CVC Capital Partners Stock

Good morning, and welcome to the CVC Capital Partners plc 2026 Half Year Results Call. Please be aware that this call is being recorded. [Operator Instructions] I would like to hand over to Bruce Hamilton to begin the meeting. Bruce, please go ahead.

Thank you, operator, and good morning, everyone. Today, we'll update you on our performance for the first 6 months of the year. We have up to 60 minutes for the call. We'll begin with the presentation. And after that, we'll open the floor to questions. Presenting today are Rob Lucas, CEO; Rob Squire, Head of Client and Product Solutions; Peter Rutland, President; and Fred Watt, CFO. Rob, over to you.

Thanks, Bruce, and good morning, everyone. Welcome to our half-year results call. Starting on Slide 2, you can see the first half of 2026 was a period of real momentum with strong performance across every part of our business. Once again, we've delivered record realizations at highly attractive returns, a track record that remains second to none. This is translating into fundraising momentum across all 4 platforms and each client channel, driving growth in fee-paying AUM, greater diversification and still stronger financial performance.

First, let me provide a bit more detail on our operating performance. Realizations continued at record levels, up 79% LTM, and these continue to be delivered at highly attractive returns. Value creation saw further increases to 11% over the last 12 months, reflecting the benefit of our sourcing and value creation engines. In the first half of this year alone, value creation for PE and Infra was 6%, with Europe, Americas delivering value creation of 8% Deployment continued at a consistent pace of EUR 26 billion over the last 12 months to June and with a strong pipeline going forward.

And we saw broad-based fundraising momentum right across the business with gross inflows of EUR 11 billion, again showing the strength of our diversified platform. That operating momentum translates directly into our financial performance. With group fee-paying AUM up 9% year-on-year, fee-related revenues followed that trend, growing 9% as well. Combined with strong performance-related earnings, first half EBITDA has increased by 12% and adjusted EPS is up 11% year-on-year. And our strong predictable cash generation supports a dividend per share up 12% year-on-year. And this is alongside our ongoing share buyback program. Fred will take us through the financials fully in a few minutes.

Looking in more detail at realizations, our record last 12 months really does mark us out as an industry leader and follows a record year in 2024 and again in 2025. Realizations in the first half of 2026 were up 19% compared to the first half of 2025, driven by exit strength right across our platform. These include notable exits from our Europe Americas Fund VII and II, such as Naturgy, the Spanish-based energy company; and Rayner, our MedTech eye care company as well as from Asia and infrastructure, as highlighted on the slide. For the full year, we expect realizations broadly similar to last year.

These record realizations feed directly into our track record of creating exceptional returns for our clients and delivering DPI that truly differentiates us. Over the past 4.5 years, we've returned 33% more capital than we have called from our private equity platform. And within that, 40% more than we have called from our Europe Americas franchise, something that is quite unique across our peer group. In an environment where our clients are ever more focused on DPI, this is central to our high confidence in our future fundraising, not least Fund X, which we'll be launching in 6 months' time.

Our returns over this period are equally strong, 3.6x gross multiple of money and 26% gross IRR across our private equity exits or 4x and 29% across Europe, Americas. But how are we able to consistently deliver these returns and realizations? For me, 3 factors stand out. First, the upper mid-market size of our investments gives us flexibility. We aren't reliant on the IPO markets to exit. Second, our prudent portfolio marks, which allow us to exit consistently at an uplift. And thirdly, and very importantly, our ability to drive strong outlook during our ownership, creating high-performing valuable businesses. On the topic of investment performance, we are seeing very positive operating momentum across our portfolio companies.

Over the last 12 months, we have delivered EBITDA growth of 13% across all of our private equity funds and 14% across Europe Americas Fund VIII. And importantly, this growth is broad-based as these funds are diversified with typically 30 to 40 investments in Europe-Americas funds. It's also worth noting this value creation includes the markdowns to our limited software exposure, in line with changes in public market valuations in the first quarter. With this value creation, a number of our funds have seen strong progress in gross MOIC over the last 6 months, with Europe Americas Fund III, for example, increasing to 1.5x from 1.3x 6 months ago.

As I've said previously, the importance of AI for portfolio companies can't be overemphasized, and we are putting material resources into preparing ours for this enormous technological change. AI will have disruptive effects, but can also be massively beneficial for those who really embrace it. This is why we are very much focused on accelerating the adoption of Agentic AI across our portfolio companies to drive further value creation, including by using partnerships with all the major providers. In our investment process, we are also leveraging AI platforms to enhance knowledge sharing and support investment decision-making, including for due diligence.

We were early adopters, taking our whole senior team out to Singularity University on the West Coast in early 2020 to better understand the significance of large language models. Since then, we have fully embedded the AI opportunity and risk lens into our investment committee decisions. More broadly, the strength of our network shows in the breadth of our capital deployment across the platform and the way our teams work together. In the first half of the year, we acquired the Animal Nutrition & Health business of DSM, an investment made possible by the combined efforts of our Benelux, DACH and Chemicals teams. In sports, media and entertainment, where we are a world leader, we acquired the world's largest online Chess platform, chess.com, and made an investment in Equine Network, which is a leading North American equestrian sports league.

Both investments combine the expertise of our SME sector team with our U.S. platform. In the first half, this led to a deployment pace that remained consistent with a 3- to 4-year investment cycle, running at a similar level to the prior year, and our healthy pipeline gives us real confidence as we look forward. We have built CVC into one of the world's broadest and most diversified private markets leaders. This breadth is a huge competitive advantage as clients consolidate relationships and are looking for partners who can serve them across multiple strategies, channels and geographies. As you can see on the left of this slide, our 4 platforms are all in sizable and very attractive markets, private equity, credit, secondaries and infrastructure.

Within each of those platforms, our unparalleled global network of 30 offices and our specialist teams provide the deepest origination funnel in our industry. This is complemented by a highly aligned, very distinctive compensation model and a business that is fully integrated as one CVC. As you can see on the other side of the slide, we are proud to have the highest quality client base and relationships. Our consistent track record of outperformance through the cycle has helped us create deep, long-standing relationships with the top LPs in the world. And at the same time, our fundraising capabilities continue to broaden and expand across the insurance and private wealth channels.

All this means we're extremely well positioned for growth, benefiting from the trends that work in our industry. We're gaining market share on the back of our consistent outperformance and investment appetite for Europe. We are demonstrating strong growth in credit, infrastructure and secondaries. In each case, we are using the power of the CVC network to keep scaling these platforms and broaden them further, including into adjacent products and client segments.

And in private equity, we are confident in future growth, driven by Fund X, which we expect to be the same size or larger than its predecessor, which is still the largest private equity fund ever raised. This all underpins our previously guided double-digit CAGR in fee-paying AUM to 2028 and a clear path to a substantial step-up in our earnings in 2028 as we activate Fund X. With that, I'll hand over to Rob to take you through fundraising. Thanks, Rob.

Thank you, Rob, and good morning, everyone. I'll start my section with an update on our closed-end institutional capital raising. Slide 11 shows that our strong execution in this channel continued in the first half with momentum across our entire platform here at CVC. We held 2 highly successful final closings during the period. Firstly, our CLO Equity Fund IV with commitments of $1 billion, a 25% increase on the predecessor Vintage III and powering $15 billion of CLO issuance. Secondly, we closed our maiden European middle market buyout fund, CVC Catalyst, with aggregate commitments of $3.4 billion. This total is 70% above our initial $2 billion target and offers yet one more data point on the strong institutional demand for European private equity.

In our secondaries business, SOF VI closed $9.3 billion at the half year, and we'll hold a final close there in the coming weeks with more capital. On the back of this success, we feel well positioned to now broaden our secondary platform into new adjacencies, including the imminent launch of credit secondaries and over time, the launch of infrastructure secondaries. And on infrastructure, we've closed EUR 5.2 billion of aggregate commitments at the half year into our Value-add Fund IV and our DIF Fund VIII. Combining this capital with further closings already held in July and other IC approvals received, we're now over 75% complete on our combined EUR 8 billion target. When taken as a whole, we see this execution demonstrating CVC's capacity to raise institutional capital at scale as we broaden our platform.

The support and the partnership that we're seeing day in and day out from our long-standing client relationships provides all of us with real confidence in our pipeline for '27 and our Fund X raise specifically. Pre-marketing for that process is now well underway and is very much in line with expectations. CVC's outstanding investment and realization metrics, combined with our proven underwriting model for that specific process, underpin our confidence in delivering a fund at the same size or larger than its predecessor. Now turning to Slide 12. And as Rob referenced, we see CVC's platform continuing to gain share in each of our channels.

And I want to quickly detail the structural drivers that I'm seeing firsthand, which position CVC so strongly. First, as we've referenced on prior calls, we see the vast majority of our clients continuing to concentrate their capital with fewer and fewer GPs, focusing both their time and their energy on relationships that can span multiple asset classes. Secondly, we see an ever-growing emphasis on partnering with managers that can demonstrate a proven track record of generating alpha across economic and market cycles. And I see this focus point especially gathering even more momentum in the years to come.

Third, institutional clients are placing ever more weight on actual cash-on-cash returns and actual DPI metrics instead of mark-to-market paper gains. On this front, CVC's track record is second to none. And fourth, we continue to see a rebalancing of private market portfolios towards greater European exposure. Given CVC's leadership position in European private equity, credit, secondaries and infrastructure, we feel very well placed to be the partner of choice for our clients. Now Rob referenced several of these trends as emerging or indeed accelerating since the start of 2022.

And as we show on the right-hand side, during that time period, we've generated in excess of EUR 100 billion of gross inflows onto our platform. While the aggregate scale of that capital is pleasing and is set to jump again with our Fund X process, what's most encouraging is the acceleration in the year-on-year cadence of these flows as we broadened our platform, specifically the growth in flows to secondaries, infrastructure and to credit. And I fully expect this cadence will amplify further when we onboard the Marathon products in the coming months and years ahead.

So lastly from me, on Slide 13, we cover private wealth, and I'm pleased to report that we've continued to make good progress in the channel with around EUR 7 billion of aggregate value now in our evergreen structures. This total is more than 4x the level of just a year ago and is 90% up on the values which I provided at the full year results. During the first half, we accepted over EUR 2.6 billion in subscriptions, and we had gross redemptions of around EUR 80 million, implying net inflows to our evergreen products of around EUR 2.5 billion. As a reminder, we see these vehicles as an important long-term opportunity for CVC to accept different forms of capital alongside our long-established strength in the traditional closed-end format.

Aside from private wealth, we believe these structures will be the conduit for defined contribution retirement plans to gain exposure to private markets, including over time, the emerging 401(k) opportunity in the United States. I'm pleased to report that from a standing start just over 2 years ago, we now have active evergreen offerings in each of private equity, credit, secondaries and infrastructure with multiple vehicles tailored to the large U.S. market.

In conclusion, as is the case with our closed-end funds, provided that we maintain strong performance, I have every confidence that the long-term trajectory of these vehicles will be incredibly positive as clients in this maturing area increasingly seek to align their capital with high-performance managers. So with that, I'll now hand over to Peter to provide an update on the developments that we're seeing in credit and insurance.

Thank you, Rob, and good morning, everybody. We have significantly scaled our credit platform in recent years to build market-leading positions in both private and liquid credit. Today, we are a top 3 manager in European private credit and the #1 CLO manager in Europe. The quality of our underwriting is reflected in our outstanding performance track record with very low default and loss rates, an annualized default rate of just 0.2% since inception in European direct lending and 0.2% loss rate in CLOs, well below industry averages. In direct lending, this is partly because European private credit markets have a more favorable dynamic in terms of capital supply and demand than in the U.S.

But in addition, like in private equity, portfolio diversification in credit is a key driver of this outperformance with, for example, software exposure well below industry averages. This performance has driven strong growth, and we have scaled our European direct lending program from EUR 1 billion to over EUR 10 billion in only 2 vintages and a 30% CAGR in our credit fee-paying AUM since 2020. We also see substantial future growth potential. We have continued to invest in our product offering. Notably, the acquisition of Marathon, which closed on July 1, brings us market-leading performance in a number of attractive subsectors, especially in the U.S. market, including the fast-growing asset-based lending, structured credit and real estate credit with minimal exposure to the U.S. direct lending market.

This significantly expands CVC's addressable market opportunity across all our routes to market. Indeed, with this broadened product suite and our market-leading performance, we are confident that we can continue to scale in the institutional channel. In private wealth, as just touched upon by Rob, we see significant further growth potential from the EUR 3.5 billion we've reached in our CVC credit vehicle in just 2 years. And in insurance, the addition of Marathon's capabilities will allow us to further accelerate our growth in that segment.

Indeed, the size of the insurance opportunity is considerable, and we are well positioned to win. Insurers need to improve the risk-adjusted returns on the asset side of their balance sheets to meet the competition from insurers backed by alternative asset managers. We have already raised EUR 18 billion over the past 5 years. And given the focus on the insurance channel, we're now bringing together our insurance expertise more closely with our credit expertise into one credit and insurance organization.

Our credit investing capabilities, together with our experience in insurance private equity and technical experience from our global insurance solutions team means that we can create solutions that are highly attractive to insurers. This broadening of conversations we can have with insurance clients is illustrated by the $3.5 billion strategic partnership we entered into with AIG at the beginning of the year. And with that, I'll hand you over to Fred to take you through the financials.

