EQT AB (publ)

Good morning everyone and welcome to the presentation of EQT's half-year report 2024. For today's call, 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. Next slide, please. Let me start by summarizing the key highlights for the first half of the year. We concluded the fundraisings of ICT 10 at hard cap, ICT Future and the Asia Mid-Market Growth Fund at close to more than twice its target fund size. Across strategies we had inflows of approximately 7 billion euros and our fee paying AUM is now 133 billion euros. We expect active fundraising efforts for infrastructure six to materially conclude this year and for the fund to reach its 20 billion euro target fund size upon final close. We continue to invest at a strong pace with 12 billion euros of investments announced in the first half of the year. When it comes to realizations, activity levels are higher than volumes may suggest at 4 billion euros. Valuations across the key funds were up approximately 5% in the first half, and the EQT key funds all continue to perform on or above plan. Equity revenues grew 7% compared to the first half of last year, paced by higher management fees. Carried interest was lower at 14 million euros, partly due to the relatively low volumes of completed realizations. And with that, I'll hand over to Christian. Next slide, please.

Thank you, Olof, and good morning, everyone. Overall, we see an improving market backdrop. Inflation is coming down. We're on a path to lower interest rates, and important elections in Europe and Asia are behind us. Yet geopolitical uncertainties continue, not least with the U.S. elections. Now, having said that, EKG is built to invest and create value over cycles and to drive long-term performance across times of volatility. We celebrate our 30th anniversary this year, and our flagship funds have always delivered at least two times returns and always paid care. However, it's about more than driving value creation now. In today's market, perhaps more than ever, liquidity is key for our clients. And as you probably know, realization volumes across private markets were at decade lows in 2023. And back in 2021, buyout and exit volumes were around a trillion dollars each. But in recent years, the ratio of client distributions to contributions has been actually less than 0.7. Therefore, we're driving best practices and exits across the firm. For example, after the combination with BPA, we implemented their exit and liquidity committee all across EQT. Here, we systematically review exit priorities and drive liquidity, whether through M&A, IPOs, private IPOs, recaps, continuation vehicles, fund-to-fund transfers, et cetera, and thus ensuring a thoughtful approach to client liquidity and solutions. In the first half, we had more than 10 exit processes completed. Some of these were smaller exits as we optimize the portfolios. Others, such as Idealista, are significant liquidity events for our clients. And through our recent IPOs, Golderma and Waystar, we create also a significant optionality for future sell-downs and liquidity. And those two are actually two of the largest IPOs in the world this year, one in Europe and one in the U.S. If you look at EQT's invested capital, it's actually relatively young, with only about 10% of companies held for longer than five years versus approximately 25% for the overall market. As such, it could take some time before part of our portfolio is ripe for exits. But even so, we have a large number of realization processes underway and in preparation. Activity levels are very high. And as you've probably also seen from the reporting by the Bulge Bracket iBanks, pitch volumes at their houses were up 3x from last year. Of course, market conditions will need to be conducive for all these exits to materialize. From a competitive perspective, we have top quartile DPI, which means cash returns to our investors and our relevant key funds. And this follows a systematic approach that we've been running since well before the pandemic to drive exits and liquidity. Also, we have robust long-term financing structures in place across the portfolio, so we can afford to be patient if markets aren't right. Finally, we also believe that the underlying value creation in our companies will become more evident now that we're hopefully entering into a period of more stable multiples in the market. Next slide, please. In terms of clients, we see a long-term trend where commitments are concentrated to scaled players like EQT. And we continue to improve our client services. Fund reporting timelines have been reduced from 57 days in 2022 to 25 days in 2024. We've launched a liquidity forecasting tool for investors where we believe we're actually the first in the private markets to do so. And we'll often pilot of our AI powered assistant for due diligence to also simplify the client experience. There's a couple of examples. Furthermore, we launched equity think, an online publication for our shareholders and stakeholders to drill deeper into current topics together with different experts across our network internally and externally. And we've also expanded the equity academy across to our clients. Although we expect liquidity to remain constrained for our clients for a while, we are selectively launching new strategies. This includes the successful mid-market growth fund in Asia, building on our strengths in that region, and it's positioned very nicely to complement our Asia flagship fund nine, which will soon start fundraising. The healthcare growth strategy, complementing our leading healthcare franchise, has also been launched, and we're preparing for the transition infrastructure strategy, building on our track record in energy transition, and to go after the huge opportunity to decarbonize the world, as we talked about at our Capital Mortgage Day. EKG Nexus, our semi-liquid private wealth product, has been active for about a year now. And we've launched EQRT, which is focused on the U.S. real estate market just recently. And we have a number of new initiatives ongoing, which you'll hear more about from Gustav. To win in the private wealth channel, we're building out the teams, strengthening our brand, and engaging with distributors all across the world. Over the long term, private wealth products have huge potential. Therefore, we're spending more to ensure that we have all the capabilities needed to win. We also continue to build on the equity platform for the long term. In May, we opened our new Warsaw office as a tech hub to drive efficiencies across the group. And we opened a new office in Bengaluru, India, that's going to host junior investment advisory professionals working alongside equity's global investment teams, as well as with Mother Brain. Next slide, please. Now, the recent PI ranking is a testament to our relative strength, with EQT being top three globally in terms of private equity fundraising for the third year running. Our value creation approach has been sharpened during our first 30 years. But as we continue on our path of outgrowing the private markets, we need to evolve. We need to stay ahead of the curve. We need to stay paranoid. And therefore, we say at EQT, everything can always be improved everywhere at all times. is our moniker. And next slide, please. So what are we doing? Well, first, we're sharpening our PE model of the future. This involves doubling down on our main competitive advantage, talent. And so we can be the choice for management teams and boards and be the best coach for all of them. It's about sharpening our sector playbooks to get repeatable models for driving value creation in each sector. And second, it's a push to stay at the forefront of future-proofing, particularly now in artificial intelligence and sustainability. Of course, we've been working with them for a very long time and will continue ensuring that we remain leaders in these key areas for all companies in our portfolio and across the world. As you know, we started MotherBrain, our artificial intelligence unit, back in 2015, then focused on deal sourcing. Today, AI and Mother Brain are becoming really ubiquitous in our business, and AI is really being integrated into the strategy plans of all of our portfolio companies, and there's a lot of work ongoing around that. We recently gathered our tech CEOs and chairpersons for reflections on the future of AI, and it's clear that both generative and specialist AI is coming faster and having a bigger impact than even people think today. And just like AI, sustainability is integrated into the investment decisions and into the strategy of our companies, simply because doing good is good business. We believe that by improving operational sustainability and growing sustainable revenues will help reduce risk in our companies and also improve their future outlook, and thus improving our exit options and liquidity and valuations. As proof, 65 of our portfolio companies now have validated science-based targets. You know, they're path to net zero validated by the Science-Based Targets Institute. And according to research by BCG, this is three times the number of any other owner in the world. Third, since going public, we've completed several acquisitions and integrations and combinations. This has helped propel our platform in terms of scale, the strategies we offer clients, and insights we gain from global teams. We expect the private markets industry to continue to consolidate, and we will continue to actively drive that consolidation, be it in terms of complementary teams, strategies, or capabilities like solutions. With that, I hand over to Gustav.

