EQT AB (publ)

Good morning, everyone, and welcome to the presentation of EQT's Q3 announcement 2024. 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. Next slide, please. Let me start by briefly summarizing the third quarter. In terms of fundraising, we launched EQT Private Capital Asia's flagship fund, BPA9, with a target size of $12.5 billion, a 20% increase compared to the predecessor fund. EQT Infrastructure 6 fundraising continued with close to 17 billion euros of closed-out commitments to date, and we had final close in EQT Active Core Infrastructure at more than $3 billion. In total, we had gross inflows of about 3 billion euros, including investments by strategies which charge fees on invested capital. We kept executing on a strong thematic pipeline and announced 6 billion euros of investments during the third quarter. We are systematically pursuing various exit avenues, be it full realizations, stake sales, or capital market sell-downs. Total exit volumes amounted to 3 billion euros in the quarter. all of the eqt key funds continue to perform on or above plan with healthy like for like value creation in the quarter we strengthened our platform with more than 60 team members in the quarter primarily within private wealth and with that i'll hand over to christian to share some more color on our current and long-term priorities next slide please

Thanks, Olaf. Good morning, everyone. I'll start first with what's top of mind for us here at EQT. First of all, we remain focused on driving exits. Our track record of generating liquidity for clients, we believe, is a competitive advantage. And we are systematically assessing which asset and which companies to exit, balancing value creation on the long term and liquidity for our clients. Second, We're focused on performance, and we see healthy value creation across the portfolio. Going a little deeper, EBITDA growth continues to trend well, and is now growing faster than revenues in several sectors like healthcare, technology, and industrial tech. Our recent focus on driving operational improvements, pricing initiatives, and cost efficiencies are delivering results across the portfolio. However, we do still have a few pockets of underperformance, but there's nothing systematic behind that. We try to continuously challenge ourselves. We have this moniker at EQT that everything can always be improved at all times. And what we're focusing on now are the themes that we want to invest behind, how we drive digitalization, AI and sustainability in our portfolio companies to make them more valuable. the drive towards net zero for all of our businesses, and very importantly, on talent development in and around the executive suite, which has a huge impact on how the companies are developing. Third, our thematic investment strategy. And in fact, we had record investment volumes over the last 12 months, and we continue to have a really solid investment pipeline ahead across both asset classes and geographies. Fourth, of course, fundraising. And as we look ahead over the next cycle, we expect to launch fundraisings of around 100 billion euros in total, helping us capture this very large investment opportunity ahead of us. In addition, we're going to be raising capital for co-investments for private IPOs, continuation vehicles, and other solutions, some of which will be fee-paying. And in parallel, we, of course, continue to build out our open-ended funds for the private wealth channel. Now, fifth, it's about developing EQT. In the quarter, we strengthened our private wealth platform. And in real estate, we're super happy to have appointed Henry Steinberg as the global head of real estate, having been with the firm for more than 15 years. At a very interesting time when activity is picking up and we're gearing up for various fundraisings in real estate, this is an exciting transition. Overall, our mother brain artificial intelligence team and our digital teams are really trying to push the boundaries, trying to find new ways to drive digitalization across the portfolio and, of course, also internally at EQT. And to date, with regards to sustainability and net zero, we have supported almost 50 portfolio companies to validate their science-based targets, which is the most of any one in the world. Separately from this, capital continues to increase and to concentrate with the larger private markets managers. And we're, of course, continuously assessing how to develop our platform, whether that's organically or through acquisitions. If it's through acquisitions, of course, track record, strategic fit, and culture, cultural fit will be super important criteria, are super important criteria. Now in particular, we're reviewing opportunities within certain investment themes on the one hand, and also solutions and secondaries on the other hand. If you look at what's happening in the market, lower exit volumes in recent years have emphasized the importance for clients to be able to balance portfolios and manage liquidity in a better way. We think we can help with that. So secondaries and solutions are gonna play a key role in the future in monetization of portfolio companies and for funds and owners going forward. For example, these come to light in creating structures such as private IPOs, evergreen funds, running with the winners funds, et cetera. In other words, doubling down on the best companies in the portfolio. Next slide, please. On the deal side, we've invested a total of 24 billion euros in the last 12 months. Like I said, a record amount. And I think it really demonstrates the strength of our global deal sourcing team, which actually is now one of the largest in the world, according to Bain & Company. We're also fairly unique, being local with locals in more than 25 countries, but with global sector teams across the world working together. And activity is also now increasing in real estate, as you may