Good morning, and welcome to EQT's year-end report. In 2021, we added new investment strategies strengthening EQT's ability to support companies from emerging to mature. We acquired Exeter and LSP, and we strengthened EQT's operating platform. Importantly, we delivered on EQT's mission to create strong returns for EQT's fund investors, paced by a record amount of realizations. As a result, EQT doubled revenues and nearly tripled EBITDA. Together with Christian, Caspar, and Kim, we will reflect on the past year, our strategy, and how we continuously invest to future-proof EQT. As always, there will be a Q&A after the presentation, and in order to ask questions, you will need to be dialed in to the conference line. With that, I hand over to Christian. Next slide, please.
Thank you Olof, and good morning everyone. It's been another engaging year, and performance has been strong across the EQT funds. As we stood here in January of last year, we announced the acquisition of Exeter, and a lot has happened since. It's been really great to have Ward and his team on board, and in actually all ways, Exeter has performed better than what we expected, and more on this shortly. We also look forward to joining forces with LSP, a leading European life sciences venture capital firm. With LSP, we strengthen our capabilities in early stage healthcare and accelerate our leadership throughout the life cycle of companies in our largest sector, which is healthcare. Thus, we're replicating the ability to invest in tech from ventures through growth and into buyouts and long-term also in healthcare.
Last year we closed fundraising of EQT Infrastructure V, and we also had the final pieces of EQT IX. Both closed at their hard caps. We launched the EQT Growth and EQT Future fundraisings. This year we expect to be even more active. We already kicked off January by setting target sizes for EQT X yesterday, EQT Ventures III, and for our new strategy, EQT Active Core Infrastructure. In the last year, we've grown our capital raising team from about 50 to almost 85 people. We've also built a team to tap into private wealth channel and we've invested into our digital client interface to support all these fundraisings. 2021 was a year of high deal activity. We had a strong year when it comes to realizations, announcing EUR 30.7 billion worth of exits.
We're returning considerable amounts of capital to our clients and our ability to realize companies at these strong returns, we believe is a testimony of our thematic investment strategy and the effectiveness of our value creation toolbox and of course, the focus on portfolio construction and driving exits in our funds. Value creation was strong throughout the year and across strategies. For example, EQT seven and EQT eight were both upgraded to above plan, and Infra three continues to develop above plan. We are now 1,160 EQTarians globally. We continue to attract talent to support our growth journey, meaning we could see EQT approaching 1,400 FTEs this year, possibly even a little bit more.
As we're growing, of course, during this time of continued pandemic and travel restrictions, we've been focusing a lot on nurturing our culture. One of the fun things we did was to come together in December for a virtual party, where we had a breakfast party in the US, breakfast, lunch in Europe, and a party lunch in Europe, and a party dinner in Asia. As you can hear from my voice, it was a bit corny, but it was a lot of fun and we are really working hard on making sure that we have as much interaction and engagement with our great teams as possible, to keep our unique culture really strong.
Importantly, we also upped our strategic focus on sustainability as part of our purpose journey. EQT as the first private markets firm in the world set science-based targets. I'm gonna have more on this in a few minutes. Our growth in AUM and the strong fund performance resulted in EQT doubling revenues in 2021, and Kim will of course come back to that later in the presentation. EQT is solely focused on active ownership strategies. Why is this so fundamental for us? Well, because it's the foundation of our ability to create strong returns for our clients. Through active ownership, we actually transform companies. We implement a clear governance framework. We accelerate digitalization, future-proofing. We invest in people. We really work hard to make the companies more sustainable for the long term and more resilient.
In short, all of these actions help the companies and the assets become more valuable for the long term. The returns we're realizing today are the results of investments and value creation actions taken over a number of years. We do call it future-proofing companies, as you know. We were early in areas such as digitalization and artificial intelligence and sustainability, and we were really early to adopt a thematic investment approach to find the best companies and assets in the industries that we wanna be in that are driven by long-term secular trends. However, with our ambition to be a thought leader, we need to continuously develop ourselves to stay ahead of the curve.
Over the past year we've broadened our strategies to build thematic expertise in, for example, life sciences. We strengthen our ability to support companies at different stages, from emerging companies all the way to mature long-term ownership. We're working with Motherbrain, our artificial intelligence unit, more deeply within the investment organization. Ultimately, actually, our goal is for her to have a seat on the investment committee. Having a listed share and a balance sheet has helped us accelerate growth, be it through acquisitions or by supporting our new strategies with capital from our balance sheet. We're gonna continue to drive growth in the business through both of these initiatives going forward.
By investing in companies from emerging to mature, we become better at refining our thematic approach, identifying investment opportunities, identifying new talents, evaluating risk, and sharing knowledge and best practices across companies at different stages of their development. For example, by adding EQT Growth, we bridge the gap between ventures and the more mature companies in private equity. This combination has already proven really powerful, with Wolt being a great example. EQT Ventures first invested in Wolt in 2016 and has supported the company to become one of the largest European tech companies and exits actually. With this and with that proven business model that Ventures helped create, EQT Growth also invested in Wolt, to help accelerate their expansion until their combination with DoorDash.
We acquired LSP for similar reasons, to be able to support healthcare companies from early stage to mature companies, and also to really strengthen our scientific expertise. In real estate, EQT Exeter strategy is similar, developing single properties which are aggregated into portfolios, which can be owned by a third party, but also managed by EQT Exeter for the very long term. In private capital and infrastructure, we're expanding our ability to own and transfer companies over the longer term. We recently activated EQT Future, our impact-driven longer hold fund with a EUR 4 billion target size, and we just set the target size at EUR 5 billion for our new strategy, EQT Active Core Infrastructure. More broadly, I'm actually quite confident that we will continue to see this trend of companies remaining private for longer.
EQT and our peers are driving this trend by being active owners and supporting companies at every stage of their development, and also with strong capital bases. Looking overall at private markets, we expect the market to continue to grow at about 10% annually until 2030. This means more than $10 trillion of capital coming into our industry. This trend is driven by investors increasing their allocations to private markets. Why is that? Well, you know, private equity, private markets has now proven that it has outperformed globally over time. There's also an increasing amount of capital in the world that is seeking outperformance and stronger yields, stronger returns. A major trend is retail and private wealth with a lot of capital now being channeled into private markets.
