Co-Founder Mathieu Chabran on Bloomberg’s Insight: Part 1

Yes. Hi, Paul. Thanks for having me. And as you might have rightly said, it's another week starting after that many market players, asset owners, asset allocators have been hoping for a short conflict and unfortunately it seems that it's not the case right now. Effectively President Trump over the weekend reaching out to some key allies to drag them into this situation hopefully for the better highlights that we are going to have as market participants to factor in this uncertainty. As we all know, markets don't really like uncertainty, a lot of volatility generated from this situation. But nonetheless, I think that's what we all have to be coping with is to be investing across cycles and we might be entering a new cycle, a cycle of much higher energy prices, a cycle maybe of higher interest rates which I'm sure we can discuss, a cycle potentially of higher dollar price after the year we had last year on the back of the liberation day. So, it looks to me a little bit like a new world order for the asset allocators and asset owners to consider.

Well, I mean, as always when you have volatility that creates some interesting entry points depending on your mandate and what you're looking for. We are Tikehau Capital, we are a compounding house, we're looking at deploying capital into strategies and more particularly mega trends that will generate this compounding return for our investors and for ourselves, for our balance sheet. And so, rather than timing the market, I think that the opportunity we see right now which is actually emphasized by this overall situation is to be focusing on a few mega trends that are requesting right now some significant capex. And that will be increased by the situation we are seeing. I mean, your point about digitalization is one, but obviously decarbonization and the energy transition is the second one that is a big investment theme for us. And obviously the defense that is unfortunately highlighted as a key need once again. And so, if you start looking at some few big themes like that, I mean, you can buy on the public market some higher dividend yield stocks. We're a credit house at core at Tikehau Capital. So, obviously I've been following all the public markets and this investment opportunity that it creates. But on the private side, there's always a silver lining to this challenging situation and I think that this is opening a cycle where private capital will be required to effectively invest across a few strategic regions, obviously Asia being the main one, Europe being the other one where we are going to require this big capex program to face what I call effectively this new order.