Overall Portfolio

Diversification and performance

31 December 2023

Brederode’s portfolio consists of two distinct and complementary operational sectors: non-listed, or Private Equity, holdings, and listed securities.

The unique combination of these two portfolios allows optimal management of the liquidity risks linked to the uncalled Private Equity commitments while remaining fully invested overall.

Concentration of talents,
alignment of interests and creation of value

Private Equity

Brederode’s Private Equity portfolio consists mainly of commitments in fixed-term (10-12 year) associations usually referred to as Limited Partnerships, or simply Funds. The managers of these funds invest the called amounts in various projects which they then manage until such time as they resell (exit) them, which is typically after a period of 4 to 7 years.

The Brederode group chooses to participate in Funds that generally pursue a buyout strategy, in other words buying, through appropriate financial leverage (leveraged buyout), an interest – in principle, a controlling interest – in already mature businesses that have predictable cash flow and offer expansion or consolidation opportunities.

Brederode also analyses all opportunities for direct co-investment in certain projects identified as promising, in parallel with certain Funds.

Brederode’s Private Equity operations date back to 1992. With its extensive experience and its network of contacts, the Brederode group is able to focus on the most promising projects, led by the best teams of managers.

Mid and long term performance

For information, the performance of BREDERODE in Private Equity over the past ten years, drawn up in accordance with IFRS standards and based on net annual cash flows, is as follows:
(in € million)10 years5 years3 years1 year
Value at the beginning of the period517,671049,481 554,832 487,51
Cash flow during the period-28,28-145,28-35,91-62,00
Value at the end of the period 2 636,652 636,652 636,652 636,65
IRR (Internal Rate of Return) (1)19,0%17,9%18,8%3,4%
(1) Internal Rate of Return (IRR) on equity capital based on the value of equity capital at the beginning and at the end of the financial year, as well as of the net distributions (capital increases) during the period.

The valuations at the beginning and at the end of the financial year relate to the NAVs reported in the IFRS-accounts on the basis of preliminary information available at the time of the closing of the accounts. The performance variances with the final valuations are not significant.

Advantages of the Private Equity

1. Alignment of interests of the parties involved

The interests of each of the parties involved are optimally aligned thanks to incentives put in place aimed at encouraging both the General Partners and the management of the acquired companies to maximise the return on investment for the shareholders over a period of generally four to seven years.

2. Long-term value creation
Since the companies remain private or become private further to their acquisition, their management teams are in a position to take strategic initiatives that may generate a temporary reduction in profitability, with a view to significantly improving the company’s valuation at the time of its sale. Such actions would be difficult to take for a public company as they could be interpreted as “profit warnings” and not as positive actions aimed at improving the performance of the company over the long term.
3. Optimisation of financial leverage
Companies backed by PE firms are able to fine tune their capital structure with an appropriate amount of leverage that optimally fits the business plan for the investment period.
4. Rigor and discipline
The board of a PE backed company, generally controlled by representatives of the General Partner, is focused on a number of KPIs, Key Performance Indicators. Such KPIs tend to zero in on cash metrics, on the progress of operational improvements, on the speed of execution of the business plan etc. and allow to spot and correct underperformance in the business very quickly. This focus provides significant downside protection to investors and gives comfort to the company lenders. The speed of reactions of companies subject to the discipline of Private Equity is a significant competitive advantage.
5. Talent
Because of the clear incentives based on tangible performance (IRR), PE firms are able to attract the best talent for both their own business and for the portfolio companies they acquire, for the ultimate benefit of their investors.

Breakdown by style

Current investments
31 December 2023

Uncalled commitments
31 December 2023

Geographical breakdown

Current investments
31 December 2023

Uncalled commitments
31 December 2023

Geographical breakdown of Private Equity activity in December 2023

(in € million)

2003 202 127 2004 218 122 2005 263 173 2006 270 271 2007 304 321 2008 309 313 2009 363 306 2010 464 261 2011 512 300 2012 525 287 2013 518 326 2014 628 453 2015 719 532 2016 795 673 2017 878 699 2018 1049 894 2019 1300 1059 2020 1555 991 2021 2344 1016 2022 2488 1255 2023 2637 1198 0 500 1000 1500 2000 2500 3000 3500 Undrawn commitments Investments

Cash-flow trend

(in € million)

2003 40 -55 2004 74 -51 2005 114 -64 2006 125 -82 2007 115 -99 2008 38 -100 2009 18 -35 2010 77 -93 2011 104 -90 2012 147 -114 2013 151 -82 2014 180 -132 2015 202 -138 2016 187 -167 2017 196 -219 2018 232 -224 2019 257 -316 2020 272 -323 2021 533 -505 2022 366 -368 2023 288 -378 -600 -500 -400 -300 -200 -100 0 100 200 300 400 500 600 700 Distributions Capital calls Net cash flows

Breakdown of Private Equity investments by vintage year

Current investments

Uncalled commitments

Our main partners in Private Equity

The Carlyle Group



Catterton Partners

HIG Capital

Providence Strategic Growth

Bain Capital

Vista Equity Partners

Genstar Capital

Alpine Capital

List of the main Private Equity managers

as 31 December 2023 (in € million)

at fair value
Uncalled commitmentsTotal commitments
JF LEHMAN57,8420,9578,79
TOTAL2 636,651 198,093 834,74
The top 25 General Partners included in this list represent 76% of total commitments.
The above assessment is based on the unaudited valuations as at 31 December 2023, covering 89% of the Private Equity

Quality, diversification and liquidity

Listed securites

The listed securities portfolio focuses on around twenty high quality companies. It is rigorously managed in order to balance its defensive nature with the profitability, liquidity and growth objectives.

