Full Year 2024 Tikehau Capital SCA Earnings Call Transcript
Key Points
- Tikehau Capital SCA (FRA:7TI) achieved a record year in 2024 with EUR7 billion of net new money, marking the third consecutive year of record fundraising.
- The company's fee-related earnings (FRE) increased significantly from EUR3 million at the time of IPO to EUR132 million in 2024, demonstrating strong growth in asset management profitability.
- Tikehau Capital SCA's assets under management (AuM) have grown from EUR9 billion at IPO to EUR49 billion, with a notable acceleration in fundraising across geographies and client segments.
- The company has maintained a strong FRE margin close to 40%, with expectations for improvement in 2025 due to growth in private equity and expense reductions.
- Tikehau Capital SCA has made significant progress in sustainability, with AuM in SFDR Article 8 and Article 9 reaching close to EUR33 billion, and a 37% increase in sustainability-focused AuM compared to the previous year.
- The deployment of EUR5.6 billion in 2024 was less than the previous year, reflecting a cautious investment approach in a challenging environment.
- Real estate fundraising was notably softer in 2024, with the sector facing significant challenges due to rising interest rates and reduced transaction levels.
- The company's average revenue margin decreased from 94 bps to 90 bps, influenced by cyclical effects and a fundraising mix that included lower-fee CLOs and CMS.
- Tikehau Capital SCA's net profit growth was impacted by higher financial interests linked to sustainable bonds issued in 2023 and the drawing of a revolving credit facility in 2024.
- The company faces increased competition in the private credit space, with many large players entering the market and raising substantial funds, which could pressure margins and deployment opportunities.
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Good morning, ladies and gentlemen, and welcome to TKO Capital's 2024 annual results presentation. I'm Théodora Xu, investor relations director, and I'm pleased to be holding this session with you today. Before we begin, a few housekeeping points.
So the management team will first take you through the presentation which will be followed by a Q&A session. We'll begin with questions from the audience here in the room and we'll then take questions and written questions from the webcast. And if we don't have time to go through all the questions, the IR team will follow with you afterward. And with that, and now I hand it over to Antoine Flamarion, Co-Founder of Tikehau Capital.
Thank you, Theo. Good morning, everybody. Thank you for being in the room with us and also on the audio webcast. We're going to start the presentation now.
So as you know, we operate in the alternative investment sector which remain
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