have seen. We've generated about 6 billion of co-invest for our clients in the last 12 months, with more to come in the fourth quarter. Now, with our focus on investing into long-term secular trends and on transforming companies and industries, we see a tremendous investment need for decades to come. For example, driving digitalization of society, areas within health and well-being, and of course, the energy transition alone. And on that, McKinsey estimates that $275 trillion is needed by 2050 to meet global energy transition targets. And this is as the world decarbonizes and as industries and countries become more and more electrified. So this goes across the energy system itself. It goes across transportation. It goes across manufacturing, you name it. We have an aging population as well across the world. By 2050, 1.6 billion people are forecast to be over the age of 65. And with the world spending about $10 trillion a year on healthcare, that number will only continue to grow. And on digitalization, the adoption of AI and more digitalization of society continues to drive a huge need for data centers and related services, benefiting really not just our infrastructure investment strategy, but also our real estate business. And in the US alone, just to give you a perspective, data center capacity needed by the end of 2040 means that more than $500 billion of investment into that area is needed in infrastructure and real estate. We believe we're pretty well positioned to help drive these themes through active ownership. Early on, for example, we identified data centers as a key in the infrastructure behind digitalization and AI. Thus we acquired EdgeConnex back in 2020. And today that business is a double digit billion dollar company and growing rapidly. It's one of the leading providers globally, having more than tripled its data center capacity under our ownership. And like I said, it's continuing to grow strongly. So the trend is clear. Our larger share of value creation and transformation is taking place in private markets. Actually, some recent data from Morgan Stanley showed that almost 90% of US firms with revenues over $100 million are private. And today in the world, there are almost three times as many private equity-backed businesses as public businesses. Sorry, that's in the US today. So three times as many PE-backed businesses versus public businesses. And we believe these trends will continue in North America, but also across the globe, creating lots of investment opportunities. Next page, please. Now, let's zoom in to one of our top priorities, which is exits. At the start of the year, as the market outlook was improving, we decided to really step up exit preparations to create optionality and really be ready to seize the execution windows that we expected to come. And activity levels have been high. We've had more than 20 exit events this year, and those are continuing. We're also engaging with our clients to innovate, to find new ways to engage new owners for our companies. And one option, as we've talked about before, is the private IPO, where we're currently evaluating this option actually for one of our larger assets. Another one is minority stakes. You've seen a number of those this year from EQT. And other structures like continuation vehicles that we're also working on, where our clients can continue to own assets with a longer runway for continued value creation. And a third idea is to reinvest in our winners, or a third concept really, is to reinvest in the winners and new fund generations together with our clients and combinations of these. So that's quite exciting, actually, these developments and the liquidity that that provides. Now, if you look at the overall exit market, the buyer universe is gradually becoming more constructive. Financing markets are strong. IPO markets are open and continue to recover. And confidence is really returning to both financial and strategic buyers. But of course, as we all know, there is still uncertainty out there in terms of geopolitical questions, security questions, major elections around the world, and trends towards de-globalization, all of which makes investors more cautious. So we remain balanced in our views. Now, during this year, though, activity levels have been high, and I think we've demonstrated the range of exit options that we can deploy, whether it's a full exit, an IPO such as Golderma in Europe, which was the biggest this year in this region, or Waystar in New York, etc. sell downs in public companies that we own around the world, minority sales and assets like EdgeConnex and ReWorld. And at the same time, we're also focused on, we're also driving exits of companies and assets and older vintages and strategies that we're no longer building or pursuing just to make sure that we manage our portfolio in a very healthy way. And as you know, we have one of the younger portfolios in the industry because of these actions. Now, exits and key funds during the last 12 months have been realized at an average gross MOIC of two and a half times, so two and a half times the money on average, which we think is also a healthy signal. Looking ahead, our exit pipeline is active across infrastructure and private equity, and we're going to continue to drive that. However, exit volumes are are going to continue to be dependent on market conditions. And you've also seen that it takes time to generate large amounts of liquidity from sell-downs of public companies or from minority stakes. So that's one element. The other element is that, of course, if market conditions aren't right, we're going to continue to focus on what's in our control. And that's to continue to make the companies more valuable over time through transforming them to become better, stronger, faster, and more sustainable over time. So with that, let's go a little deeper into fundraising and hand it off to Gustav. Thanks.