As we seek to continue to outperform public market benchmarks, which we have since our inception, we're really excited to partner with our clients on this journey to continue to deliver outsized returns. Next, let me share some more details on LSP, the leading European life sciences venture capital firm. The transaction is expected to close this quarter, and we very much look forward to welcoming the team of 34 based in Amsterdam, Munich, and Boston to the EQT family. It's a team with strong scientific knowledge and experience from investing in about 200 life sciences companies and generating excellent returns. With LSP, we see a really interesting opportunity to support life sciences companies primarily first in Europe with funding and expertise. We really do expect LSP to also strengthen our overall healthcare platform globally.
We're gonna become even better at identifying themes and evaluating scientific risk across the healthcare spectrum, and thus broadening the scope of investment opportunities within healthcare. I'm really happy to say that this, the feedback from clients has been very positive so far. This combination has strong merits for both LSP and for EQT, and maybe most importantly, we have great cooperation with René and his team already. Now to Exeter. It's been a real joy to work with Exeter team for almost a year now. We closed the transaction in April. The collaboration has been super, and Exeter is actually outperforming on all metrics. Prior to teaming up with EQT, Exeter had grown AUM revenues and EBITDA by about 25% annually over the last three years. In the last year, Exeter accelerated its growth journey.
AUM grew by about 50% while exit activity was strong. Revenues grew by about 45%, and EBITDA grew by 55%, so a great performance. EQT Exeter has delivered some quite impressive realizations over the last year, including a $6.8 billion U.S. industrial portfolio sale. This was really active ownership and future-proofing at its best. We raised occupancy from 55% to 95%, and 22 million sq ft of newly constructed properties were equipped with the newest renewable design features in the industry. Performance remains top with Preqin, for example, recognizing EQT Exeter as being a consistent top performer across vintages over time. We've of course continued to add talent in order to grow EQT Exeter's footprint with 300 people now being part of that superb team.
As you know, being a local with locals at EQT, and even more so at EQT Exeter, is a key advantage to finding the best investment opportunities. The EQT funds have performed strongly in 2021. We've returned a record amount of capital to our clients after realizations of EUR 30.7 billion. This is the result of having created future-proof companies which are more valuable, and which we realize and then pass on to new responsible owners. Looking more broadly, different sources of capital are looking to buy these kinds of thematic assets that we are owning. This means that there's great demand for the assets when we realize and make exits, but of course it also means that competition for these companies and assets are as high. That's been the case for a long time.
To future-proof returns, we continuously develop our value creation toolbox and our future-proofing capabilities, trying to find companies and assets where we can add value to the business, and where the price today is not the determining factor for the future return. Now, we have active ownership strategies, and that's how we create that return. One great example is IVC Evidensia, where we've fivefold in revenues, we've made over 600 acquisitions, and we've added 1,500 new clinics to the platform. That is the kind of, you know, active ownership that we like to see where we buy a great platform, and then we build onto it, the best we can, with all of our talent at EQT, with superb boards and management teams.
Talking about people, we of course are working to attract the best talent so we can continue to add value in creative ways. Thus we also invest in the EQT platform to support our deals and companies with everything that is needed behind the scenes so our teams can really focus on making investments and adding value. Let me therefore next share some perspectives on how we strive to stay ahead of the curve. Right now, the most integral pillars to future-proof ourselves and our portfolio companies are digitalization and AI and sustainability. Let me first focus on sustainability. We're convinced that sustainable companies attract the best talent, will have the best relationships with regulators, the most attractive customers, and be best placed in the value chain over time.
Sustainable companies are gonna be more resilient and more relevant, and therefore, ultimately, we're convinced, and we see it now in our portfolio, they're gonna be the most valuable. This philosophy, you could call it stakeholder capitalism, is simply good business. You know, like my predecessor Thomas said, we are in the business of good business. At EQT level, we took incremental steps last year to ensure we're working with all stakeholders. We were the first private equity firm in the world to issue a sustainability-linked bond at the EQT AB level. We became the first private equity firm in the world to set science-based targets and demand that our companies in the portfolio also set science-based targets.
I'm super pleased to have Bahare Haghshenas, EQT's head of sustainable transformation, now being a part of EQT's executive committee, further strengthening EQT's strategic focus on this important area of sustainability and purpose. We also continue to integrate sustainability expertise into our investment organization. Sustainability is no longer a separate corporate function. It's really being truly integrated into the entire investment life cycle of all of our portfolio companies, and lots of initiatives are underway. We're, for example, strengthening EQT's data engine to drive transparency and accountability and measurement. After setting the science-based targets, maybe more importantly, we're setting out our ambition levels for the next decade, and we'll come back to that later this year. These elements are all connected to driving long-term performance for our clients by transforming companies to make them more valuable for the long term.
For the EQT funds, there's a huge investment opportunity ahead. As you know, society faces a number of long-term challenges, be it in terms of the aging population, inequality of opportunity, or the climate emergency that we're in. To solve global challenges such as these, capital and new solutions will be required. Being a purpose-driven investor and owner, we're confident that EQT has a strong foundation to transform industries to tackle these problems like you see across many of our investments across our funds, including in particular right now, infrastructure, both in how we're transforming the student bus industry in the U.S. and how we're transforming the ferry industry in Scandinavia. In fact, I believe that private markets has the opportunity and the obligation to really make a difference.
You know, we have the governance model, the capital, the time to really be able to drive that positive change that's needed in the world. EQT's new strategy, EQT Future, is one way for EQT to accelerate that impact agenda, and the same with EQT Active Infrastructure. Now, all of EQT funds are invested based on our purpose, to future-proof companies and make a positive impact. With EQT Future, again, we really set out to challenge ourselves and to raise the bar for all of our strategies, and testing new concepts such as carry that's linked to ESG goals, all in order to secure, again, long-term returns for our clients.
