EQT AB

STO:EQT

Good morning, everyone, and welcome to EQT's Q1 2025 announcement. We executed strongly across fundraising, investments and realizations throughout the quarter with EUR 4 billion of investments, EUR 4 billion of exits and another EUR 4 billion of co-invest for our clients. And as you will have seen, EQT Infrastructure VI hit its hard cap and we've progressed well with the BPEA IX fundraising. However, needless to say, uncertainty is elevated across capital markets. And in today's call, we will discuss the outlook and how EQT as active owners manage the uncertainty. We will be joined by Per Franzén, who will succeed Christian as CEO at our AGM in May.

And with those words, let me hand it over to Christian and to Per. Next slide, please.

Thanks, Olof. Good morning, everyone, and hello from EQT's Korea office. So before diving into today's agenda, I'm super happy that Per is joining the webcast. Actually, when I became CEO in 2019, Per took over my prior role as Head of Private Capital. So I've already passed the baton to him once before, and as you've seen, he's done an amazing job. In fact, Per is, in my view, one of the best deal makers across the private equity industry. He has a really strong and pretty unique track record of creating some of the biggest and best companies in our portfolio and creating the concept of running with the winners. And we've been working together for a long time. He's been with EQT for nearly 20 years.

And like I said, he's on video. So with that, I'd like to hand the word to Per.

Thank you, Chris. And thank you for those nice words. Let me start off by saying that I'm thrilled to become CEO of EQT. Under Christian's leadership, we've built a truly global platform and I think we're well positioned to continue to deliver performance for clients and to continue to grow the firm. We have a world-class track record across private capital infrastructure. In real estate, we have nearly 1,300 clients across the globe. We have a fantastic team of almost 2,000 colleagues across 25 countries.

I'm very happy that Chris will remain at EQT as an institutional partner. Chris and I have worked together for close to 20 years, and I look forward to continuing our successful partnership in our new roles. At EQT, we manage succession carefully across key roles. You will have seen that Bert and Eric have now taken on the role of Co-Head of Private Capital in Europe and North America, and they are already fully in charge of that part of our business. Before handing back to Chris, let me say that I very much look forward to seeing many of you at our Annual General Meeting on the 27th of May in Stockholm and at our Capital Markets event in London on the 22nd of May.

With that, I hand it back to Chris and see you all again in connection with the first half report.

Thanks, Per. So Per will participate today in the Q&A, but you'll see him a lot going forward in both at the AGM and at the Capital Markets event. And by that time, Per will be EQT's fourth CEO. Now in my new role with EQT, I'm going to Chair the newly formed EQT Council, which really aims to amplify EQT's ability to create partnerships across the globe and connect more closely with governments and NGOs. With over 70% of the world's population having voted last year, geopolitical questions have become increasingly important for all of us with a huge amount of change impacting basically all aspects of society and also the capital markets in general.

In the council, I'll be joined by Conni and Marcus Wallenberg, plus senior partners from EQT. I also continue to chair the Global Investment Forum, which brings together EQT's most senior investment professionals. And I will remain a member of several EQT investment committees and really look forward to engaging in this new role.

Now next slide, please. So let's now reflect on the current market environment. We've seen cycles and uncertainty before, be it the tech bubble, the European debt crisis, the global financial crisis, the pandemic or the post-COVID inflation years. And unlike public markets, which react quickly and sharply to uncertainty, private markets are structurally different. We invest in long-term trends that shape the future of society, transaction that often first emerged in private companies. And we see those emerging companies staying private for longer as capital is increasingly available in the private markets for those businesses for a long time.

And of course, we and our business are owners of companies, we control them we control assets and this allows us to be agile to drive transformation, take advantage of market downturns, but also stay focused on the long term because we own these companies until we are ready to exit. And we typically do that when times are good for the company and good for the markets. Now today, I think EQT is better equipped than ever to manage volatility. We've learned from every cycle and continuously refine our approach. Today, we have well-diversified funds with more than 300 portfolio companies and 2,000 buildings across the world.

We're invested in high-quality companies and local infrastructure with relatively low exposure to economic cycles. And we still only have pockets of underperformance, if you look across our portfolio. With more than EUR 50 billion of dry powder, we do have capital to invest.

That's one of the great things about our model, the private markets model. We have capital in other parts of the market start to retract. And in fact, some of our best deals were done in times of uncertainty. For example, at the beginning of COVID, we acquired Schülke as part of a carve-out, turned it into a stand-alone health care company, and sold it after 3 years delivering 4.8x the money on that deal. And another great example is EdgeConneX also acquired in 2020, where EQT Infra has multiplied the company's capacity and turned it into one of the largest data center operations globally. In the most recent transaction, the company achieved a high double-digit billion dollar valuation.

Now moving on to the balance sheet with regards to leverage in our companies. We are continuously optimizing our portfolio company financings throughout the cycle. And right now, we're standing on quite firm ground only 5% of portfolio company debt is maturing before 2028.

Finally, we have a best-in-class track record as it relates to performance and cash returns to clients DPI. Actually, this is across most of our funds. And thus, we can stay patient on exits and times of uncertainty. And when you look overall at our performance, you look at half of the key funds are performing on plan. The other half are performing above plan, and those are really key indicators for everyone to follow.

Next page, please. So uncertainty remains as to how the U.S. tariff negotiations could play out and what the new economic order will be in the medium and long term. But regardless, we currently expect tariffs to have a limited direct impact on our portfolio. Our private capital portfolio is largely invested in sectors such as health care, software and services, where we have no or little exposure to manufacturing and trading of physical goods. In infrastructure, of course, we provide essential services and local infrastructure, be it data centers, energy, transportation or source of services. And in real estate, we're primarily invested in logistics assets in the United States and Europe.

Now of course, changes in global trade patterns and consumer demand might have near-term implications on real estate, but we do see robust long-term structural demand for logistics assets. Therefore, taking a step back, it's not actually the tariffs that we're most focused on at this point in time. Instead, we think it's the geopolitical risks, the potential deterioration in global growth and economic activity, inflationary pressures that might arise and potential strains on global financial markets. And these are the real risks that we need to monitor and manage now going forward as owners and investors. And this is, of course, what our deal teams, our management teams and our Boards are readying themselves for.

Next slide, please. We now have more than 30 years of experience, and we've always come out stronger from every cycle. In uncertain times, capital consolidates further with large and established managers and performance over the cycle will be driven by those that have the ability to really drive fundamental value creation and change. And we're going to showcase how we do that in our Capital Markets event in London in May. This is also a time for us to seize opportunities, as I mentioned, in infrastructure, for example, where digitalization and decarbonization continues at a rapid pace around the world. We're looking at a number of public to privates, just launched 1 a few weeks ago. And also looking at our clients, this is a time where many investors want to diversify their investments across the globe.

In EQT, we offer strategies that invest locally in each of Asia, Europe and North America. We have about EUR 140 billion of fee-paying assets under management, of which around 30% is invested in Europe, 20% in North America and 15% in Asia, and the rest of the capital is actually dry powder. So more than 30% of our fee-paying AUM is yet to be invested in the deals and in the regions where we see the best opportunities. And that actually includes now the more than $10 billion that we've raised in the first close for BPEA IX, that being the same size as the previous fund.

Also being from a small country in the north, we do follow the Wallenberg mantra of making friends, not enemies. And that gives us a unique position in the world. In addition to EQT's own balance sheet, EQT AB's own balance sheet is strong, and we have ample liquidity that we can use to grow organically and support our funds and start new funds and through acquisitions or combinations that we could do over the medium term. And if you look at what's happening in the markets, we do expect this volatility and the challenges in global markets to actually accelerate the consolidation that we've seen in our industry and will also increase the competition in our industry. We believe that the winners coming out of that will be either niche specialists or the large broad and diversified players like EQT.

Next slide, please. So during Q1, we continued to execute on something critical for us in the industry, which was large exits. And these deals have multiple benefits for a range of stakeholders. First and foremost, strong returns for our clients and liquidity for our clients. Second, optionality for them to reinvest and continue to run with the winners. Third, significant co-investment opportunities for our strategic clients and partners. And fourth, strong returns for our public market investors, with Galderma, for example, being up around 50% since IPO, even despite the recent volatility.

I'm also excited to say that Nord Anglia is becoming our first private IPO, raising around $7.5 billion outside the fund. And this deal structure provides investors with liquidity today while significantly broadening the shareholder base to over 70 investors, including some with time horizons above and beyond the private equity holding period. We also have the possibility to create future liquidity events in the future in the private market. And of course, clients will also continue to benefit from this investment as we are co-investing together with our investors with our fund number VIII at BPEA.

In EQT Equity, we also made a major exit in IFS, a software company that's been built actually by Per and team, where we just announced a minority stake sale last week. And the deal values IFS at EUR 15 billion following investments from Hg, ADIA and CPP. When EQT first acquired IFS in 2015, IFS was a small software and consultancy business focused on Northern Europe. Over the last 10 years, it's grown to become a really global provider of enterprise solutions and is now across all the funds that have invested. And for 3 EQT funds, is valued at around 5x multiple of invested capital on average. And EQT IX remains a co-controlled shareholder in the company, continuing to run with the winner.

So overall, you've seen in the report that we've been tracking our exit plans in Q1. And we, of course, have a number of companies readying for exit over the coming year, as we've talked about previously. However, as volatility -- as long as volatility will stay elevated and there's a lot of uncertainty in the world, we do expect exit activity to slow down somewhat. And thus, at the same time, we'll continue to double down on value creation, focusing on cash flows, improving the companies and building them through organic initiatives and add-on acquisitions. If exits do remain slow, of course, this may also impact the fundraising cycle again. And to go a bit deeper into that, I'm going to now hand over to Gustav, who will cover fundraising.

Thank you, Chris. So during the quarter, EQT Infrastructure VI held its final close. The fund raised EUR 21.5 billion of total commitments, of which EUR 21.3 billion were fee generating, significantly exceeding the EUR 20 billion target and hitting our hard cap. Approximately 70% of the capital came from existing clients and Infrastructure V. Some 40% of the capital was raised from EMEA, with North America and APAC representing almost 1/3 each. The commitments reflects our very strong relationship with pension funds and sovereign wealth funds across the globe. And private wealth represented around 10% of total commitments.

The fundraising for BPEA IX is progressing with strong momentum. As of today, the fund has received commitments of over $10 billion, which includes around $2.5 billion since the end of the first quarter when we were at slightly less than $8 billion. The fund will hold its first close next week, and we expect it to reach its target fund size of $12.5 billion during the summer. And the fundraising is expected to be materially concluded during 2025. Furthermore, BPEA IX was activated for management fee purposes in early March. In addition to the key funds, gross inflows amounted to around EUR 1 billion in Q1. This relates mainly to transition infrastructure and health care growth as well as various strategies charging fees on invested capital.

