EQT AB (publ)

Good morning, everyone, and welcome to the presentation of EQT's 2023 year-end report. 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 M&A. To make sure everyone has time to ask questions, we suggest you focus on the most important topics. And as always, we're going to be available for follow-ups also after the call. And with that, let's kick it off. I'll hand it over to Christian.

equity's journey through 2023, which was a somewhat volatile year marked by strategic growth, but also lots of new initiatives. First, equity solidified its globally leading position in active ownership strategies with the full integration of BPA in Asia. We delivered on our strategic objective to open new distribution channels, offering access to our investment strategies for individual investors, And importantly, we invested with confidence into what we think is a quite attractive market to invest in. In fact, almost half of our investments related to infrastructure last year, making it the most active investment year ever for our infra franchise. 2023 was a year when performance, distribution track record, and ability to generate value from operational improvements were more critical to our clients than ever before. In this softer market, we made good fundraising progress. EQT 10 will reach its hard cap in February, and we expect EQT infrastructure six to reach its target during 2024. Overall, we grew our management fees by almost 50% last year, and our total AUM is now above 250 Having said this, we did hold back on exits in 2023 in preparation for more benign markets. And as a result, as you've seen, we've also had lower carried interest last year. Finally, seeing the benefits of our scale, we kept headcount largely flat while selectively adding talent in core growth areas. And all in all, We're, I think, very well positioned for the future in what you see as a growing and consolidating market in private markets. Next page, please. So this year, EQT is turning 30, 30 years old. And as we look back, EQT and our industry has changed profoundly over the past three decades. Private equity in its early days was about efficient capital structures taking risks and finding value plays. And actually, only a decade ago, companies went public to get access to capital. Today, a large share of value creation takes place in private markets, with companies staying private for longer, at least three years longer, actually. And volumes of IPOs are down more than 50% since before the financial crisis. There are now more, far more, actually, private equity-owned companies in the United States than there are public ones. So what does this mean for EQT? We have strategies that can support companies from early stage to proven businesses that need scaling to true global leaders. All these strategies are supported by equity's deep sector expertise, industrial advisors, and world class capabilities in areas such as digitalization, AI, and sustainability. What we're doing is really transforming companies and industries. And we address fundamental challenges and opportunities of our time, such as the decarbonization of society, the aging population, and the exponential digitalization of the world. And we're continuously striving to improve, to be the best possible owner of companies and assets. In fact, we like to say we've been forward-thinking from the start, and that's why I think and I'm confident that we're primed to keep winning as EQT enters its next decade, our fourth decade. Next page, please. In 2023, we navigated a challenging market with private equity deal volumes down 40% year over year, actually, while EQT's investment volume actually increased by 60%. My reflection on that is I would say that our ability to source and execute deals across the world is truly, truly world-class. We're really combining thematic investing and being local with locals in every single country. to create a unique sourcing machine. And looking into 2024, there are reasons to be constructive. And we do expect activity levels across the market to pick up. Interest rates have likely peaked. All sources of financing are again available. The IPO market is open, maybe not fully open, but open and opening. And we will eventually see private equity managers having to start realizing assets as their funds mature. Of course, 2023 is not going to be without challenges. Inflation could turn out to be more sticky than we think. Central banks may lower rates only gradually, as we're seeing in the news today. Global conflicts may also spread, which, of course, beyond the human implications, could elevate uncertainty and also add to inflationary pressure. Also, 2024 is an important election year with multiple geopolitical scenarios and possible effects on global trade. So we're prepared to navigate an uncertain year, but we're prepared to execute well. Our realization volumes were relatively low in 2023. And this, of course, was partly due to the very active year we had in 2021, but also due to the marketplace. Fortunately, we have a quite young portfolio. And we're preparing exits in various forms for 2024, including IPOs, recaps, partial sales, and hopefully even some form of private IPOs that I've been talking about. But our focus will, of course, continue to be on performance in the companies. And over time, I'm thus confident that we'll continue to deliver top quartile returns and DPI, which is the cash returns to our investors over time. Next page, please. 