Good morning, ladies and gentlemen, and welcome to Tikehau Capital's 2024 Annual Results Presentation. I'm Theodora Xu, Investor Relations Director, and I'm pleased to be holding this session with you today. Before we begin, a few housekeeping points. So the management team will first take you through the presentation, which will be followed by a Q&A session. We'll begin with questions from the audience here in the room, and we'll then take questions and written questions from the webcast. And if we don't have time to go through all the questions, the IR team will follow with you afterward. And with that, I'll now hand it over to Antoine Flamarion, Co-founder of Tikehau Capital.
Thank you, Theo. Good morning, everybody. Thank you for being in the room with us and also on the audio webcast. We're going to start the presentation now. So, as you know, we operate in the alternative investment sector, which remains fairly dynamic across asset classes and across geographies. We think that we have demonstrated the fact that in this growing sector, we keep delivering and executing, both on the investment side, on the performance of the assets we invest in, and also on the fundraising side. As you see, it will be, sorry, 2024 is a record year again, three times in a row, EUR 7 billion of net new money. When we look at our growth journey since the IPO, we decided to put these two KPIs. When we list the firm, we were managing EUR 9 billion.
We are now managing EUR 49 billion, and we see some acceleration in our fundraising, both from a geographical point of view and also from a client segment. On top of that, and probably more important, our result from the asset management side, what we call FRE, the Fee-Related Earnings, was almost nothing when we listed the firm: EUR 3 million, and is now for 2024, EUR 132 million. When we look at the dynamic sector, on average, peers have been growing at 23%. Tikehau has been growing on average at 28%, and it's EUR 27 billion cumulative gross inflows, which translate into EUR 20 billion net inflows from 2022 to 2024. We decided to mention, since the last capital market day, these EUR 27 billion gross inflows and also this distribution to shareholders in terms of profitability of the asset management.
We mentioned these two figures because, as you know, we gave some 2026 guidance, and the world is changing, and it's changing even at a faster pace. But we feel like we are able to deliver this gross figure even in a challenging environment. A quick snapshot on 2024: EUR 9.3 billion of gross inflows, EUR 7 billion of net inflows, which, as I said, is a big number in absolute term and in relative term for the sector and for us, and at least for the European sector. We deploy EUR 5.6 billion, which is a little bit less than last year, but at the end of the day, it's very important to make sure we are doing the right investments. In a challenging environment, we invest a little bit less than last year.
The outlook for 2025 will be probably much stronger, and I think we're going to deploy more money in 2025. We realized EUR 2.1 billion of assets, a little bit less than the year before. Same thing, the market has been probably more calm, especially on the private equity side, but we expect more realization and probably a very strong 2025 year on that front. And then we'll discuss that with Vincent and Henri more in detail, but our core FRE margin remained close to 40%. We see some improvements for 2025, especially because two legs: one, our private equity is growing and will keep growing. And as you know, when you do private equity, the management fees are more higher than credit, for instance.
On top of that, for the first time, we conducted a review on the expense side, and we've been able, for the first time, despite the fact that we keep growing, to reduce some of our expenses across the board. Shareholder returns are important for you and for us as well. As you know, we remain the major shareholder, so we decided to offer an increase of the regular dividend from EUR 0.75 to EUR 0.8. It will be submitted at the next AGM, and the plan remained the same, i.e., make sure that we keep increasing the dividend in parallel with the results increasing.
Thanks, Antoine. Good morning to all of you. Happy to be with you here today. I may suggest that we start maybe by an overview of our transaction activity for the year 2024.
You do have here on the slide, on the left part of the page, the deployment level, and on the right part of the page, the exits with the value creation. For the year 2024, the deployment actually stands at EUR 5.6 billion, which is actually an increase of more than 30% versus the five years average for the past few years. That, once again, I think that clearly reflects the continued platform expansion with a global presence, 17 offices supported by strong sourcing activity in all those geographies. Discipline here, once again, has remained the key in the game, you know, because we have discarded more than 99% of the investment opportunity. High selectivity ratio is key in the way we are deploying. Credit platform accounted for more than 70% of the total amounts deployed in 2024, driven by direct lending and by our CLO activity.
In real assets, we have remained really disciplined. We've been focusing on Core Plus, Value Add. Just to mention two landmark transactions, you know, ranking among the top five largest real estate retail deals in France in an environment where clearly the level of transaction has been reducing massively, not only in France, but also in Europe. On the private equity side, we've continued to be highly selective and to invest in the mega trends such as decarbonization, Aerospace & Defense, and cybersecurity. To be noted on the private equity side, a significant investment in Italy in a company called CEBAT, which is part of our decarbonization fund. Number two, to mention, end December 2024, we were standing at EUR 7 billion of dry powder, so providing, I would say, significant resources in the context that we are going through to effectively seize some additional investment opportunity.
Cumulatively, since 2022, that means that we've been deploying no more than EUR 18 billion and realizing EUR 6 billion. So once again, years after years, we are effectively increasing this level of activity. Just a few comments maybe on the exit side, on the right part of the page, standing at EUR 2.1 billion for the year. It's been driven primarily by our credit strategies, where we had some sizable refinancing. In real assets, we actually, in a very difficult environment, but we have managed and continued to exit some assets on our granular residential portfolio. I'm thinking about some projects that we are running, notably in Iberia since the year 2020 and the year 2021.
In private equity, even though the amounts here seem smaller, it actually is three exits that are very important for us because we had the two first exits of our Aerospace & Defense fund and the first exit of our cybersecurity fund. I will come back later on that. But all these exits actually had delivered strong returns and I would say further reinforcing our expertise and our track record to further attract LP for the coming project. Maybe one word on AI and digital infrastructure investment. It's nearly more than EUR 1 billion that we've been deploying on those sectors. We are clearly committed to supporting the next generation by investing in high-impact companies that drive innovation and resilience, very important things to notice here.
