The Exchanges

Q I'm curious how you think about time horizons. You started with really all permanent capital, and then you evolved to having outside investors. How do you think about that optimal time to invest in a company in your exit strategy?

A Not very differently than my competition, I would say. It's just that I have more freedom if I want to feel differently. So that makes a hell of a change, because if you're free to think That you can decide if you have good reason to do so that you can hold on longer, then you have an advantage to your competition. Like you don't have to sell Montclair just because you're thinking on five, five years or three years and a half, even worse, because you have to raise your next fund. You can hold on to it much better. And if you have a strong conviction, then you hold to your conviction and you show to your, to your client that this is the right thing to do. Keep it for longer to have a better return overall. So that freedom has an enormous value. But overall, to your question and being honest, we don't hold our assets much more longer than my peers. It's probably a year longer on average, but you, you would see selling also investment after two years and a half if I have a good reason to do so.

AI assessment note: “we don't hold our assets much more longer than my peers. It's probably a year longer”

Q So after that run of 17 years, you alluded to quitting. What was that change in your path that led you to want to do something different?

A Okay. You're going to smile on that one because it's a funny story because I quit because of private equity and I joined a private equity firm. How bizarre is that? But I know I'll elaborate just a little bit. Well, okay. 17 years is a long time. And I learned a lot. I love Lazard. I still do. It's really, I've got great admiration for banks like Lazard who really, you know, make a living on advisory. So everything that we do from morning to desk is about advising best our clients. So what I love there, and that explains then why I wanted to go to private equity. I loved working for the same clients. Over so many years. I worked for early kids. I worked for Danone. I worked for Kingfisher. I worked in the luxury sector because it's not just about doing a transaction. It's about strategize, really being on the side of your CEOs and advising them as best as you can for the future of the company. Not dissimilar to what we do as investors. So, I mean, there's two types of bankers, you know, the transaction, you know, lead, and then, you know, the more strategic bankers, client relationships. Why would private equity get in the way? Because remember, 2004, five, six, seven, like a craziness of private equity, and it was less about client relationships as bankers, and more about securing a mandate with, you know, whoever was trying to buy whatever asset. And I thought, you know, this…

AI assessment note: “I quit because of private equity and I joined a private equity firm.”

Q So I want to talk a little bit over onto the investing side. Maybe a nice transition is you have your legacy team and strategy. You have a couple of acquisitions. Is there a common strategy that constitutes kind of a Eurasio type deal Across these different sectors of private equity?

A It's probably not a common strategy, but it's certainly a shared vision of where we think the world is going. So you could be, um, the team investing in venture, or you could be part of the team investing in a mid large buyout. You have healthcare in common. You have software as a service in common. You have tech and high growth business model in common. The VC team would do checks of 10 to fifteen million. The mid-lounge would do checks of 400 to five hundred million. But the shared vision of the emerging leaders and winners, not just post-COVID, but over the last four or five years, healthcare has been prime on our top of the pile investment strategy across All the teams. So the theme would be common because it's being thought at the leadership level and then shared with the team. Values, ESG, commitment, expertise that we bring to every of our portfolio companies. So when we invest, there's no situation where part of the due diligence is not, and there's not an ESG diligence. Then we come in, and there is an ESG grand plan with every of the company in which we invest. Could be diversity, could be supply chain, could be carbon emissions, could be women, could be just governance, but there's a before and an after Eurasio in terms of ESG. Very clear. So, if you're part of Eurasio, you see ESG and carbon neutrality as very core to what you do. So, you don't think in terms of Oka…

AI assessment note: “It's probably not a common strategy, but it's certainly a shared vision”

Q If I understand what you're saying right, it sounds like a lot of that playbook is focused, let's just say, on the revenue side. Where can you grow? Where can you expand internationally? How do you think about growth versus cost control?

A Okay, you nailed it. We are a growth private equity investor. It's true. However, You have to be paying attention to the cost of the companies in which you invest, but that's, that's not where we think we make returns for our clients. We make returns in choosing the right sectors, then in those sectors, finding what we think would be the best player in that segment and then accelerate their growth. That's what we want to bring. Could be M&A, could be digitalization. Could be commercial partnership, could be a new country. China has played a great deal in what we bring to our company. The team that I have in Shanghai is not an investment team. I do not invest in Chinese companies directly, but a lot of the companies in which we invest through our funds, our investment strategies, we push them and we help them to build their presence in China, in many sectors. And just to name a few, like hospitality, healthcare, luxury, and I stopped that because it's probably 70% of any GDP. China is the big engine of growth. So if you don't make it there, you're losing in terms of a massive opportunity of growth. So China, we try to be smart because I'm not big enough to have That coverage that maybe some other of my competition have because they're running, you know, 400 billion dollars AUM funds. So we did it street smart. We made a partnership with CIC. CIC has selected a few GPs in the wor…

AI assessment note: “You have to be paying attention to the cost... but that's not where we think we make returns”

Q The other balance you have to strike, which Eurasio has had for a long time, is as a public company, having shareholders and investors. How have you thought about that tension? And really, how has the business been managed over such a long period of time where your competitors that are public, it's a much more recent phenomenon?