So turning to upcoming flagship fundraisings. We have previously stated that we expect EQT XI to be activated in early 2026 and Infrastructure VII around midyear 2026. As you know, activation depends on the investment pace in the current vintage. And hence, if the market uncertainty remains and the deal activity slows down, this will impact. So based on what we know today, we expect activation sometime during the first half of '26 for EQT XI and sometimes during the second half of 2026 for Infrastructure VII. So in light of current market conditions, it is possible that we will see renewed cyclical headwinds as it relates to fundraising. First of all, as we've seen in the past, with lower public market valuation, some clients, especially those with mature private market programs, often are forced to limit their private market investments to align with target allocation levels.

Secondly, if deal activity slows down materially, it means less liquidity back to the client, which in turn reduces clients' ability to make new commitments. For these reasons, we want to reinforce what we said on the last update that we think that it will take at least until 2027 before global private market annual fundraising volumes reach the levels that we saw in 2021. However, taking a step back, we still very much believe that private markets continue to be set for long-term structural growth. A large part of the value creation takes place in the private markets. We have an active ownership model, which over time has outperformed the public markets. Institutions and even more so, individuals continue to increase allocations to private markets for resilient returns and diversification.

And with that, next slide, please. So on the private wealth side, we took an important step during the end of this quarter with the launch of EQT Nexus Infrastructure, providing access to EQT's Infra platform through an Evergreen structure. EQT Nexus Infrastructure becomes our third strategy in the Evergreen platform and the second in the Nexus suite, which now comprises of EQT Nexus and EQT Nexus Infrastructure. Both of these are available for clients in EMEA, APAC and Canada. EQT Nexus Infrastructure received its first inflows at the end of March, and we expect to scale up distribution network during 2025 and beyond, similar to the strategy for EQT Nexus.

Today, EQT Nexus is available in more than 20 countries. And in Q1 2025, we saw an approximately 70% increase of inflows compared to the same period last year. And we continue to onboard distributors including the expectation to onboard 2 global distributors during Q2. NAV for EQT Nexus currently amounts to around EUR 1.2 billion. Furthermore, preparations continue for our 2 planned Evergreen products focused on the U.S., 1 for private equity and 1 for infrastructure. We expect to launch our private equity product during the summer with 2 global distributors, 1 large -- which is 1 large private bank and 1 large warehouse. More on this in the H1 report.

And with that, I hand over to Olof.

That's great. Thank you very much, Gustav. Total investments by EQT funds amounted to EUR 4 billion in the first quarter, as mentioned previously. And EQT was particularly active in subsectors related to software, digitalization, with deals such as Fortnox, TravelPerk and the acquisition of Crown Castle's Small Cell Solutions business to give a few examples. We also continue to invest in energy transition with Scale Microgrids being one example. In addition to these investments, we provided co-investment opportunities of almost EUR 4 billion for our clients during the quarter.

As Christian alluded to, times of volatility can be interesting times for new investments, and we continue to pursue our pipeline actively. And this can also be a time for our portfolio companies to pursue add-on acquisitions, for example. Having said that, we expect processes to become elongated in the near term as buyers and sellers await more clarity on the tariff negotiations and the macro outlook. And therefore, we think bid-ask spreads are again likely to widen. We continuously monitor the financing markets but expect financing to remain available even in a prolonged downturn. Financing is typically not a constraint for the types of investments that we do.

Next slide, please. In the first quarter, we announced EUR 4 billion of exits. So we're imperative with investment and exit volumes for the quarter, and that represented more than a doubling of the volumes compared to the same period last year. Approximately 1/3 of the volumes in the quarter were public market exits and we completed various share sales in our listed portfolio companies, such as Galderma, Waystar, Azelis, and Kodiak. So the IPO of Galderma in March 2024, we have now completed 4 sell-downs in this company with a total capital gain of more than EUR 10 billion for EQT VIII and it's coinvestors. EQT was the most active private markets firm across global ECM markets in the first quarter, thereby extending our track record from last year.

So in total, we've been tracking well according to our plan for the year during Q1 as it relates to exits. However, the recent deterioration in market conditions will inevitably impact our exit agenda for the rest of the year. During the 90-day tariff negotiation period, we expect market uncertainty remain elevated and for deal activity to be muted. For now, we continue to main readiness to execute transactions in the third and fourth quarter. But if we were to see a period of prolonged uncertainty, as you know, we'd rather have our management teams fully focused on value creation rather than exit processes.

So with that, let me hand over to you, Kim.

Thanks, Olof, and good morning, everyone. During the quarter, all of our key funds continued to perform on or above plan. And BPEA IX was also added to the list of key funds following its activation in March. On average, the key fund valuations were up 1% during the first quarter. The underlying operating performance was strong across the portfolio, explain the more recent vintages in private capital. This value creation was partially offset by lower share prices of some listed holdings, some pockets of underperformance and some negative FX effects. Since the start of Q2, after the report date, EQT's listed assets have declined by some 9%. Listed holding represents less than 10% of the total investments across the key funds.

But assuming a continuation of today's market conditions, the decline in listed assets, the effects of the continued uncertainty and the impact from lower reference multiples may negatively impact EQT's fund valuations in Q2. With more than 300 portfolio companies, we will always have a mix of outperformance and underperformance. That's part of the model. And we have tools and processes to deal with any underperformance. When we look at the distribution of performance for realized funds for private capital, some 3 out of 10 companies have delivered less than planned since inception.

Next slide, please. Let me now take a moment to reflect on our financial model and how it is built to manage economic cycles and volatility. Our management fees are contractually agreed over the lifetime of our funds typically 10 or more years and most of our funds charge management fees on committed capital, not on market values. So this gives us strong visibility of our secured revenue over many, many years. And we're well diversified in terms of client commitments, fund strategies and currencies. Revenues are split roughly 45-55 in dollars and euros, respectively, while the cost base is around 1/3 in euro, 1/3 in U.S. dollars and the rest mainly in Swedish krona and pound sterling. Thus, a weak dollar against the euro has unhelpful effects for our earnings and also for our fund valuations.

