Dynamic asset management growth
- Fee-Paying Assets Under Management: +8% y-o-y to €25.6bn, +11% from third parties
- Assets Under Management: +8% y-o-y to €35bn, +9% from third parties
- Management fees: €100m (+10% from third parties1 and stable from the balance sheet1)
- Third-party fundraising: €210m in Q1 – Confirming positive outlook for the year
Realizations picking-up
- Realizations: €0.4bn (+20% compared to Q1 2023, €0.3bn)
- Realizations expected to rise in 2024 with a gradual improvement in market conditions
- Selective deployment: €0.4bn (€0.8bn in Q1 2023). Eres acquisition announced in April
- Substantial leeway for Group deployments (dry powder of €4.8bn and undrawn balance sheet commitments of €2.3bn)
Robust portfolio company performance
- Further revenue growth generated by Buyout companies (+9%) due to their positioning in buoyant segments
- Solid momentum from Growth companies (+19%)
New progress on ESG and impact
- Publication of the results of the ESG 2023 reporting campaign (O+ report), illustrating further progress from portfolio companies
- Progression of the CDP rating to A, in the top 2% worldwide
- Launch of the impact fund EPBF (Eurazeo Planetary Boundaries Fund)
Improved shareholder return
- Payment on May 16, 2024 of a dividend of €2.42 per share voted during the 2024 AGM
- Execution of c.25% of the annual €200m share buyback program
Christophe Bavière and William Kadouch-Chassaing, Co-CEOs, said:
“The start of 2024 was marked by a gradual recovery in our sector. Underlying long-term trends remain supportive: increased allocations from institutional and private investors to private markets, substantial financing needs for the real economy and, digital transformation and energy transition. We are focused on delivering on our strategic and operational roadmaps and we confirm our outlook for 2024 with: a rich and diversified fundraising pipeline, expected pick-up of realizations during the year and consolidation of our leadership on ESG and impact.”
ASSET MANAGEMENT ACTIVITY
A. ASSETS UNDER MANAGEMENT
As of March 31, 2024, Eurazeo Assets Under Management (AUM) totaled €34.8bn, up 8% over 12 months:
- third-party AUM (Limited Partners and private clients) stood at €24.2bn (+9% over 12 months), including dry powder of €4.8bn.
- balance sheet AUM include the investment portfolio on the Group’s balance sheet (€8.3bn, stable over the quarter) and Eurazeo balance sheet commitments in funds (€2.3bn).
Fee Paying AUM amounted to €25.6bn, up 8% over 12 months, with an +11% increase in FPAUM from third parties.
B. FUNDRAISING
In Q1 2024, Eurazeo raised of €210m from its clients.
Fundraising from institutional clients (LP) was limited in Q1 2024 due to the closing schedule of the main funds. The Group confirms its positive fundraising outlook for 2024, given its rich and diversified fundraising pipeline. In a contrasted fundraising environment that is gradually recovering, the Group’s commercial activity is satisfactory, particularly in the private debt (launch of EPD VII), Buyout, mandates and sustainable infrastructure segments.
The Wealth Management segment raised €162M in Q1 2024, the Group benefiting from its leading position in France and high-performing products, specifically tailored to private clients. During the quarter, Eurazeo launched, Eurazeo Private Value Europe 3 (EPVE3), an evergreen fund, in Germany through its technological partnership with the digital platform Moonfare. Private clients represent €4.5bn for the Group or over 18% of third-party AUM.
C. ASSET MANAGEMENT REVENUE
Management fees totaled €100m in Q1 2024, up +4% at constant scope (+6% excluding the base effects relating to catch-up fees and outperformance fees):
i) management fees from third parties totaled €70m (+6%), up +10% excluding catch-up fees;
ii) management fees relating to the Eurazeo balance sheet amounted to €30m, down -2% (stable excluding catch-up fees) in line with the Group’s strategy of lowering over time balance sheet commitments in its funds.
Realized performance fees were negligible during the period.
ASSET ROTATION
Realizations in the first quarter totaled €0.4bn, up +20% year-on-year. Since the beginning of the year, the Group has announced several exits across a wide range of its asset classes, all realized in good terms : Amolyt Pharma (Biotech) and Onfido (Venture) generated cash-on-cash multiples around 4.0x, and Efeso (closed in February), DORC (closed in April) and Peters Surgical (announced in March) posted an average cash-on-cash multiple above 2.2x.
