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Swedish private equity group EQT said it “accelerated exit activity” last year, selling or listing €11bn of company stakes and signalling the start of a recovery after the sector suffered a prolonged exit drought.
The Stockholm-based group successfully pulled off two high profile IPOs in Europe and New York in 2024, helping it post a 72 per cent increase in proceeds from exiting companies compared with the previous year.
“Private markets are returning to their long-term growth trajectory,” said EQT chief executive Christian Sinding. “The global economy is growing, paced by Asia and the US, central banks have cut interest rates, and capital markets are robust, albeit volatile.”
Private equity executives and their backers have found it increasingly difficult to exit investments since interest rate rises in 2022 hit portfolio company valuations and left a yawning gap between the sums executives were seeking for assets and what potential buyers were willing to pay.
Flagship transactions for EQT, which manages €269bn of assets, included the Swiss Iisting of dermatology group Galderma, which raised SFr2.3bn ($2.53bn) in March and is up 104 per cent on its IPO price, and healthcare technology business Waystar, which listed in New York in June and is up 77 per cent.
The results were “a sign of things getting better”, said Michael Sanderson, director in equity research at Barclays.
He added that the firm would point to the growth in some of its multiples on invested capital — a measure of the money it generates relative to backers’ cash — and the performance of some of its listed names “as evidence of their exiting at decent levels”.
“With the political backdrop being . . . a bit more stable, potentially that means [EQT goes] into 2025 in a healthier place,” he added.
Three of the firm’s roughly 30 exit events last year involved transferring holdings between EQT funds, according to a person familiar with the matter, as firms have found creative ways to return cash to backers in tough market conditions — although all three such transactions also brought in other investors.
In October, EQT struck a deal to sell part of global schools operator Nord Anglia, valued at $14.5bn, to new investors while transferring its own controlling stake in the business to a newer EQT fund. The firm also sold minority stakes in some of its other businesses last year.
EQT’s gross inflows across all of its asset classes fell from €24bn to €11bn in 2024, but Sanderson said this was mostly a result of fundraising naturally being “lumpy”. Investor commitments to the firm last year were primarily driven by the firm’s ongoing infrastructure fundraise and the €22bn buyout fund that EQT closed last February.
The firm said it deployed €11.3bn in the second half of the year, while fee-generating assets under management rose to €136bn at the end of December from €129.6bn at the same point the previous year.
Shares in the firm climbed more than 10 per cent in Stockholm by mid-afternoon on Thursday.
