Good evening, everyone. Thank you very much for joining us on the Tikehau Capital 2021 results presentation. I'm Mathieu Chabran, Co-Founder of Tikehau, and I'm dialing from New York today. I'm joined for this earnings call by my partners and Tikehau Capital Founder, Antoine Flamarion, he's in Milan tonight, and Henri Marcoux, Deputy CEO of Tikehau in Paris. I'd like to start the presentation on slide three with a quick snapshot of the key figures for 2021. Tikehau delivered a double-digit growth from top to bottom line over this period, which demonstrates once again the relevance of our business model. On the operating side, we've been very active on our key fundamentals. First, fund deployment, which jumped to EUR 5.5 billion while remaining highly selective. Second, realization within our funds, which amounted to EUR 1.5 billion.
Finally, a record fundraising at EUR 6.4 billion, which is 50% more than our average fundraising for the past three years. This high level of client demand reflect the confidence from our clients, as well as our capacity to generate performance for them. As a consequence, our AUM grew by 20% to EUR 34.3 billion at the end of December 2021, and this is very close to the EUR 35 billion we were aiming to achieve a year from now. In terms of financials, 2021 was also a very positive year. Profitability within our asset management grew sharply with our FRE reaching EUR 95 million. Again, we are ahead of our expectations since our 2022 target was to exceed EUR 100 million, and here we are reaping the fruits from our profitable growth model.
Our portfolio delivered very strong returns in 2021, driven by an active portfolio rotation, as well as the increasing contribution from Tikehau funds. Finally, and as a result, net income reached EUR 319 million, increasing significantly versus 2020. This allows us to propose a distribution of a dividend of EUR 1 per share, which is comprised by EUR 0.60 of reference dividend, plus a EUR 0.40 special dividend to reflect the strong value creation in 2021. Moving on to slide four. You can see here our main KPIs for 2021 and the tremendous progress we have made since our IPO in early 2017. I will not comment in details each chart. I think it's self-explanatory.
What we need to remember is that you can take virtually any KPIs from our asset management business, and you will see that we delivered a double-digit CAGR on top line items and even a triple digits on our profit. Let me dwell one moment on three of these KPIs. Let's start with the average management fee rate, which measures the quality of our revenue generation. It continued to increase in 2021, reaching 102 basis points or 1.02%, reflecting the very favorable evolution of our business mix. Another important metric is our fee-related earnings or FRE, which measures the increasing profitability of our asset management business. We delivered close to EUR 95 million of FRE in 2021, which is a 35% year-over-year growth and a solid 100% CAGR since IPO.
I mean, if I may say that on average, since our IPO, we doubled our FRE every year. Finally, a word on our equity base, which is strong at EUR 3 billion. Our model relies on a strong balance sheet in order to sponsor our asset management strategies and align our interests with our clients. We think that this is a critical asset, especially in the current environment. Turning now to page five. A few words obviously about the current context. Needless to say that we are closely monitoring how the current geopolitical situation unfolds. I would first like to highlight that across all our business units, there are no portfolio companies domiciled in Ukraine or Russia. Also, the portfolio company's exposure to revenue generated from those countries has been carefully reviewed in detail and is extremely limited.
Now, going forward, our take is that the current geopolitical crisis is set to clearly accelerate some of the mega trends on which we have built a growing exposure and expertise over the recent years. To highlight a few and give you a few examples, I can think of the investments in energy transition, but also in cybersecurity, which would increase sharply. Also an increased search for supply chain resilience from corporates through some re-onshoring and obviously some digitalization. There will also be clearly growing need for special financing and hybrid capital. Finally, volatility may trigger opportunities in private assets secondary as well as liquid credit and equities. Again, we rely on a strong balance sheet with EUR 3 billion of shareholders' equity and EUR 1.1 billion of cash at the end of December. This allows us to navigate the current context with confidence.
As of December 31st, 2021, we also had dry powder of EUR 6.2 billion within our funds, and that enables us to seize investment opportunities that could be provided by these market dislocations. Let me hand over now to Antoine for an operating review.
Thank you, Mathieu. Good evening, everyone. I'm Antoine Flamarion, Co-Founder of Tikehau Capital. I would like to spend a couple of minutes on our achievements of the year. Turning to page eight now. First, as Mathieu alluded to in his introduction, we have been delivering on all key items of our model. We are keeping a strong level of investment discipline, and even if we look at a much larger number of investment opportunities, we remain highly selective and do not compromise on quality. This selectivity is critical and stands at the basis of strong performance generation within our fund, which in turn translate into higher client demand, and therefore an acceleration in fundraising. As you can see, 2021 is a textbook case on how our model effectively works. Turning now to page nine.
