Welcome to the Eurazeo 2026 nine months trading update. Today's conference will be hosted by Christophe Bavière, Chief Executive Officer. For the first part of the conference, the participants will be on listen-only mode. During the questions and answers session, you may ask in two ways: by submitting a written question in the box below the player or by joining the conference call and dial pound key five on your telephone keypad to enter the queue. Now, I will hand the conference over to the speaker. Please go ahead.
Good morning, and thank you for joining this call. I am pleased to welcome you to Eurazeo's trading update for the first nine months of 2026. But before we get into this update, let me address the recent change in Eurazeo's governance. Four years ago, the Supervisory Board gave us, William and I, the task to transform Eurazeo into a full-fledged asset manager. That mission has been accomplished. Together, we have built a leading European mid-market asset manager with over EUR 40 billion of AUM, out of which close to 80% comes from third-party clients, and out of which more than 70% of fundraising comes now from international LPs. The Supervisory Board has now decided to move to a single leadership with the mission to accelerate. William has decided not to continue beyond the end of this mandate. I want to thank him warmly for his contribution.
Together, we have laid the foundations, and now my mandate is clear. It is to scale our asset management franchises, to complete the shift to an asset-light business model, and to keep returning significant capital to shareholders. I will let Pierre Bernardin, Head of Investor Relations, and then Laurence Branthomme, CFO, detail our nine months figures. But let me cover the highlights. In a nutshell, in a market that remains challenging, the first nine months confirm the momentum of our asset management platform and confirm the strength of our balance sheet. First, we continue to enjoy strong growth in asset management, gaining market shares. We already secured more than EUR 2.8 billion in fundraising, and we have a strong pipeline which should enable Eurazeo to collect more than EUR 4.5 billion for the full year 2026. Third-party AUM are up 12%, taking total AUM over EUR 40 billion.
Third-party private markets management fees are up 18%, and performance fees are up 24%. This is a testament of the quality of Eurazeo's franchises and of our expanding client coverage. Second, Eurazeo's balance sheet performance remains robust. We realized EUR 0.9 billion of exits, including the very successful sale of Aroma-Zone, which corresponds to about 13% of last year portfolio. Given the sale processes underway, we should reach around 15% for the full year 2026 as expected. And our portfolio current trading remains healthy, as Eurazeo portfolio companies continue to grow, with revenues up 6% in buyout and up 18% in growth. This shows, in a volatile environment, the strength of Eurazeo's portfolio companies. I will now hand over to Pierre, who will comment on our asset management figures.
Thank you, Christophe. Good morning, everyone. Over the first nine months of the year, we raised EUR 2.8 billion from our clients. As a reminder, in private debt, we raised EUR 1.6 billion year to date, with notably the last closing of EPD VII in direct lending at EUR 3.9 billion. This was well above its EUR 3 billion target. In private equity, we raised EUR 0.9 billion, with the final close of ESF V at EUR 2.3 billion. We had the first close of Eurazeo PME V above EUR 1 billion. That is already above the last closing of the previous fund. And we have had a good start for Future Industries III in venture. Lastly, in infrastructure, our new sustainable vintage is starting to fundraise, and we have good traction. Overall, in a tough fundraising market, we continue to gain market share and new clients.
Year to date, more than three-quarters of our institutional inflows have come from international LPs. In wealth solutions, EPVE 3, our flagship fund, continues to record positive net inflows, with EUR 3.8 billion of AUM as of now, and low redemptions. Given the current commitments and pipeline, we anticipate that fundraising for the full year 2026 should be above EUR 4.5 billion. Turning on to AUM, the good momentum in fundraising translates in strong growth. Total AUM are up 8% to EUR 40.4 billion, with third-party AUM up 12%. Fee-paying AUM are up 6%, with third-party fee-paying AUM up 13%. In both cases, balance sheet AUM and fee-paying AUM are down, as planned, as we are voluntarily limiting our commitments in our own funds. Balance sheet AUM now represent 22% of total AUM versus 31% at the end of 2023, and we are on track to go below 20%.
Lastly, on my side, turning to revenue, management fees reached EUR 322 million, up 6% overall. Third-party fees are up 14% at EUR 247 million, of which third-party private markets fees, which are up 18%, driven by fee-paying AUM growth. Excluding catch-up fees, they are up 14%. The fee rate is roughly stable. iM Global Partner revenue is up 3%, thanks to record fundraising in its own funds of managed ETF, and this is partly offset by a mixed performance of some of its partners. Balance sheet fees are down 13%, as expected, following exits and lower commitments in our own funds. Of note, performance fees reached EUR 16 million, of which EUR 10 million from third parties, which is up 24%. Total asset management fees are EUR 338 million, up 8%, and up 15% from third party. I now hand over to Laurence for comments on asset rotation.
