TIKEHAU CAPITAL CREDIT UPDATE
5 OCTOBER 2020 DISCLAIMER
By viewing or receiving or reading this Presentation (as such term is defined herein) or This Presentation contains forward looking statements about the Group and its attending any meeting where this Presentation is made, you agree to be bound by subsidiaries. These statements include financial projections and estimates and their the limitations, qualifications and restrictions set out below: underlying assumptions, statements regarding plans, objectives and expectations The existence and content of the presentation that follows (the with respect to future operations, products and services, and statements regarding regarding Tikehau Capital SCA (the and the group to which it belongs future performance. Although the Group believes that the expectations reflected in (the does not constitute and should not be construed as a contract or an such forward-looking statements are reasonable, investors and holders of the offer to contract or a public or non-public, binding or non-binding, offer to sell or a securities are cautioned that forward-looking information and statements are solicitation of an offer to buy any securities, investment products, share of funds or subject to various risks, whether known or unknown, uncertainties and other factors, other financial product or services in any jurisdiction. This Presentation is not directed which may be beyond the control of the Group and which may result in significant to, or intended for distribution to or use by, any person or entity that is a citizen or differences between the actual performances and those expressly or impliedly set out resident or located in any locality, state, country or other jurisdiction where such in such forward looking statements. These risks and uncertainties include those distribution, transmission, publication, availability or use would be contrary to law or discussed or identified in filings with the Autorité des Marchés Financiers regulation or which would require any registration or licensing within such jurisdiction. made or to be made by the Group. The Group undertakes no obligation to publicly update its forward-looking statements, whether as a result of new information, future The information contained in this Presentation is of an indicative nature and has not events, or otherwise. Any information relating to past performance contained herein is been verified independently. No representation or warranty, whether express or no indication as to future performance. implied, is given regarding the correctness, comprehensiveness or accuracy of the information and opinions contained in this Presentation. This Presentation is not The market data and certain industry forecasts included in this Presentation were meant to serve as a basis for, and shall not be used in connection with an investment obtained from internal surveys, estimates, reports and studies, where appropriate, as decision. No person shall be entitled to rely on, or shall have any claims against the well as from external market research, publicly available information and industry Company, Tikehau Capital General Partner (the Tikehau Capital publications. Neither the Company, nor its affiliates, directors, officers, advisors, Advisors, any of their affiliates, officers, directors, employees, any of their advisers, employees, consultants or agents have independently verified the accuracy of any consultants or any other person arising from this Presentation. external market data and industry forecasts and do not make any undertakings representations or warranties in relation thereto. Such data and forecasts are included The information contained in this Presentation is indicative as at the date of this herein for information purposes only. Presentation and may have to be updated, amended or completed significantly. This Presentation contains only summary information and does not purport to be comprehensive. The Company, Tikehau Capital General Partner and Tikehau Capital Advisors do not undertake to update, amend or complete the information contained in the Presentation in order to reflect new information, new events or for any other reason and the information contained in this Presentation may therefore be modified without prior notification.
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 2 DISCLAIMER
This Presentation includes certain IFRS pro forma financial information about the investors, which will reduce returns and, in the aggregate, are expected to be Group. This pro forma financial information has been prepared on the basis of substantial. Actual returns will be substantially lower on a net basis. historical financial statements of the Company but has not been audited by the Calculations of Gross Return at the investment level use the date of the relevant auditors. The pro forma financial information is presented for illustrative investment without regard to whether the investment was initially funded by investor purposes only and is not indicative of the results of operations or financial condition. contributions or by borrowings under a revolving credit facility to be subsequently This Presentation or any part thereof is not for publication, release or distribution in the repaid with investor contributions. United States. No securities of the Company have been or will be registered under Calculations of Gross Return at the fund level use the scheduled date of contribution the U.S. Securities Act of 1933, as amended (the .S. Securities or under any by fund investors to the fund for the relevant investments. For funds that borrow on a state securities laws, and the securities of the Company may not be offered or sold in temporary basis prior to calling capital, if calculations of Gross Return at the fund level the U.S. (or to, or for the account or benefit of U.S. Persons) except pursuant to an used the dates of each investment rather than the dates of each contribution by fund exemption from, or a transaction not subject to, the registration requirements of the investors, the Gross Return may be lower since internal rate of return calculations are U.S. Securities Act. time-weighted and the relevant calculations would incorporate longer periods of time The distribution of this Presentation and any information contained herein in certain during which capital is deployed. jurisdictions may be restricted by law or regulation and persons into whose There is no guarantee any of the companies acquired will reach their IRR targets. possession this document comes should make themselves aware of the existence There can be no assurance that investment objectives or investments made by Fund of, and observe any such restriction. In particular, neither this Presentation, nor any will be successful. part of it may be distributed, directly or indirectly, in the United-States, Canada, Targeted investments are based on generally prevailing industry conditions. Adverse Australia or Japan. Non-compliance with these restrictions may result in the violation economic, regulatory and market conditions could negatively impact our business of legal or regulatory restrictions in certain jurisdictions. assumptions. All projections, forecasts and estimates of returns and other - information not purely historical in nature are based on assumptions, which are unlikely to be consistent with, and may differ materially from, actual events or conditions. Such forward-looking information only illustrates hypothetical results under certain assumptions and does not reflect actual investment results and is not a guarantee of future results. Actual results will vary with each use and over time, and the variations may be material. Nothing herein should be construed as an investment recommendation or as legal, tax, investment or accounting advice. represents the aggregate, compound, annualized internal rate of return calculated on the basis of cash flows to and from all investors, but disregarding carried interest, management fees, taxes and organizational expenses payable by
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 3 EXECUTIVE SUMMARY Credit Update
1 A fast growing asset manager and investment firm 2 Robust financial performance (1) Tikehau operates in a structurally growing alternative investments Strong balance sheet ( 4bn) highly capitalized ( 2.8bn of market with high and resilient fee margins shareholders equity, 3rd ranking among AAM worldwide peers), reinforced in 2019 by the successful 715m capital increase Strong increase of the total Group AuM over the last 3 years, with a 35bn target by 2022 Solid growth of recurring revenues from both Asset Management and Investment Activities Four business lines leading to a balanced business model H1 2020 Asset Management Net Operating Margin of Strong AM risk management culture thanks to the alignment of 32.4%, boosted by revenue growth and cost control interest of the management and all stakeholders
3 Strong AM & Fundraising momentum 4 Investment grade rating metrics AuM totalled 25.7bn at 30 June 2020, up 9.8% year on year Highly selective M&A opportunities under strict financial guidelines Strong momentum in the asset management division throughout the Low balance sheet leverage first half of 2020, with net new money rising 1.1bn over the period Established and well-diversified business model Considerable success achieved over July 2020, generating an additional 1.6bn in AuM Comfortable Gearing, LTV and liquidity levels Target for AuM at end-2020 of more than 27.5bn, and confirmation Objective to be a repeat investors with already two bonds issue of organic growth objectives for 2022
(1) As at 30.06.2020 CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 4 TABLE OF CONTENTS
1 Introduction to Tikehau Capital p. 6 4 Outlook p.40
2 Operating review p. 11 5 Appendices p. 44
3 Financial review p. 23
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 5 1 Introduction to Tikehau Capital
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 6 A GROWING PAN-EUROPEAN DIVERSIFIED ASSET MANAGEMENT AND INVESTMENT FIRM
Founded in Established track record 2004 in Private and Public markets
IPO Pioneer & leader in March 2017 in alternative financing for SMEs in Europe of Cash & Cash Equivalent (1) Global presence of AuM Paris, London, Madrid, Total Financial Debt Brussels, Milan, c. 1,007m Luxembourg, Amsterdam, New-York, Singapore, Seoul Low Loan To Value ratio of and Tokyo -2.45% c.570 employees and partners Areas of expertise Low Gearing of 36% Private Debt, Real Assets, BBB- / stable Private Equity, Capital Strong liquid Asset Coverage credit rating (Fitch) Markets Strategies 1.8x
All figures as at 30.06.2020 (1) Aggregate of (i) Cash and Cash Equivalents and (ii) Current Investments Portfolio CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 7 ALIGNMENT OF INTERESTS, A KEY DIFFERENTIATOR A strong shareholder base supporting a dynamic long term development
Tikehau Capital simplified organisation (1) First-tier institutional shareholders (1)
Management and Others employees(2)
44% 56% 9%
Listed company Tikehau Capital
Asset Management activities 19%
Tikehau IM (100%) Credit.fr (96%) Tikehau Capital Europe (100%) IREIT Global Group (50%) Sofidy (100%) Star America (100%) ACE Management (100%)
A true entrepreneurial journey since inception Management is #1 shareholder of the listed company for the long term • Never sold a share of Tikehau Capital • Reinvested along new investors during past capital raises 100% of the performance fees and 53% of the carried interests remain within the listed company The listed strong balance sheet is increasingly invested in Asset funds
(1) As at 30.06.2019 (2) Including Tikehau Capital Advisors (36.9%), Fakarava Capital (6.8%) Groupama, Natixis Assurance, Suravenir, BNP Paribas Cardif, and Crédit Agricole Assurances CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 8 WHAT WE ACHIEVED SINCE TKO LAST BOND ISSUE
balance mix between banking loan debt and market financing Debt and 2-year maturity extension of the Term Loan and RCF (Nov. 2024) No debt amortization before
Transformation from Direct Investments to Tikehau funds: • Partial secondary ABB on Eurazeo stake in October 2019, total proceed of • Launching of TGE Secondary, private equity secondary fund • Continue assets disposals on TC balance sheet (Assystem, Spie Batignolles, DWS) M&A: • Acquisition of Star America in July 2020 New initiatives: Strategy • Partnership with Fideuram/Intesa and Banca March to offer private market solutions to Italian and Spanish HNWI • Support Selectirente share capital increase in December 2019 • In July 2020, Ace Management was selected to exclusively manage the fund to support the aerospace sector , with an initial closing of 630m and an objective to reach • Ongoing fundraising of TDL V, Impact Lending fund, TGE II, T2, TLTE (long-term equity fund) and Tikehau 2027 • Planned capital increase for IREIT • Launch of the Private Debt Secondaries strategy in New-York Internationalization: continue to reinforce each foreign offices through recruitment
Entry of City Developments Limited reinforcement of our footprint in Asia Partnerships Strategic partnership with Morgan Stanley to support our development especially in North America Business and capital alliance with T&D Insurance Group in Japan
Continue to strengthen ESG set-up and new recognitions obtention: Tikehau Capital has been ranked #2 by Sustainalytics, out of a universe of 246 global assets managers and custodians ESG ESG expertise recognized by Viego Eiris with an inaugural rating of 66/100 and ranked #1 in Corporate Governance in the banking insurance and asset management sector
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 9 A GROWTH AND PROFITABLE ASSET MANAGEMENT STORY Tikehau Capital is on track to deliver on its targets
Strategic objectives set at the inaugural bond in 2017 3,139 2,784 2,499 2,274 1,512 REBALANCE OUR DIVERSIFIED OUR OBTAIN AN INVESTMENT BUSINESS MODEL FINANCING SOURCES GRADE RATING n.a
2015PF 2016PF 2017 2018PF 2019 H1 2020
AuM (Group level) Fee-paying AuM Management fee rate bps 25.8 25.7 x5 19.9 20.3 +23bps x4 22.0 92.0 94.0 16.2 81.0 13.8 75.0 10.0 9.2 71.0 71.0 6.4 6.0 4.4
2015PF 2016PF 2017 2018PF 2019 H1 2020 2015PF 2016PF 2017 2018PF 2019 H1 2020 2015PF 2016PF 2017 2018PF 2019 H1 2020
Revenue from Asset Mgt division NOPAM Revenue from Investment division
174.8 NOPAM margin x17 58.5 33.5% 387.3 x6 125.8 39.5 277.8 31.4% 28.6 88.3 32.4% 99.2 90.5 57.9 16.0 39.4 3.5 27.6% 27.9 8.9% (3.6%) (1.0) (31.7) (77.2) 2015PF 2016PF 2017 2018PF 2019 H1 2020 2015PF 2016PF 2017 2018PF 2019 H1 2020 2015PF 2016PF 2017 2018PF 2019 H1 2020
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 10 2 Operating review
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 11 H1 2020 OPERATING HIGHLIGHTS GROUP
Private debt Real Assets Private equity Capital Markets Strategies
In the absence of flagship Final closing of the value-add Solid fundraising across PE Resilience over the first half, in funds, further progress made strategy and ongoing growth funds and expansion in retail an unprecedented context with institutional and retail clients