In periods of prolonged uncertainty, we typically see extended fundraising cycles. Historically, we've invested our flagship funds over 3 to 3.5 years on average. But in times of severe market dislocation, such as the financial crisis, it took 5 years as deal activity slows down and liquidity is tighter. Furthermore, in a challenging market environment, recently introduced strategies with shorter track records are typically harder to raise, as Gustav alluded to.

Moving to carried interest and investment income. Since EQT's inception in 1994, all realized flagship funds have generated carried interest. In 2024, we recognized some EUR 250 million of carried interest and investment income and based on the pace of exits completed in Q1, we were well on track to exceed last year's level for the full year. But the near-term outlook for carried interest is uncertain and will depend on how both fund valuations develop from here and realizations in the funds that are in carry mode. As Olof mentioned, we expect the 90-day tariff negotiation period to present a period of elevated uncertainty with low transaction volumes.

Therefore, the carried interest outlook for the year will very much depend on market conditions in the second half of the year. As mentioned at the full year presentation, we have 4 funds in carry mode with an expected 1 billion of carry to be generated across these funds. But as a reminder, such carry is likely to be recognized over a multiyear period. Remember also that it's not only exits that determine carry from an accounting perspective, changes in market valuations for our unrealized assets up or down also impact how much carry we recognize in the funds in carry mode. Therefore, we also show cash carry generation in our financial statements and cash carry was around EUR 60 million for 2024.

We have been through multiple years with low realization volumes. And in this context, our rule of thumb as it relates to initial carry recognition for a fund, 4 to 6 years into its life cycle, will be exceeded for the funds that are next in line to enter carry mode Infra VI and EQT IX. We do not expect to recognize carry for these funds in 2025, and they are unlikely to enter carry mode in 2026.

Next, let me comment on investment income. As of year-end, we have fund commitments and commitments to support our growth initiatives of EUR 1.4 billion on the balance sheet. The fund commitments, they create alignment with our clients and give EQT the right to carry interest in the relevant funds and represent about half of the commitments on our balance sheet. In addition, we provide temporary capital to support new growth initiatives across new strategies and across our private wealth vehicles. Our investment income is related to the valuation of the commitments on our balance sheet. Changes in fund valuations will, therefore, also influence carried interest and investment income in our financial reporting.

If we enter again an extended period of uncertainty with lower exit volumes, we expect carry and investment income for the year to be broadly in line with the recent past. As a reminder, carried interest and investment income was on average a bit more than EUR 200 million annually for the past 3 years. As mentioned, our base case is for the 4 funds currently in carry mode to continue to be the main drivers of carry also next year.

Turning to costs. We have flexibility to manage the pace of hiring, and we have some flexibility also to manage the variable pay. However, our primary objective is to execute on our long-term growth plans. And therefore, you should expect total OpEx for the full year to continue to grow at a similar pace as in recent years. Lastly, we have a balance sheet-light model and strong liquidity. We currently have 3 bonds outstanding with a total nominal value of EUR 2 billion and an undrawn RCF of EUR 1.5 billion. While our funding base is strong, we are considering to diversify it further.

Next slide, please. Just a few words on FTEs before I hand back to Olof. During the quarter, we grew the team by 7 FTEs net to support new initiatives in line with our long-term plan. The headcount increase in Q1 is not to be extrapolated for the full year. We continue to grow in targeted areas, but we will need to stay agile and adapt should the market situation require that. As of 2025, we will simplify the external reporting by focusing on FTE instead of FTE+, which included also on-site consultants. This is to align with how it's reported in the P&L, i.e., the cost of any consultants continues to be reported as other operating expenses and the cost of FTEs as personnel costs.

And back to you, Olof. Next slide.

Okay. Thank you very much, Kim. So before Chris wraps it up, let me just remind you all of our Capital Markets event, which we are hosting in London on May 22. During the event, we will explore EQT's thematic investment focus, our value creation toolbox and our governance model, and we will do this all through the lens of 6 portfolio companies, IFS, Reworld, Nord Anglia, IVC Evidensia, WS Audiology and Credila. And it's an in-person event. So if you haven't already registered, please do so by following the RSVP button on the presentation or register on our website. The EQT team will, of course, also be there along with the portfolio companies. So looking forward to seeing you there.

And with that, let me hand back over to Christian for the concluding remarks.

Thanks, Olof. So first of all, we executed quite strongly on fundraisings throughout the first quarter. EQT Infrastructure VI hit its hard cap and fundraising for BPEA IX progressed with more than $10 billion of commitments.

Second, we're gradually building our Evergreen offering, and we expect additional vehicles to come online during this year also in North America, which is the biggest market in the world. Third, Q1 showed resilient fund performance, and we currently expect the direct impact of any tariffs to be limited and all key funds to continue to perform on or above plan. Fourth, we executed on a number of exits in the quarter. But as we've said before, the current market conditions will impact exit activity for the rest of the year, most likely.

And lastly, we've been through turbulent markets before. And our model is really built to manage uncertainty, and we've always come out stronger after every cycle. We're, of course, preparing for tougher economic conditions in our portfolio companies and assets if those conditions arise.

And with that, thank you for joining the presentation, and we now open up for Q&A.

[Operator Instructions] We will now go to our first question. And your first question comes from the line of Bruce Hamilton from Morgan Stanley.

I've got 3. So firstly, just on the wealth opportunity. I'm interested in your thoughts about how durable that is in the light of the kind of macro uncertainty. And so do you see any impact to the kind of expected growth path there? Secondly, and linked to uncertainty and dislocation, on the sort of consolidation theme, are you seeing an improved range of sort of opportunities in terms of inorganic in any areas that remain a sort of key focus for you?

