EQT creates $1bn cross-border expansion fund

The Sweden-based private equity firm has merged two of its vehicles to create a platform to expand businesses between Asia and Europe.

EQT Partners is merging its expansion capital fund team and Greater China fund team to help Northern European mid-market companies expand into China and Southeast Asia, a source with direct knowledge of the matter confirmed to Private Equity International.

The firm, which will be led by deputy CEO Jan Ståhlberg, also expects to help Asian countries expand into Europe. 

EQT declined to comment on fundraising matters. 

The source said the combined fund will total about $1 billion, based “entirely” on the firm’s estimated dealflow – it expects to make 10 to 15 investments from the fund.

It is unknown whether EQT has tapped a significant number of Asian LPs for the fund, but in the firm’s latest buyout fund, which closed on $4.82 billion in 2011, Asia Pacific LPs accounted for 23 percent of commitments, compared to only 5 percent in its predecessor. 

“In Asia, you normally find companies that are younger than in Europe. There’s normally no lack of capital in Asia, but there are lack of connections to enter the European market,” the source commented. 

“By merging the two teams [EQT could] create a very strong team that can handle these two markets. If you [as a business] want to expand from Europe to Asia, you want both Northern expertise and Asian expertise in the same team.”

EQT is a Stockholm-based private equity firm with €18 billion in assets under management as of 1 November 2012, according to PEI’s Research & Analytics division. In October 2011, the firm held a final close on €4.815 billion for EQT VI, after less than a year of marketing the vehicle. The firm was founded in 1994 and specialises in buyouts, expansion capital and infrastructure investments.