What a ride the past 30 years have been. EQT has transformed itself from a Nordic owner of industrial companies to a global owner investing across industries. We have added capabilities and strategies while maintaining our central focus of buying good assets and making them great. To do this, we bring together a network of world-class colleagues, advisors, and entrepreneurs from all over the world, working together not just to deliver superior returns but to create value and make a positive impact on society and the planet. Through the years, we've pursued innovation in sustainability, digital technology, and AI. As an active owner of companies and buildings, we're experienced in navigating global economies constantly in flux. Upheaval in the financial markets is not new. We have learned to persevere through challenges, stay humble, and grow from our mistakes in order to succeed in the long run.
Our diverse portfolio of bold bets on a sustainable future reflects this. Whether we're helping to decarbonize our energy systems, propelling the digital economy, or giving patients access to new medicines, we are driving a better future while returning value to our clients, from institutions serving millions of pensioners to individuals who have trusted us with their hard-earned savings. The future holds tremendous value for people, communities, and the planet. Our mission continues to be the unlocking of its potential. Thank you for your trust in us. EQT, forward-thinking from the start.
Welcome, everybody. Hope you got inspired by our 30-year anniversary movie, because we're actually turning 30 this year. As an EQTarian, I'm turning 26. In real life, 52. So half my life has been at this firm, and that's pretty amazing, actually. We're so happy to have you here. It's our first Capital Markets Day ever, actually. It's the first we assembled this type of crowd since we went public. It's extremely bright. So if you could turn it down a little bit, that would be very nice. We're going to talk to you today about what you saw here in the video and how this momentum that we've been building for 30 years is going to continue into the future. We're excited about that, and you'll see a lot of my colleagues on stage here during the day. More about the agenda later from Olof.
I always start my presentations with our purpose. EQT's purpose is to future-proof companies and make a positive impact. When we started EQT, it was actually to be more than capital. It actually means the same thing. We're playing with words a little bit also in this purpose. The word is impact, because it's both impact in the sense of sustainability, in the sense of making our companies healthier, better, stronger for the future. It's also that everything we do, all of our investment strategies, have to do with having an impact on those companies or buildings that we're working with. You'll hear a lot more about that later today. Of course, our mission and if this was a workshop, we would do a quiz. What is our mission? What do we provide, actually? What is the product that we sell?
That, of course, is superior returns to our investors around the world. We have now built, over these 30 years, a global leader in active ownership strategies. It's five years since we went public. And this platform we've now built really puts us in a super strong position to continue to grow, take market share, to serve our clients, to continue to drive that unique performance that we are driving, and also, very importantly, attract the best talent and the best people around us to help create value. We built this systematic approach, actually. And one of Leif Östling, actually he's here, he used to be on our board, Leif said to me a few years ago, you've kind of industrialized Private Equity. We've systematized our value creation and how to develop and transform companies. And we have. And now we have 300 companies around the world.
We have something like 750,000 employees, those companies. We own 2,000 buildings. And that, of course, is a lot of responsibility. But we enjoy that. We think it's exciting. And we have a model on how to work with those, which works very well. And here are some of those principles that are behind how we work. And these have been pretty much the same since day one, actually. So it's a combination of really active ownership, being local with locals, and thematic investing. So we're finding long-term secular themes in society that we're investing behind, but we're doing it with locals. So in Tokyo or in Japan, we do it with Japanese, and Stockholm with Swedes, and Switzerland with Swiss, you name it. Wherever we are in the world, we're working locally. We're a part of society. And that gives us an edge over all of our competitors.
Nobody else in the world has that network. We also have, there's an amazing network of industrial advisors, so CEOs, chairmen, specialists from around the world in various industries that we invest behind. And they're helping us find the companies, invest in the companies, do due diligence, challenge us on the boards, lead the boards. And it's really an extended arm of EQT, which is very, very powerful. And of course, we have our own culture that you'll hear a lot more about today. We have a values-based culture, which we take very seriously in how we develop people, attract people, and retain people. And all of this within the Wallenberg mindset of thinking really long-term and being a player in society. And the Wallenbergs have wonderful expressions like "make friends, not enemies." Very simple.
