EQT launches EQT Future fund

Harriet Matthews
20 October 2021

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EQT has launched EQT Future, a longer-hold fund with a EUR 4bn target that will focus on mature impact-driven investments.

The GP's in-house client relations and capital raising teams are assisting with the fundraise. The vehicle has not yet set a hard-cap, according to a statement.

The vehicle will have a 12-year lifespan with a three-year extension.

EQT announced earlier in October that it had set science-based targets for the reduction of greenhouse gas emission across its own operations and its portfolio, as reported.

Up to 20% of the fund's carried interest will be linked to the achievement of portfolio-level KPIs, including EQT's newly established science-based emission targets.

Paul Polman, former CEO of Unilever, and Jacob Wallenberg, chairperson of Investor AB, will co-chair the EQT Future Mission Board, which will aim to provide advice on impact and strategic direction. The fund and its investment focus are expected to have strong synergies with EQT's Private Capital platform.

The EQT Future team will be integrated with the GP's platform as a whole and is expected to benefit from EQT's sector-focused teams, as well as in-house digitalisation and sustainability consultants. The team will initially comprise 10 investment professionals, including four partners, led by Anders Misund and Andreas Aschenbrenner.

Investors
The fund is expected to have a similar LP base to EQT's flagship funds. LPs EQT's latest EUR 15.6bn flagship fund, EQT IX, includes a range of institutional investors such as US-based public pension funds as well as insurance companies including Cathay Life Insurance and Fubon Life Insurance.

Investments
EQT Future will make around eight to 10 investments with an average equity ticket of EUR 400m or more. The vehicle is expected to hold its investments for seven to eight years.

In addition to private-market deals, the vehicle can make PIPE deals where EQT will have the opportunity to exercise "significant influence" on the company's value creation strategy.

Each investment will be subject to an Impact Acceleration Plan, comprising three targets: reduction of greenhouse gas emissions using the GP's science-based targets; improved employee wellbeing based on a top-quartile ranking in the Net Promoter Score; and increased gender diversity, measured by progress towards attaining a 50% split within the top 20% of earners in each company.

The fund expects to take control or co-control positions, as well as minority positions that afford significant influence. The vehicle is expected to apply conservative leverage and seek mature and downside-protected businesses.

Investments will be aligned with five investment themes under the objectives of planet, people and prosperity, in line with its impact-driven thesis: driving regenerative resource usage and creating a cleaner environment, under the "planet" category; increasing health and wellbeing, under the "people" category, meaning that the fund can back diagnostics and treatment-focused healthcare businesses; and unlocking human progress and connecting the world securely and equitable under "prosperity", which can include education technology and financial inclusion technology.

People
EQT – Christian Sinding (CEO, managing partner); Anders Misund (partner, head of EQT Future's advisory team); Andreas Aschenbrenner (partner, deputy head of EQT Future's advisory team).