Thank you, Peter, and good morning, everyone. Starting with Slide 17 and fee-paying AUM, which as we can see, grew 9% year-on-year to EUR 153 billion. As Rob noted earlier, that growth was led by credit, secondaries and infrastructure, which together were up 19% year-on-year. Private equity was in line with the June '25 levels, reflecting, on the one hand, strong realizations, but offset by fee-paying inflows with the completion of Catalyst and also the positive momentum we've seen in private wealth. Moving to Slide 18 and turning to the P&L.

Fee-related revenues were up 9% versus the first half of '25, in line with fee-paying AUM growth at EUR 771 million. As you can see on the slide, fee-related revenues included EUR 22 million of catch-up fees relating mainly to the capital close in H1 for Catalyst and SOF VI. Fee-related earnings up 11% to EUR 442 million and FRE margin of 57% also benefited to some extent from those catch-up fees. Performance-related earnings of EUR 110 million were up 15%, tracking in line with our expectations and also tracking our prior guidance for the year.

Taking both FRE and PRE together, EBITDA increased 12% to EUR 554 million. And finally, profit after tax was EUR 434 million, up 10% with the effective tax rate, excluding carried interest at around 20.5%, higher than last year, but within the range of 19% to 21% that we discussed at our full year results. Turning to Slide 19 and costs. Total operating expenses grew 7% year-on-year, reflecting our focus on cost discipline alongside investment in our growth areas such as private wealth and insurance. For the full year, we continue to expect total cost growth to be slightly below 10% with higher growth in the second half due to the phasing of hirings.

And consistent with what we said in March, we expect total cost growth to revert to mid- to high single-digit percentage from 2027 onwards. Turning to performance-related earnings on Slide 20. The basic message here is that we are reaffirming all guidance set out at the full year results in March. Firstly, the future carry potential embedded in funds already raised remains unchanged at EUR 5 billion, with carried interest recognized in the first half, offset by carry on new capital closed in the period. This will flow through the P&L over the coming years and is based on our key funds achieving the midpoint of their target ranges.

Secondly, on the outlook for PRE, we are also reaffirming the guidance that we set out at our full year results, including for 2026. The strong realizations we have delivered in the first half gives us increasing visibility and confidence in delivering this. Our unchanged expectation is for aggregate PRE of around EUR 600 million to EUR 700 million over 2026 and 2027, with the most likely path still being 2026 and around the 2025 level, followed by a first step-up in 2027 with expected initial carry recognition of Asia V. Finally, we continue to expect that a further substantial build will then follow across 2028 to 2029 as Fund VII recognizes its initial IFRS carry given the IPO perimeter and IFRS accounting effects we have discussed previously.

Lastly, turning to our balance sheet and cash generation on Slide 21. As of the 30th of June 2026, we had a healthy balance sheet position with gross cash of EUR 645 million and long-term debt of approximately EUR 1.9 billion. This reflects the issuance of $550 million of U.S. private placement notes and is adjusted for the cash used for the closing of the acquisition of Marathon, which took place on July 1. Strong operating cash flow in the first half supported the payment of the 2025 final dividend of EUR 250 million as well as EUR 194 million of share buyback completed out of the announced program of up to EUR 350 million.

The net debt leverage ratio as of June was 1.2x adjusted for the closing of the acquisition of Marathon, well within our maximum leverage guidance of 2x. The second half of the year will see continued strong operational cash flow, supporting the payment of a EUR 275 million interim dividend plus further progress in the share buyback program. With that, I will hand back to Rob for some concluding remarks.

Thanks, Fred. So to conclude, what excites me the most is not just the strength of the first half's performance. It's that every structural trend shaping private markets today, client consolidation, demand for alpha, insurance capital, private wealth, European allocations and product diversification. They all play directly to how we have positioned CVC and how we've built our strengths. Our market share gains continue.

The strong double-digit growth in EBITDA, EPS and dividends in the first half is underpinned by fundraising momentum, including the $3.4 billion raised for Catalyst and the $9.3 billion raised so far for SOF VI. You've heard today about our strong growth in private wealth and in insurance with Marathon materially expanding our offering. At the same time, we remain firmly focused on our core institutional clients. We see continued growth in private equity with increasing visibility and confidence in our ability to deliver Fund X at the same size or larger than Fund IX, alongside continued fast scaling in credit, secondaries and infrastructure.

This all underpins our previously guided top digit -- double-digit CAGR in fee-paying AUM to 2028 and a clear path to a substantial step-up in our earnings in 2028 as we activate Fund X. Thank you very much. Now just before I hand over to Bruce to start the Q&A, you'll have seen we announced in May that John Hourican will join CVC as CFO in September and succeed Fred, who will retire after almost 20 years with the firm. I'd just like to take a moment to recognize Fred for his exceptional contribution to CVC over nearly 2 decades.

Fred joined in 2007 and has played a central role in helping us build CVC into the global business we are today, including, of course, our IPO in 2024. On a personal basis, Fred has been a trusted partner and colleague to me and to many others over the years and externally as a trusted contact for many of you on this call. On behalf of us all, thank you, Fred, for everything you've done and best wishes for a happy retirement. Bruce, over to you.

Thank you, Rob, Peter and Fred. Now let's open it up for questions. Please try to keep to 2 questions per person. Operator.

[Operator Instructions] Our first question comes from Hubert Lam with Bank of America.

First, I'd like to thanks Fred, for all the help since the IPO and all the best in the future. My 2 questions. Firstly, on wealth. Any indications of slowing demand near term for your wealth products? Or do you see any change in terms of your goals or launches because of the more challenging backdrop within the evergreen sector? That's the first question. Second question is on credit. How do you see deployment opportunities now? Do you see more now just given the sector dislocation? Or is the lack of sponsor activity slowing your deployment activity?

Thanks, Hubert. Rob, would you like to take the first question there? And Peter, would you like to speak to the second?

Sure. Hubert, Obviously, I don't have a crystal ball. And so what I can tell you is that we're really pleased with the momentum that we're seeing. We had net inflows into all of our evergreen products in Q1 and in Q2. And so we feel incredibly well positioned. And I've said on prior calls, we're really seeing that differentiation in terms of that European nexus play through in terms of the reception that we're getting, not just sort of in the rest of the world space, but also specifically within the U.S. wealth space. So that's how I'd answer that. Peter?

Thanks, Rob. Yes, Hubert. As noted by some of our peers, there has been a muted level of activity in the first half, partly driven by overall industry new deal activity being lower. We see this more as a temporary phenomenon. And from our point of view, our underwriting remains extremely disciplined, and we are really focused on making sure we're picking the very best opportunities ahead of us.

Our next question comes from Nicholas Herman with Citi.

Okay. I think I -- two for me as well, please. Firstly, on insurance, outside of the U.S. players, I'm not really aware of such high integration between the insurance and credit team. So it feels like that's quite relatively unique. And I guess from a competitive standpoint, outside of your global U.S. competitors, can you just talk about the competitive environment to win these insurance mandates, which are clearly -- there's clearly a significant opportunity there.

And I guess -- and then finally just bring that all together, it feels like the AIG partnership and SMA was not really a one-off. Is that fair? That's the first one. And then the second one, just a quick one on Fund X. Just trying to conceptualize the guidance on Fund X to be at least as big as the next -- as the last fund, given the clearly very strong DPI were Fund X to be the same size as Fund IX. What level of re-up rate would that broadly equate to?

Brilliant. Thanks very much, Nick. Peter, maybe you could just take the first question, and Rob Sure.

Thanks, Nicholas, for the question. And I'm not sure whether others have integrated quite as closely as we have. But certainly, we think that to be successful with insurance clients, you do need this combination of the right products that we talked about in the presentation as well as bringing an overlay of the expertise of the specifics that insurance balance sheets need to have. And absolutely, we do have big ambitions for the insurance route to market, and we hope and expect that the AIG partnership will not be the only strategic one that we will have in a few years' time.

Great. And in terms of Fund X, Nicholas, look, we will announce the target size, the cover amount at our Annual Investor Meeting in London in the second week of September. And then in terms of your question around sort of re-uprates, as you know, we have a very proven underwriting process for that fund family where we re-underwrite every single line item over the course of the preceding 18 months.

And so we're very confident that we will achieve industry-leading, quite frankly, re-up rates there. And I think that with this renewed appetite for Europe, I do actually think that the existing clients will probably contribute more into Fund X relative they were in Fund IX. So we feel quite positive again at this stage.

That's very helpful. Could you just remind us how much the existing clients contributed to Fund IX in that case, please?

I'm not sure we disclose that, Nicholas.

Our next question comes from Arnaud Giblat with BNP Paribas.

Best wishes to Fred. Two questions, please. First, could we -- could I ask about Fund IX, it's currently deployed at 65%. Could you talk about the investment pipeline that's currently active for deals that you have in the pipeline for that fund? And specifically at what level -- can you remind us what level of investment level does that need to be for Fund X to be activated? The second question is on SMAs. So you've done really well in developing rapidly a wealth channel.

I suppose perhaps the next step is to take the secondaries and the broad-based full platform approach to small institutions globally to try and sell diversified investment to small institutions. I'm just wondering if that's something in the plan and what sort of development should we expect there?

Thanks, Arnaud. Let me talk to Fund IX and the investment pipeline and also sort of activation levels. So the pipeline is good at the moment, but the world out there is quite volatile. And so the flow rate can be quite variable. I mean we're just very fortunate to have the people on the ground in the local markets to have the local network, and we generally see opportunities and can secure those opportunities ahead of others in the market, particularly within, of course, the European context. So we will see how that pipeline flows through.

We're being very selective is the point here. And so although we are currently 65% deployed, I think we still are looking at that sort of 3- to 4-years investment cadence in terms of the amount of time. And so hence, why in terms of activation, we're still looking at the first half of 2028 to do that. In terms of the activation level, we'd normally do that generally around 95% level of deployment out of the prior fund. In terms of the SMAs, I don't know whether, Rob, you're happy to talk to that?

Very happy to. Look, I think as I said to Hubert's question, we're very, very happy with the momentum that we're experiencing with the reception that we're getting within the wealth channel more broadly defined. I think if your question was around smaller institutions, I think at this stage, we've got plenty of runway in front of us within the private wealth channel.

And many of those smaller institutions do invest in our closed-end structures already. I think over time, as I referenced, I really see these vehicles as being the linchpin to the DC, the defined contribution retirement space. We're already seeing that to a certain degree in Europe with LTIF and LTAF. And so if that broadens the aperture and part of that is smaller institutions, then that's great.

[Operator Instructions] We will take our next question from Oliver Carruthers with Goldman Sachs.

Oliver Carruthers from Goldman Sachs. I've got 2 questions, please. The first question on EU DL5, your next direct lending fund. So on Slide 11, you're showing a EUR 5 billion target for this fund. I think this is the first time you disclosed this. Obviously, that excludes leverage, co-invest and SMAs. I think you previously presented a target on a slightly different basis, inclusive of these numbers back at your credit CMD back in October last year.

But could you maybe give this EUR 5 billion, I guess, fee-paying AUM kind of context in the, I guess, the momentum you're seeing with LPs and also the deployment landscape for European direct lending. We've just seen quite a few kind of pretty strong peer raises in this space. And I'm just interested on your views on how your franchise is going there. And then the second question, per your press releases in the last few months, we've seen quite a few exit announcements, particularly in Fund VII in Europe, Americas.

Could you help us just understand how they will mechanically flow through to your performance fees as we think about the second half of this year? And -- or maybe how much of that has already come through in the first half numbers that you printed today?

Great. Thanks very much indeed, Oliver. Rob, do you want to just take the first part, then Fred perhaps second part.

Sure. Oliver, so yes, the DL5 number that we've got on Slide 11, that is an unlevered equity target. Obviously, a reasonable proportion of that total is levered 1:1. And then on top of that, again, as you rightly point out, you have a series of large SMAs that sit alongside that. And so if you recall, our EU DL4 was very successful at north of EUR 10 billion. And again, I think on this raise, we'd certainly hope that we can conclude it larger than the predecessor.

Oliver, on the performance fees and realizations, yes, there's 1 or 2 that we did announce that are still to go through regulatory approval, for example, so -- which is why we're really guiding to unchanged in total, but more second half weighted in terms of PRE. That's really in line with what we're expecting. So nothing material either way, but in line with expectations.

And in terms of the mechanics, Fred, you -- Oliver was just asking about the mechanics around the treatment within Fund VII.

Yes. So it's pretty much the same as any fund in itself. So there are some announcements we make where we make -- we sign the realization, but then, of course, it's waiting for regulatory approval, in which case under IFRS, we're not able to recognize that from a PRE perspective. So that's pretty consistent with prior periods. But we're still -- we're not changing our view in terms of timing here or total for 2026.

And of course, it's a 50% allocation through to the PLC within Fund VII, nothing within Fund VI, 50% within Fund VII, i.e., 15% through to the PC. And then once we get to Fund VIII, 100% or 30%. So good.

Our next question comes from Julian Dobrovolschi with ABN AMRO.

