Yann BENLOLO

The risk-free rate (Rf) to use in the DCF for French companies is now the yield on L’Oreal bonds… 𝗙𝗧 - 𝗙𝗿𝗲𝗻𝗰𝗵 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀’ 𝗯𝗼𝗿𝗿𝗼𝘄𝗶𝗻𝗴 𝗰𝗼𝘀𝘁𝘀 𝗳𝗮𝗹𝗹 𝗯𝗲𝗹𝗼𝘄 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁’𝘀 𝗮𝘀 𝗱𝗲𝗯𝘁 𝗳𝗲𝗮𝗿𝘀 𝗶𝗻𝘁𝗲𝗻𝘀𝗶𝗳𝘆 https://lnkd.in/dc85GCw7

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Ever wondered why two measures—PFE & EEPE—exist in investment banking when they sound so similar? 🤔 One tells you the worst wave you could face 🌊, the other tells you the average swell over time. Both matter, but for very different reasons… 1️⃣ What They Measure PFE – Potential Future Exposure • Definition: The maximum credit exposure a bank might face on a counterparty trade over a specified horizon, at a given confidence level (e.g., 95%, 97.5%, 99%). Purpose: • Used for limit monitoring (counterparty credit limits). • Focuses on extreme but plausible exposure scenarios. Key Characteristic: • Percentile-based — it’s the Xth percentile of the future exposure distribution at each time point. • Ignores average scenarios ⸻———————-————————————— EEPE – Effective Expected Positive Exposure • Definition: The weighted average of Expected Exposure (EE) over the first year of a trade’s life, where each EE is the average positive exposure at a future date. Purpose: • Used for regulatory capital under Basel (especially in Internal Model Method, IMM). • Designed to capture average risk over time rather than just the worst-case percentile. Key Characteristic: • Time-weighted average of means, not percentiles. • Regulatory definition includes discounting short-dated exposures to avoid front-loading capital. ⸻————————————————————— 2️⃣ Why Investment Banks Use Both • PFE is for risk appetite & limit setting — you need to know the “worst case” your counterparty might expose you to so you can set a limit. • EEPE is for regulatory capital — Basel wants an average measure over time to size capital more proportionately to ongoing credit risk, not just the extremes. ⸻————————————————————— 3️⃣ Why the Percentiles Differ This is the key point in your question: • PFE percentile: • Directly picks a high percentile (e.g., 97.5%) from the simulated exposure distribution. • Will always be above the mean unless the distribution is perfectly symmetric and has no volatility. • Sensitive to volatility, optionality, and market shocks. EEPE “percentile” (actually not a percentile): • Based on the mean positive exposure, not a tail statistic. • Even if you simulated exposures at the same time horizon, EEPE is usually lower than the corresponding PFE because it averages out scenarios, not just the tail. • Percentile concept doesn’t directly apply — but if you compared “EEPE vs. the mean of the same timepoint in PFE distribution,” you’d see a gap because of distribution skewness. ⸻————————————————————- Simple Analogy Think of exposure like the height of ocean waves: • PFE = We want to know the height of the biggest waves we might face in the next 5 years at the 97.5% confidence level. • EEPE = We want the average wave height over the year, weighted by time — because that’s what knocks the boat around day-to-day. #PFE #EEPE #CounterpartyCreditRisk #BaselIII #RiskManagement #InvestmentBanking #SACCR #IMM #FinanceInsights#cfbr#creditrisk

