Private Equity Bounces Back: EQT Raises $24B For Deals, Signals Listings Revival

Sweden-based private equity group EQT announced on Tuesday its largest-ever fundraising with 22 billion euros ($24 billion) in total commitments for its flagship EQT X fund.

This exceeded the company’s target size of $21.6 billion and represented one of the largest private equity funds ever raised, the company said, with investors including pension and sovereign wealth funds, asset managers and private wealth investors.

EQT has focused investments in the healthcare, technology and industrial tech sectors, and the fund has already announced around half a dozen investments since June 2022, including medical and bio pharma transport services group Envirotainer, medical components supplier Zeus and pharma group Dechra Pharmaceuticals.

Per Franzén, EQT head of private capital Europe and North America, said: “We remain focused on backing and futureproofing companies in attractive and resilient sectors, such as healthcare and technology, and have proven our ability to perform and return capital across cycles.”

EQT said the EQT X fund had already invested up to 35% of the funds raised.

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Is The Private Equity Slump Over?

This event came amid a historical slump for the private equity industry, particularly during the post-COVID-19 pandemic years and since 2022 as the Federal Reserve began to raise interest rates, which made funding for the industry more expensive.

"The combination of credit tightening and valuation mismatches made 2023 an interesting year that rippled across merger and acquisition activity, fundraising, exits, and restructurings," said MorganFranklin Consulting in its Private Equity Review of 2023.

EQT, however, expects a pick-up in deal activity in private equity markets this year. Franzén told the Financial Times that he expected many private equity groups to list their best-performing companies to raise funds for new deals.

“We see that many of the players on the sidelines the past two years are more actively pursuing monetization opportunities,” he told the Financial Times.

He added: “There are real signs that initial public offering (IPO) markets are reopening in Europe and the United States.”

Investors who were unable to participate in IPO opportunities can invest in a number of exchange traded funds that hold recently listed companies. The Renaissance IPO ETF IPO was up nearly 60% since the beginning of 2023.

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