Thank you, Chris, and good morning, everyone. We are, with BPA9, entering into the next fundraising cycle for EQT, where we expect to be in the market with some 15 close-ended strategies. This includes our three flagship strategies, where BPA9 is in the market now, and where EQT11 is next, followed by Infra7. Our expectation is that we will have approximately a three and a half year cycle before activation of the three flagships, which still implies H1 2025 for BPA9, which implies early 2026 for EQT11 and mid-year 2026 for Infra7. However, remember that this is only an estimation and it's dependent on deal flow and also that the fundraising will start earlier, like for BPA9. Secondly, we're starting to enter into a new era for real estate funds, where the real estate market is coming out of tough years, both from an investment and fundraising perspective. During 2025 and 2026, we're making preparations and execution for the next generation of our logistics and U.S. value-add strategies and our U.S. core plus strategies. In total, the previous generation of these strategies amounted to around 10 billion US dollars. Thirdly, we're expected to be in the market with a number of our newer strategies, where we will be looking to continue to scale up these strategies as discussed in the capital market states. This includes strategies such as our two growth strategies in Europe and Asia, our two long-haul strategies across PE and infrastructure, as well as our TMT and healthcare venture strategies. Lastly, on the close-ended side, we have a couple of new strategies, such as the healthcare growth, which is recently launched, and a transition infrastructure strategy that we're preparing for. And as you know, we're highly focused on expanding our evergreen offering, which I will come back to in a minute. All in all, as Chris mentioned, this will imply that we will be initiating fundraisings for around 100 billion euros in this fund cycle. And with that, let's move into the current fundraising progress. Next slide, please. Infra 6 now stands at around 17 billion euros in fee-generating commitments. And as mentioned previously, we expect active fundraising efforts to materially conclude this year and that the fund is expected to reach its target fund size upon final close in Q1 2025. In August, we launched fundraising for BPA9 and set the target at 12.5 billion US dollars. We're still early on in the fundraising. However, reception has been very strong so far, both from existing and prospective clients. BPA8 is now 70 to 75% invested. And as mentioned, we expect BPA9 to be activated in the first half of 2025. We also held final close for active core infra at 2.9 billion euros of total fee generating commitments. And management fees for this fund are charged on invested capital and it's currently less than half invested. At the end of September, fee paying AUM amounted to 134 billion euros, and where we had around 2 billion euros of negative effects impacting us in the quarter, and around 4 billion of negative effects impacting us in the last 12 months. Next slide, please. As we've talked about, we're continuing to developing our evergreen offering, both by expanding and building out our existing products, EQT Nexus and EQRT, as well as product developing, seeding, and aiming to launch three new products within the coming six to 12 months, of which two of them are in the US, as you might have seen by our recent SEC filings. On the back of this product development, we're strengthening the private wealth platform globally. Over the quarter, we've added around 20 team members related to private wealth, including Peter L. Apprentice as our head of private wealth in the US, previously at TPG. In September, we exceeded 70 FTEs in the private wealth efforts, and we expect to be around 100 people by the end of the year. The quarter also saw a number of new distribution launches, for equity nexus, as well as an exciting launch within the private retirement plans in Sweden for equity nexus, which we believe is going to be an interesting global growth vector for private wealth going forward. And with that, let me hand over to Olof to cover our deal activity in more detail. Next slide, please.