Antoine Flamarion and Mathieu Chabran, Co-Founders of Tikehau Capital

TKO Capital Investment Strategy & Outlook

• Co-founders Antoine Fulmarian and Mathieu Chabron are prioritizing private markets given current structural tailwinds.
• Key focus areas include:
  • Private credit strategies.
  • Real assets, specifically infrastructure in the US.
  • Minority private equity investments in Europe to address corporate equity base deficiencies.
  • Real estate is noted as a focus area despite existing macro "question marks."
• Post-pandemic North American operations were successfully launched to secure talent and capital, positioning the firm to capitalize on the "reset" following the US administration change.
• The firm employs a "skin in the game" approach, utilizing its own balance sheet to launch new initiatives before raising external capital.

SPAC Market Strategy

• TKO recently launched a SPAC in partnership with Bernard Arnault.
• Founders view SPACs as an industrial financing tool for company growth rather than a speculative vehicle.
• The European SPAC market is described as "very late" compared to the US, with narrower stock markets; the tool is intended to facilitate company transitions.
• The SPAC strategy aligns with TKO's core culture of partnering with industrial entities, citing a prior aerospace fund co-launched with Dassault, Airbus, and Thales.

ESG & Energy Transition Fund

• The firm launched a dedicated Energy Transition Fund in 2018, initially funded with €100 million from the balance sheet.
• The fund recently closed with over €1 billion in commitments.
• Investment thesis centers on directing 10% of the €80 trillion global asset management universe toward reducing the estimated 51 billion tons of annual CO2 emissions.
• The approach targets real SMEs to institutionalize impact rather than simply adhering to ESG ratings.
• The strategy acknowledges that pandemic-related economic slowdowns only achieved a 5% reduction in global emissions, necessitating capital reallocation rather than economic stagnation.

Career Development & Firm Culture

• TKO Capital was founded in 2004 with €4 million and has expanded to include offices in the US, Asia, and Western Europe (with a new Germany office imminent).
• Founders cite three major lessons from early career deals:
  • Contrarian Thinking: The first deal involved purchasing a flea market in Paris, a non-traditional real estate asset.
  • Ambition: The €26 million purchase price exceeded the firm's initial €4 million capital, requiring the recruitment of Goldman Sachs as a co-investor.
  • Outcome: The contrarian deal resulted in a 3x multiple return within 12 months.
• Success factors identified by the founders include:
  • Maintaining curiosity and avoiding complacency regardless of market tailwinds.
  • Practicing agnosticism toward trends and focusing on creation rather than competition.
  • Making independent judgments despite advice from law firms, accounting firms, and investment banks.
• The firm emphasizes that experience cannot be "cheated" and relies on early exposure to investment banking, client, and deal-making environments.

Future Advice for Investors

• Founders recommend that newcomers should be "more offensive" and "think big," noting that ambition and humility are not mutually exclusive.
• Aspiring investors are advised not to be shy and to act immediately ("it's never too early").
• Mathieu emphasizes the importance of not taking market conditions or external ratings for granted, particularly in accommodating cycles.