Now, on the other hand, for several years or for many years now, we've invested in digital transformation to support our investment core. We've built an in-house team of digital natives to work alongside and together actually with investment professionals in due diligence and in value creation and with the companies. Second, to accelerate improve accuracy of decision-making across all aspects of investing, we've developed this Motherbrain AI platform, and we built a team of super strong data scientists and data engineers that are also working in a really integrated way with the investment teams. These early investments have been paying off since and strongly contribute to our current performance and resilience, but will do so even more in the future.
Today, fully integrated, EQT Digital systematically engages across all of our investment strategies although we can continue to do a lot more. We're actually in a great place. Like I said, we continue to stay paranoid and work hard to stay ahead of the curve. During 2021, we established a dedicated in-house cybersecurity center of excellence to reinforce our efforts in portfolio resilience. Motherbrain has also added emphasis on supporting portfolio companies on identifying add-on acquisitions, for example, in GETEC. She has so far supported EQT Ventures in identifying 14 new investments. Motherbrain is then being rolled out across the EQT platform with use cases depending on fund strategy and a common core to ensure that we really over time create one easily accessible EQT corporate memory and corporate intelligence.
We're measuring how we take decisions in Motherbrain, to help us sharpen the pencil on, our own decision-making in our investment committees. Super exciting developments, I must say. With that, I'd like to hand over to my colleague Caspar, who will talk more about future-proofing, regarding the EQT platform. Caspar.
Thank you, Chris. We have three strategic priorities for EQT's operating platform. First, we are investing in talent to support our growth journey. Over the past year, we've added great people across capital raising, technology, sustainability, and operations. We're further strengthening the EQT Academy, our in-house training program, and we're also developing our platforms for talent management. The objective is clear. We will continue to invest in our ability to attract, retain, and develop the best talent. Second, we continuously invest to improve the client journey. We recently launched a new investor portal, and we're trying hard to make it easier for our clients to gain access to data and simplifying the fundraising process for our clients. This is particularly important in a year like this when our clients will be busy with a very active fundraising pipeline across private markets.
Third, we continue to build EQT's platform for scalable growth. As mentioned, this means adding talent but also developing our organization structure and establishing even more efficient data management tools, for example. We now have about 730 clients globally, up from 550 a year ago. The commitments that we have from North American clients represent now about 30% of commitments, partly driven by the addition of clients from Exeter. Our capital teams are expanding with stronger local presence across Europe, APAC, and the U.S. Over the past year, our capital raising team increased from about 50 people to almost 85 people, a significant increase and investment. We're also strengthening EQT's focus on private wealth clients. Our products are now distributed through more private wealth platforms. Remember, EQT is not structuring investment solutions. That's not really our core.
We instead work with private wealth managers and servicing their clients, offering them our products in partnership with us. The private wealth landscape is evolving, and we are in active dialogue with various distribution platforms to explore new ways to broaden access to alternative investments in general. Next slide, please. 2022 will be very active when it comes to fundraising. We continue to raise EQT Future, EQT Growth, and EQT Exeter's fourth U.S. Industrial Core Fund. We've just set the target fund size for EQT X at EUR 20 billion and EQT Ventures III at EUR 900 million. The target size for EQT's new infrastructure fund, Active Core Infrastructure, was set at EUR 5 billion. Similar to EQT Future, EQT Active Core Infrastructure will have a longer hold structure and initially charge fees based on invested capital rather than on committed.
This means that management fees will ramp up as the fund deploys capital and not, you know, in fundraising. Fundraising of EQT X could follow a broadly similar timeline as EQT IX did. Fundraising will likely be materially done during 2022, but certainly, it will certainly continue into 2023 before we have a final close. EQT Infrastructure V is now 60%-65% invested, and we're making preparations for Infrastructure VI. As previously stated, we will not be fundraising the flagship funds in parallel in their active phases. It is more likely that we will follow a similar sequencing as we did when it came to the fundraisings of EQT IX and Infra V, where Infra V was launched when the active part of the EQT IX fundraise was materially concluded.
As previously mentioned, we continue to strengthen our position in APAC, hiring leaders in both Japan and South Korea over the past months across Infra, PE, and real estate. However, we have decided to prioritize other near-term fundraisers. Looking ahead, we see opportunities to expand the investment strategies within healthcare, as Chris mentioned, to support, for example, growth stage companies in a similar way that we do with growth within tech. We also continue to selectively evaluate M&A opportunities to strengthen our products or geographic presence. The bar, as mentioned before, for any acquisition is high, and we stay focused on culture, performance, and our vision on being the most reputable investor and owner.
Before handing over to Olof, let me briefly comment on the ongoing review by the Swedish Financial Supervisory Authority, SFSA, with regards on how we handle the information in relation to the lock-up revision and related sale of partner-owned shares back in September. We continue to be of the view that we acted correctly. We have leading Swedish law firms advising us throughout the process, and we have subsequently obtained a second opinion from another leading Swedish law firm supporting that view as well. In addition, we've engaged two separate leading international experts on the EU market abuse regulation, the MAR, and they have both made their assessments, and their conclusions also support our view. Regardless, we are fully collaborating with the SFSA and will await their final decision. If and when we have anything further to communicate on this matter, we will provide an update.
Active dialogue with distribution platforms to explore. Yes. Okay. Thank you. With that, I'll hand over to you, Olof.
Thank you, Caspar. Deployment continued at a good pace throughout 2021. We'd signed investments of just over EUR 20 billion, of which EUR 13 billion related to the second half of the year. Deployment over the year was evenly distributed between private capital and real assets at about EUR 10 billion per segment. In terms of our key funds, EQT IX is now 75%-80% invested, up from 65%-70% in our Q3 update. Notable investments in the last quarter included Suplas, CFC, and 3Shape. Looking at Infra V, it's now 60%-65% invested, as Caspar mentioned, and that's in line with the deployment level in our Q3 update. After a busy Q3, the main investment announced in Infra V during Q4 was the acquisition of Icon Group.