During our H1 results presentation, we told you that 2021 was set to be a solid year in terms of investment from our closed-end fund. Indeed, we have deployed a total of EUR 5.5 billion, which represents an 83% upside to the average amount deployed per year during the past three years. Private Debt has led deployment during 2021, in particular within our direct lending business, where we are seeing a very attractive deal flow. Let me highlight that this is actually very positive for our revenue generation, since we are mainly charging fees on invested capital for this strategy. Henri will get back to that in a minute. We have been very active in deployment while maintaining a strong focus on ESG, as well as a high level of selectivity and discipline across the board.
This is evidenced by an average selectivity rate across our business line of 97%, which remains at high level even as we are looking at more and more investment opportunities. Last but not least, the level of dry powder at end of December stands at EUR 6.2 billion, stable versus December 31st, 2021, showing that we have been able to accelerate both fundraising and investment. Turning to the next page to illustrate a few landmark transactions, which are good examples of our sourcing capacities. First, we bought a 40% stake in Egis through our T2 Energy Transition Fund. Egis creates and operates smart infrastructure and buildings capable of responding to the climate emergency and the major challenges of our time by enabling more balanced, sustainable, and resilient regional developments.
Tikehau Capital will support Egis expansion, which is primarily focused on the international market and aims at positioning Egis as a top global 10 engineering company by doubling its revenue within five years. An example on the real estate side, on the real asset side, IREIT Global, our Singapore-based REIT, has acquired a 27-property portfolio in France leased to Decathlon with a 10-year initial lease. This is IREIT's first transaction on the French market. Of note, Tikehau Capital has invested EUR 22 million in IREIT Global's EUR 127 million capital raise on July 21st to finance that acquisition. We also completed our first investment in Portugal through our European value-added strategy. In June 2021, we invested in a 4,000-unit residential portfolio at an average EUR 800 per sq m.
Through this transaction, we were able to provide clients with co-investment opportunities, allowing them to complete their allocations. Lastly, an example in direct lending, we arranged a new financing for Prodware, a European leader in IT solutions, consulting, integration, and hosting of IT management solutions. We have a strong relationship with the company, which we already financed between 2014 and 2018. Moving now to slide 11 to discuss the KPI that we would like to highlight, which is the level of realization we have been making within our funds. We maintain a healthy pace of realization in 2021, with EUR 1.5 billion realized during the year, which is slightly higher than the amount recorded in 2020. Private Debt accounted for 70% of that amount, which is not surprising since our direct lending strategy is one of our most advanced flagship strategies.
Of note, realizations within our real estate activity have doubled year-on-year, thanks to both our U.S. Infra strategy as well as our Chorus European sale and leaseback funds, which have entered an active realization phase. Finally, we recently announced that our Pan-European Growth Equity Fund, TGE II, made its second disposal through the sale of Assiteca, the largest independent Italian insurance broker. To illustrate that, under our ownership, Assiteca deliver on multiple front. First of all, the consolidation strategy with five acquisitions, followed by LFL revenue and profit growth. Furthermore, the company has proven to be extremely resilient during the pandemic, achieving a positive 5% organic growth each year. As a shareholder, we've been instrumental in helping them implement their digital transformation plan, as well as the hiring of new key top manager.
As a consequence, the EUR 25 million invested in that company back in 2019 has generated a strong 2.6x multiple and a 45% IRR. Again, this is a new accomplishment in our track record in terms of investment performance and active ownership within our Private Equity strategy. Turning to the next slide. Performance metrics within selected fund across our strategies. We are first and foremost investor, and as such, investment performance is at the heart of our model. This is essential to maintain a healthy flow of client demand, but also it allows us to generate growing return for our balance sheets.
As an example, I will not comment all the fund you have here, the performance of the vintage 3 and 4 of our flagship direct lending strategy is supporting the current fundraising of TDL V with gross IRR on exited transaction that stand above 10%. Our Special Opportunities fund, TSO II, which has surpassed expectation in terms of fundraising, has been performing extremely well. In private equity, we post a solid multiple for TGES, our secondary fund, in which we have contributed assets from the balance sheet. On the real asset side, you can also see that STAR I, our infrastructure program, is on track to deliver solid return in a fast-growing U.S. market. That has been reflected in the strong fundraising for fund two, which reach a final size of EUR 700 million, which is a 133% increase versus fund one.
In real estate, the sale and leaseback fund, in which we are managing assets from utility provider EDF, has kept a healthy pace of realization in 2021 and generate compelling performance. It is important that we communicate more on this topic because once again, performance is critical for both future fundraising and Tikehau portfolio performance. Today's performance is definitely tomorrow fundraising. Turning now to slide 13. In our industry, selective deployment generates strong performance, which in turn support fundraising. 2021 has been a clear demonstration that we are delivering on all fronts. Our fundraising performance was very solid in 2021, and it has been achieved across the group's entire asset management platform. We attracted total net inflows of EUR 6.4 billion, which is 53% more than what we have been generating on average over the past three years.
