EQT may miss the €4 billion target it has set for the Future fund, its longer-hold impact private equity vehicle, head of business development Gustav Segerberg announced in the firm’s third quarter earnings call on Tuesday. The fund is expected to close by the end of this year and has so far raised “in the €2.5 to €3 billion” range, said Segerberg.
This will not be entirely surprising to New Private Markets readers: chief executive Christian Sinding said fundraising the Future fund had slowed in the firm’s H1 results in July, as we reported. It had raised €2.7 billion in “fee-generating commitments” in April, a spokesperson for the firm told NPM at the time. This makes it the largest generalist impact fund in private markets to date.
“Funds that have a longer hold… let’s say EQT Future and EQT Active Core Infra” may close below target, said Segerberg on Tuesday. “In general, fundraisings are taking longer than previous years and newer funds and strategies are the most difficult. During 2022 and early 2023, we saw the denominator effect… Today, similar to historical trends, it’s more of a cashflow effect for clients, where they need to see distributions before they can allocate to new funds. Increasingly, we’re also seeing a strong correlation between performance in the last vintages and the ability to fundraise.”
EQT X, the firm’s latest flagship buyout fund, on the other hand, has raised “just short of €20 billion” and is expected to close in Q1 2024 near its €21.5 billion hard-cap, said Segerberg.
The Future fund is a generalist impact buyout vehicle with a 12-year life. EQT plans to hold assets for up to seven years – allowing it to scale impact positive businesses and implement ESG improvements in large businesses.
More generally, sustainability remains a priority for EQT. The firm is “making sure sustainability is deeply embedded in the strategy so that companies become more resilient over time but also more valuable”.