"Throughout the third quarter, we continued to execute on a strong pipeline of thematic investment opportunities, drive value creation across the portfolio and systematically pursue realizations. We are taking advantage of improving capital markets to increase exit activity, but risks remain elevated due to an uncertain geopolitical outlook."
Christian Sinding, CEO and Managing Partner
Highlights for the period Jul-Sep 2024 (Jul-Sep 2023)
Strategic
EQT launched fundraising for EQT Private Capital Asia's BPEA IX and set the target fund size at USD 12.5bn, an increase of almost 20% compared to BPEA VIII's fee-generating commitments
EQT prepared for additional Private Wealth products, in line with the ambition to reach a total of five products within 6-12 months
EQT continues to assess strategic opportunities, organically or through acquisitions to strengthen its platform
Fundraising
FAUM increased to EUR ?134?bn (EUR ??128?bn). Total AUM was EUR ?246?bn (EUR ???232?bn). Gross inflows amounted to EUR 3bn, partly driven by closed out commitments from EQT Infrastructure VI
EQT Infrastructure VI had fee-generating commitments of EUR 16.9bn. Active fundraising efforts are expected to materially conclude in 2024. The fund is expected to reach its target size upon its final close in the first quarter of 2025
EQT Active Core Infrastructure closed at EUR 2.9bn in total fee-generating commitments, including EUR 0.3bn of fee-generating co-investments. Management fees for the fund, which is currently less than half invested, are charged on invested capital
BPEA IX is expected to be activated in the first half of 2025, and upon activation, management fees for the predecessor fund BPEA VIII will be based on net invested capital at the fee rate applicable post the commitment period
Investment activity1
Total investments by the EQT funds during the period amounted to EUR ?6?bn (EUR ??2?bn) driven by continued strong deal flow across regions and strategies. EQT has executed new thematic investments across cyber security, waste management, affordable housing and sustainability
Investments include Acronis, a leading cybersecurity and data protection platform (EQT X); AMCS, a global leader in performance and sustainability software (EQT X, EQT Future); the public-to-private of PropertyGuru, a leading PropTech company in Southeast Asia (BPEA VIII); the public-to-private of Keywords Studios, a leader in gaming technology services (BPEA VIII); KJ Environment, a leading waste treatment provider in South Korea (Infrastructure VI); and GeBBS Healthcare Solutions, a leading healthcare technology solutions provider in India (BPEA VIII)
Exit activity1
Total gross fund exits announced during the period amounted to EUR ?3?bn (EUR ??2?bn)
EQT has taken advantage of improving market dynamics to pursue various realizations, including full exits, equity sell-downs and stake sales in listed assets, minority stake sales, as well as certain exits in mature funds
Exit events include the minority sale of EdgeConneX, a leading global provider of data center capacity (Infrastructure IV, Infrastructure V); the partial sell-downs in Galderma, a leader in dermatology (EQT VIII); the partial sell-down in Beijer Ref (EQT IX); and the full sale of EQT's stake in Fiberklaar, a leading independent fiber-to-the-home provider in Belgium (Infrastructure V)
Investment performance
All key funds continued to perform On plan or Above plan
Value creation on a like-for-like basis across the Key EQT funds amounted to 4% during the quarter, following continued healthy earnings growth and a recovery in valuation multiples
The development was consistent across business lines, with particularly strong performance in the listed portfolio companies in EQT Private Capital's key funds. Recently acquired assets in Private Capital Asia's key funds were positively impacted by performing ahead of their value creation plans
People and future-proofing
The number of full-time equivalent employees and on-site consultants (FTE+) amounted to ?1,927? (??1,832?), of which ?1,861? (???1,752?) were FTEs
Henry Steinberg was named Global Head of EQT Exeter after Ward Fitzgerald, founder of EQT Exeter, decided to step down. Since the acquisition of Exeter in 2021, EQT Exeter has doubled its fee-paying AUM, revenue, and EBITDA. Ward will work with Henry to ensure a smooth transition
Masoud Homayoun, Head of EQT Value-Add Infrastructure, was also appointed Head of EQT Infrastructure
Since committing to the Science Based Targets initiative in 2021, EQT has supported 49 portfolio companies in setting science-based targets.2 In terms of invested capital, around 57% of portfolio companies have validated science-based targets, which is about three times higher than the median alternative asset manager3
Other
In the third quarter, EQT completed a share buyback program of 2 million ordinary shares. As previously communicated, EQT expects to execute share buyback programs twice a year to offset the dilution impact from EQT's equity incentive programs
On October 22, EQT will host its first US capital markets event in New York
EQT will participate in the upcoming UN Climate Change Conference, COP29 in Baku, Azerbaijan
Lock-ups related to 12% of EQT's share capital expired during the quarter, with around 40% of released shares being owned by members of the Board or Executive Committee. Since the IPO in 2019, EQT's free float has increased from around 24% to over 40%
Events after the reporting period
EQT Infrastructure V announced the sale of a 25% minority interest in Reworld to GIC
Investment levels in EQT Key funds as of 17 October 2024 were 40-45% in EQT X, 45-50% in EQT Infrastructure VI and 70-75% in BPEA VIII
Signed transactions, if not otherwise mentioned
Of which five completed the validation process during the period. In addition, 22 companies are in the process of setting targets
BCG, May 2024
Presentation of EQT AB's Q3 Announcement 2024
Financial analysts and media are invited to participate in a conference call, including a presentation at 08:30 CEST.
The presentation and a link to follow the webcast and conference call live can be found here and a recording will be available afterwards.
To participate by phone, please register here. You will then receive your personal dial-in details, to be able to ask questions during the Q&A.
Information on EQT AB's financial reporting
The EQT AB Group has a long-term business model founded on a promise to its fund investors to invest capital, drive value creation and create consistent attractive returns over a 5 to 10-year horizon. The Group's financial model is primarily affected by the size of its fee-generating assets under management, the performance of the EQT funds and its ability to recruit and retain top talent.
The Group operates in a market driven by long-term trends and thus believes quarterly financial statements are less relevant for investors. However, in order to provide the market with relevant and suitable information about the Group's development, EQT publishes quarterly announcements with key operating numbers that are relevant for the business performance (taking Nasdaq's guidance note for preparing interim management statements into consideration). In addition, a half-year report and a year-end report including financial statements and further information relevant for investors is published. Finally, EQT also publishes an annual report including sustainability reporting.
Contact
Olof Svensson, Head of Shareholder Relations, +46 72 989 09 15 EQT Shareholder Relations, [email protected]
This is information that EQT AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 07:00 CEST on 17 October 2024.