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Week 18 (2025) in M&A and Private Equity 🛰️🇪🇸 • FI Group, a Spanish consultancy specializing in innovation funding, has reached an agreement to integrate into the French company EPSA. This strategic move aims to strengthen FI Group's position in the innovation funding sector, leveraging EPSA's resources and expertise to enhance service offerings and expand global reach. • SAMY Alliance (Bridgepoint Group) expands European footprint with aquisition of Intermate. Founded in 2015, Intermate has emerged as a category leader in end-to-end social media marketing. • Cibus Capital has acquired a majority stake in PSB Producción Vegetal, a Spanish company specializing in stone fruit breeding and genetics. Founded in 1989 and based in Murcia, PSB boasts a portfolio of 74 patented fruit varieties encompassing peaches, nectarines, apricots, and plums, and is expanding into table grapes and cherries. • Oaktree Capital Management, L.P. has acquired real estate financing platform Xenia Capital, in a deal that it said will boost its position in the Iberian real estate market. Xenia finances developments across locations in the Iberian region including Madrid, the Costa del Sol and Barcelona. Its portfolio encompasses a diverse range of assets including build-to-rent, residential, co-living, and five-star hotels in tourist hotspots. • Prismore Capital (formerly Sonae Capital Industrials), has acquired 100% of Madrid-based Waste Plastic Iberia and 33% of Catalonia's Greenertis. These companies are developing facilities to convert plastic waste into pyrolytic oil. The first plant, located in Tarragona, has a projected investment of €100 million and is expected to commence operations by the end of 2025. • Greening has signed a capital increase agreement with the Mexican company Latina Desarrollos Energéticos, which becomes a shareholder. The deal involves a capital injection of up to €45 million. • Mediterrania Capital Partners, a firm founded and led by Albert Alsina, has completed its full exit from Akdital, Morocco’s leading private healthcare group, through its MC III fund. The private equity firm initially invested in Akdital in March 2020. • AUREN has reached an agreement to integrate V2C Abogados, a multidisciplinary law firm with over 25 years of experience. In March 2025, Waterland Private Equity, a European investment firm, acquired a significant stake in Auren. This investment reflects a broader trend of increased private equity activity in the professional services sector. • Andbank has reached an agreement to sell its Brazilian fund brokerage to Allfunds. As part of the deal, Andbank will also adopt Allfunds as its global partner for fund distribution. • ... ☝️ More info, sources and subscription️: https://lnkd.in/d9Cx84zv ⏭️ ALBIA | IMAP, Fusiones y Adquisiciones M&A // Empresax 🎙️ Fusiones y Adquisiciones Podcast #privateequity #fusionesyadquisiciones #capitalprivado #MnA #Spain

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Largillière Finance joins the international network of independent investment banks REACH Cross-Border Mergers & Acquisitions as its exclusive member for France.   REACH is a cross-border M&A network focused on the mid-market segment, bringing together 400 investment bankers from 23 independent investment banks in over 30 countries, known for their high-level strategic advice and strong sector expertise, serving private equity funds, corporates, and entrepreneurs.   By joining REACH, Largillière Finance brings unique value to the network with its deep knowledge of the French market, a proven ability to execute complex cross-border transactions, and an entrepreneurial deal-making approach.   Largillière Finance also strengthens REACH’s multi-sector capabilities through its recognized expertise in the Financial Services industry.   Thanks to REACH, our clients gain direct access to leading M&A partners in over 30 countries—experts known for their operational excellence and ability to deliver high-impact results with precision, agility, and speed.   For more information, see the press release link in comments. Saga Corporate Finance AS, Brown Gibbons Lang & Company (BGL), 414 Capital, Meridian Capital, Cooper Parry, Crosbie & Company Inc., Macroinvest, Banmerchant, Aventum Partners, RECOF Vietnam, Total Finans, Value Base - ווליו בייס, Invescom Corporate Finance, JBR Strategy, Corporate Finance, Restructuring, Condere, Fenix Partners, BANICOL | Banca de Inversión, IOM Advisory, Anquor Corporate Finance, Broletto Corporate Advisory, Nash Advisory   #MergersAndAcquisitions #REACH #CrossBorderM&A #MidMarketDeals #InternationalGrowth #PrivateEquity #InvestmentBanking #SectorExpertise #LargilliereFinance