New institutional mandate Final closing of TREO, raising Continued success of the Strong rebound in Q2 for (Novo 2020), adding second generation of special both flexible / equity and in AuM at end-June 2018 and closing in February situation funds fixed income funds 2020 New success with retail Tibi clients with a 2nd closing of Positive momentum for energy transition fund in more than Sofidy France initiative launched in Italy with Partnership with Banca Fideuram in IREIT March in Spain, new initiative targeting retail clients
Acquisition of Star America Infrastructure Partners finalized in July 2020
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 12 ACQUISITION OF STAR AMERICA AM Successful completion of the acquisition of Star America Infrastructure Partners on 30 July 2020
Snapshot on Star America A promising asset class Upside for Tikehau Capital Infrastructure Partners
Independent asset manager US Infrastructure market holds a A new asset class for TKO, founded in 2011 by two strong growth potential over the accessed through a renowned entrepreneurs: Bill Marino and long term player in the infrastructure field Christophe Petit Infrastructure spending in the US Active in majority & minority Addition of a seasoned team with represents c.2.4% of GDP vs strong entrepreuneurial DNA investments primarily in mid-sized c.5% on average in European infrastructure assets countries Strong expertise in public-private expansion in North America, partnerships in 4 verticals: transport, Recent intentions from US officials providing access to new LPs for social, environment, communication point to potentially sizeable the Group infrastructure investment plans An institutional, well-diversified and anglo-saxon LP base (70% US- Preqin survey(1) suggests 94% of Accretive impact on asset based) LPs are looking to maintain or management revenue mix Manages over $600m AuM ( increase their allocation to this at end-April 2020 asset class in the mid-term
(1) Source: Preqin Investor Interviews, November 2018 2019
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 13 SOLID TRACK RECORD IN TERMS OF OPPORTUNISTIC GROUP ACCRETIVE AND VALUE-CREATING M&A OPERATIONS
Culture Value creation Strategic Accretion
M&A deals carried out by Tikehau Capital, and main benefits associated with each transaction
AuM at International Business mix Expand product Client base Asset category acquisition Expansion rebalancing offering diversification Star America (2020) Real Assets ✓ ✓ ✓ ✓
Homunity (2019) Real Assets n.a ✓ ✓ ✓
Ace Management (2018) Private Equity ✓ ✓ ✓
Sofidy (2018) Real Assets ✓ ✓ ✓
IREIT (2016) Real Assets ✓ ✓ ✓ ✓
Credit.fr (2017) Private Debt n.a ✓ ✓ Lyxor (2016) Private Debt ✓ ✓ ✓
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 14 PRIVATE DEBT ACTIVITY IN H1: CLOSE MONITORING AM AND SUPPORT OF THE PORTFOLIO COMPANIES
Close support provided by Tikehau Capital to its portfolio companies, helping them to monitor the evolution of the situation and emerge from the crisis with the means to seize opportunities
Close contact with portfolio Implementation of Stats for the TDL IV flagship fund companies specific measures when needed (end-July 2020)
of portfolio companies requested a Regular assessment with our portfolio Specific supportive measures 27% cash interest postponement implemented to create liquidity buffers potential short- and medium-term for our portfolio companies: of portfolio companies requested a 37% impacts on revenues, margins and cash- Interest payment postponements covenant waiver flows Covenant breach waivers of 33 portfolio companies requested a Close attention paid to preserving cash Add-ons 15 state-backed loans and controlling costs RCF drawings Contingency plans Level of weighted average net 4.4x Increase in debt basket to allow leverage at portfolio companies level state-backed loans
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 15 TIKEHAU CAPITAL PLATFORM PROVIDES CAPITAL TO AM FINANCE GROWTH AND SUPPORT VALUE CREATION
Unique set-up to support high-potential companies in the wake of the unprecedented economic shockwaves caused by the Covid-19 outbreak
Bring Patient Capital 5 pillars of Value Creation
Partnership Support international expansion: TKO established Co-controlling with the management team in 11 countries Agreed path to exit and value creation Ticket Provide access to Tikehau platform: 70+ Expert Senior Advisors & 250+ companies financed Sweet spot - Follow-on investments through equity lines Enable digital transformation & innovation: investment approach Partnerships with Ring & Collaboration Capital
Foster ESG initiatives: Dedicated ESG team within TKO
Boost competitiveness and economic resilience Support skills and social and territorial cohesion Leverage relationships with banks & institutions: Strong relationships with European Banks
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 16 HOW DOES TIKEHAU CAPITAL DEPLOY ITS VALUE AM CREATION CAPABILITIES FOR ITS PORTFOLIO COMPANIES ?
Support International Expansion Provide Access to Tikehau Platform TKO supports Dove Vivo in its organic expansion in TKO Real Estate owns retail chains shops which are France & Spain potential business prospects for GreenYellow
to First commercial success with c. find clients, offices & recruit new people TKO Real Estate Assets to connect sites with power
x
Leverage relations with banks and 5 pillars of Value Enable digital transformation institutions & Innovation TKO has strong relationships with main Creation TKO partners with Opeo and OSS to European banks help Nexteam achieve Factory 4.0 During Covid TKO helped French Nexteam already implemented 3 companies secure public loans solutions to digitalize its operations
x x OpLit Foster ESG initiatives TKO supported Oodrive in its carbon footprint evaluation and helped build its ESG roadmap
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 17 FUNDRAISING PIPELINE AM Combination fundraising of flagship funds and launch of additional strategies
Drive further diversification of the client base (institutional and retail)
Capital Markets Private debt Real Assets Private equity Strategies
Grow new Grow current Fixed vintages of Continued development Finalization of T2 and Income & Equity funds TDL V flagship / existing of club deals TGE II fundraising Enhance long-only funds equity and credit offering
Enhance offering Private Debt Secondary TLTE (long-term equity Fundraising for TKS fund through new fund fund) (medtech) strategies Impact Lending fund Tikehau 2027
Leverage past Integration of Star ACE Management: acquisitions to America Ramp-up of US High continued fundraising Planned capital increase Yield strategy expand the AM for Ace Aéro Partenaires platform for IREIT
Tactical Strategies (special opportunities and cross-assets solutions)
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 18 + AUM ADDED IN JULY 2020 AM A very strong start to the 3rd quarter
Proforma Asset Management AuM as of end-July 2020
bn 25.6 +0.5 24.0 +0.6 +0.3 +0.2
1 2 3 4
30/06/2020 Private Equity Private Debt Evergreen Mandate Acquisition of Star 31/07/2020 PF America Infr. Partners
1 Private Equity: Ace Management has been selected to manage a fund dedicated to support the French aerospace industry, as part of a tender organized by the French State (in particular via BPI France) and the leading players of the aerospace industry (Airbus, Safran, Thales, Dassault Aviation). First closing of including from TKO balance sheet 2 Private Debt: th generation of Direct Lending fund, with Tikehau Capital committing from its balance sheet; have also been added in July to the Novo 2020 fund 3 A has been entrusted by a French institutional investor to Tikehau Capital and will be mainly invested in Private Debt strategies 4 Finalization of the acquisition of Star America Infrastructure Partners (c.$600m or c. (1) of AuM), an independent asset management company specializing in mid-market infrastructure in North America, allowing the Group to expand its expertise in real assets and reinforce its development strategy in North America. The acquisition has been paid partly in cash and partly in shares
