Good morning. This is the conference operator. Welcome and thank you for joining the Antin Halfyear Results 2025 conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing *N0 on their telephone. At this time, I would like to turn the conference over to Ms. Ludmilla Binet, Head of Shareholder Relations of Antin. Please go ahead, Madam.
Good morning. Good morning, everyone, and thank you for joining the call today. Earlier this morning, we issued a press release announcing our half-year results. A copy of this release and the presentation are available on the shareholder section of our website. For today's presentation, I am joined by Alain Rauscher, Chairman and Chief Executive Officer, and Mélanie Biessy, Managing Partner, Chief Operating Officer, and Interim Chief Financial Officer. The presentation will be followed by a Q&A session. Let me now hand over to Alain.
Thank you, Ludmilla, and good morning, everybody. It is my pleasure to welcome you on this call and present our activity update. The first half of 2025 was quite eventful on the geopolitical and macroeconomics front. In this volatile and uncertain context, we concentrated largely our investment activity on growing our portfolio companies. Let me focus here on a few highlights of the period. First, our portfolio continues to perform well, and our companies yet again display nearly 20% EBITDA growth over the last 12 months. Second, we have been increasingly active on the investment side, signing many large add-on transactions at our portfolio companies. After the end of the first half, we unveiled a new investment for our NextGen Fund 1. Third, we have a good exit pipeline, as most of the companies in Fund 3 and some in Fund 4 near maturity.
These exits will enhance DPI for fund investors in time for our next fundraise. Turning to our financial performance, we delivered slightly better revenue and slightly lower costs than expected. We continue our high dividend policy as announced in March. Finally, we have refined our outlook for this year, mainly to reflect the depreciation of the U.S. dollar compared to the euro. More about this will be said in a moment by Mélanie. The first half of 2025 was a very busy period for our portfolio companies. Let me tell you about some of the major events that took place across our portfolio. These include a new £2.3 billion financing round for CityFibre, the acquisition of 500 megawatts from Acciona in Spain by OPD Energy, and Velvet, brand name Reveal.
Those should not eclipse other operations such as Origis, securing over $1 billion of investments, or Concilium, acquiring Ares Marine and ISC. These are only a couple of examples. All these, plus more initiatives not displayed here, contribute to a healthy 10.4% revenue growth and 19.1% EBITDA growth across our portfolio. We complemented them with further injections from our funds, totaling €700 million over the last 12 months to help these companies become a platform. This allows them to reach a scale that is attractive to a potential buyer, which in turn will enhance the returns of our funds. In terms of new investments, we continue to be very disciplined and focused on paying the right price for each acquisition.
Just last week, we announced an exciting new investment, a maturity stake in a company called MataOne, a fast-growing smart mobility platform, which offers mission-critical services to public transport networks and travelers in Europe and the U.S. This is the seventh investment by our NextGen Fund 1, which is now more than 65% committed. We hope to share more good news with you in the coming weeks, particularly in the mid-cap segment. Our portfolio companies have continued to perform well above the first half, despite the macroeconomic headwinds. All our funds remained on or above plan. This is the strength of infrastructure, which has proven once again to be a highly resilient asset class. We strengthened this resilience by building diversified portfolios by sector and by country, as you can see on this chart. Foreign exchange fluctuations in the first half, particularly with the U.S.
dollar, led to an unfathomable impact when translating asset values from dollar to euros. This explains why net asset values across all our funds increased by an average of 1.3%, which included currency effects, but by 4.7% excluding them. Fund 5, which has yet to make an investment in U.S. dollars, is largely unaffected and continues to perform very well across all assets. We also have a solid exit pipeline for our funds. With Fund 2 fully realized, as of the end of last year, we are now focusing on the realization of Fund 3 and Fund 3B. Back in March, we pointed towards two exits in 2025. We are actively working on both of them, but their exact timing is evidently uncertain in today's volatile environment. This does not, however, change the big picture.
Most of Fund 3 and some of Fund 4 investments are nearing maturity, and we expect to greatly ramp up our exit activity over the next 12 to 18 to 24 months. This will allow us to return several billion euros to investors over the time period, which would help feed new allocations to new funds. That gives us a fairly clear trajectory for the near future. Our top priority is to accelerate the deployment of our funds and to return to shorter fund cycles. We have been below our usual pace of development for the last two years. We clearly have the means to do more and quicker while maintaining our quality and performance standards. Our second priority is maximizing returns on upcoming exits. Realizations of Fund 3 and 4 will be key for the next few years of our time to attract both clients and talents.
