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Swedish Private Equity Group EQT Reports Accelerated Exit Activity
EQT, a prominent Swedish private equity firm, has announced a significant uptick in exit activities, successfully selling or listing €11 billion in company stakes over the past year. This development marks a positive turnaround following a challenging period marked by a noticeable decrease in exits within the sector.
Successful IPOs Fuel Recovery
In 2024, the Stockholm-based group achieved two notable initial public offerings (IPOs) in Europe and New York, which contributed to a striking 72 percent increase in proceeds from company exits compared to the prior year. EQT’s Chief Executive Christian Sinding emphasized the return of private markets to a long-term growth trajectory, attributing this to global economic growth driven by Asia and the United States, along with recent cuts in interest rates by central banks.
Challenges in the Private Equity Landscape
Since the rise in interest rates in 2022, private equity leaders and their investors have encountered increasing difficulty in exiting investments due to declining portfolio company valuations. This shift has led to a significant disparity between the prices sought for assets and what potential buyers are willing to pay.
Flagship Transactions Showcase Growth
EQT, which oversees €269 billion in assets, highlighted its flagship transactions, including the Swiss IPO of dermatology group Galderma that raised SFr2.3 billion ($2.53 billion) in March—a remarkable 104 percent increase from its IPO price. Additionally, the healthcare technology firm Waystar listed in New York in June and saw a 77 percent rise in value.
Positive Signs for the Future
Michael Sanderson, director in equity research at Barclays, referred to these results as indicative of a recovering market. He noted EQT’s growth in multiples on invested capital—a critical metric for assessing returns relative to investors’ contributions—as further evidence of successful exits at favorable levels. With an increasingly stable political landscape, Sanderson expressed optimism for EQT as it approaches 2025.
Innovative Solutions Amid Market Challenges
Of EQT’s approximately 30 exit events last year, three involved re-allocating holdings between its own funds. This creative approach has enabled firms to return cash to investors even in challenging market conditions, though these transactions also included new investor participation.
Strategic Sales and Fundraising Initiatives
In October, EQT finalized a deal to sell a portion of the global education operator Nord Anglia, valued at $14.5 billion, to new investors while transferring its controlling stake to a newer EQT fund. The firm also made minority stake sales in several other businesses throughout the year.
Investment Inflows and Asset Management Growth
Despite a decline in gross inflows from €24 billion to €11 billion in 2024, Sanderson described this phenomenon as typical of fundraising cycles. The firm’s capital commitments last year were largely fueled by its ongoing infrastructure fundraising efforts and a €22 billion buyout fund that closed in February. EQT reported deploying €11.3 billion in the latter half of the year, with fee-generating assets under management increasing to €136 billion at the end of December, up from €129.6 billion the previous year.
Market Confidence Evident
On Thursday afternoon, EQT’s shares rose by over 10 percent in Stockholm, signaling growing confidence in the firm’s performance and outlook amidst evolving market conditions.
