How Does EQT AB Company Work?

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How does EQT AB operate?

EQT AB is a global investment organization that has established itself as a leader in the private markets. Since its founding in Sweden in 1994, EQT has grown significantly, managing a diverse range of funds including private equity, infrastructure, real estate, growth equity, and venture capital. The firm's reach extends across Europe, North America, and the Asia Pacific region, demonstrating its extensive global footprint.

As of March 31, 2025, EQT managed a substantial €273 billion in total assets under management, with €142 billion specifically in fee-generating assets. This scale highlights EQT's significant influence and capacity within the global investment landscape. The company's strategic operations are geared towards active ownership and creating sustainable value across its investments.

Understanding how EQT AB works involves looking at its core business model and investment strategy. The firm is known for its approach to value creation within its portfolio companies, often leveraging operational expertise to drive growth and efficiency. EQT's deal sourcing and execution capabilities are central to its success, identifying and acquiring businesses with strong potential. A key aspect of its operations is its fund management, where it raises capital from institutional investors and deploys it across various strategies. The EQT AB BCG Matrix can offer insights into how different portfolio companies are positioned within their respective markets. EQT AB's sector focus areas are broad, reflecting its diversified investment approach.

EQT AB's core operations are centered around its distinctive active ownership model, a key differentiator in the global investment management landscape. The company expertly manages a wide array of funds, encompassing private equity, infrastructure, real estate, growth equity, and venture capital. These funds cater to a diverse and global base of institutional investors, including prominent pension funds and sovereign wealth funds.

The operational framework of EQT is underpinned by a thematic investment approach. This involves identifying high-caliber companies and assets that align with enduring macro trends such as digitalization, the energy transition, advancements in healthcare, and the evolution of education. EQT's proprietary 'House of Value Creation' framework provides a systematic and repeatable methodology for enhancing the performance of its portfolio companies. This is achieved through various strategic interventions, including boosting revenue, optimizing management structures, implementing cost efficiencies, and executing strategic realignments. The firm's extensive industrial network and deep sector-specific knowledge are instrumental in driving growth and ensuring the sustainability of its investments.

EQT's strategic thematic focus is evident in its portfolio, with significant investments concentrated in sectors like healthcare, software, and essential infrastructure. These sectors often exhibit limited direct exposure to trade-related risks such as tariffs, highlighting a deliberate and forward-thinking investment strategy. The company's commitment to its Mission, Vision & Core Values of EQT AB guides its operational decisions and long-term vision.

Active Ownership Model

EQT AB employs an active ownership model to enhance portfolio company performance. This involves direct engagement and strategic input to drive growth and operational improvements.

Thematic Investment Approach

The company identifies investment opportunities aligned with long-term macro trends. This strategic focus helps in selecting resilient companies and assets for its funds.

Value Creation Framework

EQT utilizes its 'House of Value Creation' framework to systematically improve portfolio companies. This structured process targets revenue enhancement, cost optimization, and strategic adjustments.

Global Presence, Local Insight

With over 1,900 employees across more than 25 countries, EQT combines global scale with local market expertise. This 'Locals-with-Locals' strategy is crucial for competitive advantage in private markets.

Key Value Proposition

EQT AB's value proposition is built on its ability to deliver attractive returns for investors through active management and strategic growth initiatives. The firm's global reach and deep sector expertise are central to its success.

• Manages diverse funds: private equity, infrastructure, real estate, growth equity, venture capital.
• Focuses on long-term macro trends for investment selection.
• Leverages an extensive industrial network and sector expertise.
• Employs a 'Locals-with-Locals' strategy for competitive advantage.

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EQT AB's financial engine is primarily driven by two core revenue streams: management fees and performance-based fees, often referred to as carried interest. Management fees provide a consistent income, calculated as a percentage of the fee-generating assets under management (FAUM). This metric is crucial for understanding the stability of EQT AB's operations. As of March 31, 2025, EQT's FAUM reached €142 billion, a notable increase from €132 billion in March 2024. This growth in assets under management directly translates to higher management fee revenue, reflecting the expansion of EQT AB's business model.

