EQT AB (publ)

Good morning, everyone, and welcome to IKIT's quarterly announcement. Good morning everyone and welcome to EQT's quarterly announcement. Today we're joining you from EQT's London office. Together with Christian, Kim and Gustav, we will reflect on the first quarter for about half an hour before opening up for Q&A. As always, if you've registered ahead of the call, you should have received an email with your personal PIN code to participate in the Q&A. And with that, I'll hand over to Christian and ask for the next slide, please.

Thank you, Rolf, and good morning, everyone. We just finished our global partner summit with 125 partners from around the world, and we're excited about the future of our platform. In the first quarter, we had to pick up an investment activity with more than 10 new investments announced. Deal flow remains strong across the platform, and we're seeing buyers and sellers getting closer to each other. even though it is still an uncertain market out there, and exits do remain muted. The fundraising environment continues to be challenging. Flagship fundraisings are taking longer to raise, and for the smaller and more recently launched strategies, it's also more work. Importantly, equity 10 is expected to be materially completed during the summer, and infrastructure 6 is expected to have a first close during Q2, with a majority of the fund to be raised this year. All our key funds continue to perform on or above plan, with valuations flat or slightly up in Q1. We continue to prepare for launching semi-liquid products, which will cater to private wealth investors. And the main BPA integration is complete and has been quicker and better than expected. The investment teams have aligned processes, working now together on a global basis. And we're already driving best practices in investing, value creation, and exits together, as well as actually creating true global sector and subsector teams. The number of employees remained largely flat in the quarter, and while we have slowed down the hiring pace, we see many interesting growth opportunities ahead, and will continue to hire selectively. Markets are volatile, and the economy is facing some headwinds. But in light of our long-term investment strategies, we view these challenges as being more temporary. And we continue to manage equity for future growth based on a laser focus on delivering performance for our clients. The market for actively managed alternative AUM is expected to grow to 15 trillion by 2030 and 30 trillion by 2040, driven primarily by private markets delivering higher returns compared to public markets across relevant time periods. As such, private market allocations are critical for our clients to meet their return targets. And underpinning a long-term trend of clients gradually increasing allocations to private markets, in particular within private wealth and sovereign wealth funds. Next slide, please. As private markets grow, there are five broader trends that we expect to continue to shape our industry. First, companies are staying private for longer, while the investment universe in public markets is shrinking. According to analysis in the U.S., there are more than 10,000 P.E.-backed companies, while there are fewer than 5,000 listed companies. Over the past two decades, the median age of a company going public has increased with more than three years, and the number of IPOs has decreased with more than 60%. Thus, a large part of value creation takes place in a private setting. And we have the ability to support companies all the way from ventures to mature companies. Second, we have a governance model and the capital required to catalyze change. We take swift action, yet have the ability to take a long-term view in our investment decisions. We also see a trend where clients want to remain invested in certain assets for longer rather than having to reallocate capital. We therefore have an opportunity to create products to remain invested beyond a typical fund life. Today we do this in Exeter, for example, where clients acquire portfolios of stabilized assets from us and we continue to manage those assets. We also see a preference to concentrate relationships with fewer managers. In this context, we expect that larger managers with an ability to offer different products to clients will continue to gain share. And in fact, Bain estimates that megafunds, those that are greater than $5 billion, their share of total global buyout capital raise in 2022 was 57%, up from 43%, for example, in 2021. At the same time, individual investors are looking to increase allocations to private markets from a low base. We see four principal drivers for long-term growth of our firm. First, we'll continue to scale our flagship funds with larger funds, and we increase the number of investments somewhat in those, but we're also able to do larger deals and larger underwritings. Today, we have a global infra flagship fund raising $20 billion, and our buyout fund in Europe and the U.S. is also raising $20 billion, whereas our private equity fund in Asia is currently sized at $11 billion. Looking across the world, of closed-end funds, the largest single fund in the world is $30 billion. Thus, we have several vectors from which we can grow our flagships over time. Second, we plan to scale our recent new initiatives, such as equity growth, and our longer-hold strategies, such as infractive core. This will be done over fund generations and likely also to involve more open-ended structures over time. We'll also extend funds with a European focus today to cover North America and or Asia. For example, we recently launched the mid-market growth strategy in Asia, and that's going well. Unique to Exeter, we see potential to grow across regions from what today is mainly a North American and to some extent a European business. Third, we see significant potential in providing access to our funds for private wealth clients. You get a lot more on that from Gustav in a minute. Fourth, we plan to launch selective new initiatives. These could be thematic or geographically focused funds. Next slide, please. So IKITI does things differently. And this is why I'm confident that we will continue to outperform also during these more challenging times. It's really about delivering true value creation in our investments for our clients by being active owners. For example, we're creating our next level value creation playbook now per subsector across the world. We're continuously refining our thematic investment approach, and we're developing our world-class network of industrial advisors and boards to support our companies. We aim to make our companies and buildings more resilient for the long term through our integrated approach to sustainability and digitalization. And now, generational AI will help propel our own mother-brain AI forward. We're local with locals. in countries now representing 80% of global GDP. And having these local teams means that we can build long-term relationships with potential investments and truly understand the local operating environment to drive better returns. And this of course is quite different than flying in teams from a central location somewhere else. Next slide, please. During the quarter, fee-paying AUM increased to 119 billion euros and our total AUM to 216 billion euros. Some reflections. First, our AUM is quite diversified across strategies and across geographies. Also across clients, with no client constituting more than 5% of total committee capital. And in terms of bank and other financing relationships in the portfolio companies and real estate. Each fund is also diversified in terms of its number of investments and sectors, and we maintain a quite strict thematic focus on companies and assets, which are supported by long-term secular trends rather than the economic cycle. With a combination with BPA, we can identify trends and source the best investments on a global basis. Take India, for example. This is our largest market in our Asian business, and it's the fastest-growing major economy in the world. It's supported by favorable governmental policies and a young, digitalized population. And here we see very interesting growth opportunities in sectors that are at the core of EQT's long-term strategy, like tech services. 2023 is a year of execution. First and foremost, this means driving continued performance for our clients. The integration with BPA and other combinations and acquisitions have progressed well and are substantially complete. On the fundraising side, we're making good progress, but it's taking longer and requires a lot more work. We continue to future-proof EQT for long-term growth. And as part of that, during Q1, preparations for the launch of semi-liquid structures intensified, which we're quite excited about. And with that, I hand over to Gustav. Next slide, please.