Fred, first of all, I wish you a really happy retirement. Indeed. Two questions. First on the management fee rate. We've seen record fee realizations, which have been shrinking the PE-fee paying AUM in the mix, while the credit secondaries and infra now exceeding 50% of the asset base. And we also know that the strategies carry lower fee rate than the PE, especially the credit and secondaries.

So my question is, how should we think about the blended management fee rate margin over the next 2, 3 years in the -- as the mix shifts away from the PE strategy? And the other one really quick. Just wondering how sustainable do you think is the 57% FRE margin in H1? So how much of that do you think we can actually sustain in the second half given the fact that the OpEx is going to accelerate?

Yes. Let me take both of these, Julian. Thank you. So in terms of fee rate, I think the blended rate we're still seeing as we look forward, is still at around 1% of fee-paying AUM. You're right, credit is lower fees, but equally, secondaries and infra are higher than the group average of 1%. So we're still seeing that overall blend moving in a consistent path towards that maintaining 1% on average fee rate. In terms of your margin point, it's really partly around -- I get your point on expenses, but it's also partly around the catch-up fees that we saw in the first half. And I think if we spread that EUR 22 million of catch-up fees across the full year, I mean, first half would have been at 56%, and that's probably in line with where we're headed for the second half as well.

Our next question comes from Michael Sanderson with Barclays.

Just a couple of quick ones, please. First of all, you mentioned the progress in MOIC. I was just interested if you were able to break that down at all between sort of the earnings growth, the realizations you've seen and whether sort of multiples you've applied because clearly, where we are at end of H1 '26 is nicely higher than where we were at the end of FY '25. So just interested if there was any more granularity you're willing to share on that.

Second thing was Europe, Americas, obviously, by its name, there are the opportunity to invest in 2 major areas. Are you having any sort of -- in the early conversations you're having around re-ups, is there any sort of discussion about how the allocation of Fund X might change or not versus prior vintages? Or are you I mean I know it's all a long way off, but just interested to know whether there's a demand from investors that you're going to spend more in any -- in either of the individual geographies? And thank you, Fred, for your help.

Thanks, Michael. Let me just take the second of your questions there. And then maybe, Fred, you could just give a little bit of the breakdown in terms of the MOIC. Just in terms of Europe, Americas, I mean, we -- as you know, we invest very bottom up. And so it all depends on where we see the very best opportunities, Michael, in terms of how we approach it. Having said that, -- we are putting 35 to 40 investments into a Europe-Americas fund. And generally speaking, the exposure to the Americas within that has been in the sort of 15% to 20% region, something like that. And I think we probably see that as a sort of similar level.

There's no doubt that there has been increased investor appetite for Europe that we've seen over the recent months. And that's really, really come through. And so -- and certainly, we see the ability to drive alpha within the European environment as particularly compelling at the moment. But it all depends on where we see the very best opportunities, and that's what will dictate. But I would have thought generally around that sort of 15%, 20% level as it's historically been something similar.

And on your MOIC point, Michael, so yes, most of the uplift is coming from real earnings growth. So you see that on Slide 7, where we set out the EBITDA and revenue growth by -- in Europe and Americas in particular. So the vast majority is coming from that. But we're also seeing some uplift from realizations as well. I mean we are realizing at above the mark that we were holding assets in December. And so that continues. And so that's a contributor to it. But the biggest element of the growth in MOIC is from underlying real earnings growth at the portfolio level.

Great. I think -- though we're now -- there are no further questions. So thank you all for your participation, and we look forward to speaking again soon. Thank you.

Thanks very much indeed, everybody.

This concludes today's call. Thank you for your participation. You may now disconnect.

CVC Capital Partners Plc 2025 Full Year Results Call. Please be aware that this call is being recorded [Operator Instructions]. I would like to hand over to Bruce Hamilton to begin the meeting. Bruce, please go ahead.

Thank you, operator, and good morning, everyone. Today, we'll update you on our performance for 2025. We have around 60 minutes for the call. We'll begin with the presentation. And after that, we'll open the floor to questions. Presenting today are Rob Lucas, CEO; Fred Watt, CFO; Peter Rutland, President; and Rob Squire, Head of Client and Product Solutions. Rob, over to you.

Thanks, Bruce, and good morning, everyone. Welcome to our 2025 full year results, and thanks for joining the call. 2025 was another really strong year of delivery for CVC. We achieved further great fundraising success with EUR 23 billion of gross inflows and powerful contributions from Credit, Secondaries and Infrastructure. Importantly, the premarketing of our latest private equity vehicle, Europe/Americas X, is progressing well. We're seeing strong -- very strong growth across the Private Wealth and Insurance channels, the aggregate value of our Private Wealth vehicles increased to approximately EUR 800 million as of December 2024 to EUR 3.6 billion as of December 2025, and our recently announced $3.5 billion strategic partnership with AIG illustrates our compelling capabilities in the insurance channel.

Our fee-paying AUM increased to EUR 148 billion. More than 50% of that now comes from Credit, Secondaries and Infrastructure. These 3 platforms grew by 12% in 2025 demonstrating the benefits of our diversification of the group. And we achieved record realizations of EUR 21.9 billion in 2025 at highly attractive returns. Over the past 4 years, we have now returned 30% more capital to our clients than we've deployed. This is a key differentiator compared with our private market peers, which positions us extremely well as we look towards Fund X.

Our strong operating performance translated into record financial performance. Management fees increased by 9% to EUR 1.45 billion Performance-related earnings increased by 39% to EUR 254 million, and EBITDA increased by 13% to EUR 1.1 billion. But what is it that enables us to deliver such strong operational and financial performance with such an unstable macro, not just this year, but consistently over time. Well, as I say on this slide, it's the power of our platform, which underpins our consistent performance.

Firstly, the CVC network. This is the most powerful origination engine within our industry. Secondly, our disciplined focus on running highly diversified portfolios, meaning we're never overly exposed to any one sector, region, vintage year or single investment. Thirdly, our focus on active ownership and value creation over the life of each investment. And then if you look to the right of the slide, you can see the results over 30 years all the way from Fund I, consistently outperforming across multiple economic cycles. And the outperformance over time is not just restricted to PE. You can see the exceptionally low loss and default rates in our credit business since inception and the strength of return in secondaries and infra strategies. So it's across the whole business. It's this consistent investment track record that underpins our clients' trust and support for CVC and our confidence in continuing to deliver strong returns and to grow.

Despite current events, looking out over the years ahead, we see a very exciting market opportunity, and it's one CVC is extremely well positioned to take advantage of. Let me explain. Firstly, we see clients allocating ever more capital to field managers. Given current market volatility, we expect this trend to accelerate with clients allocating their capital to managers they trust and CVC is and always has been a major beneficiary of this flight to quality. Secondly, we see clients continuing to rebalance their portfolios towards Europe. Our leading position in Europe across Private Equity, Credit, Secondaries and Infrastructure means we're extremely well placed to benefit from this ongoing shift. Thirdly, we continue to see significant traction in the Private Wealth channel, where we believe we are at the early stages of a multiyear growth opportunity. Private Wealth clients are looking to increase their private market allocations and we saw this trend in the very strong Private Wealth growth we delivered in 2025. CVC's track record, brand differentiated positioning place us very well in this channel.

Finally, we also see very strong growth in the insurance channel as part of a long-term structural reallocation of capital towards private markets. Our partnership with AIG is a powerful endorsement of our ability to serve this channel at scale and our capabilities will be further enhanced by the acquisition of Marathon. We see all these 4 trends supporting a long-term and durable growth in our MFR. We've been very clear about our strategic objectives, and we continue to deliver on these strongly. With EUR 148 billion of fee-paying AUM across Private Equity, Credit, Secondaries and Infrastructure, our business is stronger and more diversified than ever.

Over the past 24 months, we have grown our fee paying AUM by more than 50%, driving strong growth in our management fees. We have significantly scaled our Credit, Secondaries and Infrastructure platforms, which now represent over 50% of our fee paying AUM. We've broadened our distribution and client channels across insurance and Private Wealth, complementing our well-established institutional client base. And as a result of this growth and our focus on cost discipline, we've grown management fee earnings by 50% and earnings per share by 43%.

Turning now to the operating highlights for 2025. In fundraising, we saw EUR 23 billion in gross inflows with Credit, Secondaries and Infrastructure accounting for 80% of the total. We delivered another year of record realizations, up 67% year-on-year, led by Private Equity with exits achieving 3.2x gross MOIC and 23% gross IRR underpinning our confidence in fundraising, including Fund X. Deployment rates remained strong, led by Credit, Secondaries and Infrastructure with Private Equity deployment consistent with our stated 3- to 4-year fund cycle. We also continue to see strong investment performance across each of our strategies. Across our Private Equity and Infrastructure portfolios, we continue to deliver strong value creation of 11% pre-FX.

Let's move to our financial highlights. We saw strong fee paying AUM growth of 6% in the second half. And in aggregate, fee-paying AUM across Credit, Secondaries and Infrastructure grew 12% in 2025. You'll see the private equity fee paying AUM declined slightly in the year. As Fred will discuss later, this is mainly a function of our record year in realizations. Importantly, those distributions back to our clients reinforce our confidence in our private equity fundraising over the next 24 months. In financial terms, management fees grew 9%. We delivered a 39% increase in performance fee earnings and overall EBITDA increased 13% to EUR 1.1 billion. Given the highly cash-generative nature of our operating model, we are announcing an aggregate dividend of 2025 of EUR 500 million and in addition, a share buyback program of up to EUR 350 million. Fred will cover both of these in more detail later. Everything I've been talking about means we are highly confident in growing our fee-paying AUM at a compound annual growth rate over the next 3 years of 10% or more. This delivers EUR 200 billion of fee-paying AUM by the end of 2028.

Given our highly diversified model, this growth will come from multiple drivers. The EUR 50 billion increase in fee paying AUM will be split roughly 1/3 from Private Equity, 1/3 from Credit and 1/3 from Secondaries and Infrastructure. Over the next 36 months, Fund X and Asia VII will help deliver a step change in our private equity fee-paying AUM. We see significant continued growth from our existing Credit platform and growth across Secondaries and Infrastructure will come from existing funds in market on which we have good visibility. These fundraisings are progressing well.

And I'll now pass to Rob Squire for a more detailed update on fundraising and the strong momentum we take into 2026. Rob?

Thank you, Rob, and good morning, everyone. I'd like to start my section with an overview of the progress that we've made in scaling and diversifying our closed-end funds across private equity, across credit, across secondaries and across infrastructure over the last 3 vintages. Against a challenging market backdrop, Slide 9 demonstrates that we have delivered on our growth objectives. As Rob referenced, fee-paying AUM grew 50%, that's 50% in the 2 years from year-end '23 to year-end '25. Specific to full year '25, we achieved a record year of capital raising volumes for an off-cycle year away from our Europe and Americas Private Equity Fund. Throughout the year, we also saw a real acceleration in clients' repositioning portfolios with a greater weighting towards Europe and this was especially the case in the second half of the year.

Personally, I expect this trend to continue and in fact, like we gain further momentum throughout '26 and into 2027, something that bodes well for CVC. The right-hand side of Page 9 sets out our forward pipeline of closed-end funds for '26 and 2027. These strategies provide our clients with a series of well-established offerings with proven multi-vintage track records alongside newer offerings in some of the more nascent growth areas of private markets, many of which are crossover strategies say between credit and secondaries or insurance segments. Lastly on the institutional capital side of things, just a few remarks on key areas of progress from our last call 6 months ago. Our Secondary raise of Fund VI continues to progress well. with north of $8.5 billion now aggregated for that program and a strong pipeline through to a final close by the end of the summer.

CVC Catalyst, our newly launched European middle market private equity strategy has been very well received and is significantly oversubscribed for its $2 billion target. That fund will also hit a final close later this summer. And on Catalyst, the reception that we've had there for that offering, combined with this general increase in appetite for Europe, provides me with confidence on our Fund X process which I'll now cover. So if we turn to Slide 10, as shown in this high-level overview, we have a very well-established process at CVC for raising our Europe and Americas funds. And many of you will have seen a more detailed version of this process ahead of us launching our Fund IX capital raising.

A key point to emphasize here is the highly iterative nature of our process. Our team is regularly assessing demand levels on a bottom-up, line-by-line basis from our clients around the world for the 18 months ahead than expected closing. This process ensures greater visibility and confidence in our final outcome on what is an incredibly complex and scaled process. It's also important to note that this process is delivered for CVC repeatedly at times of significant market disruption and dislocation. For example, our Fund VIII was raised during the initial outbreak of the COVID pandemic in the first half of 2020, and our most recent raise Fund IX was executed in the first half of 2023 with markets recalling from both the Ukraine war and the spike in interest rates that we experienced in '22.

In terms of Fund X specifically, we're now just under a year away from our expected launch in early 2027, and sitting here today, I can confirm that we're pleased with the initial feedback that we're receiving from our client base. We would expect to have the target fund set post the summer of this year and our current expectation is that Fund X will be the same size or larger than its predecessor.

And lastly from me, on Page 11, we cover Private Wealth. As a reminder, we have been consistent in the Private Wealth as a long-term structural growth opportunity for CVC as individual investors and savers allocated increased share of their portfolios to private markets. We see these evergreen structures as part of a diversified funding base for CVC. And importantly, as a complement to our long-standing strength with pension, sovereign wealth fund and other institutional investments. In just over 18 months since the launch of CVC-CRED in Q2 '24 we reached EUR 3.6 billion of aggregate value at year-end '25 across our Credit and Private Equity evergreen products, approaching 5x what it was just 12 months ago.

