EQT set to hit €4.75bn hard-cap

The firm has collected more than €4bn for control-oriented, mid-market investments in Sweden, Germany, Norway and Denmark as well as secondary activity in Central Europe.

EQT Partners has shrugged off a tough fundraising environment as it moves closer to hitting its hard-cap of €4.75 billion in the next few weeks, according to a person with knowledge of the fund.

The firm, based in Stockholm, has already closed on more than €4 billion after less than a year in marketing, despite hunting commitments in a crowded fundraising field that includes firms like BC Partners and Cinven.

The Stockholm-based firm had targeted €4.25 billion for mid-market control-oriented investments in businesses in Sweden, Germany, Norway and Denmark, as well as secondary activity in Central Europe. EQT launched the fund earlier this year, obtaining its first commitment in May, according to SEC documents.

UBS Securities is working as a placement agent on the fund. EQT declined to comment.

The sixth fund has obtained commitments from a number of US pension systems, including the Teachers’ Retirement System for the State of Illinois, the State of Wisconsin Investment Board and San Diego County Employees’ Retirement Association, according to Private Equity International’s data provider Private Equity Connect.

EQT’s marketing of the fund may have benefitted from an “early bird” discount offered to LPs who made commitments prior to its first close. According to reports, early stage investors would only pay management fees on 10 percent of their committed capital. BC Partners offered a similar discount for their most recent fund.

LPs were likely also attracted by the firm’s track record. As of 30 June, the firm has generated a gross internal rate of return of 58 percent and a gross multiple of invested capital of 4.2x, according to SDCERA documents. For its sixth fund, EQT aims to generate an overall gross IRR of at least 25 percent and an overall gross multiple of invested capital of 2.5x.

EQT is one of several European-focused firms raising mega-funds this year. In July, London-headquartered BC Partners held a second close on its ninth fund on almost €6 billion. Cinven launched its €5 billion for European buyout fund in March.

The firm was founded in 1994 and has raised approximately €17 billion across 13 private equity funds, according to its website. EQT has invested around €10.4 billion through 90 portfolio companies.

Christopher Witkowsky contributed to this report.