But if you think about it, as an owner of companies around the world, that's actually pretty important to us. And all these things put together are what makes us different. Now, we're also trying to be thoughtful about how do we stay ahead of the curve. So we were one of the first in the world, actually, to use this Industrial Advisor approach. We've never been financial engineers. A lot of our peers in our industry come from accounting or finance or whatever. We come from long-term ownership, being the best owner that we possibly can be. And therefore, we think about what do companies need to excel? Well, you have, of course, digitalization. We started that, what, more than 10 years ago, our digitalization effort, probably almost 15 years ago now.
EQT is actually completely in the cloud, from the back office all the way to the front office and everywhere in between. We're 100% in the cloud. And that, of course, helped us with EQT Ventures also create Motherbrain, our artificial intelligence unit that we've had since 2015 or so. You'll hear more about this later, of course. But it's something that we've been training in AI in years and years and years, and now being totally accelerated with generative AI. Super exciting. And we try to think about this. How do we stay ahead of the curve? What do we need to win? What do our companies need to win in this competitive world? And the mindset that we have is this one. And for those of you who know us, it's a little bit painful, because you can never be satisfied.
So yes, we've had a lot of success at EQT. But we don't want that to come to our heads, shouldn't go to our heads. We want this mentality every day. When something is good, it can be better. When something is great, it can make it awesome. When something is awesome, we have to find a new verb or adjective or whatever it is. But that's how we think, continuously improving and improving and improving. And that makes it never boring to work with us as well. Now, if you think about why is the private ownership, private equity model so successful, it's got some clear advantages. We have long-term capital, sticky long-term capital, 10 years at a time. We like to say to our companies that we will take a decision in 48 hours if you need capital. Think about that versus a public company.
It's probably six months if the window is open to raise capital. It's a completely different world. We have the sense of urgency. What we can do today, we do today. We decide. We control or co-control all of our companies, buildings. So we can actually, with all this talent, we can actually make things happen. We do that. We try to do it in a good way, with good governance, with healthy, strong boards, coaching, management. We don't like to go in and step on people's toes. We rather inspire and challenge and drive change. All this together, also with incentives that are aligned, it's pretty interesting. We, as owners, the boards of the companies and the management teams, we're all aligned on the same plans, on the same future. We're all invested in the success or the challenges that companies might experience.
And that also is very powerful, to have that alignment that you don't see in many other or probably any other ownership structures. And this is, of course, one of the reasons, probably one of the main reasons, that our industry is growing so quickly. And these are pretty powerful numbers, actually. We're 13 times the AUM versus 3 times the AUM in the public markets. But it's still only a fraction. It's only like $9 billion out of around $100 billion that's in the private markets. So behind this, of course, is companies staying private for longer, more value creation happening in the private markets, the volatility in the public markets, and lots of other issues. That's a whole nother speech that I can talk about at another time, the challenges of the public markets and the rise of the private markets.
But this is happening, and it's going to continue. So bringing it back to EQT, how do we work in this private market? Well, we're investing in these themes. And here are four of them. Now, in energy transition, we own InstaVolt. When we bought InstaVolt, they had 1,000 charging stations in the U.K.. The plan is to hit 10,000 charging stations in 2030 already. Digitalization of society, we actually own 360,000 kilometers of fiber optic cable. So we're one of the biggest owners of broadband in the world, actually. We own one of the biggest data center platforms in the world called EdgeConneX. And they're, of course, helping digitize society. And that is happening faster and faster and faster than anybody thought after AI got so big. Health care is one of our largest sectors.
Of course, in logistics, in real estate, we are absolutely strongest in logistics. This is also a megatrend with nearshoring, with reshoring, with e-commerce, all these trends coming together. Within logistics, we try to use those buildings to make them more sustainable. We have a program. We actually even have a company delivering that, putting solar power, for example, on the roofs of these buildings, which are not used for anything. These are the kinds of themes that we invest behind. If you look at how we've built our companies, we always like to say Thomas, my predecessor, used to say, you could take the Pepsi challenge. I still don't know why he used that example, but I think it's funny. The Pepsi challenge is, do we really create value? Are we really growing our companies? Are we really making a difference?
If you look at the economy and how the economy is growing, these types of growth rates on the revenue side and these types of growth rates on the profitability side, of course, is one way to measure that we actually are making an impact on our companies. About 2/3 or so of this growth is coming from organic growth, so not from acquisitions. So this is fundamentally making the company stronger and better, which we like. Now, these operational performances that you saw help us deliver strong returns to our investors. This is actually across all of our major asset classes, 2.7x the money in private equity in Europe and North America, 2.4x in Asia, 2.5x in infrastructure, and 2.5x in real estate. This is what we're working hard every day to deliver. Remember, we're owners, so we make an impact behind it.