As you know, we are managing Europe's largest AI-based cybersecurity investment strategies, and through that second-generation fund, we are now managing more than EUR 500 million for second vintage of cybersecurity. We've been investing so far in 17 companies as far as this business is concerned. To mention also the fact that we recently expanded our investment in Eclairion, specialist in high-performance computing and AI hosting service, bringing our total commitment to EUR 160 million through our special opportunity strategy. To be mentioned as well, I did mention that previously, but one of the key successes for 2024 was the disposal of Preligens, an AI-driven cyber intelligence company, to Safran for an EV over EUR 220 million . So here, once again, a multiple of 2.4, demonstrating our capacity to create value for the long term and to take on the companies, I would say, to the next level.
Jumping to fundraising, you know, we usually tend to say that today's performance is to more fundraising. As such, here, I'm really pleased to share with you that effectively, once again, as mentioned by Antoine, we have attracted a record level of net new money for the year 2024, standing at EUR 7 billion, so our best year ever in terms of both gross fundraising and net fundraising, actually. Fundraising was particularly strong in Q4, which allowed us actually to significantly outperform our 10% acceleration target that we had set back in the context of our Q3 AUM. All our asset classes have actually played a significant part, a role in that strong fundraising exercise. Obviously, credit strategies, both actually public and private, drove the fundraising in 2024. Particularly to be mentioned, the CLO activity, direct lending, but also dated fund. Private equity fundraising has also accelerated during the year.
To be noticed, notably, we'll come back on that, decarbonization, Aerospace & Defense, and cybersecurity. Obviously, demand for real assets was obviously softer this year, and we've been more focusing, as I said, on the investment side, where we've been able to effectively capture investment opportunity in that different and complex cycle. To provide maybe a quick word on how the fundraising is moving forward on three of our flagship strategies. Let me start maybe by our European direct lending flagship. We are currently fundraising for our vintage number six, Tikehau Direct Lending number six. We are relying on a very strong track record, as you can see, and unique pioneer positioning. So here, good achievements so far on this vintage. On the PE side, we are actually fundraising on several businesses.
As far as decarbonization is concerned, we have reached over EUR 1 billion, which is already a size higher than the previous vintage that we had raised in 2018 and 2019, and as far as special opportunities concerned, here again, we've just announced earlier in the week that we were above EUR 1.2 billion for that strategy, so you see here, once again, doubling the size with the main flagship and all the mandates that were within this activity. With, once again here, very significant commitment, both from pension fund, insurers, family office, and sovereign wealth fund as well. One word maybe on page 16, so beyond the funds and the asset class, here, once again, in 2024, I could say that we have made additional strong progress in addressing private client growing demand for private market.
In 2024, nearly 1/3 of our inflows came from private investors thanks to our tailored solutions and also to the strong distribution partnership that we've been able to implement over the last years. Our private debt unit-linked products have continued to gain traction, attracting more than EUR 1.3 billion of commitments, while Opale Capital, our digital platform for IFAs, has accelerated rapidly over the last quarters. We've reached more than EUR 250 million of fundraising. So that's nearly 30% of our AUM as we stand at the end of 2024, coming from private clients. At the same time, we've made strong progress in internationalizing our franchise. As you know, since the IPO back in 2017, this has been a clear strategic orientation. End of 2024, international investors accounted for 44% of our AUM, about 2/3 of third-party net inflows.
So that means that for the fourth consecutive years, that's more than 50% of these other inflows coming from international clients, reflecting once again our expansion in Europe, the Middle East, and Asia through our different locations where we are now operating our business in these 17 geographies. That's a good transition maybe to provide you an update on our partnership with Nikko that we announced a little bit more than a year ago. Happy to share with you that our partnership is making good progress. First component being on the distribution side. Nikko is currently distributing our direct lending, decarbonization, and credit secondary product. We are working very closely with them, very strong pipeline, and probably good news in the coming months is with them.
But here, with the support of them and the track record that we are able to deliver on our products, here once again, that's a win-win situation. Regarding our plan to create a co-GP to address dedicated Asian private markets, happy to share with you as well here that the JV is not incorporated. We have submitted a license application to the local regulator, MAS, since end December, and we will as well attach our Asian private debt strategy to that JV. And then in the second, we will then focus on decarbonization. Happy to share with you as well that Nikko Asset Management is now a shareholder of Tikehau Capital through share purchases that they've been carrying out during the year 2024. So clearly here, very good partnership, strong ambition on the setup that I've been mentioning just a minute ago.
Sustainability achievement, a quick word on that, and I wanted to share with you maybe a few achievements for the year 2024 because I believe that we do believe that increased transparency regarding the sustainability characteristic promoted by our product is crucial. To be mentioned, at end December 2024, AUM in SFDR, Article 8 and Article 9 grew by 14%, and they have reached actually close to EUR 33 billion of AUM. To provide you a few data points on what we are doing, because I think a good example is much more self-explanatory, but at the end of 2024, 50% of our portfolio company in the private equity strategies had established a sustainability roadmap. As far as private debt is concerned through the year, that means more than 65% of new direct lending and corporate lending transactions have carried out an ESG ratchet mechanism.
So here, strong progress on this achievement and key mechanism. Once again, here, our objective is to increase the share of funds with robust decarbonization strategies in line here, once again, with our net zero commitment. End of 2024, our sustainability themed and impact platform had EUR 4.1 billion of AUM specifically allocated to climate and biodiversity to enable transition at scale. So that's representing, once again, here a 37% increase compared to the year ago, and that puts us on a good roadmap to actually overachieve our target that was set a few years ago to achieve this EUR 5 billion mark for the year 2025. Finally, our sustainability performance has also been recognized, as you can see on the right part of the page.
Sustainalytics has identified our firm as a top-rated ESG performer in a sector where we have received several sustainability awards across our private debt, private equity, and real estate initiative. That's it. Maybe I will pause here and provide the mic to Vincent for the financial parts.
