EQT AB (publ)

Good morning, everyone, and welcome to EQT's Q1 announcement 2026. It's been a busy first quarter at EQT. We kicked off the year by announcing the combination with Color Capital. In Galderma, we completed the largest sponsor-backed block trade ever to deliver the largest single fund capital gain ever. We closed BPA9 at hard cap. We launched our new AI infrastructure strategy, and we had a record quarter in terms of net inflows to our evergreens. This quarter again faced significant volatility across markets, which affected our fund valuations in different directions. So we'll cover all of these points in further detail over the next 30 minutes. And with that, let me hand over to Per. Next slide, please.

Thank you, Olof. And good morning, everyone, from IKT's London office. It's been a volatile quarter driven by rapid advances of AI technology, as well as geopolitical uncertainty. And that uncertainty having a short-term impact on energy prices and also the broader macroeconomic outlook. In this environment at DQT, we remain focused on executing on our strategic priorities. And as we're entering the second quarter, I'm happy to say that we continue to see strong and broad-based momentum across our business. You will have seen that we yesterday in our infrastructure strategies launched our new AI infrastructure fund, seeded by our highly successful investment in EdgeConnex. Our infrastructure business has seen strong deal flow during the quarter and been very active since the start of the year. Most notably, we launched a $30 billion plus public takeover offer for AES, a very exciting and highly thematic investment in the energy sector. In private capital, we pursued a number of attractive new investments out of our early stage strategies, and we continue to monetize investments. As Olof said, most importantly, IKT8's remaining stake in Galderma. In the quarter, we also saw strong fundraising momentum as we are continuing to take market share. We closed BPA Fund 9 at $15.6 billion, a close to 40% increase in fund size compared to BPA Fund 8. And for IKT 11, we're also seeing strong momentum and we see this fundraise being on track for a strong first close around mid-year. Our evergreen vehicles for the private wealth segment saw record net inflows of 1 billion euros during the quarter. And the combination with Kohler Capital has really been very well received by stakeholders, including our clients. And the transaction is on track to close in the mid to latter part of the third quarter. Business momentum in Kohler Capital remains strong, and we target to double fee-based assets under management within four years. Across strategies, we have more than 40 billion euros of dry powder, putting us in a strong position strategically, and this doesn't yet include the upcoming EGT11 fund. During this time of volatility, we remain focused on executing on our exit agenda. With Galderma, we executed the largest sponsor-backed block trade ever done, despite significant and elevated geopolitical uncertainty. Similar to last year, in our exit pipeline, we target approximately 30 exit events this year. And if I look at the pipeline, I see that exit pipeline nicely spread across our focus sectors. Our target exit volumes for the year is in line with last year's volumes. Next slide, please. AI is arguably the most important investment team of our generation. It will substantially impact most of the sectors and businesses that we're investing into. And it will change how we drive value creation in our investments. And it will also change how we run our firm. I'm saying this with all humility, given the rapid advances of technology. But if I was asked to design a private markets platform from scratch to best capture the AI investment opportunity, I would design it exactly the way EQT is set up today. First, we are the only scaled private markets firm with both a ventures and a growth strategy. Out of these funds, we make attractive investments into native AI winners, examples being Harvey, Parloa, and Lovable, just to name a few. Our early stage platform also provides the rest of the firm with valuable insights and access to talent. This helps us in our deal selection and gives us access to the capabilities required to drive ambitious AI-based value creation and transformation plans in our private equity portfolio. Second, being active across infrastructure, real estate, private capital, and soon also secondaries means that we can allocate capital to the entire spectrum of compelling AI opportunities. In infrastructure, we invest into the physical assets required to power AI. We now even have a dedicated strategy to do just that. The infrastructure team is working closely together with the real estate business on the AI opportunity. For instance, out of our real estate funds, we source land for data centers. And post the acquisition of Collar, we will also be well positioned to invest into the market dislocation triggered by AI, particularly in the private credit space. In our private equity funds, we target investments where we can leverage our active ownership model, our governance model, our expertise and resources to implement ambitious AI-based value creation plans. Across the private equity portfolio, we're already seeing the impact as we're accelerating both AI-driven revenue growth and AI-enabled cost savings in companies such as IFS, CFC, IVC Evidencia, and Nordic Ferries, to name just a few. We want to make sure we can provide our deal teams and portfolio companies with direct access to the most relevant AI expertise. This is why we keep on developing our ecosystem of AI natives and strategic partnerships, partnering with key players such as the large language model providers and other companies that are at the forefront of AI technology. And this is nothing new for us. We've been building our AI capabilities really over the last 10 years when we first launched EKT Digital and EKT Motherbrain. And thanks to this head start, we're well set up also in our internal processes, including how we structure the data that we sit on across our firm. And this way, IKIT, you could say, is really set up already in a way that is very similar to an AI-native organization. Next slide, please. At EQT, we want to be the most attractive global provider of international alpha. This is how we think about developing our platform, how we set our priorities. And as a result of this mindset, we took the strategic decision not to be in private credit, but instead to grow our active ownership strategies through the combinations with BPA in Asia, the acquisition of Exeter in real estate, and LSP within private capital. And, of course, now most recently, the decision to build our capabilities within secondaries by joining forces with Kohler Capital. Being able to clearly articulate your sources of alpha and value creation matters more than ever, and the scale players in our industry are pulling ahead. Post Caller Capital, we now have four top performing platforms delivering global alpha. The most attractive returns and the most attractive solutions for clients. We're now taking the next steps to align our governance and reporting more closely with our four business lines so that we can further sharpen accountability, drive even closer global collaboration, and really maximize the potential in all of those business lines. Bert Janssens has been appointed chair of a newly created global private capital management committee, and Bert will be joining the executive committee. We see strong potential to grow our real estate platform, both organically and through M&A, which is why I've asked Henry Steinberg, head of IKT Real Estate, to join the executive committee. As part of these changes, Lennart Blecher will step down from the committee, but Lennart will continue to work