In addition to the twenty billion euros of investments announced in 2021, our clients deployed another about nine billion euros through co-investments with us over the past year. As Christian mentioned, we continued to make investments where sustainability is an important value driver. To highlight a few examples, EQT Ventures is backing Einride, specializing in electric and self-driving trucks. EQT IX acquired thinkproject, providing software to help reduce waste in the building sector. In our infrastructure segment, decarbonization and electrification was a key theme, as Chris mentioned, in recent investments such as First Student, Molslinjen, and Progal. Over the past year, we realized assets of thirty point seven billion euros. In private capital, EQT VI is now fully realized, and it will be removed from our key funds from Q1 and onwards.
More than half of the current value of EQT VII has been realized, and we have selectively started to realize assets in EQT VIII. This means our private capital team has ample capacity to continue to drive investments at a good pace in more recent funds and value creation in the existing portfolio companies. In real assets, almost 90% of the current value of EQT Infrastructure II has been realized. In Q4, EQT Infrastructure III announced the sale of GETEC and Phoenix Marine, and we expect Infra realizations to continue in 2022. Similarly, the drive for exits means that the smaller size of the portfolio enables us to continue to develop companies and make new investments at a reasonable pace. As Christian already mentioned, EQT Exeter, of course, had some large recent portfolio sales. Next slide, please.
Value creation across our key funds continued to develop well throughout 2021. As previously noted, EQT VII, EQT VIII, and EQT Infrastructure III are all expected to deliver returns above plan. Notably, EQT VIII saw a valuation uplift from 1.4x gross MOIC to 2.6x over the past year. Companies across the portfolio have performed strongly this year, and the fund has had a few exits, including some IPOs. Listed holdings are booked at market value in our quarterly fund valuations. EQT VIII being a 2018 fund will be active for a few years still. As such, we stay focused on developing companies rather than the short-term market moves we see in listed holdings.
The valuation of Infrastructure III increased from 1.8 times to 2.6 times over the past year, and this was partly driven by strong realizations towards the end of the year, resulting in a meaningful value uplift. As the EQT funds have actively been exiting assets, they have a relatively young portfolio of companies which have all been sourced with a strict thematic focus. With a healthy portfolio, investment teams can largely focus on sourcing new investments and driving value creation across portfolio companies. Market values remain high, and we continue to be very focused on companies which are supported by strong secular growth trends. Our funds invest in companies with leading market positions and pricing power and in downside protected businesses with high cash conversion.
We're also remaining disciplined when it comes to leverage levels, targeting what is best for the business and its value creation plan rather than maximizing total leverage. To put this in context, when we analyze the value drivers for our past exits, about three-quarters of value creation was driven by sales growth and margin expansion in our private capital segment. In other words, it's how we develop the companies over time and over cycles which matters the most, not leverage. Portfolio construction is important, and we maintain well-diversified funds. With deal flow continuing to be strong across sectors and geographies, we stay selective. With that, I'll hand over to Kim.
Thank you, Olof, and good morning, everyone. I'm very pleased to look back at a year of record performance in all areas. The full effect of EQT IX and Infrastructure V as well as the addition of EQT Exeter led to a strong uplift in management fees. In addition, the strong performance resulted in significant carry recognition. Combined, this meant revenues doubling and EBITDA nearly tripling as the business scales. Let me first focus on AUM, which increased by 40% during 2021, mainly driven by EQT Exeter adding about EUR 9 billion in AUM as the acquisition closed on April 1 and with another more than EUR 6 billion of gross inflows since closing. With some sizable successful realizations this year, Exeter is today at about EUR 12.5 billion of AUM.
Secondly, on EQT Infrastructure V, the fund had its final close at EUR 15.7 billion in AUM, with about half of the fund commitments being attributed to 2021. EQT IX held its final close at EUR 15.6 billion in April, with about EUR 1.6 billion of that, those commitments being closed out in 2021. As you know, the AUM base is reduced with the cost of investments as the fund exits holdings, so amounting to about EUR 8 billion last year. But remember that some of the recently announced exits have not yet closed and are therefore still included in our AUM numbers. As we think about 2022, we expect a meaningful uplift in AUM based on the various fundraises which have been initiated as Caspar outlined earlier.
There are a couple of technical aspects to keep in mind. First, in our H1 2022 numbers, only closed out commitments from the ongoing fundraises will be included in AUM and thus in the management fee number for H1. Secondly, when we activate a new fund generation, the previous fund generation generally reduces the AUM base to invested capital. And thirdly, all clients, regardless of when they commit to a new fund, they pay fees from the fund starting date. Next slide, please. Revenues more than doubled in 2021 compared to 2020. The increase was primarily attributed to the management fees from Infrastructure V and EQT IX, as well as the combination with Exeter and the carried interest from EQT VIII and VII.
One-third of revenues in 2021 were attributed to carried interest and investment income, of which investment income was some EUR 73 million. As a reminder, investment income is a function of the changes in fund valuations. Currently, EQT's fund investments stand at just shy of half a billion euros. Our platform is scalable, and while we grew expenses meaningfully in 2021, our EBITDA margin widened to 68%. The retroactive fees, as we call them, late fees, did increase the margin somewhat, approximately two percentage points, for the year. Note that Exeter's financials were only included during nine months of 2021. Exeter contributed to revenue with EUR 134 million and EUR 86 million of EBITDA during the nine months of our ownership.
For Exeter's full year numbers in 2021, you can add another approximately EUR 30 million to revenues and EUR 50 million to EBITDA. Next slide, please. In 2021, we added about 450 people, of which approximately 300 related to Exeter. We're growing across the board, including in areas such as client relations and capital raising, digital, and fund operations. We also added colleagues across EQT's investment strategies, including our new strategies. The 2021 personnel expenses do not show the full effect of this FTE increase, with many joiners only having been with us for part of the year. We continue to actively hire to support our growth agenda. As Christian mentioned, we could see EQT having towards 1,400 FTE plus at the end of the year or possibly more.