Thank you, Henri. Good morning, everyone. I will walk you through the financials, and I'm very pleased to report that we published this morning strong results on the asset management segment for 2024, and particularly H2. Starting with fee-paying AUM. So fee-paying AUM reached EUR 39.8 billion at year-end, as disclosed on the slide, and is up 14% compared to a year ago. So this growth mainly reflects the dynamic fundraising for capital market strategies, private equity strategies as well, alongside sustained deployment momentum for the credit strategies.
As regards future fee-paying AUM, which correspond to AUMs that will generate management fees in the near term, they reach EUR 4.9 billion, and this will translate in the coming years by an additional EUR 15 million per year on average. Overall, this healthy pace of growth in our fee-paying AUM, on top of the future fee-paying AUM bucket, will basically provide strong long-term visibility for management fee generation. Going to the next slide on revenues. So, as mentioned, management fees and other revenues increased 8% year over year to EUR 337 million. 2023, as was mentioned, benefited from a high basis of comparison due to upfront fees generated from gross inflows, in particular from our real estate strategies, so we did in particular, and excluding these effects, net management fees grew 17% year over year, demonstrating solid fundamentals of our business model.
The average revenue margin stood at 90 basis points compared to 94 basis points a year ago. This evolution reflects cyclical effects linked to fundraising, in particular real estate that I just mentioned, as well as the fundraising mix over the year, more fundraising for CLOs and CMS, which generally charge lower management fees but benefit from strong operating leverage on a core FRE. Now, looking at the blue part on top, the EUR 14 million, which represent perf fees and carried interest, they include EUR 7 million of performance fees linked to capital market strategies, in particular Tikehau 2027, which is a dated fund, and it does also include the contribution from our third vintage of direct lending fund. Next slide is a focus on our core FRE and asset management EBIT.
As I mentioned, quite strong for H2, but overall for the year 2024, core FRE increased 7% to EUR 132 million. That represents a margin of 39.2%, so close to 40%. This is quite a significant acceleration in terms of generation, in particular in the second half of the year, with an increase of 37% compared to the first half. Core FRE margin improved to 42.1% in the second half, so that's a significant rebound compared to 36% we disclosed for the first half. After taking into account the EUR 40 million of performance fees and carried interest, asset management EBIT stands at EUR 126 million for the year ended 2024. Looking now at this slide showing performance-related earnings.
A few data points, as you may know, performance-related earnings are due to become a material profit driver in the years ahead, notably when first generation of closed-ended funds will mature. At end 2024, and as shown on the histogram, AUM eligible to carried interest grew 15% and reached EUR 22.6 billion. AUM eligible to carried interest, which is in maroon color, currently invested and above hurdle rate, reached EUR 8.5 billion. That's quite a steady increase, up 16% versus end 2023. In addition, that's the figure we disclosed of EUR 210 million. This is the unrealized performance-related revenues pot accrued today in our group's fund. This is more than 2.5 x higher than in December 2021, and it illustrates the performance of our funds over this period.
Worth mentioning that this amount is not yet accounted for in our group P&L, but it will be recognized as funds approach maturity and crystallize their performance. I also would like to remind you that shareholders are the main beneficiaries of performance fees, as reflected in how they are allocated and as per our dividend policy that Antoine mentioned previously. Going now to our investment portfolio metrics, and in particular this view in terms, and this is on the balance sheet side. At year-end 2024, we reached EUR 4 billion. It's a very granular portfolio still with 288 investments, approximately EUR 3 billion, so around 74% is invested within our own asset management strategies, which ensure alignment of interests with our investors and clients. The remainder in light blue, so EUR 1 billion, is invested in our direct investment and ecosystem.
As you can see on the right-hand part, on the pie chart, we have a well-balanced exposure across our credit, real estate, and private equity strategies. Now, this slide shows the flows over the years that impacted our portfolio activities. First, investments reached EUR 790 million, of which EUR 530 million invested in our own strategies, with the catalyst being mostly CLO and private equity. We also invested EUR 189 million in our ecosystem, which is inclusive of our stake in Schroders, and at end December 2024, we acquired approximately EUR 55 million worth of Schroders shares. As you know, Schroders is a U.K.-listed asset manager, close to GBP 800 billion of AUM at the end of September 2024, and on the 30th of February, we crossed 4% of Schroders' capital. On the divestment and returns of capital side, right-hand part with EUR 613 million.
So, it was mostly linked to capital reimbursement on our CLO, credit secondary, residual strategies. We continued to structure also innovative initiatives to enhance our capital rotation. Notably, we transferred non-retention equity tranches of our European and U.S. CLOs to new vehicles, and we also structured in Q4 a second collateralized fund obligation, which is dedicated to credit and most specifically direct lending. The translation in terms of portfolio revenues is shown in this line. So, in 2024, we generated EUR 207 million of revenues, which is up 16% compared to last year. Growth has accelerated in H2, with revenues increasing 65% compared to the first half, mostly driven by private equity and credit. In terms of composition, so mostly, and it is the blue part on the left, the 202, which is realized revenue. So, it accounted for the bulk of our group portfolio revenues.
It's an increase of 7% compared to last year, and it was mostly driven by real estate and credit. Unrealized revenues stood at EUR 5 million in 2024. It reflects EUR 55 million of net positive unrealized revenues, mostly from private equity and our ecosystem investments, which was offset by EUR 49 million of negative market effects on our firm's listed REITs. Now, all these data points translate in the P&L disclosed here. Once again, if you look at the overall performance for 2024, we achieved strong operating performance, both for our asset management and investment portfolio activities. Net result before tax grew by a solid 9% to EUR 210 million , in spite of higher financial interests linked to our EUR 300 million sustainable bond we issued back in September 2023, and also by the fact that we drove our RCF in 2024.
Tax expenses reached EUR 54 million in 2024, which reflects a return to a certain normative tax rate of around 25%, which we should also expect in the coming years. And as a result, the change in net profit group share reflects solid operating performance offset by EBITDA item evolution that I just mentioned. So, net profit generation accelerated in the second half of the year, and it's an increase of 71% compared to the first half. Now, the cash generation, where I would like to spend a couple of minutes. So first, I would like to remind you that IFRS revenues are probably not the best proxy to assess portfolio performances, and it does not fully reflect the active management of our portfolios that I just described. Indeed, under IFRS rules, we can account for returns of capital in the P&L only when a fund DPI exceeds one time.
