EQT to launch semi-liquid alts products in private wealth push

The European giant aims to increase the share of private wealth capital in its closed-ended products, which stands at under 10%.

EQT is set to launch semi-liquid products this year to expand its reach in the private wealth segment, the firm revealed on its full-year 2022 results on Wednesday.

“We’re planning for launches this year. We’re starting to have teams in place and also the structures,” said Gustav Segerberg, head of business development at EQT, on a call to present its results.

“What we see is that it will probably be a mix of both asset specific funds as well as [a broader] private markets structure… the main distribution is through distribution banks, but also through existing clients especially on the family office and private wealth side that we have already today.”

Segerberg added: “On sizing, we will not go out with a specific target… it will not have a material impact on the size of EQT in the beginning, but rather over time it will.”

EQT joins a growing list of firms including Ares Management, Blackstone, Apollo Global Management and KKR that have launched products and structures dedicated to the private wealth channel and expect inflows from the investor base to increase over time. In November, Partners Group formalised its private wealth fundraising activities into a private wealth business unit with $37 billion in AUM.

Private wealth is one of the EQT’s strategic areas of growth alongside its buildout in Asia.

Segerberg did not provide further details on the timeline and types of semi-liquid products. He noted, however, that the move is “a good way to target private wealth”.

“Private wealth represents about half of the global wealth and only 1 percent is allocated to actively managed alternatives assets, which we, like many others expect to increase over time. For us this is a significant opportunity, as private wealth represents less than 10 percent of our commitments in closed-ended funds and we do not have any semi-liquid funds.”

Asked about how the firm is looking at liquidity, investor education and regulation around semi-liquid products given headwinds in the market and recent headlines around such products reaching redemption limits, Segerberg said that EQT benefits from having “a clean slate” with “no legacy portfolio nor legacy impact”.

“The semi-liquids market will develop as a result of what we are seeing in the market right now, and that it will also be clearer for all participants what type of product this is, ie, that it is a semi-liquid product and not a liquid product.”

He noted that the firm’s planned semi-liquid offerings will be global, and that he expects strong demand from its core market Europe and over time in Asia and North America. Management fees for the products will be roughly in line with those of its current private capital offerings, he added.

EQT raised €31 billion in 2022 across its platform over the last year, including Ventures III at €1 billion, Growth at €2.2 billion and BPEA VIII at €11.2 billion. EQT X, which has a target of €20 billion, has recorded €16 billion of commitments so far. The firm expects the vehicle to be substantially completed during summer.

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