Carried interest, on the other hand, represents a more variable but potentially lucrative component of EQT AB's revenue. This fee is earned when EQT's funds achieve returns that exceed a predetermined hurdle rate, directly linking compensation to investment success. In 2024, EQT's adjusted revenue, which encompasses carried interest and investment income, climbed to €2,653 million, a significant jump from €2,122 million in 2023. This surge was largely attributed to successful value creation within portfolio companies and increased realization activity. While carried interest historically represented about 13% of EQT's revenue over a five-year period, it saw a dip to 6% in 2023. However, a threefold increase is anticipated for the 2025-2026 period, signaling a recovery in dealmaking and a positive outlook for this performance-driven revenue stream. For the first half of 2025, reported carried interest stood at €86 million.

Management Fees

EQT AB generates stable income through management fees, calculated on assets under management. This is a cornerstone of the EQT AB business model, providing predictable revenue.

Carried Interest

Performance-based fees, or carried interest, are earned when funds exceed specific return thresholds. This revenue stream is more volatile but offers significant upside potential.

FAUM Growth

Fee-generating assets under management (FAUM) are critical for management fee generation. EQT AB saw its FAUM grow to €142 billion by March 31, 2025, up from €132 billion a year prior.

Revenue Increase

EQT AB's adjusted revenue, including carried interest and investment income, rose to €2,653 million in 2024, an increase from €2,122 million in 2023.

Carried Interest Outlook

A threefold increase in carried interest is projected for 2025-2026, indicating a positive trend driven by market recovery and EQT AB's investment strategy.

Private Wealth Expansion

EQT AB is expanding into the private wealth segment with evergreen products, aiming to diversify its investor base and tap into a rapidly growing market.

Innovative Monetization Strategies

EQT AB is actively pursuing innovative monetization strategies to broaden its revenue base and enhance client engagement. A key initiative is the development of evergreen products tailored for private wealth investors, a segment experiencing substantial growth. In the first quarter of 2025, EQT launched EQT Nexus Infrastructure, an evergreen strategy accessible to individual and institutional investors across EMEA, APAC, and Canada. Further expansion is planned with a U.S. evergreen product for private wealth slated for a summer 2025 launch. This strategic move into private wealth is expected to be a significant revenue driver, complementing the existing base of institutional investors, which still accounts for approximately 75% of private markets AUM growth. EQT also facilitates co-investment opportunities for its clients, with nearly €4 billion committed in Q1 2025 and a total of €11 billion in the first half of 2025. These co-investment programs not only strengthen client relationships but also create additional avenues for fee generation, reinforcing the EQT AB company structure explained in its Brief History of EQT AB.

• Launch of EQT Nexus Infrastructure in Q1 2025.
• Planned U.S. evergreen product for private wealth in summer 2025.
• Targeting the growing private wealth segment.
• Co-investment opportunities totaling €11 billion in H1 2025.
• Diversification of revenue streams beyond traditional institutional investors.

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EQT AB has navigated a path of significant growth and strategic evolution, marked by key milestones that have reshaped its operational landscape and market position. The company's initial public offering in 2019 served as a catalyst, enabling an expansion of its investment strategies from six to eighteen, thereby establishing a robust global platform. A transformative move occurred in March 2022 with the acquisition of Baring Private Equity Asia (BPEA) for €5.3 billion in new EQT shares and €1.5 billion in cash. This acquisition substantially bolstered EQT's footprint in Asia, with the entity subsequently rebranded as EQT Private Capital Asia in 2024.

The year 2024 proved exceptionally active for EQT, with total investments across its funds reaching €22 billion, representing a 27% increase compared to 2023. Notable transactions during this period included the acquisition of Perficient for $1 billion and Indostar Home Finance for $210 million. Further demonstrating its strategic momentum, EQT acquired a logistics collective in northern Italy for approximately €230 million in January 2025. March 2025 saw significant strategic maneuvers, including the $4.25 billion acquisition of Crown Castle's small cells business and participation in a consortium-led acquisition of Nord Anglia Education, valued at $14.5 billion. In July 2025, the EQT X fund entered into an agreement to acquire Adevinta's Spanish online classifieds businesses.