This will determine the success of our next fundraising cycle, which we are starting to prepare with the launch of Mid Cap Fund II in 2026, followed by Flagship Fund VI. NextGen is a new strategy, and we will return to market once we demonstrate our ability to create value there. With that said, I will now hand over to Mélanie for the financial results.
Thank you, Alain. Good morning, everyone. It's my pleasure to present our financial results for my first earnings call as Interim CFO. Although it may not happen again, as we announced this morning, the appointment of our new CFO, Walid Damoud, will arrive in February 2026. Walid will bring great expertise in both private markets and corporate finance, thanks to his prior experience at CBC, Morgan Stanley, and Credit Suisse. We look forward to having him on board. For now, let us proceed with our financial performance in the first half. On slide 10, you see that we comment on key metrics with and without catch-up fees. I will focus on the evolution without catch-up fees, as this reflects the intrinsic performance of our business, which remains solid. As a reminder, catch-up fees are non-recurring revenues.
They were quite significant last year, standing at €10.5 million in 1H24, and much lower in 1H25 at €0.9 million. Given Fund 5 has now been raised, we will not account for catch-up fees on Fund 5 anymore beyond this half. Let's start with fee-paying AUM that are up 6.2% year on year. This was driven by additional funds raised in 2H24 and add-on investments made in our portfolio companies in 1H25. This higher fee-paying AUM consequently increased management fee revenue, which drives our top-line performance for the first half. Revenue was up 8%. Simultaneously, operating expenses increased by 8.9% year on year, resulting in a 7.1% underlying EBITDA increase. This increase was essentially linked to personnel expenses, which rose by 11.1%. This is a contained increase, as we had guided earlier this year on a mid-teens growth. This has been slightly favored by the U.S.
dollar depreciation, as one-third of our OpEx are in U.S. dollars. Other operating expenses grew by just 3.6% compared to last year. Hence, on cost management, we aim to strike the right balance between discipline and continuing investment in the team to support our future growth. Net income increased by 1.3% year on year, and this growth was impacted by lower financial income as interest rates have come down. Taking a closer look at our top-line evolution between 1H24 and 1H25, management fees on our flagship funds increased by €10.6 million. Indeed, additional funds have been raised for Fund 5, final closing has occurred in 2H24, and we've been able to raise €0.8 billion. We have further injected capital in our portfolio companies over the last 12 months, including in Fund 3 and Fund 4 for around €400 million. Regarding performance revenue, changes versus last year are less material.
As Alain outlined in the business update, currency movements hamstrung some asset valuations in the first half, which led us to recognize limited contributions from investment income and almost no carried interest. With respect to carried interest, the first recognition of accounting carry from Fund 3 and Fund 3B is contingent on the timing of exits and on the valuation of assets. We are making progress on the two exits with plans for this year, but the exact timing is uncertain. The currency headwind mentioned by Alain earlier negatively impacts the valuations of our U.S. investments. As a result, we do not expect to recognize carried interest in 2025, but its medium-term potential remains unchanged. Overall, carry revenue potential for Antin for all current vintages remains above €500 million based on the funds' target performance. As a reminder, there are no costs associated with this revenue apart from taxes.
Moving on to our balance sheet, we retain a strong cash position and no borrowings at the end of June, which are enabled by our capital-light, high-cash generative business model. We have not only continued to invest in our funds. As a reminder, out of our €361 million in cash, about €110 million are earmarked for co-investment and carried funding for current vintages. We have already called capital for an amount of €90 million. A sizable share of cash will also be used to fund our co-investment in future vintages, consistent with the capital-light approach we have deployed so far. The remainder of our cash is currently reserved to potentially fund organic growth or opportunistic M&A. We are continuing to work on these topics, but our current focus is on maintaining the right momentum on our capital deployment and exit activity. We also maintain our distribution policy.
Our interim dividend is slightly up year on year, but the full-year distribution will remain stable versus 2024. This is in line with our policy to have a stable or growing dividend over time and reflects confidence in our future growth potential. With this interim distribution, we will now have returned more than €400 million to shareholders since our IPO four years ago, which represents about €2.3 per share and 20% of our market cap. A word now about liquidity. We are well aware of the difficulties encountered by some public market investors when faced with the trading volumes induced by a small free float. To address this situation, we expect to enhance our liquidity through successive share placements enabled by lock-up expiry. We started doing so with our first share placement in January of this year, which expanded the free float by 1.3%.