We're not just allocating capital or buying shares or whatever. We take responsibility, and we drive the companies behind this. And then if you think about who are the ultimate clients, who are we serving, actually? Well, today, we're serving 1,200 clients that are institutional around the world. And behind those, the biggest ones are pension funds. So we have a lot of pensioners that are dependent on us generating good returns. We have financial institutions, health care systems, et cetera, sovereign wealth funds, not yet the one in Norway, where I'm from, but hopefully in the future, and of course, increasingly, also private individuals. And we'll come back to that a lot later today. But that's a big, big theme, to provide access to these superior returns in our industry to everyone. That's our vision. The industry calls it democratization of private equity, which sounds a little weird.
It is actually what we are trying to do. Taking a step back now in 2019 versus where we are today, and for those of you who saw our pitch at the time, which Ted, if Ted's here, helped create from Ventures, one of our great storytellers, we had on the front cover a cross-country skier, actually, grabbing a power drink and about to drink it. I probably should have had a cooler picture today. What we said then was that was a watering station for EQT, the IPO, building our balance sheet and building our brand and a number of things I'll come back to in a second. That actually really became so. Since then, we've become a truly global company, joining forces with Jean and his team, among others, with Exeter, Ward and his team, et cetera. It's fantastic.
We've more than tripled, almost quadrupled our client base. We've quadrupled our assets under management. We've quadrupled our revenues as well. They, of course, hang together. And we're also getting better. One of the I get asked quite often, isn't it, as a private partnership becoming a public company, isn't that a problem? Isn't that difficult? And actually, I think it's been great for us, because of course, we've been able to grow and develop like we have. But also, the machinery behind EQT, all of our operations, everything, all of our fund operations and tech and legal and finance and reporting and CSRD and whatever they all are, we take that even more seriously as a public company. We're getting quite good at it. And that's scaling and improving the quality at the same time you see in our margins. So that's great.
Christina leads that operation very, very well. Good. These are the objectives we set out when we went public. They've actually all come true, which is also important to reflect on. I think we still have, of course, a lot of work to do. We're not nearly finished with developing and building this firm. But we have a lot more capital. We have a currency, strong balance sheet. We have a totally normal public company board. There's no super voting shares. There's no golden shares, nothing funny. We're just a clean, simple public company. At least that's our vision to be. We've been able to attract lots of talent to EQT, both organically and through acquisitions, and keep the talent and, of course, build new talent coming up. Strengthening our brand, we have strengthened our brand quite a bit.
There, we have a lot more work to do. Rickard is here somewhere. He's responsible for that whole initiative. Of course, as we move from institutional towards private wealth, towards private individuals slowly but surely, that brand becomes ultra-important. We have plenty of things to do, but we're pretty much on track. Good. Then we've been really accelerating our growth story. We're not only; we haven't only grown through these acquisitions. We've also taken market share, both in our flagship funds, which are growing faster than the market, and in the younger strategies that we've launched. We've actually launched nine strategies since we went public, supporting that with our balance sheet to make sure that we can get going quickly.
So when we hire a team or we create a team internally, that team gets capital to work with and make investments from day one. And that creates a really positive dynamic that we didn't have before. But we remain balance sheet light, as everybody knows. So looking forward, private markets are expected to continue to grow. The numbers that we have from various sources show a doubling by 2030, probably a doubling again by 2040, hopefully more. We'll see. And in that, there's a lot of positive trends. I've talked about a number of them. You'll understand and see more of that during the whole day today. But this outperformance of the public markets, this active ownership that we have, which the public markets increasingly don't have, is going to lead to continued strong returns and continued attraction of capital to this industry.
Within that, we expect to continue to grow and scale our flagship funds. You might have seen, I'm sure you did, last week, we announced a $22 billion hitting the hard cap announcement for EQT X, our 10th flagship private equity fund. Per and team have done an amazing job in a very difficult fundraising market to meet that. It's now one of the largest funds in the world. But more importantly, we are among the absolutely best performers. Infrastructure VI is raising right now. That's also going to be significantly larger than its predecessor. We have a target of $20 billion there. And of course, also on the Exeter side, we raised their largest flagship fund last year, also at a record level. Now, I also get asked the question, how large can a private equity or private markets fund be? We don't know, actually.
