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00:00The current chair, Connie Johnson, and the incoming chair, Jean Salata.
00:05Guys, thanks very much indeed for spending some time at this Momentum moment, a momentous moment for your firm.
00:12Connie, let's start with you. You've got your guy, he's sitting next to you.
00:17Why is he the right person for the job?
00:21What can I say? He sits here.
00:22No, he's a super good leader. He's a good entrepreneur.
00:28And, you know, we care so much about soft issues.
00:31So we care about his personality, his style, his values.
00:35But also, before everything else, he's a super good investor.
00:38He has built the bearings.
00:40And then when we came together with him, we were able to integrate bearings in Niquity,
00:46but together build a global platform.
00:48And he's a perfectly positioned leader to continue to build this platform into the global leader that we aim to become.
00:55So a great investor and a great person.
00:59Wow, that's quite the compliments that you get coming from Connie there, Jean.
01:05Let's talk about kind of where you do see this firm going.
01:08Connie's set you up.
01:09He's got a great business.
01:10He's handing it over to you next.
01:12You are Asia-focused.
01:14You have been Asia-focused.
01:15Is that where we now see EQT's balance being?
01:19Is that the trend that we could follow in terms of where EQT goes next?
01:26Well, Connie's handing over the business at a time when it's never been stronger.
01:31And so we're in a position to really take advantage of all the opportunities in our industry that we see today.
01:36I think the opportunity is certainly in Asia, but it's really a global opportunity for us.
01:41We're a very global company today.
01:43Asia's an important part of that story.
01:44We're both in Singapore right now.
01:46We're having our board meeting here today and tomorrow.
01:49So it's a really critical part of our strategy.
01:52But we see tremendous opportunity for us to continue to accelerate our growth
01:56and drive our growth agenda that we've set out in our strategy.
02:01Connie, is this a shift, though?
02:04I think that's a question that people are asking.
02:06A couple of months ago, I think it was in an FT interview, but I think I may have seen it elsewhere.
02:10You talked about the fact that the focus should be on the United States,
02:13that that's where the balance of the business should be.
02:16You talked about maybe doing takeovers in the United States.
02:19Has that changed?
02:23Well, the U.S. is a big market, and we are too small in the U.S.
02:26We should be bigger there.
02:28But the long-term growth for us and for the world and for our industry is in Asia.
02:32And we don't really see those markets sort of competing about our attention or our capital.
02:39We look where we have the best investment opportunities to make.
02:42The key for us is that whatever we do, it's like a planned process.
02:47You know, this change that doesn't came up yesterday or the week before.
02:50We have done five CEO successions, all nicely planned with good candidate
02:55and a well-thought-through process around it.
02:58So it's no change.
02:59It's a continuation to build equity into the global platform that we hope it can become.
03:04Global platform.
03:05That is the key words that I'm hearing time and time again from you this morning.
03:10Connie, just to stay with you for just a moment, and I'll get Jean's take on this as well.
03:15Well, we're starting to hear talk that investors are looking to European firms, though,
03:21because they offer diversification, because they don't want to put money into the United States,
03:25that they want a more global benchmark in terms of the way they see their businesses needing to invest.
03:32Is that something that EQT is seeing?
03:35And is that part of that kind of that global story that you're talking about?
03:38Yeah, we have the lack to be ideally positioned to exploit that trend,
03:47and it's a very logical trend, because people understand with the geopolitical risk we see around us,
03:52diversification is critical.
03:55And we are very strong in Europe.
03:56We are very strong in Asia.
03:58We are weak in the U.S., but, you know, the diversification of what we can offer our investors
04:04is exactly what they're looking for right now.
04:06And it's not so that we're just buying paper, shuffling those around.
04:10We buy companies.
04:11We manage companies.
04:12We have people on the ground.
04:13We are local with locals.
04:14And that's a unique setup that I think we are rather lonesome about.
04:18And that's going to be the success or the key to our success going forward.
04:22Yeah, I would agree with that, Guy.
04:25We're seeing investors really thinking about rebalancing their portfolio
04:28and diversifying more, as Connie is saying, to Asia, to Europe,
04:33both because I think of geopolitical considerations,
04:37but also just in terms of valuation and even things like portfolio construction
04:41and portfolio concentration correlation around the whole technology space
04:47and the technology names in the U.S.
04:50and whether they feel like that is stretched
04:52and wanting to rebalance and diversify more into global markets.