Now given some of the events over the last few weeks, I'm also pleased to report that these two vehicles have both had a very encouraging start to '26. Aggregate value now stands at EUR 4.2 billion through the end of February, experiencing one of our largest ever monthly inflows. Q1 redemptions amounted to around EUR 15 million. That's 1, 5 or approximately 0.6% of net asset value. In terms of future Private Wealth offerings, there are two major updates to provide.

Firstly, earlier in Q1, we commenced formal fundraising for CVC PAT, our U.S.-based private equity evergreen structure dedicated to U.S. domicile individuals. Secondly, we're now well on track to launch our first evergreen secondary offering, CVC PSEC in the coming weeks, and Peter will cover this shortly as part of the broader AIG partnership.

So in summary, despite some recent headlines, we continue to see substantial scaling potential as we roll out additional CVC offerings to individual investors and savers alongside a growing roster of distribution partners around the world. The CVC brand, the CVC investment performance and the CVC European heritage are each key differentiators to our larger and more established U.S. peers within the Private Wealth channel. So with that, thank you, and I'll hand over to my colleague, Peter now to cover the building momentum that we're seeing in the insurance channel.

Thank you, Robert. As we discussed earlier, we see significant growth potential with our Insurance clients. This is not a new area for us. In fact, we have raised over EUR 15 billion from insurers over the past 5 years mostly through our regular LP dialogue. But in 2025, we established a dedicated insurance solutions team, and we've seen significant progress on multiple fronts. Our strategic partnership with AIG announced in January is a powerful endorsement of our ability to serve the evolving needs of global insurance institutions at scale. Our initial agreement with AIG sees us manage a $2 billion credit SMA. And as Rob Squire just mentioned, AIG will also act as a cornerstone investor in our soon-to-launch secondaries Evergreen product. contributing up to $1.5 billion from their existing private equity portfolio as a seed investor for that fund.

We see this partnership evolving and we're also engaged in discussions regarding SMAs and partnerships with other insurance clients. We have also seen increased engagement from insurers in our fundraising. For example, approximately 25% of our commitments to the EUDL direct lending fund have come from insurance companies. This is complemented with growing interest in dedicated structures from insurance clients such as the $1 billion collateralized fund obligation structure raised in the U.S. for CVC Secondaries in the third quarter. In each case, our breadth of credit capabilities and investment track record are key points of differentiation. The recently announced acquisition of Marathon Asset Management will further broaden our offering for insurance clients. including adding capabilities in U.S. asset-backed finance, real estate, structured credit and public credit to complement the existing strengths of our European credit platform.

On the Marathon acquisition, U.S. credit has been a key area of focus for expansion, but we have set a very high bar for any acquisition. Marathon ticks all the boxes. We look to partner with businesses that have a culture focused on investment performance. Marathon has a market-leading track record in each of their business lines and a culture that aligns closely to CVC. Secondly, we look for a business that is scalable within our platform. Marathon has complementary investment and geographical focus and with limited client overlap. This creates the basis for us to significantly accelerate their growth as part of CVC.

And finally, Marathon size means that it is meaningful to CVC, but still has substantial growth potential ahead of it. And approximately 30% of the size of our existing Credit business, the integration will be very manageable. As such, pro forma for the transaction, which we expect to close in the third quarter, our fee-paying AUM in credit would have increased to over EUR 60 billion as at December 2025. Marathon's strength across U.S. credit and in particular, in asset-backed lending and structured credit is highly complementary to our existing European platform.

Therefore, Marathon enhances CVC's ability to service institutional, Private Wealth and Insurance clients globally. Its stand-alone growth outlook was already strong, thanks to its high standards of underwriting discipline and investment performance. But combined with CVC's client relationships, we expect growth to accelerate. To give some additional data regarding the combination with Marathon, you will recall that we indicated we expect the transaction to be broadly neutral to EPS in 2027 and low single-digit accretive for 2028.

In terms of Marathon's capabilities, this slide shows the breakdown of the approximately $20 billion of fee-paying AUM. Given Marathon's business mix, we expect fee margins to be somewhere between CVC's existing credit business and the rest of CVC Group. So approximately 75 basis points. Given Marathon's current scale, run rate MFE margin is approximately 20% to 25% with high single-digit euro million PRE contribution to CVC. We expect management fee revenue growth to 2028 to be slightly ahead of CVC as a group at low to mid-teens with substantial operating leverage driving much faster operating and EBITDA growth.

The transaction consideration is net partly with cash of $400 million upfront as part of the $1.2 billion initial consideration, but there is significant performance criteria embedded in the transaction structure to ensure strong alignment. With that, I'll hand back to Rob Lucas.

Thanks very much, indeed, Peter. Now let's turn to deployment. As you can see on the left-hand side of this slide, deployment remains strong across Credit, Infrastructure and Secondaries. In Private Equity, as with the rest of the market, we see deployment impacted by the uncertainty following Liberation Day. But despite that, we remain on track for our normal 3- to 4-year fund cycle. We continue to deploy across a wide range of sectors and geographies with a clear focus on building portfolios that are highly diversified by asset, sector, region and vintage year. For example, within our Europe Americas funds, we typically make 35 to 40 investments. This is more than double most of the market. This has enabled us to deliver consistent investment performance across 3 decades and across multiple economic cycles.

As we set out on the right-hand side, we continue to invest on a highly diversified basis by sector and by region. This ability to invest across a range of sectors and regions underpins our ability to continue delivering great investment performance across economic and secular cycles. Let me talk a little bit about AI. Whilst this has attracted a lot of attention recently, we've taken a cautious and highly selective approach towards investing in software for many years. As a consequence, software only comprises 7% of our total fee-paying AUM well below industry averages, reflecting our disciplined approach to constructing broadly diversified portfolios. In private equity, most of these investments were made after the 2021 peak and at average entry EBITDA multiples of 15x to 16x well below industry comparables. A good early example of when we started using AI is in Zabka, our Polish convenience store investment, which we acquired in 2017.

Shortly after our investment, we began embedding AI into our value creation program to help generate dynamic pricing and to improve the targeting of new stores. Within CVC operations, we've created a dedicated AI team to support our portfolio companies as they look to mitigate AI risk and embrace the significant opportunity provided by AI. Impact of all of this work is illustrated by our recent Pulse survey. This survey was conducted across each of our Private Equity, Credit, Secondaries and Infrastructure portfolios and covered almost 1,600 investments. More than 90% of the companies surveyed said they expected the impact of AI to be positive or neutral over the next 2 years. However, there's no complacency and our teams remain highly focused on embedding AI across everything we do to ensure our portfolio remains well positioned as we go through the next few years of substantial change. Moving on to value creation. I have already mentioned the healthy performance we delivered this year across our Private Equity and Infrastructure portfolios, which is shown again on the left-hand side of this page.

Turning to the right-hand side, momentum is even more pronounced when we look at LTM EBITDA growth across the private equity portfolio, 14% as at December 2025, up from 10% as of June. Specifically, Fund VIII continues to follow a similar evolution to Fund VI and we have seen an even stronger acceleration in operating performance with LTM EBITDA growth more than doubling during 2025 from 6% as of Q1 to 13% as of Q4. I touched on realizations earlier, but I want to reemphasize our proven ability to return capital at scale. In a market where LPs remain highly focused on liquidity and DPI, this is a huge competitive advantage in fundraising and underpins our confidence in near-term fundraises such as Fund X. As I mentioned, realizations were up 67% in 2025 with private equity realizations up 77%. As you can see on the right-hand side of the page, we have now returned more than 1.3x the capital we've deployed over the past 4 years in Private Equity.

In Europe, we have delivered a much larger number of private equity exits than any other firm in 2025. Importantly, we remain highly flexible in our approach to realizations. This is the result of the number of investments we typically include in a fund and therefore, their upper mid-market equity check sizes. Not being slaves to the mega market provides us with multiple exit pathways. As a result, we are not reliant on IPOs, which accounted for only 5% of proceeds in 2025, and we are instead far more focused on cash exits through sales to strategic buyers, which accounted for 35% and sponsors, which accounted for 46% of total gross proceeds in 2025. This is another reason why we are able to deliver DPI at times when others are struggling.

With that, I'll hand to Fred to go through the financials in more detail. Fred?

Thank you, Rob, and good morning, everyone. First, looking at fee paying AUM evolution. And a reminder that the first half of '25 was affected by FX, strong exits that Rob referenced and step-down impacts, which more than offset strong gross inflows in that half. However, the second half showed broad-based positive momentum with fee paying AUM increasing from EUR 140 billion at June '25 to EUR 148 billion at December, up 6% in the half.

As Rob mentioned, Credit Secondaries and Infrastructure together saw strong growth year-on-year, up 12% and now represent just over 50% of fee-paying AUM demonstrating the benefits of our efforts to diversify and broaden the group. In terms of P&L evolution, management fees increased by 9%. This included revenues from our evergreen products for the first time of around EUR 10 million. Fee margins were stable at approximately 1% overall and MFE margin remained strong at 58%. I will discuss costs and cost discipline shortly. Strong growth in PRE, which was up 39% year-on-year and in line with previous guidance drove EBITDA growth of 13%. Profit after tax of EUR 873 million also reflects the impact of a slightly higher tax rate following the first year of implementation of Pillar 2 rules in addition to the impact of tax on carry from the credit vehicles. This year, the effective tax rate on profit before carried interest was approximately 20%, and we see the go-forward rate also being in the range of 19% to 21%.

Turning to operating expenses. Cost evolution was impacted by year-on-year FX translation. And as we indicated at the midyear, the growth investments linked to Private Wealth which amounted to around EUR 14 million or around 3% of our cost growth. As I said, this investment is already generating revenue, and I will talk more about the rapid payback on the investment in Private Wealth in a second. Core cost growth, excluding those effects, was 7% and we remain consistent with our guidance from mid- to high single-digit percentage growth. Looking forward, we expect to deliver core cost growth at a similar level in 2026 and total cost growth below 10%, even including the full year effect of cost investments for Private Wealth. As a result, we're getting back to our mid- to high single-digit percentage growth a year earlier than we previously indicated. Beyond 2026, we continue to expect total cost growth to limit to high single-digit percentage range.

Moreover, the payback on these new investments is rapid. As we show on the right-hand chart, we expect that revenues from our fast-growing Private Wealth business will cover the related cost base in 2026 and will deliver significant operating leverage thereafter as we scale the Private Wealth channel. Turning to PRE. The first point to make is the substantial future carry value potential embedded in funds already raised. And that this is unchanged versus previous expectations at EUR 5 billion. This will flow through our P&L over the coming years and is based on achieving the midpoint of our target ranges. Given our consistent and repeatable value creation process, we have high confidence in delivering this carry over time. There's EUR 300 million left to come from funds currently in carry and with the funds mix to come into carry, including Asia V and Europe/Americas Fund VIII and further EUR 1.9 billion. The remainder of the EUR 5 billion comes from funds more recently activated such as Europe/Americas Fund IX and Asia VI.

The second point to make is that we will always run the business to deliver the best return outcomes for our fund investors. And while there's a high degree of alignment PRE is more of an output and something we can closely control year-by-year, given multiple input factors. And I would like to spend some more time on this.

The first of these is what we call the perimeter effect. Whilst realizations have been strong, there is one technical factor, which means that this hasn't yet fed into higher PRE numbers. This is the effect of the perimeter set at the time of the IPO where no carry from Fund VI was contributed to the Plc perimeter and only half of the ongoing rate from Fund VII. Indeed, if Fund VI and VII had delivered 30% of carry the IPO perimeter, as opposed to 0 and 15%, respectively. Reported PRE would have been at over $400 million for each of the last 3 years, given the strong exit activity being driven by those funds. The key here is that achieving the medium-term target range is not dependent on a material setup in the realization phase, but requires the next generation of funds special harvesting to move into carry mode.

The second technical factor to consider is around the IFRS accounting rules and how these impact recognition of PRE. To remind you, under IFRS, we apply a 40% haircut to unrealized positions in determining whether carry is receivable. Furthermore, no carry in a fund is recognized until the preferred return to fund holders has been delivered. Therefore, carry recognition is materially delayed versus a more accrual-based approach like U.K. or U.S. GAAP. Exits are therefore important because it's only at the point of exit, that this 40% discount is released. In practice, this means carry recognition under IFRS will not typically occur until MOIC is approaching approximately 2x and DPI approximately 1x at the fund level. Then when you reach this point of recognition you effectively see close to half of the lifetime carryover fund come in a single year, well into the life of a fund rather than accruing over time as it would under U.K. or U.S. GAAP.

This slide shows that unlike a more linear accrual-based carrier condition approach like the dark blue bars on the slide, under IFRS, no carrier is recognized in this example until year 7, and almost half of the carry or in this example, EUR 250 million in that single year. Typically, we expect a range of 5 to 8 years to reach this IFRS recognition point. Although relative to what we thought at IPO and similar to our peers, macro uncertainty, particularly around tariffs, has generated some slippage in the time frame for carry condition for some funds. Therefore, PRE under IFRS is likely to be lumpy, not linear, some years being above the guidance range, some years below with single year outcomes being inherently difficult to predict.