We are clearly on an acceleration trend. Private Debt accounted for 50% of 2021 net new money, driven by the firm's flagship strategy in direct lending, as well as its new launch impact lending fund and secondary private debt fund. Real Assets represented circa 25% of 2021 client demand, while Capital Markets Strategies and Private Equity accounted for approximately 15% and 10% of the total. The strong client demand, once more, validate the relevance of the Tikehau Capital model, which with high alignment of interest and constant innovation at its core. Turning now to slide 14, and I will be brief. The strong momentum of 2021 is a reflection of how we steer the company with scaling, innovation, and institutionalization as key part of our growth model.
First, our flagship strategies are scaling up rapidly as evidence of fifth vintage of direct lending fund, which is still raising capital, as well as the successful closing for our second vintage of U.S. Infra strategy and the second vintage of our Special Opportunities fund. During 2021, we also demonstrated our ability to innovate successfully and expand our product offering. For example, we launched our first secondary private debt strategy, and we expanded our CLO franchise in North America with the successful launch and closing in Q4 of the first U.S. CLO. We have also successfully closed our cybersecurity fund with commitment exceeding our EUR 150 million initial target.
Finally, leveraging on our expertise, platform, and track record, we have been firming our position as partner of choice for European government in providing financing to the real economy and support the post-COVID recovery with material successes recorded in France, Spain, and Belgium. Mathieu will now talk about our client base. Back to you, Mathieu.
Thank you, Antoine. I'm now moving on to page 15. Tikehau Capital is increasingly global, and I can assure you that we are witnessing this progress every day. We've built now a permanent presence in 12 countries, and there will be more to come. This local presence, as we've had the opportunity to tell you many times, is key for two reasons. I mean, first, for the origination of investment opportunities for our investment strategies, but also it is a critical tool when it comes to gaining new clients and capturing the growing share of capital that global investors seek to allocate to alternative and private assets. As such, we continue to internationalize our client base with AUM from international clients now reaching EUR 12 billion. This is a 29.3% increase year-on-year, growing faster than asset management AUM.
In terms of flow, you can see that more than 50% of our fundraising came from non-French LPs, and that since IPO, our international AUM has been growing almost twice as fast as AUM for the group. Clearly we are delivering on this front as well, and we will keep a strong fundraising momentum in all our geographies. I'm now on page 16, looking at our client base breakdown. First, we have a very solid and growing institutional LP base. As I just discussed, this client base is increasingly international, and our LP base keeps expanding across the globe. In 2021, we have enhanced our product range for private investors, which offers significant growth potential.
As an example, two unit-linked products have been successfully launched in France, one in Private Debt, the other one in Private Equity, and both attracted a total of more than EUR 200 million of commitment at the end of December, just a few months after we had launched. These initiatives, together with the growth at Sofidy as well as our listed REITs and obviously our crowdfunding platforms, are putting the group in a strong position to capture the growing demand from private investors to access alternative assets. In September 2021, we also launched a private wealth solution group aiming at enhancing direct access to our funds for family offices and high-net-worth individuals globally. This is a new step forward in addressing a growing client category, which is becoming increasingly sophisticated and willing to raise its exposure to alternative assets.
This initiative complements the existing intermediated private clients coverage that we had been developing at Tikehau through private banks, IFAs , in French, the CGP, and unit-linked insurance contract. In other words, we are building an infrastructure which puts us in a very favorable position to tackle the growing demand from private investors to access private market. Moving on now to our investment portfolio, which has delivered very sweet performance in 2021. I'm now on page 18, and as you can see, our portfolio is as granular as ever with 229 underlying assets, representing a total of EUR 2.7 billion. In 2020, we kept on investing in our own asset management strategies in line with our alignment of interest approach.
As such, at the end of last year, 75% of our portfolio was invested in our own funds, compared to 66% at the end of 2020 and 61% at the end of 2018. I would like to highlight that we have already reached the upper end of our targeted allocation target, which was to have between 65%-75% of our portfolio invested in our own funds by 2022. We've been, you know, repeatedly saying that our alignment of interest is unique. Management is the number one shareholder of Tikehau, and Tikehau invests its equity primarily in its own funds. That at the end of the day, management, shareholders, and LP are fully aligned, and this is a unique feature in our industry. Looking now on slide 19 at portfolio movements during the year.
They are reflective of Tikehau Capital allocation policy and serve our growth strategy. EUR 700 million of investment were carried out over the full year, mainly directed to our own asset management strategies alongside our clients. EUR 600 million of exits were realized, reflecting the active and value-creating rotation of our investment portfolio with, in particular, the disposal of a number of listed investments. EUR 200 million of positive fair value changes reflecting the value appreciation across portfolio assets, mainly driven by the performance of Tikehau Capital funds as well as listed investments. Going forward, we will continue to use our balance sheet, which remains a key differentiating factor and enabler of growth, to strengthen our platform by launching new families of products and vehicles. As such, we will also maintain a high level of alignment of interest with our shareholders and our investors clients.