So, since our large funds are still quite young, we have not entered yet harvesting period. Capital returns are thus not a significant component of IFRS revenues. Meanwhile, and that is what is disclosed on the left-hand part, gross cash flows provide probably a better assessment of our active portfolio management. And in 2024, the EUR 830 million as disclosed include dividend, coupon, distribution, asset disposal capital returns, and it contributed quite significantly to finance also our investments that I mentioned earlier. So, looking at the right-hand side on the cash flow, so free cash flow improved in 2024, reached a positive plus EUR 124 million, mostly due to our cash flow from asset management activity, EUR 122 million, and as well as from cash flows from the investment activity.
Before handing over to Antoine, a quick look at our balance sheet, which is instrumental and has supported the growth of our firm, and it will continue to do so in the coming years. We have strong financial means, EUR 3.2 billion of equity and short-term financial resources of EUR 1 billion. Our financial debt increased to EUR 1.6 billion at end 2024, and a gearing ratio of 51% at year-end. As you know, sustainability is at the heart of our DNA, and it also translates in the way we are financed with an ESG-linked debt, which remains stable and accounted for 78% of our total debt compared to zero back in 2020. That concludes my financial review, and I'll let Antoine have the mic.
Thank you, Vincent. A few slides before answering a question.
We've got hundreds of questions, but out of the hundred questions, 99 are regarding Schroders. So, that's good. Everything we do is not relevant, but taking a stake in Schroders is the most relevant thing. So, we'll comment thereafter. So, as you know, the asset management industry keeps growing. It's basically a derivative of the savings around the globe, and people are living older and older, and there are more and more savings around the globe. And the plan, obviously, is to capture this growth. And you see that, obviously, in various geographies and in various segments as well. One of the big themes developed by our peers has been the retail money, because at the end of the day, if you manage money for a pension fund, from an insurance company, for a sovereign wealth fund, for a retirement system, for an endowment, it's coming from a retail investor.
A third of what we manage, more or less EUR 16 billion, is coming from retail investors. So, we've been a little bit ahead of the curve, not because we are smarter, it's just because we started with private investors when we started the firm with EUR 4 million. So, part of our DNA is to tackle private investors. We are doing that directly through our PWS, our own internal team, indirectly through Opale that Henri mentioned, our digital platform, through unit-linked products, through IFAs agreement, and also partnership with private banks. We did in the past, as you know, partnership with First Abu Dhabi Bank, with Santander, with Société Générale Private Banking , with Intesa, and much more to come, and probably some more broader distribution partnership in the coming months and year.
Also, and Henri touched base on that, we will keep doing joint ventures, and Nikko is a good example of a joint venture we set up less than a year ago. As you see on the previous slide, the pipeline is over a billion, with some very strong success coming very soon, and that will give us access to some very large Japanese investors and Asian investors. So, all this fundraising effort is evolving around the years. And what you see on this slide is a few themes which are becoming top priority for all of our peers, including us. But as you know, we try to create and not compete. So, retail investors, it's not that we wake up last year saying, "Oh, we should tackle the retail investors." We've been doing that for quite some time.
Permanent pool of capital. When you're an asset manager, obviously, you want to manage money for the long term. When you're a traditional asset manager managing UCITS, the money can disappear tomorrow. When you're an alternative asset manager, you manage money for the long term, 10 years and even further, and few of our investment vehicles or funds are long-dated, so for instance, the REIT we manage are evergreen. So, we manage the money for 99 years, and these two REITs, it's EUR 1 billion out of EUR 49 billion. So, we'll keep, obviously, expanding our permanent capital with innovation. As I said, you don't want to mimic or to replicate what others are doing. It's been part of our secret sauce, and 2024 was our 20-year anniversary. Just to put things in perspective, the first year at Tikehau Capital, we raised EUR 7 million, from EUR 4 million to EUR 11 million, EUR 7 million.
Last year, we raised EUR 7 billion, so I'm not telling you that in 20 years we raised EUR 70 billion, but I suspect we probably raised more than that. Because as you keep expanding, the brand is becoming more global. We've got offices all around the world, joint ventures with more and more partners around the globe. I know that there are a few questions also on the guidance. As I said before, the world is changing very fast. It's becoming totally uncharted, so a month ago, everybody was willing to invest massively in the U.S. As time elapsed, I suspect that people will be probably less excited over investing in the U.S. My point is, the world is changing fast, so you have to adapt. We think that only entrepreneurial firms can adapt and become more efficient, and I think that's how we build the firm.
Capturing the future growth for us is not something that is scaring us, quite the opposite. And we feel like we have a very strong team around the globe, very strong performances around our asset classes. We keep being a little bit ahead of the trend, and I don't want to be arrogant saying that, but people have been overexcited to AI. I'm not sure people realize that we have EUR 1 billion out of EUR 49 billion invested in AI and cyber companies and assets. Henri mentioned, for instance, the Eclairion investment in a slide. I'm not sure how familiar you are with Eclairion, but Eclairion is the company who has rented this giant data center to Mistral. So, everybody knows Mistral, at least in Europe and in the Middle East. So, we are the ones financing the company, renting a data center to Mistral.
We will keep innovating, thanks to the team, thanks to the joint venture we have. That's why we are fairly excited and optimistic on the delivery in the coming years. Just this slide to illustrate that we created a Capital Solutions Group. What's a Capital Solutions Group? You raise money, you invest, you divest. From time to time, you have opportunities that are not fitting into a fund and into a bucket. We launch a specific dedicated team enabled to tackle and to source special opportunities, and we'll bring investors. We said that we'll start, obviously, with small size. As the firm expands, we will probably attract very large institutions. I suspect that in the coming days, we'll announce a very large transaction of one of our portfolio companies bringing some really big investors.
