Eurazeo / 2018 Registration document

GOVERNANCE Risk management, internal control and main risk factors

MAIN RISKS AND UNCERTAINTIES 3.4.2

The main risk factors to which Eurazeo is exposed can be summarized as follows:

EURAZEO'S OBJECTIVE

RISK FACTOR

RISK MANAGEMENT

Transparency/listed company : • communication of incorrect information to the market/third-party investors. Cybercrime and other IT risks (3.4.2.9) • Occurrence of a risk (CSR, regulatory, • performance, security, other) including in an investment that reflects on Eurazeo's reputation (3.4.2.7 and 3.4.2.8) Private equity market (competition, U.S. • market, etc.) (3.4.2.4) Vetting of projects : major risk not identified • on acquisition resulting in the long-term in a loss in value (3.4.2.2) Investment capacity : liquidity/resources • necessary to complete good opportunities (3.4.2.10.4) Investment partner fund management : • ability to raise funds/conflicts of interest (3.4.2.6) Co-investment strategy : performance • default Dependency on key personnel in Eurazeo • and in the investments (3.4.2.5) Legal or tax changes unfavorable to private • equity transactions (3.4.2.7) Eurazeo held liable following • non-compliance with regulations by an investment (3.4.2.7) Financial markets (3.4.2.10): market/interest • rate risks relating to bank debt, foreign exchange risk Valuation of unlisted assets (3.4.2.1) • Terrorism and impact on the behavior of • customers/consumers (3.4.2.3) Inappropriate investment strategy •

Organization: human resources and • processes implemented for the production, control and communication of information IT security policy, security audits, fraud/cyber • insurance policies Governance implemented by Eurazeo in its • investments CSR 2020 strategic plan • 8 investment divisions and employees • dedicated to sourcing investment opportunities Governance role and vetting process (see • Section 3.4.1.2) Absence of structural debt within Eurazeo • SE/syndicated credit facility/Regular rotation of the portfolio/ Investment partners Dedicated fundraising team, high quality • track record, wide range of products, business network Rigorous conflict of interest management • procedure Clear strategy: definition of 4 investment • divisions and characteristics of resilient models * sought Governance implemented by Eurazeo in its • investments Long financing maturities/anticipation of • refinancing maturities/mix of floating-rate fixed-rate debt Hedging strategy (interest rate, foreign • exchange) Rigorous internal valuation process • (including external due diligence) Characteristics of resilient models * sought • Diversification of the portfolio • Preparation of crisis management • Characteristics of resilient models * sought • Diversification of the portfolio (sector and • region) In-depth due diligences on • Mechanism to align interests • Anticipation and regulatory watch • partners/Shareholder agreements (co-investment)/Succession plans

Have exemplary governance and be a responsible investor

3

Optimize the detection of investments with growth prospects; ensure that investment decisions are made with full knowledge of identifiable risks liable to affect its value

1

Achieve the planned transformation of each investment

2

Macro-economic and political •

environment altering investment, transformation/value enhancement conditions (3.4.2.3)

Portfolio companies: failure to implement the • strategy Equity markets : valuation of listed securities • (3.4.2.1)/ Poor timing of exit

Management quality • Performance monitoring • Governance, Senior advisors •

Optimize the timing and the terms of the sale of its investments

3 No limit on the investment period: Eurazeo • retains control of the exit timetable Exit options identified on acquisition • Exit planned well in advance • Company characteristics sought: growth potential, international potential (relayed by offices in the United States, China and Brazil), experienced * management team, strong competitive advantage, barriers to entry, visibility and low sensitivity to the economic environment.

Eurazeo

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2018 Registration Document