested 230 million from the balance sheet, and we had a part of the French state and Credit Agricole and Airbus d'Azotales Saffron. Nobody was willing to invest in the sector, so we used the balance sheet. precisely 230 million to invest in this strategy. Obviously, a few years down the road, now everybody is overexcited with defense. As you know, we have more than 2 billion of equity invested in the sovereignty sector. So without the balance sheet, it would have been totally impossible. While we have 75% invested, we continue to invest in what we call our ecosystem, which is really investing alongside partner, but also investing directly. So more or less 25% of the balance sheet. And we decided that we're going to migrate a little bit more into direct investment. with partner or without partner, and the main reason for that, and there are two to be precise, one is we don't need to seed with so large amount of money our new strategy, number one, because the brand is stronger, because the track record is stronger, and number two, also the velocity of the portfolio is probably more efficient when you have direct investment. When you invest in a fund, the weighted average life is probably seven, eight years, So it takes a lot of time. So we decided slowly but surely to keep investing in our direct portfolio. And if you remember, the firm has been started and set up as an investment firm. So obviously the goal is to remain an alternative leader in the alternative investment management in Europe. We're going to be more agile in the balance sheets. uh use and the ecosystem we created and i think we we describe it in our annual results is probably over 30 different partners across the globe so we've been investing in the us we've been investing in asia and so on so we're going to continue to do that and so the decrease you saw in the Asset management investment will probably continue in the next quarter, but we are the largest investor in more or less all of our funds. We remain very committed to our strategies and to our strong track record, but it's also a way for us to diversify, and more important, to create more velocity in the portfolio, which will translate into more net income in the coming years.

Thank you.

I think we have a question on the conference call.

Yes. The next question is from Nicolas Veselier for BNP Paribas. Please go ahead, sir.

Hi. Good afternoon. Thank you for taking my question. I just have two. One is a bit technical, but I'm trying to get my head around the economics for this Aegis transaction. As I understand, the $1 billion commitment was in the fundraising figures for Q2, so went on your AUM bridge. But when I look at the progress in fee-paying AUM in private equity specifically, I think it went from 4.8 billion in December to just over 5 billion as of June. So I was wondering if you could provide more clarity about this 1 billion, how much of that is co-invest and how much is, let's call it pure fee-paying AUM. and what are the different management fee rates you get on both that pure fee-paying AUM and the co-invest part? That would be my first question. Second, it's more a high-level topic, but I'd like to have some color on the commercial momentum at Sofidi. Have you seen any gross subscriptions in H1, and what feedback do you hear from customers? from your networks about the client demand of this product and what they think of SCPI in general. Thank you very much.

Thank you for your question. Maybe I start with Aegis. So we announced the Aegis transaction just after H1. So that means that the closing occurs at this stage. already but the fee generated by this transaction the management fee will be generated over the years so that means that in H1 you have no management fees tied up to this transaction also we generated some carried interest But when it comes to management fees on the Aegis transaction, it will be generated starting, let's say, in H2 and increasing over time. And it's a pretty large P transaction, so the fees will be probably lower than the 2% management fees because it's a large equity check. and potentially generating a lot of carried. When you do such transaction, it's a mix between management fees and carried interest, as you know, and it will be generating fees starting H2.

I don't know, Henri, if you want to add something on that and then I answer the second question.

Yeah, to complement on the Aegis transaction, so the impact it had on the AUM, in terms of incremental AUM, it's 850 million euros of net money, of which we have 430 million euros of future flipping AUM, because as mentioned, Antoine, we did not recognize management fees yet in H1.