Henri Marcoux will now go through the main 2021 financial highlights.
Thank you, Mathieu. Good evening, everyone, and thanks for attending this call. Let me start maybe by a quick word on our fee-paying AUM, page 21 of the presentation. Fee-paying AUM, as you know, are a key indicator to monitor when it comes to revenue generation for our asset management business. They have increased by 22% year-over-year, reaching EUR 28.4 billion at end December 2021. This solid growth has been driven actually by recording flows during the year, combined with a sustained pace of deployment across our strategy, notably on private debt strategies for which management fees are charged on invested capital. It is worth noting as well that our fee-paying base has been growing faster than the overall asset management AUM since 2016, generating a CAGR of 36% per annum over the period.
As a consequence, 86% of our asset management AUM are fee generating, which is actually steadily improving since 2016. If we focus now on our closed-end strategies, 96% of AUM have duration of above three years, providing us a strong visibility on revenue generation since our solutions are actually sticky with clients committed along us over the long term. Turning to page 22, which shows actually the evolution of our management fees rate since 2017. Well, I guess this chart is actually self-explanatory. At end December 2021, the average management fee rate stood at 102 basis points, which was up 10 basis points compared to end of 2020 and up 31 basis points compared to 2017.
This increase reflects actually the accretive evolution of the group business mix towards Private Equity and Real Assets, which charge management fees above the current group average. Such evolution has been driven by the ongoing fundraising momentum for Sofidy, with the growing contribution from subscription fees that are actually generated in line with Sofidy's fundraising. In addition, the management fee rate improvement has benefited from the positive contribution of late management fees linked to the strong fundraising of our private equity energy transition fund, which closed in Q1 2021. We are quite satisfied with the way our management fee rate is actually progressing years after years. Not only are we increasing the fee-paying nature of our AUM, but we are also compounding that with our capacity to improve the average fee margin, which actually translates very positively on our revenue generation.
Turning now to our asset management revenue, page 22. You can see here the consequences of what I just described. In 2021, management fees and other revenues increased to EUR 264 million, driven by fee-paying AUM growth, which I just detailed previously. Those revenues, with a high level of visibility going forward, increased by an impressive 33% year-over-year, and they represented 93% of total asset management revenue. Thus, we are delivering, you know, a high gross rate in highly qualitative revenues. A word maybe on performance-related revenue. They contributed EUR 19 million to asset management revenue, which is three times the level of performance-related revenues generated the year before in 2020. This growth was notably driven by the outstanding performance of our UCITS funds.
Performance-related revenues still have a limited contribution to our asset management revenues, given, I would say, the relative use of our funds, as well as the cautious approach we have in recognizing carried interest in our financial statement. Maybe I'll come back to that in a minute. Moving to the next slide, page 24. Let's have a look now at our asset management profitability. Our fee-related earnings, which is a key metric to assess the scalability of our platform, has increased to EUR 95 million, representing a 35% growth year-over-year. We actually achieved 95% of the 2022 fee-related earnings target we had released back in 2019, a year in advance. We are clearly reaping, I would say, the benefits of a strong operating leverage, with revenue growing faster than our expenses.
In addition, maybe, and as previously indicated, performance-related earnings, which are, equal to our performance-related revenues, have been multiplied by three in 2021 compared to the previous year. All in all, I would say that these positive elements are explaining how we did manage to increase the operating profit of our asset management activity by 49% in 2021, reaching EUR 114 million and representing an operating margin of 40% for the year. Precisely, you have on page 25 the evolution of our fee-related earnings and asset management EBIT margin. Again, I think that this slide is pretty self-explanatory. FRE margins stood at 36% and operating margin at 40% at the end of December 2021.
This clearly actually validates the relevance of our model and reflects the powerful operating leverage that underpins Tikehau Capital growth model. I will be moving to the next slide, page 26. On top of our operating leverage in fee-related earnings, performance fees and carried interest are representing a key earning generation engine for Tikehau Capital in the coming years. AUM eligible to carry interest keeps on growing at a higher pace, reaching EUR 14 billion at end of December 2021, showing a 25% increase year-on-year, and therefore growing faster than asset management AUM. That means that actually we are raising capital in priorities, in strategies eligible to carry interest, which is a strong revenue and profit engine.
On the total AUM eligible to carried interest, EUR 9.2 billion were already invested and EUR 5.5 billion generated IRR above the hurdle rate, which is actually up 80% versus the figures of 2020. As I mentioned earlier, our revenue generation in asset management is today more geared towards management fees, given that our large funds are quite still young. We are therefore expecting to start generating more material performance-related revenues when our flagship funds will mature. Please also keep in mind that we have a pretty cautious approach when it comes to recognizing performance fees. We already mentioned that, but we only book them when we are certain that we are actually going to realize them.