closely with myself and with the relevant business line heads, and he'll continue as chair of Real Assets. Massoud Omayoun continues to lead IKITI infrastructure. And of course, we also look forward to welcoming Jeremy, Jeremy Kohler, to the executive committee once the combination with Kohler Capital closes in Q3. Next slide, please. Let me just double click on the AI opportunity that we're seeing in our infrastructure business. The newly launched AI infrastructure strategy builds on IKT's deep expertise and leadership in digital and energy infrastructure. Through our ownership of Edge Connects, IKT Infra today operates more than 90 data centers globally. On the connectivity side, 29 million miles of fiber network has been deployed globally across our portfolio. And the energy companies that were invested in IKITI Infra have a development pipeline exceeding 100 gigawatts. The enterprise value of our digital and energy assets combined today is north of $100 billion. We see global demand for AI compute and hence data centers and power consumption only accelerating. Industry estimates suggest that $4 trillion will be invested into data centers and energy infrastructure to meet this demand over the next five years. At the same time, we see bottlenecks in the form of access to power, reinforcing the need for a coordinated investment approach across digital and energy infrastructure. And this is why we're now launching a dedicated EQT AI infrastructure strategy focused on investing in a holistic way in the physical infrastructure that AI requires. The strategy is seeded by Edge Connects, one of the world's leading data center platforms. And as I mentioned, an existing EQT infrastructure investment. It sits in funds four and funds five in our infrastructure platform. The fund will have an open-ended structure and will enable EQT investors to double down on existing AI winners that are providing integrated end-to-end solutions to the global hyperscalers and large language model providers. Next slide, please. During the quarter, we saw significant share price volatility and pressure on listed software companies as fears of an AI-led business model disruption for this sector spread. Against this background, I'd like to just now take the opportunity to share some perspectives on how we at EQT think about investing in software. Software today represents approximately 7% of our fee-based assets under management and 14% of the fee-based assets under management in private capital. We have, over the last years, built the capabilities necessary to properly assess AI risk and opportunities. The EQT software investments are focused on mission critical B2B enterprise software, companies that are really deeply embedded into the workflow of their clients, supported by proprietary data, and are really incredibly difficult to displace. These software companies will be the primary diffusion mechanism for AI into large organizations. So we're really invested into software companies that will be at the center of the transition to AI. All of these investments that we've made in software are control investments that allow us to attract the best AI forward CEOs and to move quickly in terms of implementing ambitious AI based transformation plans. Performance is strong and on average across our software portfolio, net sales grew at low to mid teens and operating profit at 20 to 30% last year. And this momentum in our software portfolio has continued into the first quarter. And in 2026, we expect the operating performance of our software companies to significantly outperform broader public market software indices. Zooming in on the individual fund exposures and looking at each of the key funds in private capital, starting with EQT7 and EQT8. Both of these funds are largely de-risked and the funds are performing above plan with top quarter performance for their respective vintages. To date, we've had four software exits across these funds at a weighted average gross MOIC of approximately five times. We still hold one software asset in each of EQT7 and EQT8. Turning to EQT9, where we last year sold a minority stake in IFS, crystallizing a gross MOIC of more than seven times. IFS remains exceptionally well positioned also going forward. IFS is actually a great example of the AI-based value creation potential that we see inherent in mission-critical software companies. IFS has been embedding AI into its processes and products for years and company management is continuing on this journey. In 2026, IFS will, as part of that journey, actually reducing its workforce by approximately 20% thanks to realizing AI-driven efficiency gains across its business. And the annual savings that IFS will be achieving as part of that of up to 100 million euros will be 80 to 90 percent reinvested into growing the company's library of industry leading AI agentic solutions. This will help IFS continue to expand margins and continue to grow ARR at more than 20%. And this is quite outstanding, also in light of the fact that its sales are quite a bit above 1 billion euros today. The strong performance of IFS continues to underpin also our confidence in the performance outlook for EQT9. As we know, EQT9 was invested in a tricky vintage for the private markets industry. But EQT9, we can today confidently say, is invested in a number of winners. Companies such as IFS that I mentioned, but also BESPAC, Bayer Ref, Idealista, and CFC, just to name a few. So we're confident that IKT 9 will be a top performing fund for its vintage. In IKT 10, it's still early days, but you know, software, represents below 30% of the fund. And these investments that we've made are still early in their value creation journey. But also here, we've already started to see the positive impact from AI, helping us drive revenue growth and margin expansion. The underlying performance across the EQT 10 software portfolio is strong. And we're confident also here in the outlook for these investments. If we turn to Asia, software today represents a fairly small share of the portfolio. The existing software investments are also here performing well. But given the limited exposure that we have so far, in particular also in BPA Fund 9, we actually see the current market dislocation as an attractive opportunity to allocate more capital to software. And we're excited about our pipeline. Next slide, please. There's really no better way to illustrate EQT's differentiated thematic investment strategy and hands-on approach to value creation than Galderma. This investment ticks all the boxes for how we unlock structural alpha at EQT. from how we source investments to our unique ownership and governance model with access to world-class buy-in shares and CEOs, to our value creation and differentiated exit capabilities. EQT8 and its co-investors acquired Galderma in 2019, and post a complex carve-out, we embarked on a full transformation of the business. Caldera was listed on the Swiss Stock Exchange in the beginning of 2024. And since the IPO, the share price has approximately tripled. And within two years of the IPO, we were able to fully monetize the investment, sending back approximately $26 billion to investors. The investment generated approximately $20 billion in capital gains, making Galderma the largest fully monetized capital gain from a single fund in the history of our industry. Our final sell-down was the largest sponsor-backed block trade ever done at $6 billion. After Antisemex, Nord Anglia, IFS, and EdgeConnex, to name just a few, Galderma is just another recent example of how we keep on producing those incredibly attractive investments and long-term winners across our target sectors, geographies, and strategies. With that, I'll now hand it over to Gustav, who will start by giving you the latest on the caller acquisition. Next slide, please.

