EQT has held the final close on its largest private equity fund and the second-largest for a Europe-headquartered manager in US dollar terms.
The Scandinavian firm gathered €15.6 billion for EQT IX, surpassing its €15 billion hard-cap, according to a statement. It is the firm’s first buyout fund since its initial public offering in 2019.
EQT had raised €14.6 billion for the vehicle by the end of last year against a €14.75 billion target, according to its 2020 year-end report.
The firm completed fundraising in about 15 months, nine months longer than its predecessor, which closed on €10.75 billion in 2018 after six months in market.
Chief executive Christian Sinding said during the firm’s first quarter earnings call in April last year that fundraising would take longer for its buyout fund due to the market environment.
“It’s the practicalities for being able to do their due diligence on EQT remotely as opposed to in person,” he said. “LPs are also taking a bit longer to make decisions or are re-allocating capital. All these elements together are affecting fundraising timelines.”
EQT IX, which launched in January 2020, is 45 percent larger than its 2017-vintage predecessor.
LPs in EQT VIII made up roughly 70 percent of the commitments to EQT IX, according to a statement. North America-based LPs contributed about a third of capital commitments, Asia-Pacific based LPs committed about a quarter and the rest are from Europe and the Middle East, Morten Hummelmose, head of client relations and capital raising at EQT, told Private Equity International.
Investors who have committed to the fund include the Houston Firefighters’ Relief and Retirement Fund, Cathay Life Insurance, Chicago Teachers’ Pension Fund and Fubon Life Insurance, according to PEI data.
Hummelmose noted that the terms for Fund IX have been consistent with the prior flagship funds. He declined to provide further details.
Capital raised for EQT IX will follow the same strategy as previous vehicles, focusing on TMT, healthcare, services and industrial technology. Equity investments are in the range of €150 million to €1.2 billion.
EQT has already made nine investments from Fund IX, representing between 40 percent and 45 percent of the vehicle. These include French laboratories company Cerba HealthCare, UK veterinary care provider IVC Evidensia and US software payments and insurance company Storable.
“What we’re seeing really post-pandemic is many of our competitors focusing even more on the thematic opportunities that we’ve been targeting for a number of years,” Per Franzen, co-head of EQT Private Equity, told PEI. “That’s news great news for us in terms of the performance in the portfolio and in driving exits, but it makes sourcing deals more competitive.”
EQT is focused on near-term strategic priorities including venture, growth, public value and the Asia-Pacific region, it said in prior earnings calls. The firm established a Tokyo office in January and partnered with Japan Industrial Partners, a Tokyo-based private equity firm, to help source investment opportunities.
It has also set the target size for its debut growth fund at €2 billion, according to a statement. No hard-cap has been set. The EQT Growth strategy launched last year and had made its first few investments using balance sheet capital. In addition, the firm is exploring potential long-hold investment strategies for both private capital and infrastructure.
EQT’s total assets under management rose 12 percent during the quarter to €58.7 billion, of which about 40 percent or €34.4 billon is in private capital assets, which include private equity, venture and growth.