EQT raises Us$15bil for new fund, defying market headwinds

STOCKHOLM: Despite wider economic and fundraising headwinds, Swedish private equity firm EQT AB has raised approximately

€15bil (Rm67bil) for its new flagship fund.

The buyout firm has received commitments for about 70% of the fund’s maximum

€21.5bil cap of (Rm96bil) by the first close, according to a letter to investors seen by Bloomberg News.

EQT expects to “materially” conclude active fundraising this year, with a final close planned for 2023, it said.

EQT is raising money at a time when investors are becoming more selective about the managers they back and questioning

buyout firms’ speed in returning to the market to raise ever-larger funds.

Recession fears and tightening financing markets are also weighing on deal activity.

“In the current market environment with high inflation and rising energy prices, amidst the conflict in Ukraine, and a deteriorating economic outlook, our well-invested and growing EQT Private Equity platform remains resilient,” the letter said.

“Activity in the transaction market remains muted, negatively impacted by current conditions and tighter financing markets.”

EQT was seen as one of the more active buyout firms at a time when valuations were rising.

They’re approaching investors at the same time as rivals like Hellman and Friedman,

which has started pre-marketing for its next flagship fund and is targeting more than Us$30bil (Rm135bil), Bloomberg News reported in March.

Private equity transactions have declined about 30% this year after a record in 2021,

but the volume of Us$971bil (RM4.35 trillion) is still high relative to historical averages, according to data compiled by Bloomberg.

EQT’S new fund teamed up with Mubadala Investment Co in June to buy Swedish medical freight company Envirotainer AB for

€2.8bil about (Rm13bil). It also invested in the United Talent Agency, which manages actors and artists, in July.

EQT is looking to reassure investors with the fundraising update after a roughly 50% drop in its share price this year.

Despite the decline, the shares are still up about 260% since EQT’S September 2019 initial public offering.

— AP Master stroke: The goings and comings at the harbour of Nynashamn in Sweden. As the world grapples with all sorts of fundraising challenges, including rising valuations, Swedish buyout firm EQT has managed to raise some Us$15bil.