The European private equity group EQT prepares an aggressive acquisition strategy to capitalize on the expected wave of consolidation in the $10 trillion private capital market. Christian Sinding, CEO of EQT, announced in an interview with the Financial Times that the company is specifically targeting specialized investment groups, including secondaries firms and growth-oriented investment companies, as well as niche providers in the healthcare sector.
There are still geographical regions and competencies that we do not cover in either growth or private equity," Sinding explained. "For example, if we were to discover an outstanding healthcare growth company in the USA, it could be an interesting opportunity for us." This strategy aims to complement EQT's existing business areas and strengthen competitiveness at a global level.
EQT has been using its shares, currently valued at 36 billion USD, as acquisition currency since its IPO in 2019. Since then, the assets under management have quadrupled to 246 billion euros. Recent acquisitions include the purchase of Barings Private Equity Asia for 6.8 billion euros in 2022 and the acquisition of Exeter Property Group, a major industrial real estate operator.
The planned acquisitions also include asset managers and investment teams focusing on digital infrastructures such as data centers and the transition from carbon-intensive industries. Sinding emphasized that no immediate deals are planned; rather, each acquisition will be carefully scrutinized to ensure synergies with existing business areas.
We are focusing on more affordable names that could benefit from future AI developments," added Sinding. This strategy is intended to help EQT assert itself in an increasingly competitive market, where major investors such as pension funds and sovereign wealth funds are becoming more selective in choosing their partners.
Comparable strategies are also pursued by other major private equity groups like TPG and CVC, which use their public shares to accelerate growth through diversification. However, Sinding warned of the challenges faced by many smaller firms, which may fall behind without sufficient scaling and clear succession plans.
Many companies will come out well enough, but others will go bankrupt," said Sinding. This underscores the urgency for private equity groups to clearly define their strategies and strengthen their market position in order to survive the next investment round.