Thank you, Per, and good morning, everyone. Since the announcement in January, we've been truly encouraged by the positive response that we've received. Clients and employees on both sides have been very supportive, while industry peers, shareholders and other stakeholders have recognized the strategic logic. Meanwhile, the caller business momentum continues to accelerate. In private credit secondaries, the team is just about to launch CCO3 with very good traction, especially given the current interesting dislocation in the credit market at the moment. In private equity secondaries, the team is preparing to launch its next flagship fund, SIP10, during Q3 on the back on very strong fund performance. In private wealth, Kohler had over $400 million of net inflows in Q1, despite the negative sentiment around credit in the evergreen world. And finally, in insurance, Kohler continues to have strong momentum in terms of structuring bespoke solutions for the insurance channel. The integration plan is progressing at full speed and we're on track to close by mid to end of Q3. And as Per said, we're confident in our ability to scale collar and double fee-paying AUM within four years. Next slide, please. Turning to fundraising, we're off to a strong start of the year. Starting with BPA9, which closed at US$15.6 billion in total commitments, hitting the hard cap and with fee-generating commitments of US$14.9 billion. This makes BPA9 the largest Asia-focused private equity fund ever raised. The fund attracted more than 75 new investors, including more than 45 investors from EQT's other strategies. And these 45 clients contributed close to 25% of the total commitments. This is a clear validation to the success of the combination. With that turning to EQT11, fundraising momentum remains strong and we expect the fund to have a first close around mid-year. And then finally, on the flagships, we're preparing to launch fundraising for Infra7 around mid-year. Despite the volatile market environment, we see our fundraising progresses strongly across a broad base of investors, as the concentration of capital to larger managers is just accelerating. In total, during this year, we will be in the market with more than 10 other closed-ended fundraisers, and many of these fundraisings will continue into 2027 with the full fee-paying AUM contribution continuing into that year. And then moving over to the open-ended institutional products, we expect these to grow as a share of our fee-paying AUM. Active core infra is continuing to see strong development. And as Per said, we're excited to introduce the AI infrastructure strategy where our institutional clients can access long-term return opportunities at scale. And our private wealth clients have a unique opportunity to get dedicated exposure to AI infrastructure. The fund is an open-ended structure which charges fees on NAV, effective from early Q2. The fee rate is broadly in line with our other long-haul strategies, and the strategy is also eligible for performance fees. In terms of initial size, think about this in line with our guidance for other first-time funds. And then over time, we see the potential to scale this strategy to become a key fund. And then finally, let me comment on our Evergreen offering. Next slide, please. Soon three years since the launch of our first Evergreen vehicle, we continue to see strong momentum building. Quarterly net inflows have been growing meaningfully from approximately 200 million in Q4 2024 to 1 billion euros in Q1 26. A result of new successful product launches, the build-out of our network of distributors and strong early performance across vehicles. We're currently preparing for two additional vehicles, one for infra in Q2 and one for private capital in Q3. Redemptions continue to be very, very low and amounted to less than 0.5% during the quarter. We have embedded the right lessons on product design with institutional underwriting standards and ongoing investor education. Something we believe will only grow in importance as the industry continues to develop. And with that, I will hand over to Olof. Next slide, please.

