Tikehau Capital

Good evening, ladies and gentlemen. Thank you for joining us today for H1 results. I will start with the first couple of slides, four slides, and then over to Henri. First slide. Market environments remain volatile and selective. Geopolitical development continues to wait on visibility. Financing conditions remain relatively tight, and investors remain highly selective in their capital allocation decisions. In that context, discipline matters more than ever. Discipline in deployment, underwriting, capital allocation, and cost management. This environment is challenging, but it also creates opportunities for experienced professionals. Importantly, we are also seeing encouraging signs of improvement in exit activity, particularly in part of private equity and real estate. But the environment remains challenging, but it is supportive of differentiated platforms that can execute with discipline, innovation, entrepreneurship, and agility. Next slide. H1 2026 marks a clear step up for TKO and in our view, a major first step in our harvesting phase. What we are seeing now is the translation of execution into profitability and earnings. For TKO Asset Management, we deliver a strong increase in profitability supported by continued operation momentum, client-based expansion, and strong operating leverage. On the investment portfolio side, we deliver active portfolio rotation and value create crystallization as a consequence. The combination of these two engines results in a doubling of net results, group share, year on year. More fundamentally, this semester confirms that our model is becoming more scalable, more visible in its earnings power. Now a few key figures for H1. We reached 53.5 AUM. Up 5% year-on-year, reflecting continued franchise momentum in a still-selective fundraising environment. For TKO Asset Management, management fees increased by 13%, and more important, core FRE increased by 32%, bringing core FRE margin above 40% to 42%. This is an important milestone. It shows that the operating leverage embedded in the platform is now materializing clearly in our profitability. On the balance sheet, we generated 310 of realized revenue and 220 million of total portfolio revenue in H1, reflecting active portfolio rotation and value crystallization in this challenging environment. All that translates into 168 65 million of net results group share which is double of H1 2025. So the key point here is that we are seeing both stronger recurring earnings from asset management profitability and meaningful contribution from the balance sheets. Few takeaway for today. First on CTO asset management. Our first key takeaway is that the profitability inflection in asset management is now clearly visible and will accelerate. We now have a more focused, robust, and streamlined platform, better positioned to convert operating leverage into earnings growth. At the same time, our franchise continues to demonstrate strong momentum, as illustrated by the successful closing of the sixth direct lending vintage, for instance, at 5.2 billion, around 60% larger than its predecessor. More broadly, we are pursuing a more selective approach to goals focused on strategies and initiatives that are scalable, profitable, and aligned with our long-term model. Now on the balance sheet side. Second takeaway is that the balance sheet is delivering value crystallization and benefits from greater financial flexibility. We have been actively rotating the portfolio in the first half. At the same time, we have materially strengthened our financial flexibility with now 1.6 billion of available short-term resources, 500 million of cash and 1.1 billion in our RCF, and no debt maturity before 2029 following redemption that will take place in August. Our investment grade rating was reaffirmed by both S&P Global and Fitch Rating. These stronger balance sheets provide both resilience and optionality as we move into the next phase of development. I'll now hand over to Henri for a detailed look at our operating highlights.