You should expect other share placements to take place in the future and the free float to gradually expand over time. Looking forward, we have refined our 2025 outlook with the full-year EBITDA now expected at around €160 million versus above €160 million previously. We are impacted by unfavorable currency fluctuations, mainly the depreciation of the U.S. dollar versus the euro. As a consequence, as of today, we no longer expect carried interest recognition in 2025, but its medium-term potential remains unchanged. For the same reason, we expect investment income for the year to be lower than previously anticipated. We have partially mitigated this by more long-term contracted revenues and cost discipline. All in, our expected landing for the year does not move much, and our P&L remains strong.
The other elements of our guidance are unchanged, and we reiterate our expectations of a step change in earnings in 2027 with the significant expected contributions from Mid Cap Fund II and Flagship Fund VI. Back to Alain now for some concluding remarks.
Thank you, Mélanie. We focused today on our solid first half 2025 results, but I hope you also take away from this call our strong confidence in Antin's continued growth journey. As a company, we are focused not just on the short term, but on building Antin for the medium and long term. We are a differentiated and growing platform, one of the largest managers in Europe and worldwide in infrastructure, an asset class that has proven its resilience and growth potential across cycles. Our objective since the inception of the firm has remained unchanged: deliver top investment returns while at the same time building a better business that creates value for all our stakeholders, whether fund investors, employees, or shareholders. Thank you very much for your attention, and I would like to open up to questions.
This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press *N1 on their touch-tone telephone. To remove yourself from the question queue, please press *N2. Please pick up the receiver when asking questions. Anyone who has a question may press *N1 at this time. The first question is from Sarat Kumar, Deutsche Bank.
I hope you're able to hear me well. Thank you for taking my questions. I have three questions, please. Firstly, I wanted to understand a bit more about your views on the deal activity outlook. While it is perfectly understandable on the lack of exits, I was a bit surprised in the slower pace of the deployment. We have seen a lot of your competitors talk about 2025 having the potential for being a very good vintage year. I gently wanted to have your thoughts as to why the slower pace of deployment. Related to exits, you spoke about recovery in exit activity over the next 18 to 24 months. In this context, do you think that carry reverse expectations from consensus for 2026 have some downsides? That is the first question. The second one is on fundraising.
Again, given the slower pace of deployment in your Flagship Fund, do you think it is more reasonable to expect as a base case Flagship Fund VI coming on board only in 2027? Also, do you want to make any comments at this point in time on the potential size that we can expect? The final question is on the use of cash on your balance sheet. It's quite substantial at nearly 60% of your asset size. With interest rates getting lower, at least in the near term, it would be fair to say that it's not being put to optimum use. How should we think about the utilization? Any updates on M&A opportunities or the potential launch of new strategies would be appreciated. Thank you.
Okay. Thank you very much, Sarat. First of all, the first question you asked about carried interest recognition, what we can expect from 2025 to 2026, and why we did not take in for the first half any recognition. I think it would be useful if Mélanie could explain the mechanism because it is not as if the pie is not there. The pie is there, but we are bound by IFRS rules, and so it is important to understand what it is.
Exactly. Exactly. The pie is there. I totally concur to that. In terms of carried interest recognition, the most imminent carried interest lies with Fund 3B. Of course, Fund 3, but Fund 3B, where we have 20% of the carried interest there. Fund 3B is a concentrated fund, which is a nonexpensive Fund 3, four assets in two days. When you compute the accounting carry, you have to determine a discounted liquidated value of your portfolio. This discounted liquidated value of the portfolio, seen from today, has been impacted over the first semester by the U.S. depreciation. We have one asset in U.S. dollar, one in GBP in this four-asset fund. The sensitivity is very high when you compute the liquidity value and discount it. You discount it based on your perception of when your assets will be sold. There is a bit of uncertainty there.
We are very close to the other return. This means that very rapidly, if valuation is a bit down, you get down. The first asset that will be sold from this Fund 3B will allow us, you know, having a better certainty and visibility on when we can recognize carried interest. That's the reason why for 2025, we decided that we would take a conservative position, not expecting recognizing carries in 2025, but potentially recognizing it in the short to medium term thereafter. Will there be carried interest in 2026? It's possible. We cannot confirm it during this call. It's too soon to say.