04:56So that's something that we're seeing in our business,
04:58and it's benefiting our business, actually.
05:00John, do you see that you talk about benefiting your business?
05:04Is that going to make fundraising easier?
05:06Because the other thing we're hearing as well is that there's caution
05:08in the fundraising world right now, and some firms are struggling, others aren't.
05:13But maybe that geography that you talk about,
05:17that sort of home bias here in Europe, that Asia focus, that opportunity,
05:21do you think that's going to make fundraising easier for EQT?
05:23I think the answer is yes to that.
05:28And I think part of that's driven off of this dynamic.
05:31Part of it is also driven by the distributions that we're making
05:34from our investment programs back to our investors.
05:37As we've announced in our public information,
05:39we've had a record year of distributions,
05:41something like 20 billion euros of distributions back to our LPs
05:45at a time when people aren't seeing that many distributions.
05:48So it's a combination of performance distributions
05:51and some of this portfolio diversification geopolitical considerations.
05:57Connie, in the past, there has been a focus within the portfolio
06:01on renewables businesses.
06:04Now, clearly there is, and you can see this,
06:06obviously with what's happening with Orsted at the moment,
06:09there's been a significant amount of turbulence in that space
06:12as a result of what's happening in the United States.
06:14Are you going to stick with that?
06:16As you think about Europe, as you think about Asia,
06:18do renewables and that side of the business
06:20maintain a significant portion of the portfolio?
06:25Not a significant portion.
06:27And we are, of course, adopting the strategies
06:28where we think the investment opportunities are mostly attractive.
06:31Today we talk about energy transition,
06:33we talk about technical services,
06:35we talk about technical integration
06:37or technological integration cross geographies and cross sector.
06:40So it's not so much renewable in itself.
06:43and I think we are extraordinarily well positioned
06:47to exploit that being in the US, in Europe and in Asia.
06:52Technology is travelling cross borders
06:54and we need to be able to participate and play
06:56and follow what happens in each of the three different geographies
06:59that we're operating in.
07:01So renewables is there, but it's not an important,
07:03and it has never been,
07:05it has never been any transition has been what we're focusing on.
07:08OK, I guess I'm probably widening the lens a little bit too much.
07:13Jean, there's a number of key questions around AI at the moment.
07:17So I'm curious to get your take.
07:20In terms of the portfolio companies,
07:21what are you seeing in terms of the impact?
07:23What do you see going forward from here?
07:25How is EQT using AI in terms of its investment decision-making process?
07:29It's a question that all investors are asking at the moment.
07:32How can I use this technology?
07:33What impact is it going to have?
07:35What is your answer to that question at the moment?
07:40It's at the very top of our strategic agenda for the business.
07:43We are embracing it internally.
07:45We have teams of data scientists working on that internally.
07:48We have our digital value creation teams
07:50working with our portfolio companies.
07:52I think there's a couple of key things happening here.
07:54Number one, first and foremost, this is a productivity tool.
07:57A productivity tool that can be used by EQT to drive our investment performance
08:03and the way, the efficiency in our business.
08:05But more importantly, I would say it's a productivity tool
08:07across all the industries and sector thematics that we invest in,
08:11which is critical for driving value creation as we move forward.
08:15Secondly, I'd say what we're seeing in our portfolios
08:18is that having the right leadership team in place,
08:21those CEOs and management teams that get it
08:24and that are embracing AI quickly and moving quickly
08:27are going to be the ones that stay ahead
08:29and get ahead of these tremendous technology trends
08:33that are happening.
08:34So it's a critical part of our future strategy.
08:37And I think every single company in our portfolio
08:40needs to be focusing on this.
08:43Absolutely.
08:44And I'm sure your investors will be pleased to hear you say that.
08:47Guys, just before I let you go,
08:49Connie, I have to ask the question.
08:50This is the end in terms of your chair,
08:55but clearly not the end of Connie Johnson.
08:58And I suspect we're going to be hearing much more from you.
09:00Let me ask a simple question.
09:02What is next?
09:03I have a rather diversified private portfolio
09:10focusing on entertainment.
09:12I'm sure that many of you have seen ABBA Voyage in London.
09:15That's one of the projects.
09:17And I like to work with sort of things that is changing.
09:20So the technological change forming the future entertainment market
09:24is clearly an area of the like.
09:26But also biodiversity.
09:28I'm a little environmental muppet.
09:30I like to be able to make some good impact for the environment.
09:35And so you will see me in a couple of different sectors like that.
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