EQT CEO Franzen on Deals, Volatility, Consolidation

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00:00It feels great to be stepping into the CEO position.

00:04I've been with the firm for quite some time, close to 20 years.

00:09And I think we're in a really strong position.

00:14It's an interesting time for the industry.

00:16It's an exciting time for our firm.

00:19Thanks to our global geographic diversification,

00:24I think we continue to execute in a very strong way.

00:29Also in the current volatile environment.

00:32And you see that reflected also in the numbers that we're presenting today.

00:36Putting 7 billion euros of capital to work in attractive thematic investments

00:43across strategies, across geographies.

00:45And importantly, also sending 13 billion euros of proceeds back to our investors

00:50as we continue to stay disciplined in monetizing deals.

00:54Where do you see the biggest opportunities, given all of the uncertainty,

00:59all of the tariff talk and question marks about inflation and the like?

01:03Is it ripe for new deals?

01:05Are you finding them easily?

01:07Or is there actually a lot of other rivals that also want similar deals?

01:12Well, like you say, it's certainly a volatile and uncertain environment.

01:21But that volatility also creates opportunities, in particular for us,

01:25thanks to that global platform that we have.

01:28We have hundreds of investment professionals on the ground across Asia, across Europe.

01:33And we try to leverage that strong local presence with our thematic investment approach

01:41to unlock also opportunities in these times of volatility and in certain places also market dislocation

01:50to help us invest in some of the most attractive opportunities that we've been following for years

01:58and sometimes decades.

02:00And at the same time, we're also staying disciplined in realizing deals.

02:08And in certain parts of the world, capital markets are actually pretty strong.

02:13So EQT was recently ranked the second biggest PE firm globally by capital raised over the last five years.

02:22Do you expect to be the number one slot under your leadership?

02:28I think we're in a really, really strong position.

02:31I mean, the proposition that we have to be one of the scale players in the industry

02:40that is really focused on delivering global alpha to private market investors

02:45is a differentiated proposition.

02:48On top of that, we are one of the few scale players that is not US-centric.

02:55And in the current environment, as investors across the world are again focusing on the benefits

03:03of portfolio diversification, geographic diversification,

03:07I think that is an opportunity for us to continue to scale all of our existing strategies

03:13and to continue to take market share.

03:16Abir, what about strategic M&A?

03:18Is there anything that you'd want to buy right now?

03:22Well, what I would say taking a step back, right, because of the market volatility

03:29and the slightly slower deal-making environment,

03:31we have seen a bit more of a challenging fundraising market.

03:36And at the same time, there's also a need to really invest into strategic growth opportunities

03:41for us as a firm and for the industry, AI, private wealth,

03:47the democratization of the asset class.

03:51And not all players will be able to make those investments.

03:53So we do think that the consolidation of this industry will accelerate

03:58and we want to continue to play an active part in that consolidation.

04:03How much of a headache for you are uninvested funds?

04:10Sorry, I didn't catch that question.

04:13On uninvested funds.

04:15So there's some analysis by Bloomberg Intelligence saying that CVC and EQT

04:20have the most uninvested funds in the peer group at $57 billion.

04:24How much of a headache is that?

04:27I'd say it's an opportunity, right?

04:29I mean, you know, having that dry powder in this market environment

04:33with the strong platform that we have,

04:38I think it's a very, very good time and a real opportunity

04:41to also put that capital to work.

04:43And we see a very attractive pipeline.

04:47In particular, I'd highlight the opportunities that we see right now

04:51across Asia in places such as India and Japan.

04:55So I think that's a real strength of ours to have that dry powder.

05:01Apir, when you talk about opportunities in India or Asia,

05:05is there any type of sectors that you see good opportunities?

05:09And is it on price or just because they can grow?

05:13You know, we are a sector-focused thematic investor.

05:18And we apply that approach really across all the regions as we're investing.

05:25In Asia in particular, we're excited about some of the more domestically focused

05:31businesses in those target sectors.

05:33For instance, in the technology sector, but also within industrial tech

05:39and other focus sectors of ours, right?

05:43And then leveraging that thematic investment approach

05:45with that strong local presence across the region creates those opportunities.

05:52Per, one of the other things that, you know, we noticed is in June,

05:55you announced a big reorganization.

05:59Where did you see the company needed change?

06:01And what else do you have planned?

06:05I mean, at EQT, we've seen a lot of success.

06:08We've seen a lot of growth over the last five, six years.

06:12And as a result of that, there's also always an opportunity

06:16to sort of revisit your setup, your organizational design.

06:20At EQT, we have a saying that everything can always be improved

06:23everywhere at all times.

06:25So it's with that mindset that, you know, also during the transition period

06:30and during my first 100 days, we've revisited the organization

06:35and there was an opportunity to simplify things, reduce complexity,

06:41and as such also reduce the size of the executive committee,

06:45the leadership team, from 10 to 8 participants.

06:48And with this new setup that we have, I think we're really well positioned

06:52to be able to continue to scale and also participate

06:55in the ongoing consolidation of the industry.

06:59So is that it in terms of reorganization?

07:01Or is there even going to be more streamlined for here

07:04in the second half of the year?

07:08I mean, we're a performance-oriented business, right?

07:12And so like any professional services business,

07:16I mean, there's always an opportunity to run things

07:21in a more efficient way, in a better way.

07:23On top of that, you have all of the investments

07:25that we're making into AI

07:27and other productivity-enhancing initiatives.

07:31So, you know, we do believe that over time

07:34that should allow us to operate

07:38in an even better, more efficient way.

07:42Vera, I also, I mean, it's pretty incredible.

07:44Since, you know, the company IPO-ed in 2019,

07:46you went from €7 billion in market cap to €40 billion.

07:51And I think it was really this month

07:53that you also got included in the OMX 30.

07:56Is that, I mean, how important is that for the team

07:58and also for your journey?

08:02So the way we think about it at DQD

08:06and the way we've thought about it really since our IPO

08:08is that we just want to continue to invest into our platform,

08:12develop the best possible platform in the industry.

08:15We know that that way we'll be able to, you know,

08:18continue to attract and retain the best talent in the industry

08:21and that way also produce, you know,

08:24really attractive results and return for our clients,

08:27for our investors.

08:27And then the result of that will be shareholder value creation.

08:31So we will continue to have that mindset also going forward.

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