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🚀 8 Types of Investors: Which One Are You? Investing is not a one-size-fits-all game. Different investors use different approaches depending on their risk tolerance, goals, and strategy. Here are the 8 main investor types 👇 ⸻ 🔹 Value Investor Looks for bargains — companies trading below their intrinsic value. 📌 Focus: Low P/E ratio, low price-to-book ratio. 💡 Famous name: Warren Buffett. 🔹 Growth Investor Targets high-potential companies with strong revenue and earnings expansion. 📌 Focus: Revenue growth > 10%, earnings growth > 15%. 💡 Example sectors: Tech, AI, biotech. 🔹 Trader Short-term focused, using technical analysis instead of fundamentals. 📌 Focus: Support & resistance levels, moving averages. 🔹 Speculator Buys based on hype or gut feeling — high risk, high potential reward. 📌 Focus: Social buzz (Reddit, X), intuition. 🔹 Dividend Investor Seeks stability and steady income through dividend-paying stocks. 📌 Focus: Dividend yield, payout ratio. 💡 Example: Utility and consumer staples stocks. 🔹 Momentum Investor Rides trends — buying rising stocks, selling when momentum peaks. 📌 Focus: Price movements in past 3–6 months. 🔹 Minimum Volatility Investor Wants predictability and safety with “boring” companies. 📌 Focus: Beta < 1, very low volatility. 💡 Example: Consumer goods, healthcare. 🔹 Quality Investor Seeks top-tier companies with durable competitive advantages. 📌 Focus: Strong capital allocation, sustainable moat. ⸻ 📊 Each style comes with unique risks and rewards. Many successful investors mix elements of these strategies to fit their personal goals. 👉 Which investor type do you identify with the most? 🔵 Follow INVEST for premium market insights & strategies 🌐 Explore more at www.INVES7.com #Investing #Strategy #Finance #StockMarket #Investors #INVES7

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Credit swaptions: pricing and strategies Very happy to teach once again the course 'Quantitative Strategies Applied to Credit' which is part of the Master 2 Probability and Finance at Sorbonne Université in collaboration with Julien Turc. The credit market offers a wide range of instruments and possible strategies for investors along with numerous challenges for quants. Credit index swaptions can be used to design various types of strategies, such as hedging strategies to protect against a widening of credit spreads or volatility carry strategies to capture the spread between implied and realized volatility in the credit market. But pricing models to value credit swaptions can become quickly complex and very time consuming to compute as the price of the instrument is a function of the joint distribution of the level of future spreads and the number of defaults. Pedersen (2003) proposed a simplified framework using for the default risk an estimation of the expected loss and assuming that forward spreads follows a lognormal distribution. In this framework the price of the swaption can be obtained with a simple integral. What do you think? Nicole El Karoui Gilles Pagès Huyên Pham

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Tikehau Capital is pleased to announce the launch of Tikehau European Private Credit (TEPC), the Group's first ELTIF 2.0 semi-liquid private debt fund for private investors accessible outside French life insurance. 📌 TEPC will finance the growth of a wide range of profitable mid-sized European companies, with the aim of offering investors an attractive risk-return profile. 📌The launch of this fund is part of the Group’s ongoing efforts to democratise access to unlisted assets with the aim of making these strategies accessible to a broader audience. 📌 TEPC will leverage Tikehau Capital's Credit platform, one of the largest in Europe, with over 50 investment professionals and €23.3 billion of assets under management. The fund will co-invest alongside the Group’s institutional credit vehicles, which has invested nearly €70 million of its own balance sheet in the vehicle. Read the press release (EN) 👉 https://lnkd.in/ez9dGs9Z Read the press release (FR) 👉 https://lnkd.in/eEM_NbRe #privatemarkets #credit #assetmanagement #privatedebt

