EQT winds down flagship fundraise, builds out infrastructure portfolio

EQT IX, the latest EQT Partners’ flagship offerings, is ready to wind down its fundraising efforts and was one of two successful 2020 launches at the Stockholm-based private investment firm. EQT IX was activated as EQT VIII was terminated in mid-July, according to the firm’s latest shareholder report. During the first half of 2020, fundraising of EQT IX (target fund size of €14.75 billion and hard cap of €15 billion) progressed according to plan albeit with an increasing share of work handled remotely and digitally, officials reported at the $47 billion private investment firm. EQT CEO Christian Sinding said, “Valuations of our key funds have remained broadly stable, although we do have several companies that are challenged by the pandemic.” He pointed out that while new investment activity continues it is at a slower pace than the same time period last year. Exit activities have also been slower with much of the exit pipeline anticipated to be executed beyond 2020, he added. The EQT Infrastructure IV fund is between 80% to 85% invested and officials have been busily putting money to work in recent months. At mid-year, the fund totaled $9.1 billion in committed capital. This week the fund formed a deal to buy data center company EdgeConneX from an investor group led by Providence Equity Partners. EdgeConneX is looking to be a trusted partner as companies look to expand their critical infrastructure around the globe, and to do the work in an environmentally friendly manner. The business proposition comes as the need for data grows larger due to cloud and content needs but also innovation in artificial intelligence, 5G networks, virtual reality, autonomous vehicles and more. The transaction is subject to customary closing conditions and is expected to close in the fourth quarter of 2020. "EQT has followed EdgeConneX's journey from its early years to its growth into a top data center industry player,” said Jan Vesely, partner at EQT Partners. “We are deeply impressed by EdgeConneX's management team and the success they have had in creating a key contributor to the global cloud infrastructure. This partnership represents an exciting opportunity for EQT in a sector and geographies where we have significant experience.” According to EQT Infrastructure, their investment will support the continued development of EdgeConneX and actively assist the company to grow in existing and new markets around the world. The infrastructure fund partnered earlier this year with Ontario Municipal Employees Retirement System in buying Deutsche Glasfaser, an internet infrastructure provider in Germany. As EQT has also rolled out in mid-June an ESG-linked subscription credit facility related to the private equity business line and EQT IX fund, more investment activism is on the way. “We aim to play an active role in creating the new “normal” post COVID-19 - as responsible, purpose-driven investors,” Sinding concluded in his report to investors.

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