EQT warns of "longer" fundraising for flagship vehicle

The EQT IX fund was registered in November 2019 and formally announced in January this year with a €14.75bn target. The fund's investment strategy and terms are expected to be broadly in line with EQT VIII, which targets majority equity investments in companies with strong market positions and cashflow, deploying equity tickets of €150m-1bn.

The GP also said in the Q1 announcement that the hard-cap for the vehicle had been set at €15bn.

Its predecessor, EQT VIII, hit its €10.75bn hard-cap at a first and final close in February 2018. The fund was launched in September 2017, targeting €8bn, and is now around 70-75% deployed. Launched in January 2015, EQT VII targeted €5.25bn before closing less than six months after launch on its €6.75bn hard-cap.

EQT said in its Q1 presentation that it was currently focusing on "impact assessment, liquidity need and developing existing portfolio companies further" until the market recovers, but that "over time, increased opportunities could arise".

It also noted that the equity need for the portfolio currently stood at around 15% of the companies held in its key funds (covering EQT VI to VIII, and EQT Infrastructure II to IV). More than 75% of assets in those same key funds also benefit from covenant-light structures, it noted.

The GP's Q1 presentation also mentioned that new recruitment, unless "highly strategic", was currently paused.

EQT is not the only large European player looking to raise in excess of €10bn for a new fund in a challenging environment. Unquote reported that CVC is still targeting a first and final close on €17.5bn by the end of June this year for its flagship fund, CVC Capital Partners VIII.

EQT had not returned a request for comment at the time of publication.

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