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💥 New Deal 💥 We’re proud to announce our investment in Genesis AI’s $105M Seed round, alongside Eclipse, Khosla Ventures, HSG, Alven, Eurazeo, Drysdale Ventures, Eric Schmidt & Xavier Niel ! 🚀 Half of global GDP is physical. Less than 5% of it is automated. Today’s robots are narrow, rigid, and too expensive to scale. Genesis AI is here to fix that. Large language models are trained on vast datasets of text, but AI models for robotics must be trained on data on the physical world. However, acquiring that real-world data makes for a costly and time-consuming endeavor. To overcome that, Genesis has built a proprietary simulation engine capable of accurately modeling the physical world (already +25k stars on Github) in order to train a robotics foundation model capable of controlling any type of robot for any task. 🤖 Zhou Xian, Theophile Gervet and their all all-star team are uniquely positioned to rise to the challenge of unlocking unlimited physical labor & we are super excited to support them 🦾 Joy Boustani Thibault Passaga Véronique Jacq Paul-François Fournier Nicolas Dufourcq #AI #robotics #frenchtech #foundationmodel

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Venture capital (VC) funds and the funding of innovation At the last meeting of the research committee of Autorité des marchés financiers (AMF) – France (https://lnkd.in/en63xcV8) – I discussed the paper by Maxime Bonelli on VC funds (https://lnkd.in/eXMwEDET), which raises an important question: will VC funds continue to support innovative startups with the advent of machine learning (ML) screening technologies? The paper shows that VC funds using ML techniques become better at screening “safe horses” (companies with business models mirroring existing ones), but falter at discovering “future stars” (highly innovative companies poised for IPOs). The paper concludes with a concern: relying more on ML could potentially stifle the financing of groundbreaking ideas. I am not sold on this conclusion (yet). Let’s consider two segments of the startup market : “safe horses” and “future stars”. Both segments offer positive expected returns, albeit with diseconomies of scale—the higher the funding, the lower the return. With ML, it becomes easier to screen “safe horses”, which increases their expected return relative to “future stars”. As the funding of “safe horses” becomes more attractive, how do we restore equilibrium? The paper argues that VC funding flows out of “future stars” towards “safe horses” until the expected returns in both segments equalize. As a result, we have less funding for innovation. But this scenario is just one of many paths towards equilibrium. One possibility is that there are few barriers to using ML. As new VC funds enter the “safe horses” segment, returns equalize without any drop in funding for innovation. Another possibility is that the diseconomies of scale in the startup market are strong (i.e., a small change in funding has a big impact on return). In this case, returns equalize with very little change in VC funding for innovation. Thus, the effect of ML on innovation funding heavily depends on the VC industry’s structure, making it challenging to predict at this stage. For more insights (including my methodological concerns), see my detailed discussion below. And to conclude: Maxime is the winner of the 2024 AMF prize for young researchers in economics (congrats again Maxime !)

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One of the ways we create value as active public equity investors is by taking a partnership approach with management teams – an increasingly rare practice in a market characterized by short-termism and misalignment. One such company is Precigen for which we led a capital raise last December to help propel their mission to discover, develop and commercialize next generation gene and cell therapies focused in immuno-oncology, autoimmune disorders, and infectious diseases. Thank you Bill Miller and RJ Kirk for your help! Today, we are proud to celebrate Helen Sabzevari PhD, President and CEO, and the entire Precigen team, which just announced full FDA approval of their cell therapy, the first and only approved therapy for the novel treatment of #RecurrentRespiratoryPapillomatosis (RRP), an HPV-related disorder. Before today, patients suffering from RRP had to endure repeated, ongoing surgeries as their only option for the managing recurrent, wart-like, benign tumors that grow in the respiratory tract as a result of the disease, significantly obstructing voice and airway function. These surgeries serve only as a temporary fix before new tumors develop, failing to address the root cause - and are associated with significant morbidity, as well as meaningful patient and health system burdens. Now, patients can receive a simple set of shots that lead to complete remission (no surgeries) in more than half of patients. We love investing like this, in a way that helps companies, patients and the broader world. We call this conscientious capital, and it’s a big part of our WHY. #PatientNotPassive #InvestingWithAConscience #ConsciousCapital

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