NATIXIS_REGISTRATION_DOCUMENT_2017

FINANCIAL DATA Consolidated financial statements and notes

Asset management transactions 4.1.3 Mutual funds In general, seed money investmentsheld for less than one year were not consolidated. 1. Non-guaranteed mutual funds: In the context of mutual funds, relevant activitiesare investment and divestment activities involving securities in fund assets. These activitiesare managedin a discretionarymanneron behalf of investors by the management companies of Natixis InvestmentManagersand NatixisWealthManagement. The compensationof Natixis Investment Managers and Natixis Wealth Managementas managers is marginal compared to the returns generated for investors. Indeed, the management and incentive fees are obtained on the market and are consistent with the servicesrendered,since the asset managementactivity takes place on a competitiveand internationalmarket. In the absence of rights held by third parties (e.g. withdrawalor fund redemption/liquidationrights), the control of mutual funds managed by Natixis Investment Managers and Natixis Wealth Management is assessed according to the combined interests held by the entities and business lines within Natixis’ consolidatedscope: as managers,Natixis InvestmentManagersand NatixisWealth a Managementdo not invest in the funds and generallyown only severalshares; Natixis Assurances may take out interests in mutual funds a managed by Natixis Investment Managers via its insurance subsidiaries. These interests are subscribed in the form of euro-denominatedor unit-linkedinsurancepolicies: Euro-denominated policies are policies under which the j insuredparty receivesa minimumguaranteedreturn plus the major share of the surpluses generated by the insurance company’s main fund. Any shortfall between the fund’s return and the minimum guaranteed return is borne by the insurer,which thus incurs the risks, Unit-linkedpoliciesare policiesunder which the insuredparty j selects the funds in which the insurer invests on its behalf. The value of the insurer’s interest in such funds is reflected in the insurance policies. Invested funds representing unit-linked policies are consolidatedunder IFRS 10 if all the control criteria are met cumulativelyand if the funds have a materialimpact; other Natixis entities and business lines may hold minority a interests,intendedmainlyto meet cash investmentneeds. A fund is subjectto consolidation: if Natixis acts as principal, i.e. if Natixis is a manager and is a non-revocable by a limited number of persons and if Natixis holds a large enough material interest to conclude that it controlsthe fund; or if Natixis is not a managerbut owns virtuallyall the shares. a Non-guaranteedmutual funds subject to consolidation but not consolidateddue to their materialityare listed in Note 17.1. 2. Guaranteed mutual funds: Natixis guarantees the capital and/or performance of certain mutual funds. These packaged funds are passively-managed

funds. Once the structuring is established initially, it is fixed for the fund’s entire lifetime. Natixis has relatively limited exposure to negative variable returns thanks to the fund’s strict managementby the NAM managementcompany and a robust risk control system put in place upon structuringand monitored throughout the fund’s lifetime. These controls significantly limit the risk of guaranteeactivation. Just as for non-guaranteed mutual funds, guaranteed mutual funds are subject to consolidation under IFRS 10 whenever Natixis acts as principal (e.g. Natixis acts as an irrevocable managerand holds a material interest).Guaranteedmutual funds subject to consolidation but not consolidated due to their materialityare listed in Note 17.1. Real estate funds The relevant activities of these funds are those involving the investment and divestment of real estate assets. These funds are managed on behalf of investors by the management companiesof Natixis InvestmentManagers (AEW Europe, AEW CentralEurope, etc.). With regard to compensation, the returns received by Natixis include income received by Natixis as a managementcompany (management fees, incentive fees, etc.) and as an investor (dividends). A fund is subject to consolidationif Natixis acts as principal (e.g. Natixis is a managerand is non-revocableby a limited number of persons and holds material variable returns). Real estate funds subject to consolidation but not consolidated due to their materialityare listed in Note 17.1. Private Equity funds As part of its Private Equity operations, Natixis makes equity investmentsin unlisted companiesvia private equity investment vehicles (Fonds Communs de Placement à Risque – FCPRs – private equity investment funds and SICARs – Sociétés d’Investissementà Capital Risque – venture capital companies) and limitedpartnershipswhich it has typicallymanaged. The analysis criteria for IFRS 10 consolidationapplied to Private Equity funds are the same as those applied to real estate funds. A fund is subject to consolidationif Natixis acts as principal (e.g. Natixis is a managerand is non-revocableby a limited number of personsand holds materialvariable returns).Private Equity funds subject to consolidation but not consolidated due to their materialityare listed in Note 17.1. Securitizationtransactions are generally constituted in the form of structured entities used to segregate assets or derivatives representativeof credit risks. The purpose of such entities is to diversify and tranche the underlyingcredit risks, most oftenwith a view to their acquisition by investors seeking a certain level of compensationbased on the level of risk assumed. The assets of these vehicles, and the liabilities they issue, are rated by the rating agencies, which continually monitor the suitabilitybetweenthe level of risk associatedwith each tranche sold and the rating attributed. Securitization transactions 4.1.4 Securitization vehicles

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Natixis Registration Document 2017