Thank you, Gustav. So let's next turn to investment activity. Q1 was paced by thematic investments within infrastructure and Infra 6 is now 75 to 80 percent invested. And as previously communicated, we expect to activate Infra 7 around year end. Our open-ended core infrastructure strategy made its first investment and the fund, which charges fees on NAV, will be activated upon close of the deal later this year. IKT 10 remains 60-65% invested and we have an active pipeline and it's possible that we activate IKT 11 around mid-year. Technically, EQT11 will be activated upon closing of the fund's first investment, and the fund will only be part of net inflows, our dry powder number, and FAUM upon activation. Let's next move to exits. And in Q1, we successfully exited two portfolio companies, Galderma and Azelis. Both exits were out of EQT8, which is in cash carry mode. Post-quarter end, Infra 4 and Infra 5 sold minority stakes in their respective holdings in EdgeConnex to the AI Infrastructure Fund. And Infra 5 sold the minority stake in Nordic Ferry Infrastructure. A few words on the exit outlook. As a reminder, in conjunction with our full year results in January, we said the gross exit pipeline for 2026 is broadly in line with 25, should markets be supportive. This target remains unchanged. We are maintaining exit readiness and we have a diverse pipeline of exits across infrastructure and private equity globally. Some of the assets in our pipeline including certain IPO candidates we believe could be net beneficiaries of the asset class rotation that we've seen in the first quarter. Next slide please. Talking about IPOs and before handing over to Kim, I wanted to highlight our upcoming Value Creation Day. For the second consecutive year, we will host a capital markets event in London on the 20th of May. The EQT team across the EQT platform will go into detail of our investment and value creation approach for the AI era. And you will have the opportunity to hear from and meet with the CEOs of four of our portfolio companies across various sectors. including Anti-CMAX, EdgeConnect, CFC and Strive. We hope to see you there and make sure to register via the link on this slide or on our website. So with that, I'll hand it over to Kim. Next slide, please.

Thank you, Olof, and good morning, everyone, from me too. Looking at the average key fund portfolio valuations, they were flat in the quarter as strong performance in infrastructure was offset by lower valuations in certain private capital funds. Let's break this down, starting with the earlier vintages. The private capital fund valuations were lower, impacted by a combination of lower reference multiples and lower closing share prices for the listed part of the portfolio. Remember, however, a large share of the portfolio in these funds has already been realized, and they are largely de-risked from a returns perspective. The infrastructure funds saw positive value creation, In Q1, our funds with 2020 to 2021 vintages saw valuation uplifts in infrastructure, primarily driven by the digital and energy subsectors, and in private capital, some multiple headwinds, while underlying operating performance remained strong, resulting in flat valuations. For the more recent vintages from 2020 and onwards, several investments are developing ahead of plan. Valuations have been somewhat held back by lower software multiples, particularly for EQT 10, but the underlying operational trajectory is positive. And remember that new investments enter at 1x, which means it takes time before the underlying value creation becomes visible. On software specifically, the portfolio was marked at lower valuations, but the strong revenue and earnings growth, AI defensiveness and mode strength resulted in more resilient valuation developments compared to the broader public market software indices. All key funds across private capital, both Europe and North America and Asia, as well as infrastructure, continue to perform on or above plan. As always, listed assets are marked at the closing price, but when we value entire companies, the valuation moves tend to be less accentuated compared to how the marginally traded share moves in the public markets. Since we closed the valuations at 31st of March, public markets have traded up and the reference multiples for our software assets have come back slightly. Next slide, please. Let me also take a moment to reflect on our financials, starting with fee-related revenue. As you've heard today, we are in a very active fundraising year. BPA 9 has already closed, but the majority of the fundraisers will continue into 2027. As a consequence, we expect the contribution in terms of management fees largely in 2027. At least one quarter of contribution from the combination with Kohler Capital is expected in 2026. We've included a page in appendix with a recap of the expected 2026 financials for Kohler. They are the same as presented at announcement. And Kohler EQT will be reported as a separate operating segment upon close. Today, we also stated our intention to report real estate as a separate operating segment. This change will come into effect in our H1 report. This means we will report based on four segments, private capital, infrastructure, real estate, and secondaries and solutions. Moving to FTEs and costs, we added some 10 FTEs in Q1, and we will continue to be disciplined in our hiring. We stay focused on our strategic growth areas. It's Asia and the U.S., it's AI capabilities, it's private wealth. And over time, we believe that AI will increasingly allow us to grow without adding people in certain functions. And we're already beginning to see productivity improvements from this. To measure such improvements, we're developing KPIs to track both AI spend and efficiency gates. So by that, promoting AI usage while also holding ourselves accountable. As previously communicated, we expect mid-single-digit OPEX growth in the year. In our full year results announcement, we mentioned we have four key funds in carry mode with approximately 600 million euro carry left to be recognized over a multi-year period. And let me reiterate that we do not expect infrastructure four or equity nine to be in carry mode in 2026. We expect to start recognizing carry from these funds only when the DPI is well north of one. With that, I will hand over to Per for some concluding remarks.