From LSP, for example, we expect 34 people to join, and they will also be growing their organization during 2022. By adding people across the platform, we continuously invest ahead to support our AUM growth and to have the right resources to continue to drive investments and returns across our investment strategies. As we look ahead, we will likely continue to have about two-thirds of our cost base relating to personnel expenses, and about half of our personnel cost is generally variable. In a year like 2021, where performance is very strong across the board, incentive compensation is higher as we look to reward our global teams. Next slide, please. 2021 has been a very strong year, but we remain vigilant. Inflation has picked up and interest rates may be on the rise.
As Olof described earlier, our funds are well positioned with portfolio companies backed by secular growth trends, and we have well-performing funds. Our business is to transform companies, and this is the primary driver of the returns, not leverage, for example. While we think our portfolio would be resilient in a downturn, we would surely be affected if we were to see a sustained deterioration in the economy and markets. Let me recap what we would expect in such a scenario. We'd expect the activity levels would go down, which in turn means we could revert to more normal fund cycles. Our management fees are stable and contractually recurring, but if realizations go down, it could take longer to realize carried interest. If funds were to be marked at lower valuations, this would be reflected in our investment income.
We do control a meaningful part of our costs, and thus we would expect our cost base to grow at a slower pace in such a scenario. Next slide, please. Let's wrap up by looking at our financial targets. As stated at the IPO two years ago, we expected an EBITDA margin of between 55% and 65% over the medium term. The targets should be viewed over a cycle, and we think this range is still a reasonable indication of where we expect margins to be over the mid to long term. In years with great performance and thus carry recognition, we would expect to be at the upper end of such range or even above.
Indicatively, we have also said that over time, the share of carried interest and investment income is expected to be between 25%-30% of total revenues. Carry and investment income corresponded to 33% of total revenues in 2021. As always, it's important to look at carry on a long-term basis over the lifetime of the funds. Remember that carry is 20% of all profits in a fund. When a fund goes from 2x-3x, that doubles the amount of carry generated. We've stated that our ambition is to generate a steadily increasing dividend in absolute euro-denominated terms. We continue to see opportunities for growth. With a strong balance sheet, we retain the flexibility to support new initiatives with capital, to follow our fund commitments, and to make add-on acquisitions.
The board of directors has proposed a dividend per share of SEK 2.80 in Swedish kronor to be paid in 2 installments. With that, I'll say thank you, and we will now open up for questions.
Our first question comes from Arnaud Giblat with BNP Paribas. Please go ahead.
Good morning. It's Arnaud Giblat from BNP Paribas. I've got three questions, please. Firstly, could you talk about the outlook on investment activity and exit activity? Obviously, we're coming off a very hot 2021. How does the pipeline look on both fronts? I have a subquestion on there as well. Could you talk a bit about the sensitivity to returns over a 100 basis points increase in base rates, and how you're factoring that in your investment models? My third question is on corporate M&A. I mean, across the board, we've seen quite a lot of activity happening there. You talk about it as an opportunity for growth. Could you talk, give us a...
Flesh out a bit more what sort of opportunities you may be looking at? Are there a lot of companies that might be seeking to be acquired? Thank you.
Thanks, Arnaud. I'll share some of these questions, I think, with Caspar. Starting on the activity, the strong activity that we saw in 2021 on the new investment side is continuing. It's continuing across all of our asset classes, actually. You know, the way that we work, we work with long-term secular trends. We're local with locals in every country, and for Exeter, actually, even every state or jurisdiction. Our ability to drive deal flow, you know, continues to be very strong and really unchanged. The momentum for, you know, for the medium to longer term also looks strong.
When it comes to exits, you know, we've had a huge push on exits as we've been talking about, I think, for quite a while, across all of our strategies. That will continue. You know, we believe that it's quite important to drive portfolio construction, you know, when you're making new investments and adding to the portfolio. It's also important to work with the older portfolios and to make sure that you exit in a way where you drive returns to the investors as we have been doing, but also making sure that the portfolios become in total manageable for our teams to continue to be really close to and add value to. Our exit, you know, push will continue this year across.
Yeah, again, across you know, multiple strategies or all of them. When it comes to M&A for add-on acquisitions for EQT, as you heard, we're you know, super happy with how we're working together with Exeter and becoming one company. LSP is about to join the team. We're looking at a number of smaller, you know, let's say specialty investors, either in certain geographies or in certain investment themes. We continue to look at, you know, filling in the white space over time, where we're still not yet that active.
Behind the scenes, we've also been really strengthening our M&A and business development team so that we can continue to, you know, drive the add-on acquisitions and also make sure that we handle them and work together and integrate them in a really good way. That's also, you know, one of the reasons. Maybe I should say it this way. We're also growing organically quite significantly, both in existing funds and in new funds. Therefore, we're having a lot of focus on making sure our whole platform, which Caspar is responsible for, is really scalable, you know, so we can continue to add new initiatives to the platform. Anything you wanna add, Caspar?
No, I think you covered it well.
Very good. Thanks. Anything further, Arnaud?
Yes. Just the impact of 100 basis points
Oh, yes.
Um-
Apologies, I didn't write that one down. You know, the way that our value creation plans are developed, it's really about transforming companies. As you heard, about 75% of our value creation is actually generated by, you know, by transforming the companies by increasing sales and growing margins. Then there's a remaining effect between leverage and multiples. A hundred basis points in our models, given also that we're typically not the ones that are maximizing leverage, is not gonna have a material impact.
Perfect. Thank you.
Thank you.
Our next question comes from Bruce Hamilton with Morgan Stanley. Please go ahead.
Hi there. Morning, guys, and thanks for all the information. Three from me. Firstly, on exits, I guess just as we cast forward and if, you know, market uncertainty increases, how important to you, if you look historically, have sort of IPOs been versus strategic buyers and selling to other PE, just to get a sense of the importance of the sort of IPO market? Secondly, on the wealth access, which we agree is, you know, is gonna be an important growth area, just to double-check. You'll not change. You're not sort of innovating on product, you're just looking to access more distribution channels. Is that mainly sort of large wholesale banks across different geographies? Is it through wealth platforms or a combination of both?