And then finally, just in terms of sort of end client demand for sort of investment exposure. Obviously, there's been quite a bit in the press about certain clients saying they wanted sort of non-U.S. exposure. Do you pick that up in conversations? And do you think that could play in your favor as you think both about sort of the wealth and the institutional opportunity set looking forward?

Yes. Maybe I'll start off with -- so on number one, I would say, I think, first of all, it's probably a little bit too early to know. But I think if we think about the, let's say, general behavior with institutions and individuals in it, I think uncertainty is, of course, not helpful for inflows in general. So I think we expect to see an impact. Exactly, what that will be, I think we'll need to assess further.

I think when it comes -- you can probably divide it into 2 different parts. One is the, let's say, ability with the distributors that we have onboarded that you might see, let's say, a little bit slower monthly inflow. And then, of course, on the other hand, you have, let's say, the onboarding of new distributors where I think our expectation is that everything else being equal, that some distributors will be a little bit slower to onboard new products.

Bruce, I think it's also too early to tell. Probably in the short term, when there's a lot of uncertainty. Firms are going to be focused on delivering for their clients, taking advantage of deal opportunities, driving those exits that one can. But if this uncertainty continues, I think there's a real strength in coming together. So that's why I said in my remarks also that I do believe that the consolidation will continue to accelerate in our industry.

And I think the competition that you'll see for fundraising dollars and for building new funds and new strategies is going to increase, and that also probably will lead to consolidation. But I think it will take a little time before firms are standing on really good stable ground with regards to what's happening around us until transactions are going to happen. And the last one was -- lost that one. What was the last question?

So it was just whether you're picking up from clients any sort of increased demand for non-U.S. exposure and whether that plays in favor of your model?

Yes. Exactly. Yes, if you look at where EQT is, in the world coming from a small, relatively neutral country and investing globally. Now we have an on-the-ground presence in, I think, 24 countries now and investors from all around the world, we are hearing those kinds of dialogues. It's still, I'd say, bits and pieces, nothing systematic. But I think you can see what's happening geopolitically in the world that's starting with goods primarily moving. Some of those questions are flowing over into intangibles and into where capital moves and how it moves. I think EQT being a global investor will have an advantage with where we're coming from, but we're, of course, taking it step by step.

We will now take the next question. And the next question comes from the line of Hubert Lam from Bank of America.

I'd first like to wish Christian all the best in his new role and congratulate Per on becoming the CEO. So 3 questions. Firstly, on performance fees and exits. They've been weak for the last -- they're going to be weak for the last 4 years. Is there a point where exits have to happen and where you and the industry are under pressure to sell? And do you think that this has a consequence for the long-term attractiveness of the private markets industry? That's the first question.

The second question is on U.S. Evergreens. I think you said you're launching U.S. Evergreens in the summer where you've already lined up some distributors. How would you say you compete against other more established players who are in there already and who have more established track records? And so what's your differentiating factor? And lastly, I just wanted to check on performance fees, what Kim said. I think he said that performance fees this year could be around in line with the recent past, which is around 200 million. Just checking if -- what's the base case around that and what your assumptions around that? And also, is this still the case given you've had decent exits in Q1, and I think I estimate around 5 billion by exits in Q2. So that seems still like a low number just given how much of exits you've had year-to-date.

Thanks. I'll take the first one. The -- if you look at EQT across our funds, we have market-leading DPI, as we've stated before. So we've delivered a lot of cash returns back to our investors. Also in recent vintages, even EQT IX is now a DPI 0.2 and the ones before that, well above 1. So I think we're in a pretty strong position. Our portfolio is still pretty young. We are distributing capital to our investors. We have very strong overall performance. So that pressure doesn't really exist. It's not the way we think about it. Our job is to generate long-term returns.

That's the beauty of the private equity model. We have 10-year dated funds plus extensions if we need it to really create value. And our job is to maximize value, and that's what we're doing. Now if you look at the industry, whether some players have not been able to exit enough are going to be under pressure to deliver capital back to investors, that may happen. But there's another thing happening, of course, in the private markets industry, and that's the secondaries market and the solutions market increasing up a lot and creating liquidity either for GPs in companies or, of course, LPs, the traditional one in funds.

So we expect there to be continued activity in that side. So for investors who want to rightsize rather than pulling out of -- rather than a GP actually selling the underlying company, and LP can, of course, sell their interest if that's desired. So I think there's a pretty good balance in the industry, but there will probably be some pressure on some of the players. I think the second one is for Gustav.

Yes. Thank you, Chris. I think, first of all, we haven't launched yet. So I think we will need to wait and see to make sure that we're able to compete. I think, let's say, based on the discussions that we have had so far, based on that we have secured what we feel is probably 2 of the best distributors in the market. We feel that we are in a, let's say, relatively good position to start off with. I think that based on discussions we've had with them, it's actually relatively easy to differentiate us versus the market because when you actually look at the market, the market looks pretty much the same, while we're actually coming with something, which has a pretty different exposure, both from a geographical point of view and from a sector point of view.

And then, of course, we think that our performance track record is also something, which is very differentiated. So I think we feel carefully optimistic. We understand that we're coming from a, let's say, branding perspective from a different starting point than some of our peers, but also that we have a very good track record to lean on and, therefore, a long-term ability to be very competitive in the market.

And to the last question, Hubert, I'd say that, well, first of all, I don't have that much to add to what I already said, but do note that I said if the period of elevated uncertainty continues, as the intro to my statements. Secondly, you should also note that not all exits are in funds that have -- that are in carry mode. So that's another sort of detail to note in all of this.