(1) Based on a $/ of 30 June 2020
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 19 MAJOR SUCCESS FOR ACE MANAGEMENT AM Ace Management will exclusively manage Ace Aéro Partenaires
Ace Management selected to exclusively manage Ace Aéro Partenaires, a private Ace Management in a nutshell equity fund aiming at investing to support and strengthen the aeronautics industry An initial successful closing for has been achieved to date: Private Equity specialist player, with a sector focus on select verticals in "high value" and sensitive industries (aerospace, defence, cybersecurity) Created in 2000, acquired by Tikehau Industry French State Tikehau Capital Capital in December 2018 players c. of assets under management at end-June 2020
joint commitments of which TKO balance sheet Long term base of industrial groups from Airbus, Safran, from Bpifrance commitment, strongly among key investors (Airbus, Safran, Thales and Dassault aligning interests Thales, Naval Group, etc.) Aviation Seasoned management team, led by The fund aims to reach a total size of at least through further fundraising Marwan Lahoud (industry veteran) and Guillaume Benhamou (Tikehau Capital A major step forward for Ace Management, after its acquisition by Tikehau Capital veteran) in 2018 private equity platform and franchise, More than 130 companies financed
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 20 TKS: ONE OF A KIND PARTNERSHIP AM
Early stage med- Examples of TKS portfolio companies TKS I tech & life science Digital Health & companies Investment Investment Advisor Virtual and Hybrid Trial Solutions Manager TKS IIA AI, Digital Health, SPRIM VENTURES TIM Asia Biotech Patient Screening & Diagnostics
Curated Regulatory Intelligence Strategy & Innovation Outcome Delivery SPRIM expertise comes from deep scientific knowledge across medical areas. It integrates scientific rigor, commercial insights and Practice entrepreneurial wiring to deliver results for its clients Clinical Research Leading CRO with a global footprint in Biotech pharmaceuticals, consumer healthcare, and clinical Novel therapeutics engineered nutrition to cross the blood-brain barrier Regulatory Affairs Development of lipid nutraceuticals Provide regulatory strategies and regulatory implementation solutions in over 60 markets across a range of product categories NEREUS INNERGY THERAPEUTICS BIOPHARMA Medical Marketing
Medical communication strategies and programmes FORESIGHT PHOSKA BIOPHARMA designed and implemented globally based on strong, BIOPHARMA relevant and rigorously vetted scientific information
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 21 GROUP Strong ESG set-up, convictions and recognition
Sustainability-themed & impact investing Address societal challenges while generating competitive financial returns for investors Recognition
A+ rating Provide financing to companies that contribute (Confirmed in July 2020) to energy and ecological transition 10 funds labelled to date 2018 Private Equity: launch of T2 Energy transition fund in 2018 Group ESG rating above sector average 2020 Private Debt: launch of an impact investing fund Tikehau Capital ranked 2nd out of 246 companies in its sector
Targeted Sustainable Development Goals Inaugural rating of 66/100, ranking Tikehau Capital among the best companies in its sector
ESG ratings obtained in 2020
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 22 3 Financial review
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 23 H1 2020 RESULTS - EXECUTIVE SUMMARY GROUP Tikehau Capital delivers on its growth strategy
of Group Assets under Management at end-June 2020, +9.8% over 12 months and stable over H1, despite an unprecedented complex and uncertain context AuM and Solid fundraising momentum with + for the Asset Management activity in H1 2020 fundraising Fee-paying AuM of Private Equity and Real Assets (mainly Sofidy) coupled with deployments in Private Debt and Real Assets (TREO)
Asset Management revenues of -June 2019 with improved management fee rate of Asset 94 bps vs. 84 bps in H1 2019 and 92 bps in FY 2019 Management activity Asset Management net operating profit of -June 2019, due to solid revenue growth and controlled cost evolution, representing an operating margin of 32.4% (up 5.4 pts yoy)
Operating profit from Investment activities of Investment activities implemented by the Group as part of its risk management policy
Net income attributable to the Group of -June 2019 Solid balance sheet, a key competitive advantage, with of gross cash Group and of undrawn credit lines inaugural rating from Vigeo Eiris ESG rating agencies
Several key achievements completed in July 2020, adding a total of of AuM Outlook Objective is to reach more than 27.5bn of AuM by the end of 2020 (1)
(1) Assuming stable AuM for Capital Markets Strategies CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 24 SIMPLIFIED CONSOLIDATED P&L GROUP
in H1 2020 H1 2019
Asset AM revenues 88.3 75.9 +12.4 +16.3% Management Operating costs (59.7) (55.4) (4.3) +7.7% activities AM net operating profit 28.6 20.5 +8.1 +39.5% AM net operating margin (%) 32.4% 27.0% +5.4pts
Investment revenues (77.2) 157.7 (234.9) Operating costs 1 (47.3) (37.5) (9.8) Investment Operating profit from investment portfolio (124.5) 120.2 (244.7) activities Other items 2 (165.8) (0.8) (165.0) Investment activities net operating profit (290.3) 119.4 (409.7)
Financial interest (19.2) (22.0) +2.8 Non-recurring share-based payments (1.3) (3.1) +1.8 Group Tax 3 41.4 (17.6) +59.0 Minority interest - (0.1) +0.1 Net profit - Group share (240.9) 97.2 (338.1) EPS ( (1.73) 0.91
1 Investment activities operating costs include the remuneration of general partner for 2 Other items include result from financial instruments for
3 Positive tax impact of x of
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 25 3.1 Asset Management activities
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 26 GROUP AUM | EVOLUTION IN H1 2020 GROUP +9.8% Group AuM over the last twelve months (+
+9.8% +9.8% +13.2%
LTM LTM Asset Management 25.7 25.8 = AuM growth AuM growth 23.4 2.2 1.7 Direct Investments Direct 2.1 Investments impacts (including financial instruments)
+13.2% 24.0 Asset Management
24.0 +1.7% +1.1 23.6 23.6 Asset (0.5) (0.2) Management 21.2
31/12/2019 Fundraising Distributions Market effect 30/06/2020
30-Jun-19 31-Dec-19 30-Jun-20
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 27 ASSET MANAGEMENT REVENUES AM Asset Management revenues grew much faster than AuM over H1 2020
Asset Management revenues
Management fees & others(1) Management fees growth of 16% in H1 2020 Performance fees & carried interests 88.3 of performance fees and carried +16% interests generated in H1 2020 x2.5 75.9 1.2
0.9 61.1 H1 2020 Mgt fees & others by business line 2.9
Capital Markets Private Equity 35.8 Strategies 14% 15% +16% 87.1 2.9 75.0 58.2
32.9
Real Assets Private Debt 42% 29% 30-Jun-2018 30-Jun-2018 30-Jun-2019 30-Jun-2020 (published) (proforma, incl. Sofidy & ACE)
(1) Management fees & others include management fees, subscription fees, arrangement fees and other revenues
