From the top floor of private equity firm Eurazeo’s headquarters, discreetly tucked away in the chic 17th arrondissement in the west of Paris, you can just about make out the wrought iron gates of the Parc Monceau.
Virginie Morgon, the 52-year-old chief executive of one of Europe’s largest private equity firms, strides into the room, sporting a pale blue corduroy suit, teapot in hand. It is the day after the first round of the French presidential elections, with only two candidates remaining in the race. Morgon, a former investment banker, doesn’t want to comment on the elections. “It would take more than just a comment,” she says.
As one of the most senior women in private equity and the CEO of Eurazeo since 2018, perhaps Morgon has more immediate concerns as she caps a busy first four years at the helm of Eurazeo.
Eurazeo was founded in 2001 and now has nearly 360 employees across 12 offices around the world, including in New York and London. Listed on Euronext Paris, it counts among its portfolio 450 companies, including French confectionery group Carambar and Belgian solar energy firm Ikaros Solar.
After graduating from Sciences Po Paris in 1990, Morgon spent more than 16 years at Lazard, flying between New York, London and Paris. Her clients included French carmaker Renault, and food and beverage giant Danone. She became the bank’s youngest senior managing partner in Paris in 2001.
READ Ukraine war ‘bankrupts’ ESG case, says BlackRock’s former sustainable investing boss
She joined Eurazeo’s executive board in 2008. She subsequently multiplied the firm’s assets from €6.7bn in 2017 to €31bn today through a continued strategy of diversification across all market segments and sizes. In 2021, Eurazeo brought in a record fundraising of €5.2bn, topping its previous record of €2.9bn the year before.
She is also credited with extending the firm’s geographical reach during her tenure as chief investment officer — a role she took on in 2011. In 2016, she opened Eurazeo’s New York office and in 2018, she signed a partnership with China Investment Corporation to launch a vehicle dedicated to European companies seeking to expand in that country.
Her four years as CEO have been turbulent, interrupted by the pandemic. Morgon says her experience weathering the financial crisis during her first few years at the firm was “extremely helpful”.
“Being the captain of the ship is quite different than even having very senior responsibility in the same company, like I did in the past,” Morgon says. “You’re in charge of every consequence of every decision you’re taking. It is a really heavy weight on your shoulders.”
Coming out on the other side of the health crisis, Morgon has set her sights on new goals: reaching €60bn in assets under management in five to seven years. “The challenge is not knowing what we have ahead of us,” she says. “Significant disruption, decoupling between geographies, probably the US and Europe with the recent acceleration related to the war in Ukraine in Europe.”
Eurazeo has said it has “very limited exposure” to Russia and Ukraine. It has also been “carefully monitoring the indirect effects” of the war, including rising energy prices.
“Inflation? Deglobalisation or still a lot of globalisation?” she continues. “Is it just a supply chain issue or is it wider? Is it about the consumer refocusing on a smaller area where they operate? Or is it just about adapting your companies to a global world but with maybe a slightly more local market in terms of the energy supply chain? We don’t know that yet.”
As of 10 March, Eurazeo had secured €550m of fundraising this year. Tech, healthcare and payment-related businesses are the sectors in which Eurazeo is most interested at the moment, Morgon says.
READ PE and VC-backed companies in Europe created more than 100,000 jobs during pandemic, study finds
Another key part of her vision is sustainability and ESG investing. Responsible investing exploded during the pandemic, with money pouring into funds touting sustainable investments. But the growth of the sector has come accompanied by calls for better regulation because of fears about “greenwashing”, with many prominent figures in finance voicing scepticism about the sincerity of the City’s new sustainability obsession.
“You don’t have 10 people doing this in your organisation, across the board, and then elevate your ESG director to partner level because you want to look fashionable,” she says. “You show your team, your partners inside the firm, that this is serious.”
Eurazeo has been ahead of the curve by the standards of both private equity and the broader financial sector, exploring these topics as early as 2005. It has linked 15% of all its partners and managing directors’ bonuses with ESG targets and committed to reaching carbon neutrality by 2040. “That’s serious now,” she says. “If you don’t meet them [the goals], then you don’t get that part [of the bonus].”
Linking compensation to ESG targets has become more mainstream over the past couple of years. But Morgon says financial incentives are not the only way to encourage City employees to meet sustainability targets — they’re only one of the tools in the toolbox.
“You need to pull all the levers that you can,” she says. “We’re all different… Financial levers are not magical; it is also about awakening people to what is happening.”
At least it is easier now to explain the importance of sustainability to CEOs compared to when Eurazeo first started raising the topic with its portfolio companies, she says.
“Back in the day, it was more difficult to convince our CEOs of our companies of why we should be doing this [ESG].”
To convince them, she would tell them it wasn’t just about “being a good citizen” but about productivity, efficiency, saving and better performance.
“You can show the sceptics that it is in their interest because one day they will wake up and it will be too late,” she says. “Their business model will be so disrupted that there will be no turning back.”
Economics and finance degree, L’Institut d’études politiques de Paris
Master’s in Economics and management, Università Commerciale Luigi Bocconi
Member of the executive board, Eurazeo
Investment banker, Lazard
FN100 Most Influential Women in European Finance
FN50 Most Influential in Private Equity
To contact the author of this story with feedback or news, email Bérengère Sim
Read More: Eurazeo’s first female CEO Virginie Morgon on why she’s pulling ‘all the levers’ on ESG