EQT mulls bulking up private wealth offering in ‘competitive’ fundraising environment

Swedish firm is in market with its 10th flagship fund, which held a €15bn first close in August and has a target of €20bn.

EQT is in the process of evaluating structures that would allow private wealth clients greater access to the firm’s funds.

Speaking on the firm’s third-quarter results call on Tuesday, chief executive Christian Sinding noted that the firm sees “strong interest” from a wide range of private wealth clients hoping to invest with EQT.

He added that EQT’s active ownership, strong track record and focus on digitalisation and sustainability are the main draws for the private wealth channel.

Sinding noted it was “a little bit early” for the firm to get into specifics of what those structures are.

He said these products will provides access to EQT’s private capital strategies, which include PE, growth and venture, as well as infrastructure and real estate. The firm expects to provide further details on this in the coming quarters, he added.

Over the past year, EQT has been exploring a number of initiatives to help democratise access to its strategies, including working with digital platforms and partnering with private banks and wealth managers, a source familiar with the firm told Private Equity International. The firm has also added a global team of private wealth specialists across the Americas, EMEA and APAC, it is understood.

Elsewhere in the call, Sinding said he expects headwinds to impact fundraising globally until the market stabilises. “And while the long-term prospects are exciting for all the reasons I just mentioned, we do believe that… the fundraising market is quite competitive, and the US in particular, where you continue to see the denominator effect affecting allocations to private markets for some of the US pension funds.”

EQT is in the market with its 10th flagship fund, seeking €20 billion. As of August it had raised three-quarters of the target, or about €15 billion, and has thus far deployed between 10 and 15 percent of the vehicle, according to Q3 results materials. It is also raising its third venture fund, which the firm is “making good progress on”, Olof Svensson, head of shareholder relations, said on the call accompanying the results. Some of EQT’s newer initiatives – including its debut long-hold fund EQT Future, which has a €4 billion target – are “taking longer to raise” and to invest in this environment, he added.

Tapping the private wealth channel has been a strategic focus for the firm. Sinding said on the firm’s half-year results in July that it had been building digital capabilities and adding staff “to make sure that we can structure this approach in the right way”. He estimated that inflows from the private wealth channel have more than doubled, or even tripled, in Fund X versus its predecessor vehicles.

Firms including Blackstone, KKR, Apollo Global Management and Ares Management have pushed into private wealth by expanding their offerings and bulking up dedicated teams for the investor base. Ultra-high-net-worth investors’ exposures to private capital will reach $24 trillion globally by the end of 2024, according to management consultancy Oliver Wyman.

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