As such, we are not exposed, I would say, to any clawback risk or negative performance fee into our P&L. Finally, I think that I already mentioned that before, but we have, you know, a very shareholder-friendly approach in term of allocation of carried interest and performance fees. Please remember that 100% of our performance fees and 53% of the carried interest are allocated to the listed company, available for the shareholders. I will be moving to page 27 to address our portfolio performance. Total portfolio revenue amounted to EUR 387 million in 2021, which is actually 4.6x the level of 2020.
What is important to notice here is actually that Tikehau Capital funds have strongly contributed EUR 156 million to those revenues, which is actually 2.7x the level recorded the year before in 2020. Such increases is obviously a testimony of the solid performance generated by our funds. We highlighted on this page, actually in orange, the level of return or yield generated by our portfolio over the last three years. In 2021, given the solid performance of our portfolio, gross return, which is actually calculated by dividing portfolio revenue by the average portfolio fair value between 2020 and 2021, reached 15%. This level actually compares to 13% in 2019 and 4% in 2020. Now turning to our realized portfolio revenue, which are on page 28.
The realized portfolio revenue amounted to EUR 243 million in 2021, which is actually, once again, 1.8x the level of 2020. The growth in realized revenue was actually mainly driven, you know, by the sharp increase in realized capital gain, represented in blue on the chart . We reached EUR 133 million compared to EUR 37 million in 2020. This increase was mainly driven by the disposal of our investment in several listed assets. As such, I think that in 2021, we demonstrated once again our ability to actively rotate our portfolio while generating strong returns. Dividend, coupon, and distribution, which are actually represented in orange on that page, grew by 8% year-on-year, reaching EUR 105 million.
Maybe important to add also that on the right side of the chart, you have the breakdown of realized revenue between Tikehau Capital funds and other ecosystem and direct investment. I'd like to highlight maybe that the contribution from Tikehau Capital funds to those revenue stood strongly at EUR 79 million for the year 2021. Overall, the realized in cash component of our portfolio revenues has been steadily increasing since 2019, which is as well, obviously, extremely positive. We are now moving to our profit and loss for the year 2021, which is page 29. Main takeaways for the year are actually the following. The 50% growth in our asset management EBIT reaching EUR 114 million. Second, the strong evolution of our investment portfolio standing at EUR 387 million.
Maybe important one to be noticed as well, you know, the EUR 55 million decrease in our corporate expenses when looking at the year 2020 published figures. That strong decrease actually corresponds to the positive effects of the reorganization and simplification that we announced back in May 2021. To be mentioned as well, the EUR 12 million decrease in financial interest resulting from our active debt management policy. Finally, for the year, you know, the net results, group share, which has reached an outstanding EUR 319 million, driven by the very positive performance of both our asset management business and our investment activity. You do have on slide number 30 the key figures of our robust balance sheet.
We did mention that previously, but our model is supported by strong financial means with EUR 3 billion of equity, EUR 1.1 billion of cash available, and EUR 725 million of undrawn revolving credit facility. As you know, ESG is at the heart of our DNA, whether in term of investment, but also at the level of our group financing.
As such, following the issuance of our inaugural sustainable bond in March 2021, and more recently, the pricing for inaugural sustainable USPP, we will have 63% of our debt linked to ESG criteria, which is a significant and massive evolution versus previous year. We think that's the only way to go further. I will be moving to page 31 within an important subject, which is actually the proposed shareholder distribution. The excellent results we generated in 2021 enables us to propose to the next general meeting the payment of a dividend of EUR 1, including a reference dividend of EUR 0.60 and a special dividend of EUR 0.40. The EUR 0.60 Reference dividend represents actually a 20% increase compared to 2020 distribution level.
Most importantly, it represents 92% of our asset management AUM, which is actually a level in line with the guidance we had provided last year to distribute at least 80% of this metric to our shareholder. The EUR 0.40 special dividend is linked to the strong value creation resulting from the active rotation of our investment portfolio in 2021. Obviously, such level of distribution illustrates, I would say, once again, the strong alignment of interest of our business model. That's it on my side. Mathieu, maybe over to you for concluding remarks.
Yeah, thanks. Thanks, Henri. You know, before concluding, I would like to take the opportunity to thank and congratulate all the Tikehau team for the contribution. After this financial review and this extremely solid year, we wanted to give all credit to them. Let me wrap up on page 33. Clearly, 2021 is another year of over delivery for Tikehau. We already achieved 98% of our 2022 AUM target and 95% of our 2022 FRE target. Even though the current economic context generates many uncertainties, we firmly believe that we have built the right setup and that we can navigate uncertain times with confidence. Thank you all for joining us today.
I mean, we look forward to seeing you hopefully in three dimensions, if I may say, in London on March 22nd for our Capital Markets Day. That will be the first since May 2019. During which we will outline the key drivers reporting of our next phase of profitable growth. With that, let me open up the floor for questions.