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 28 FEE-PAYING AUM EVOLUTION IN H1 2020 AM -paying AuM as of 30 June 2020, up +17% over the last twelve months
+13%
+2% 24.0 23.6
1.0 Total AM AuM 21.2 1.1
2.7 2.6 Fee-paying AuM growth over H1 2020 Non fee-paying AuM 1.1 reflects solid fundraising in Private Equity and Real Estate (mainly Sofidy) coupled with Future fee-paying AuM 2.7 deployments in Private Debt and Real Estate +17% (TREO) 20.3 +2% Fee-paying AuM as a % of AuM have Fee-paying AuM remained stable over H1 (85% at end-June 19.9 2020)
17.4 (in (in 30-Jun-19 31-Dec-19 30-Jun-20
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 29 FEE RATE EVOLUTION AM -generation profile
30 Jun. 2019 31 Dec. 2019 30 Jun. 2020
% AM AuM Bps % AM AuM Bps % AM AuM Bps
Real Assets 39% 99 bps 39% 110 bps 39% 107 bps
Private Debt 34% 69 bps 37% 73 bps 33% 79 bps
Capital Markets Strategies 19% 53 bps 16% 53 bps 19% 62 bps
Private Equity 7% >150 bps 9% >150 bps 8% >150 bps
Management fees (1) 84 bps 92 bps +2 bps 94 bps Performance-related fees 1 bp 5 bps 5 bps
Total weighted 97 bps +2 bps 99 bps average fee-rate (2) 85 bps
Management fee rate of 94 bps at end-June 2020 representing an increase of 2 bps vs. end-December 2019 reflecting both margin improvement on Capital Markets Strategies (+9 bps) and a favourable mix in Private Debt strategies (+5 bps mainly driven by Direct Lending)
(1) AM fees include management fees, subscription fees, arrangement fees and other revenues, net of distribution fees (2) Implied fee rates are calculated based on average fee-paying AuM CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 30 ASSET MANAGEMENT PROFITABILITY AM
Thanks to the combination of strong revenue growth and controlled cost evolution, NOPAM margin increases year-over-year by more than +540 bps to 32.4%
NOPAM(1) margin evolution
x3.1 32.4% +39% 27.0% 25.7% 88.3 75.9 11.6% (59.7) (55.4)
35.8 (26.6)
) -3.9%
m ( H1 2016 PF H1 2017 H1 2018 H1 2019 H1 2020 H1 2018 H1 2019 H1 2020
AM costs AM revenues NOPAM(1)
(1) Net Operating Profit from Asset Management Activities CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 31 3.2 Investment activities
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 32 PORTFOLIO REVENUES INVEST H1 2020 revenues adversely impacted by unrealized change in fair value (-
Revenues from the investment portfolio impacted by change in fair value, of which Q1 2020 unrealized change in fair value reached 44.1m At end-June 2020, realized change in fair value reached (vs. Dividends, coupons and distributions amount to at end-June 2020
157.7
188.7 100.8 144.1 49.0 42.3 ( 11.5 30.8 7.9 23.8 10.0 13.8
H1 2019 (165.0) (143.3) (287.5) Impact from derivatives
(77.2) (266.0)
H1 2020 Q1 2020 Q2 2020
Dividends, coupons, distributions Realized change in fair value Unrealized change in fair value
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 33 GROUP A well diversified investment portfolio, geared in priority towards TKO funds
2,447 2,336 2,371
▪ 1 investment > ▪ 10 investments between Non-listed investments 396 823 ▪ 92 investments < 911 31 Other listed investments 1,260 35% 30 Foncière Atland 39% 130 Direct 427m DWS Listed investments investments 51% 236 Eurazeo
230 Capital Markets Strategies
318 1,548 Private Equity 1,425 ( 65% 1,187 61% 539 49% Tikehau Capital Real Assets funds
461
Private Debt 30 June 2019 31 Dec. 2019 30 June 2020
Net investments of over the half-year, including further investment in TKO funds, with capital being called as funds are deployed, the disposal of part of the stake in DWS
invested by Tikehau Capital in its asset management strategies, as of end-June 2020, i.e: 65% of total portfolio, +16 pts vs end-June 2019
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 34 3.3 Key balance sheet items and Financing structure
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 35 CONSOLIDATED BALANCE SHEET GROUP
BBB- / stable outlook credit rating assigned by Fitch Ratings to Tikehau Capital in January 2019 Robust equity structure supporting the business model in 30-Jun-20 31-Dec-19
Investment portfolio 2,371 2,335 +36 of cash and cash equivalents Cash & cash equivalents (1) 878 1,307 (429) Other current & non-current assets 711 699 +12 of undrawn facility
Total assets 3,960 4,341 (381) Cash & cash equivalents evolution mainly linked Shareholders' equity - Group share 2,784 3,139 (355) to: Minority interests 7 7 - Total 2,791 3,146 (355) Portfolio investments for a net of (acquisitions net from disposals) Financial debt 1,007 997 +10 Dividend payments for Other current & non-current liabilities 162 198 (36) Impacts related to financial instruments for Total liabilities 3,960 4,341 (381)
Gearing (2) 36% 32% +4pts Undrawn committed facilities 500 500 - Level of financial debt stable
(1) Cash and cash equivalents and cash management financial assets of to the portfolio derivative instruments (
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 36 FINANCING STRUCTURE OVERVIEW GROUP Solid financial profile Key indebtedness highlights
Following to negotiate with the banking pool a 2-year extension of the Diversified financing resources: with syndicated loan (Term Loan + RCF) maturity from Nov. lines (o/w 2/3rd drawn) of which 2022 to Nov. 2024 In parallel, we early reimbursed 100% unsecured drawn debt and negotiated a rebalance the financing mix between banking loan and Diversified sources of funding (40% of international banks) bonds Average Maturity: 4.9 years We obtained end-November the unanimous approval from banking pool to extend maturity and we early reimbursed Gearing: 36%
Financial indebtedness as at 30 June 2020 and amortization plan
Amortisation Plan Banks 1,800 borrowings 1,600 RCF - with floating 1,400 rate 500 1,200 1,000m 2019 Bond - 47% 1,000
800 500 500 2017 Bond - 600 400 500 Term Loan - (in (in 300 300 Bonds with 200 500 200 200 300 200 fixed rate - 53% Total Drawn debt 2020 2021 2022 2023 2024 2025 2026 facilities (Pre-bond issue and early reimbursement: 79% banking loan vs. 21% bond) CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 37 LTV ANALYSIS & GEARING EVOLUTION GROUP LTV is under control despite the rapid growth
LTV Covenant: <47.5% (1) Minimum liquidity ratio : > (2)
3,139 60% 2017 2018 2019 H1 2020 3,000 2,784 2,499 50% 2,500 2,274 36% 35% 40% 12.5% 2,000 32%
30% -2.4% 1,500 22% 1,432 1,117 1,085 997 1,007 -15.0% 1,000 796 20% 548 574 500 10%
-29.3% (
0 0% 2017 2018 2019 H1 2020 Shareholders equity - Group share Total financial debt
Consolidated Cash and Cash equivalents (3) Gearing (%) (4)
Covenant on Syndicated Term Loan and RCF (1) LTV = (Consolidated Financial Indebtedness Consolidated Cash & Cash Equivalent) / (Consolidated Asset Value Consolidated Cash & Cash Equivalent) (2) ent (3) Aggregate of (i) Cash and Cash Equivalents and (ii) Current Investments Portfolio, as shown in annual or semi-annual consolidated financial statements Group Share
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 38 ASSET / FINANCIAL DEBT COVERAGE GROUP Available liquid assets comfortably covering total financial debt
3,000 3.0x 3.0x 2,172 2.2x 2.5x 2,500 1.8x 2.0x 1.6x 2,000 1,625 1,787 740 1.5x 1,500 1,248 670 1.0x 540 0.5x 1,000 674 0.0x
( 1,432 500 1,085 997 1,117 1,007 796 -0.5x 548 574 0 -1.0x 2017 2018 2019 H1 2020
(1) (2) (3) Consolidated Cash and Cash equivalents Non current Portfolio (Listed) Cover ratio (x) Total Financial Debt
(1) Aggregate of (i) Cash and Cash Equivalents and (ii) Current Investments Portfolio, as shown in the annual or semi-annual consolidated financial statements (2) Non current Portfolio (Listed) shall mean assets classified in level 1 (3) Listed Investments and Consolidated Cash & Cash equivalents divided by Total Financial Debt CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 39 4 Outlook