Thank you, Pierre. Asset rotation remained dynamic over the first nine months, despite a rather downbeat market. Let me walk you through the key figures. We deployed EUR 3.5 billion in the period, of which EUR 1.8 billion in private equity and EUR 1.6 billion in private debt. We deployed capital on a pan-European scale with, for example, the acquisition of Nextron in Germany, T1A in Denmark, or MIYA Water in Spain. We have EUR 6.3 billion of dry powder to continue to invest selectively in top European assets. In the meantime, we realized EUR 2.3 billion of exits, up 34%, driven by private equity, thanks in particular to the successful exit of Aroma-Zone. As you know, in a market where exits are slow, this ability to return liquidity to LPs is a key differentiating factor for Eurazeo.
Our 2026 exits show again our ability to sell our assets in good financial terms. In H1 2026, we closed Fermax and Ex Nihilo with cash-on-cash multiples of 2.6x and 2.7x respectively, both well above their latest valuation. Since then, Memo Therapeutics was sold to Ipsen for EUR 200 million, with milestones that could bring the multiple up to 5x. We announced the sale of Aroma-Zone, materializing a cash-on-cash multiple above 3x overall, bringing in about EUR 600 million of gross proceeds to the balance sheet. Part of it will be reinvested through our EC V and ECAF. Closing is expected in Q4. Since 2012, our realizations reach an average gross multiple of around 2x. This is the best proof of the quality of our assets. Balance sheet rotation is key to our asset-light model and to shareholder returns.
Announced and realized disposals reach EUR 900 million, or 13% of last year's portfolio valuation. Other processes are launched, and we expect to reach around 15% of last year's NAV in 2026. I now hand over to Christophe for comments on our portfolio and for the conclusion.
Thank you, Laurence. Before concluding the presentation and opening the Q&A session, a word on our balance sheet portfolio. It's important. Eurazeo's portfolio companies continue to enjoy a robust momentum. In buyout, revenues are up 6% on average versus 4% at end of June, and growth is across the board. In growth equities, revenues are up 18%. Our biggest investment, like Doctolib or Back Market, are outperforming. Our latest investments are done through EGF IV, Eurazeo Growth number four, which was the latest vintage raised in this field. Our latest investments are up around 43% year to date. In real assets, hospitality revenues are stable despite a tough market, and infrastructure revenues are growing strongly. These figures. These figures highlight the strengths of Eurazeo's portfolio companies. Let me conclude now with three key messages. We are scaling a leading European asset manager, gaining market shares.
Our asset manager is delivering steady earning growth through third-party revenue growth and through cost discipline. We are completing the shift to an asset-light business model, and we are returning significant capital to shareholders. Thank you. We can now open the Q&A session.
Ladies and gentlemen, if you wish to ask a question, you may ask in two ways: by submitting a written question in the box below the player or by joining the conference call and dial # key five on your telephone keypad to enter the queue. The next question comes from Nicolas Vaysselier from BNP Paribas. Please go ahead.
Hi, good morning. Thank you for taking my question. I will have three questions, please. The first one, I would like to come back on the changes at the head of Eurazeo. In your introduction remark, you have alluded that William did not want to renew his term. But maybe I guess I would like a bit more input on what has been the motivations from the board to push for that structural change, and what are they seeking to achieve in doing so? My second question would be on the balance sheet and the investment performance. I know that in Q3, it is not the focus as the revaluations, but how should we think about H2 returns? You had neutral value creation in H1, and you are guiding for improving returns in H2. Has it changed since?
Lastly, if you could give us more color on what is in the pipeline for exits, notably on the balance sheet. Could we expect things to accelerate in H1 next year, as H2, barring the Aroma-Zone situation, has been pretty quiet so far? Thank you.
Thank you. Thank you, Nicolas. Maybe I will answer the first question, and then I will let Laurence answer the second one. I will be back for the third one. Well, first, regarding the change of governance, again, four years ago, the Supervisory Board gave the Executive Board a very clear mission. It was to establish Eurazeo as a full-fledged asset manager. That mission has now been accomplished, and our foundations are laid. The current mandate comes to an end next February. So next February, Eurazeo enters a new stage focused on acceleration. The Supervisory Board appointed a single CEO to decide and act faster. William has decided that he will not continue his mission beyond the end of this mandate. So I warmly thank him for his significant and instrumental contribution to Eurazeo's development and success. Laurence?
