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.
Building companies well positioned for the future
EQT has two overall Business Segments - Private Capital (including Private Equity,Ventures, Public Value, Growth), Real Assets (including Infrastructure and EQT Exeter) – guided by a responsible ownership approach and an thematic growth strategy.
The most tangible result of the EQT Business Model is that the portfolio companies have on average increased its number of employees by 7%, the average annual revenue growth by 12% and the average annual earnings growth (EBITDA) by 13%. Almost all of the return on investments is attributed to operational improvements such as increased sales and efficiency gains.
EQT’s model allows the portfolio companies to develop and grow with a high sense of urgency. Consensus around strategic direction for a company is a prerequisite as the partnership between management and the board of directors is key when developing companies. Once a company has been acquired, a board of directors is appointed, which in turn applies EQT’s Corporate Governance Model and, when needed, the management team is strengthened. The strategy acts as a roadmap for value creation and progress is closely monitored.
Key strategic measures typically include:
- Market and product expansion – targeting new customer groups or broadening the product offering, which could mean new products in existing categories or applying a proven technology to new product categories.
- Internationalization – a key benefit, given access to the extensive international network of Advisors and EQT’s global platform.
- Add-on acquisitions – step-by-step expansion by acquiring competitors or companies with similar or complementary products, technologies or market presence. The ambition is often to achieve economies of scale and drive internal efficiency. It may also mean driving consolidation of a fragmented industry.
EQT’s digital team works with a dual role - supporting existing portfolio companies and pollinating the EQT organization with digital skills and new, more efficient ways of working. The mission is to accelerate both groups’ expertise and capabilities within tech and the digital space in order to help future-proof them for the long-run. Read more here.
Having a long-term, responsible and sustainable approach to investment and ownership is EQT’s way of creating value for investors, portfolio companies and society as a whole. By considering sustainability as an integral part of its business model, EQT, as well as the EQT funds’ portfolio companies, can identify and capture value creating opportunities as well as mitigate relevant risks. Read more about Sustainability here.
Access to broad expertise in management helps the portfolio companies to increase efficiency and profitability. State-of-the-art benchmarking and assessment methods are installed. The ambition is typically to become best- in-class in such areas as production, customer relations, digitalization, sustainability and service.
Utilizing changing industry dynamics, investing in future technologies and divesting non-core businesses, to create a base for rapid expansion.
Optimizing capital structure
The EQT funds have access to the financial expertise that can be applied to create efficient capital structures and, ultimately, prepare the improved company for the transition to a new owner.