The largest infra fund in the world is $40 billion. The largest private equity fund in the world is slightly larger than ours. But there are many different ways to build our business. We can have new sectors. We can have new geographies or existing sectors and geographies where we create specialty areas, like we're doing now with Health care Growth or infra transition, a strategy that we're about to launch pretty soon. So I was also asked the question, how large can this industry become, owning companies and owning buildings, et cetera? And nobody really knows. And I was actually sitting with McKinsey, their leadership team, a little while ago and asked how many consultants they have. And they said, well, we have 45,000 employees and 22,000 consultants. And running a consulting company has some similarities to running our business, although they're very different businesses.
We have something like 700 or 800 or so dealmakers at EQT. I asked the question, why couldn't we have 22,000 dealmakers? And this is not a prognosis, so don't have to write that down. But just philosophically, we really want to be we want to be the best owner of companies. And why should that have a limit? We think there's a lot more to do across all the asset classes that we're in. And infrastructure alone has massive potential. And I'll let Masoud tell you why a little bit later. We've also launched a number of strategies. Like I said, there are the smaller ones. Today, those together have around EUR 7 billion of AUM. And most recently, just yesterday, I think it was, we announced that we closed EQT Future at close to $4 billion of total commitments, EUR 3 billion of fund.
And that's also amazing. It's one of the biggest impact funds in the world and the biggest first-time fund in the world. And we're very proud of that, because it actually helps us stay ahead of the curve on sustainability in multiple dimensions. Very inspiring. And then we have other things like Health care Growth, Transition Infrastructure, Asia Logistics, et cetera, strategies that we're working on or have just launched. And all these together, we'd like our plan is to triple those within the next five years. I mentioned also that we're expanding our distribution channels to private wealth right now. About 9% of our AUM is from that channel. It's going to continue to grow a lot. Suzanne will talk about that in a few minutes. And today, we have EQT Nexus. We have EQRT, which is just launched, which is a real estate REIT in the United States.
But we're preparing also for other strategies. So we're doing a lot more product development to open up distribution channels, which is very exciting and a lot of fun, actually. Hard work, though, but fun. And we think we have a right to win in that industry or that part of the industry with our returns, the breadth of our investment strategies, also avoiding a double layer of fees. A lot of the strategies that have been presented to the market before have been done by secondaries players, where they add a layer of fees. Now, we're going direct. So we're actually taking away a layer of fees for all the clients, which is great. And we think that we see now that our current fundraisings are around 10%-15% of the AUM is from private wealth in total.
And that's going to go to 15%-20% or something like that over time. So another dimension is M&A. Here are the transactions that we have been responsible for. So combining with these other great companies, BPEA and Exeter being by far the biggest ones, LSP giving us the largest and best performing life sciences investment strategies in Europe, and actually give us the credibility to launch a health care growth strategy between early stage and private equity, where we are. And Redwood and Bear Logi are specialty teams in multifamily and in Asia in real estate. And based on this, we've actually created a playbook on how do we find and integrate smaller and larger acquisitions in a great way. And of course, this is also a whole nother speech. But it is something very important in a people's business, actually.
I'm sure you'll hear a little bit more about that from Jean later, for example. Looking forward, we're going to continue also with M&A to build either capabilities or new strategies, whether it be in a geography, in the U.S., for example, or in Asia, or it could be in capabilities. One of the themes in our industry is owning companies and owning assets for longer. Rather than selling the great ones, our classic story here in Sweden is actually Securitas Direct, which was the biggest capital gain ever at the time, 2011. We were very happy. We had to think of $2 billion capital gain on that. Now some of our competitors own it, and it's worth $20 billion. We look back and say, why did we sell it?
Well, at that point in time, we had to sell companies, basically, to be able to raise the next fund. Now, there are totally different solutions out there. There are continuation vehicles. You can sell companies from one fund to another. Or we can get longer-term strategies, even strategies where we can own these companies for a great period of time. And we have some of those. We call it running with the winners. And we're going to be innovating around those elements as well over time. We, of course, want to, from this European very strong base that we have, we're actually also super strong in Asia. And our plan is to become the number one player in Asia over the next few years. And we look forward to that. And of course, we have a lot of space in North America to continue to grow. Good.