Okay, regarding the value creation, you mentioned that we do not revalue our assets on a quarterly basis. Christophe mentioned also that the trading of our portfolio company is positive, while the market remains volatile. Our valuation committee has not started yet, but there is no reason to change our indication at this stage.
I will take the last question on capital rotation. On capital rotation, our ambition is intact. The strategy is to continue to scale the asset manager, and it is to execute our asset rotation plan and to return capital to shareholders. We are in the guidance in terms of capital rotation, maybe in the lower range, but we are in the guidance. Let us admit that Eurazeo realizations have been better than that of the market overall. But as you know, the market has not yet normalized. It has not normalized as fast as expected. Again, in 2026, we nevertheless have been able to realize a significant deal with the sale of Aroma-Zone, and as Laurence was explaining, in good financial conditions. For 2027, we are confident. First, because we have a good pipeline of realization. Our teams are working on a deep and diversified pipeline of realization across strategies.
Sorry, I cannot comment on single names because it is too confidential. But this is for the first component. For the second component, we could also use the secondary market as we did in 2025. In 2025, we realized two secondary transactions for a total of EUR 400 million. Again, what is important to have in mind is that we have been able, at Eurazeo, in the last three years, to increase the ordinary dividend by 10% per year and to buy back 15% of our shares while keeping a low gearing. We will continue to increase our dividend and to execute our buyback program.
Okay, thank you very much.
The next question comes from Oliver Carruthers from Goldman Sachs. Please go ahead.
Hi there. Oliver Carruthers from Goldman Sachs. Congratulations, Christophe, on your expanded responsibilities. I have two questions, please.
Oliver, we cannot hear you very well. Can you speak a bit louder, please?
Sure. You hear me okay now?
Yes, that is better. Thank you.
Okay, great. I have got two questions, please. The first on fundraising, the second question on one of your divestments. On the fundraising side, we have heard from some of your peers there is a bit of a pro-Europe view from some of the large global allocators out there at the moment. I noticed that your share of fundraising from international markets stepped up again, I think 75%, 76% for the first nine months. I wonder if you could just give a perspective on, as you think about 2027 and beyond, what you are seeing and what is resonating with the global allocator community, particularly in the context of you being a pure play European mid-market alternative asset manager. That is the first question.
The second question, asking this question given its size on your balance sheet and given that you referenced it a number of times in the presentation, but the exit, the divestment of Aroma-Zone, I think you have signed it, but this has not yet completed. I saw a headline a few days ago that seemed to imply the syndication of the acquisition financing had not gone through. I just wondered, is there any risk of this transaction not closing? Is that something that we should be thinking about as a risk here, or are you kind of very confident on this closing? I think you talk about this in Q4 2026. Thank you.
Thank you, Oliver. I think I can take the two questions. Regarding fundraising, the market is tough for, I would say, for everybody and with overall slow fundraising across strategies and geographies. Nevertheless, as you mentioned, thanks to Eurazeo's European mid-market positioning, thanks, of course, of the quality of our franchising and of expanding international coverage, we can gain market share. I think that today, yes, a large number of international LPs are realizing that Europe may be still a patchwork, still a fragmented market, but Europe is a land of mid-market companies. It is a land of what we call the hidden champions, and it is also an investment universe where you can create value without using too much leverage. You can create value by buy-and-build strategies. Again, it is a patchwork of mid-market companies, so you can transform a local leader into a European leader by buying builds.
You can help your portfolio companies to accelerate, and you know that at Eurazeo, we have offices in China. These offices in China are only there to help Eurazeo's portfolio company to sell their products in China. You can help also your portfolio companies to better understand AI, which is a good way to improve the profitability of your portfolio company. So again, yes, you are right to mention that it is probably a large number of international LPs are still underweight Europe and underweight a strong component of Europe, which is mid-market. Regarding the size of Aroma-Zone, it is not fully signed, but it is well underway, and I am happy to confirm to you that the financing is 100% secured.
On top of that, you remember that there is a buyer, but there are also several co-investors that have already given us a positive answer to co-invest alongside us in the Aroma-Zone transaction. Again, the financing is now 100% secured.
Got it. That is very helpful color. Thank you.
The next question comes from Alexandre Gérard from CIC-CIB. Please go ahead.
