In an interview with “Echoes”, Patrick Sayer, Chairman of the Eurazeo Management Board and Virginie Morgon, its Managing Director, review the holding’s balance sheet with a view to the handover on March 19.
2017 was rich for Eurazeo. Shareholder restructuring, signing of a series of alliances and transition at the head of the group, effective in March… What do you remember from the last twelve months?
VM : We are completing a very solid year, emblematic of the progress made in recent years. In France, we are now an essential partner for companies, whatever their size. In the United States, in less than two years, our unique offer which combines both permanent capital and long-term horizon, as well as European anchoring and openness to Asia and Latin America, is already making a real difference through compared to local players and to the few large global funds operating in the mid-sized business segment. As proof of this, our first two American acquisitions, Trader Interactive and Worldstrides, for which we have been able to convince two leading partners, Goldman Sachs and the Chinese Primavera, to invest alongside us. In total in 2017, our investment activity was very sustained, with nearly 2 billion euros invested in the service of growth. We also sold assets worth 1.4 billion, bringing the level of our capital gains to nearly € 600 million. This dynamic is very well understood and valued by our investors. The evolution of Eurazeo’s discount is an illustration of this: from 20% to 30% in 2002, it has almost disappeared today.
Why suddenly ally with Rhône and Idinvest?
P.S. : It’s in Eurazeo’s DNA. We started out as a traditional holding company. Over 80% of our portfolio was linked to Lazard. Since my arrival in 2002, the priority has been to transform ourselves into a value-creating investment company. We have also gradually decided to combine the strength of our balance sheet with the dynamic leverage of funds raised from partner investors. It is a factor in multiplying our strike force in the service of financing the growth of our companies and a guarantee, for our shareholders, of recurring and predictable revenues. This strategy materialized in particular in 2011 with the takeover of OFI Private Equity, now Eurazeo PME. With the entry into the capital of the American Rhône at 30% and the takeover of Idinvest, we are accelerating this dynamic. Today, with these two operations, we manage 15 billion euros, 9 of which are on behalf of third parties.
VM : We are now present in all areas of investment, from venture capital to large companies, including funds of funds and debt. We want to consolidate our essential position in France with a European and transatlantic vocation and preserve the unique character of the Eurazeo model with a strong ambition for each of our businesses. With Idinvest, for example, we want to create the European leader in growth capital with the creation of a fund of 1 billion euros to which Eurazeo will contribute. Each investment pole will develop and grow and ultimately demonstrate its attractiveness to partner investors by raising additional funds.
Tikehau, which acquired your capital last spring, could also have helped you to do so …
P.S. : Our objective is not, in itself, to raise funds. Our job is the long term and the transformation of companies with a very field approach to our investments.
VM : The strategic partnerships with Rhône and Idinvest go well beyond a desire to accelerate fundraising. These are two projects that strengthen our ability to support companies more generally and at all their stages of development. They are also partners that we have known for a long time and with whom we share a DNA, a culture and a vision.
Patrick Sayer, after 16 years at the head of Eurazeo, you are handing over the baton to Virginie Morgon. How do you see the progress made?
P.S. : By entrusting me with the reins of the company, Michel David-Weill and Bruno Roger have given me exceptional confidence. I owe them a lot. I have been fortunate and honored to work with exceptional people over the past 16 years and I am very proud of how far we have come. Eurazeo has experienced extraordinary growth. Its capitalization increased from 1.9 billion to 5.7 billion euros, we returned 2.7 billion to our shareholders, and our assets under management increased fivefold. I also gradually took Eurazeo out of the protective wing of Lazard and transformed the company, with Virginie and all the Eurazeo teams, into one of the main investment companies with a global dimension, multi-strategy and multi-country. by making it evolve towards management on behalf of third parties. I am also very proud of the perfectly natural managerial transition that we are putting in place. I am convinced that it is necessary to know how to develop corporate governance. It is also the sign of modern and efficient governance that I have always called for. Virginie, with whom it has been great to work for 25 years, is ready to succeed me. It has the full confidence of the Eurazeo board and its major shareholders, the David-Weill and Decaux families. Above all, she has all the talent to continue this magnificent adventure.
Will you be required to take on other mandates within Eurazeo?
P.S. : I will keep certain directorships, such as on the board of Europcar. In the immediate future, I will devote myself to my duties at the Commercial Court and my family office Augusta.
Are you going to run for the presidency of the Commercial Court, as we attribute to you the ambition?
P.S. : This institution is very well managed today. And, no change in his head is expected immediately. Anyway, I have only been there for four years and the rule requires six years of seniority at least to be able to claim to take responsibilities.