Executing on fundraising, investments and performance in a challenging market
"The first half of 2023 has been all about execution. Having completed the combination with BPEA, EQT entered the year focused on maximizing the potential of our global active ownership platform. Whilst we are faced with continued market uncertainties and a slower fundraising market, EQT has seized investment opportunities globally and secured strong client commitments to our latest generation of flagship funds. We have also executed on our long-term ambition to offer strategies for individual investors."
CEO and Managing Partner
Highlights for the period Jan-
Financial
- Adjusted total revenue amounted to
EUR 1,019m (EUR 733m ), an increase of 39%. Total revenue (according to IFRS) wasEUR 1,006m (EUR 733m ). Management fees increased by 63%, which was partly offset by a decrease in carried interest -
Adjusted EBITDA amounted to
EUR 555m (EUR 413m ), corresponding to a margin of 54% (56%). EBITDA (according to IFRS) wasEUR 296m (EUR 332m ), corresponding to a margin of 29% (45%) -
Adjusted net income amounted to
EUR 450m (EUR 363m ). Net income (according to IFRS) wasEUR 11m (EUR 234m ) -
Adjusted basic earnings per share amounted to
EUR 0.379 (EUR 0.366 ). Adjusted diluted earnings per share amounted toEUR 0.379 (EUR 0.366 ). Reported basic earnings per share amounted toEUR 0.010 (EUR 0.236 ). Diluted earnings per share amounted toEUR 0.010 (EUR 0.236 ) -
Net debt amounted to
EUR 1,504m (EUR 57m )
Strategic
- EQT launched its first semi-liquid strategy, EQT Nexus, providing access for individuals to a diversified portfolio of EQT's funds
- Work to integrate and optimize synergies with BPEA, including the alignment of investment teams and processes, was substantially completed
Fundraising
- FAUM increased to
EUR 126bn (EUR 77bn ). Total AUM1 wasEUR 224bn -
EQT Exeter Industrial Value Fund VI held its final close at
USD 4.9bn of fee-generating commitments, exceeding its target size ofUSD 4.0bn -
EQT Infrastructure VI, which has a target fund size of
EUR 20.0bn , was activated inDecember 2022 . The fund completed its first close, with fee-generating commitments of approximatelyEUR 11bn to date (July 14 ). A significant majority of the fund is expected to be raised in 2023, with fundraising set to continue well into 2024. The fund is expected to meet its target fund size -
Fundraising continued for EQT X with fee-generating commitments of more than
EUR 18bn to date (July 14 ). The target fund size isEUR 20.0bn . Fundraising is expected to be materially completed during the summer, with additional time provided for certain commitments, including private wealth platforms. The fund is expected to meet its target fund size - Fundraising continued for EQT Future, EQT Exeter US Multifamily Value II, EQT Exeter Europe Logistics Core-Plus II and EQT Active Core Infrastructure, with fundraisings generally taking longer in the current fundraising environment
Investment and exit activity2
- Total investments by the EQT funds during the period amounted to
EUR 11bn (EUR 5bn ), as EQT increased the pace of thematic investments, primarily in Infrastructure -
Signed investments include
Radius Global Infrastructure and Tion Renewables (EQT Active Core Infrastructure), LazerLogistics and SK Shieldus (EQT Infrastructure VI), IntegrityNext and GotPhoto (EQT Growth),Dechra Pharmaceuticals (EQT X),IMG Academy and HDFC Credila (BPEA VIII), andWind Tre (EQT Infrastructure VI) -
Total gross fund exits announced during the period amounted to
EUR 4bn (EUR 4bn ) -
Signed exits include the full exit of
Vistra (BPEA V and BPEA VI) following its merger with Tricor (BPEA VIII), Blume (EQT Infrastructure II andEQT Infrastructure III ), VBill (EQT Mid Market Asia III), a partial selldown inCoforge (BPEA VII), a partial selldown inBeijer Ref (EQT IX), the IPO ofKodiak Gas Services (EQT Infrastructure III and EQT Infrastructure IV), kfzteile24 (EQT Mid Market fund), BBS Automation (EQT Mid Market Europe and EQT Mid Market Asia III), andEllab (EQT Mid Market Europe)
Investment performance
- All key funds continued to perform On plan or Above plan
- Fund valuations were for the most part flat, underpinned by continued underlying operational performance, and fairly stable public market valuation benchmarks
People and future-proofing
- The number of full-time equivalent employees and on-site consultants (FTE+) amounted to 1,814 (1,471), of which 1,716 (1,356) were FTEs. The increase relates primarily to the combination with BPEA in the second half of 2022, whilst EQT maintains a restrictive approach to new hires
Suzanne Donohoe joined EQT in January as Chief Commercial Officer ("CXO") to lead a newly-formed platform to drive EQT's external commercial activities. In addition to Capital Raising & Client Relations, the new platform ("EQT-Ext") includes EQT's Sustainability, Business Development, and Communications efforts-
EQT further strengthened its investment organization with senior talent including
Francesco Starace , former CEO and General Manager of Enel, joining EQT as a Partner within the EQT Infrastructure Advisory Team, bringing deep experience and expertise in energy and energy transition related industries -
EQT opened an office in
Seoul, South Korea , andEQT Infrastructure made its first investment inSouth Korea with SK Shieldus - As of the end of the period, 21 portfolio companies had validated their science-based targets, and additionally, 32 had started the process to set their own science-based targets
- EQT published its Net Zero Guidelines and set the target that 100% of the EQT funds' portfolio investments3 should be on track to deliver on their own net-zero pathways by 2040
Other
- EQT intends to initiate share buyback programs twice a year, corresponding approximately to the expected number of shares to be delivered under its equity- and option incentive programs
EQT's Global Capital Markets team has put in place a structure for equity capital market services, similar to its already established practice of providing debt underwriting, in equity and notes offerings related to EQT and its portfolio companiesThe EQT Public Value Fund (PVF, with FAUM ofEUR 0.6bn ) has decided to transition into a value creation and realization focus, effectively moving into a closed-end structure. This means the fund will discontinue further fundraising and return proceeds to clients as value is realized. There is no limit on PVF's ability to support with additional capital and no outer time-limit for PVF's commitment to its portfolio companies.
Events after the reporting period
- Investment levels in EQT key funds as of
14 July 2023 , were 20-25% in EQT X, 15-20% in EQT Infrastructure VI and 25-30% in BPEA VIII
1) Total AUM is defined as the sum of fee-generating AUM, value appreciation of investments and fair market value of non-fee-generating co-investments as well as remaining commitments in active funds and committed capital yet to be fee-generating
2) Signed transactions, if not otherwise mentioned
3)
Presentation of
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Information on
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
EQT Shareholder Relations, shareholderrelations@eqtpartners.com
EQT Press Office, press@eqtpartners.com, +46 8 506 55 334
This is information that
About EQT
EQT is a purpose-driven global investment organization focused on active ownership strategies. With a Nordic heritage and a global mindset, EQT has a track record of almost three decades of delivering consistent and attractive returns across multiple geographies, sectors and strategies. EQT has investment strategies covering all phases of a business' development, from start-up to maturity. EQT today has
With its roots in the Wallenberg family's entrepreneurial mindset and philosophy of long-term ownership, EQT is guided by a set of strong values and a distinct corporate culture. EQT manages and advises funds and vehicles that invest across the world with the mission to future-proof companies, generate attractive returns and make a positive impact with everything EQT does.
More info:www.eqtgroup.com
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