You have to understand that we are very, very close to this hurdle rate to activate the recognition of carried interest. A small, and actually a small FX impact, and actually the impact has been very significant. It's minus 13%, as you know well. The dollar has gone down to the euro by 13%. It gives you an idea of the impact since the beginning of the year. This is the kind of impact which is sufficient, in fact, to not recognize any kind of carried interest. The reality is, again, the pie is there. It's a matter of time to recognize it.
I think that was a question on the deal activity, correct?
Yeah, deal activity. Deal activity, I would say that we measure that actually internally in a very simple manner by the number of investment committees that we convene and we attend. I must say, it is an extremely busy time, way more busy than a year ago. Typically, things are going back to normal. Financing, as you know well, also is available. It's difficult, of course, it's expensive, but they are available. We indicated to you some landmark financing, particularly one being CityFibre, which is a big, it's £2.3 billion, so it's €2.8 billion financing. It's a very large financing, and it gives an idea of the depth, I would say, of the market for high-quality assets and projects. Yes, deal activity is picking up again. With that being said, we are very, very careful, especially when we think of selling assets.
We don't want to sell to people who are just the bottom fishers and look to try to expect some form of a quick fire sale. We are not in this mood at all. Our brief is to maximize revenues for our investors. Therefore, we take a very prudent route whenever we look at some disposal. For acquiring new assets, yes, and you will see probably in the next few weeks, we'll make some announcements in the mid-cap strategy. There are several situations which are extremely advanced. When I say extremely, it means we talk about things which are under exclusivity, so very advanced. You will see that activity is picking up. On fundraising, I think the one thing I would like to mention is very simple. The DPI is the major driver to limiting or allowing LPs to reinvest or invest more cash in some new strategies.
The question really is, how confident are investors that money will be returned to them shortly so that they can commit new additional capital to one manager or a new strategy? This is really what it comes down to. We, of course, cannot control what's going in the market. The market is what it is. The DPI is today low in the market, which limits the ability of LPs to put more capital, except in some particular cases like sovereign wealth funds who basically don't have really to incur, I would say, to pay pensions, for instance, but who receive cash that they have to invest. More or less, the DPI is a major factor limiting the ability of LPs in the market of funding new strategies or new funds. We enjoy a relationship with a very large number of LPs and trustful relationships.
What we can do ourselves is to return capital. Of course, we've done that, and we will continue. I can tell you that the more we return, the easier the fundraising will be. We have that in our mind. I don't want you to perceive that it's a particularly risky environment. It is not. If we do a good job, good investments, return capital, then we will get new strategies funded or new funds funded.
Timing-wise, maybe just to tell you, the next one to go to the market will be mid-cap. Mid Cap Fund II will be launched at some stage, and there will be some impact in 2026 of Mid Cap Fund II. As per Flagship Fund VI, as you were referring to, Sharat, it's too soon to say. We need to focus on deploying capital first, and we'll be able to come back to you in a few months to give you a more precise view on the timing to market for Flagship Fund VI.
One thing which is very important is that you say, I would say the sort of a mainstream view would be that, you know, if you have a big fund to raise, it's more difficult. Yes and no. Yes and no. Because, in fact, when you start deploying, which is our case, funds of €10.2 billion for Flagship Fund V, which is $12 billion, by the way, so it's very large. In fact, you enter into a category of LPs who can offer some very significant co-investments to some very large, very large LPs. This has a huge value for those LPs. The ability, if you ask a major sovereign wealth fund to deploy, to invest, to make a co-investment of €100 million, it would be of no interest to him.
If you can propose to him to make €0.5 billion or €1 billion or €1.5 billion co-investment, it has a huge value. I would like to mitigate the perceived risk of raising a big, depending on raising big funds, by this factor, which is very, very important. In fact, we have a group of LPs for a Flagship Fund, which are very, very large investors globally. Those guys will basically continue, I think, to back us because they get, I would say, extra benefits like access to large co-investments. Use of cash, balance sheet. We certainly have kept some more cash at the bank. I would tend to think that, you know, in today's environment, it's pretty good to have cash at the bank than debt. I'm sorry to be very conservative, but I truly believe that.
