How one European asset manager with $40 billion is weathering

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Mathieu Chabran helms Tikehau Capital, a European asset manager, which oversees $40 billion in private debt, real assets, private equity, and capital markets. With a front row seat to the uncertainty and geopolitical tension in Europe, Chabran sat down with the Delivering Alpha newsletter to discuss the role of alternatives in the region along with his shifting perspective on tech. 

 (The below has been edited for length and clarity. See above for full video.)

Leslie Picker: As you look across your portfolio, are you seeing the effects of war of inflation on the assets that you manage?

Mathieu Chabran: Actually, not at this stage. Obviously, we’re monitoring extremely carefully, because we were first focused a couple of months ago on the [rising] interest rates, even if Europe is lagging a bit relative to the U.S. And then obviously, and unfortunately, the war started, and now we’re seeing some supply chain issues, some increase in raw materials. So, as much as we are very close to the company we’re working in, we are trying to anticipate as much as we can. But we see, also, some interesting shifts happening, typically on the energy – I know we debated that a lot. So, right now, I think it’s a critical moment, crossroads, to work on your portfolio companies – to anticipate, to provide your portfolio companies with the long-term resources they need. And that’s what we’re doing at Tikehau. 

Picker: So you’re not seeing any impact of inflation on margins, or higher prices, or anything like that?

Chabran: We’re actually seeing that less in Europe [than] what we are seeing in the U.S. right now. In Europe, we’re trying really to be as local as possible and to be less dependent on some supply sources. Energy is one big thing. The other thing is obviously on the cost of funding and the interest rates. That’s one thing we monitor, very, on a daily basis, if I may say. And B) on the private debt, on the private equity, on the real estate, we see different approaches where you can try to anticipate that, work with your portfolio company. But right now, on the mid-market, because that’s really what we’re focusing on, it still remains under control but it’s up to the companies, it’s up to the management team to effectively anticipate that so that we can weather this situation and make sure we can shift our supply chain.

Picker: Because of that, are you seeing more opportunity in Europe than you are in the United States right now?

Chabran: If you can remain local in your sourcing, and Europe, as you know Leslie, is a big playground, right? From northern Nordics all the way down to southern Europe, those are very specific markets. And if you have the footprint on the ground, as we try to develop, and as we’ve been developing at Tikehau, it effectively provides you the ability to be more nimble, if I may say, working with your portfolio companies, with your management, with your local…