So, too early to tell, but a few days, we'll see. But I think as the firm becomes bigger with a stronger track record, we are able to bring the very large investors on very large opportunities. And that's why if you do that, the question is not to know if we are going to manage EUR 65 billion or when are we going to manage EUR 100 billion or EUR 200 billion. And maybe one last slide before we answer a question. We consider ourselves probably only with KKR having a hybrid model. What's a hybrid model? It's that you've got a balance sheet and you've got an asset management business. We feel like it's better to have both rather than just have one. So, the balance sheet, as you know, is invested in our funds. And as time evolves, we're going to enter a harvesting phase and value realization.
What does that mean? That means that our funds are selling assets. And because we are a very large investor in our funds, we're going to get proceeds and results. That's why we are very optimistic for 2025 results when it comes to net income, because we've been investing the balance sheet quite heavily in the last few years, and it's now time to realize assets. So, part of the future profitability will come on the realization of the balance sheet. And as we keep saying, you'd rather have a balance sheet than not having a balance sheet, because when you get bored of the balance sheet, you can give back the balance sheet to the shareholders. And I'm not saying that we had a few questions in the past about how are you going to spin off the balance sheet and the asset management. Brookfield has done that.
So, we are three heavy balance sheet players, Brookfield, KKR, and us. Brookfield decided to spin off the balance sheet and the asset management. We'll see what we do, but at least if you have the balance sheet, you can spin off. If you don't have the balance sheet, you just have the asset management business, and that's it. And when it comes to asset management and more important asset management profitability, because at the end of the day, obviously, we are very strong in ESG, we are very strong in innovation, but at the end of the day, you need to realize strong net income, and it's coming from really two legs, the balance sheet and the asset management.
When we launched the firm, nobody realized, but the asset management was not profitable at all in 2016, and I prefer the 2016 figure, which is EUR 3 million rather than the 12 for 2017. So, we moved from EUR 3 million to EUR 132 million. So, that's why also when the target on the guidance is EUR 250 million, when you move from EUR 3 million to EUR 130 million, you multiply by 40. So, maybe I let you multiply by 40 the EUR 132 million, and that gives you what's our long-term plan in terms of profitability. So, a quick summary. We have the balance sheet. We have now the asset management profitable. We have a brand much recognized around the globe, in various parts of the globe. The track record keeps increasing because when we started the firm, we have nothing to sell apart from some excitement from Chabran and Flamarion.
But now we have 20 years of track record with a realized track record in various asset classes, in various geographies across the cycle. So, we had the 2008 crisis. We have the 2012 uncertain sovereign crisis in Europe. Are we going to have some new big crises coming? We are fairly convinced because inflation is still there. Long-term interest rates will keep increasing. Very convinced of that. And also, as I said two times already, the world is entering a totally uncharted territory, especially from a geopolitical point of view. So, it's going to be bumpy, but we think that with our track record, with our balance sheet, with our unique team, with our unique set of partners, and just one word on that, when we launch energy transition in 2018, we've done that with Total.
When we launch Aerospace & Defense in 2020, nobody realized that we partner with Airbus, Dassault, Thales, Safran, and now everybody's focusing on that. It's not we wake up tomorrow and we're going to launch that. As Henri mentioned, we already sold two companies this year in the Aerospace & Defense. We're going to probably announce a few in the coming weeks or months, so our job is really to make sure we are ahead of the curve, and the main reason is that we are entrepreneurs, and there are not so many entrepreneurial firms founder-led where the founder, the entrepreneur, are still the acting CEO. That's the case, and we are not disappearing anytime soon, so that's why we feel very excited about the coming years, and I'm going to stop here because I look at you, it's like the guy will never stop.
We're going to answer a few questions.
Thank you, Antoine. We are going to start the Q&A session first with questions from the audience here in the room. Do we have any questions here live? Yes, Arnaud. First question from Arnaud. The mic is going to come to you. Arnaud Palliez from CIC Market Solutions.
Thank you, Theodora. I have two questions. The first one is, without giving us precise guidance for the current year, can you give us an indication of what is the ongoing fundraising? What type of new vintage you intend to launch this year? And any new strategy also in the pipeline? The second question is more about your shareholding. Can you give us the stake of Nikko today? And also maybe an update on the share buyback program?
Thank you for your two questions.
Maybe I start with fundraising a little bit on shareholder, and I will let Henri to comment on the share buyback. On the fundraising, it's very important in our business to get scale, as everybody knows, because it's the same job to manage a EUR 10 billion fund and a EUR 5 billion fund, more or less. So, right now, we are finalizing three flagship strategies, direct lending, where we started in 2009 our direct lending with a EUR 140 million fund. Our predecessor fund is a EUR 3.3 billion fund. We are already more or less at EUR 3 billion on direct lending, and the goal is to go between EUR 4 billion and EUR 5 billion, and it's very important for us that we finalize that. Our decarb fund, so it's a PE fund. The first fund was a EUR 1 billion fund, and it was a first-time fund in 2018.
We are already above a billion with a target between two and three billion and a very strong pipeline around the globe. And we see some acceleration there. So, we need to finalize that as well. The only one within the flagship, which we just closed, is our special situations fund. Special situations fund is a fund doing quasi-equity return, but mainly with credit profile. The target was EUR 1 billion. We closed at EUR 1.2 billion. So, before answering your question, we need to finalize that before. So, that's one. We have a few funds on the road. We need to finalize or close our Aerospace & Defense Fund, our Cybersecurity Fund. So, that would be for private equity. Also, one comment is that you've seen us in the past launching a lot of initiatives, and we've been very good at launching tons of initiatives.
We try to be a little bit more focused and maybe a little bit less entrepreneurial, but we feel like it's very important to grow our flagship strategy, so that's what we are doing here. I mentioned these two private equity strategies. We went public. We issued already two CLOs, one in Europe, one in the U.S., and the plan is to increase that as well because you're issuing securities and it's a different fundraising, and we want to make sure that our credit platform, and as you know, everybody has been overexcited with direct lending and private credit, it's becoming the next big thing, according to what I'm reading. BlackRock bought HPS for $12.5 billion, so everybody is very excited with private credit. It's more than 40% of our assets.
