Peter Veldman, Head of Fund Management at EQT explains how a local player from Sweden soared to become a major global player in 25 years. Interview.

 

Can you describe EQT in a few words?
EQT is a global private equity firm that was established in Sweden in 1994. It was sprung out on the Wallenberg family – a prominent industrialist family, with a 160-year long history of controlling or co-controlling Swedish companies, such as Ericsson, Electrolux, ABB, SEB, Atlas Copco and SAS. Having been very successful with an initial focus on Swedish companies, EQT then expanded in the Nordics, the DACH – Europe’s German-speaking region – before expanding our business into Asia and the US. Today, EQT is a global PE player with 61 billion euros committed to 29 funds with around 40 billion euros in assets under management. The firm employs 600 people in three overall business segments across offices in 14 countries and three continents! EQT focuses on large-scale buyouts, early-stage investments, infrastructure, real estate, LBOs and debt among others. EQT recently added a public value initiative, extending the focus onto public companies using a similar approach. Since the establishment 25 years ago, EQT has owned or co-owned around 210 portfolio companies and perhaps most importantly, returned around 35 billion euros to the firm’s 600 investors. EQT also has a global industrial network comprising more than 500 core Industrial Advisors, who are current or former business executives of major international corporations and successful companies in a variety of industries.

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 “EQT has grown in 25 years from a Swedish company to a global player”.

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How are current local and global developments impacting your industry?
The first trend I identify is that private equity is now recognized as a strategy that delivers returns, and that plays in EQT’s favour. There is also an ongoing consolidation which allows large players to get even larger. On the regulatory side, everything is becoming more complex, but EQT has the scalability to deliver a solid return on investment to our clients. Finally, LPs want more transparency. They want EQT to report on many things in a timely manner. In order to achieve this, EQT needs to have the data available, to be  at the forefront of digitalization. We have a three-fold approach: firstly, our venture team has introduced AI in our “Motherbrain” system. It allows us to collect and screen huge numbers of data points in order to identify the next Spotify or Skype. EQT has already found a few companies like that. Secondly, the firm’s digital team is part of the due diligence process. They perform a digital analysis and create a digital roadmap to help newly added companies on their digital journeys. Lastly, EQT itself invests heavily to be a leader in this field. Internally, the platform built in Luxembourg is the main hub for funds based in Luxembourg, Amsterdam and the UK.  It gives EQT scalability to support future growth.

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How is EQT adapting to this fast-changing landscape?

EQT adopts a very proactive approach. If you look back, the firm decided in 2010 on an onshore strategy. Three years later, AIMFD kicked in, so EQT applied for licenses in London, Amsterdam and Luxembourg. Once we reached a deep understanding of the market, we decided to make Luxembourg EQT’s fund hub in 2016.  I moved from Amsterdam to Luxembourg early 2017  to work on the platform which is already very strong and highly scalable. EQT connects with managers everywhere and prides itself to be ranked #7 on the PEI-300 ranking.