EQT AB (publ)

It's crazy. Okay, good morning everyone and welcome to the presentation of EQT's Q3 announcement. We will provide a short update on the latest developments, fundraising, investments and performance. As always, if you have registered ahead of the call, you should have received an email with your personal PIN code to participate in the Q&A. You can also click telephone conference at the top right corner of the live stream window to ask questions. And with those words, I'll hand over to Christian. Next slide, please.

Thank you, Olof. Good morning, everyone. So during the third quarter, EKG continued to perform well with our differentiated active ownership approach and our diversified offering to clients. We made good progress in EKG 10 fundraising, where we do expect the fund to close at or near the hard cap in early 2024. In this market environment, our track record in terms of IRR and DPI, cash return to investors, are important differentiators. And equity nexus continued its rollout. And we're quite excited about the long-term prospects within private wealth. Equity now has more than 50 billion euros of dry powder available and a strong pipeline of deal opportunities. But we are pacing our investments in this uncertain macro environment. So we create the right portfolio construction over time. The exit environment remains somewhat muted. And there's been a lot of talk about green shoots for a while now, but capital and markets activity is yet to really pick up meaningfully. So we remain vigilant. Data suggests that inflation is moderating and rates are stabilizing, but at the same time, we do see an increase in conflicts globally, foremost a human tragedy, but also something that could further impact energy prices and global trade. Now, next slide, please. Let me briefly reflect on the journey that we're on. Since our IPO four years ago, we've more than tripled fee generating AUM to 128 billion euros, and our total AUM is more than 230 billion euros. With funds that are 10 years long or longer, we have a model with long-term contractual revenues, And already now, more than 8 billion euros of carried interest to be realized over the lifetime of the existing funds alone. And of course, there are future funds to come. Today, we're local with locals in countries representing 80% of global GDP. And we have four flagship funds across private equity, real estate and infrastructure. And in a more challenging market environment, the value of diversification and differentiation become all the more important. So we at EQT are solely focused on active ownership and our mission is to create investment performance for our clients. EQT's track record underpins the growth of our client base to now include almost 1200 clients globally. And with regards to diversification, October actually marks the first anniversary of the combination with BPA. And I can tell you it's been a great success, both in terms of strategic fit, performance, but of course, very importantly, also culture. So with this global platform now, we work with sector teams across the world to identify the best companies and assets that we want to own. All of us are supported by Mother Brain, our internal artificial intelligence unit, which we've been building actually since 2015. And now, of course, is getting accelerated with generational AI. So both of our firms in this combination have tremendously benefited. We've broadened the investable universe. We're implementing best practices. And the deal teams are now cooperating on a global basis. For example, we're pursuing themes in Asia that we've invested in across Europe for several years, like the personification of pets. Or areas such as education, where BPA, EQT, owns the world's largest private education company, Nord Anglia, and we're looking into that sector across the world. Next slide, please. So the bifurcation between high-performing managers and other managers is becoming now more visible, first time in a long time. So those with a consistent top quartile track record are growing fund sizes and are meeting their flagship fundraising targets, while other managers have lowered their flagship fundraising targets. EQT's track record is consistently strong over time. And that's why we're seeing material growth across our flagship fundraisers, whether it's in private equity, Europe and North America, Exeter's industrial fund, BPA, EQT Asia, or our latest value-add infra fund, Infrastructure 6. However, our clients are also taking longer to commit in this environment. But they do want to participate in the vintage, so it's primarily about delays and not declines. Next slide, please. As you know, our purpose is to future-proof companies and make a positive impact for all. And there's a tremendous need for capital to finance areas such as the energy transition and the digitalization of society. And this need for capital and growing allocations to private markets will underpin the growth of our strategies. Long-term, we see opportunities to further grow our flagships, either in size, geographic focus, and or sector focus. And given our two-pronged approach of being the only firm in the world that's truly local with locals, together with global sector teams, we do have continuously strong deal flow as we speak as well. In the last five years, we have initiated a number of newer strategies where we still have a significant runway to scale, including future, growth stage technology, healthcare, multifamily, and active core info. In addition, we're in the early stages of exploring new investment strategies that further build on our leadership in areas such as healthcare within private equity and energy transition within infrastructure. We do continue to selectively evaluate M&A as well, with culture, performance, and strong fit with our strategy being critical criteria. And we think that the market will reshape over time as a result of this current tough environment. And therefore, there will be interesting M&A opportunities coming along as a result.

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