If you would like to ask a question, please press star one on your telephone keypad. Please ensure your line is unmuted locally as you will be advised when to ask your question. Once again, that's star one if you would like to ask a question. The first question comes from the line of Tom Mills from Jefferies. Please go ahead.
Oh, good evening, guys. Thanks very much for the presentation. Just had a couple of questions, please. Firstly, could you just give us an idea how perhaps your client conversations are evolving year to date with respect to fundraising? Obviously, just with the market context in mind. Perhaps how that is different across your various client channels. Then secondly, could you talk a little bit about how the deployments that you're making into your own funds and how that's been shifting higher has helped you accelerate sort of increasing scale in your third party AUM? And obviously you now got kind of EUR 2 billion invested there. How do you see those benefits compounding over time? Thanks very much.
Thank you for your question. One thing we try to build when it comes to clients and fundraising, as you all know, we build a strong infrastructure. We are now in certain countries. What we've been trying to do is raising money in various geographies with various client type, ranging from Mathieu mentioned the initiative on private wealth. As you noticed, we have three strong initiative with retail, unit-linked, and also our digital platform dedicated to real estate community. We cover small clients to sovereign wealth fund in various geographies. We try to diversify this pool of clients, number one.
Number two, obviously, with the war in Ukraine, probably a lot of clients will assess their portfolio. We think that because of the diversity of our clients and our capacity to innovate, and I think we mentioned briefly that, we raised in 2018 the largest, for instance, energy transition fund. We are subsequently raising one in the U.S. and probably the second vintage at year-end in Europe. We think our products are very attractive for clients and investors around the world. We mentioned also our cybersecurity fund closing above the target.
We try to offer to clients really innovation and products they need. It's too early to say if there will be a shift on client demand. What we can tell you is that, you know, we raised more than 50% in 2021 in comparison with 2018, 2019, and 2020. We will continue to expect some strong growth. You know, we put the infrastructure, we continue to have the drive, the energy, the entrepreneurship, and also specific innovative products. We feel confident for now. Obviously, all that could evolve.
Thanks very much.
Maybe Tom, on the deployment, could you just repeat your question on deployment number two, please?
Yes, of course. Just obviously you've now got EUR 2 billion of your capital invested in your own funds. I'm just wondering, could you talk a bit about how you're perhaps seeding new strategies there and how you might expect those to ramp up over time? I guess you've already touched on some of the new kind of initiatives you've got.
Yeah. No. Sure. Exactly. What is important is, keep in mind is more than seeding, because we're invested for the life of the fund. It's not just being used as a warm up for a new strategy and what's just taken off, we'll take out. W e want to benefit from the compounding effect that the various private strategies can benefit from, so that we can effectively have the equity base of the balance sheet compounding at the internal rate of returns of the underlying fund, plus obviously benefiting from the management fees and the carried interest.
On top of that, maybe Tom, the contribution of those investments being made by the balance sheet in our funds has clearly increased strongly in our results for 2021. You have both effects, on the one hand benefiting the asset management, and on the other hand benefiting actually our investment revenues.
That's very clear. Thanks very much, Mathieu and Henri. Thank you.
The next question comes from the line of Arnaud Giblat from Exane BNP Paribas. Please go ahead.
Yeah, good evening. I've got a few questions, please. Firstly, could you give us perhaps an outlook in terms of how your fund performance has been going year to date? What sort of marks could we be expecting for Q1? Any update there would be useful. Also, I was wondering how your thoughts had evolved with regards to hedging any balance sheet exposure you might have given the market volatility. As well, how are things looking on the CLO front given the current market environment? Does the appetite remain there? Are the markets functioning well?
I was just sort of curious about what could be happening there. Thank you.
Yeah. Thank you for your question. I think, we've been managing the firm for 17 years in a very defensive mood. W e went already through Lehman, the global financial crisis, the sovereign crisis, the pandemic, and now, the Russian War. When you look at our figures, we have the largest ever amount of cash on the balance sheet, EUR 1.1 billion, which compared to EUR 800 million last year, plus a EUR 725 million credit facility, which is almost a EUR 1.8 billion, and EUR 1.8 billion of cash or cash equivalent is fairly big for this industry. It's even the market cap of some of the large asset manager in the world, traditional, for instance.
We decided that first, and I think I mentioned that initially we decided to dispose the bulk of our listed investments, so DWS, Eurazeo, and our UCITS fund back six months ago. We consider that to manage potential downside risk, we'd rather have cash on balance sheet. There is no particular hedging on our portfolio, and we don't really need to do that. As a consequence, that's probably why as of yesterday evening our stock price was in negative territory, but - 3% as of yesterday evening. That's compared to - 35%, -45% for all the other listed alternative manager in Europe.
We feel fairly defensive on the balance sheet, on the way our portfolio is diversified, with limited leverage and gearing. We feel fairly comfortable in the current environment. Mathieu, you want to answer on the CLO?
