EQT AB (publ) Q1 Announcement 2024

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 ‌​​‌132​‌bn (EUR ‌​​​119​‌bn). Total AUM was EUR ‌​​‌‌242​‌bn (EUR ‌​​‌​216​‌bn). Gross inflows amounted to EUR ‌​​​‌5​‌bn 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 ‌​​​​15.1​‌bn. 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 ‌​​4​‌bn (EUR ‌​​‌5​‌bn). 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 ‌​​1​‌bn (EUR ‌​​‌2​‌bn). 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

1. EQT Future charges management fees on invested capital
2. 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, shareholderrelations@eqtpartners.com

Rickard Buch, Head of Corporate Communications, +46 72 989 09 11
EQT Press Office, press@eqtpartners.com, +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.

About EQT
EQT is a purpose-driven global investment organization focused on active ownership strategies. With a Nordic heritage and a global mindset, EQT has a track record of almost three decades of developing companies across multiple geographies, sectors and strategies. EQT has investment strategies covering all phases of a business’ development, from start-up to maturity. EQT has EUR ‌​​242​‌ billion in total assets under management (EUR ‌​​‌132​‌ billion in fee-generating assets under management), within two business segments – Private Capital and Real Assets.

With its roots in the Wallenberg family’s entrepreneurial mindset and philosophy of long-term ownership, EQT is guided by a set of strong values and a distinct corporate culture. EQT manages and advises funds and vehicles that invest across the world with the mission to future-proof companies, generate attractive returns and make a positive impact with everything EQT does.

The EQT AB Group comprises EQT AB (publ) and its direct and indirect subsidiaries, which include general partners and fund managers of EQT funds as well as entities advising EQT funds. EQT has offices in more than 25 countries across Europe, Asia and the Americas and has more than 1,800 employees.

More info: www.eqtgroup.com
Follow EQT on LinkedIn, X, YouTube and Instagram

Tags: