EQT sets PE flagship target, warns newer strategies could take longer to raise

EQT AB (publ) expects strong momentum for its well-established funds in market, but fundraising for its newer strategies could take longer, executives said on its first-quarter earnings call.

The fundraising market is "crowded and competitive," with most of EQT's peers raising flagship funds this year, COO Caspar Callerström said. Hamilton Lane Inc. in its 2022 Market Overview report estimated that 15 buyout fund managers aim to raise at least $15 billion in 2022.

EQT announced April 19 that it set a €21.5 billion hard cap for its latest flagship private equity fund EQT X; this is significantly higher than the €15.6 billion it raised for the fund's predecessor, which closed in 2021.

It has also set targets for its third venture fund, its new longer-hold strategy Active Core Infrastructure and its real estate arm's EQT Exeter Industrial Value VI. It began fundraising for debut strategies EQT Future and EQT Growth last year, and EQT Exeter US Industrial Core-Plus IV continues to raise, Callerström said.

CEO Christian Sinding said the firm was confident it would meet its fundraising goals, with "quite a healthy demand" from its investors for its flagship funds, but added there is "a little bit of slowness" in raising for the newer products.

"That's actually very normal through a cycle where [for] existing products that have a long track record, fundraising is more straightforward assuming you perform as well as we do, and in newer products it takes a little bit more time," Sinding added.

Investors may continue to concentrate commitments with fewer managers with strong track records, and EQT would benefit from this, Callerström said.

Fundraising for EQT X is expected to be materially complete in 2022, with a final close in 2023. EQT plans to start fundraising for EQT Infrastructure VI in the fourth quarter, should EQT X's fundraise go as expected. The firm does not plan to raise two flagship vehicles concurrently.