So the next leg of our journey will be a little bit more punchy here. First of all, what's the most important? Continue to perform. This is the, like any company, I always get this question too. Say latest yesterday. Why are we successful? Well, we're successful because we think about delivering for our clients. And that's why we also don't have an AUM goal. As you've seen, most of our competitors have an AUM goal. AUM is a result of delivering for our clients, actually, delivering performance, delivering returns. So we are putting so much effort behind all these different things you hear about from Christian in a few minutes and Per and others on creating value. We want to continue to grow faster than the private markets, actually grow our management fees faster than the market, to be the global leader in private equity.
Today, we're number 3, top 3 in infrastructure, and continue to be number 1 in the world in value add, where our flagship fund is. Top 3 in real estate. Today, we're top 10. That's a hairy goal. We think we have the capabilities and the people to do it. Behind that, we also are trying to look forward, where do we need to continue to innovate? I talked about some of those things earlier. Here are some of them. On the sustainability side, we were the first in the world to set science-based targets. We're thinking about, how do we do the same thing for real estate, which we're about to do? How do we stay ahead of the curve with biodiversity, nature positive, and even water? We were challenged yesterday.
How do we think about our responsibilities there, staying ahead of the curve in AI, et cetera, et cetera? Then this convergence between the public and private markets. We're large enough now that we can do some innovations. So hopefully, we can already this year create an exit, which involves being a private IPO. We continue to own and control the company for the long term, but we create a market in that company in the private markets. Super exciting stuff. So that won't be stopping. And as some of you know, my favorite value at EQT is entrepreneurial. And that makes it fun to be here and drive those things. So the human dimension is ultra important. And we have our own EQT Academy, which we're expanding and building.
We're also going to bring the EQT Academy more out into the public, because we have a lot of thoughts and innovation, et cetera, that we want to share with people. Today, we're a pretty diverse firm. We have 70 different nationalities at EQT. And we're about 120, almost 130 partners in the firm. So it's becoming quite sizable. But of course, we still have a lot to do in creating an even more diverse workforce. And you'll hear more about that from Bahare. Looking at our values, these are our five values. They've been more or less unchanged since a long, long time. And some of them are a bit different, actually, than a typical financial company, at least a company in the financial industry as we are. Things like informal means that we can approach anybody and that our conversations are open and fun.
We try to find solutions together. Entrepreneurial, I mentioned, respectful, which is Conni's favorite. I'll let him talk about that more later. Then transparent, which is great, because with transparency, you eliminate politics. With secrets, it gets a little, you can get a little skeptical if I stand back here and whisper. But if I'm open, then you have trust. So we work a lot with our values, actually, in how we hire, how we retain, how we develop people, how we develop leaders. It's quite fun. And this culture, actually, we always try to test if it's true. So we have all this online stuff that we get that's very modern and that looks pretty good.
But actually, Pauline, who works with me in Zurich, last year she called around the world and asked a number of random EQTarians about why they like to work at EQT. And I liked this video so much, so I figured I'd share it with you. It's actually made for internal purposes, but we made it look a little better. And here we go.
What I like about EQT is its ability to be a very flexible, innovative, and millennial organization within a very old-school industry. I like EQT because I'm given the opportunity to work on matters that are eye-stretching and yet exciting and impactful. And more importantly, the firm's value is alive, my personal value as well. I always try to see EQT because the super-fast growth and developing strategies means there's a huge amount of opportunity for young people starting their career like me. I met a bunch of colleagues who were able to bring an informal, respectful attitude to what I had originally thought was a formal work environment.
What attracted me to EQT was the brains, the humor, and the reputation for being the industry's nice guys. What impresses me most about EQT are the people and the culture, working together as a team to drive superior returns. The reason I joined EQT is that I really liked EQT's focus on its culture and values, which is really differentiated to other private equity firms. I love the team, the global team, the local team, what we have been able to build and accomplish here over these last years. What excites me constantly about EQT is how we continue to challenge the status quo in everything we do. People, people, people. That's what I like at EQT. That's what attracted me here and keeps me here.
I'm going to round off there. Again, wish you an exciting, fun day. Please engage. We have some Q&As interspersed throughout and lots of action. Thanks a lot and enjoy.