Thank you, Kim. In a quarter marked by volatility and uncertainty, we executed well and we entered Q2 with strong momentum across our platform. Thanks to our platform design, we're well positioned to capture the AI opportunity across strategies. from making attractive native AI investments in our early-stage funds to investing at scale in AI out of our infrastructure business and out of the EQT real assets platform. We're excited about the launch of our AI infrastructure strategy, which will give clients direct exposure to this once-in-a-generation investment opportunity. Thanks to the investments we keep on making in our alpha generating capabilities, we set new global standards for value creation at scale. During the quarter, we executed the final stake sale in Golderma, the largest capital gain ever generated by a single private equity investment out of a single fund. The private markets industry consolidation is continuing and scale is growing in importance. Our strategy to be the scale player focused on delivering global alpha continues to resonate with investors and we're taking market share as clients consolidate relationships to fewer managers. Fundraising momentum is strong both among institutional and private wealth investors. In a volatile environment, we remain focused on executing on our exit pipeline, and we maintain the previous guidance for the full year, of course, subject to market conditions. When it comes to color, the transaction is expected to close in the third quarter, and the business is really seeing strong momentum. The combination will further strengthen our ability to serve clients and will add scale, diversification, and growth in fee-related earnings to EQTAB. Thank you all for joining us today. We look forward to seeing you in London in a couple of weeks. With that, we open up for a Q&A. Operator, please.

Thank you. To ask a question, please press star, one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star, one, and one again. We will now take our first question from the line of Oliver Carruthers from Goldman Sachs. Please go ahead.

Hi there, Oliver Carruthers from Goldman Sachs. Thanks for the presentation and all the color. So I've got three questions, please. First question on software, and I really appreciate all the colors and detail here. It seems like you're seeing pretty healthy growth across your software assets, and you expect that to continue this year. But it feels like software deals are going to be a little bit slower as people get to grips with AI disruption potential and some of the nuances around things like mission criticality, et cetera. So is this more cautious underwriting something that you're picking up and seeing in the market too on the private side? Any thoughts on what could drive a pickup in deal activity here and when this could happen? So that's the first question. The second question, still on, I guess, the theme of AI, but on AI-enabled cost investments, improvements that you called out. So this question is quite intangible. But to me, AI is making capital more valuable, labor less valuable. So private equity should be pretty well placed here for the bulk of assets in the industry. Are you able to give any color on how your value creation playbook is evolving here and Are there any companies that are potentially exceeding business plan expectations because AI is letting you take out costs or perhaps expand these businesses at a lower cost than your business plan assumed? And then the final question on Infra 7. So it looks like Infra 6 is nearly fully invested. Is it still right to be thinking about an Infra 7 activation by year end? I think you mentioned that at the four-year results call. Thank you.

Thank you, Oliver, for those questions. I'll take the first two and the third one I'll leave to the team. So in terms of the software environment and deal-making activity, what could drive a pickup? what we saw during the first quarter was, of course, a lot of volatility in share prices, in valuations for public listed software companies. You also saw some of that reflected in how in pricing, in credit, in the credit markets for some of the software, the private equity-owned software companies. What we've seen really over the last couple of years weeks is the market in general becoming a little bit sharper, if you will, a little bit more nuanced in terms of how this AI risk and the AI opportunity is being priced for publicly listed software companies, both on the debt side and on the equity side. And, you know, I'd say that is going to be probably the primary driver of when sort of the bid-ask spread also in the private markets will narrow for software companies and software investments. And that will then... also, you know, drive a pickup in deal activity. In the meantime, as I referenced earlier, I do think that, you know, public to private will be an opportunity for private equity players that have dry powder and can invest into this market dislocation that we've seen. Second question, how are we leveraging AI to drive a value creation? How is our playbook evolving? It's a little bit what I touched upon in our presentation. This is nothing new for us. We've been investing into our digital and AI playbook for a decade. We are continuing to make investments, continuing to build our internal team capabilities, making significant investments here. We already have 30 plus in-house data scientists, but we're continuing to grow. grow and strengthen that team set up. In addition to that, we're also entering new partnerships with the relevant players, relevant AI technology providers, but also other players that have interesting and relevant and attractive AI value creation playbooks that we want to tap into. And we're applying this playbook really across our portfolio, across sectors today. I mentioned some examples in my presentation earlier. I think just a great example of how we're implementing this playbook at scale is IFS, right? And this is a company with 5,000 employees. And as I said earlier, we're, you know, in 2026, there's an opportunity for the company to reduce its workforce by 20%, creating 100 million euro plus of savings and 80 to 90% of that is being reinvested into product offering to accelerate sales growth, right? I think that's just a great example of this AI value creation playbook at work in the equity portfolio.

Maybe picking up on your third question, Oliver, was in relation to the activation of Infra 7. And as we said previously, we expect that to be activated around year-end, as you correctly pointed out. And as you know, Infra 6 is now 75% to 80% invested. These things are never in exact timing in the sense that it depends on the progress in terms of deals, but we certainly have a strong continued deal pipeline, both on the infra side and as Pat talked about previously, also on the equity side as it relates to the outlook for activation for IKT11. Thanks a lot.

Thank you. We will now take the next question from the line of Hayley Tam from UBS. Please go ahead.

