EQT, the Swedish private equity investor that is also highly active in infrastructure plays, has announced it is seeking a listing on the Nasdaq Stockholm market to raise at least €500m to invest further in private markets.
With some €40bn of assets under management - split between private capital (56%), real assets (38%) and credit (8%) - the business currently offers some 19 actively managed funds across geographies, sectors and strategies. The money being raised via the IPO will come from the sale of shares to both existing and new investors, with the final free float ratio including both new and existing shares of around 20%.
Investor, founded by the Wallenberg family in 1916, holds some 23% of EQT shares currently. It is expected to sell pro rata with the other shareholders in the IPO - the other shares are owned by some 70 partners/former partners in the business. The partners will not sell their respective holdings for a period of 3-5 years following the IPO without prior written consent, EQT noted.
Conni Jonsson, chairman and founder of EQT, said: "Over the last 25 years, EQT has grown from a small Swedish buyout firm to a global and diversified investment firm. Our path has been guided by our values and taking long-term responsibility as investors and owners, which we will continue to do. The contemplated IPO is an important step on our journey to continually improve what we do, as we work towards our vision of becoming the most reputable investor and owner."
Christian Sinding, CEO and managing partner of EQT, added: "The private markets investment industry is expected to grow significantly and we see that fund investors continue to increase their allocations to the industry as we continue to deliver attractive risk-adjusted returns. EQT is well positioned to capitalize on this trend and I am confident that EQT's key differentiators - our unique culture, value creation approach, the EQT Network, governance model, and digital and sustainability capabilities - will enable us to continue to create value, future-proof the EQT funds' portfolio companies and remain at the forefront of our industry. The contemplated IPO is an exciting milestone for us as a firm, and we are confident that a strong balance sheet will better position EQT for the long-term and facilitate our mission of making a positive impact with everything we do."
Following the IPO, EQT "is expected to be entitled to 35% of the carried interest participation in future EQT funds."
"Historical entitlement to carried interest participation for EQT has been lower and the increase is mainly due to Investor no longer being an anchor investor, and therefore not being entitled to carried interest participation in future EQT funds," the company said in a statement.
"In 2018, management fees accounted for 98% of the group's total revenues. In the medium term, EQT believes that carried interest and investment income could account for approximately 25-30% of the group's total revenues, principally as a result of the group's share of total carried interest having increased in more recent funds, combined with larger fund sizes in recent years, which are not yet recognizing any carried interest."