So, you're going to see us launching probably new initiatives in the private credit, potentially, for instance, in the mid-market CLO, which is different than the broadly syndicated loan CLO business. So, when it comes to fundraising, one is to finalize this flagship, two existing fundraising in some strategies, and we're going to probably launch one or two innovations during the year, but we have enough on our plate. We are fairly convinced that it's going to be a very good fundraising year. We are trying to. Obviously, it's challenging to keep making a record year, but what we see in the market, and I'm making a comment, you have three markets for alternative asset manager fundraising. You have on one end the very large U.S.-listed alternative asset manager who partners with insurance companies or bought insurance companies and are raising an amazing amount of money.
As I keep saying, to put things in perspective, we finished the year with EUR 49 billion. My team will not like what I will say, but 49 billion is what Apollo raised in nine months. Either you want to be in this league, and we want to be in this league, or you remain a small listed alternative European manager, but there is no doubt that we are looking at that direction. I said, you've got three groups of people doing fundraising in the alternative space. You've got the large U.S. guys who partner with insurance companies, all of them. That will be Apollo, Blackstone, KKR, Ares, TPG, Carlyle, and Sixth Street, which is private for now, but going to be probably listed in the coming years. All these guys are partnering with insurance companies.
We decided not to do that for now, and it's changing a little bit the company when you do that, and especially from a regulatory point of view. So, that's the first group. The second group is people specialized only on one asset class. So, for instance, Clayton, Dubilier & Rice just raised a $26 billion private equity fund, and they are only focusing on one asset class, which is private equity. In the same group, you have Warburg Pincus, same size of fund. So, that would be the second group, focusing only on one strategy. And then you've got a lot of people trying to survive in the market, and as you noticed, all of you, or some of you who are very familiar, all the alternative asset management companies managing from $1 billion-$20 billion are for sale.
Last year, the M&A team headed by Louis here signed 85 NDAs on companies for sale, okay? And you're going to not see us buying a mid-market French PE firm or an Italian real estate asset management company because we feel like this group will have difficulty to survive in this new fundraising environment. So, it's a very long answer, but this is what's happening in the market. And our plan and our goal is to make sure we are getting close to the U.S. peer group. I should have mentioned Europe, but in Europe, you have, let's say, Partners Group, Equity and ICG. You have a new company being listed last year, which is CVC. And by the way, they just announced this morning that one of their shareholders is selling some shares. So, you've got, let's say, four large listed European alternative asset management companies.
And in Asia, you have nobody listed. Our view is that at the end of the day, or at the end of the market, as we'll say, Mathieu Chabran , there will be only probably 10 players globally, and the plan is to be part of that. So, it's a very long answer to fundraising, but that's where we are. I start with shareholder before you go, and Henri will comment as well on the.
No, maybe on fundraising, just one important point, I think, is that over the last two years, we've had an increasing contribution from co-investment. Now that we are operating a larger platform, we are able to effectively be and invest on larger deals, and we have strong demand from our LP to co-invest alongside us. So, that means a positioning on different asset classes on larger deals and attracting co-investment LPs alongside us.
And that's clearly a new engine for fundraising alongside our flagship.
When it comes to shareholders, as you know, the management is still controlling 57% of the company alongside a group of historical shareholders, namely FSP, the French insurance fund, AXA, Temasek, and two historical families, one Belgian and one French. Our free float has been more or less around 20% in the last years. What happened in 2024 is that Nikko became a shareholder and a minor shareholder now with 1%. If you look at the Bloomberg filing, you'll see that Capital Group is now a shareholder with 2.5%. Capital Group has been one of the large shareholders of all the listed U.S. alternative investment firms. So, there is still some activity, and I think the plan, obviously, is to increase that in the coming years, and we are working on that.
That's why now we've got 13 analysts covering us, and thanks for that. I'll let Henri comment on share buyback.
Yeah, so as you know, share buyback was implemented early in the year 2020. Overall, the program size was EUR 150 million. We just increased it slightly in the press release that we released this morning. So far, we bought back approximately EUR 130 million at an average price of EUR 20 since the beginning of that share buyback.
Thank you. Next question. Is there any other questions from the room? Sorry. Okay, maybe we are going to start taking questions from the webcast. So, regrouping some questions on Schroders, as mentioned by Antoine, can you elaborate on the rationale behind the acquisition of a 4% stake in Schroders? Is this purely a financial investment, or is there some other strategic purposes behind that?
The financial services industry is changing and is changing very fast. As we used to say 20 years ago, you had mainly banks and insurance companies and a little bit of traditional asset managers, and very few were listed. All this industry is changing, and now you can also add some fintech companies listed, for instance, Adyen with a 45 billion EUR market cap. So, I'm mentioning that because the entire landscape is changing and is changing super fast. Last year, one of the largest European fintech invested close to 200 million EUR with us. So, the landscape is changing, and we feel like that people have been mainly and only focusing in the last two years on alternative asset managers. You've got a lot of transactions. You see holding companies buying alternative asset managers. You see some very large family office launching alternative asset managers.
You see insurance companies partnering with alternative asset managers. And on the other end, people have been less focused on traditional asset managers, and we see a lot of value in the sector, and obviously, all these companies are very different. And that's why we decided to do this financial investment in Schroders. Schroders is probably one of the best remaining global brands, U.K.-based. When we entered this investment, the company was trading at more or less 10x PE with a very strong dividend yield. And obviously, there may be some commercial collaboration in the future, but the rationale of that, we'll have really these two legs I mentioned, and I'm going to unfortunately stop here because they are listed, we are listed. So, maybe I stop here, Theo, if you authorize me.
Thank you, Antoine.
Next question from the webcast before taking any other questions from the room here. On 2026 outlook, can you please give us an update on where you categorize progress? In which areas have you made faster or slower progress for the 2026 outlook?