Breakdown of the listed portfolio

By industry
31 December 2023

Performance by investment and by industry as 31 December 2023

Description(€ mil) %
Samsung Electronics Co., Ltd. produces electronic products for consumers and industry, semi-conductors, PC’s, peripheral equipment, screens, televisions and household appliances such as air conditioners and microwave ovens. The company also produces internet access systems, telecommunication equipment and mobile phones. 79,7040,4%
MasterCard, Inc. offers payment solutions through its credit and debit services and payment programmes with financial institutions. The company also offers transaction services for debit and credit cards, transferable money, automated counters and traveller cheques. 121,1818,9%
The company Intel develops, produces and sells IT-parts and related products. The main products are microprocessors, computer mice, integrated processors, microcontrollers and memory cards, graphic products, network and communication products, operating software, conference systems and digital imaging products. 51,2585,9%
Relx PLC provides information solutions for professional customers across industries. The Company publishes information for the scientific, medical, legal, and business sectors. Relx serves customers worldwide. 84,7241,2%
Alphabet Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.103,3845,7%
Prosus N.V. provides internet based services. The Company focuses on investment in internet, digital media, e-commerce retailing, and technology companies. Prosus serves customers worldwide.22,62-8,5%
Alibaba Group Holding Limited operates as a holding company. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide13,65-15,1%
Investment companies 205,080,7%
Sofina SA is an investment company listed on the Brussels stock exchange.82,6911,2%
Brederode S.A.122,38-5,4%
Health care120,6011,1%
Novartis AG manufactures pharmaceuticals and health care products for the general public, including medicine for the treatment of cardiovascular diseases, breathing difficulties and infectious diseases, internal and urological pathologies, products in the field of oncology, dermatology, eyesight, arthritis, vaccines, diagnoses and animal health.75,0817,0%
Sanofi is a worldwide pharmaceutical company focusing on the research, development and production of medicine and vaccines for the treatment of cardiovascular diseases, thrombosis, metabolism disruptions, tumours, the nervous system and internal medicine.45,522,5%
Consumer goods 217,301,3%
Unilever SA produces well-known brands and consumables such as food products, detergents, perfumes, hygiene and household products. The company is also listed on the London stock exchange. 79,85-2,8%
Nestlé SA is an international company producing and selling a wide range of food products such as milk, chocolate, sweets, mineral water, coffee, cream, herbs and pet foods.71,07-0,9%
LVMH Moet Hennessy Louis Vuitton SE is a diversified luxury goods group. The Company produces and sells wine, cognac, perfumes, cosmetics, luggage, and watches and jewelry. 66,399,5%
Iberdrola S.A. produces, distributes, commercializes and sells electricity in the United Kingdom, the US, Spain, Portugal and Latin America. The company specializes in clean energy, wind energy in particular. 103,5812,8%
Enel SpA operates as an integrated electricity and gas distributions company. The Company generates, distributes, and sells electricity and gas. Enel also provides electric transportation and storage services. Enel serves customers worldwide. 92,5441,7%
Royal Bank of Canada is a diversified financial services company. The Company provides personal and commercial banking, wealth management services, insurance, corporate and investment banking, and transaction processing services. Royal Bank offers its services to personal, business, public sector and institutional clients with operations worldwide.61,077,3%
Other holdings < € 10 MM n.a
TOTAL1 276,6816,3%

Portfolio on 31 December 2023

Securities (In € millions)Number of shares ISIN-code
Mastercard313 950US57636Q1040
Alphabet (C)810 611US02079K1079
Relx2 367 465GB00B2B0DG97
Samsung Electronics (GDR)58 790US7960508882
Intel1 127 000US4581401001
Prosus838 134NL0013654783
Alibaba194 587US0160W1027
Consumer goods
Unilever1 820 684NL0000009355
Nestlé674 872CH0038863350
LVMH90 503FR0000121014
Investment companies
Brederode1 204 575LU1068091351
Sofina366 863BE0003717312
Iberdrola8 726 618ES0144580Y14
Enel13 751 056IT0003128367
Health care
Novartis819 200CH0012005267
Sanofi507 100FR0000120578
Royal Bank Of Canada667 300CA7800871021
Other holdings < € 10 MM (3)n.a.

(3) The “other holdings” item mainly contains listed securities distributed by certain Private Equity funds.