I think we certainly have got ambitions to deploy this cash, these revenues, or funding organic initiatives. We evidently have to take into account when it comes to, say, launching new initiatives, the market status. Is there a market appetite for a new strategy that we will back in today's, exactly today's environment? I think we've done a lot of preparation work. We're ready, actually, to launch several such, I would say, organic initiatives. Clearly, we have to wait for the right window of opportunity. By the way, it comes back to one point I would like to make because we manage this company, you know, in the interest of investors and shareholders. Clearly, our first brief, and this is why we exist, is to make sure that, you know, we have proper resources to do the best possible job and create the best investments for our LPs.
This is why we come to the office every morning in the first place. We always tend to, we have a question to say, do we want to maximize income by postponing or reusing investments and recruitments, or do we want to invest in the future by preparing for the next step? What we do is clearly the latter. We continue in our P&L. What you can see in our open space, you see some amount of people, of people we recruited to prepare for the next step. This is very, very important for us to do this and not just try to maximize by $1 million or $2 million profits for the first half or the second half. I would like to reiterate this.
Thank you, Gideon.
Thanks, Sharat.
Next question is from Nicholas Herman, CET.
Yes. Good morning. Thanks for taking the presentation and for taking my questions. Three questions from me as well, please. The first question is on hiring. There was a notable increase in investment staff in the first six months of the year. Could you please clarify which strategy that hiring relates to? The second question is on your guidance. I note your comments that you don't expect to recognize any carry in 2025. Given that you're now guiding to around €160 million of EBITDA, does that imply around €140 million of costs for this year? If that's correct, that would imply about 6% cost growth this year. Does that sound right to you? The final question, just to clarify on the FX headwinds, I think you said that the adjustment to your guidance is driven by FX.
I understand, i.e., that FX has had an impact on fund valuations, and I understand that fully. I guess, is my interpretation from that that you seem to be implying that otherwise you would be achieving a hurdle rate without that FX impact, which I'm a little bit surprised by, just because I would have thought that you also need to have exits in order to hit that for the accounting portfolio value to hit your hurdle rate. So far, there have been no exits this year, and with only three and a half months of the year left, it doesn't seem like there's going to be time to achieve the exits that would be needed to hit your hurdle rate anyway. Just to clarify that, please. Thank you.
Yeah. Good. I'll start with the hiring and the increasing effects. Indeed, and it's a nice segue to the comments Alain just made on fueling the engine to prepare for the future growth. We have hired more people. You have always joiners, leavers, but we have hired people and promoted people at Partners' level, Senior Partners' level. One key hire is a Senior Partner that has joined the New York office in May this year, Ryan Shockley. Ryan is really focusing his time on the flagship strategy. He's also focusing on NextGen. For the moment and for the time being, he's working, and all the people that we hire so far are working on the existing strategies. That's your first question.
In terms of guidance, we assume that the OpEx will be stable up to the end of the year, which means that we expect an average of 10% increase in terms of OpEx. Don't expect that we'll get above that rate. Maybe a last point I'd like to answer on the FX headwinds and the fact that we could not necessarily recognize carried interest in 2025. Just back to the way we account for carried interest on the P&L. We follow an IFRS norm that is a matter of the timing to exit of assets and the valuation of those assets. You could potentially recognize some carried interest without having to sell an asset. It depends upon the valuation. If there's a hit, it reduces your chances to recognize carried interest.
If you have assets that are far from being in a selling mode, then you are far from recognizing carried interest as well. The two parameters have to play and go the right direction to be able to extract a discounted liquidated value that is above the other return. That's the reason why, since from today, and as of today, we expect not recognizing carried interest. We'll see. Maybe we will be, but we'd like to be prudent on that. We feel it's better not to overpromise on carried interest in 2025.
Nicholas, to be clear, when you see some of our peers, for instance, who have very diversified, who've been there for many, many years, you see some carried interest in their books. It is not related to exits. It's just a way to value. It's related to the valuation of a portfolio according to certain norms. It is not related to, you know, cash on cash.
It's not cash on cash.
Sure.
You have that in mind. That's good.
Just a quick follow-up. Thank you for that. Just one quick follow-up then. You guided to around 10% OpEx growth for this year. I guess that seems to be, because if I say that's slightly below your BAU, should we be assuming then a cost catch-up in 2026?
Yeah, expectation, it's roughly 10% on the CapEx. I think that the number you were referring to when you started asking your question is kind of spot on if I heard it well. Sorry.
I think you just talked about 10% cost inflation for this year. Should we therefore expect a cost catch-up in 2026, please?
Yeah, I can comment on that.
Again, Nicholas, we don't talk about, it's not a cost inflation. It is very clear.
Sorry, I missed a cost growth. Excuse me. Apologies.