Maybe if I go back to your second question on SCPI. So as you know, we manage over 14 billion of real estate in various vehicles, including SCPI. As pointed before, real estate remain very challenging and very difficult for the large institution, traditional asset manager, banks, insurance company, mainly because of interest rates and the previous cycle. We decided to be very offensive when it comes to real estate because we see fairly unique opportunities around the globe in Europe, but not only in Europe. And more specifically, so that's why we are able to raise money in real estate, in SCPI, but not only in SCPI. I think we start seeing some inflows, which were very close to zero The previous year, I think we raised a little bit more than 200 million euros in H1. So it's really much lower than what we had before. But we start seeing a little bit of momentum, and there are a few firms having some inflows. So we are fairly optimistic on that. We think it's going to take some time. But the most important thing I will say is that we have over 10 billion of gross inflows in the last 12 months with almost nothing coming from real estate. So that means that with an engine totally shut down or more or less shut down, we have a record fundraising. And the network we put, our 17 offices, our various asset classes, the positioning on the firm enable us to continue to be very successful at raising money, which is going to translate into much higher profitability in the coming quarter and year, especially because the bulk of the infrastructure is paid. So to go back more specifically on real estate and the CPI, which are, as you know, very French, the momentum remains calm or very different, but we still have some inflows, and we are still raising real estate assets

across our real estate practices.

Thank you, Antoine. Operator, I think we have a question on the call.

The next question is from Nicola Herman from Citi. Please go ahead, sir.

Yes, good evening. Thanks for taking my questions. Just a follow-up on the management fee question. That's somewhat related to the question. Can you quantify the catch-up fees for DCARB Fund 2 on the $1 billion of commitments that were raised in the first half? And then the other questions I had, please, on Trollers, I appreciate that you said before this is a financial investment for you, but just I guess how are you thinking with the benefit of six months or plus since the acquisition, since the purchase of the estate, about any potential partnership and what that might look like? The third question I had is a bit more technical on management fees. Could you just help me riddle some of the moving parts on the management fee rate, please? I was wondering whether credit is due to lower arrangement fees given lower activity and then on real assets. That was just a little bit counterintuitive to me, given improving activity as well as increasing net new money. I would have thought that would drive higher subscription fees. If you could help me understand, that would be helpful. And then finally, sorry, I appreciate this is a number of questions. The final question was on performance fees and credit. My impression was that you were going to be recognizing performance fees or carry related from fund TDL3 this year. Is that still the case? Thank you.

Thanks. Well, I'll come back to your first question. Aegis transaction did not trigger any catch-up fees in H1. Aegis is a separate transaction, co-investment, follow-on investment in a vehicle. No catch-up margin fees in H1. We'll come back on question two on Schroeder.

I'll pick up.

No catch-up fees on H1 in the management fees that have been just published. The only impact of H1 financial is the carried interest that was recognized in performance-related earnings due to this transaction. No additional fees on H1 in H1.

I think that's right. Apologies for confusion. I was referring more to the, at the full year, you talked about how you were more than $1 billion of commitments raised on DCAB Fund 2, and I think today you're more than $2 billion. So I was asking if there were any catch-up fees related to that $1 billion of commitments raised.

The size that we've just been mentioning on 2 billion euro on the size of the fund is equal to the commitment in the flagship and to the additional... I understand.

Okay, got it. Thank you.

Then we'll come back to Schroeder in a second maybe on that. Maybe then on the... Question number three on management fee rate. Management fee rate is quite stable at 90 basis points due to mixed effect. And I remember that on credit, management fees are actually calculated on invested capital. And here, quite steadily fixed, so no specific impact here to be noticed in terms of not only as far as direct lending is concerned, but also the CLO activity that probably in H2 has been a bit lower in Q2, sorry, than in Q1. Performance fee on credit. We still have, we've been exiting some of our position in TDL3. I think one of the latest one is currently in portfolio and should trigger a little bit of carry interest, but we've already recognized some of them last year and this year. So no further main significant expectation as far as the performance fees are concerned on TDL3. Antoine, you want to go ahead on maybe Schroeder's update?