2023 was a landmark year for us in terms of innovation. We opened up new distribution channels, providing access for individuals to invest in private markets through what we call semi-liquid products. And last week, we kick-started Healthcare Growth, a buyout strategy focused on scaling innovative, fast-growing healthcare companies. And in fact, EQT has invested over 23 billion euros in more than 200 healthcare companies to date. So with this new strategy, we add Another piece of the puzzle is we can support healthcare companies in every stage of their development, from early stage through growth to the long term. And we do the same thing, as you know, in technology. In Asia, we introduced the BPA Mid-Market Growth Fund, where the team has already made four investments, and we broke through the hard cap. And we continue to lean into future-proofing with AI, sustainability, and climate. So EQT's Mother Brain platform now allows deal teams across business lines to leverage collective insights across the world. And we actually manage our deal flow now in Mother Brain. And our experimental team, Mother Brain Labs, developed tools to help our portfolio companies find unique add-ons, unique technologies, and also talent, in fact. So as a further testimony to our leadership in digital, actually, we were interestingly awarded the first ever patent in private markets. on automation and AI. Now in sustainability, we're working to really sharpen our pencil and drive growth and revenues from sustainable products and sustainable services across our investments to really make our companies more sustainable, more resilient, and of course also thus more valuable over the long term. And as we like to say, the time of financial engineering is over. Now it's really about fundamentally improving companies and assets. And we've also sharpened our best of best value creation methodologies by sub-sector across the world. And doing all these things, really doing what EKG has been all about since day one is being the best possible owner and developer of companies and buildings. Next slide, please. So clients are now assessing more and more each manager on their ability to generate returns over time across cycles and, of course, into the future. So those firms with consistent performance, proven ability to return capital, and the scale resources and insights to be ahead of the curve are going to continue to gain market share. And that differentiation is becoming increasingly evident. And we see the larger share of commitments coming to larger funds at the expense of smaller funds or those funds and firms without a real sharp edge. And this slide is kind of interesting because it shows the historical performance versus the growth in fund size for a group of large private equity funds now in the current vintage. And as you'll see, those with high performance are growing and those with weaker performance are actually shrinking. So, this is one of the first proof points in the larger market where performance really, really matters. And that's, as you know, at the core of our mission. So, EKG 10 is growing almost 40% compared to its predecessor fund. And I think that's a great testimony from our clients. And we're also very thankful for it. Next slide, please. As we look forward, our focus is on four key priorities, all centered around our fundamental philosophy of active ownership. So first, performance and exits. Selectively, we're going to continue to invest in companies and assets supported by these long-term secular growth trends. And as markets continue to stabilize, we will also gradually increase exit activity. Second, we'll continue to develop our investment strategies, primarily organically, but also through M&A. The healthcare growth strategy and BPA mid-market growth Asia are two recent examples. And we're creating strategies which build on our leadership and energy transition within infrastructure. And actually, this is truly one of the biggest investment opportunities of our lifetime. And I think we've all seen the sharpened interest in infra here over the past weeks and months. And we have a super strong franchise that gives stuff we'll talk about. And having done a number of combinations and add-ons within EQT, we now have a real playbook on how to integrate firms together with EQT, but we do remain highly selective. Third, we're continuously developing our client relationships, being adding new clients, offering more strategies to existing clients, improving our service level, our digital approach and everything, and also opening up new segments as we've done by accessing, helping individual investors access our strategies and private wealth. Fourth, we're continuously developing our platform while driving efficiencies, allowing for us to have scalable growth, as you also saw there in 2023. So with those words, I'll pass the stage to Gustav. We'll now delve into infrastructure, Asia, and fundraising. Next slide, please.