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 40 TIKEHAU CAPITAL IS WELL-POSITIONED TO NAVIGATE THE CYCLE
The Covid-19 outbreak has raised with the building of the right set-up
A diversified exposure to complementary asset Value creation in asset management is 1 switching from asset allocation to asset picking classes During the last 10 years of easy monetary policies 2 High level of selectivity and investment discipline valuations of all asset classes have increased together 3 Strong alignment of interest with LPs having a good portfolio construction was enough to generate satisfying returns 4 Local footprint and sourcing capabilities We have seen volatility increasing, dispersion is on the rise and idiosyncratic risk is rising 5 Concentrated portfolios of high convictions Competitive landscape is structurally evolving, with Strong balance sheet allowing to keep growing AM 6 banks less active in mid-market corporate activities financing 7 Strong proprietary financial and ESG analysis
Strong 4.7bn firepower (at end-June 2020) of dry powder within of cash available o of undrawn credit lines Group funds on the balance sheet(1)
CREDIT UPDATE 5 OCTOBER 2020 (1) Cash and cash equivalents and cash management financial assets of to the Tikehau Capital portfolio derivative instruments ( 41 OUTLOOK AND GUIDANCE Tikehau Capital is on track to deliver its targets
A very strong start to Q3 2020 with + added in July 2020: Private Equity: first closing of Aéro Partenaires) Private Debt: • First closing of TDL V with • Novo 2020 fund with additional • A Real Assets: Finalization of the acquisition of Star America Infrastructure Partners (>$600m or c. (1) of AuM)
A to be launched by the end of the year by IREIT Global, a Singapore-listed real estate investment trust
more than AuM by the end of 2020(2)
Tikehau Capital is on track to deliver its 2022 organic guidance to reach more than in total AuM and generate more than in NOPAM
(1) Based on a $/ (2) Assuming stable AuM for Capital Markets Strategies CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 42 1 Strong market dynamics favouring Alternative Asset Managers
2 A fast growing player in the European market
3 Four business lines leading to a balanced business model
4 A diversified investor base with increasing international presence
5 A resilient and profitable business model
6 A disciplined investment strategy
A robust balance sheet built through a cautious financial policy governed by strict 7 guidelines and a high asset coverage ratio
8 Strong partnerships with international banks, investors and major players in their sector
9 An experienced management team with a strong alignment of interests
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 43 5 Appendices
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 44 TIKEHAU CAPITAL OVERVIEW Structure chart June 2020
Founders & Management
34% 66% Other shareholders including
Tikehau Capital 100% 49% Fakarava Capital Advisors FSP Tikehau Capital General Partner 37% 7% 56%
General Partner Tikehau Capital SCA
Listed company
50% 100% 100% 100% 100% 96% 100% Asset Ireit Global Tikehau Capital Management Tikehau IM Sofidy ACE Credit.fr Star America Group Europe activities
Tikehau Capital SCA consolidated perimeter
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 45 HUMAN CAPITAL Experienced and diversified teams
Experienced and committed team FTEs by age 570 FTEs at Group level at end-June 2020 50 and over Gender-balanced staff, across 27 nationalities, with 14% 20-29 14 years of average experience 24%
skin in the game (44% of Tikehau Capital) 40-49 unmatched within the European landscape 23% 30-39 39% Governance
Group governance and corporate structure are adapted to an entrepreneurial and fast-growing company Supervisory board is 50% independent, in line with French governance code 53% of carried interest and 100% of performance fees remain available for shareholders
A solid network of advisors
Creation in 2019 of an International Advisory Board at Group level Distinguished and complementary members with significant expertise in international affairs Chaired by Sir Peter Westmacott, former British ambassador to Turkey, France and the United States Creation in 2020 of an Advisory Board for Tikehau Investment Management
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 46 TOTAL AUM HAS INCREASED BY +33% PER YEAR SINCE 2016 Group AuM target is to exceed
Total Assets under Management in (1)
CAGR: +29% p.a >35
>27.5 25.8 22.0
13.8 10.0 6.4 4.3 1.6 3.0
2004 2012 2013 2014 2015 2016 2017 2018 2019 2020 20222022 guidance Inception of Acquisition of Opening of Opening of Opening of Temasek and Listing of Opening of Opening of guidance Tikehau Capital Salvepar London Office Singapore Brussels and FFP become Tikehau Capital New York Office Tokyo Office Increase of Office Milan Offices shareholders on Euronext Launch of Partnership with Paris Acquisition of Private Equity T&D Insurance IREIT Global Lyxor Opening of funds Group in Japan Partnership with Senior Debt Madrid and Strategic Partnership with Banca March activities Seoul Offices partnership with Fideuram Acquisition of Acquisition of DWS Intesa Sanpaolo Star America IREIT Global Issue Acquisition of Launch of the Infrastructure Acquisition of Sofidy and ACE Partners sheet Crédit.fr Management (finalized in July) team CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 47 ASSET MANAGEMENT INVESTOR BASE AT END-JUNE 20 AM Tikehau Capital keeps expanding and internationalizing its investor base
Asset management AuM by investor origin H1 2020 3rd party fundraising by origin
32% Fundraising from international investor accounts for RoW, 3% 36% of total asset management fundraising Asia, 5% +2 pts x2 vs 30 June Excluding Sofidy (not distributed globally), this share 2019 stands at 55% Europe 16% (excl. AuM France), 24% 31 Dec. 30 Jun. 2015 2020 France, 68% International 42% 41% 36% 55% A well-diversified investor base
Tikehau Capital group, (2) Others, 6% (1) 9%
France 58% 59% 64% 45%
AuM
H1 2018 H1 2019 H1 2020 H1 2020 (excl. Sofidy)
Asset Managers & Family offices, HNWI,(3) Institutionals, 45% Retail, Banks 40%
CREDIT UPDATE 5 OCTOBER 2020 (1) Including corporate groups, funds of funds and foundations Tikehau Capital (2) Including commitments by Tikehau Capital and its subsidiaries 48 (3) High Net Worth Individuals TIKEHAU CAPITAL DEPLOYMENT AM Screenings and execution in H1 2020 show maintained high selectivity
Real Assets team (1) Private Equity team Private Debt team (TKO + Sofidy)(4)
177 screened deals 1,315 screened deals 426 screened deals
56 screening 9 firm offers 64 firm offers committees
8 closed 27 closed 26 closed deals(2) deals(5) deals
Conversion rate (3) 4.5% 2.2% 6.1%
A strict investment discipline maintained in 2020 across all business lines, leading to carefully selected deals
Notes: (1) Only relates to Direct Lending activities (2) Closed deals exclude follow-ons (3) Conversion rate calculated as Total closed deals / total screened deals (4) 1,315 screened deals in 2020, of which c.1,233 performed by Real Estate investment team (5) Only relates to Sofidy deals CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 49 AM
-end funds
end funds, down compared to the same period last year, 1.5 the Covid-19 outbreak - (1) 1.2 108 companies / assets financed in H1 2020 (vs. 145 in H1 2019) 1.0 ESG criteria fully integrated in selection process 0.8 A variety of financing solutions provided (private debt, equity, structured products, crowdfunding, etc.)
