Swedish alternative investment firm EQT is seeking to raise 2 billion euros ($2.36 billion) for its Asia Pacific strategy, significantly larger than the $800 million it previously raised for an Asia mid-market fund.
During the firm’s half-year 2021 update, EQT CEO Christian Sinding said the firm is sharpening its strategy in the Asia Pacific region, although developments have been progressing slower than initially anticipated.
The lag is partially attributed to the challenges caused by the pandemic, aside from other fundraising challenges. “We have about $800 million in the existing fund in the [Asia] mid-market. Growing from the $800 million to $2 billion range is actually quite a significant step,” said Sinding.
“As we are building out the team, we are building out the strategy as well. [We would rather] build stone upon stone and invest to really build the platform in a high-quality way, and spend a bit more time doing that than to try to take a giant leap.”
EQT closed its $800 million Mid Market Asia III fund in 2018. The fund, which seeks to make control or co-control investments in companies in Greater China and Southeast Asia, is backed by a global blue-chip investor base such as pension funds, insurance companies, and funds-of-funds.
The Asia fund focuses on investments in healthcare, services, consumer, TMT and industrial technology.
Investments made through the fund include Singapore-based healthcare services administrator MHC, hospital chain HMI Group, education services provider ILA in Vietnam, cloud and managed services provider Nexon Asia Pacific in Australia, and ingredient manufacturer Indesso Group in Indonesia.
As part of its efforts to widen its footprint in the Asia Pacific region, EQT established a local office in Japan early this year. It has partnered with private equity firm Japan Industrial Partners, which has been operating since 2002, to access the Japanese market.
Besides an office in Sydney that it established last year, EQT has offices in Hong Kong, Shanghai, and Singapore.
The Stockholm Stock Exchange-listed firm invested 7.7 billion euros in the first half of this year, a step up from 1.9 billion euros in the same period last year. Meanwhile, exit values reached nearly 10 billion euros in H1 2021.
The firm’s AUM rose to 71.3 billion euros at the end of June this year, from 36.5 billion euros recorded at the end of June 2020. It is currently investing across 27 funds within private capital and real assets.