Great. Thank you. Thank you, Chris. So starting off with infrastructure. Over the last 15 years, EQT has built a top performing infrastructure franchise. And today we're top three in value add infra globally. We expect infrastructure to continue to benefit from strong growth driven by multiple factors, including that private markets is playing a critical role as public finances are constrained. Furthermore, ICT is playing a key role in the digitalization of societies through fiber and data center investments, as well as driving the energy transition across industry, most notably in transportation. We've seen a number of strategic transaction in infrastructure over the last six months, much on the back on healthy appetite among clients to invest more in the asset class, driven by resilient returns, downside protection, and low inflation risk nature of the asset class. In this context, we are very well positioned to continue to take market share by growing our global flagship fund, scaling within the core space. And we're also, as Chris mentioned, preparing for strategies focused on the large opportunity within energy transition, building on our strong track record within the space through our flagship fund. And with that, let's move into the Asia opportunity. Next slide, please. As of the start of this year, BPA-EQT is known now as EQT Private Capital Asia, having fully transitioned into EQT's global name and branded identity. And we're even more excited about the opportunity set out in Asia today. Macro, demographic and competitive dynamics are all in our favor, as we are one of the few players with a global approach, and local teams in every major region in Asia. And we also have strong performance across the funds, but also across the different regions. This of course creates exciting deal opportunities. In particular, almost a third of our investments are in India, where we built a very strong track record in software services. And this year, we also acquired India's largest chain on fertility clinics, Indra IVF. Furthermore, Japan is seeing a gradual shift, where over time we expect this to be a very important market for us, both from a deal as well as from a client perspective. And over the last couple of months, we've announced two deals in Japan, and we expect more to come. We're still in the early innings when it comes to infrastructure and real estate investing in Asia-Pacific. We're today around 10% of our infra investments are in the region, and the equivalent number for real estate is less than 10%. As we've talked about in the past, we expect this to meaningfully grow over time. And with that, let's move into the fundraising side. Next slide, please. So we continue to be in a challenging fundraising environment, even though the denominator effect has abated over the last year as equity markets have come back and clients have started to adjust their alt allocation upwards. However, clients still remain liquidity constrained, having made substantial commitments in the recent years, while realizations remain low across the market. We therefore expect only a gradual improvement in fundraising markets, and fundraising timelines will continue to be prolonged across strategies, also for the flagship funds. However, there are bright spots. We've seen clients who committed early in the fundraise to come back to increase the commitments as the market has slightly improved. We see large clients investing more and more broadly with us across PE, infrastructure and real estate, where our scale and breadth really becomes a real competitive advantage. And also, as highlighted on the previous page, that our clients are very supportive of our development in Asia, where we have raised the hard cap of our Asia Mid-Market Growth Fund with 40% to $1.4 billion. So, looking at our ongoing fundraising activities. As Chris mentioned, EQT 10 is expected to reach its hard cap at 21.5 billion euros in February. We've made good progress on EQT Infrastructure 6. As of today, we secure commitments of close to 14.5 billion euros, up from 10.9 billion euros at our Q3 announcement. We expect to reach our 20 billion euro target fund size during 2024. In real estate, in 2022 and 2023, we raised three large logistics funds in Europe and the US. And given the market environment, we have been restrictive in investing this new capital, resulting in that we today have approximately $13 billion of dry powder within real estate. Hence, there will be some time before we raise the next round of larger logistics funds. So in 2024, we will mainly focus on our newer strategies, such as US multifamily, as well as growing our presence in Asia. IKT Nexus is progressing with good monthly inflow and addition of new distribution partners. NMV is today amounting to more than 500 million euros. And as we've previously mentioned, we will continue to scale Nexus over the coming years. Furthermore, we're progressing preparations for additional semi-liquid products with more information to follow during the year. Looking ahead, we expect EQT BPA 9 to be the next flagship fund to be raised. EQT BPA 8 is today 40-45% invested, with the first investment was done in early 2022, so approximately two years ago. As we want to get to 80 to 85% invested before we activate the next fund, we have another 40% or so to be invested. We expect to invest this capital at a similar speed as we did in 2023, where we invested over 25%. Hence, we're looking at an investment period of around three and a half years for BPA8. And with that, I'll leave it over to Olof and next slide.