So how to think about the coming years. A first step up from current PRE levels is dependent on Asia V and therefore, Asia exits. We are confident in delivering significant exits at strong returns in Asia V in 2026, and initial carrier condition could happen this year. However, on balance, we think guiding towards 2027 is more prudent given the current macro conditions and the IFRS effects. The initial contribution of Asia V is expected to be approximately EUR 100 million. With that, this being recognized until 2027, PRE in 2026 is likely to be at a similar level to 2025, but growing to around EUR 400 million in 2027 based on best estimates of exit timings as we sit here today. With, therefore, a total of between EUR 600 million and EUR 700 million across these 2 years, as shown on the slide. Our current assumption is the initial carry recognition for Europe Americas Fund VIII will not happen until after 2027 leading to an expectation of PRE of between EUR 1.2 billion and EUR 1.5 billion across the 2 years of 2028 and 2029.

As we move through perimeter effects, achieving these numbers would represent an aggregate of between EUR 1.8 billion and EUR 2.2 billion or an average of between EUR 450 million and EUR 550 million per year over the next 4 years. We also show on this slide what we think PRE would have looked like if we were operating under U.S. GAAP. Across 2026 and 2027, a more accruals based approach would double the level of PRE we would be disclosing. We recognize that U.S. peers who report on an adjusted basis would likely sit somewhere between U.S. GAAP and IFRS.

Lastly, talking to our balance sheet and cash generation. As of 31 December 2025, we had a healthy balance sheet position with gross cash of around EUR 700 million and long-term low-cost debt of EUR 1.45 billion. Our first capital allocation priorities will always be to invest in the organic growth opportunities we see ahead of us and to deliver progressive growth in dividends, which are cash-generative model clearly supports.

Given this cash generation, we will also consider ongoing capital returns, including via buybacks, as we announced today unless we see compelling inorganic growth opportunities that match our strict financial criteria. As we have previously said, we're comfortable operating at up to 2x net debt-to-EBITDA leverage and we expect to be well within this at the end of 2026 at approximately 1.5x. This is after taking into consideration EUR 350 million of buyback and $400 million of upfront cash consideration for Marathon. In summary, the confidence of our growth prospects and our cash generation allows to return up to EUR 850 million back to shareholders through our dividend program for 2025 and the buyback that we announced today. With that, I'll hand back to Rob for concluding remarks.

In summary, 2025 was another strong year of delivery for CVC. We've grown our fee-paying AUM to EUR 148 billion, and we're highly confident in 10% plus compound growth to EUR 200 billion over the next 3 years. This will deliver substantial earnings growth by the end of 2028. We started 2026 with strong positive momentum. We remain absolutely focused on continuing to deliver our performance for our clients, and we are very excited about the opportunities that lie ahead. Thank you very much indeed for listening. Thank you.

Thank you, Rob, Fred, and Peter and Rob. Now let's open it up for questions. If I could ask people to limit themselves to 2 questions, please that would be great. Over to you, operator.

[Operator Instructions] Our first question comes from Hubert Lam with Bank of America.

I've got 2 of them. Firstly, on performance fees, just a follow-up. So I know it's delayed now our expectations of when it gets back to EUR 400 million. So I just wanted to just go over this again. So what's changed now? Is it your expectations that exits are just taking longer because on the accounting side, we would have obviously known that would be lumpy. And also, you showed strong exits last year. So I probably would have thought that there'd be a bit more of a recovery this year? That's the first question.

And the second question is on evergreens just recently reading that you are possibly incentivizing some of your distributors for your wealth product with performance fees to incentivize them to sell your product. Can you talk about this and also the margins you're receiving on these new products?

Great. Thanks very much, indeed. Let me -- Fred, I don't know whether you'd like to just to take the first part of that. And Rob, the second.

Sure, it's Fred. Yes, on this performance fee timing point, if you like. As we highlighted back in September last year, this first step up from current level of PRE was heavily dependent on the first recognition of carry under the accounting rules. As we sit here today, we just think it's prudent given market conditions that it's all dependent on timing of exits. Nothing more than that. We still see the absolute value there that we saw before, but timing of exit is critical, as I hopefully outlined in the slides about how it all works. And it may happen this year, but we're just sitting here thinking, with everything we're on and the number of exits that will happen this year is probably prudent to assume that some could slip into next year. They may not, but we're assuming that they might. And that's the only cause of the delay.

And it's Rob. On your second question, look, I'm not going to comment on any specific contractual relationship. What I'd tell you is that every single bank has got a different arrangement based on where in the world they operate and other factors. What really matters here is the performance. And if you look at it, CVC PE is taking a 20% north and CVC Credit is a 10% compound return. We've got over 15 distributors on the platform, and we feel very, very good about the sector that we're on within the Private Wealth.

Our next question comes from Arnaud Giblat with BNP Paribas.

I've got 2 questions, please. First, can I start with Fund X and the confidence you have there. I mean, you outlined that quite well in the presentation and I understood that you've been in front of LPs and they'v'e giving you a provisional commitments. I'm just wondering what LPs are looking at here for those provisional commitments to do something more are they looking at DPIs? Are they looking at your delivering on performance? What is it the day that you feel will convert that provision to a national commitment?

My second question is on Marathon. You outlined that ABF is a part of the logic there. I'm wondering if the plan here with Marathon is to really turn out a bigger ABF business in insurance as some of the American peers have been doing.

Thanks, Arnaud. Well, let me just talk just high level about Fund X, and then Rob can just sort of give some precise input regarding the feedback we've had. But we're following very much the same program with Fund X that we followed with previous funds, particularly Fund IX. And what we're doing at this stage is, of course, we have very, very close ongoing contact with our investors all the time. And we flagged very long way in advance that fundraising such as Fund X is coming up so that they can factor it all into their allocations well, well ahead of time.

And so as we sort of move through the first quarter of this year, Rob and his team are having those direct conversations with all of our key investors pretty much every single one, just to understand exactly how they're sitting and how they're looking. And indeed, to your question, exactly what they will be focusing on and looking at. And that feedback has been very encouraging indeed, very much in line with what we saw as we approached Fund IX, which, of course, as we all know, is the largest private equity fund in the world. And the fact that we're looking in this current market at the same or larger, I think, is a real testament to the underlying strength and the relationships we have. But Rob, to just take us through just a little bit more of the detail of what -- just to answer the question.

Happy to be, I'll be concise. Look, I think a few additional points here, please. I mean the first is that our average relationship with our largest clients in that strategy is now approaching 2 decades. And so we have to look at this as a very, very deep, very, very long-standing base of dialogue and a relationship with the clients. And that also spans to the cross-sell ratios that we've achieved over the last few years, which have really accelerated as well. I think in terms of sort of key metrics that I would suggest, there is no one single individual point Again, people would look at it over a much longer time horizon. CVC's lowest-ever performance over 40 years, approaching 40 years is a 2.1x net, 2.1x net is the worst performer for the flagship fund.

And so really, in terms of sort of economic market geopolitical cycles, this firm has proven it's been able to deliver. The last few points that I would suggest it would be the cash returns to answer your question directly on DPI has been exceptional. Over the last 5 years, the flagship fund has delivered over 4x money multiple on over EUR 44 billion of cash distributions to clients in the Europe and Americas fund. And then the final point that I would suggest is very noteworthy is our relative position, and this will be my fifth fund raise here on the Europe and American side. Our relative position in the European context has never been stronger. Both relative to peers, but also relative to appetite in the market. And so those would be the key additional factors in addition to what Rob referenced, it gives me confidence sitting here today.

Great. Thanks very much, indeed, Rob. And Peter, I don't know whether you'd just like to talk about Marathon and the asset-based investments.

Sure, very happy to do so. And Arnaud, you're absolutely right to pull out the asset-backed funding part of the Marathon capabilities is 1 of the areas that insurance clients, particularly find attractive. We expect that business to grow substantially. And indeed, the asset-backed area is one area which emphasizes the importance of both being able to raise money through traditional fundraising as well as through SMA and strategic partnerships. And we think that, combined with Marathon's excellent track record and CVC's leading position as an asset-light alternatives manager, puts them in a position to grow this area substantially.

Our next question comes from Oliver Carruthers with Goldman Sachs.

Apologies. Our next comes from Nicholas Herman with Citi.

Thanks for the presentation, two from me as well, please. On costs, I just -- why the need to scale back the cost growth cost growth given really such strong momentum on the growth initiatives and the clear significant payback from those investments. And then the second question on wealth. I appreciate there is the increasing, I say, negative sentiment on the outlook of private markets, both private credit and on the outlook on equity on tech and software. I appreciate that you guys are relatively better positioned in this context, but what are distributors telling you about their appetite for industry content in the wealth channel?

Fred, would you like to just to take the costs?

Yes. Let me just clarify what we're saying on costs and Nicholas, we're not scaling back. We're operating effectively and efficiently within our core, the kind of low to high single digits, and we're absolutely in line with plan for investing to support the wealth product. I think the only change that we're signaling here is that we're being more effective and efficient within the core. We're certainly not investing less for the growth in the growth area. And you can see that even with the investment we're putting into that wealth channel, we're very confident in that being covered by revenue this year and more than covered by revenue in the years ahead. So apologies if I signaled differently, but we're certainly not scaling back on the investment in the opportunities.

Thanks, Fred. Rob, would you just take the wealth question.

Absolutely. Nicholas, yes, look, it's obviously very relevant. It's something that we are tracking incredibly closely, particularly in the media in terms of CVC specifically, though, as I said, over the first 2 months of this year, we've had record flows, and I think that's representative in my view, of a differentiated offering. What we believe we have is a real strength in terms of our European narrative. We think that many of the alternatives that are out there, both globally and specifically within the large U.S. wealth market are very U.S. focused and are managed by U.S. managers. And so we continue to sort of double down on our European heritage alongside the brand and the investment performance.

The second aspect that I think is really important, and you've been on many of these calls, so you'll understand this, is that we have got a very clear road map laid out in terms of product development -- and that is an acknowledgment that having a diversified offering is going to be important. There will be some market conditions that appeal to strategies and others that appeal to different ones. And that's why we started with CRED, we've then gone into private equity.

And as I said, within the next few weeks, now we'll have a secondary evergreen fund up and running with infrastructure later in '26. And so we're really trying to build out a balanced portfolio where there is CVC products on the shelves of our distributors, whatever the prevailing market sentiment may be.

Our next question comes from Oliver Carruthers with Goldman Sachs.

Oliver Carruthers, can you hear me okay?

Yes, we can hear you fine.

Great. Apologies for the technical difficulties. So I've got two questions, please. So on Slide 18, you show some operating KPIs for Europe VIII. It appears to be accelerating in terms of revenue and EBITDA growth. Could you talk to the breadth of the acceleration here? I think it's just a little bit of a market perception that this fund is not doing well. So any kind of commentary around that, I think, would be very, very helpful. And then my second question, so I guess you talked to a slippage in the time frame of carry being recognized, but you kept the gross MOIC midpoint constant. To me, that suggests that, that's dilutive to gross and net IRR over time?

So I wonder if you could frame that slippage in the time frame in the context of what you're seeing kind of more broadly among your private equity competitors. And then I think you made a comment as well that this slippage in the time frame was relevant to IFRS carry because it was -- you made a comment about the pref return but my understanding of IFRS carrier was the pref return only becomes relevant for this calculation. If the ongoing return of these funds is tracking at or below the pref return. So could you just confirm what those levels are. And if you're able to talk to which funds this is relevant for, that would be very helpful.

Great. Thanks, Oliver. Let me take your first question, and then Fred can talk about the IFRS point. On Page 18, I mean, I think this is really powerful information here. And as you say, we have seen, particularly in relation to Fund VIII a strong acceleration in the -- most of all the EBITDA performance of that fund. And so what we feel very comfortable with where Fund VIII is. We take a very long-term perspective. We are prudent, we're cautious and with our marks. And you'll see that relative to some of our peers, our funds tend, therefore, to develop over a slightly longer period. But they deliver very strong performance through the end.

And what we are doing here with Fund VIII is we're very much tracking it alongside our other previous funds. And this is very much in the pack. And so Fund VIII is the 2021 sort of vintage is always going to be a more challenged vintage. That's a more challenged vintage across the whole of the market. But we have a very diversified portfolio. And this is where that diversification really comes into play. So I think seeing that performance in terms of the acceleration in EBITDA and in revenue across that fund is both encouraging but not unexpected. Fred?

I'll pick up the other two questions, two parts of the IFRS question, if you like. So the -- you're correct in some respects in terms of delays of exits. And I think this is a market phenomenon, not CVC phenomenon, will result in this vintage, I think being a lower IRR vintage than others, but we're very confident in our multiples of money that we will be generating for the clients. But I think that's just a general theme, and we're not an outlier at all in that regard. In terms of how IFRS works, in terms of the hurdle, and if you recall, the whole is on debt with IFRS is that you don't ever see a reversal of revenue that you accrue in the form of performance fees, such that if I explain the hurdle point as brief as I can take Fund VIII, for example, our hurdle rate there with our LPs is 6%.