Well, once again, I think this effective outlook, if you remember, 2026 outlook was issued in 2022 at our last market day. We've made massive and significant progress during the last two and a half years on that. We are clearly confident, and we are doing all the effort to effectively switch on all the engines all around the world to achieve this target.
We've been going through, and we may comment on that, Vincent, say a word on that, on the profitability, and notably the fact that we had not anticipated the real estate environment that we've been going through for the last two years, which has clearly impacted our revenue generation. We've lost roughly something like EUR 30 million of revenue. So, despite that, we've been increasing our revenue-based investing into the platform. Once again, as we speak, what we see, as Antoine said earlier, difficult to comment, well, we'll be the 26th and the years after in the current environment where we are clearly in uncharted territory as far as political and economic issues are concerned. But I mean, as we speak, we are confident to effectively achieve.
Maybe we all know that guidance is super important, but as I said before, the first year of Tikehau, we raised EUR 7 million. 20 years after, we raised EUR 70 billion. As we said, both of us, we have now a global platform, some unique partnerships around the globe, a very strong pipeline of joint venture agreements, and a strong pipeline of investments. Henri mentioned co-investment that we call Capital Solutions, where we find deals and we bring investors directly. So, you don't have a fund, you just find an opportunity, you bring investors, they will pay you fees, management fees, and carried interest. Obviously, all that will increase your AUM and your profitability. We are looking at very large transactions with some very large investors. So, we are fairly confident that probably the magnitude of acceleration could be or could become really important.
Thank you, Antoine.
Three questions now from the audience on the webcast. First, on credit, can you elaborate on the dynamics around credit deployment at the moment? Is activity mainly being driven by refinancing? And what competition are you seeing from other lenders? Second question on wealth. How do you expect momentum in wealth to develop over 2025? Are you seeing any pressures from larger peers entering the space in Europe? And third question on cost. How do you expect operating costs to increase or to evolve in 2025?
Maybe if I start on credit, as I said before, credit became a really hot topic. Nobody was talking about direct lending and private credit 15 years ago. Now it becomes the next big thing, just as a reminder for everybody, what's the business of a bank is to lend money, okay? So, it's not something magic or a new invention.
Banks have been lending to companies forever. But when the 2008 crisis hit, obviously, the banks have been retrenching massively, and it's been accelerating also with the regulatory change, unfortunately, mainly in Europe. So, that's why you saw a lot of private credit initiatives. So, in our case, we started in 2009. We were one of the first few companies to get licensed to do that in 2009. Now it's 40% of our AUM, more or less. So, we have some very strong origination teams, some very strong credit research teams, and we're going to accelerate that just because we've got the track record and the team. What we see on the market is that the deal flow is increasing all around the globe, but you see different deal flows.
So, each time you have a new sector, and I will mention AI, for instance, with financing AI, there are not so many people financing companies which are losing a hundred of millions. And just to be clear, we are not doing that as well. But this company did financing, and that's why you start seeing some private credit or private debt technology focus in the U.S., a little bit in Europe. So, that means that the activity of private debt will keep increasing because each time you have a new sector, and that was the case for energy transition, for regenerative agriculture . And by the way, you can lend money to companies directly or to lend money to LBO. But that's increasing, number one.
Number two, you had less activity in 2023 and 2024 when it comes to financing private equity firms because you had less activity on the LBO side, and as a consequence, you had less primary but more secondary or refinancing, so that was the 2023 and 2024 activities. Now the pipeline, and you just see the announcement of private equity operation, as you see more operations announced, that means that there are more and more activities coming, and the goal is very simple. You want to make sure that when you provide financing, you keep delivering a good return on what you do. There are some areas of the market where you see a lot of competition because some people have been raising a huge amount of money, especially the U.S. folks, and they want to deploy.
So, very important for us to be disciplined and to choose which company we want to refinance or finance. But more activities on the private debt, more players, but also same thing that you see on the private equity. You see some very large players who keep growing. That's the U.S., I mentioned, and you guys in Europe. But very difficult not to enter this market for new players because you need to be at least a few billion to get started unless you want to lend money to very small companies where the credit risk is much higher. So, we are fairly confident that the entry barrier is now very high. So, that's good news for a player like us and more activities coming. What you will see also, there are more defaults coming.
There is no doubt because the economic cycle has changed, and you start seeing some very large companies defaulting in the U.S. and in Europe. And I already mentioned economic cycle, but economic cycle changed when interest rates started increasing two years ago. Some people will tell you that short-term interest rates are decreasing, which is true because central banks are interfering for short-term interest rates, but they are not interfering for long-term interest rates. And when you see where is the 10-year U.S., 10-year French, 10-year U.K., it's close to the high end of the range. So, if long-term interest rates are remaining high, a lot of companies will have borrowing costs, which will increase, more difficulty to get refinanced, and that's probably leads to more opportunities if you are a private credit player. But we are very excited with this business.
As I said, it's 40% of our assets. We've got some very strong origination and credit team. The deal flow keeps increasing. The question for us is, are we expanding our private credit in the U.S.? And it's too early to answer. We launched a fund in partnership with UOB in Asia to do direct lending. As we speak, we closed our first transaction. So, we are excited by the sector, probably more developments, but some people will suffer because as economic cycles change, there will be defaults coming as well. And when it comes to maybe the second question on wealth, we started the firm, as I said, with private investors. Some of the largest families in Europe have been Tikehau shareholders for almost 20 years.
So, we think that we've got a good connectivity and a good traction with wealthy families because they invest with us, they co-invest with us, they invest in our fund. We looked at opportunities with them. So, it's not like we wake up in 2023 saying, "Oh, the wealth is great, let's do that." It's just we started like that. So, we're going to increase that. We have now the co-head of the wealth management is based in the U.S., which is new. So, we have the other co-head is in Europe, in Paris, and the second co-head is in the U.S. We're going to expand that, and the plan is to be probably a little more aggressive when it comes to wealth, not doing crazy things and not hiring 150 people doing that.