Thanks Antoine. Good evening everyone. Nice to be here with you tonight for this H1 call. I'm now moving to page 10, and I'll start maybe with our transaction and commercial activity for the last 12 months, end of June 26. So, as said by Antoine, but I think that overall, you know, in a market environment that remains highly selective, the TKO platform has continued to show resilience across deployment, realization, and fundraising. So starting with deployment over the last 12 months to June 26, as you can see, deployment has reached €7 billion, moving from €5.7 billion to the last 12 months of June 25. H126 was marked by the slower pace of deployment in credit, mainly due to our CLO activity, translating once again here, you know, our pushers approach in the current context. As far as realization are concerned, so they rose to 3.7 billion euros from 2.7 billion last year, showing once again here our ability to crystallize value across all our strategies. This has actually translated into 3.3 billion euros of return of capital distribution to our LPs, reinforcing here the strength of our asset management flywheel. On the right part of the page are commercial momentum translated into 5.7 billion euros of net inflows over the last 12 months. H126 fundraising activity at 1.7 billion euros as here to be compared to H125. As a reminder, H125 benefited from a high comparison basis as it was notably linked to the Aegis Continuation Vehicle and we also had for the first semester of last year. Our master fund in credit, TKO Direct Lending No. 6 and Secondaries No. 2. We are ending end of June with a position of 7.2 billion euros of dry powder, giving us once again here flexibility entering into H2. So overall, despite, I would say, a more demanding market backdrop, last 12 months' view shows continued scale, strong realization activity, and solid capital formation. We are now going to provide you a few explanations on our main business unit, starting by private credit, page 11. Here, once again, the platform has remained both resilient and highly selective in the first half. Starting with a few data points on our portfolio quality first, our discipline has remained unchanged. For the direct lending funds, 100% of our investment are covenant attached and analyzed default rate has remained stable at 1.5%. We just announced that our sixth vintage of direct lending strategies, you know, at 5.2 billion euros. And here, average leverage at closings to that 4.3, so remaining, you know, quite secured. At the same time, we have maintained a high, very high degree of selectivity, as you can see on this page, with a 98% rejection rate for H1. Just a few data points on activity. We completed 43 investments in the first half, representing 1.3 billion euros deployed. Around 50% of deployment came actually from add-on financing in direct lending, which here reflects or focuses on supporting existing portfolio companies once again in a more selective market. We remain also active but burdened in the CLO market. We have issuance reflecting discipline pace in less clearly supportive environment than last year in 25. As far as exits are concerned, we completed 24 exits in H126, corresponding to 0.6 billion euros of realization and realized performance remains here once again solid with an average MYC of 1.2 for direct lending and special opportunity. So overall, as far as private credit is concerned, I think that we are reflecting here what we've always been focusing on, strong underwriting discipline, resilience portfolio quality, and continued actively focused on attractive risk-adjusted opportunities. Providing you now a few data points on our real estate business, page 12. We have maintained a dynamic transaction activity in a market that has here once again remains relatively limited and muted. We actually deployed 0.7 billion euros in H1-26. Supportive by attractive opportunities across our platform. To be noted, we completed two co-investment transactions representing an aggregate value of 400 million euros alongside us to onboard here new clients, new funds and co-investment opportunities. One of the key transactions in the period was actually the acquisition alongside co-investors of a Spanish portfolio Thank you very much. Here again, illustrating our conservative use of leverage. On exit, 0.3 billion euros during the first semester. These disposals were actually many primary granular assets in Spain, in Iberia, in France, completed with an average MOIC of 2.2 for our value-add strategies and 1.2 for our core plus strategy. More broadly, as far as real estate is concerned, as a conclusion, market backdrop remains selective, but we continue to see attractive deployment opportunities, and we have a robust pipeline in terms of identified exit opportunities for H2. I will now move to private equity business, page 13. Here, the first half was characterized by continued value crystallization, while deployment has remained deliberately selective. We have deployed €0.3 billion across three investments. The approach remains conviction-led, focused on dedicated vertical, and also focusing on sourcing larger transactions, enabling us to generate co-investments. That being said, the number of transactions have been signed at the end of June, not yet closed, and they will benefit to our second half. A few data points on our portfolio quality side. Average leverage stood at 3.x time, and the average EV to EBDA multiple at entry overall for all our strategies now stands at 11.3 times in the current environment. As far as exits are concerned, we completed on private equity three exits during the first semester, representing €0.3 billion realized, an average MOIC of 1.7 times. These exits actually came from our cybersecurity, aerospace defense, and gross equity strategies. Here, once again, we continue to benefit from a healthy pipeline in terms of identified exits opportunity, which give us confidence in our ability to further crystallize value for our LP going forward during the second semester. Overall, I would tend to say that PE remains here a strategy where discipline on entry and strong thematic positioning continue to support the attractive exit outcomes. Jumping into page 14 and providing you a few data points on our capital market strategy, H126 fundraising was slower than last year, but overall performance remains solid. Net infos were clearly affected by outflows during the first quarter, but the picture improved in the second quarter with renewed positive net inflows. Investor demand has remained supported by the resilience for short duration strategy in a context where clients continue to look definitely for yield, with controlled duration risk. The quality of the platform is also reflected in external recognition and here we provided you a few data points on that. Several of our strategies continue to benefit from strong ratings from Morningstar including notably TKO short duration, TKO credit court term, TKO listed real estate. We also continue to broaden on international distribution footprint with particular focus in the UK, Switzerland, Italy and Germany, on which our team have been working strongly since the last quarter. So overall, while fundraising was slower in the first half, CMS remains an important contributor to the diversification of the group, visibility and international reach of our platform. Now we've gone through the four business units. Maybe one quick focus on page 15 and the solid fundraising for our flagship strategies. In direct lending, we completed the fundraising of our sixth vintage with €5.2 billion in H126, which is around 60% larger than the predecessor fund. This is once again here a major milestone for our platform in a strong sign of continued investor confidence in our European mid-market direct lending franchise. New LP coming from a new geography, so benefiting and here demonstrating growth. The track record that we've been building in direct lending now for more than 15 years. In private equity, fundraising also continued to progress well. A few data points on our flagship thematics. First one on decarbonization strategy, which has now reached 2.6 billion euros, progressing towards a target of more than 3 billion, with a fundraising period that will end in Q4 2026. On aerospace and defense strategy, overall has reached 700 million euros for vintage number two and co-investment vehicles. So progressing toward here, a target of 1.4 and fundraising will be running until end of the year 2026. Across this strategy, we continue to see strong interest, specifically in the current geopolitical and economical environment that we're going through since the beginning of the year. So taken together, I would say that these dynamics confirm the relevance of our flagship strategies and the continued depth of demand from our client base. That's it for TKO Asset Management Optional KPI. I will now hand over the mic to Vincent for the financial highlights. Vincent, the floor is yours.