Your next question comes from the line of Haley Tam from UBS.

Hopefully you can hear me okay. I'll ask a few, please. Firstly, on the impact of a slower near-term exit environment. Just to follow on from Hubert's question. Clearly, that's been a feature of the market now for some time. Could you specifically answer whether there have been any fund extensions at EQT in the last few years due to the slow environment, just in terms of how long you can stay invested? And any color if that is the case?

Secondly, in terms of valuations, I think one of the benefits of private markets should be that we have less volatility in performance versus public markets. So I just wondered, could you give us any color on the composition of the plus 1% on average you saw in Q1, perhaps what the underlying performance was, excluding some of the public market and FX effects? And then the third and final question, just on exits, the innovative exit for Nord Anglia. Could you give us any color on the frequency of liquidity events and whether you see any opportunity for more private IPOs perhaps in the near term given the bid offer spreads perhaps are returning and rewidening?

Thank you for those questions. I'll kick it off. The -- if you look at EQT's portfolio of funds, we have one of the youngest portfolios in the world actually. The oldest fund that we have that is active, that's material is from 2015, and that's pretty much exited now. So we have not seen any fund extensions, and we've been able to deliver well within the 10-year period in our key funds in the past, and we expect to continue to do so also in the future, obviously, unless there's some major crisis that happens. That's, of course, something we don't know. But we pride ourselves really on driving exits, driving liquidity and managing the funds within that time frame. And during that time frame, we also keep capital in the funds so we can support those companies that we don't exit. So I think that covers the first one. And the second one is probably for Kim.

On the valuation, yes, let me provide a little bit more color, maybe not numerically. But I'd say, again, reiterating that the performance of the underlying portfolio was good. Maybe if you only look at that, it's maybe some plus 4% or so for the quarter. And then the FX effect is essentially the U.S. dollar effect during the quarter, and that's maybe minus 2% or so on the overall. But these are round numbers. Then we had the public companies. But again, there's -- we said it's less than 10% of our overall portfolio is in companies that are already public, but that has some percentage impact as well. So those are sort of the components of it within the portfolio.

And on private IPOs in general, these are -- each of the transactions that I mentioned are slightly different. The 1 is public, 2 are private. One, we're setting up as a private IPO. We haven't set a time frame for further liquidity, but rather we're proving with this first transaction that it's actually possible, and we're getting a spread in the shareholder base that the company is then much more able to bring further liquidity for those investors over time. And I wouldn't be surprised if we see more transactions like that, of course, if the public IPO markets are closed, then I think more innovation will happen in private markets, and we're definitely going to be a part of that.

We will now take the next question. And the question comes from the line of Ermin Keric from Carnegie.

Maybe to start off, I think you mentioned that around 9% would be kind of the mark-to-market quarter-to-date on your listed holdings. Is that at all a good benchmark for your overall portfolio as well when you look at peers? Or should we think that it's much less? I think, you've previously talked about the kind of the marginal share is not equivalent to the actual change of the value of a full company.

Then also on the exit side, I think you've previously talked about around 30 exits planned for 2025. Kind of best guess, given where we are now, what would you say that is given all the uncertainty? Are you halving it? Or kind of could you give us anything -- any more color there? Then also just on the OpEx, I think, Kim, you mentioned that we should expect a similar growth as in recent years. Is that in absolute terms? Or are we talking in kind of percentage growth?

Maybe I can take the first one. On the -- no, you should not read into the listed holding that, that sort of translates into all of the portfolio. Again, it is a small part of our overall portfolio. And like you mentioned yourself, the value of a whole company is not necessarily the sum of the value of the marginal shares trading in the market at any given point in time. So you should not read too much into that.

The number of exits.

I can pick up on that. Yes, we did talk about the 30 exit events in our full year results. And as I said, I mean, during the first quarter, we've actually executed very well on that agenda, and we talked about some of all those deals that we've executed. But I think it's fair to say, our visibility on the rest of the year and in particular, the next 3 months is relatively low, right? And you will have extended processes, and we are maintaining readiness. It's a narrative out there that, as we've all seen, can change rapidly, and it's too early not to maintain optionality to go ahead. And especially you asked about the listed holdings there, we can act very quickly, of course, if sentiment turns. So I think this will be a year that will play out in the second half and potentially in the months after the summer essentially. So let's have another check in our H1 report on what the world looks like by then.

And I was referring to percentage terms. But again, I would caution you in the sense that we are only 3 or 4 months into the year. It's a fairly volatile environment. And if we will stay agile and if needed, we will adapt the cost basis accordingly. But that's sort of the base case plan I was referring to.

Your next question comes from the line of Angeliki Bairaktari from JPMorgan.

First of all, it was interesting to see the Karo Healthcare and the IFS exit get announced despite the volatility we've seen in the markets over the past couple of weeks. I was just interested in hearing your thoughts on sort of those 2 deals still going through. Was that a factor of them being stronger assets being pre-agreed or something else? And are you currently seeing any deals being pulled or funding for deals by banks or private credit players being pulled?

And secondly, with regards to the current interest and investment income for this year, based on the exits that you have announced, so far year-to-date, how much carry could you crystallize? Just so if we assume there are no further exits and no further sort of valuation uplifts or changes, can you tell us sort of how much is the year-to-date sort of carry recognition? And then thirdly, with regards to your dollar exposure, can you give us the exposure to your cost base, please?