Thank you, Christian, and good morning, everyone. As we talked about in the last update, we continue to see very interesting opportunities in the private wealth space. The segment has historically been facing difficulties investing into our industry due to the large required ticket sizes, multiple drawdowns and long lockup periods. However, this is changing and we expect the allocations to increase in the coming years. Today, individual investors' average allocation to private markets stand at around 2%. And to active managed strategies, where we are focused, it's only 1%. In comparison, institutional investors' average allocation are around 8%. The expectation is that individual investors' allocation to active managed strategies will go from $1 trillion today to $4 trillion by 2030. Therefore, we are very excited that we expect to launch our first semi-liquid strategy during the coming months, where individual investors will be able to get exposure to our funds in private capital and infrastructure. More to come on this in the H1 update. Next slide, please. So, continuing to the fundraising update. We are, as we've said previously, and as Chris said, in a more challenging fundraising environment, driven mainly by the lower liquidity among our clients. Despite that, during the quarter, we have raised more than 5 billion euros across the platform. In EQT 10, we have now closed out more than 17 billion euro. And as Christian said, we continue to expect the fundraise to be materially completed during the summer. In Infra 6, we had closed out around 6 billion euros as per the end of Q1. And in the first part of April, we have received commitments of close to another 1 billion euros. We're yet to have the first close in Infra 6 and expect to raise the majority of the fund in 2023. Finally, for IKT Exeter Industrial Value 6, we're in the last part of the fundraise. We will significantly exceed the $4 billion target, being at $4.8 billion by the end of Q1, which is also where we expect the fund to end up around. As a benchmark, Fund 5 was around $2 billion. Next slide, please. And with that, I'll hand over to Olof.