Good morning, Christophe, Pierre, and Laurence, and thank you for taking my questions. I have three questions. The first one is, Christophe, regarding your introductory words when you say that your new mandate was to accelerate the change at Eurazeo. What do you mean precisely by accelerating the change? Are there things you are still unhappy about? And globally speaking, can we expect to be updated earlier than expected maybe on Eurazeo's new midterm ambitions, or shall we wait until the end of 2027? That is my first question. The second question is regarding the asset-light model. Can you, or would it be possible to quantify what you mean by asset-light model? Sheet is still worth EUR 7 billion. Is there an optimum size for that balance sheet according to you? And my third question is regarding the indebtedness of the group. I am asking the same question.
A few years ago, Eurazeo used to apply a very strict zero financial debt rule, and today your net financial debt stands at EUR 1.7 billion, and it has increased by EUR 0.7 billion year to date. Yes, you are returning money to shareholders, but also we have the feeling that you are drawing on your banking facilities to return cash to shareholders, which might be seen as a kind of zero-sum game from a shareholder value point of view. Do you have a precise view on what should be the leverage of the company going forward? Thank you.
Thank you. Well, regarding what we mean by and thank you, Alexandre, for these questions. First of all, again, I mentioned that my mandate is to continue the strategy, but to accelerate the development of an asset manager, to accelerate realization, and return capital to shareholders. But we can go faster, and there are plenty of ways. We can focus on our strengths and scale our most promising franchises, as we have done with Elevate in buyout, as we have done with direct lending in private debt, or as we are currently doing in real assets with sustainable infrastructure, because we are preparing the second vintage of what was initially a first-time fund. There is also another way, which is to find more synergies and more efficiency across our European platform.
We are a diversified platform, but there are plenty of synergies that we can build better between our different activities. We can also, and this is an important component of our acceleration, we can accelerate realization through straight exits. Again, sorry, I cannot comment on the individual names, but we can also accelerate through secondary transactions. Again, the secondary market now all over Europe, all over the mid-market in Europe, is a deep and active market. Again, my commitment as CEO is just to maintain the strategy. The current strategic plan ends in 2027, and I stay committed to the goal of 25% of share we want to retire from the market overall. And this is feasible.
Yes, you are mentioning that we have a gearing and that we have diversified the gearing with a bond issue, but we keep and we are able to maintain a very low gearing. Again, this has been, I would say, testified by the BBB rating that we receive from rating agencies.
Regarding the size of the balance sheet, I mean, EUR 7 billion is something that you want to keep in the medium or as we go for lower, EUR 2 billion, EUR 3 billion, EUR 4 million, EUR 5 million?
No, we currently stick to the 2027 plan, which again ends by the end of next year, and we stick to the capital rotation that was planned, and it will, yes, it will decrease the size of the balance sheet. It is also decreasing the size of the management fees we receive from the balance sheet, as you have seen in the statement of our asset manager fee composition. But yes, it's a maintain.
Okay, thank you, Christophe.
And yes, maybe this will need to be We will update you in due course.
Maybe before, if you still have questions on the line, you can ask them. Maybe I take one or two written questions. I have one question that is coming on maybe Doctolib and on Mistral. The first one on Doctolib, to know if you have any granularity on the NVIDIA investment in Doctolib. I have a similar question on Mistral, or quite similar, asking what's our stake in overall the deal? I don't know who is taking the-
Well, on Doctolib, as you have seen, first of all, it is good news in terms of valuation because NVIDIA validated an upgrade in the valuation of Doctolib. But even more important than that, it is a strategic partnership between NVIDIA and Doctolib, and you know that Doctolib is very active at a new round of growth. You know that Doctolib is not a winner-takes-all in terms of its basic, its initial business model, but now Doctolib wants to gain in the value chain with doctors and to help them to use artificial intelligence power tools to be more productive at the end.
That's definitely for us very good news that it's not only confirmation of the valuation, it is even more than that, a strategic alliance and a confirmation that the evolution of the service of Doctolib, which is to move from the agenda component to value-added services, is confirmed. Regarding Mistral, we participated to each round of financing of Mistral. We were lucky enough to be in the early stage rounds, and yes, we contributed to each round of financing since then. We must admit that the very last round was very large, and I don't know our exact level of dilution. But you know that in this component of the market You can't be the majority shareholder. All shareholders are minority shareholders.
I will come back to a few questions we have on fundraising. I have a question on precisely Q3, saying Q3 was overall low compared to the previous quarters. On the other side, you give a guidance of more than EUR 4.5 billion, which means that you have a sharp acceleration in Q4. Maybe a comment on why Q3 was a bit lower, and what do you see in Q4 that makes you confident that you can go above EUR 4.5 billion?