Yeah, maybe I can elaborate on CLOs, Arnaud. What we saw, and let's say, over the past seven days, okay. What we saw, if I'm only focusing on the rising interest rates and the fear of inflation, is that any variable fixed income instruments and floating rate based, and obviously leveraged loans are by design a floating rate fixed income instrument, the appetite remains strong. That's for the underlying assets.
Now, the CLO, which is effectively a repackaging of leveraged loan to be securitized through the CLO issuance, had also remained. Th ere's still an appetite there because people could access, if you will, quote, unquote, a levered play to the fixed income market without being subject to the interest rate risk where people effectively are forecasting, which is our assumptions, and an increase in interest rates. That's to address the inflation fear and increasing interest rates. Obviously, adding the past 10 days in a week now, in terms of the uncertainty around the macro, I mean, to my knowledge, but I will check with my colleagues here.
The market has remained relatively calm on the primary issuance side, as the yield market has been. We will monitor that. I mean, the key challenge for CLO, as you know very well is the senior piece and the AA A and finding interested buyers to pick up a premium through the structural nature of the instrument, and that's very much why the people are very excited, if I may say, by this triple A-rated instrument. Then the equity, which is obviously the levered piece.
As you know, in Europe, there's still the retention rules, which force any manager to retain 5% of any given deals. Remember that putting 5% of any given deal, if you take an equity piece, 50% of the equity piece, it's 10 years of a management fee that you put down here. In the U.S., where you don't have the retention rules, but which is a great way to differentiate yourself by taking down and aligning interest, which we have done on the first deal that we issued in December. W e are currently ramping here in the U.S. our second deal, and that's a key differentiating factor.
Maybe, Arnaud, to come back on your points on the performance of our funds for Q1. I would say that the performance of our fund is reflecting the performance of our portfolio company. Then we are doing valuation exercise on a quarterly basis based on the performance of our portfolio company. So far, we don't have within our portfolio any incident to report vis-a-vis their businesses, either in real estate, equity, or debt. On top of that, maybe to come back on the overall on page five that we presented today during the presentation.
We tend to think that actually the current context could potentially accelerate the mega trends on which Tikehau Capital is clearly positioned such as energy transition, cybersecurity, special financing and hybrid capital. We are rather positive on that.
I'm adding two comments, first of all, on portfolio. The way we've been marking our portfolio has been very conservative, and we see that each time we exit companies or investment, which is very often higher than the mark, and the mark are obviously defined by European standard. That's my first comment. Two, we are carrying limited leverage in our portfolio. Apart from the CLO by design, we have leverage. But for instance, our Private Equity is mainly minority private equity, so we don't do control LBO where a player have a lot of leverage. We feel like we are fairly confident on our portfolio.
Maybe on your CLO question, probably everybody noticed that Carlyle just announced a very large acquisition in the CLO business this morning, New York time. That tells that there is a strong appetite for the CLO business in general.
Okay, thank you.
The next question comes from the line of Mandeep Jagpal from RBC Capital Markets. Please go ahead.
Hi, everyone. Thank you for taking my questions. Two from me, please. The first one is on asset management margins. The FRE margin for the asset manager increased by 1 percentage point to 36%, I think. And the asset manager division was able to scale up its revenue, but the cost also went up by a comparable percentage. So how should we think about the future investment required to continue to develop the asset management platform? That's the first question. And the second one is on the investment portfolio. You reached the top end of your 2022 guidance range for the investment portfolio, of 75% by the end of last year. 35% in Tikehau funds. And so this move is moving into a position of high alignment of interest.
How should we expect this proportion to change from here? Are you happy to stay within the current range, or should we expect a shift upward, in the range going forward?
Thanks, Mandeep. Maybe on your first question, if you remember well, effectively for the year 2021, our operating costs have gone up by 31%. If you remember well, in 2020, in the context of the COVID, we had announced an hiring freeze and definitely our operating costs for the year 2020 had increased by only 10%. We have restarted, I would say, to invest into our platform by opening new offices, notably Germany, that we announced last year. Operating costs have been increasing at a higher pace compared to 2020. Nevertheless, they have been increasing at a lower pace than our revenue, enabling us actually to increase our FRE margin and moreover, our EBIT margin, which is standing at 40%.
We do expect over the coming years to increase year after year, I would say, our fee-related earnings margin as we will be investing through the platform. Obviously, operating costs will increase at a lower pace than our revenue. On your second question, I would say on portfolio allocation effectively, that's the trend we had set up back in 2019 was to have a portfolio exposed to our funds by 75%, which we have achieved a year in advance. You can clearly see the, I would say, positive effect of those investments as our investment revenue are clearly benefiting from these strong investments in all the funds that we have made. Clearly, once again, performance of the fund is benefiting the result.
We do not intend to modify significantly such allocation in the short term or medium term.
Thank you.
The next question comes from the line of Nicolas Payen from Kepler Cheuvreux. Please go ahead.