A There's no conflict of interest, I don't think, between a client coming into our fund and my public investors. I have to generate value for all my stakeholders. For my LPs, it's IR, cash on cash, ESG, full value transformation play through a fund. And for my public investors, it's about, that's more of a challenge. It's about transforming these successful returns into the share price. And sometimes the share price has that volatility, which is a little bit disconnected from where we effectively realize in terms of performance in our funds, because I'm publicly quoted. I'm part of an index. Sometimes I'm compared to a bank or a financial institution. So some investors sometimes want exposure to the financial market and, or, and sometimes not. So, but over a long-term period, there should be no disconnect. Between the share price appreciation, value creation, and what we do for our clients as LPs in our funds.

AI assessment note: “There's no conflict of interest, I don't think, between a client coming into our fund”

Q From this long roots in Europe, there is this sort of Europe from the inside out with this globalization. And I'm curious, what's different about private equity investing in Europe than it might be from say the US?

A It's probably not that different meaning in terms of how the team operates and the type of talent that you find in private equity teams in Europe or in the US, a lot of talented people, a lot of expertise, commitment, engagement. The market is different because there's not such thing as the European market, as you know, I wish, but it's way more complicated. So, being a good investor in Europe takes many decades of operating in France, in Germany, in Italy, which, you know, I'm just putting UK aside, I mean, UK is the largest market, then comes France from a private equity side standpoint, then comes Germany, and then Italy is probably number four, but a long way behind. So Germany, you know, the German penetration, extremely difficult, very local, very federal, a little bit like in the US, but even more complicated. So being a European player, you have to have a very diversified team, very European team to cover better the market, especially if you're doing smaller deals. It's a market which I feel, although it's my home, I feel a little bit more difficult to penetrate. Which schools have you been going? You know, who have you been raised with? Who are your friends? What are your network? How do you exercise your influence in order to secure a deal? That's sort of different in the US, which I quite like, to be honest, because you're, you're not a weighted, of course, in the US…

AI assessment note: “The market is different because there's not such thing as the European market”

Q Have you found that that frame of mind or that time horizon shifted at all to shorter once you brought in outside capital?

A I think it's not the outside capital which has this consequence, because our clients are just like us as your Azure as an investor. They want, they want their capital to be invested. That's what they're here for. So those equity bridge line and all of this, you know, they understand why it's there, increase your return, but you know, they want to be called. And if they like the company, In which they're invested through your fund, you know, they would rather continue the journey with that company that has been performing very well. However, the pressure comes from the fundraising cycle. Because you show to your clients a performance, but if you don't have DPI, if you don't have exits, like the real moment of truth, not just the reevaluation through your, um, four times a year exercise, you need to show them exits. So in a way, sometimes clients should probably think, okay, you know, I've been with this team for a number of years, decades. I don't have to push them to exit to trust that their next funds will be great. So they do their job well. They can continue to hold on to some assets, no pressure to sell. And that's okay for the next fundraising that the DPI is not like, you know, 1.5 times or We just have to find that balance between us as clients and GPs, so that as a GP, you don't feel pressure to be showing exits and results. Guess what? When you have to show exits, you …

AI assessment note: “I think it's not the outside capital which has this consequence”

Q So outside of your upbringing with four brothers, what was it that about you and your path as a woman where you saw success, and as you mentioned, like far fewer others are alongside of you in that path?

A I was raised by a working mom, a doctor. She's a doctor in law, and she's a doctor in science. I never thought being a woman was a problem because I was raised. In that sort of environment where men or women doesn't really make a difference. You just have to work hard, respect people, you know, have your own values and exercise your judgment. I had no idea that being a woman could be a problem because I was never raised with that thinking. And I had my mom right there, you know, working just like many other male doctors around her. So that's, I think, a big thing first, because you're not thinking it's a problem. I was actually thinking quite the contrary, to be honest, because I thought you're different, you're bringing something, a new energy, a new way of expressing, having people work together. It's sort of fun and at the same time very serious. So it wasn't really never for me an obstacle. Of course, I could see clearly that there wasn't that many women staying there. It's not that they were not hiring women as analysts or associates, but it's such a hard work, and I don't know, for some reason, we were losing a lot of women along the way, and that's the big hurdle. Keep the women. Make sure that for different reasons, they feel welcome, loved, The infrastructure in a private equity firm or a bank is made also for them. It's difficult when you come back from a maternity le…

AI assessment note: “I never thought being a woman was a problem because I was raised.”

Q Take me back to that stretch at Lazard. You were very successful very early on. What were the skills that you felt worked for you to become a partner so early on in your career?