Well, we have already secured additional fundraising from our LPs, and we expect again around more than EUR 4.5 billion for the full year. It is important to mention that Q4 is always very busy, and last year was the highest, I think, on record. I cannot tell you more at this stage very precisely, but what I can mention is that in buyout, we already have a long list of LPs that are in due diligence, obviously largely on PME V, which is a flagship that is currently being raised, but also on co-investment opportunities. We have LPs that are close to their IC decision, to their investment committee decision. In venture, we mentioned the fact that we are preparing the first close of Future Industries III.
Private debt is always very active, and we already are preparing the fundraising of the next generation of fund, which will be vintage number eight. I mentioned that in real assets, we are currently preparing, and it is an important step in terms of profitability of an asset manager when you move from the first-time fund step to the second generation of fund. Obviously, it is an important acceleration for us in real assets, and this is well underway. It is important to mention, again, Q4 is always very busy. It is important to mention that in 2026, we have a stronger proportion of private equity. Last year was highly influenced by our major flagship in private debt.
Thank you, Christophe. I have a question on the portfolio mention of why did you see acceleration, a bit of acceleration in the revenue in buyout? Is it widespread or is it one or two companies? Could you give a comment on the trends that you are seeing on EBITDA? Is it similar to what you are seeing on the revenue level?
Thank you, Pierre. Yes, it is. Eurazeo portfolio company have a robust momentum, and it is not some specific company. It is across the portfolio in buyout and in growth equity. We do not report EBITDA on a quarterly basis, but the trend we mentioned in H1 is the same, and we will comment precisely at the end of this year.
Okay. Thank you. I have a question on deployment. You had a bit of an uptick in deployment in Q3, and you still have some commitments. That is roughly in line with the level that you had last year. How should we think about this going forward? Do you think that as a percentage of the balance sheet, it is going to go down over time, or is it going to continue to be on those types of levels?
Yes. Generally, the long-term trend is still the same. We are progressively reducing our commitments within our funds, and it is, again, a firm commitment to continue to move into an asset-light business model. But nine months activity isn't statistically indicating any long-term change in this strategy.
Thank you. I don't know if Alexandre still has his hand up, if on the phone.
The next question comes from Alexandre Gérard from CIC-CIB. Please go ahead.
Yes, that's me again. Sorry, two additional questions. The first one was on wealth solutions, fundraising in wealth solutions in Q3, which seems to be slowing down. Are there any particular reasons behind that? Can you please give some more color? The second question was on the private debt business also in Q3, which seems to be dragging down also the asset rotation, so both in deployments and realizations. Can you comment also there? Thank you.
Thank you, Alexandre. Well, first of all, we continue to have net inflows in France on our flagship vehicle, which is called EPVE 3. You know that it's now close to EUR 4 billion of AUM, and we also have sectoral funds such as Entrepreneurs Club or FCPI. As you know, we are in discussion to open, to finalize discussion in Europe for a new line of product which is more European. It's called the Prime line. But it's true that gross inflows in the market have momentarily slowed down during the period. It's important to mention first that redemptions are very low. Redemptions on EPVE 3 continue to be well below 5% gates. It's 1% in Q3. Yes, the fundraising at the beginning of 2026 was impacted first by the noise on gates that was mainly hitting the U.S. market.
Collection of wealth product was also influenced because EPVE 3 2025 performance was a little bit under its historical average of 7%, and we will be back. We are already at 5% now. So the performance for 2026 for EPVE 3 will be in line with its historical average of 7%. We expect to enjoy a more regular fundraising on wealth solution for 2027. In private debt, yes, you're right to mention that private debt at some point of time was to a certain level criticized by our LPs because the market was You remember that we experienced a kind of golden age in the buyout market, and during that period, private debt was a little bit too short for our The average duration of private debt at some point of time was at 3.5 a year.
It was relatively short because debt was very easily available, and our deals were relatively rapidly refinanced. We are back to the normal, the usual, the historical average of private debt durations. When you look at the realizations of 2026, they are impacted by this general trend. But again, we do not face any It is not perceived as something unusual for our LP base. It is just a back to normal situation.
Thank you, Christophe.
I have some questions that we are going to answer offline on the webcast. I think there is no further other questions. I can thank you for attending this call, and we will be back talking to you on March 10 for the full year 2026 results. Thank you very much.
Thank you. Thank you very much. Bye-bye.