We are using also Opale, our wealth management platform, to channel this retail and wealth management investor, but as I said, the big trend on the wealth and private investor is there, so it's for us just a question of how do we tackle that, and we keep increasing that.
As far as the question on cost is concerned, well, clearly we are on expansion mode. We are opening new offices. We are arriving on new markets, so we need to invest into our workforce to effectively capture inflows, but as well to invest in these new geographies. If you have a look at the figures for the year 2024, our operating costs have increased by 8%, so yes, we've been, I would say, suffering from the inflation environment, no doubt on that, so we are reshaping our priorities as far as costs are concerned.
I think the focus has become, obviously, over the last 12 months on costs, with a strong review of our operating costs, once again in a very inflationary environment. I think the most important part is to also focus on the revenue. And the key trigger is that effectively for H2, for the last three semesters, we had revenues ranging in the range of EUR 150 million. H2 24, our revenues are standing at EUR 180 million. So, clearly, our profitability road will come from the revenue.
Thank you, Henri. Two questions on the webcast from Nicholas Herman from Citi. First question on DPI. When do you expect to cross 1x DPI in some of your most recent and large flagship fund? And second question on co-investments, so the ICS team that we just launched.
Will these co-investments be used to attract capital to your main funds, or will these also be expected to generate fees? If so, how should we think about the fee structure?
Thank you for the two questions. Maybe on DPI, which is a very important metric. Our largest fund when it comes to performance fees and where DPI is relevant is our energy transition fund number one, our decarb fund. I think we are working on exiting, and I mentioned it before, a few transactions in the coming months. And if we are doing that, that means that we cross the 1x DPI, just to put a little bit of pressure on our teams now. So, that will be my first answer. And it's the most relevant DPI, is the decarb fund.
But we are making sure that we are harvesting assets at a quicker pace for DPI, but also that obviously our LPs will be happy. But for us, as Vincent pointed out, you've got EUR 210 million carried interest embedded or provision that could be delivered if we sell assets and the DPI is increasing. So, I think more progress to expect in the first half of 2025 for the decarb fund and also other funds. Henri, you'll take the second question.
I mean, obviously, there's no one single answer on the question of fees, co-investment. We are offering some co-investment schemes for LPs where they have effectively some condition with lower fees than if there were not LPs in the fund. So, clearly, there are some economics attached to co-investment, but that's clearly something we've been seeing over the last 18 months, growing demand, but also growing demand from LPs.
But that also enables us to position ourselves on probably bigger deals and to have more, I would say, firepower in the context of when we clearly are investing on those aspects.
Thank you, Henri. Next question is from the webcast as well. Could you please elaborate on real estate inflows for 2025 and the global sector in general?
So, Henri alluded before, but it's a record year 2024 in terms of fundraising with almost no fundraising in real estate. So, that tells you the robustness of our model. But needless to say, that real estate is a mess around the globe, from Los Angeles to Berlin to London to Paris, especially on the office market. So, real estate has been very challenging all around the globe and for only one reason.
When interest rates start increasing, obviously, people realize that buying real estate at 2% when you can buy 10-year U.S. government bonds at 4.5% is maybe a little bit stupid. So, that's why, as Mathieu said, the longer the happy hour, the harder the hangover. And now the hangover is massive. So, you start seeing a lot of real estate developers being bankrupt. You start seeing some very large bankruptcy when it comes to real estate. There is a big article on FT relating to a very large bankruptcy in Europe a few days ago. So, real estate remains on one end very complicated. The appetite for real estate is very limited. But the good news is that on the other end, when you are contrarian, which is our case, and we build a firm being contrarian, there are tons of opportunities.
Last year, we did two deals where we bought not giant portfolios, but we did two transactions for a few hundred million where we've been buying real estate at more than 10% going in yield and even higher. That's the first time probably since almost 20 years that we are able to buy real estate above 10%. We are doing a few other transactions right now, including one in the Netherlands where the cap rate is a little bit under 10%. But we are very excited with real estate because the cycle remains difficult, especially for office markets and logistics and retail. On the other end, hotels and residential remain super appealing for a lot of people, and we think that hotels are very expensive. We've got more than 200 people doing real estate.
So, the real estate platform at Tikehau is very big, and you're going to see us doing more transactions, larger transactions, and take advantage of the market. You also remember that we launched a real estate debt fund in partnership with Altarea. We did our first deal last year where we lent money at 15%, 1.5% secured by a real estate portfolio. So, we see opportunities both in equity and debt. We've done also real estate in the U.S. in the first, sorry, last months of 2024. So, real estate remains difficult, but for us, it's a major opportunity because everybody is tied up with fixing their own problems. And as you all know, we built a firm being contrarian, thinking a little bit out of the box. So, fundraising is probably a little bit more difficult, no doubt.
But if you find the right opportunities, it's very easy to bring investors and co-investors to go back to the CTO question. And obviously, these people investing with you are paying you fees and carried because we'd love to work for free, but our shareholders rather that we work to deliver P&L. At the same time, we've got a very large and robust real estate portfolio with limited leverage, which is the key point when it comes to real estate. We are doing a very good job when it comes to asset management, and sometimes we have to reposition assets because we have some office building. So, we are spending a lot of time making sure that we fix the assets when they need to be fixed.
And the fact that we've got a very strong team enables us to do the job ourselves rather than to talk to an external asset manager where they will be working from home, on vacation, and improving their golf. The fact that we have a very strong team in-house enables us to take care of managing our real estate assets. So, very long answer on real estate, but it's a big part of our portfolio, and we love real estate. We think there are tons of opportunities, and the fact that the competition is fixing their own assets leaves us with a lot of room to invest, to source good opportunities. So, we are very excited when it comes to real estate. Next question could be something which is not exciting you or.
Thank you, Antoine. Just checking if there are any questions from the audience in the room.
Thank you. I'm conscious of time. It's 10:30 A.M. We'll address questions unaddressed directly offline. Thank you so much for your attention, and happy to drink a coffee with you after that. Thank you.