Thank you, Henry. Good evening, everyone.

Very happy to be here with you today.

So a few data points and metrics around our TKO asset management platform. So H1-2026 marked a clear step up in the profitability of TKO asset management. We delivered across all key operating metrics, reflecting clearly the embedded scalability of our model. First, fee-paying AUM increased by 7% year-over-year, supporting the continued expansion of our recurring revenue base. As regards management fees, they increased by 13% year on year, reflecting both asset growth and a resilient revenue margin. But most importantly, as disclosed on the right-hand side, this growth translated into a significant increase in profitability. Core FRE increased by 32% year on year, with a 42% core FRE margin. As regards asset management EBIT, it grew by 22% year on year, with a 39 EBIT margin. So this is exactly the operating leverage we have been building towards larger platform, disciplined cost management, and a stronger conversion of revenues into earnings. So in short, H1 confirms that the asset management business is not only growing, it is becoming materially more profitable. On the next slide, a few data points on fee-paying IUM. Fee-paying IUM continues to grow, reaching 43.5 billion euros at engine 2026, which compares to 40.8 billion euros one year earlier. So that represents a 7% year-on-year growth. This progression is significant because fee-paying AUM is a foundation of a recurring management fee generation. And on the other side, in correlation, revenue increased in terms of management fees by 13%. Year-on-year from €169 million to €190 million. So as a consequence, total asset management revenues reached €198 million, which includes €8 million of performance-related earnings. As regards the quality of these revenues, it remains pretty high. 96% of the H1 AMA revenues came from management fees, with an average revenue margin which remained resilient at 90 bps, reinforcing the stability and predictability of our fee base. The message here is really clear. Our platform is generating larger, more recurring, and more resilient management fees which create a strong base for long-term earning growth. On slide 19, let's now focus on IAM profitability specifically. and as mentioned by Antoine, this is one of the most important messages we have for H1 2026 as core FRE increased by 32% year-on-year from 60 to 80 million euros. At the same time, the core FRE margin in percentage points increased and expanded significantly from 36% to 42% which is a six-point improvement year-on-year. This shows clearly an operating leverage which is embedded in our platform As revenue grows, a greater share is converting into earnings. As regards asset management EBIT, it also increased significantly, as I mentioned, 22% year-on-year to 78 million euros. The EBIT margin also increased from 35% to 39%, which is a four-point improvement year-on-year. So overall, this performance was driven by solid revenue growth, disciplined execution, and Continued Cost Management. Moving now to performance-related earnings on slide 20. Beyond recurring management fees, performance-related earnings represent a meaningful future profit driver for the group. As we disclosed it on the left-hand side, AUM eligible to carry the interest increased by 5% year-on-year to 25.2 billion euros. Our approach remains the same. We are disciplined, shoulder-friendly. We allocate carry in a way that aligns shoulders, teams, and clients. We also apply cautious P&L recognition. And in addition, we view these performance-related earnings as a material mid-term profitability driver and carry not a short-term accounting exercise. On the right-hand side, we show the embedded unrealized performance-related revenues which stands at approximately 207 million euros. Out of this amount, around 160 million is expected to mature by 2029 so this creates tangible visibility on potential future value crystallization in this regard. Our profitability is not only improving today as a platform has also clear embedded earnings potential for the coming years. Slide 21, I move to our investment portfolio. So the investment portfolio remains a key pillar of our business model. We have at the end of June 2026 a portfolio which remains granular with 318 positions and which stood at around 4 billion euros which compares to 4.4 billion euros at end 2025. The decrease is significant primarily attributable to an active rotation and also value crystallization which includes 637 million euros of exits and returns of capital. At the same time we continue to invest selectively with 261 million euros of new investment which includes 218 million euros invested in our asset management strategies. Also, market effects reach minus 61 million euros, many linked to the fair value changes related to some direct legacy and listed investments. And we also have some currency effects amounting to a positive 10 million euros, which is linked to the appreciation of the US dollars against the euro. The portfolio remains strongly aligned with our asset management platform. 76% is invested in TQ Capital Strategies, and the remainder, 24%, relates to ecosystem and direct investments. Our investment portfolio is an active growth compounding engine that supports our strategies and it clearly reinforces the alignment with our clients and it creates value over time. Which brings us on slide 2022 to a snapshot on portfolio revenues. So H1 2026 was a period of value crystallization for the investment portfolio. They stood and they doubled year on year reaching 222 million euros.