We don't get 10% increase everywhere to everybody.
Indeed.
It's related to hires. These hires basically reflect the needs that we foresee for our activity. They are totally under our control. It's very hard to assess what will be the number for 2025.
It's too soon. You'll be informed, but it's too soon from today. We are really focusing on the end of this year and not projecting on 2026.
I would say we have made some, in 2025, we made some very big reinforcements, especially at senior levels like Ryan Shockley, for instance, in New York, which is a very important reinforcement and others, by the way. I think the bulk is behind us. Evidently, if we believe we need to reinforce, we will do it.
Understood. Thank you very much.
Next question is from Arnold Dublat, BNP.
Yeah. Good morning. Just three questions then. Sorry. I'd like to follow up on the hirings in 2026. You said the bulk of hirings is behind you. Have I heard that right? What sort of headcount growth could we expect for 2026 if I can try again? My second question, please, is on value creation. Thanks for the useful slide there on value creation. Ex aesthetics, you seem to be running a high single-digit value creation on a yearly basis. That's been the case for some time. You also give EBITDA growth in your portfolio companies. It's been running at north of 20% or close to 20% for a number of years. I'm just wondering if you could comment on the other moving parts because, I mean, clearly, over time, perhaps you should expect maybe a bit more of an alignment between value creation and EBITDA growth.
Is it the case that valuation multiples are coming down, or is it a dilution from the CapEx as you're doing, or other moving parts? If you could give a bit more color, that'd be useful. Finally, could I ask about Origis? There's been some announced changes on tax credits in the U.S. I was wondering what impact that would, what changes there, I mean, obviously, with the U.S. government maybe being less generous on tax credits, if there's any impact on Origis. Thank you.
Thank you, Arnold. On the hiring plan for 2026, we'll continue recruiting in people. We see that there are some new skill sets that we want to reinforce. You should expect that the PEX base will continue to increase, but in a contained manner. As Alain said, the bulk is behind. We want now to be really focused when hiring people and have really complementary and high contributors to the team. I can't give you any numbers for the time being. Of course, you get to know more and get more information on that. Clearly, we'll continue hiring in a contained and disciplined manner.
On value creation, I think the activity we try to display to you in the first half, which I think is very consistent with what we've been doing since the inception of our time, is that value creation is related to investing in companies which are or which we will transform into platforms for growth. That's really our mantra, our DNA. We don't invest in a company, make a couple of minor investments, make a small recap, and then sell it three years later. We don't do that at all. Typically, we would take a company and consider it as a platform for growth. One very good example, actually, of that strategy is CityFibre, where, as you know, we team up with Goldman Sachs and Mubadala. We have grown this company enormously over the last seven years. This is really the kind of things we do.
Value creation is related to, of course, commercial activity, to creating platforms, and also to CapEx. Apparently, it is very difficult, Arnold, to give you any benchmark because CapEx associated to growing platforms varies enormously. It can be M&A. We can do bolt-on M&A. In fact, it's not CapEx, it's M&A. You can, on the contrary, do a very large CapEx or do little CapEx. It varies enormously, and I'm very sorry to skip it. We would have to be specific deal by deal to give you much more clarity on that. The concept is we invest in platforms and we grow the platform. That's how we make things. The idea behind that is that when we sell the assets, people will buy an established platform and pay value for that. That's really our way.
Concerning Origis, I think Origis has gone through, I would say, a major step in its development. It's a great platform. It's a big platform, by the way. Now, you have to understand that most of the, I would say, most of the Origis on its field have in the U.S. are with states, not with federal government. So it's with states. Therefore, you have some states which are favorable to some, I would say, development, including, I would say, some red states, like maybe Florida, things like that, who are favorable to renewable. I think that what you hear, a lot of noise on offshore wind in particular, for which President Trump has got some very strong dislike. I don't know why, but he has that. Now, offshore wind clearly is within the realm of federal states. This is why there is some backlashing at that.
We have no exposure to offshore wind then. For the rest, to be frank, it's a matter of development state by state.
Yes. As you know, Origis is using investment tax credits to finance and build solar and storage energy. The one big bill of Trump on July 3 has announced that tax credit will be absent from all projects from June 1, 2028 onwards. Everything that Origis is doing currently is not impacted by this bill. The Origis team has always developed an investment case that is not based on subsidies and tax credits. You should be reassured because Origis will not be negatively impacted by this new bill.