But for the next roughly 2%, we're in catch-up carry phase, which means that even under IFRS, you've got to get through about an 8% IRR hurdle to be clear of any reversal or potential reversal of revenue you recognized as performance fees. So it is that, that delays the carry recognition under IFRS. Certainly, that's our interpretation of it. So it's not so much, you've got to be below or above a hurdle point. It's just that you've got to get through all of that to avoid any risk of reversing the accrual for revenue in the first place. So until you're through all of that, there is 0 carrier recognized. And as I said on the earlier part of the call, a lot comes through in one go and then the rest thereafter.

I think we are nearly out of time. So operator time for one more call, please. Thank you.

Your final question comes from Haley Tam with UBS.

I'll give you just one then, if I can. Can I ask you about the evergreen funds. Thank you very much for giving us that EUR 15 million redemption figure. Could you clarify for us what proportion of your funds may be are still subject to soften and hard lockups and how that might change over the coming year? And is there any comment you can give us in terms of Marathon's experience given some of the headlines we're seeing on credit evergreen fund redemptions in the U.S.

Rob, would you like just to take the first part of that. Peter, maybe talk to the second part.

Yes, sure. Hey, it's very easy. A very, very small part of our total now of EUR 4.2 billion is subject to any form of soft log whatsoever. So we're really through a lot of that. And so that's not something that I would that certainly would be on my radar screen.

And with regard to Marathon Haley, Marathon doesn't have any evergreen products at this stage and its overall fundraising momentum remains extremely strong across these various different fund raises that are going on currently.

Great. Well, thanks for the questions. Thank you, operator.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.

Good morning, and welcome to the CVC Capital Partners plc 2025 Half Year Results Call. Please be aware that this call is being recorded. [Operator Instructions].

I would like to hand over to Walid Damou to begin the meeting. Walid, please go ahead.

Thank you, and good morning, everyone. Today, we will update you on our performance for the first 6 months of the year. We have 60 minutes for the call. And as usual, we'll begin with the presentation. And after that, we'll open the floor for questions.

Presenting today are Rob Lucas, our CEO; Fred Watt, CFO; and Rob Squire, Head of Client and Product Solutions. Rob, over to you.

Thanks, Walid, and good morning, everyone. Welcome to our interim results, and thanks for joining the call. While we're here to talk about our very encouraging H1 results, I also hope that you'll take away from the presentation that we're continuing to make good progress in building CVC for the medium and long term. Our objective throughout the last 40 years has been to deliver top-class returns for our stakeholders today, while at the same time, building and strengthening CVC for the future. And that is what we are continuing to do. We are incredibly fortunate to be so well positioned in a fast-growing dynamic market, and we are all on a very exciting journey together.

In terms of our first half results, H1 '25 represents another period of encouraging performance. We've seen strong fundraising momentum across CVC and we're benefiting from long-term structural tailwinds overlaid with clients allocating ever more capital to scaled multi-asset managers such as CVC and increased interest in Europe. We continue to scale and diversify our Fee-Paying AUM, which has increased from EUR 128 billion as of June '24 to EUR 140 billion today. We'll talk about our investment activities in more detail. But the last 12 months, deployment and realizations both increased by more than 20% year-on-year. And importantly, these realizations are delivering strong investment performance for our clients with last 12-month average realized returns of 3.3x gross multiple of money and 27% gross IRR.

As Fred will walk you through later, this resilient operating performance is translating into strong financial performance. Both revenues and EBITDA grew by 14% over the last 12 months, with PRE tracking our expectations for the full year. And the cash-generative nature of our business allows for increased distributions. As a result, in October, we will pay an interim dividend of EUR 250 million, bringing total distributions over the last 12 months to EUR 475 million.

As you can see on Slide 4, our key medium-term focus remains delivering on the plan we outlined at the time of the IPO, and we are making excellent progress against our strategic ambitions. Rob Squire will talk about this in more detail, but we're delighted with the significant fundraising momentum we're achieving across CVC, and we're building an exciting pipeline of future product launches. We're working hard to deepen and expand our institutional client base and to drive further growth through Wealth and Insurance. And I'll talk a bit later about our achievements across credit, secondaries and infrastructure, which together now represent about 50% of our Fee-Paying AUM.

At the center of everything we do is our focus on delivering attractive investment performance for our clients. This was very much a feature in the first 6 months of this year, and we're continuing to achieve significant success with realizations with the last 12 months period representing a record year. All of this generates a highly attractive financial profile, growing, predictable and cash generative, allowing us to continue building out our business and delivering on our plan.

I'll now hand over to Rob for a more detailed update on the fundraising and the successes he and the team have achieved. Thanks, Rob.

Thank you, Rob, and good morning, everyone. If we turn now to Slide 5, I'd like to start my section with a brief recap on where CVC was just 2 years ago and the transformation that we've experienced in capital formation. As shown on the left-hand side, at 30th of June '23, our Fee-Paying AUM stood at EUR 97 billion. Since then, CVC has aggregated around EUR 60 billion of capital across our platform to bring us to a Fee-Paying AUM at H1 '25 of EUR 140 billion. This growth over the last 24 months has been achieved in one of the more challenging environments that we've seen in private capital since the onset of the GFC in 2008.

With that capital now closed, we feel well positioned with our current processes also. We have EUR 29 billion of active fundraising underway with much of it already well advanced and indeed derisked. It's important to note that 90% of this capital, 90%, will support our credit, our secondaries and our infrastructure platforms. Beyond this, as we look forward into '26 and 2027, we have an attractive and relevant mix of well-established institutional funds such as CVC Europe X, sitting alongside several new institutional strategies such as credit and infrastructure secondaries as well as a growing suite of strategies in our evergreen space for Private Wealth.

So when we look at the first half specifically on Page 6, the main message from my side is one of continued progress in deepening our existing client relationships through greater cross-selling while simultaneously expanding into new channels and also winning new clients in our existing channels. The first half was very active for CVC in terms of capital formation. We held over 35 individual fund closings and aggregated over EUR 6.3 billion of capital closed during a period of significant uncertainty and also volatility. During times like these, our experience has been that clients will focus ever more of their time on core relationships with proven partners.

Turning to Slide 7 and briefly covering some of the milestones from the first half. Starting with Private Equity. And in Q1, we held the final close for our third StratOps vintage, securing EUR 4.6 billion and becoming the only GP globally to have a third vintage long-duration vehicle closed and actively deploying. We also launched CVC Catalyst, our new Private Equity strategy focused on fast-growing European middle market buyouts and building on our 40-year track record of successfully investing in the area. We've already secured over $800 million for this fund and expect to hold a final close next year.

Finally, for Private Equity, looking forward, we expect to launch both CVC Europe X and CVC Asia VII in 2027, consistent with the 3- to 4-year investment cycle for Private Equity that we've previously communicated. On Secondaries, we continue to see strong momentum. I'm pleased to report that the $5 billion for the sixth vintage shown on Page 7 now totals around $6.5 billion, and we remain confident in exceeding our $7 billion target at final close in '26. At that $7 billion target, Fund VI would be in excess of 2.5x the size of Fund IV, which Glendower was investing when it was acquired by CVC.

Turning next to Credit. Our fourth European Direct Lending round has now raised more than EUR 10 billion of investable capital, exceeding our EUR 6 billion guidance. We expect to hold a final close in late Q3 and given our strong deployment, would anticipate being back in the market with the success of vintage V in 2026. While on Credit, it's worth referencing that our CLO Equity IV capital raise has now exceeded its $750 million target and a final close is expected to support future CLO issuance of between $15 billion and $20 billion.

Lastly, on the institutional side, CVC's Infrastructure fundraising is progressing well. And last month, we commenced the process of rolling closes for both DIF VIII and Value-Add IV. We expect to complete the first closings for both strategies by year-end '25, thereby derisking a substantial proportion of our EUR 8 billion target. Finally, in Private Wealth, we've seen very strong momentum, which I'll cover in depth on the next slide.

On Page 8, I want to start with a quick reminder of how we view Private Wealth at CVC. We believe private wealth is an important long-term opportunity for CVC as part of a diversified funding base for our firm. CVC believes the growth of Private Wealth is supported by a series of long-term structural factors present in many markets around the world as individual investors seek to commit an ever greater share of their wealth and their pension to private markets. Our focus at CVC is ensuring that our long-term investment performance, which has served us so well in the institutional channel is now replicated in that Wealth arena for the years to come.

In terms of where we stand today, a slight update to the data on the slide is that as at September 1, our 2 existing evergreen structures, CVC-CRED and CVC-PE, together now exceed EUR 2.5 billion in value. When considering these vehicles, it's important to note that to date, both vehicles have only been distributed outside of the very large U.S. wealth market. We're pleased to report that CVC-PE will launch in the U.S. in early '26 with an attractive list of distributors ready for that U.S. structure. Building on the success of CRED and PE, we're now actively preparing for the launch of comparable evergreen products in both the secondary and infrastructure strategies to broaden the number of offerings that our wealth partners can access with the CVC Group.

Finally, to support the continued growth of our evergreen products, we're continuing to invest in our wealth team to ensure that we at CVC have the capabilities that our distribution partners require. In closing, we feel really positive about the progress that we've made in the evergreen space from a standing start not that long ago. I look forward to the opportunity to update you on our progress in this space in future calls. Thank you, and I'll hand back to you, Rob.

Lovely. Thanks, Rob. As I mentioned earlier, credit, secondaries and infrastructure together represent about 50% of Fee-Paying AUM and are really important growth engines for CVC. Each of these platforms benefit from long-term structural tailwinds, and we've scaled each significantly as we lever the CVC network for sourcing and distribution and continue delivering attractive investment returns for our clients. You can see on the chart that these 3 strategies together represent 2/3 of the growth in Fee-Paying AUM since December 2021. That is approximately EUR 40 billion out of the EUR 60 billion growth that has been achieved in the last 3.5 years.

Let me spend a couple of minutes on each of these platforms, starting with CVC Credit. We now manage EUR 43 billion of Fee-Paying AUM, nearly double the size of just a few years ago. Our consistent returns and very low loss rates have driven strong client inflows. And as Rob Squire just mentioned, we've now closed more than EUR 10 billion of investable capital for our latest European Direct Lending Fund, making CVC a top 3 manager in European private credit. Thanks to the collaboration with our PE platform, CVC Credit has access to unique investment opportunities. And this is a real competitive advantage in a market with significant tailwinds, both in terms of client demand and deployment.

Across our liquid strategies, we now manage EUR 30 billion of Fee-Paying AUM, and we are the #1 CLO manager in Europe. As well as diversifying our credit distribution across institutional clients, insurance and wealth, we've been actively working on the launch over the next 12 to 18 months of new products in high-growth areas of credit, levering the CVC network and addressing strong client demand. You'll be able to hear more about CVC Credit on Thursday, the 2nd of October, when we will be hosting a deeper dive for analysts and investors here in London.

Turning to Slide 11 and CVC Secondary Partners. Growth fundamentals remain very strong. While overall trading of Private Equity LP stakes remains relatively low compared to broader PE, demand is accelerating as Secondaries become a key liquidity and portfolio management tool. These market drivers overlaid with our strong investment performance have allowed us to scale significantly, and we're seeing a good interest for SOF VI from both existing and new clients who are drawn to the repeated strong performance achieved across market cycles, the quality of our team and the power of the CVC brand. Beyond scaling the flagship Secondaries product, we are looking to widen the platform beyond PE Secondaries with the launch of Credit and Infrastructure Secondaries funds and a new Evergreen Secondaries product, underpinning significant future growth.

Turning to Slide 12. In Infrastructure, we're the leading investor in the European mid-market, and we're benefiting from significant macro tailwinds. CVC's brand and client base are helping accelerate this growth, and we expect the current infra funds to be twice the size of the funds raised 5 years ago. As with Credit, we're seeing significant benefit from our Private Equity and Infrastructure teams working together and our ability to lever the CVC network provides a further driver of growth. Finally, we are also preparing to launch an infra evergreen fund in 2026.

Turning now to deal activity and starting with deployment on Slide 13. We delivered strong deployment across the platform with EUR 24.9 billion deployed over the last 12 months. That's up 22% year-on-year. Credit was the major driver of the growth over the last 12 months with EUR 10.3 billion invested, an 81% increase year-on-year as we continue to scale that platform and build market leadership. Private Equity deployed EUR 10.7 billion over the same period, and we continue to invest at a pace consistent with a 3- to 4-year investment period across our PE funds. Secondaries and Infrastructure also maintained their investment pace with nearly EUR 4 billion deployed in the last 12 months and growth expected to accelerate with market activity levels picking up and recent fundraising for both strategies providing additional dry powder.

The new H1 investments shown on the right-hand side of the page illustrate the breadth of our sourcing and execution capability. A good example of this is Dream Games on Page 14, where earlier this year, we partnered with the founders to support their next phase of growth. The relationship was built over 2 years by our sports, media and entertainment team. This was a true cross-strategy collaboration across Europe, Americas, strategic opportunities and private credit, showcasing how our global platform and sector expertise help us source and scale unique opportunities. Thanks to this successful cooperation, we've been able to increase our commitment from EUR 700 million up to EUR 1.2 billion across those 3 strategies as well as our PE evergreen vehicle.