A I was, well, hardworking, you know, discipline. You do what you say, you say what you do, you deliver, you're going into detail, you know, specific, you're really providing great support and, and, you know, safe harbor to your partners, you know, they can rely on you. So all of this has to, you know, be there, of course. But, but there's this other layer, which I think I brought is I was the only one at that moment to have started in New York, then worked in London, And then I finally joined Paris. Not that I really wanted to go back to Paris, but Lazard was that house with that strength and that reputation in Paris. So I thought, you know, you have to be spending time there. But my point is, I was the only one, very early on, I was probably 26 or 27, to have all those connections in the three main Lazard houses, which at the time were different houses. It wasn't merged. It wasn't one bank. There were three different banks just with the, you know, Lazar Frere, Lazar Brothers, Lazar Frere, and they hated each other. They were competing with each other, and I mean, the Brits were, they were the Brits, and the French were looking down on the Brits, and the Americans thought they ruled the world, and you know, those Frenchies, you know, not obeying and not following the rules, but at the end, you know, I created Bridges, That's for sure, because I like working with bigger team of i…

AI assessment note: “hardworking, you know, discipline. You do what you say, you say what you do”

Q So as you thought through that diversification and globalization strategy, how did you think about effectively the buy or build decision with team members?

A I remember the first acquisition, which was in 2011, which is now our small cap investment strategy. What brought us together with Olivier's team and Eurazeo was ESG. We were very much into ESD already at the time. I was, I, Virginie, was very much incarnating the diversity and the gender. One of my partner at Eurasio, who has left since then, was very much about climate and environment, and that's quite early on. I mean, we're in 2005, 2006, 2007, and Olivier and his team, the company was called Ofi Private Equity. They were very much On the same line on ESG. So we started talking because it's years ago and not many GPs were spending time on ESG back then. Long story short, fast forward, you know, we have great values in common. We see the world the same way. Their shareholder can't continue to support them. It's a public company. We take it private. We buy it and we fully integrate it into Eurasio. We changed the name. And your Azure as a client starts investing balance sheets in the funds. Now, you know, we're raising a billion euro funds, AUM probably three. We bought a company which was probably managing two hundred and fifty million. It's 10 times bigger. The team is still there. Retention a hundred percent. We've grown the team, of course. So that's one situation where you get to get together because you have something in common. You have common values. Then we did subse…

AI assessment note: “I needed expertise in tech. I didn't have it in-house”

Q So even the path to hopefully exponential growth, as you say, has bumps and twists and turns along the way. So what do you think some of those challenges will be both for Eurasio and the industry as a whole?

A Well, people, you know, battle for talent. That's tough. It's an industry which is attractive. Pays well. Exciting. You're learning a lot. You're on many fronts. You're meeting only great people. You're lucky. Basically you are, it's hardworking, but you learn every day. So it's attracting and, you know, great talent. And at the same time, because this is growing so far, and I think it's only a start for very obvious reason of long-term low interest rate of volatility of the public market. Of, uh, disappearance of the banks in terms of financing, like, you know, classic banks. So private debt, private equity, real estate, infrastructure will continue to grow very, very, very fast. So the battle for talent is going to be a big challenge. So it's not just about the money, but it's also about the money. So if you can't completely compete on the money side, then you have to compete with your own assets. Who are you fundamentally? And assuming that you can provide a very decent compensation package, the rest would be way more attractive. You know, the mindset, the working condition, a big topic these days, more for, you know, investment banking than for, for private equity, but still the values that you carry, the incarnation of who you are, So you are there. What is it? You are there. It's diversify. It's modern. It's three dot. Oh, it's young. It's forward looking. It's entreprene…

AI assessment note: “Well, people, you know, battle for talent. That's tough.”

Q You mentioned working with operations professionals on your team, lots of them. How do you integrate the operational playbook once you own a company with the investment team?

A You said it, playbooks. We're very disciplined, so we're, we're very much following our playbooks, hundred days, 200 days, you know, milestones with our team and also, uh, senior advisor that we, so we tap into our pool of competence depending on which sector, what issues. Our ELG team is part of those hundred days and 300 days, you know, milestones, playbooks, Same thing. Sophie is heading my ESG team. We have, um, a sort of big and small team at the same time. It's big for a private equity of our size. I've got five full-time professional only doing ESG at Eurazeo. I would need much more. So what I do is that I work with a very large ecosystem of professional in ESG. Could be climate, could be diversity, could be governance, could be social protection. So that's how I would say we work day one, very disciplined. Don't waste a day. Just don't waste a day. And that's where sometimes I get crossed and, um, lose my temper because time is not our friend. We know that. Not that we have to exit fast, and certainly not Eurasio, because we have, we have time, you know, we can be very long-term, and at Montclair, we kept Montclair And, you know, the last exit, we made 10 times our money. We kept it nine years. Montclair is the age of my fourth child. So Montclair is the age of Alice, nine years. I closed down the day after I gave birth, and then we sold the last stake that we had in Mo…

AI assessment note: “You said it, playbooks. We're very disciplined, so we're, we're very much following our playbooks”