This performance was driven primarily by realized revenues and notably because of the disposal of the Schroeder stake earlier this year.

That transaction in particular with Schroeder generated a 217 million euros capital gain with a 64% gross IRR and a 1.65 times gross MOIC, which is a clear example of our ability to create and crystallize value from the balance sheet. This period also included positive fair value changes in private equity strategies and also in our co-investment in the leading US radiology service provider. These positives were partly offset by negative fair value changes, which are linked to certain direct legacy and listed investments which I just mentioned earlier. And in addition, currency effects were also favorable in H1 2026, contributing to a positive 10 million euros. If we now turn on the P&L, on the following slide, H1 2026 demonstrates the strength of TKO Capitals to growth engine asset management. and also of the investment portfolio. So, core theory increased by 32%, reaching €80 million, with a core theory margin of 42%. Asset management image rose by 22%, reaching €78 million, with a margin of 39%. At the same time, investment portfolio revenues doubled to €222 million. This combination drove net results to €165 million, close to the double For the conclusion, profitability has materially increased supported by a more efficient asset management platform and also a balance sheet now actively crystallizing value. Last but not least, to finalize this financial review, a snapshot on The balance sheet before handing over to Antoine. So our model is supported by strong financial means with 3.2 billion euros of shareholders' equity and short-term financial resources of 1.6 billion euros. Our financial debt reached 1.5 billion euros at the end of June 2026. And we've got an early redemption of our 2026 bonds, which is expected in August 2026. and it will further simplify that profile, giving us greater financial flexibility to pursue agros. Fitch Ratings reaffirmed our investment grade, a BBB- rating with a stable outlook earlier this month, in addition to S&P Global, who also confirmed it earlier in Q2. Overall, we have the financial resources, flexibility and credit profile needed to support disciplined growth and continued value creation. Thank you for your attention, and I will hand over to Antoine for the concluding remarks and outlooks.

Thank you, Vincent. A few slides to conclude. First of all, as you noticed, a key priority for us has been to simplify and streamline the organization to concentrate resources on our core growth platform. We have successfully regrouped Our real estate activity into one unified platform and we are very enthusiastic about the growth and the profitability in this real estate market. It's an important step for us in terms of scalability and operating efficiency and asset sourcing. We also announced the disposal of 80% stake in Ominity and Opal, our digital subsidiary. while remaining a non-core shareholder in order to give these businesses greater autonomy after helping them reach profitability and scale. In parallel, we signed a separation agreement with Duke Street, a 2013 investment consistent with our focus on simplifying the group structure and concentrating resources on core activities. The logic behind all this action is clear. We are sharpening the focus of the platform to support the continued growth and more important, the profitability of our asset management. In an entrepreneurial journey, it takes time to build, to scale, and we think that now it's time to harvest and be much more efficient, if we can say that. Moving now to the next and last slide, Looking ahead, we enter the next stage of our development with confidence, focus, and ambition. On CKO Asset Management, we now benefit from a more streamlined organization, a more integrating operating model, which would continue to support profitability and earning growth. As in prior years, FRE generation is expected to be more weighted toward the second half, and private equity fundraising could reinforce this pattern in 2026 with potential catch-up fees. We also have a healthy private equity and real estate exit pipeline which supports visibility on future value crystallization and monetization for our LP. The balance sheet is stronger than ever with the 1.6 billion, as Vincent highlighted, of short-term resources and no-debt maturity before 2029. Taken together, this element gives us a strong confidence in our ability to accelerate profitability growth while continuing to create long-term value for our shareholders and also for our LP and investors. As you know, we are an investment firm and our core focus is to deliver strong and robust performances across the cycle for investors and LP and that would translate into more shareholder value Thank you for your attention. I would be happy now to take your questions.

Thank you. 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 their telephone or may type their questions on the webcast platform. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from David Peek of RBC.

Hi, thank you for taking my question. David Peek, RBC Capital Markets. The first one on the net money slowdown drivers. While you have cited a high comparison base, I guess stripping the positive one out, the underlying run rate also appears to be slowing. I guess how much of that reflects softer LP appetite versus simply just digestion period following some of the 2025 closings? And with the decarbonization, IRS, Prison Defense flagships still in fundraising mode, how confident are you in the last quarter of run rate being the reasonable anchor going forward? And then second question on capital deployment and some of the strategic priorities. With the available resources that you've got and know that Mathieu reaches until 2029 and healthy leverage ratio as well, I guess, how are you thinking about further balance sheet reductions and also returning more capital to shareholders potentially for some buyback programs? Thank you.

Thanks for your question. So maybe on the first part of your question on the rate rate, the run rate on fundraising. Well, as just explained, I mean, 2025, we had a finalization of secondaries number two in private credit and then direct planning number six, which affected mostly H225 and the beginning of 2026. Then, as we said on the CLO business, we have clearly and voluntarily reduced the pace of launching new CLO vehicles. So, this is roughly the main effect that we've gone through over the first semester. Now, as you said, obviously, on private equity, We have our two flagships on the road. They are currently investing, divesting. We will be fundraising. So vintage number two for decarbonization and natural transition and vintage number two for aerospace and defense. We think that more than ever, these two semantics are clearly, you know, Thank you very much. which means that with an average duration of roughly four years, we have a DPI which is close to one. So we've been able to create value, to bring back capital to our LP, and as a consequence of that, our new vintage on aerospace and defense is currently in fundraising mode, deployment mode as well. As far as your question... On deployment is concerned as well. We've been announcing significant investments, notably on our space and defense funds recently. These deployments are currently signed, but not yet closed. This is why we actually see for H2 as well, a strong deployment base in the context of a strong fundraising for PEA. You had a second question on our capacity to enhance shareholder return. I think that what is key here is that, as we said, you know, back in February during our Capital Market Day in London, we are clearly, you know, entering this harvesting mode, accelerating our portfolio rotation, notably, accelerating on this several, you know, pillars, key driver of value creation on one side, our asset management business, Increasing IFRE capacity to generate more carried interest and then the second leg with the portfolio accelerating the rotation of our portfolio and obviously effectively this potential acceleration and value creation from our portfolio will drive dividend-wise for the coming years. As far, I think you had also a question on the share buyback. Our share buyback is still active with a size of 190 billion euros. We still have a capacity of close to 50 billion euros still open, so still very active in the market.

Great, thank you.

The next question is from Nicolas Hermann, Citi.

Yes, good evening. Thanks for taking my questions. A couple, please. Firstly, I've not seen any mention of the targets you set at the start of this year for 2026, namely FRE, Net Profit, and AUM targets. So where are we on those, please? Secondly, could you just talk about what you're seeing in terms of retail appetite for real estate? Certainly, it seems like on the institutional side, that demand has notably picked up. Are you starting to see that turn on the retail side? And then finally, on Duke Street, what proportion of your management fees is that with about 15% be a reasonable proxy and also the proportion of FRE? Thank you.

