Introducing Vintage Altaroc Odyssey 2025 FPCI

Louis Flamand: We're launching Odyssey 2025 with even greater conviction, as the private equity market recovers. In this new Vintage, you'll find the main themes that make Altarocs offering so strong. Institutionalized managers meeting allAltaroc 's selection criteria: deep track record, high and consistent historical performance, low loss ratio, proven ability to create value through strong operational growth of their portfolio companies and low financial leverage. Stable, institutionalized organizations, rich in human resources, with strong in-house sectoral and operational expertise.

A selection universe of seven funds from six managers: Insight Partners XIII, Great Hill Partners IX, Hg Saturn IV and HG Mercury V, New Mountain Strategic Equity Fund II, Inflexion Buyout VI, Nordic Capital XII. This universe has been built around long-term, recurring investment themes: 1. high-growth strategy, primarily in the technology and software sector with Insight Partners, Great Hill Partners or Hg. 2. Lower Mid-Market funds benefiting from their membership of quality Large Cap platforms, giving them a competitive edge over the lower Mid-Market thanks to access to strong internal, operational or sectoral resources with Hg Mercury or New Mountain Strategic Equity Fund II and finally Growth-oriented buyout leaders such as Inflexion or Nordic Capital. The only change expected is a little more software and a little less healthcare.

Louis Flamand: Our portfolios have historically maintained significant exposure to healthcare, a sector appreciated for its resilience and long-term growth potential. However, the availability of specialized funds that meet our exacting standards has led us to adjust our approach and adopt greater flexibility. The market for private equity managers specializing in healthcare remains small, and few new players meet all our investment criteria. We have therefore adjusted our target exposure to a range of 10-20%, compared with our initial target of 20%. This does not call into question our commitment to leading funds already present in our past portfolios. At the same time, we have strengthened our allocation to software. This rebalancing is based on a number of fundamental factors: the large number of specialized managers meeting all our demanding Altaroc selection criteria, sustainable structural trends driven by the adoption of the recurring SaaS subscription model, the transition to the cloud, the rise of cash flow visibility and the ability of companies in the sector to maintain high growth. The services sector, facilitated by Technology Enabled Services, is now impacting all sectors of the economy. As a result, our target allocation to technology-enabled software and services is now between 50 and 60%, reflecting the sector's strong appeal and the large number of high-quality managers specializing in it.

Louis Flamand: With Odyssey 2025, we're moving into Vintage Re-Up or re-engagement.

Louis Flamand: We are continuing our commitment to leading managers with whom we have already invested in our previous Vintage . Five of the six managers in our selection universe are already part of our portfolio: Insight Partners and Nordic Capital Capital, who are managers present in Altaroc Odyssey 2021, Hg , who is present in Altaroc Odyssey 2022, New Mountain and Inflexion , who are managers already present in Altaroc Odyssey 2023. By launching a fifth Vintage, it is natural for a fund of funds to commit to the successor funds of its existing portfolio managers. However, it should be pointed out that underperformance is not the only reason for deciding not to reinvest in a manager's successor fund. Other reasons may be: the size of his successor fund is too large, and will lead to a change of strategy or a succession issue at the head of the firm; or he has just lost one or more very good partners, which will impact the performance of his future investments; or he is performing well, but one of his competitors is performing much better. When we invest in a fund, we don't stop our due diligence - quite the contrary. We follow each of our portfolio managers very closely, attending their annual general meetings, talking to them regularly and analyzing investment opportunities alongside them. We constantly evaluate and compare them with the best-performing competitors in our shadow portfolio.

Louis Flamand: A simulated, parallel portfolio, comprising the managers most likely to enter our portfolio one day, either as new managers or as replacements for existing ones. A Re-Up is therefore really the fruit of due-diligence just as thorough as when we bring a new manager into our portfolio, because it involves comparing in great detail the opportunity to re-enter alongside an existing manager, with the opportunity to replace him with a manager from our shadow portfolio. We have already made two significant commitments to Odyssey 2025. Firstly, $52 million in Insight Partners XIII, a Growth Equity Growth buyout fund dedicated to the software sector, which has already begun investing. Good news for the deployment pace of this new Vintage. This commitment is shared between the main Insight Partners XIII fund ($42 million) and its companion fund Insight Growth Buyout Fund XIII ($10 million). The companion fund invests alongside Insight Partners XIII in its LBO transactions only, and benefits from attractive financial terms. Management fees are charged on the amounts invested over the life of the fund. Insight Partners XIII invests mainly in Growth Equity in hyper-growth software companies valued at a multiple of sales, as they are investing in their growth and their profitability is therefore not yet optimized. Valuations of these hyper-growth software companies peaked at 18 times next twelve months' sales during the 2021 software bubble, but have since fallen to an average level of six times next twelve months' sales.

Louis Flamand: A level not seen for over fifteen years, and therefore an attractive entry point for Insight Partners XIII. Second commitment: 60 million euros in Hg Saturn IV. A large-cap LBO fund dedicated to the software sector. The fund will invest mainly in Europe and North America. We have made four investments alongside the Hg Saturn III fund and will probably also invest alongside Hg Saturn IV. Hg is one of our biggest relationships.

Louis Flamand:In addition, we are conducting advanced due-diligence on Great Hill Partners, an American Growth Equity Growth buyout manager I've known for a long time, whose past performance has been exceptional, generated with little financial leverage. The average net performance of Great Hill's latest mature funds, Vintage 2008 Fund IV, Vintage 2014 Fund V and Vintage 2013 Fund VI, is 3.1x stake and 31% IRR net of fees. Finally, we are also currently looking at New Mountain Strategic Equity Fund II, a mid-market $1 billion minority buyout fund managed by the same team currently investing in New Mountain VII, anAltaroc Odyssey 2023 fund.

Louis Flamand: High-quality companies looking for a majority partner are housed in New Mountain VI. Companies led by founders looking for a minority partner are housed in this fund: New Mountain Strategic Equity Fund II. The strategy of this fund is very similar to that ofInflexion Partnership Capital III, which we supported in Odyssey 2023.

Louis Flamand: In conclusion, we can say that the seven funds making up our advanced selection universe for this Vintage constitute a well-balanced portfolio by geography, with an almost perfect target balance between Europe and North America, and in terms of deal size. By sector, at plus or minus 5%, we are perfectly in line with our target allocation of 50% to 60% to the technology sector, essentially the software sector, 10% to 20% to the healthcare sector, 20% to the services sector and 10% to the consumer sector. This selection universe offers sector exposure via funds specializing in their target sectors, by number of investments with up to 170 underlying investments in this portfolio of funds, by type of transaction with buyout, growth, equity and even minority buyout with New Mountain Strategic Equity. One of the key common features of these seven funds is that the primary source of their value creation is the strong operational growth of their portfolio companies, rather than debt, which is their weakest lever for value creation.

‍