Having a long-term, responsible and sustainable approach to ownership is EQT's way of creating value, for investors, in portfolio companies and society at large.
Building companies well positioned for the future
EQT invests in good companies across the world with a mission to help them develop into great and sustainable companies. By providing access to ownership skills and operational expertise, EQT helps the acquired companies grow and prosper, both under EQT's ownership and with future owners. EQT has three overall Business Segments - Private Capital (including Private Equity, Mid Market Asia, Ventures, Public Value), Real Assets (including Infrastructure and Real Estate) and Credit – guided by a responsible ownership approach and an industrial growth strategy.
The most tangible result of the EQT Business Model is that the portfolio companies have on average increased revenue growth of 10%, earnings growth (EBITDA) by 12% and employees by 7% annually during EQT funds’ ownership. Almost all of the return on investments is attributed to operational improvements such as increased sales and efficiency gains.
EQT invests in companies, sectors and regions where there is an opportunity to make a genuine difference through consistent application of thematic approach, access to specialist expertize and strategy geared towards growth and development. The ownership mission is to invest to create strong and sustainable businesses, bringing great companies to future owners.
The EQT Network is a key competitive advantage. The network consists of more than 500 independent core Advisors who are established business leaders with experience from different industries and regions from around the world. The EQT Network also includes entrepreneurs and former politicians – all contributing with skills relevant in various ownership phases. They are an integral part of EQT's business model and the industrial approach, providing competence on operational and strategic issues in their fields of expertise.
The EQT Network assist in identifying and evaluating attractive investment opportunities, take positions on the portfolio company boards and support development throughout EQT's ownership period. The different Investment Advisory Teams work closely together with EQT Network to ensure the due diligence process is executed in the best possible manner. EQT's business model also ensures that the management of the portfolio company has the best support on the road to excellence.
Driving growth as an owner
EQT applies the Portfolio Governance Model for all majority-owned portfolio companies with clear roles and responsibilities. Once a new portfolio company is acquired, EQT appoints a board of directors with a Chairperson, generally an Advisor, supported by other sector/industry specialists from the EQT Network and the EQT partner responsible for monitoring the portfolio company. The board of directors defines and monitors strategic plans in the portfolio companies and ensures that management gets the relevant support and resources to implement these and to run the company in an efficient, responsible and accountable manner.
An important pillar within the Portfolio Governance Model is the TROIKA, consisting of the Chairperson, the portfolio company CEO and the EQT Partner. The TROIKA works closely together on an informal and continuous basis, which provides a sounding board to the CEO. He or she can address and get advice and support on different topics such as operational or strategic issues. The TROIKA offers the portfolio company an extra supportive forum and keeps the owners updated on the business and progress. The TROIKA does not have decision-making powers and is in no way a substitute for the portfolio company board of directors.
The EQT Credit funds invest in debt which is why the Portfolio Governance Model is not applicable. The EQT Credit funds' investments are therefore not included in any statistics across the EQT website.