EQT closes €1.6 billion mid-market fund

The fund is the Swedish private equity firm’s first solely to target Europe and will focus predominately on the TMT sector.  

EQT, the Sweden-headquartered private equity firm, has held the final close on its EQT Mid Market Europe fund on its hard-cap of €1.6 billion, the firm announced in a statement.

Launched in the first quarter of 2016, the fund will invest in high-quality mid-market targets in Northern Europe, using its competence in improving industrial processes and global reach to grow its investments.

According to partner and mid-market Europe head Jannik Kruse Petersen, the TMT sector is of particular interest given the plethora of scalable business models available, with healthcare and consumer goods and services also attractive.

The Mid Market Europe fund has already made four investments: TransIP, a Netherlands-based web hosting and domain name provider, Utimaco, a Germany-based provider of cyber security and compliance solutions, Adamo, a fiber-based service provider from Spain and Fertin Pharma, the world’s largest independent developer and manufacturer of medicated chewing gum, based in Denmark, according to the statement.

These investments were priced at between 10x and 13x times EBITDA, according to a source familiar with the fund.

Investors in the fund include BNP Paribas Fortis, HarbourVest Partners, Neuberger Berman Private Equity and SEB Asset Management.  

Simpson, Thacher and Bartlett provided legal counsel on the fundraising. The fund is domiciled in the Netherlands.

According to Petersen, Mid Market Europe is a successor to the €1.1 billion, 2013-vintage EQT Mid-Market fund, which has a cross-regional focus on Europe and Asia. EQT’s mid-market team came together then and has since grown into a 37-strong group drawn from across businesses lines.

The fund is entering a crowded marketplace. In September Ardian announced it had raised €4 billion for its sixth Europe-focused mid-cap buyout fund. In November, IK Investment Partners announced the close of its €1.85 billion IK VIII Fund, which makes majority investments with values of up to €500 million in Benelux, DACH, France and the Nordics.