I think one of the reasons for such a graceful attitude from President Trump relates to the fact that there are enormous needs to develop data centers for AI-related activities and that it's the cheapest and quickest way to provide energy for the sector. You know, people who are working on AI cannot wait. Typically, this type of data centers consume enormous amounts of energy, and this is the quickest available, I would say, source of energy possible. I think this is why we have this gap. Clearly, contrary to the perception, anti-rival energy, etc., there is a sort of a grace period which will be favorable to our business.
Could I follow up there, please? One on value creation. Can you give us the typical range of uplift on exits that you've experienced in the past? There haven't been any material exits for a while. I'm just wondering if you could update us on that. The second on Origis, you mentioned energy for data centers. I completely get that. Could you give us an idea of what the proportion of the energy generated by Origis would go to data centers? Thank you.
We go to what, sorry?
We go to the data center.
Sorry, the proportion of energy. I would say this one, we cannot, the second question, we cannot answer. We don't know. It's a fair answer because when you have some installed base, I mean, it's there, and therefore, whoever wants to use it can use it. We don't really control that. We're connected to a grid, and that's how it goes. Concerning the first one, the uplift of valuation, we have some metrics. Again, metrics can vary, but just to tell you an idea, if we compare the NAV, say, one year before exits, to the price we get, historically, and I would like to be pushed on that, historically, we've got, it's a multiple, several times 10% uplift, which is very sizable. We have to be very careful about that. We don't want to overpromise. We have to be careful because the market can be good at some time.
It can be less good. We certainly cannot commit to a figure. Clearly, we are very prudent in our evaluations, and we are known for being very prudent, which is good in my view. Maybe it won't help you to push up your target price because we don't recognize enough carried interest value, but we are prudent by nature. Yes, uplifts, we expect to have a very significant uplift, but we keep it until the sale is done. We'll communicate, actually, to you about this uplift deal by deal.
Next question is from Anjaliqi Bharakthari, JP Morgan.
Good morning, and thank you for taking my questions. Just two for me, please. On the Mid Cap Fund II fundraising, I think last time you indicated that you needed another two to three deals for Mid Cap Fund I to activate Mid Cap Fund II. Realistically, given we haven't had any announcements so far this year, and it takes some time between announcement and close, are we looking into a Mid Cap Fund II activation in terms of management fees towards the second half and perhaps late 2026? Have you already started marketing Mid Cap Fund II to investors, or is that something that is going to happen a little bit later? Second question, just to follow up on the potential launch of the new strategy, which I think we have touched upon in the past. You mentioned that you obviously need, you are ready to go.
You have done the work, but obviously, it needs to be the right market window. What conditions do we need to see to have the conviction to launch this potential new strategy for you? What would need to be in place for that to happen? Thank you.
Okay. Thank you, Anjaliqi. On Mid Cap Fund II, I think we are in a situation where Mid Cap Fund I is very, very advanced. As I said, we are in a couple of very, very advanced situations which will take us very closely to our threshold or exceed it according to the price we pay. We are very close to that. Have we started launching? Officially, no, of course, but you know we are constantly in the market preparing for new rides. To be quite frank, we are ready to go. If we want, we need to go, and we have cleared all our, I'd say, hurdles to go. Preparation is done. The LP base, we know very well, of course, and we expect, like it's a case of always when we need new funds, we expect most of the existing LPs to come back.
Hopefully, you know, some others have expressed some interest to join a mid-cap strategy. We are not really worried. It's a matter of when. I'm sorry to not be more specific, but.
We can say maybe that pre-marketing would be starting imminently once we announce potentially one or two deals. Pre-marketing is almost there, and then activating effectively will be 2026. Is it in 1H or 2H? We would be disappointed if it would be in 2H, but at the same time, we can't be affirmative on that as well.
Yeah. Clearly, we're ready. I think, you know, if we have the ambition of raising a bigger fund, a Mid Cap Fund II larger than Mid Cap Fund I, evidently, we'll need to get new money, as we say in our verbiage. This means that the pre-marketing actually focuses precisely on new money, not existing money, because people know us, you know. Usually, people who invest in mid-cap strategies also invest in other strategies for 10 or 15 years. It's the quickest way, in a way, to raise. If we are ambitious to raise a bigger Mid Cap Fund II, this is where we need pre-marketing. Concerning the launch of new strategies, what is required? I would think, as you understood, that we've been doing lots of preparatory work. What is required is essentially, you know, market appetite, market appetite, interest for a strategy.
We're testing the water, and we try to see whether there is enough interest to raise a significant new strategy. When we launched NextGen, we targeted €1 billion. Clearly, a new strategy, we would not target smaller because it would make no difference, you know, for us. This is why we have to wait for the proper time to go to market on a new strategy. I'm sorry not to be more specific, but this is exactly the way we reflect, by the way.
We received a question in the chat on the webcast, and the question comes from Arnaud Pallier from TIC. He's asking, when do you expect to launch fundraising for Flagship Fund VI and Mid Cap Fund II and NextGen Fund II? We just talked about Mid Cap Fund II, but perhaps a word on NextGen Fund II.
On NextGen Fund II, and then you say just, I'm sorry, you say just the Flagship, Flagship Fund VI, yes. I mean, basically, it's all related to the deployment of capital. We have just done, I think, what is an amazing investment in this company called MataOne, which is really a very innovative type of, I would say, investment because it's all about, you know, mobilities for public transportation. They have this amazing SaaS and service, which is very capital-light for municipalities or local authorities. That's a big thing, you know, compared to other things. It's an extremely appealing investment thesis when some municipalities want to change their tram or bus networks because it requires extremely little CapEx from them. It is a very, very interesting type of thing. With that, I think we have reached about 65% of capital deployed for NextGen Fund I.
As you know, our threshold is to reach 75% of capital before being allowed by those to launch a new fund. You see, we're not very far from that, maybe one or two deals away. Before coming back to market, this one, we want to make sure because it's a new type of strategy on nascent, I would say, activities. It can be recharging networks for electric vehicles. It can be recycling units for used tires to extract carbon black with the JV we have with Michelin. We want to be sure before coming back to market, even if we raise 75%, that we have a compelling case for LPs that they are happy with what we are doing and that the value we have created is in line with their expectation.
It's not just like we reach 75% and one euro and we go to market for the second fund. We have to first make sure that our LPs are happy and we are happy at the beginning of it and they are happy for another and larger fund, NextGen Fund II. Concerning Flagship Fund VI, we are looking at many projects. I would say that probably we are one or two deals away, maybe two deals away, two, three deals away.
Yeah, a bit more, but we don't have the visibility enough today to.
It's premature. We're working a lot on that, but frankly, it's too early to tell.
It's likely that Flagship Fund VI will come before NextGen Fund II. Mid Cap Fund II first.
Cap first, yeah.
Very imminent. Flagship Fund VI, as soon as we have more visibility and we're working on deploying capital, and NextGen Fund II indeed maturing with the value creation on the portfolio companies that we hold, continuing in deploying capital, and so coming at a third stage in terms of timing.
Concerning NextGen Fund 1 and NGI, we are not a tech firm. We're not a VC, right? We invest in products with companies with proven technology. We don't take any technological bets. We essentially try to invest at a pretty advanced stage, in companies which have not met completely the infrastructure, I would say, characteristic, and hopefully, they will when we sell the asset. That's really our mantra. That's why we are extremely attentive to be very selective on picking the right investments and growing those companies to create value. We take our time. Clearly, as Mélanie said, we are not far from launching the second fund.
We also received a question from Laura Liuxilo from Jefferies. The question is, should we expect to see a further flipping AUM uplift driven by more capital calls on Flagship Funds 3 and 4 in the second half of 2025? Thank you, Laura. That's a good, interesting question. You've seen that we had injected further capital in Fund 3 and Fund 4 and in 1H. 2H will be more limited because those portfolio companies have matured. We come to a stage of high maturity, preparing, nearing exits for some of them. Indeed, usually, capital calls at that stage of the cycle are lower by definition. You should expect very limited, very limited, if not no capital injection. Maybe don't project much on that. Another question from the webcast is about share buyback. The question is, are we considering a share buyback to reflect the company's value?
We've partly answered the questions when we were speaking about the liquidity, about the fact that there would be further share placement in the market to gradually expand the free float. Share buyback is not the priority for us. We really focus on allowing some market and public market investors to beef up their position or enter into the capital of the firm. That's the priority. Improving liquidity, growing the free float, and this will be enabled by the future share placements once lockups that bond the current equity partners will have expired. These were all the questions from the webcast. Operator, do we have other questions from the call?
We have no other questions registered at this time.
That terminates our call. Thank you very much for your attention, all of us. Looking forward to seeing you next time.
Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.