Morning. Thank you very much for taking my questions. I have three as well, please. If I could ask one, firstly, on software. Again, just to follow up on Ali's question. Again, thank you for the detailed commentary around slide seven. I think it was incredibly useful. Given what you say there about software multiples contraction, but also the 29% of EQT 10 that is invested in software, can we just confirm that positive 4% value movement you saw in Q1, you did also lower the reference multiples there. So they actually implied earnings growth there is much more than the 30% that you're saying for the whole year. of that group of software portfolio. So that's the first question. Secondly, just in terms of fundraising, evergreen vehicles, congratulations. It looks like that's doing really well with a billion euros of net inflows and the 0.2 of redemptions. Are those sort of run rates we expect to be stable from here? Or can you give us any guide on how to look about that going forwards? And then just if I can on The EQT8 cash carry generation, I think you mentioned it's now in that mode, and I think you'd said in the past there might be half a billion of potential there. Could you just update us on how much you've already seen and perhaps what your plans are for proceeds? Thank you.

Thank you for those questions. Maybe I'll start with... the question on software multiples contraction and then I hand it over to Gustav to also elaborate on that if he has anything to add and then take the other questions. So in terms of valuation levels for our software investments during the quarter, we saw pressure based on the development of the publicly listed peer group. But when we And so on average, evaluation levels for the software portfolio across EQT private equity was down. But in terms of the relative performance versus the public peer group, of course, they were down to a lesser extent. Why is that? Because we're a controlled investor. to acquire control in these companies based on the market conditions today you'd have to pay a significant premium to where share prices are today for these companies and then The other factors are what I mentioned earlier, a superior operating performance that we see in general across the board in our software companies compared to the relevant peer group performance. And then just like also the type of software companies that we're invested into, all of them really being mission-critical B2B software companies, right? And you see that distinction also in share price levels reflected today, but also in debt trading levels. If we look at the trading levels for the publicly listed debt levels in our software companies, they're all trading at par. And yeah, so that's probably what I'd say on that first question. Anything to add on that, Gustav? And then maybe you take the second one as well.

Yeah, nothing really to add. I think IQT 10 is also a fund that is right now coming into value creation mode, which I think is also seen in that sense, so to speak. So even if you have reference multiples going down, it will still have a good trajectory, so to speak. I think on the Evergreen side, I would say that, first of all, we feel very happy about the quarter. I think we see, in general, the market on the Evergreen side is impacted by what's happening on the credit side. And that, of course, flows into... into the other asset classes as well, and then have the ability to get to the numbers that we said that we were going to get to and we got to, I think it just shows that we're on the right track, so to speak. I think when it comes to forward looking, as we've said, we see that we continue to see momentum. It's not going to be linear, so to speak, but I think the level that we're at now is probably a relative good proxy of at least the coming quarters. As I said, we're going to launch two more products during the year that will have a bit of, of course, positive impact. But I think in general, you can say that this is a relative good proxy of what we see. And then, of course, on top of that, you will have the color flows once the deal closes.

And on cash carry, maybe I'll take that one. First of all, we can confirm that the 500 million that was mentioned earlier is still valid. A significant part of that will be already in H1 of this year. So it will... by the time the next financials are out. The capital allocation framework is a much broader question and maybe where we need to triangulate between on the one hand capital structure which is strong as you know We need to triangle it between growth opportunities, which we continue to seed a number of new initiatives that we have talked about here also during today's presentation. and then returns to shareholders, where we have returned close to 800 million in the last 12 months through dividends and share buyback. So we will come back to this topic over the course of the year.

Thank you very much. Thank you. We will now take the next question. From the line of Hubert Lam from Bank of America, please go ahead.

Hi, good morning. Thanks for taking my questions. I got three of them. Firstly, on fundraising, on slide 10, you mentioned that there is more than 10 other closed-ended strategies to be fundraising in 2026. Can you detail what strategies you are referring to here? Are these new funds or just new vintages of existing funds? So any new detail there would be great. Second is also in fundraising. Given what we're seeing in the Middle East, are you expecting to see any change in commitments from Middle Eastern, some wealth funds, institutions? I think they contributed about 15% to your commitments. So any change there? And lastly, on software, I think you mentioned that for one of the funds or one of the assets that you deliver about 5x. on it, do you think you can still maintain these high exit moiks for software companies in your portfolio? Thank you.

Super. Thanks for those questions. I'll take the second and the third one up front, and then I'll leave the first one to the team. On the Middle East and what we're seeing in terms of activity level from our clients in that part of the world, We continue to be very active with our Middle Eastern investors, really across strategies, and we continue to engage with them both on opportunities in relation to new fund commitments and Yeah, we saw strong interest also, you know, continuing in the quarter, but also in terms of co-investment opportunities that we're working on with some of our most important Middle Eastern partners. I think my reflection, my expectation would be that, you like what we're seeing really for the entire private markets industry from the larger, more sophisticated LPs. They're all looking to consolidate their relationships to a smaller number of more strategic, you know, GP relationships that can help them achieve their strategic portfolio objectives being more you know, attractive fund-based performance, but also being able to offer them the most attractive co-investment opportunities in the industry and really being able to work with them more holistically to help them achieve their strategic portfolio objectives. And hopefully also what you heard from me in my introduction, in my presentation, we believe that we're just incredibly well set up to continue to take market share in that environment in our industry and post a combination with Kohler Capital will be in an even stronger position. And our strategy, that strategy focused on a global alpha really resonates with investors across the world, also in the Middle East. In terms of the software opportunity for private equity going forward, will we be able to maintain the attractive returns that we've generated in the past? Of course, there's some uncertainty and volatility right now in the market also in terms of valuation levels. But we expect that to normalize going forward. And the market becoming more sophisticated in terms of pricing AI winners and AI losers more. in software. Given the strategy that we have within software really being focused on investing into those mission-critical B2B software companies, you know, we are very optimistic about the outlook of the investments that we have. And in that sort of world where there will be, you know, Winners and losers, and maybe also in certain segments of software, more of a winner-takes-it-all type of environment. We're still positive and optimistic that we will also, going forward, be able to create outsized returns in software in our private equity strategies.