Where are you know, perhaps from a geographical standpoint, pushing first, or is it across, you know, across all geographies? Then I guess just any other color around sort of cost flexibility. I guess on cost, we should take sort of the second half run rate and grow from there. You're annualizing at about SEK 610 million of costs, I think, based on the second half. Is that the start point, or is there sort of an elevated level of variable compensation because 2021 was an extraordinary year? How should we sort of think about some of the impacts that might offset the strong growth in FTEs? Thanks.
Mm-hmm. Thank you, Bruce. On the IPO side, and might be that one of my colleagues have this number off the top of their head, but in general, we are, you know, we like to make exits through either strategic buyers or through financial buyers or families, or other groups that will buy the companies from us. In certain circumstances, we do IPOs. We typically do a few per fund, and we try to select those very carefully so that they're companies that are really highly appreciated by the public markets, and where we can, you know, let's say slowly but surely monetize over time. So, the...
That's kind of the philosophical answer and, you know, certainly there's a premium for us, also for our clients, when we make an exit to distribute cash. Everything else equal, we'll typically choose another route than IPO. It's really on a case-by-case basis. Sometimes, like Certara, for example, which is a platform that's doing lots of acquisitions and needs a currency to grow, makes a lot of sense to have it, that be a public company. There will be a few, but generally, it's not our, you know, preferred or primary route. Let's see if I don't know if you have anything to add, team. Otherwise, I would go to the next question and that's the wealth channel. Caspar, do you wanna cover that?
Yeah, sure. I can just touch upon the IPO exits as well. Now, it was a couple of years since I looked at it, but a couple of years ago, it was less than 20% of our total exits that were IPOs. It's not a huge, and has never been, although this varies quite a bit over time, and we've gone through periods, long periods, where the IPO markets have not been open, and we've managed to do, you know, good exits during those periods of time as well. Just to be clear on that. When it comes to the wealth channel, I guess there was basically two questions.
You know, what do we think about distribution and are we distributing through banks or other platforms? I would say both. From a geography perspective, we are also working with both. I mean, historically, we very much come from a Nordic distribution, if you look way back to a more European, and now I would say global, with also quite a few of the U.S. big names, as you would imagine. We have also added cooperation with the more specialized platforms that we work closely with. I think it's early days with those, but I think the potential there is obviously great over time, but it will not move the needle in the short period of time.
We're investing in that relationship as well. I think if you look at private wealth as a whole, we expect, you know, that share to be growing in our fundraising. Even though, you know, our fundraisings will grow by itself, the share from private wealth would grow at a higher pace. A third question with regards to costs, Bruce. Well, of course, it's so that the latter part of the year is more representative of the current run rate on the cost side.
When it comes to flexibility or variability in the costs, I did mention that north of half of the employee costs are variable in a year like this. It really depends on what you assume as performance in the future, whether how much you vary that cost number. I can't give you that type of guidance, but then you sort of have a sense for what we can do under different scenarios.
Maybe also a reminder that the investment professionals' ability to invest in the funds and therefore take part of the performance upside through the carried interest is an important element of the wealth creation for the investment professionals, not necessarily the variable compensation here.
Got it. Very helpful. Thank you.
Thank you.
Our next question comes from Ermin Keric with Carnegie. Please go ahead.
Good morning, and thanks for the presentation. Could you just talk a little bit more on the carried interest that you booked now in H2 in terms of which funds are contributing? So for instance, is Infra III contributing? Could you quantify-ish how much?
We do not provide that breakdown in detail for you, but we did mention that seven and eight and Infrastructure are contributing all three of them to the carried interest. Obviously, EQT VIII is a significant. It's a larger fund where we have a larger part of the carry going to the house as well. That's an important element to it. I'll leave it at that.
Okay. Thank you. Then returning a little bit to the private wealth channel, do you see that you'll have any different terms or higher fee levels or so in that channel? I can just also add on the last question I had on a different topic. Given the quite material exits that Exeter has had recently and so on, when could we expect EQT to start having any carry contribution from Exeter? Is that still a few years away or has the kind of more active exit agenda generally also moved that time point earlier?
Should I start with private wealth? I would say there is in general not a big difference on the private wealth side if you look at the net fee levels. Typically the models may be looking a little bit different than institutional capital. If you look at the net fees received by EQT, they're typically aligned with what an institutional investor of that similar size pays. I would say, you know, that's the answer to that question. Exeter carry, do you wanna-
Yeah. You can fill in, you're on the board. The deal was structured in a way whereby we had a smaller proportion of the carry in some of the older funds, and then in all funds following the acquisition, we would have the 35% as we do have in EQT. It is not yet time for carry from Exeter. Yeah. I'll leave it at that.
Got it. Thank you.
Our next question comes from Hubert Lam with Bank of America. Please go ahead.
Hi. Good morning, guys. I've got three questions. Firstly, on Infrastructure VI, you seem to imply that fundraising could start later this year. Any indication in terms of the size for that particular fund? That's the first question. The second question is on valuation of your funds. You moved up valuations across most of your funds in private capital over the last year. Do you see any risk to the fund valuations now, just given, you know, the recent sell-offs and your exposure to the tech sector and high multiple sectors? Lastly, I guess you did discuss a bit about M&A and that you are open to doing more.
Which areas or you mentioned a white space do you think that you could look at, how you could possibly fill if you see good opportunities?
Mm-hmm.
Thanks.
Thank you very much. Good questions. When it comes to Infra VI, you know, we haven't indicated a size yet. The way we typically do that is that we, you know, once we get towards the end of the previous fund, which is Infra V, of course, we look at the opportunity set, we look at the, you know, the demand that we expect from our clients, and then we set a target. Once we start the fundraise, then we set the hard cap. That's how that process works. Sorry, I'm just seeing myself in triple here for some reason. There we go. So, we'll be clearer on that, you know, as the year goes by.