Investments on closed-end funds by business line
Private Equity ( 21% H1 2018 H1 2018 H1 2019 H1 2020 (published) (pro forma) 0.8bn Real Assets 15% 64% Private Debt
(1) Excluding CLOs and crowdfunding entities
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 50 FOCUS ON ASSET MANAGEMENT AUM AM
Asset management fundraising by quarter, and asset class
bn 1.2 1.1 Real Assets and Private Equity 0.6 0.6 0.6 account for 0.5 80% of H1 2020 AM fundraising (vs. 60% in H1 2019)
Q1 Q2 H1 Q1 Q2 H1 Private Debt Real Assets Private equity Capital Markets Strat. 2019 2020
Favourable business mix evolution in Asset Management AuM since IPO
16% 22% 35% 57% x2.8 Private Debt 9% Real Assets at 31/12/2016 Private equity at 30/06/2020 21% Capital Markets Strategies
CREDIT UPDATE 5 OCTOBER 2020 40% Tikehau Capital 51 FEE-PAYING AUM ANALYSIS AT END-JUNE 2020 AM High fee-paying base, with long duration on closed-end funds
AuM breakdown (AM activities) Fee-paying AuM by duration
30 June 2020 30 June 2020
Non-fee paying Permanent Future fee-paying 4% Capital Markets 11% Strategies 5% 19% 7 years or more 26%
fee-paying AuM AuM 1% 29% Less than 21% 3 years Funds managed by Sofidy 3 to 6 years Fee-paying +3pts 85% vs 30 Jun. 2019 98% of AuM in closed-end funds have durations above 3 years
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 52 +4% GROWTH IN AUM ELIGIBLE TO CARRIED INTERESTS AM Slight increase in H1 2020
AuM eligible to carried interests AuM eligible to carried interests is growing at a faster pace than Group AuM
The operating leverage does not rely on short-term carried interests, which should contribute to profit +4% 9.0 8.6 generation over the long-term +16% Contribution from this revenue stream will increase as a 7.5 growing number of funds, with larger individual size, will -3% 3.6 start maturing +8% 3.7 3.4 Carried interests are due at funds maturity, range usually between 10% and 20% of the total performance (i.e. 3.1 with catch- should a hurdle IRR be exceeded 3.0 +5% 2.7 +9% 53% of carried interests remain within the listed company, i.e. benefitting Tikehau shareholders +16% 2.3
1.3 +48% 2.0 (
30 Jun. 19 31 Dec. 19 30 Jun. 20
Private Equity Real Assets Direct Lending and Multi Assets
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 53 FOCUS ON TKO FUNDS INVEST Unrealized change in fair value impacting contribution of TKO funds
Contribution of TKO funds to H1 2020 revenues
DWS +7 TKO funds (6) TKO listed REITs (11) ( 31.2 +31% 31.2 18.9 23.9 HDL - Assystem (5) vs 30/06/2019 0.2 H1 2018 H1 2019 H1 2020 (61) (48.3)
Eurazeo
Others
(16.9) (
(77.2)
H1 2020 Dividends, coupons, distributions Realized change in fair value Unrealized change in fair value
TKO funds negatively contributed to H1 2020 investment revenues due to unrealized change in fair value, of which half is linked to share price decline (listed REIT in France) Over the long- Confirmation of 10-15% target run rate return on capital invested by the Group in its own funds
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 54 BUSINESS LINE UPDATE PRIVATE DEBT
Key figures Areas of expertise Investment universe & key features
Direct Lending Senior loans, stretched senior, unitranche, mezzanine, preferred equity of Assets under Management Corporate Direct European lending to French Targeted companies with revenues Direct Lending SMEs between -4% AuM change over H1 2020 Leveraged loans Innovative & flexible structuring capabilities -1% AuM change over the last 12m European CLOs Strong partnership with PE funds Leveraged Loans & banks
H1 2020 developments and outlook March 2020 No flagship fund in the market during H1 2020 ahead of TDL V launch Wholesale insurance broker specialized in health & protection Deployment mainly driven by Direct Lending funds and loan and property & casualty insurance solutions funds Tikehau Capital acted as a sole arranger of a Combination of follow-on deals to support some portfolio with a -investment companies as well as 8 new Direct Lending transactions Outlook: Further fundraising for the fifth generation of the Direct May 2020 Lending fund with an expected second closing during H2 2020 Launch of new strategies and in particular an impact lending Manufacturing of transfection reagents essentially for gene and strategy as well as a secondary private debt fund cell therapy industries Tikehau Capital acted as a co-arranger of a and -investment CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 55 BUSINESS LINE UPDATE REAL ASSETS
Key figures A comprehensive Real Estate platform
Core+ Strategy Core / Core+ of Assets under Management Value-Add (TREO 2018) Retail clients / HNWI / Institutional Clients Institutional investors / Family Offices +4% AuM growth over H1 2020 investors Universe Offices, retail, residential, hospitality Offices, retail
AuM growth over the last 12m Medium to long (Core+) +19% Holding period Long Medium (TREO 2018)
Listed REIT
H1 2020 developments Outlook and strategy Cautious approach on deployment during the Covid-19 Further deployment of TREO with opportunities in outbreak residential, asset conversion to residential, hotels and Resilient portfolio skewed towards offices, light industrial, offices: retail parks and asset conversion strategy to residential with Launch of a capital increase for IREIT by the end of 2020 to low exposure to hotels finance: Positive momentum for Sofidy with acquisition of a mixed The acquisition of the remaining 60% stake in a commercial and office portfolio (acquired from Blackstone in Spanish portfolio from Tikehau Capital March 2020) as well as retail and office portfolios Acquisition of an office building in Milan finalized in August The repayment of a shareholder loan provided by CDL, 2020 through the value-add fund (TREO) launched in 2018 one of IRET main shareholder Acquisition of Star America Infrastructure Partners finalized in July 2020, adding AuM to the Real Assets business line CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 56 BUSINESS LINE UPDATE PRIVATE EQUITY
Areas of expertise Key figures Growth and expansion Equity to Entrepreneurs
of Assets under Management Thematic expertise B2B Macro Trends in partnership with large international corporates
+14% AuM growth over H1 2020 Tech-enabled B2B Aerospace Energy transition services Healthcare AuM change over the last 12m Industrials +58% Financial services Cybersecurity Medtechs / biotechs Secular and emerging Macro Trends
H1 2020 developments and outlook January 2020 Energy Transition fund with two special opportunities fund Ireland-based global energy efficiency services provider Stake acquired by T2 Energy Transition Fund generating gross MOIC of 2.2x and 48% IRR Outlook: Deploy the funds with selected investments and strict July 2020 investment process within investment period range Continued development of Ace Management with additional Italian-based leading manufacturer of stators and rotors for fundraising expected for Ace Aéro Partenaires in H2 2020 electric motors and generators 30% stake acquired by T2 Energy Transition Fund
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 57 PRIVATE EQUITY Growth Equity: growing an emerging segment with attractive returns
Growth Equity: a differentiated approach to private equity Track record
Growth and expansion capital for founders / entrepreneurs Tikehau Capital is active in this segment since 2005 On-balance sheet approach until 2018 Key features Target growth companies, profitable with a proven business model 2.2x gross MOIC since 2009 Accelerate revenue growth and operational performance, Recent exits: whether organic or acquisitive
An international investment team with complementary skills 2.3x A team of and expertise experts Full dedication to support the management teams of the companies across all key aspects of their development 2.5x
Entry multiple lower than for buyout strategies 8.3x Risk / return profile closer to buyout vs venture An attractive vertical in PE Offers performance comparable to buyout, but with less leverage 2.2x Strong deal flow and less competition
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 58 CAPITAL MARKETS BUSINESS LINE UPDATE STRATEGIES
Key figures Investment universe ESG label awarded to 10 TKO funds
Open-ended funds and managed LuxFLAG ESG label has been accounts (High Yield, Investment Grade of Assets under Management awarded to 10 open-ended funds corporates, Subordinated financials) managed by Tikehau Capital Primarily pan-European credit and Acknowledges the incorporation of +1% AuM growth over H1 2020 Asian credit ESG considerations throughout entire investment process +15% AuM change over the last 12m Value Quality and Special Situations equity stocks
H1 2020 developments Outlook and strategy
Solid inflows in Equity funds in H1 2020 in spite of the Launch of new innovative products (notably in the US) complex market conditions Launch of a long-term equity fund (TLTE) with innovative Good overall performance over the half-year, especially on Private Equity approach applied to public equities the subordinated financials Flexible and balanced management in the equity and credit Further development of such as markets Tikehau Global Value and Tikehau Global Credit to capture more international and institutional clients Strong internal research capabilities, allowing to perform conviction-based management Highly scalable strategies
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 59 NOVEMBER 2017
Key objectives Unsecured Facility - Main terms
Give the complementary resources to growth and strategies Amount Term Loan Syndicated RCF Tikehau Capital has mandated Natixis, UniCredit and BNP Paribas as Coordinators, Bookrunners and Global Main Lead Arrangers to arrange a new Mandate Letter: 31 October Signing date Syndication process goal reached: at least 1,230m of commitments Facility Agreement: 23 November in order to get more liquidity and to reduce Coordinators, then Main Lead Arrangers Maturity 5 years
24 months 20% 1 FINANCING GROUP S GROWTH & STRATEGIES 36 months 20% Amortisation 48 months 20% In Fine 2 RATIONALIZATION AND FLEXIBILITY OF DEBT STRUCTURE In Fine 40% 3 TAKING ADVANTAGE OF LOW INTEREST RATE ENVIRONMENT
4 INTERNATIONALIZATION OF BANKS POOL (40% OF INTERNATIONAL BANKS) Drawing Can be drawn one day after other Terms fully drawn Term Loan Lenders 31.12.2018
Coordinators, Bookrunners & 2019 update Global MLA 300m early repayment of the Term Loan occurred in November Main Lead 2019 Arrangers From 29 November 2019, syndicated loan is amounting to 700m ( 200m of Term Loan, 500m of RCF) Maturity has been extended from November 2022 to November 2024 Lead Arrangers 200m Term Loan with a bullet amortization
Total committed:
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 60 NOVEMBER 2017 - TIKEHAU CAPITAL - 2017 Milestones: 6-year senior unsecured inaugural bond Transaction Details Investor breakdown (by allocation)
Issuer Tikehau Capital S.C.A Investor type Geographical split Issue Rating Unrated Issue Size 1% 3% Status Senior, Unsecured, Reg S Bearer, Dematerialised 5% 17% 6% Maturity Date 27 November 2023 Settlement 27 November 2017 15% Coupon 3.0% (Annual ACT/ACT) 54% 55% Issue Spread vs. MS MS+266.8 bps 28% Re-offer Price / Yield par / 3.0% 16% Standalone / Euronext Paris Listing / French Law / CoC / Documentation / Listing / 3mth Par Call / MWC / Clean-Up Call (80%)/ Law Unencumbered Assets Value > Unsecured Debt/ Negative pledge/ Cross default France 55% Italy 16% Funds 54% Banks & PBs 28% Denomination / Increment BeNeLux 15% Spain 6% Global Coordinators Natixis, UniCredit Insurers 17% Others 1% Switzerland 5% Others 3% Joint Book runners BNP Paribas, Natixis, Nomura, SG CIB, UBS, UniCredit Co Lead Manager Degroof Petercam Executive summary
After a successful capital increase of 702m achieved in July 2017 and a 1.0bn senior Tikehau Capital decided to announce on 20 November 2017 a new Investment Grade unsecured bank loan (50% term loan, 50% RCF) obtained at the end of October 2017, 300m 6-year senior unsecured inaugural bond with IPTs of 3.0% area. Thanks to a Tikehau Capital decided to diversify its funding sources by accessing the debt final book over 300m, the size was set at 300m, for a 6-year maturity and a final pricing capital markets at 3.0% :
Tikehau Capital announced its pan-European roadshow on 6 November 2017 with ▪ By geography, the demand was dominated by France (55%), followed by meetings in Paris on 13 November 2017 and London on 14 November 2017. Italy (16%), Benelux (15%), Spain (6%) and Switzerland (5%) Through one-on-one meetings, calls, group meetings and General Investor Call, the ▪ Fund managers took the bulk of the demand with 54% of the allocations, followed company managed to exchange with more than 100 investors by Banks & Private Banks (28%) and Insurers (17%)
CREDIT UPDATE 5 OCTOBER 2020 Tikehau Capital 61 OCTOBER 2019 - TIKEHAU CAPITAL - 2019 Milestones: 7-year senior unsecured investment grade bond Transaction Details Investor breakdown (> #105 investors at allocation)
Issuer Tikehau Capital SCA Investor type Geographical split Issue Rating BBB- by Fitch Issue Size / benchmark size 1% Status Senior unsecured, Reg S, Bearer 10% Maturity Date 14 October 2026 19% 3% 30% Settlement Date 14 October 2019 7% Pricing Date 7 October 2019 Coupon 2.25% (Annual ACT/ACT) 8% Issue Spread vs. MS MS+260bp 20% 60% Re-offer Price / Yield 99.859% / 2.272% 17% Standalone / Euronext Paris Listing / French Law / Change Documentation / Listing / 23% of Control / 3mth Par Call / Make Whole Clause / Clean- Law Up Call (80%) / Cross default Denomination / Increment France Italy Global Coordinators BNPP, Société Générale Asset Managers Insurers Spain Germany Banks & PBs Others Joint Book runners Banca IMI, BNPP, CA-CIB, Société Générale, UniCredit Switzerland United Kingdom Others Executive summary Two years after its unrated inaugural bond and the assignment of a On 7 October, Tikehau Capital opened books for a 300m+ 7-year Senior Unsecured transaction corporate rating BBB- by Fitch early-2019, Tikehau Capital announced a 4- with IPTs of MS+270bp area at 9:50 CET. The deal was well received by investors with more than day roadshow across Europe on 23 September, in order to engage and 500m of orders collected by 11:15 CET. Books continued to grow over 700m by 12:55 CET, prepare accounts for a new 300m-500m 7-year Senior Unsecured allowing the issuer to revise the guidance at MS+260/265bp and to announce an upsized transaction, expected to be rated BBB- by Fitch transaction of 400m-500m Through meetings and calls organized in Paris, London, Frankfurt, The final book closed at a benchmark size 500m at 2.25% for 7-year against 300m 3.00% Amsterdam and Milan, Tikehau Capital managed to exchange with more coupon for 6-year for the inaugural bond 2-years ago: than 50 investors during the roadshow ▪ by geography, the demand was dominated by France (30%), followed by Italy (23%), Spain Tikehau objectives were to diversify and rebalance its funding (17%), Germany (8%) and Switzerland (7%) sources, continue to build its credit story and maintain a regular ▪ fund managers took the bulk of the demand with 60% of the allocations, followed by Insurers presence on the debt capital market (20%) and Banks & Private Banks (19%) Compared to the inaugural bond, this new issuance confirms the growing interest for Tikehau CREDIT UPDATE 5 OCTOBER 2020 credit especially in Italy, Spain and newly in Germany Tikehau Capital 62 The information contained in this presentation is confidential and is for the exclusive use of the original listed recipient(s). The contents of this presentation are for TIKEHAU CAPITAL informational purposes only, and should not be regarded as an offer to sell or a solicitation of an offer to buy any securities, futures, options, investment products, share of funds or other financial product or services. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change 32, rue de Monceau - 75008 Paris - France without notice. Tikehau Capital shall not be held liable in any case for any decision taken based on the present document. Past performances are no indicator of future Phone: +33 1 40 06 26 26 performances. Fax: +33 1 40 06 09 37