Side Letter: EQT’s growth plans, Apollo’s impact, CalPERS’ need for PE

EQT has brought in another heavyweight to help get its growth platform off the ground. Plus: Apollo's impact framework, private credit default rates and more. Here's today's brief, for our valued subscribers only. 

They said it

“Private equity isn’t my favourite asset class. It helps us achieve our 7 percent solution. I know we have to be there. I wish we were 100 percent funded, then maybe we wouldn’t”

Theresa Taylor, chair of the California Public Employees’ Retirement System, quoted in the New York Times

Just happened

EQT’s growth strategy

EQT has brought in Marc Brown, previously Microsoft’s vice-president of corporate development, to lead its growth strategy, per a statement. Brown was with Microsoft for two decades and oversaw the company’s more than 185 acquisitions and 80 strategic investments. He is heading a partner team of five that includes Atomico and SoftBank Vision Fund veteran Carolina Borchado as well as EQT veterans Victor Englesson, Dominik Stein, Johan Svanström and Henrik Landgren.

Brown will transfer from the US to London. EQT’s growth partners will all be based in Europe and the unit expects to make more hires in the next six to nine months, Svanström tells Side Letter. Some more notes:

  • Investments will come from EQT’s balance sheet (for now). The firm expects to launch a dedicated vehicle “sometime next year”, chief executive Christian Sinding said on the firm’s half-year earnings call.
  • Ticket sizes are between €50 million and €250 million and could straddle venture growth to minority and control deals, said Svanström.
  • Europe will be a big focus for the growth unit. “EQT has the aspiration of supporting what we think is the golden era for Europe tech over the next five to 10 years – we just need to make sure we grab the opportunity,” Svanström said.

Apollo’s creed
Apollo Global Management has signed up to the Operating Principles for Impact Management, a standardised framework for managing impact investments, which it will apply to its nascent impact platform, the firm said on Monday. The firm is in the process of building its impact capability and unveiled its leadership team last month (see Side Letter, 16 September).

They did the math

Defaults dropping. Proskauer’s Q3 Credit Default Index shows more companies fighting their way through difficulties now than earlier in the year.


CalPERS’ need for PE

A New York Times article analyses the underfunding of the California Public Employees’ Retirement System and concludes that the priority for the next CIO – whoever that may be – will be to work out how to get more of the system’s money into private equity.

Q3 fundraising

Looking to dive deeper into our Q3 fundraising report? This nine-slide presentation breaks down the $348.5 billion amassed by PE firms in the first nine months of the year by geography and strategy, and lists the largest capital raisers.

A quick ESG benchmarking exercise

After examining the websites of 100 private equity firms of various sizes, accounting firm BDO concluded: 49 percent of firms are signatories to the UN Principles for Responsible Investment; 29 percent of firms make their full environmental, social and governance policy available online; and 25 percent of firms have a dedicated individual or team responsible for embedding ESG into investment processes.

Dig deeper

LP meetings. Here are some to watch out for this week.

20 October

21 October

22 October

23 October

Today’s letter was prepared by Toby Mitchenall with Isobel Markham and Carmela Mendoza.

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