Swedish alternative investment firm EQT Partners is considering raising a larger Asia Pacific fund in 2021 or 2022, the firm said in its IPO prospectus.
The 40 billion euro fund manager said it saw “potential in leveraging the established EQT Mid Market Asia business line to further expand and build a scaled platform” in the entire Asia Pacific region.
“Asia Pacific is a large, fast-growing market and is the home of a large number of fund investors who EQT believes value EQT’s commitment to the region,” the firm said, emphasizing that its current presence could create a platform for an Asia Pacific growth strategy beyond mid-market private equity.
EQT Partners began investing in the Asia-Pacific region in 2006. Its Mid Market business line is active in Greater China, Singapore, Malaysia, and Vietnam, having backed 14 companies via growth, control and co-control investments as of 30 June 2019.
The latest fund in the series, EQT Mid Market Asia III, has invested 68 per cent of its $744 million capital, EQT said in the prospectus.
In May, we reported that the private equity firm was in early talks to raise the EQT Mid Market Asia IV, which will be a larger vehicle.
EQT said it was also looking to widen its reach in Australia and Japan.
In addition to mid-market deals, the investor said it saw an opportunity to leverage infrastructure as a springboard for further growth in the Asia Pacific. Since 2017, it has collaborated with Singapore state fund Temasek to make investments in the region’s infrastructure market.
Investments in the Asia Pacific have to date accounted for up to 6 per cent of EQT’s global activities, according to the prospectus. The firm has realized a gross multiple on invested capital of 3.1 times for the Mid Market business line, compared to its average of 2.4x.
EQT will launch its IPO on the Nasdaq Stockholm exchange, and proceeds from the transaction will be dedicated to scaling its real estate platform, moving to venture growth strategies and selectively expanding the niche strategy with the credit strategy, besides Asia Pacific expansion.