Eurazeo / 2019 Universal Registration Document

Risk management Risk factors

Competition fromother private equity firms 4.2.1.5

MODERATE Risk that Eurazeo’s ability to deploy itsprivate equity investmentprogramsoverthe desiredtime horizon is altereddueto increased competition from other industry firmsand inflatedvaluations. The Companyoperatesin a competitivemarketdueto the existence of a largenumberof privateequityplayers.Strong competition for the most sought-after assets, in a context of plentiful capital,can leadto veryhigh acquisition prices, particularlyfor assetsin themost sought-after sectors. The excellent performance shown i the assetclass representing privatequityattractsnewcomers looking forreturnswhich they cannot achieve in other assetclasses.This increasedcompetition,associated with inflated valuations, is likelyto reduce the field ofattractiveinvestment opportunities - it can also result in Eurazeo spending considerable time and expense on investment candidates where Eurazeo'sproposal isnotselectedor see the loss ofsomeopportunities. With five differentprivateequityinvestment strategies, as wellas investmentteamsworkingin EuropeandNorth America,Eurazeo has a wide range of opportunities.By opening a subsidiary in New York in 2016 (EurazeoNorth America) andpursuingthe goalof directinvestmentin U.S. companies, Eurazeo isnow activein the numberone privateequitymarket in the world which has numerous playersanda wide varietyof opportunities. The Capital andBrandsinvestment strategies have made no fewer than eight direct investments in North America over the past threeyears. Also,by structuring its activity arounddifferentinvestment strategies focusing investment on growth companies with positiveunderlyingeconomic trends, Eurazeo isableto identifyandexamineopportunities, andbetterunderstand vendors at a very earlystage.This approach of identifying non-brokered deals, offers a competitive edge in the salesprocess andcan reduce exposure to competition inherent to brokered deals. To effectively support its dealflow,Eurazeo also aims to reinforce its business network andcontinually seeks to further its understandingof strategic sectors. Teams are dedicated to creatinginvestment opportunities, relying on a digital deal flow monitoringprocess. Eurazeo has formed a team of AmericanandFrenchinvestorsas part ofthe roll-out of its activitiesin theUnited States (Capital and Brandsdivisions).This team issupported by senior advisorswith considerable experience in the industrial sectorandan extensive business network in the United States, valuable in understanding the specific characteristics of the American private quitymarket.Finally, the strategic investment in the management firmMCHin Spainin 2019 marks a new stage in Eurazeo’s ambition to develop its international network andbecomea major European player. Potentialeffects Increasein deaddealcosts •

Examples of risk mitigation measures Range ofopportunities in more countries: Europe andNorth America • Diversificationof investment strategies • Deal sourcing:dedicatedteam,digital dealflow • Business network: strategicpartnerships,senior advisors • Competitive job conditions for investment teams •

Acquisition ofovervaluedassetsin the eventof an economic downturn • Reducedperformance of investment programs/loss of confidence • by investmentpartners Competition in human resources/headhunting •

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