Great. And maybe I'll take the first question around the 10 plus close standard ones. So I think what I can say is more or less all the funds that are across our early stage platform. So that includes the second generation of our growth fund. closing out the Healthcare Growth Fund, the fourth generation of the Ventures Fund, the eighth generation of the Life Science Fund, and also the second generation of the Asia Mid-Market Fund. On the real estate side, a couple of different funds, I think the most notably is that during the year we'll start fundraising for the seventh fund on the value-add side, on the logistics side, which the sixth fund was the five billion fund that is there. And then on the infra side, it's continuing the infra transition fund. And then on the later stage private equity side, you also have the next generation of ICT future.

Great. Thank you.

Thank you. We will now take the next question. From the line of Erming Gehrig from D&B Carnegie, please go ahead.

Good morning. Thanks for the presentation and taking the question. Maybe starting on the exit pipeline, I think it was a quite strong message in kind of reiterating the exit outlook despite the market volatility we've seen Is that enabled by kind of a tilt towards infra, or what gives you confidence you can defy kind of these broader market fluctuations? Are you assuming a stabilization, or kind of what does it take for you to be able to deliver on that? Then maybe a question more about the long-term outlook for Evergreen. So if you see any risk that the headlines we've seen for private credit will spill over also to the strategies you're running. And then lastly, on the funding of holdings, I mean, you just mentioned that the software assets, you're still seeing the debt trading at par, but do you see any kind of risks or impact there going forward with regards to the price or cost of debt? Thank you.

Good. I'll take the first and the third question, and then I leave the second one to Gustav. In terms of the exit pipeline, I think it's a very similar situation to the situation that we were in last year around this time in connection with our Q1 report. At that time, 12 months ago, there was a lot of uncertainty in relation to tariffs and the actions from the U.S. administration. creating uncertainty and volatility. Just like last year, you know, this year we also have a pipeline of around 30 exit events and we have a similar volume that we're targeting. And, you know, Just like last year, we're just focused on preparing these investments to be ready for exits, whether that's IPOs or trade sales or other type of monetization events. And so that's really what we're focused on. Of course, everything is always subject to market condition, but... market conditions, but what gives me confidence is that this exit pipeline is nicely spread across strategies, asset classes, infrastructure, private equity, early stage, and also across sectors. Of course, the bid-ask spread is... is more significant now in subsectors such as software. In the private markets, we've spoken about that. But some of that capital that is looking to be allocated to attractive new investment opportunities, both in the private markets and from public market investors, that will seek... other subsectors and other themes to be invested in. And here we just believe that if we look at our pipeline, that some of these opportunities will resonate with public and and private market investors going forward and will also be attractive opportunities for potential strategic buyers, right? So that makes us optimistic also about our ability to execute on our ambitious pipeline of exits also this year. And the backdrop is pretty similar to last year. Third question, software in terms of the debt trading levels. It's exactly the same as with the share price trading levels. I think the point I was just trying to make is that the market is becoming more sophisticated and is in a position to today better prize the winners and losers from AI in software. And you see that reflected both in recent share price developments, but also in terms of how that risk is being priced in the credit markets. And the point I was trying to make is that the market is also seeing that in terms of the investments that we have in software as performance remains strong.

And then maybe on the evergreen outlook, I would say a couple of different things. First of all, I think it's important to remember that this type of volatility that we're seeing in the private credit is not very different from what we saw in the real estate a couple of years back. situation around BE REIT and others, so to speak. So I think it's not unique in that sense. And we, of course, saw what happened after that in terms of how the market developed. I think that's one part. Second part is, I think we see that there are, as I said, there are affecting the broader evergreen market. I am 100% sure that we would have had more than a billion in this quarter had we not had the private credit issue, so to speak. So we see it affecting the full market. Right now, we don't see that it will affect more than what we've seen during this quarter. But of course, there is always a risk around it. Thirdly, I would say that I think that The theme that you see around where this impacts more is in asset classes where you've had a significant uplift in inflows for a relatively long or relatively high amounts in a relatively quick time. Private credit for the last three, four years from an evergreen perspective has been seen as an extremely easy sell. And therefore, there has been a lot of inflows coming into it. And then, of course, you see the effect of that when the return expectation and the worry around software turns in the private credit side. And then I would say, lastly, I think on the other side of that, I think what we're starting to see and what we think will only happen more during this year and coming on to that is the transition from private credit to infrastructure on the evergreen side, where we think that there's going to be a relatively strong transition there from a risk-reward perspective.