Thanks for your question. So maybe I will start with question number three about Duke Street. We were not consolidating Duke Street, neither in our AUM, neither in our FRE, neither in our management fees. It was consolidated by specific means within the line of our profit and loss, so it will not be below our FRE, below the result of the portfolio. So the fact that we are exiting Duke Street will not affect or AUM. We had a minority stake in Duke Street, so this will not affect AUM and this will neither affect RFIE or performance-related earnings. Coming back to your question number one on our target, well, clearly here we see the path to this milestone as being driven by the trend that we have already seen visible in H1. As we said in our press release, FRI generation is typically more weighted towards the second half, and that could be reinforced this year by our private equity fund. So the main building blocks, you know, for FRE are really continued growth, fee growth on our larger base, combined with a more integrated and streamlined platform, notably from our real estate business. On the net results, to come back to your question on target, you know, beyond FRE, key driver here is once again, you know, value crystallization from our investment portfolio. Here, once again, I think that... In H1, we already saw active portfolio rotation, strong realized revenue, significant contribution from exits. Looking ahead, you know, we clearly have a healthy private equity and real estate pipeline, which here once again gives us further visibility on value creation. So I think that combined, you know, with enhanced financial flexibility and stronger balance sheet, these elements support confidence on our ability here once again to progress towards continued growth And we tend maybe also to come back. But since February, clearly, global backdrop has become more uncertain. Greater macro, fiscal, geopolitical, volatility, solar fundraising environment. Some discussion may clearly take longer, but from a long-term business like ours, this may create timing effects, but it does not change our trajectory. And clearly here, you know, what remains crucial is once again our ability to keep accelerating profitability generation. As reflected in the 2020-19 guidance we gave, we are not, once again, important to hear, but we are not pursuing growth for growth's sake. We remain highly selective across deployment, realization, AUM growth, with a clear focus on profitable AUM. You had a question on retail and real estate. Antoine, you may want to come back on this question, but clearly here, real estate, retail market has been suffering now for quite a few years. We still see this market as quite muted. Thank you very much. And maybe if I add one thing on that, as you know, we have 34% of our UM is coming from what we call retail, but it's really several components into that.

We have on one end high net worth and ultra high net worth individual, which has been clearly the DNA of Kikéo back 20 years ago. And we add, thanks to SOFIDI, a more retail channel through IFA's unit linked product in France. And we have really these two components. What we can say is that in the US, the market probably retrenched a little bit and you see all the noise with private credit and all that. But thanks to our two components, we are still very active on one of them, which is Ultra Net Worth and iNet Worth Individual. And by the way, it's for real estate, but not only for real estate. And then it's probably much more calm when it comes to pure retail. But despite that, we continue to fundraise in our real estate, probably less spectacular than the year 2020. but the two engines in the retail are still working.

Helpful. Thank you very much.

The next question is from Philippe Goussens, Devro Petitcan.

Mr. Goussens, your line is open. Philippe Goussens, your line is open.

Please go ahead.

Maria, we have some questions that came through the webcast. So if I'm regrouping some of them, maybe on the investment portfolio side of things, how should investors think about the revenues for our investment portfolio? and also how to think about the future value crystallization from the remaining €4 billion of investment portfolio going forward.

Okay, thank you, Theodora. I will take this one. So first, just to reiterate what we said at the strategic update, portfolio rotation is a clear part of how we want to manage the balance sheet going forward and that's what we did with the exit of Schroders in H1. So the overall idea is to be more active, to increase the portfolio velocity and to crystallize value. So overall, we are taking a very pragmatic approach, including, of course, in H2, with one key objective in mind, which is to improve profitability generation. So that said, we have a granular, more than 300 investment lines, which is well diversified across asset classes. which helps mitigate the impact of isolated valuation movements. I think it's worth mentioning that we see some positive contributions from our aerospace and defense strategy as well as decarbonization where portfolio companies have delivered very strong profitability growth over the past quarters and we hope it will continue to do so in the next quarters. So on H2, to answer specifically the question, I would be a little confused We do have a healthy private equity and real estate exit pipeline, which supports visibility on future value crystallization.

Thank you so much. Maria, do you want to try again with the Groove Pericam on the line?

Sure. The next question is from Philippe Coussens. Please go ahead.

Yes, good afternoon. Sorry, I had my headset on mute. Three questions, if I may, this afternoon. The first one, there was a few days ago an announcement from Revolut that they had struck a deal with a couple of private equity and private credit funds in the US to Try to kind of kickstart the democratization of private equity and private credit. Do you expect that could have an impact over time on your platform as well? Do you have any ideas to participate in a potential democratization of the private asset class in Europe? Any initial thoughts maybe?

