EURAZEO (+) : Non material data changes

研报英文原文证据摘录

EURAZEO (+) : Non material data changes

Investment case, valuation and risks

Eurazeo (Outperform, Target Price EUR67)

Investment case

Eurazeo's shift to a dual business model reduces its risk profile in our view and

should be a catalyst for a re-rating and a reduction in the discount to NAV. Growth in

third-party asset management is rapid and should remain strong over the next 6

years. But reaching the aim of having >50% of the EV tied to asset management will

be a long process given the current split is 25% in asset management and 75% from

the investment portfolio. However, support from management and the main

shareholders to accelerate this transition could be major catalysts in the short to

medium term.

Indeed, the company intends to accelerate the rotation of its balance sheet along with

reducing the re-investment needs. This would free up a significant amount of cash to

reinvest in asset management through M&A and do sizeable share buybacks. Both

moves could trigger a re-rating.

Overall, the investment portfolio is of good quality in buyout but 25% of Eurazeo's

portfolio is invested in venture and growth where many companies are not profitable.

This warrants caution.

Valuation methodology

Our TP is based on an SOTP where we value the fund management company

separately with FRE post tax 2027 valued on 12x for the private assets, 6x for FRE

coming from IM Global and PRE at 40% discount to the private assets FRE multiple.

We apply a 40% discount to the investment portfolio ex growth and venture for which

we use a 50% discount.

Risks

To the upside:

Eurazeo delivers on its portfolio exit programme and uses the cash for M&A to grow in

asset management and increase share buybacks. The third-party asset management

business scales faster than expected.

To the downside: