(News Bulletin 247) – The investment company confirms its annual objectives after observing an increase in its activity over the first three months of 2023. Eurazeo also reiterated its ambition to reach 60 billion euros in assets under management within five years.

Despite a complex market environment, Eurazeo recorded an increase in its activity over the first three months of the year.

Between January and March, the investment company saw its assets under management appreciate by 10.1% over one year to reach 34.8 billion euros. “Private equity still represents the vast majority of its assets under management (74%, compared to 70% last year), followed by private debt (17%) and real assets (7%)”, reminds Degroof Petercam in its note of the day devoted to Eurazeo.

In terms of fundraising, they represented 866 million euros against 878 million euros last year, a slight decline of 1.3%. Excluding fundraising from Rhône Group – for which Eurazeo announced the end of its cross-shareholding last April – this amount is up sharply by 42% over one year. Management fees increased by 28% at constant scope and exchange rates in the first quarter to stand at 105 million euros.

A “good performance of the companies held in the portfolio”

As of December 31, 2022, the investment portfolio carried by the balance sheet was valued at €7.8 billion net (€100 per share), invested almost exclusively in Eurazeo programs and funds.

Christophe Bavaria and William Kadouch-Chassaing, co-chairmen of the Eurazeo management board, welcomed the “good performance of the income of the companies in the portfolio”. This portfolio includes more than 70 holdings, none of which represents more than 6% of the total value and are mainly “positioned in structurally buoyant segments such as health, business services, digital, strong consumer brands or energy transition. “.

However, the investment company did not communicate the consolidated turnover of the companies in which it has invested, due to the application of a new accounting standard. For Eurazeo, this change in status results in an exceptional gain of 1.94 billion euros which will be recognized at the end of the first half of 2023.

“This quarter marks a new stage in our ambition to become the European leader in private asset management in the mid-market segments (SMEs valued between 25 and 500 million euros), growth stocks and impact”, add Christophe Bavaria and William Kadouch-Chassaing.

Confirmed objectives

For 2023, the investment company confirms its outlook and declares that it is aiming “in a normal market environment”, for further strong growth in its fee related earnings – indicator put forward by Eurazeo to measure the recurring result of the activity -, which should be driven by rising management fees and good cost control. In 2022, this indicator had appreciated by 26% over one year, to reach 120 million euros.

Eurazeo also confirmed the five-year outlook announced in early March 2022, namely “the trajectory of doubling its assets under management” which could reach 60 billion euros, as well as an increase in the margin from fee related earnings at medium term at 35%-40%.

The investment company also announced the payment on May 3, 2023 of a dividend of 2.2 euros per share representing a total amount of approximately 168 million euros. In this perspective of shareholder return, Eurazeo also confirmed the launch at the end of March of a €100 million share buyback program.

“Eurazeo is in a position to sustainably increase its dividend thanks to commissions from its asset management activity,” adds Degroof Petercam, which remains buyer of the file with a target price of 100 euros. For the research office, “future divestments (supported by the divestment gap of large investments in 2022) could unlock significant value and therefore lead to a rise in the share price”.

On the Paris Stock Exchange, the activity point issued by Eurazeo receives a mixed reception. The action is moving down 1.6% around 10:20 a.m. but has risen nearly 10% since January 1.