Yes, thanks for taking my question. Just brief follow-up, to be honest. The first one is coming back on the previous question, the FRE margin. If I look actually at the last three semesters, the FRE margin is on a trend, downward trend. I wanted to just check with you that it's just because of the catch-up effect on investment that Henri just mentioned. That was the first question. Then on the second question, withou unveiling anything, of course, regarding March 22nd, should we expect any big change of strategy or any new vertical that you might launch? Or what would you want to improve if you had to improve anything regarding those results? Thank you very much.
Maybe on your first question, effectively, I don't think having a look at semester by semester is the proper way to actually do that because you do have some effects going on. If you take a look at H2 last year, our fee related margin was standing at 38%, H1 this year, 37%, H2 2021 , 36%. Overall, this should be actually looked year after year, and what we can see is obviously from 2019, we were standing at 30.1%, 2020, 35.3%, 2021, 36%. Once again, you do have effectively the effect of the freezing of the progression of our operating costs in 2020. On top of that, you do have some effect of late management fees on private equity fund.
You do have, for example, the effects in H2 2020 for something roughly impacting like EUR 6 million. You do have a similar effect in H1 2021 for EUR 4 million. If we were to restate, I would say those effects, it's a bit difficult to handle. We tend to have on a regular basis each year this kind of late management fee. I don't think it's we should have a look maybe at the proper way on a yearly basis rather than from a semester to semester view.
Answering your question on CMD, which is occurring on March 22nd in London with few events around that. We expect you all to be there. I think, you know, we're gonna continue to develop our strategy, and I don't want to spoil anything, anyone before that. W e're gonna first discuss the industry that you all know and the tailwind, which are fairly amazing in this industry. We're gonna discuss and briefly touch based on that, the client strategy, because we think that what we initiated a few years ago with retail is a good example, whereby you can really grow your client customer base.
We'll discuss obviously innovation because we build a very strong innovative platform, and that's why I think in 17 years, we managed to raise from scratch EUR 34 billion. We're gonna touch base on innovation and then potentially, as you pointed, new vertical on new products. That's something we'll discuss. Also, I think we're gonna discuss structure because in this industry, everything is open and you all probably saw the Brookfield comments a few weeks ago. You know, 2022 will be fairly open in terms of discussion. I hope it answer your question.
It does. Thank you.
The next question comes from the line of Christoph Greulich from Berenberg. Please go ahead.
Yeah. Good evening, and thanks a lot for taking my question. Yeah, two questions from my side, please. Firstly, we have seen the average fee rate improving quite meaningfully in 2021. So do you consider this new level as sustainable and there might be further scope for improvement in 2022? Or was 2021 rather an exceptionally strong year due to the catch-up fees in private equity that you mentioned? And then, secondly, looking at the current political crisis, have you already seen any market dislocations that have actually led to investments by your funds or the balance sheet?
First, Christoph. Well, as you may have noticed, we have actually never provided any guidance, I would say, on the management fee rate, because effectively it can vary with mixed effect within our AUM. Since IPO, we've always position ourselves from a strategic point of view with higher private equity, a higher level of AUM from real estate, and thus improving significantly year after year such level of management fee rate. We will not provide any further guidance on that. We think that a level around 100 basis points should be maintained in the coming years, but we are not expecting, we will not guide you on a further increase in the coming years.
On the second part, Christoph, if your question is, if I understood correctly, have we been deploying the balance sheet through direct investment in opportunities that may have been provided by the recent market dislocation? The answer is no.
The same is true for your funds, I assume?
The funds are not trying to time the market. I mean, I'm talking about the private market funds, Christoph. I mean, they're not reacting to a short-term movement. What I could say, leaving aside, again, I'm trying to move away from the past few days and more in the broader scope of things in the context of the inflation and the increasing interest rates. As you know, in private credit we are relatively immune for the reasons, I mentioned earlier to Arnaud's question and the fact that the direct lending is also floating rate.
The fact that the real estate is mainly sale-leaseback on long-term leases indexed to inflation. That our private equity portfolio, as Antoine was saying, is not buyout, so it's not highly levered controlled investment. Primarily minority equity and growth and growth equity in the context of this recent situation, we might see more opportunities to deploy on these strategies. Finally, obviously, the most relevant strategy in the context of high volatility as we've just experienced is our Special Opportunities, and Antoine elaborated on that earlier.
Yeah. That's very clear. Thank you.
There are no further questions in the queue, so I will hand the call back to your host to close today's call.
Thank you very much, everybody for your time, for your question. We hope that everything is safe on this current unfortunate war environment. We have to expect that, hopefully, it's coming to an end. Thanks again for your time, for your question. We remain at your disposal. To conclude the call, we'll tell you that we continue to be entrepreneur in the alternative asset management space with the same drive, the same energy, the same innovation. We look forward to discuss that with you in the coming weeks. Thank you very much.
Thanks. Take care. Bye-bye.