Just to add to the very good and comprehensive answer from Gustav, some of the dynamics that we're seeing in private wealth and in those evergreen products around private credit are very credit-specific dynamics also. What Gustav alluded to in terms of how those products maybe have been sold and marketed as more semi-liquid type of products. I don't think that holds true at all for private equity and the products that have been sold within the private equity asset class to private wealth and retail investors. I think it's always been clear to that investor base, certainly in relation to our products, that these are long-term commitments. And then, of course, in terms of the AI point that Gustav made, right, if you take a portfolio of 10 software investments, half of them are... software losers because of AI and half of them are winners in such a scenario in a private equity strategy the outcome for that type of portfolio could still be very attractive in private equity whereas of course in private credit the outcome would be you know very disappointing in such a scenario and you see that dynamic also being played out in the private credit asset class and that doesn't hold true for private equity and you know private wealth and retail investors are seeing that and that's also what you see reflected in the momentum in our products thank you for all the color very much appreciated thank you we will now take the next question from the line of arno

Givla from BNPP, please go ahead.

Yeah, thank you. I've got three quick questions, please. Firstly, if I could start with the activation of EG11 guided for mid this year. I suppose that that is a contingent on a number of investments being carried out in front end. How much visibility do you have on those investments happening? And maybe the quantum, I'd assume it's two or three. The second question is on the launch of the data, the AI strategy with EdgeConnect. I was just wondering if you could maybe give a bit more detail around how that works in terms of partial crystallization, I assume, or sell-down from Fund 4 to Fund 5 into this new fund. What is the quantum there? And more important, Is there a revaluation event with this leading to a higher, could this potentially drive up valuations for Infra 4? And my final question perhaps relates to that is on your new guidance for Infra 4 and for 9 having, hitting the, going into carry mode, we need a DPI close to one time. Is this just a function of the long duration now of these funds and the compounding of that, or is this the reasoning behind your introduction of that incremental piece required for going into Cameron? Thank you.

Good. I'll start with the first question and leave the other two to my colleagues. So in terms of activation for EQT11, of course, it's subject to our pipeline of new investments and deal flow materializing. When I look at our current pipeline in private equity and EQT equity specifically, it's I think it's a very attractive pipeline. I'm definitely more excited about the pipeline in that part of our business than I've been in quite some time. And it's a pretty deep, deep pipeline, more than a handful of really exciting active opportunities that we're working on. So that's why we think there's a real chance for us to win a number of those investments. That would then also mean that we would start to activate and invest EQT 11 in connection with with a first close around mid-year. So that will be the color. But of course, it's subject to that attractive pipeline of new investments that we're working on also materializing.

And maybe then on the AI strategy, I would say, so in general, the way that it will work is that it will be a combination between both primary capital coming in to EdgeConnex and other assets on the basis of the AI infrastructure strategy, as well as the potential of further sell-downs from Infra 4 and 5. And those transactions will then happen on an NAV basis, so Infra 4 and 5 would then benefit from any value increase from here onward, so to speak, on that basis, as well as the potential risk of decreases, of course.

Maybe what I'd add to that, if I may, just to provide maybe even more color, I think we see an attractive value creation opportunity for the existing investments in that strategy going forward. And as that value creation opportunity materializes, given that it's an open-ended fund structure based on NAV, we see... The size of that AI strategy fund, of course, there's an opportunity to grow that. And as that grows and attracts new commitments, then the result of that would also be that there would be an opportunity for Fund 4 and Fund 5 investors to continue to monetize its investment in EdgeConnex.

And on the carry question for DPI guidance, I'd say, first of all, I believe I said that it has to be well north of one DPI before we start there. before we start recognizing carry. And sort of that it's more than one X DPI is not really new. That would be standard economics for these kinds of closed-ended funds. Maybe it's accentuated then by the fact that they have been open for slightly longer and the cumulative effect of the... hurdle rate, but it's more or less in line with what we've said before. And this is not really new guidance. I was trying to reiterate what we've said before, that this is not carry mode in 2026.

Very clear. Thanks. If I could just maybe follow up with a very quick one. It seems like I mean, to me at least, it seems that you've become a bit more vocal around wanting to build out the real estate business and perhaps more inorganically than before. I'm just wondering if I'm reading that right. I'm just wondering what you have to say to that. Thank you.

No, I think it's a similar message to what I've said in the past, that we believe we have a very well-performing real estate strategy with excellent returns. You see that reflected in the fundraising momentum that we're also seeing in that part of our business. We have a great leader and a strong team. And, you know, we of course want to continue to invest into that part of our business. It's the part of our platform where, you know, we're still relatively small. We have leading market positions today in private equity and in infrastructure. In real estate, we've so far been fairly narrow in our thematic focus, being mostly focused on the logistics segment. As I referenced in my intro presentation, we're now looking to broaden that thematic focus. We are seeing closer collaboration between real estate and infrastructure companies in opportunities such as data centers. But we see also an opportunity outside of data centers and logistics in areas such as multifamily, student housing, medical offices. And of course, just like we have done always in the past, we will continue to build our platform organically to be able to invest into those opportunities. But if the right acquisition opportunities present themselves, we will certainly also evaluate those in our real estate business. And with this new governance set up and also with Henry being represented directly in the executive committee and also with us reporting this part of our business separately, we'll be in an even better position.