EQT launches semi-liquid strategy for individual investors

Ero Partsakoulaki
15 May 2023

Tweet
Facebook
LinkedIn
Google plus
Send to

Sweden-headquartered EQT has launched EQT Nexus, its first semi-liquid scheme allowing individual investors to access a range of the firmтs investment strategies through a single investment

EQT Nexus is a global portfolio that will invest in the Swedish sponsor's strategies, spanning mature buyouts to early-stage investing across geographies and industries. It will focus on private equity and infrastructure strategies, according to a statement. It will also co-invest in companies alongside EQT's funds, it said.

The minimum ticket size that investors can invest in the strategy differs for certain geographies due to regulatory restrictions but, as a base case and where possible, the minimum will be EUR 25,000, according to EQT Nexus' website. The information on the website is only intended for investors who have an income of at least GBP 100,000 or net assets above GBP 250,000, it said for investors based in the UK.

Whether any sophistication requirements need to be fulfilled will depend on the regulations in the investor's geography and individual investors will need to reach out to their financial intermediary to help them assess whether they are eligible to invest, it said.

The EQT Nexus Advisory team will be led by advisory head of fund strategy William Vettorato, who recently joined the firm from Partners Group, where he managed a global semi-liquid open-ended strategy. The global advisory team is led by EQT partner Peter Beske Nielsen, it said.

With individual investors' allocations to private markets expected to grow 12% annually over the next decade, according to the statement, EQT believes that product innovations that aim to tackle the challenges for individuals looking to invest in private markets will further accelerate this reallocation.

Blackstone, KKR and Apollo are among the firms seeing potential in retail capital. KKR Private Markets Fund in particular allows investments across its strategies with USD 25,000 minimum subscription for the USD share classes, according to the fund's prospectus.

To date, individual investors looking to access private markets have been faced with several barriers to entry, including significant investment thresholds, long lock-up periods and complex investment terms, said the statement. EQT Nexus will address these challenges by allowing investors to gain access to EQT's strategies through a simple, single layer of fees, it said.

The return target for the Luxembourg-registered structure UCI Part II SICAV, an Article 8 fund, is 12% to 15% in net annual returns, it said. Management allocation is 1.25% or 1.35% of the greater of NAV and NAV less cash and cash equivalents plus unfunded commitments. A carried interest of 15% per annuum on direct investments will be applied, with a 5% hurdle rate and high-water mark with 100% catch-up, it said.

A servicing fee of up to 0.85% per annuum of fund NAV will be applied, subject to share class and payable to financial intermediaries, said the website.

EQT currently has EUR 119bn in fee-generating assets under management, with EUR 216bn in total assets under management within both its private capital and real assets segments. EQT announced the launch of its latest flagship private equity fund, EQT X, in January 2022 with a target of EUR 20bn and a hard-cap of EUR 21.5bn. The final close of the fund is expected this year on EUR 20bn, according to Unquote Data.