As Caspar said, you know, we'll start to activate that once the main intense period of EQT X has been, we've been through that, and of course, as Infra V becomes fully invested. When it comes to the valuation of funds, you know, most of our value creation is actually from transforming the companies from driving revenue growth, EBITDA growth, you know, changing the company to become more valuable for the longer term. If you look at this correction in some of the growth stocks that has happened in the new year, we don't expect that to have a material impact on our valuations nor on our long-term performance.
Of course, there are probably one or two companies that are, you know, that are mark to market that are public. But, you know, if you take the scale of EQT's funds and where our capital is invested, the amount that are in such high growth public companies or private companies is pretty small. I think this is really an important point and why we're so focused on active ownership and really driving value creation of businesses. We'd like to say, you know, the companies that we buy today, the prices that we're paying today for the businesses is ultimately not the main determining factor. The key is to buy the right platform, the right company, the right asset that we can really transform.
In EQT Exeter, of course, is buying multiple smaller assets, creating much more resilience and the much better assets, pulling them together, and then exiting that to, you know, to a longer term owner. In companies, it's really about driving transformation like the great example that we love with yellow buses. You know, any short-term market fluctuations, as we see now or a little bit of interest rate movements is not really what drives the value creation in EQT's investment strategies. The next one, M&A, not sure I can answer it much more specifically. If you look at, you know, what we've said is that over time we would like to be global in all of our strategies. Where we're the strongest today is in Europe.
The second strongest market that we have is North America, but still there's a lot to do there. The third one, where we're the smallest in relative terms, both to EQT and to the market, is in Asia. There are certain themes like life sciences, like tech, et cetera, that, you know, are our largest investment strategies where we could be interested in, you know, in accelerating. There might be other themes that we also would like to, you know, when we look at long-term secular trends that we'd like to strengthen. That's kind of how we think about the matrix. We of course try to choose or we only choose companies that fit EQT's culture and values.
Great. Thank you.
Our next question comes from Magnus Andersson with ABG. Please go ahead.
Good morning, guys. A lot of questions already, but I think I'll just for you, Kim, try my luck again with the carry split between the funds in VIII to X to 2021. In relation to the first half report, you were a bit more explicit saying that 90% of the total carry was from the EQT VII, which at least was very helpful to me. So I would just like to know if you can be a bit more specific. You're highlighting EQT VIII, but could you say whether it's, I mean, more than 50% of the carried interest or be a bit more explicit.
Really fishing there for a number.
Yeah.
Magnus, no, I wouldn't like to give those numbers randomly here now. I don't think that would be fair to everyone. Because of that you have a kind of the seven is the seven number that I mentioned, and then in the H one, and then that gives you sufficient triangulation to know where we are approximately. Sorry about that.
Secondly, just, Olof, you mentioned that you had EUR 9 billion in co-investments in 2021. What was that number in 2020?
Between SEK 2 billion and SEK 3 billion.
SEK 2 billion-SEK 3 billion. Okay. Thank you very much. That's all for me.
Thanks.
Our next question comes from Michael Werner with UBS. Please go ahead.
Very much, thanks for the presentation, guys. Two questions from me. First, I guess on the dividend. You know, I think the proposed dividend for 2021 was a little bit less than what the market was anticipating. You know, I know you guys have a progressive dividend policy, we saw the dividend rise, I think, about 17% year-on-year, whereas net income more than doubled. How should we think about, you know, the progressive dividend policy as we go forward, in terms of the correlation between earnings growth and dividend growth?
Second, very helpfully, you provided the percent of variable costs in 2020 as a percent of personnel costs, which I think was a bit greater than 50%. Can you provide, and again, apologies if I've missed, the figure for 2020? You provided on 2021. Can you provide that figure for 2020 last year? Thank you.
Yeah, I can take-
Yep.
I guess, but about at least the second one.
Yeah.
Yeah, the 50% is more of a rule of thumb. The difference between 2021 and 2020 is not dramatic because you have I mean half of it is fixed costs, and the significant part of the variable is also sort of you know the same year-over-year, regardless of whether it's a great year or just a good year. I guess 2020 was also a really good year. It's only a few percentage points that those differ from each other. Secondly, when it comes to dividend, we have explicitly not tied the dividend to net income.
You should not be looking at our dividend policy as a function of the net income, but rather as a stable growth in the dividend in euro terms. That's the target for us.
Thank you.
Kim, do you wanna add a little bit on how we're thinking about our balance sheet?
Yeah. I guess that we are in the growth business and you know that the various opportunities we have been discussing here already, both when it comes to M&A, when it comes to starting new strategies, helping out with those, when it comes to investing in the funds in order to show to the client base that we strongly believe in these funds as well. All of that requires a strong balance sheet with flexibility. That's what we think we have in addition to the cash we had on the balance sheet as of year-end, which was close to SEK 600 million.
We obviously have SEK 1 billion of revolver as well, and you know, significant operational cash flow coming in. Maybe a reminder that year-end and half-year-end are always the sort of low points of our cash position as the management fees are charged in January and July.
Thank you.
As a reminder, if you do wish to ask a question, please press zero one on your telephone keypad. Our next question comes from Jakob Brink with Nordea. Please go ahead.
Thank you, and good morning from my side as well. Just on two technical questions. We just discussed it just before, but on the variable pay, maybe I missed it in the report, but do you state or can you help us understand how much of the Q4 staff costs were related to performance-based pay? That was the first one.
No. We do not state that number. We just give a sort of rough split, i.e., that 50% of the employee costs are variable. That number was a few percentage points higher this year than it was last year, which was also a good year. Keep that in mind.
Yeah. The reason for asking is that obviously costs were somewhat higher in the half year than consensus had expected. Just trying to understand how much of that is with all the stuff that has happened with Exeter coming in and you expanding outside Europe with higher pay. How much of it is sustainable and how much is related to the strong year? I don't know if you can give any help there.
Well, it is a mix of both of those. We are recruiting, like we mentioned, both in sort of new geographies. We've opened offices in Japan and Korea and so on. That's a sort of slow change if you have more than 1,000 employees to start with. Those are on the margin changes. So the main part of it would relate to the compensation to the ones that are on the book already.
