EQT raises $726m for debut US fund

The capital raised for EQT Mid Market US, which had an initial target of $1bn, includes a GP commitment of 2%.

Swedish private equity powerhouse EQT has raised $726 million for its first dedicated US fund, according to a statement from the firm.

EQT Mid Market US, which closed on 30 September, will write equity cheques of between $35 million and $140 million for control or co-control positions in companies across six sectors: industrials, consumer goods and retail, services, TMT, energy and environment, and healthcare.

The fund was launched in June 2015 with an initial target of $1 billion, according to PEI data. Investors in the fund include pension funds, insurance companies, funds of funds, and other institutions from North America and Europe, according to the statement.

It is understood that there was additional demand from LPs, but EQT decided to end the fundraising process this year to focus fully on investing the capital, driven by a strong pipeline of potential transactions.

EQT made a GP commitment of 2 percent to the fund, it is understood.

The fund, which has a five-year investment period, has already made two investments, backing market research company FocusVision and XP Solutions, a provider of industry-standard sustainable drainage and flood hazard software for the civil engineering and environmental sectors.

“The closing of a US-dedicated fund is a milestone in the overall expansion of EQT, being an integrated alternative investment firm with multiple investment strategies globally,” Jan Ståhlberg, head of mid-market US and deputy managing partner at EQT Partners, investment advisor to the EQT Mid Market US fund, said in the statement.

“We believe EQT’s value-add industrial approach, clear corporate governance model and global platform is distinctive in the US middle market and we believe EQT offers mid-market businesses more than traditional private equity firms can offer.”

EQT has already been investing in the US market through its equity and infrastructure funds. EQT’s corporate private equity team EQT Equity, investing from its latest €6.75 billion Fund VII, made its first direct investment in the US in August, agreeing to buy Indiana-based healthcare performance improvement company Press Ganey for around $2.35 billion, as reported by Private Equity International.

EQT Infrastructure was the first strategy to break into the US in 2008. Just over 20 percent of the €1.92 billion EQT Infrastructure II is invested in North America, according to the firm’s website.

EQT’s mid-market US investment advisory team comprises 10 professionals, including Matthew Levine and Brendan Scollans as local US Partners, the firm said. The team will work solely on this investment strategy and is based in New York. The fund will also work with EQT’s network of more than 250 industrial advisors to support portfolio company growth.