Moving to Slide 15. Despite the market for realizations continuing to be challenging, we delivered a record level of EUR 13.2 billion over the last 12 months. That's up 20% year-on-year, and we remain confident in delivering full year realizations at or slightly above the 2024 level. Looking at the sources of those realizations, sponsor-led exits remain the largest driver, reflecting the ongoing subdued IPO landscape. But more encouragingly, we have seen a modest pickup in sales to strategics compared to 2024. We continue to generate highly attractive returns with average realized gross returns of 3.3x multiple of money and 27% IRR across our Private Equity strategies over the last 12 months.

A key element to delivering these highly attractive returns is our focus on building better businesses. And I wanted to highlight just a couple of recent examples of this. Ethniki. We acquired Ethniki, a Greek insurance business in March 2021 from the National Bank of Greece. Our financial services expertise, together with our local presence in Greece, put us in a leading position to make this investment. Under our ownership, Ethniki has been transformed into a modern insurance provider with improved customer experience, enhanced distribution capacity and greater capital efficiency. Building Ethniki into a better business increased its attraction to strategics, allowing us to achieve an attractive exit to Piraeus Bank earlier this year.

We've made several attractive investments in India since expanding the CVC network there in 2017. The Gujarat Titans, as you can see on the page, is another good example, where long-standing sports expertise, combined with our local presence in India, enabled us to win the right to build a new, exciting cricket franchise. The team we built won the Indian Premier League in 2022, our debut season, and we continue to build a world-class sports franchise on and off the pitch, enabling us to successfully sell the majority of this investment to the Torrent Group earlier this year. Driven by this exit activity, our Private Equity funds have returned more capital than they've called from our clients over the past 3 years, underpinning our future fundraising in an environment where our client base is ever more focused on distributions.

I'll now hand to Fred to talk about fund performance and financials. Thanks, Fred.

Thank you, Rob, and good morning, everyone. Moving to Slide 16. The underlying operational performance of our portfolio companies continues to be resilient with LTM EBITDA growth of 10% across Private Equity. Over the same period, we delivered 7% value creation across our Private Equity and Infrastructure portfolios or 9% on a pre-FX basis, achieved despite a continued challenging market backdrop. Changes in FX rates in the first half, particularly the U.S. dollar, were a notable factor given that we have approximately 20% of our Europe/Americas funds invested in U.S. dollar assets, which obviously experienced a negative impact when translating valuation into euros. Conversely, our dollar-based clients will have seen a strong pickup in overall fund values given the relative strength of the euro versus the dollar.

Moving to overall fund performance on the right-hand side of the slide, all material funds are on or above plan. And again, despite continued macro headwinds, we remain confident in end-of-life multiples for these funds being within target range. Our focus remains on building diversified portfolios, and that is a hallmark of our investment approach. This diversification underpins consistent performance for our clients across market cycles while supporting both our fundraising momentum and our ability to deploy capital at scale. This, together with strong DPI metrics, underpins the continued support we see across the client base.

Turning to Slide 17 and looking in more detail at our Fee-Paying AUM development. Fee-Paying AUM grew 10% year-on-year to just over EUR 140 billion. This growth was driven primarily by the inclusion of Infrastructure following the completion of the DIF acquisition last July, which contributed EUR 15 billion of Fee-Paying AUM. Gross inflows were also a key driver of growth, amounting to approximately EUR 20 billion over the last 12 months or EUR 9 billion in H1, mainly driven by strong deployment activity across Private Equity and Credit, plus continued growth in commitments to SOF VI in Secondaries.

Before the impact of step-downs in FX, Fee-Paying AUM would have stood at around EUR 151 billion, reflecting the strong fundamental growth driven by inflows and the expansion of our platform. This growth was partly offset by strong realizations across Private Equity, step-downs for Europe/Americas Fund VI, Asia IV and SOF III as they reached the end of their contractual fee-paying period. And finally, negative FX movement with the conversion of U.S. dollar-denominated funds, mainly in Credit, Secondaries and Asia into our euro reporting currency. We expect to see growth in Fee-Paying AUM in H2, driven by continued scaling of our platform with further deployment in Credit, further inflows into Secondaries and Wealth and the activation of our Infrastructure funds.

Turning now to Slide 18 and the financials. We continue to see strong financial growth across the board, driven by our ongoing fundraising momentum as well as strong operational performance. Management fees for the first half of the year were up 20% compared to H1 '24, reflecting the first 6-month contribution from Fund IX and Asia VI, which were activated in May last year, obviously comparing therefore, to only 2 months in H1 '24. This increase in management fee revenue helped drive a 25% increase in management fee earnings, up from EUR 317 million last year to EUR 397 million in H1 '25. MFE margin also remained within range at 56%, up from 54% this time last year.

Performance fee-related earnings were EUR 96 million in the first half, in line with our expectations, and we remain confident that 2025 full year PRE will materially exceed 2024. Taking both forms of earnings together, EBITDA grew to EUR 493 million, an increase of 14% from last year. Finally, profit after tax increased by 8% compared to H1 '24 to EUR 396 million, reflecting the increase in EBITDA, partially offset by higher income tax due to the impact of the new minimum tax rates, which were implemented for the first time in 2025. The overall effective tax rate for the year is expected to remain broadly in line with the first half.

Turning now to operating expenses on Slide 19. As mentioned earlier, we're continuing to invest in areas that will drive future growth. Headcount increased by around 10% year-on-year, driven primarily by targeting hiring in Wealth, Insurance and technology. We added around 20 people in the past 6 months alone and are on track to exceed 60 full-time equivalents in Wealth at the end of the year. The full impact of this recent hiring is yet to show in the numbers with H1 people costs increasing just 4% versus the prior year.

At the same time, we're building out our operating infrastructure, particularly in AI and client servicing in support of the Wealth and other initiatives as well as an increase in funding costs, central costs in relation to the IPO and an FX swing year-on-year of around EUR 8 million, hence, the growth in nonpeople costs compared to the first half of last year. Looking ahead, we expect full year 2025 operating expenses growth to be in line with the first half, albeit with a different mix as we expect people cost growth to reflect the additional hiring, while non-people costs are expected to remain broadly flat versus H1. We remain firmly committed to disciplined cost management. And notwithstanding the investments we're making to support growth, we expect MFE margin in 2025 to stay well within the 55% to 60% range.

Let's now turn to our embedded carry potential, a key driver of future performance revenue. We remain highly confident in our medium-term carry potential and the total quantum expected from key funds, which remains at between EUR 3.9 billion to EUR 7.5 billion, assuming on-plan performance, of which EUR 0.6 billion has already been recognized as at 30th of June. Within this, first, we have funds already in carry mode, expected to deliver a further EUR 0.2 billion to EUR 0.7 billion in carry from Europe/Americas Fund VII and earlier Asia, Growth and StratOps funds. And we'd expect the significant majority of this carry to be realized by the end of 2027.

Second, the next group of funds moving into carry mode representing between EUR 1.4 billion to EUR 2.8 billion, driven by Europe/Americas Fund VIII, Asia V, Growth II, StratOps II and selected Credit funds. We would expect this carry to be realized over 2026 to 2030, with a significant majority of it being delivered by the end of 2028 or into '29. Together, these 2 groups of harvesting funds are expected to generate between EUR 1.6 billion and EUR 3.4 billion in future carry, which we expect to realize over, say, the next 4 to 5 years. As you're aware, PRE recognized in an individual year can be variable and nonlinear. Under IFRS, the timing of carry recognition can also be particularly sensitive when a fund is in its carry catch-up phase.

Taking Asia V, for example, we're in a $4.5 billion fund, all it would take a slippage of $100 million in exit proceeds from '26 to '27 for close to EUR 100 million of carry to also slip into 2027 with no change to the overall value of that carry. Bringing the conversation back to 2025, as we highlighted in March and again in May, we expect PRE in 2025 to grow materially versus 2024. Though as we said previously, recognition will be weighted towards H2. Our current realization pipeline for the coming months gives us confidence in our ability to deliver on this outlook.

Turning to the next slide. We continue to run a capital-light model with strong cash generation and conservative leverage. This gives us real flexibility to build the platform and at the same time, have the ability to make increasing distributions to shareholders. Given the strong cash generation, we have announced a EUR 250 million interim dividend to be paid in October, up from the EUR 225 million paid in June. That brings total LTM shareholder distributions to EUR 475 million, just over a year after our IPO. With that, I hand back to Rob for some concluding remarks.

Thanks very much indeed, Fred. As you've heard from us today, we are very pleased with the strong performance we have delivered in the first half and with the excellent progress we're making in delivering on our plan. We are seeing strong momentum across CVC with success over multiple fundraises, the build-out of new distribution channels and an exciting pipeline of product launches. Additionally, we're seeing increasing client interest in investing into Europe, from which we are very well positioned to benefit based on our strong network and regional leadership.

The most important message we want to leave you with today, as mentioned at the beginning of the call, is that while we are very pleased with the results announced today and remain committed to continued delivery, we never lose sight of our longer-term goals. Everything we are doing is designed to build a better business because that is how enduring value is created for our clients, our partners and our shareholders. Thank you very much.

Thank you, Rob, Fred and Rob. Before handing back to the operator, I'd like to highlight that in addition to our usual meeting with shareholders and analysts over the coming weeks, as mentioned by Rob, we will be also hosting a dedicated deep dive session focused on our credit business. This presentation will take place in person in London on October 2. We look forward to engaging with many of you there. Now operator, let's please open the line for questions.

[Operator Instructions]

Let's please start with the questions asked on the line.

We do not yet have any questions on the line. However, we do have a written question from Oliver Carruthers. I'll hand back to you, Walid to take that.

Thank you, Oliver, for your question. So I read the question, which is probably for Rob Squire here in the room. So you lined up several distribution partners for your upcoming launch of CVC-PE in the U.S. in Q1 next year. Can you share any early indications of demand your partners are seeing in what is becoming an increasingly competitive market?

And then second question, again, for Rob Squire. You mentioned the U.S. retirement channel in his Wealth remarks. Yes, so you did mention that. Can you expand on this comment, particularly given the recent executive order surrounding 401(k)?

Yes, please. Thank you.

Happy to. Thanks, Oliver. So look, in the U.S., I'm not going to comment on sort of individual distribution partners. But as I said, we're very, very pleased with the response that we've had. Again, they do obviously require that Delaware structure, as you know. What I would say, however, is that the feedback that we've got from multiple parties is that really Europe is a massive differentiator. Most of the product that is being distributed in those channels today is very, very heavily U.S. orientated. And I think just given CVC's track record now over 35, 40 years, in European Private Equity specifically, the view is that it will have a very good reception. I want to manage expectations that it's -- these things always sort of start more cautiously and then build momentum. But as I said, at this point in time, we feel quite excited about the prospects.

Your second question then on 401(k), I think for CVC, my view at least, and Rob may jump in here as well is that, that certainly addresses the -- certainly increases the total addressable market for the asset class broadly. But I would encourage you all to think about that more as a medium-term opportunity. At the end of the day, there needs to be much greater clarity from a regulatory perspective before some of the plan sponsors will be comfortable allocating. And my expectations would be that initially, in the early years, a lot of those flows will go to domestic U.S. product. But that over time, as I said, in the medium term, that could be a very, very attractive market for us, just given our leadership position in Europe. And so for us, the #1 priority when we think about that over the medium term is let's just get the performance of our Wealth products, as I said in my remarks, on par with that of our institutional products.

I'll move on. We have more written questions. So I'll read the next one, which comes from Arnaud Giblat from BNP Paribas Exane. So value creation seems to have slowed and relative to what we see at some of your peers. Could you discuss some of the drivers of this?

Fred, would you like to take that?

Yes, sure. Thank you, Arnaud. Yes, I'm not sure it has slowed relative to peers. I think we're all experiencing more volatile markets, changes in multiples, headwinds on the economic outlook. And of course, on top of that, as in a European context, negative FX from assets that we have invested in the U.S. So I think all things considered, we're pretty pleased with the underlying performance of the operating companies. That always doesn't always translate into value for the funds for the reasons I've outlined. But at this point in the cycle, we're pretty pleased overall with the value creation we're achieving.

We have 2 other questions from Arnaud. So first on Wealth, regarding U.S. launch. Given structuring of CVC-PE, can you talk about the capacity for this product given consideration around diversification?

Rob, are you okay to take that?

Yes, sure. I mean, again, I think if you look at what we've said previously, we're very focused on putting together these products for the long term. We do see this as a long-term structural opportunity for the firm. And so we'll be growing in a very considered manner. And we feel very, very comfortable making that representation today. That's what I'd say.

And then last question from Arnaud on Credit and Infra Secondaries. Can you comment on potential size of the first funds and more broadly on the capacity in the market?

Yes. Rob?

Yes, happy to. Sure. So again, I wouldn't want to comment on any specific size for a specific vehicle to be launched in the future. What I'd say is that when you look at CVC's track record, certainly in the 13 years that I've been here, the main priority is raising a size that makes us relevant in the market in which we're operating and that we feel we can deliver attractive returns from relevant to that market. So directionally, when you look at our past, that means usually a Fund I of somewhere in the sort of $500 million to $1 billion range and then usually investing that over a 2- to 3-year period and coming back relatively quickly to then raise vintage 2. And so that's how I would orientate you toward those sort of newer de novo product offerings.