Okay. Fair enough. Thank you. Maybe one other point where you deviated somewhat from consensus on the carried interest in the quarter. You did already mention, was it SEK 73 million investment income for the full year? But just trying to understand a bit more. I know we have discussed it before, and I do get the overall model, but how exactly did you end up with the carry and investment income number to put in the P&L this quarter? I mean, the fund, the gross MOIC of EQT8 was unchanged from Q3, obviously up a lot from the half year, but what kind of discount, MOIC assumptions did you make on the line to derive that number?
We have said that the discount we apply is in the range of 30%-50%. It is higher for the higher risk strategies than for the lower risk strategies. It may be higher depending on the time of where we are in the specific funds. We have high discounts. We have used at the upper higher end of that range discounts during the course of this year or last year.
Isn't it fair to say that the
You said-
The majority of the carry realizations come or the carry recognition comes out of realizations from the portfolio?
Yes.
It's when exits are made. I mean, obviously it's an equation where you have both valuations and exits, but really, it really comes out of realizations exits.
Yeah. Okay. I was just. I can't remember exactly when you did the exits, but you have done two real exits, right? From EQT8 and then two semi exits. I can't remember exactly when you did them, but just wondering why exactly this pretty big impact in the second half of the year. I guess you must have moved the discount somewhat or is it?
No.
Are you-
No, it doesn't have to do with that. When you make an exit, you obviously take away the discount completely because then the company has been exited. If you make a partial exit, you still leave the discount on the part that you own, but you may mark up the value, of course, to the exit value. The valuation may still be higher or would still be higher in these instances than they were in the books.
It is a combination of valuations and exits there. As we mentioned, SEK 73 million of the total carried interest and investment income line is actually investment income, which is directly related to the changes in the fair values of the fund investments we have.
The MOIC driven mostly by the exits went from 2.1-2.6 in the second half.
Yeah.
I hope you understood that it's getting a bit technical, but what Caspar and Kim are saying regarding what happens when you drive an exit, you have a kind of a double whammy because you eliminate the discount and you have a mark to market.
I think in the interest of time, I'm very happy to follow up on all these, the details and the technicals around this, you know, separately as well. Maybe we move on.
Yeah. Maybe we do the same on personnel expenses, so we don't get more questions on that because I don't think we're gonna give more information on that in this forum.
Thanks a lot.
Good. Thank you.
Our next question comes from Maths Liljedahl with SEB. Please go ahead.
Yes, good morning, guys. A few follow-ups from the SEB team. Kim, you mentioned in relation with the Q3 update that you had, like, SEK 4.4 billion in implied carried interest if all funds were performing according to plan. Do you have an updated figure on that number, or has it been changed because it was according to plan? That's the first. Infra VI, if you could just allude how we should think about size going forward because EQT IX and 5 were rather similar. Could we draw the same conclusions on the upcoming Infra VI, or is it too far-fetched? Thank you.
Mats, do you want to
On the first one, no, I do not have an updated number for that.
Okay. Thank you.
Sorry.
On the second one, you know, I explained a little bit earlier that, you know, once we are a little bit more invested, and we're, you know, heating up the fundraising for Infra VI, then we evaluate the opportunity set, the momentum in the funds, and we're, you know, speaking to our clients, and that's when we set the target fund size. In the same way that we set the target fund size last night for EQT X. It's too early for us to comment on the size of that fund.
Of course, what I can say is that as you can see, our fund strategies are performing well, and we're driving both deal flow and exits, and have the capacity to, you know, to drive a good fundraise.
Okay. Thank you.
Our next question comes from Gurjit Kambo with JP Morgan. Please go ahead.
Hi. Good morning, guys. Just a bit of points of clarification. On the EQT Fund ten, are we expecting a first close, like, in the first half of this year and then the final close in 2023? Did you say the Infrastructure Fund six could come, like, the second half of this year? Just, I'm trying to understand a broad timing around the, you know, I guess the bigger flagships that you have. That's the first question. Then on the personnel and other operating expenses, I think on slide 25 you give some comments around the exit and purchase price and transaction costs. Just to clear that those are excluded, those are the items that adjust the comparability just so they're excluded from the, I guess, the starting base.
Finally, just on the FTEs, the 1,400 employees, how much of that growth, you know, year-on-year will come from the in-sourced consultants versus the FTE plus numbers? Thank you.
Mm-hmm. Thanks. The quick answer to your first question is yes. You know, we're 75%-80% invested in EQT X. We're in fundraising now as we speak. The timing you mentioned is what we would expect. The same with Infra VI is that once the active period of EQT X is done, we would activate the Infra VI. Of course, depending on also investment pace, but generally first half and second half, yes. Then a final close in 2023 for EQT X. Kim, did you hear the question on the personnel expenses?
I didn't get the second question. I'm sorry. Can you repeat that one? Or maybe I answer the
No
... the third one first on the 1,400. That's the answer is that we don't necessarily know, because some of the people that are starting off as consultants then transfer into full-time employees over time. But I I'd use a similar proportion as we have right now. I don't see any reason to change that with the potential exception then of acquisitions where, as we mentioned LSP, we'll add 34 to, say, by the end of the year, 50 heads to the headcount already. So that's the third question. The second one, can you repeat that?
Yeah. Yeah, sure. So just on the SEK 524 million of costs for the full year, you know, I'm just trying to understand, is there anything that would be considered to be, I guess, slightly exceptional? It's sort of coming back to the point, you know, if we use the exit rates for H2 gets us to about SEK 610 million. You know, is there anything exceptional maybe in the second half for cost?
No, no. If you look at the adjusted numbers that we are the ones that we follow operationally, there is nothing exceptional in those numbers, no.
Okay. Thank you very much.
You're welcome.
There are no further questions. I hand back over to our speakers.
Chris, you're on mute.
Thank you very much, Kim. Thank you very much for the engagement and all the questions. We look forward to seeing you at our next quarterly meeting and continuing to drive the momentum of EQT forward. Have a great day, everyone. Thanks.