Good afternoon, everybody. I'm Olof Svensson. I head up shareholder relations here at EQT. Let me add my warm welcome to you all to Stockholm, to EQT, and to our very first Capital Markets Day. You are all committing your afternoon to be with us here this afternoon. We are committing to deliver an informative afternoon. As Christian said, we're committing to make sure that this becomes an interactive afternoon for everybody. We will take you on a journey across the global EQT platform, be it from the U.S. to Europe and to Asia.
We'll do it across private equity, infrastructure, and real estate. We will take you on a journey from algorithms and artificial intelligence. We'll do it from sustainable transformation to the implementation of science-based targets. We will also make deep dives this afternoon into specific themes such as energy transition and health care. I hope that the combination of all these presentations and the different presenters today will provide you all with an understanding of why we are passionate about our ownership model and our ability to generate returns and create market-leading companies across the globe. I will make sure, as Christian said, that there is Q&A time in between the presentations. We also want to share some external perspectives on EQT and our industry.
We will therefore, towards the end of the afternoon, have Reuters come here and share their perspectives on us and also host an interview here on stage with Christian and Suzanne. We will try to piece everything together towards the end of the afternoon when Kim, our CFO, will take the different parts that you hear today and put them together in more financial terms. We will round off the presentations in this room with Conni, our founder, providing his perspectives on the day, on EQT, and the future of us and our industry. Then towards the very end of the day, we hope that you will all join us upstairs for dinner. I think that's part of our wish that this becomes an informative day.
So please join us for drinks, discussions, challenge us, and ask whatever questions you may have that you haven't asked already in this forum. But now, let's dig into the presentations. And where better to start than to start with our clients, the more than 1,200 institutions and a large number of private individuals who trust EQT, where there are funds of more than EUR 200 billion to create resilient returns over the cycles. Our client relations and capital-raising functions, they are headed by Suzanne Donohoe, who joined EQT about a year ago. She brought even more energy and experience to the EQT team. And she's recently led the charges here when it comes to raising our largest private equity fund ever at EUR 22 billion. So welcome, Suzanne.
Hi. It is such a pleasure to be here with all of you today. Christian's right. It is bright up here. So I'm hoping you can see me better than I can see you. As Olof mentioned, we're going to spend a few minutes. It won't be too long. Just give you a bit of a journey. I think I need a clicker. There we go. Talking a bit about the opportunity set that is embedded in our client universe and where we're headed on that front. So that's the journey we're about to go on. As Olof mentioned, my name is Suzanne Donohoe. I'm the Chief Commercial Officer and lead the external platform for EQT. The external platform encompasses the client relations and capital-raising group, the corporate business development function, parts of our sustainability effort, and then our corporate branding and communications efforts.
So we get to bring together a lot of our external voice at EQT under one umbrella and think about all the ways that we can be even more impactful in the market as a result. Given that I just joined EQT a little over a year ago, I've been privileged to witness firsthand some of the unique qualities that really help us stand apart from our competition. And today, I'm excited to share what I hope will be a little bit of a fresh perspective on how we stand out and where we're headed. So let me begin by setting the stage. You got a glimpse of this in Christian's slides. And what you can see here is how capital pools are expected to develop over the next several years. Despite recent headwinds, particularly in fundraising, which I know you all know about, our longer-term outlook remains incredibly strong.
So if you look here, you can see the growth that we're expecting over the next what did we show? We show 2040. Yes. So over the next 20 years. And what you see is that we expect markets to double in size by 2030 and then double in size again in the next 10 years following that. The growth is underpinned by new capital flows, which have begun to shift into private markets from all segments. And you get a feel for that in the chart on the right. However, those sources of capital have begun to shift. And in the coming years, what we expect is that private individuals will invest more in private markets than they ever have done before and will play a much more pivotal role in funding our industry.
We also expect that institutional capital pools, and particularly those in the sovereign space and in the pension space, will remain very important audiences and will also enjoy high growth rates. Numerous factors really drive that growth. A notable trend Christian referred to this earlier is private companies staying private for longer. Now, you all know some of the reasons for this, whether it's increased regulation or its availability of capital to continue to fund their businesses even as they achieve unicorn status and beyond. But that type of opportunity means that management teams and founders are really able to stay in private format for longer and drive value in a private setting, which often gives them more flexibility. Consequently, the investable universe with faster-growing parts of the economy remaining outside public markets is just a bigger and bigger space for us to play in.