Great. Thank you, Christian. Next slide, please. Thank you. So we think, as Christian mentioned, that the private wealth space offers significant growth opportunities for the global private markets. No doubt this will be a segment where competition is and will continue to be high. However, we believe that EQT has some unique angles to offer. Our products invest into the underlying equity funds or make direct investments leveraging our own deal expertise. Hence, we're not relying on other managers, which means competitive fee structures, top quartile performance across the investment strategies, and strong liquidity management with high visibility on drawdowns and distributions, and as Chris mentioned, short fund reporting timelines. Furthermore, we can use the EQT-AB balance sheet strategically to make seed investment, allowing us to launch new private wealth products that are starting off in value creation mode. We are now one year into the launch of Ikti Nexus and where we really seen the power and the strength of the seed portfolio in the investment performance of the fund. In the past quarter, we have continued to add distributors in existing and new countries, and we now have around 15 significant engaged distributors for the fund. Looking out 12 months in time, we expect to at least double that number, including entry into 10 to 15 new countries. NAV for Ikti Nexus is currently around 700 million euros. Furthermore, we're preparing for additional products and are aiming to launch three new products in the coming 12 months, either catering for specific regions and or specific investment strategies. With this ongoing product development, we have a continuous need to strengthen the private wealth platform. This involves hiring talent both within sales and marketing, product management and product development capabilities across US, Europe and Asia. It also involves increasing brand awareness through client engagement and brand campaigns, as well as educating distributors and advisors on the equity offering. Next slide, please. So, moving on to fundraising. During the period, EQT 10 reached its hard cap with almost €22 billion of fee-generating AUM, which was a 40% increase from EQT 9. The EQT Future Fund closed with total fee-generating commitments to the strategy, which includes fee-generating co-investment totaling €3.6 billion. And during the late spring, BPA equity mid-market growth closed at more than double its target size, raising $1.6 billion in total fund commitments. As a reminder, EQT Future and BPA EQT Mid-Market Growth both charge fees on invested capital and are currently about 50% and 25% invested respectively. Fundraising continued for EQT Infrastructure 6 with 16.2 billion of fee generating commitments up more than 1 billion euro during their quarter. We expect active fundraising efforts to materially conclude during 2024 and the fund is expected to reach its target fund size upon final close. As of today, BPA8 is 65 to 70% invested, and our Asia strategies are performing at its highest level. We expect to formally launch the BPA9 fundraising by mid-August, and that the new fund will be activated during the first half of 2025. Over the past year, we have seen some signs of improvement in the fundraising environment. The denominator effect has abated, we have seen a recent increase in risk appetite for co-investments. However, having said that, fundraising timelines continue to be extended, and in order for the fundraising market to further improve, we need realizations to pick up materially across private markets. We continue to expect fund cycles of three to three and a half years for our flagship funds, which strikes the balance between investing well-diversified portfolios and having time to realize investments in earlier funds to provide liquidity to clients. As a reminder, BPA8 has been activated for two years and 10 months, equity 10 for two years and equity infrastructure six for one year and seven months. With that, let me hand over to Olof to cover investment and realization activity in some more detail. Next slide, please.