Thank you. I'll start with the first one. What we've seen in similar markets when there's uncertainty is that high-quality assets and high-quality sectors are still transactable and it's still at healthy valuations. Of course, those processes were just ending around this time. So I think the process was good. The companies were good, and we're very happy to get those transactions done. Right now, I'd say the transactions that we're involved in on the buy side and on the sell side are moving a bit more slowly, but are moving forward. And I think owners are taking a look at the market and saying, do I want to start new exit processes now or not? And that, I think, will depend both on the markets in general, but also on the sectors that we're talking about.

My expectation for the rest of the year in that sense is that there will be transactions probably more of them in those spaces, which I mentioned, which happen to be areas where EQT is mostly invested, which are removed a bit from the direct tariff exposures, et cetera. But with the uncertainty that's there, time lines are being stretched and, therefore, volumes will probably be somewhat lower than expected. So we're going to stay close to it. And hopefully, we'll find some really good companies to buy and we'll hopefully be able to execute on a number of exits, whether they're public or -- sorry, in our public portfolio or in our private portfolio. But the uncertainty, of course, makes it harder for us.

And on the carry point, I'd say we have 2 reports per year where we go into the numbers in depth and have a full P&L and full balance sheet. And then we have these 2 reports in Q1 and Q3 where we talk about the environment and the exits and the investments. So I will not give you more details on numerical details on the carry for the year than that. On FX, yes, I can give you some split of the cost. It's broadly so that 1/3 is dollar, a little bit less than 1/3 is euros. And then there's SEKs and pounds sterling on top of that. And some other currencies, maybe 10% of other currencies. That's the big picture split of costs.

Your next question comes from the line of Magnus Andersson from ABG Sundal Collier.

First of all, on fundraising, I mean, we all realize that the uncertainty currently is huge. But I mean, you talked about last year, this 100 billion fundraising target for the next cycle, which was defined as '25 to '27. And I was just wondering, should we think about those 100 billion around that as they are likely to still happen, but that the cycle will be longer? Or would you, if uncertainty remains for a prolonged period of time, in the interest of time, go for perhaps a lower amount, but to be done earlier?

And linked to that, you also set this adjusted fee-related EBITDA margin of 55% to 65% at the CMD and to be reached towards the end of the fundraising cycle, which would imply '27, '28. My question there is, I mean, is the 100 billion a prerequisite for reaching that level to scale? Or could you offset through streamlining the platform or something else? I guess this will be a target for Mr. Franzén.

And finally, just Infra VI, you talked about it as a fund that would close at the target size for, I think, at least 6 months and as late as in late January and 2 months later, you closed it at the hard cap. So I was just wondering, should we read anything into that with regards to demand for infrastructure assets given the way the landscape has recently changed?

Yes. Maybe if I start with number one. I don't think that we said exactly '25, '26, '27. That's probably your interpretation of it. I think what we said was during the next fundraising cycle. And I would say that we still stand by that. We believe that we will be able to reach it based on what we know today. But that, of course, could mean that the next fundraising cycle, as you say, is a little bit longer. Because in an environment of uncertainty, as we've seen with, let's say, Infra VI and EQT X, the fundraising in itself take a little bit longer. But in both those cases, we have surpassed both the target and reached the hard cap, so to speak, in both those funds. So I think that's the, let's say, ambition that we've set, and that's where we stand right now that we still think that 100 billion should be reached during the next fundraising cycle.

And that also translates into the margin, I'd say, it all hangs together. The components of the margin expansion we do expect can be found in the 100 billion with new flagship funds that are very high margin, new funds of the sort of smaller funds that we already have, which will be at a better profitability level and higher share of private wealth in the mix. So all of those sort of taken together with the general scaling builds into the margin improvement.

Magnus, I can pick up on your third question as it relates to infrastructure. And as you rightly said, we closed that at hard cap, a very strong outcome for the fundraising. And I think there are many factors behind this. And as you know, we have a very differentiated infrastructure franchise with a very strong and consistent track record over many, many vintages that is invested across Europe and North America and to some extent, also Asia. I think the investment opportunity across infrastructure is very, very interesting for our clients.

As you know, we are focused on teams within digitalization. We have the investments that we do across data centers, essential services, and these are all assets that have downside protection, inflation protection and very long-term interesting structural growth prospects. And I think all of these factors feed into the success that we had with the infra fundraising. So yes, it is an asset class where we see very long-term interesting potential to continue to expand the Infra platform and to scale this over a long time. And I think the client interest in this product is the latest confirmation of that.

Your next question comes from the line of Jacob Hesslevik from SEB.

So Gustav, in your comments regarding -- your comments on fundraising, is it discussed denominator effect mainly affecting U.S. investors and that your global investor base better protects you compared to peers? Or is it a global issue that we currently see? And then second, as you have mentioned, the market sentiment right now is volatile. And I mean, it changes on a single tweet basically. Is it not very conservative to state that Infra IV and EQT IX will probably not enter carry mode in 2026 already today?

On comment number one, I would say, I think, my comment was related to the history that we've seen. I would say that we don't see this yet. So it's not nothing that we -- I think as you see from the numbers, the fundraising volumes in Q1 is very strong. So we don't see anything actually in the numbers yet. So it's more, let's say, a look back at history of especially how we saw it during the last couple of years.

I'll just add one comment to that because it's an interesting question. After the previous cycle, a lot of investors have also rather than having points where their allocation is supposed to be targeted to private markets, whether it's 15 or 17 or 20 or 12, whatever it is, they build ranges. So I think we're going to -- I think it's going to take more time and bigger disruptions to happen before the denominator effect really starts to take hold. actually. So I think the cycle that we're now talking about is rather around cash flows from exits. We will see.