Thank you for your question. We think there is a big trend there coming from various players. It's probably started, to be frank, in the U.S. with iCapital, and we are a small shareholder alongside a large alternative U.S. manager into iCapital, and they built a platform to democratize that. It's been much more active in the U.S., if I may say. It's close to $200 billion At iCapital, you have initiatives in Europe which are between 1 and 3 billion, let's say. So Revolut announced an agreement to commercialize six alternative asset managers, mainly US one plus one in Europe. We are obviously talking to them. This trend will probably take some time. But private assets will be democratized, there is no doubt about that. But as you know, we are a little bit cautious overall, especially on the liquidity side. We did not build private debt evergreen with mostly liquidity funds because we feel like it's probably a little bit early for pure retail investors to access that because the liquidity is not there yet. But going back to your question, it's a long-term trend. It's happening. TKO will take its share of that. We have various initiatives, I must say. So everybody should expect that there will be some democratization around private market, and it will be probably private equity, private debt, infrastructure, because on the real estate side, we can say that in Europe, it's already... Thank you for that clarification. My second question is, you sounded cautiously optimistic that we might see a little bit of a pickup in terms of exits on the private equity side.

To really kick it off, what would be required according to you? Is it a more robust IPO market? Is it more visibility in terms of a more stable geopolitical environment? And then the types of exits that you're seeing right now. In what type of form are you seeing them? Is it IPOs? Is it industrial players that are picking up assets? Or is it sales amongst private equity firms in the form of secondary trades?

Well, thanks for that. Clearly, you know, overall exits depend on portfolio performance. So if you have a company on which you've been building the performance, starting with the top line, ABDA evolution, gain of market share during many years, you do have a good portfolio company. So now it's both a question of valuation and as far as you remain competitive, Thank you very much. On decarbonation, on aerospace and defense, from all the deployments, you know, we've been investing in decarbonation and aerospace and defense since 2018, 2019. So all our vintage number one for these two strategies are seeing good pipeline of exits, once again focusing on the underlying performance. And as of such, you know, we've chosen since 2020, to be, not to be a LBO generalist, but to be focused with two clearly dedicated thematics. And we have a strong, you know, backbone set up, teams, dedicated operating partners, which have helped us on value creation focusing. We see appetite for exits, both coming from industrial, both coming from funds, which actually during many years have not, we are not investing in aerospace and defense. Things have changed. And now we see also on top of that new generalists New Generalist Fund, coming to invest in aerospace and defense.

Okay, thank you very much. And then my final question, if I may follow up on the earlier question from Nicolas. For the Outlook 2026, I was reading page 8 again of your press release. I did not see a reiteration of the earlier objectives to reach 60 billion AEM and FRE of between 175 and 225 million. Are you not restating or reiterating that or you're a little bit more cautious given the uncertain geopolitical environment?

I can just repeat the answer I provided earlier, is that clearly we see the path to these milestones as being driven by the trends we've seen during H1 and that we think will continue in H2 with one caveat, which is we want a profitable AUM and we are pursuing growth. We are not pursuing growth for growth's sake. We want to accelerate profitability generation, both on our FRE and the figures we provided you earlier this year, both on net results.

Okay, great. Thank you so much for the clarification. Very helpful. Thank you.

And maybe to summarize and to conclude, it's very clear that our two priorities are one, profitability of both engines, the asset management and the balance sheet. So when it comes to asset management, as I already stated, we want to protect our margin and then you see our management fees on average is increasing a little bit. and we are back at 94 bps when it comes to management fees plus performance fees and it's critical to us. The profitability of the balance sheet will come with some exit and as I always said if you have good portfolio companies you will have good exits and you have a very healthy pipeline especially when it comes to aerospace and defense. So our two priorities are one, profitability of the asset management and the balance sheet and two, performance of the funds because All these businesses, traditional asset management or alternative asset management, you can scale, develop, expand if you deliver all these performances across cycles, across vintages to your investor. To raise money, you need to make sure you deliver the right performances. And it's clearly for us our priority moving forward.

Thank you very much, everybody. There's no additional questions, neither on the line or on the webcast. So, Antoine, over to you to concluding remarks.

Thank you, Théo. Thanks, all of you, for attending this H1 results pre-summer break for some of you, I guess. We are very enthusiastic about the milestone we reach in terms of profitability of our asset management. Overall net income has been multiplied by two. We are very enthusiastic despite the challenging geopolitical, political, monetary environment that will continue to scale. Upgrade the platform, continue to streamline, and some of you had questions on streamlining and simplification. For the first 20 years of an entrepreneurial journey, we put the foundation, we innovate, we put it piece by piece, and now it's really the time of harvesting, streamlining, and accelerating profitability. Thanks for all of you, and we look forward to in-person meetings or calls or discussions. Thanks to all of you.

Good night. Thanks, bye.