And in terms of the size of the market, we are seeing a real increase in volumes that have been traded in the private market assets other than Private Equity. So Credit and Infrastructure specifically for us, just given our makeup of businesses, we feel we can have a very, very interesting position within those markets.

I'll move then to questions received from Hubert Lam from Bank of America. So first, on outlook for realizations and exit. Can you comment on the expectations for the rest of the year and next year? Second question on cost outlook for 2026. And Hubert's last question is around PRE for 2026 and how it compares to midrange -- midterm guidance?

Great. Okay. Well, thanks, Hubert. Let me take the first of those and then maybe, Fred, you could take Hubert's second point. In terms of the outlook for realizations and exits into next year, realizations and exits are always lumpy as we know. And they can move around a fair amount. Having said that, I do think that we are seeing some signs of positivity in relation to the exit and the realization environment. And by that, I particularly mean we're just seeing the reemergence of strategics coming through. And clearly, we have had a very strong level of realizations over the last 12 months, and that we see continuing through to -- in the second half of this year.

In terms of the outlook and the macroeconomic environment, I think that the -- we're still seeing a substantial level of uncertainty within the macro environment. And we're still seeing, as we know, levels of volatility within the markets. And I'm not sure that we see or predicting that to be changing dramatically as we look out. All I'd say is that we are finding some very good investment opportunities, and we're continuing to be able to realize during the periods of uncertainty that we have had. So some signs of improvement and positivity on the realization front, but still lumpy.

Do I take the question about cost growth and about PRE?

Yes, please. Thanks, Fred.

Hubert, thank you for your questions. Cost growth outlook for '26, I would say that we see sort of what we would call BAU cost growth in single figures, maybe high single figures, as we've said before. But on top of that, we're really encouraged with what we're seeing in terms of the growth opportunity for Wealth and Insurance. And that's where we've been investing beyond that level this year. I see that carrying into next year, but in support of income growth and really encouraged by the start we're seeing there. So similar to cost growth this year, but supporting income growth from these new initiatives.

In terms of PRE for '26, I was hoping earlier that I would illustrate the idiosyncrasies of IFRS accounting amongst other things. It's just too early to guide towards '26 at this stage. As we know, individual years within the range as we see out in the medium term will be up or down versus the average. But for '26 at this stage, it's too early to comment. But we are confirming the medium-term outlook for carry within the numbers today. And I hope you saw that in both the presentation and in my narrative.

Thank you, Fred. I'll move to a question from Nicholas Herman from Citi. So 3 questions from Nicholas. First one on Secondaries. How are you thinking about timing on Credit Secondaries and Infra Secondaries? And which client segments do you expect to be most keen to allocate to those asset classes?

Second question from Nicholas on M&A. In broad terms, can you talk about how you see the M&A opportunity set today? And within that, with real estate valuation having reset, we are seeing a pickup in both activity but also demand. I appreciate you have been recently relatively more focused on Credit for inorganic growth, but how are you thinking about real estate today?

And last question from Nicholas on investment income. Why did your GP commit fall by almost EUR 250 million? And at the time of the IPO, we talked about 15% to 20% returns on the GP commit. We have been tracking below that for quite some time. Can you comment on when do you expect to get to the 15% to 20% level?

Okay. Well, let's just maybe -- I'll take the second one first in relation to the M&A opportunity. Maybe, Rob, you can talk about the timing in relation to the second and Fred on the GP commit question. Just in terms of the M&A, as we've said previously, we remain very open-minded about M&A. And the 2 gaps that we have highlighted where we would look at potential inorganic development of the business are in the U.S. credit arena and also real estate. But for each of those, it's about -- we're not under any pressure, and we're not in any rush. And it's about finding the right opportunities. And so it's all about finding businesses, as I've said before, which are the right size for us.

We don't -- we want things that are large enough to move the needle, but not so large that they distort our organization or our culture. We want businesses that we can really scale across our platform in either area. And we want businesses where the relationships and the cultures of the business are really, really complementary. And these are -- this is quite a high bar that we are applying to these, but it's very, very important in my mind that these criteria are right at the front of our minds. And so yes, I think you make a good point about the real estate market.

And certainly, in my mind, the real estate market is more interesting today from an M&A perspective than it was a year or 2 ago. But we will continue to look on both sides of that. And if we find an opportunity that really excites us and is the right meets those criteria, then we will look at that very carefully. Rob, on the secondary side?

Yes, happy to. Thanks, Nicholas. So look, our focus today on the secondary side is obviously wrapping up the sixth vintage at a great outcome, and I gave you sort of the update on that. I would say we're very actively working on all of the sort of building blocks to have a successful launch of both Credit Secondaries and Infrastructure Secondaries in 2026.

In terms of your question about sort of where do I think the capital comes from? I think for Credit Secondaries, it's going to come primarily from insurance, primarily from sovereign wealth funds and then the credit or opportunistic pools within the client base. I think what you're finding there is, quite honestly, a little bit of saturation with some of, say, the U.S. Direct Lending product. And so I think a lot of clients are looking for yield-orientated product that is a little bit differentiated and a little bit different. And so that's how I see that business funding that business.

Infrastructure Secondaries is really everyone with infrastructure allocations, to be honest with you. And so really folks that have that real asset bucket, I think more and more people will look at this. I think as I said in one of the earlier responses, it's a nascent market. We're seeing a nice uptick in trading volumes within that space. And so that probably looks more like sort of our general mix, which is obviously nicely diversified across sovereign funds, insurance companies, corporate pensions and public pension. So hopefully, that answers your question.

Thanks very much, Rob. Fred?

Yes. Nicholas, it's Fred. This was a question on investment income and why did our GP commit fall on the balance sheet? And when do we get back to the kind of 15% to 20% return on our investments that we indicated. Taking the second point first, I mean, we are confident that the way that we are selecting and investing in assets and the way that we are delivering returns to our client base, we will be at 15% to 20% range in IRR terms before long. We mustn't forget that the underlying investments that we've been making have been into one of the most difficult markets that we've seen for a very long time, both in terms of cost inflation that they've had to deal with, with headwinds in the economies. And as those investments mature and economies have returned a little bit more to growth and we move more into the exit phase in those investments, we do see the ability to get back to those level of returns that we are confident in achieving.

As to the GP commitment movement, you'll recall when we launched the Wealth products, particularly the PE product, whilst it was always going to be ongoing a product that invested alongside on a kind of deal-by-deal basis, it was important that we seeded that initiative with some existing PE positions to really see that opening portfolio for that new client base. And we had the luxury of having investments on our balance sheet that we could transfer to that PE structure to initially see that portfolio. And that's exactly what we did. And so that's why you'll see the movement down in the GP commitment being then deployed in the PE opening for the Wealth channel.

Thank you, Fred. I'll now take the question from Angeliki Bairaktari from JPMorgan. Angeliki has 3 questions. One on exit activity in PRE, second one on Wealth and then the last one on Infrastructure.

So first, can you please provide some guidance on 2026 PRE? What are you seeing in terms of exit pipeline? Do we expect some exits out of Europe/Americas Fund VII?

Second question, what are -- what share of the EUR 2.5 billion aggregate value in Private Wealth reflect incremental Fee-Paying AUM outside of the deployment in flagship funds? And then Angeliki's last question, any scope for new infra funds to exceed the EUR 8 billion target?

Okay. Well, thank you. Maybe we should -- we can just take those in reverse order. And Rob, maybe you could just cover off the infra and the Private Wealth question.

Yes, sure, happy to. Right, reverse order -- doesn't matter -- okay. So look, I think, Angeliki, I think that the -- for now, we're just incredibly focused on, as I said, sort of completing the first closings for both DIF VIII and Value-Add IV and then just derisking that process, right? And so from my perspective, the EUR 8 billion target is what we're focused on, and that represents a significant increase from the last round, which only closed in the last 18 months. And as Rob referenced in his comments, it's twice the size of the round before that. So that's really what we're focused on delivering. Your question on Wealth, if I've understood it correctly, all of that is outside of the Private Equity Fee-Paying AUM. So it's absolutely incremental.

Very good. Okay. Thank you very much. And Fred, just the first question.

Yes. So Angeliki, I'm not sure if you heard my response to a similar question on '26 PRE. I think it is still too early to say on an individual year, what individual amounts will be as we look forward. So I'll happily come back to that another time. But as I said earlier, we're very confident in the PRE that has still to come and is in the pipe, if you like. In terms of the exit pipeline, should we expect some exits out of Europe/Americas VII? Yes. I mean that's where a lot of our focus is. And as we've seen in H1, we would continue to see Fund VII producing exit flow later this year and into next.

Let me then move on to the next questions from Charles Bendit at Redburn. So Charles has 3 questions as well.

First question, can you remind us of the typical time line between fund launch and activation for Europe/Americas? Second question, do you have early views on whether Europe/Americas Fund X is likely to target a step-up in size relative to its predecessor?

And last question, still on Europe/Americas. So Fund IX was the largest PE fund globally. As you consider scaling that strategy further, do you see continued headroom for a single transatlantic multisector vehicle? Or are you increasingly leaning towards sector or region-specific strategies within PE? Just keen to understand how scalable you believe these large flagship plans remain, appreciating you likely fielded similar questions at the EUR 5 billion and 10 billion marks already.

Okay. Thank you, Charles. Let me just take the last part of that and then the slightly more detailed questions then Rob can cover off. I absolutely see continued headroom for a single transatlantic multi-sector vehicle, as you say. Yes. And we have, as you quite rightly pointed out, we've absolutely fielded similar questions at the sort of EUR 5 billion and the EUR 10 billion marks. And of course, the whole point behind this fund strategy is that it gives us great flexibility to select the very best opportunities. So we are a geographically focused predominantly on the Private Equity side of our business, geographically focused operation.

Now we do have sector teams. We have very, very strong sector teams and obviously achieved a lot there. But predominantly, it's geography. And therefore, in terms of the Europe and the Americas focus, those are very large areas with a huge amount of activity within them. And therefore, having a large multi-sector vehicle to embrace that, we think is absolutely the right way of doing it. And the critical thing to understand is that whilst we raise and whilst Fund IX was the largest PE fund globally, we are not doing the very largest deals. We're still doing a very large range of deals within it.

What we're doing is we're putting a large amount of funds into that fund and into predecessor funds. And so what it is, it's giving us great flexibility to invest across the whole of that space, which our history and our track record shows is very powerful and very effective. And so we will be maintaining that as the way that we take that forward. And let's just go on to the sort of other 2 questions that you've raised in terms of the more detail, if we could, Rob?

Yes, sure. Happy to, Rob. Thanks, Charles. So the first one, and Walid, correct me if I go off piece here, is sort of the gap between fund launch and activation. So what I'd say is the way to think about this is usually for the flagship, and this has certainly been the case of Fund VII, Fund VIII and Fund IX. Usually, after closing, we would look to activate within a 6, maybe 8-month time horizon. Obviously, it's very driven by deal activity to make sure that the predecessor funds are fully invested. But that's usually the time frame, as I said, over sort of the data for the last, say, 10 years back to Fund VII in 2017.

If you -- your second question was sort of step up in size relative to predecessor. Look, the reality, Charles, is we're still sort of 16 months out. And I think if anything that we've learned from the last few years is that a lot can change in the world within that time horizon in terms of the external environment. What we can control, obviously, in terms of the funds, the realizations, we keep delivering. And so the performance has continued to be very strong. You heard the numbers from Rob and from Fred earlier. The portfolios are incredibly well diversified by sector, by geography, by company.

But also, Charles, one really important thing that I think clients will focus more and more on is also diversified by vintage year. And I think that's something that really CVC has sort of stuck to its knitting throughout. The other variable that I think is potentially quite positive for us over that sort of more medium-term view is to Rob Lucas' comments, seen a real uptick in institutional interest in Europe. And so I think that also bodes quite well for Fund X. But again, I want to have some degree of prudence here in terms of sort of a process that is still 18 months out.

We'll just answer the last question. Julian, you had -- from ABN AMRO, you had 2 questions. I think we answered the first one. So we move straight to your second question.

So if you look at PE realizations of EUR 11.3 billion during the last 12 months, can you please indicate what share of exits was towards continuation funds? Also, can you please remind us what are the conditions for placing an exit investment into a continuation vehicle?

Okay. Thank you. Fred, do you want to?

Sure. Well, to the actual facts of the EUR 11.3 billion, less than 1/4 of that was to one continuation vehicle that we exited into. We've only ever made 2 exits into continuation vehicles and one was in the first half of this year. And from time to time, they are a useful part of the whole ecosystem in Private Equity exits. But the one that we did exit into, just to give you an example of it, the continuation vehicle was just one part of a very, very large external new equity going into that asset. So it was not the case where we were just putting it from one of our vehicles into another vehicle, a proper well-run exit process where the continuation vehicle was a participant, but there was substantial new equity from other investors coming in alongside as part of that process.

Okay. Thank you very much indeed, Fred, and thank you very much indeed, everybody, for joining the call. I think we're leaving it there. Walid?

Thank you very much. Thank you, Rob. Thank you, Fred, and thank you, Rob. So this is all we have time for. So thank you again for your participation and for your questions and looking forward to speaking soon.

Thank you. This now concludes today's call. Thank you all for your participation. You may now disconnect.