And in terms of the current volatility and how that translates into exits and subsequently into carry, I mean, yes, it's early days, but I'd say that already the fact that we now have 90 days in front of us where there's likely to be much lower deal activity than there would have otherwise been, that's already going to push things forward with a quarter. And then whether that trend leads to sort of process is actually beginning on the -- like Olof said, on the listed companies, we, of course, can do something on a fairly short notice.

But if you have other types of exits, they are long processes that require significant attention from the management of our portfolio companies, and we don't do that on a whim. We're going to take very, very -- all of the consequences into consideration before starting those processes. So an uncertain environment is not helpful from that perspective.

We will now go to the next question. And your next question comes from the line of Gregory Simpson from BNP Paribas.

I wondered if you could update on cross-selling across EQT. Are you seeing a step-up in your LPs committing to multiple strategies like BPEA and Infra as part of the theme of investors consolidating relationships? Second question is, can you maybe talk a bit more about real estate and fundamentals like occupancy, just where logistics is maybe a bit more vulnerable to tariffs and trade wars? And thirdly, can you just remind us of the current headcount dedicated to private wealth? And do you expect to continue hiring and building out here given some of the U.S. build-out?

Yes, should I go? I think if you start with question number one around cross-selling, I would say that we continue to see, let's say, fairly significant cross-selling across especially some of our flagship funds. And of course, when you have BPEA IX, which is the first fund that we raise within -- or the first generation of fund that you raise within the EQT family. I think, it's very encouraging to see, let's say, the support that we're getting from, let's say, EQT clients moving into that side. So I think in general, we see that, that is a trend that we've seen over the last couple of years developing, and we continue to see that increase.

I think when it comes to real estate fundamentals, when it comes to the logistics portfolio as we see it right now, we feel that we entered into the year in a very good position with a lot of fundamentals on the real estate side looking better and better. Our portfolio looking very strong, so to speak. So I think we felt that we were in a good position. I think it's too early to say what the impact of the tariffs will be given that we don't know what the tariffs will be. And therefore, I think everyone realizes that if we have a long time, a long period of significant tariffs, that's going to impact global trade and, therefore, the demand for logistics assets on a global basis. So I think it's probably a little bit too early to tell. We'll probably need to come back in the H1 report when we've seen actually what of this is real and what of this is negotiations.

And maybe I continue with Private Wealth. I would say that I think the guidance that we've given previously is that we're around 100 people. That has increased slightly during Q1. We were continuing to, let's say, add resources in that part of the business. I think we will -- you should expect that number to increase during 2025. And then if that is from 100 to 150 or exactly where it is, I think we'll need to come back with. But you should see a good increase on it. And that, of course, relates to Kim's comment on that is an area that we expect to add and -- but it will not, let's say, be on a gross basis, but rather on a net basis.

We will now take our final question. And the final question comes from the line of Nicholas Herman from Citi.

Three from me, please. Just a couple of questions just to get a better sense of what you're seeing on the ground. I guess in response to recent volatility, at the margin, have you seen LPs postponing any commitments or requesting more time to convert soft commitments to BPEA IX? Obviously, that's got very strong momentum or other funds currently raising or currently in market. I'm just trying to get a better sense of how quickly this elevated uncertainty is feeding through at the margin.

Second question then on bid-ask [Technical Difficulty] EQT. Presumably, you must be going through a number of processes right now. And it seem inconceivable, but your ICs have already asked deal teams to adjust or reduce bids in response to market pressures. So beyond the pause in activity given uncertainty, just curious if you think there could already be a spread between buyer and seller expectations. And then the final question, in terms of deployment, you said that dealmaking might slow in response due to uncertainty. I guess the flip side is the valuations are more attractive. The advantage of the manager your side is that you do take private. So would you expect to do more take private in response to all this has been going on? And just can you quantify what proportion roughly take privates comprise of your deployment pipeline, investment pipeline?

Thanks. I think what's important about the private markets is that they're very, very long term. So we don't see investors not committing to a 10-year lifetime fund because of short-term volatility because that's a strategic allocation that is part of how they want to allocate capital over the long term. So I think these shifts that we've been talking about, they're rather if we go into an economic downturn or lots more volatility that our cycle in our industry could stretch a bit. But in the short term, we don't notice those kinds of things, and this is a very long-term business. And I think you've seen that over the past -- over the previous cycle, we continue to build larger funds over time. And we continue to invest around a 3.5-year time frame, a little bit longer if times are really difficult and a little bit faster when times are good. So that's kind of the first one.

And it's a little bit the same with bid-ask spreads. Right now in the market, I'd say exit and buying processes are just taking a little bit longer, so people can get a bit more comfortable with the decisions they're taking. But there's still lots of activity ongoing. And hopefully, we'll see deals convert like we've seen with some of the recent exits at EQT and also some of the recent purchases that we've made. So again, time will tell. And it's not -- and it's also very easy to generalize about the whole world. You have to break it down to which sectors is it that EQT is investing in. We talked about private capital being a lot in health care, in technology, software, services and tech-enabled services and, of course, our whole infrastructure business. Those are quite resilient sectors.

And logistics is also quite resilient, but of course, somewhat more exposed to macroeconomic activity, but the long-term trend in logistics is also very positive. So putting that all together, exactly what we're going to see in the market is, we don't know, but we have all the skills to manage through whatever cycle comes. And the final question was public to privates. We always have a number of different deals in the pipeline. We just launched a public to private in Sweden. So if the markets stay very -- if they stay difficult and volatile, then probably there will be more public to privates than otherwise. But time will tell. We work on all sources for the long term actually.

There are no further questions. I will hand back to the studio for closing remarks.

Thanks, everyone, for participating today. Thanks for all the great questions, and we look forward to seeing you either at the AGM or at the Capital Markets event here in May. Have a great day.