EQT has demonstrated considerable resilience in adapting to operational and market challenges, particularly in a demanding fundraising environment. Despite these conditions in 2024, EQT successfully closed substantial fundraises, including EQT X, which became the largest private equity fund globally that year with €22 billion in commitments. Furthermore, EQT Infrastructure VI reached its hard cap of €21.5 billion in the first quarter of 2025. The firm has also shown an ability to increase exit volumes amidst market volatility, with gross fund exits totaling €13 billion in the first half of 2025, more than tripling the volume from the same period in 2024.

IPO and Strategic Expansion

EQT AB's IPO in 2019 marked a pivotal moment, enabling a significant expansion of its investment strategies. This move allowed EQT to scale its global platform and diversify its offerings.

Acquisition of Baring Private Equity Asia

The €6.8 billion acquisition of BPEA in March 2022 was a landmark event. It significantly broadened EQT's presence in Asia, leading to the rebranding of the acquired entity as EQT Private Capital Asia in 2024.

Active Investment Year and Key Deals

In 2024, EQT funds invested €22 billion, a 27% increase from 2023. Key acquisitions included Perficient for $1 billion and Indostar Home Finance for $210 million, alongside significant deals in 2025 such as Crown Castle's small cells business for $4.25 billion.

Fundraising Success and Market Resilience

Despite a challenging 2024 fundraising market, EQT successfully closed major funds like EQT X (€22 billion) and EQT Infrastructure VI (€21.5 billion in Q1 2025). The firm also saw a substantial increase in exit volumes.

EQT's Competitive Strengths

EQT's competitive edge is built on its strong brand, consistent outperformance, and a distinctive active ownership model. Its 'House of Value Creation' framework, coupled with thematic investment and deep sector knowledge, drives value in its portfolio companies.

• Global platform with local market presence in over 80% of world GDP.
• Integration of AI and focus on digitalization for operational efficiency.
• Expansion of private wealth offerings to cater to evolving investor needs.
• Thematic investment approach and deep sector expertise as core differentiators.

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EQT AB operates as a significant force in the global private markets, holding the second-largest position worldwide by capital raised as of July 2025. It stands as Europe's largest alternative investment platform, encompassing private equity, infrastructure, and real estate. The firm managed approximately €273 billion in assets as of March 31, 2025, reflecting its substantial market influence and extensive global reach. EQT's robust client relationships, with an average tenure of 15 years among its top 100 clients, underscore a high degree of client loyalty and consistent capital commitments, which are crucial for its ongoing EQT AB operations and EQT AB business model.

The EQT AB investment strategy is built on thematic investing and a repeatable value creation toolbox. This approach aims to future-proof its portfolio and drive long-term value for its investors. The company's commitment to digitalization and sustainability further shapes its EQT AB sector focus areas and EQT AB impact investing strategy, positioning it for sustained growth and influence within the investment industry.

Industry Position

EQT AB is a leading global private markets firm, ranking as the second-largest by capital raised as of July 2025. It is the largest alternative investment platform in Europe, managing €273 billion in assets as of March 31, 2025. Strong client relationships, with an average tenure of 15 years for its top 100 clients, highlight its market standing.

Key Risks Faced

Global economic and geopolitical uncertainties pose risks, potentially slowing exit activity and impacting fund valuations. Increased competition and evolving regulatory landscapes are also significant challenges. The pace of fundraising recovery in private markets, not expected to reach 2021 levels until 2027, adds to the risk profile.

Future Outlook and Growth Initiatives

EQT plans to launch additional evergreen vehicles, including a U.S. product in summer 2025, to diversify its funding. The firm is also fundraising for its flagship EQT XI fund, targeting €23 billion. The company anticipates increased realization volumes and a 20% average annual growth in adjusted operating profit over the next three years.

Strategic Focus Areas

The company's strategic direction emphasizes future-proofing its portfolio and driving long-term value creation. This is supported by its thematic investment focus and a robust value creation toolbox. The integration of digitalization and sustainability is central to its ongoing EQT AB investment strategy and how EQT AB works.

EQT AB's Commitment to Value Creation

Per Franzén, appointed CEO and Managing Partner in May 2025, highlights EQT's dedication to delivering for clients. The firm's approach to EQT AB deal sourcing and execution, alongside its EQT AB exit strategies for portfolio companies, is designed for sustained performance.

• Thematic investment focus
• Repeatable value creation toolbox
• Digitalization and sustainability integration
• Focus on long-term value creation

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