Yeah, I think Schroeder is listed and we are listed as well, so I'll be very precise, but 10,000 feet. The idea is really to develop and expand partnership with financial institutions. As you know, we have one joint venture with Amova in Japan, formerly Nikko Asset Management, and we build the firm with a strong network of partners. So we have various discussions with Schroeder on product, on distribution, on asset class, and so on. So while it's also a financial investment, we'll continue to have a positive discussion with them. And the plan is to cooperate in a geography where we have some presence, but TKO is not super strong in the UK. So we see that clearly as an addition to our platform. There is a question on competitive pressure in private wealth from more peers, especially in the US. As you all recollect, TKO has been launched in 2004 with private investor, some of the largest European families in various sectors and the largest family offices in Europe. 30% of IUM is coming from wealth management directly or indirectly. So we have our own private wealth team covering directly private clients. We have some indirect wealth coming through private banks' partnership. We have partnership with Intesa, with Banca March in Spain, with First Abu Dhabi Bank in Abu Dhabi. We have also our own digital platform, Opal Capital. So there is pressure and everybody wants to tap private wealth, but 30% of IOM is coming from that. We continue to enjoy a super strong growth on this segment. You need to innovate all the time. You probably recollect we are the first one to launch unit-linked products for private debt. We were the first one to launch, and nobody has launched it so far, a unit-linked product for defense and sovereignty. So there is pressure from our peers, but when it comes to Europe, we think we are well-positioned, and we don't see that as a threat at all. And the fact that we enjoy a record semester when it comes to fundraising, we are fairly convinced that it will continue. And as Henri and Thomas highlighted, the pipeline is super strong. Question on real estate. potentially at an inflection point. As we all know, real estate suffered for the last three years with people being very excited and piling real estate at very low and very stupid yield. And that translates into no more activity. And that's been true, by the way, all around the globe. So both a very expensive price and also a shift in some of the real estate assets Retail has been suffering, office with the work from home suffered a lot. We are fairly excited because we have almost no competition when it comes to real estate. So we've been buying a lot of residential in the last few years in Portugal, in Spain, in Belgium. We close also some large retail transaction, as I mentioned before, double digits. So real estate is a good opportunity in our mind, and that will probably translate into more AUM growth. and probably more management fees and performance fees.

Thank you, Antoine.

One last question on the call from Deutsche Bank.

Yes, the next question is from Sarath Kumar from Deutsche Bank. Please go ahead.

Good afternoon. Actually, all my questions have been answered to the webcast. Thank you for the opportunity. I also posted some questions to the webcast which have been answered. Is there any other questions from the call operator?

No, there are no more questions registered at this time.

Thank you so much. Antoine, would you like to say some words for concluding remarks? Thank you. Thank you, Teo.

Thanks to all of you for your question. Maybe to conclude, I will say we remain very excited as being well positioned in Europe. Europe is becoming very attractive as discussed for various reasons, both from an investment point of view and a fundraising point of view. We are well positioned and I think our H1 figure demonstrated that. We see some acceleration across asset classes and across geographies, so we are fairly enthusiastic. TKO has been built on innovation. When we launched our DCARB practice, we were one of the few guys doing that. When we launched our direct ending, before it became very popular, it was 2009, on the back of the 2008 crisis. When we launched our defense and sovereignty practice, In 2020, nobody will even take calls on that. And as I said, we have $2 billion. So we are fairly excited by the growth and, as a consequence, by the profitability that will be generated. We know that it takes time to build, and we are not managing the firm on a quarterly or monthly basis. We've been investing a lot in the firm and we can do that because of our balance sheet. So the profitability on the asset management took a little bit of time, but for those of you who remember, when we IPO the firm, the FRE was 5 million. So nothing. Now the FRE is going to be a big multiple of that this year. and it takes time to build profitability. But when the profitability is embarked, if I may say, you're managing money for 10 years on average. So we see the profitability increasing. And the second engine, the balance sheet, will be also generating profitability. So very excited and enthusiastic about the firm, about the performance and the track record. reading you know a lot of news for difficult real estate pe has some difficulty to exit portfolio companies as you saw in the in the value slide it's been a record semester as for us for exit which means that we are giving back money to our lp to our investor and as a consequence they will probably reinvest in our funds we had let's say three exit above 2.5 times both in terms of defense sector and DCARB. And we see that accelerating. And I've been a little bit long on the conclusion, but very excited, very enthusiastic by our positioning. Strong appetite for Europe. We have robust performances. So we see some acceleration, both on fundraising and on profitability, coming both on the asset management and FRE as a consequence and the balance sheet as well. Thank you all of you, especially for end of July. So thanks for your time and we remain at your disposal to discuss and answer more questions. Thanks to all of you.