STOCKHOLM, April 18, 2024 /PRNewswire/ — A promising start to 2024 – and to EQT’s fourth decade
“EQT started the year with the successful completion of two fundraises, EQT X and EQT Future, with total commitments of more than EUR 25 billion. Investment activity continued at a good pace and, with transactions such as the IPO of Galderma, we expect a gradual increase in exit activity. Whilst the macroeconomic environment, financing conditions, and capital markets activity have improved, we continue to monitor geopolitical risks and macro developments, including interest rates, and maintain our focus on performance.”
Highlights for the period Jan-Mar 2024 (Jan-Mar 2023)
Strategic
EQT X closed at EUR 22bn in total commitments, of which EUR 21.7bn are fee-generating assets under management, hitting the hard cap
EQT Future1 closed at EUR 3bn in total fund commitments, with total fee-generating commitments to the strategy, which includes co-investments, totaling EUR 3.6bn
EQT hosted a Capital Markets Day, re-confirming its revenue growth and adjusted EBITDA margin targets, providing further color on its fee-related EBITDA margin ambition, and refining its dividend growth target to be on a per share basis
Preparation continued for a transition infrastructure strategy, as well as further products targeting the Private Wealth segment
Preparations also continued for BPEA IX
Fundraising
Fee-generating assets under management (FAUM) increased to EUR 132bn (EUR 119bn). Total AUM was EUR 242bn (EUR 216bn). Gross inflows amounted to EUR 5bn and were primarily driven by closed out commitments from EQT X and EQT Infrastructure VI
Fundraisings are generally taking longer in the current fundraising environment, and we expect the fundraising market to meaningfully improve only once realizations pick up materially across private markets
EQT Infrastructure VI had fee-generating commitments of EUR 15.1bn. Fundraising is expected to continue at least throughout 2024, and the fund is expected to reach its target fund size
EQT launched EQT Healthcare Growth, a dedicated healthcare buyout strategy
Fundraising continued for EQT Exeter US Multifamily Value II, EQT Exeter Europe Logistics Core-Plus II, EQT Active Core Infrastructure and EQT Exeter Asia Pacific Logistics II
Fundraising also continued for BPEA EQT Mid Market Growth, with the increased hard cap of USD 1.4bn
EQT Nexus’ NAV was more than EUR 600m, and EQRT, EQT’s semi-liquid strategy focusing on direct investments in commercial real estate, announced its first acquisition
Investment activity2
Total investments by the EQT funds in the quarter amounted to EUR 4bn (EUR 5bn). Investments include the partnership with EdgeConneX to develop hyperscale data centers in APAC (EQT Infrastructure VI); the public to private tender of Believe, the largest independent digital-native music label globally (EQT X); and Avetta, a leading cloud-based supply chain risk management software platform (EQT X)
The transaction with Wind Tre (EQT Infrastructure VI) was terminated
Exit activity2
Total gross fund exits during the quarter amounted to EUR 1bn (EUR 2bn). Exits include the sale of CMS Info Systems, India’s largest cash management company; Shinhan Financial Group, the largest financial group in Korea; and RBL Bank, one of India’s leading private sector banks (BPEA VII)
Other exits include Ottobock, the global leader in wearable human bionics (EQT VII); and Cardior Pharmaceuticals, a leader in RNA-targeted therapies for people with cardiovascular diseases (EQT Life Sciences)
Galderma, a leader in dermatology, priced its IPO on the SIX Swiss Exchange gaining >20% on the day of the IPO, with a total offering of USD 2.6bn. The offering comprised mainly of primary shares, to raise capital for Galderma, with only a minimal sale by EQT VIII
Investment performance
All ten Key funds are performing On or Above plan, meaning they are on track to deliver on or exceed the return targets communicated to our clients
In the first quarter, Key fund valuations increased by almost 3%, as underlying performance remained healthy and valuation references were supportive. The portfolio remains robust, albeit with certain pockets of underperformance
Strategies focused on earlier-stage investments, such as EQT Ventures and EQT Growth, saw a meaningful value uplift in certain portfolio companies
People and future-proofing
The number of full-time employees and on-site consultants (FTE+) amounted to 1,859 (1,792), of which 1,802 (1,687) were FTEs. Hiring was primarily to support new strategic initiatives such as Private Wealth and prioritized regions such as Asia and the US
Masoud Homayoun, Partner and Head of EQT Value-Add Infrastructure, joined EQT’s Executive Committee
EQT Network appointed Sir Alok Sharma as a Senior Advisor on geopolitical topics and economic trends, drawing on his extensive experience in sustainability, with a background as the President of the 2021 UN’s Climate Change Conference in Glasgow (COP26), and the Secretary of State for Business, Energy, and Industrial Strategy in the UK
Since committing to the Science Based Targets initiative in 2021, EQT has supported 39 portfolio companies in setting science-based targets, out of which 7 completed the validation in Q1. Additionally, 24 are in the process of setting targets
Other
EQT won six awards in the 2023 PEI Group Awards, including Infrastructure Investor’s “Global Sustainable Investor of the Year” for the second consecutive year, and New Private Markets’ “Multi-Strategy Firm of the Year (ESG)”
Further to the ongoing review of certain current and former EQT employees’ carried interest taxation, the Swedish Tax Agency has communicated its intention to review EQT’s related social security contribution obligations
Events after the reporting period
Investment levels in EQT Key funds as of 18 April 2024, were 35-40% in EQT X, 30-35% in EQT Infrastructure VI and 40-45% in BPEA VIII
EQT Active Core Infrastructure entered exclusive talks to acquire Ocea Group, a leading French water and heat submetering infrastructure provider
EQT Infrastructure VI acquired a majority position in Universidad Europea, a leading private higher education platform in Spain and Portugal
EQT Mid Market Europe has signed an agreement to sell Rimes, a global leader in enterprise data management solutions for the investment industry
Fundraising was launched for EQT Healthcare Growth
EQT Future charges management fees on invested capital
Signed transactions, if not otherwise mentioned
Presentation of EQT AB’s Q1 Announcement 2024
Financial analysts and media are invited to participate in a conference call, including a presentation at 08:30 CEST.
The presentation and a link to follow the webcast and conference call live can be found here and a recording will be available afterwards.
To participate by phone, please register here. You will then receive your personal dial-in details, to be able to ask questions during the Q&A.
Information on EQT AB’s financial reporting
The EQT AB Group has a long-term business model founded on a promise to its fund investors to invest capital, drive value creation and create consistent attractive returns over a 5 to 10-year horizon. The Group’s financial model is primarily affected by the size of its fee-generating assets under management, the performance of the EQT funds and its ability to recruit and retain top talent.
The Group operates in a market driven by long-term trends and thus believes quarterly financial statements are less relevant for investors. However, in order to provide the market with relevant and suitable information about the Group’s development, EQT publishes quarterly announcements with key operating numbers that are relevant for the business performance (taking Nasdaq’s guidance note for preparing interim management statements into consideration). In addition, a half-year report and a year-end report including financial statements and further information relevant for investors is published. Finally, EQT also publishes an annual report including sustainability reporting.
Contact:
Olof Svensson, Head of Shareholder Relations, +46 72 989 09 15
EQT Shareholder Relations, [email protected]
Rickard Buch, Head of Corporate Communications, +46 72 989 09 11
EQT Press Office, [email protected], +46 8 506 55 334
This is information that EQT AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 07:30 CEST on 18 April 2024.
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