As of the end of April, the Groupe had realized 538 M€ for the balance sheet, of which 131 M€ were realized in Q1 2024.
Several divestment processes have been initiated since the start of the year and the Group’s exit pipeline should result in higher volumes of realization for the year.
Group deployment totaled €0.4bn in Q1 2024, compared to €0.9bn in the same period in 2023. Deployment mainly focused on the Buyout, Secondary and Venture segments as well as the current portfolio. In April, the MLBO strategy signed agreements to acquire Eres, the leading independent player in profit-sharing and retirement schemes in France.
Eurazeo benefits from substantial leeway for its future investments: dry powder of €4.8bn and balance sheet commitments in funds of €2.3bn.
PORTFOLIO COMPANIES
As of March 31, 2024, the investment portfolio carried on the balance sheet was valued at net €8.3bn (€109.9 per share), invested almost exclusively in Group funds and programs. This portfolio includes 68 companies, none of which represent more than 6% of the total value. This portfolio is not revalued quarterly.
These companies reported further solid revenue growth during the quarter6 :
- Buyout (+9% over the quarter): The portfolio delivered robust organic growth reflecting the Group’s positioning in high-quality assets from buoyant segments (business services, financial services, technology, healthcare, new consumer trends...);
- Growth (+19%): Growth remained dynamic, particularly in the SaaS and circular economy marketplace segments;
- Real Assets (+7%): Robust growth in hospitality and resilience of portfolio real estate assets.
ESG & IMPACT
Eurazeo furthers and enriches its strategy towards a sustainable economy based on two levers of action:
1. Driving the transformation of Eurazeo and its portfolio companies towards sustainable performance and growth
The first quarter was marked by further progress in ESG:
- the publication of the results of the ESG 2023 reporting campaign (O+ report), illustrating a growing commitment on the part of portfolio companies (93%7 participation rate of the portfolio in value), as well as ongoing progress on environmental, social and governance issues
- an increase in the CDP rating to A (top 2% worldwide), in recognition of the Group's performance on climate issues
2. Investing in companies providing innovative, practical solutions to environmental
In Q1, Eurazeo launched EPBF (Eurazeo Planetary Boundaries Fund), an article 9 fund, marking a new approach to investment. Based on a rigorous scientific approach and a global view of the environment that goes beyond climate change to enable sustainable development, this fund will focus on financing activities in the regenerative economy and encouraging the development of the circular economy require significant short-term investments. Our ambition is to accelerate and consolidate these new, value-creating activities, while generating solid financial returns.
BALANCE SHEET AND CASH AND CASH EQUIVALENTS
As of March 31, 2024, net debt totaled €851m (€10.8 per share), including gross cash and cash equivalents of €1m. This debt represents a limited gearing of around 10%.
As of April 30, net debt amounted to €562m taking into account the divestment of DORC.
Eurazeo has a €1.5bn revolving credit facility (RCF) maturing in 2026, of which €815m were drawn at the end of March 2024.
The Group held 3,034,989 treasury shares, i.e. 3.99% of total outstanding shares (76,081,874 shares) as of March 31, 2024. Excluding treasury shares held for cancellation, the number of shares outstanding is 75.3 million. The shares purchased will be canceled before the year end.
SHAREHOLDER RETURN
The Executive Board launched a new €200m share buyback program for cancellation and started its execution in January 2024. This program reflects management’s confidence in the Group’s prospects and the value of its assets, and will be accretive for shareholders. The Group will also buy back shares to cover the Long Term Incentive Plans (LTIP).
In Q1 2024, the Group bought back 590,413 shares for €45.3 million.
APPENDIX 1: PARTNERSHIPS
iM Global Partner (no consolidated AUM)
It is recalled that iM Global partners assets are not included in assets under management published by the Eurazeo Group.
The Assets Under Management of iM Global Partner (IMG share) total US$41.6bn at the end of March 2024, up 13% on end-March 2023. This growth is notably due to the good performance of affiliates despite the current uncertain macro-economic environment, and the iM Global Partner's dynamic M&A strategy, in particular through Litman Gregory Wealth Management's acquisition of Wedgewood Partners' private client business in August 2023 (AuM $275m).
APPENDIX 2: BREAKDOWN OF EURAZEO BALANCE SHEET AUM
APPENDIX 3: ASSETS UNDER MANAGEMENT
****************
