Tikehau on course for €25bn of assets by year end

Private debt growth slowed due to distributions to investors but the firm is on target to reach its long-term fundraising targets.

Tikehau Capital’s assets under management grew 11 percent in the first three quarters of the year driven by private equity and real estate strategies but private debt growth was slow.

According to its third-quarter report, the firm had total assets under management of €24.3 billion at the end of September 2019, split between €22.2 billion for asset management and €2.1 billion for investment activities. The asset management portion increased by €1.8 billion in the first three quarters.

Growth in assets was particularly strong in the third quarter, with €1 billion added due to inflows of €1.3 billion and distributions totalling €300 million, mostly to private debt strategies.

But private debt growth was relatively slow, growing €200 million to €8.5 billion in the first nine months of the year, an increase of 2 percent. This is largely due to Tikehau closing its €2.1 billion fourth generation private debt fund early in the year and €300 million of distributions made to direct lending and leveraged loan strategies.

In the summer this year the firm finalised its fifth CLO at €500 million, with €200 million recognised in the third quarter.

Real estate strategies saw strong growth, up €800 million, or 11 percent, to €8.4 billion making it Tikehau’s second-largest asset class by AUM. In line with the group’s strategy to rebalance its business mix, real estate now makes up 35 percent of its assets.

The group’s private equity activity was the fastest-growing part of the business, though it still remains relatively small compared to other asset classes. The firm has increased its private equity AUM from €100 million at the end of 2017 to €1.9 billion at the end of September 2019, increasing by 50 percent or €600 million since the beginning of the year. The closing of the firm’s first secondary private equity fund in September was a major driver of growth in its private equity business.

The group said its fourth-quarter fundraising activity remains solid and it expects to reach its target of €25 billion of assets under management by the end of December. It added that it was on track to achieve its structural target to exceed €35 billion in AUM by 2022 and generate more than €100 million of net operating profit from asset management.