As we look at the world from client perspectives, there is also the attraction of including private market return streams, which tend to have lower correlation and, as you know, have delivered higher returns, frankly, across different markets, across different time periods than their public market comparables. And so for all those reasons, we have great tailwind at our back in private markets. The outperformance of the asset class, which I just mentioned, is really probably the most important of those drivers. It really creates an ever-growing appetite for exposure to this space. I would say that a second characteristic is also the desire, particularly on the part of institutions, to increasingly consolidate their efforts behind a smaller number of GPs.
I think it's really a reversal of a trend that took place over probably a 20-year period where portfolios became over-diversified and, therefore, more challenging to manage. It became difficult for institutional investors to achieve some of the economies of scale that they sought to achieve. So that trend toward consolidating GP relationships is also one that should benefit us as our capability set expands and we operate in a broader set of asset classes and across more geographies. This is especially relevant in the Private Wealth segment, which traditionally has engaged less in private markets due to the complexity of investing in the asset class. However, with the landscape evolving, this segment opens up a $10 trillion market opportunity in terms of growth over the next decades.
If we step back and think about what will be some of the success factors for GPs to really participate in this growth, I think it will require those GPs to adapt some new strategies that aren't so prevalent today in the market. They will need, of course, to deliver investment performance. As you've already heard and will continue to hear, that's a focus at EQT. But increasingly, it will also rely on product development, product innovation, on building brand, and having a deep organizational competence to be able to deliver operationally and from a brand and marketing perspective. EQT is strategically positioned to capture a significant share of this growth. With robust investment performance across our key funds and now also products designed for easier access by client segment, we're firmly in the race.
On the product side, we will continue to innovate to enable clients across regions to access our high-performing investment strategies with reduced complexity. We're also focused on thoughtfully expanding our brand to regions where EQT is not as well known. The branding effort also involves increased transparency about private market investing in general, which is an effort that really should help to build confidence in this investor base and familiarity to newcomers coming to the asset class. Over the past few years, we've also been building the organizational backbone necessary for efficiently accessing and serving clients who are on this journey with us. Going forward, we'll scale the sales and operating machine in a way that builds on the strong foundation that we have today. While the private wealth segments present a significant growth avenue, we remain committed to deepening our engagement with our institutional clients.
With sovereign wealth funds ramping up significantly in their investment programs and also the steady growth that we expect from pension funds, we're well placed to continue to attract new clients and to deepen our existing relationships. Our extensive reach among the sovereign funds today means that we're well positioned to deepen our partnerships there. And certainly, with the pension funds as well, who, despite the relative maturity of that space, will still enjoy growth over the next decades. Specifically, we have a goal as it relates to the pensions to, in particular, deepen our penetration in the U.S. market, where today, we enjoy a number of relationships. But we know there are many more to be had. Taking a broader view of our clients, as Christian mentioned, we have about 1,200 clients today, which is up meaningfully since the IPO.
We've got a very diverse base of clients both by type of client and also by geography. While we've historically had a lot of depth in the Nordics and in Europe, in recent years, we've really expanded our coverage in Asia and in the Americas. You can see the growth that we've enjoyed. Christian referenced this as well, from just over 400 clients at the time of the IPO to 1,200 today. We're, I would say, very proud and humbled by the longevity of those client relationships and their desire to continue to increase their exposure to EQT. Importantly, though, when we look at clients who've joined us over the last five years, about two-thirds of those 1,200 clients have just a single strategy with EQT.
And so when I look at that from an external perspective and think about the growth opportunity embedded in that, we have, call it, 800 clients who know us, who trust us, and for whom we've delivered excellent performance so far. And we have an opportunity to introduce them to other things that we do here at the firm. So why do our clients partner with us? There are really a lot of different things that resonate well and help set us apart. And to highlight a few, I would tell you that performance is paramount. And we're laser-focused on driving it as we have for the past 30 years. It is certainly, to my fresh years here at EQT, one of the things that we talk about most in the executive committee. And that remains a focus for the firm at the top of the house.
Our thematic investment strategy is also robust and differentiated. We're backing the winners of tomorrow in sectors and subsectors with long-term secular growth trends where we have extremely deep expertise and an incredible operating network to drive value creation. I think this headset was built for somebody with a bigger head. We have skin in the game that ensures our success is directly tied to the success of our clients. That's also an important component for our clients. We have incredibly stable leadership across our investment strategies, a genuine commitment to driving sustainable outcomes across our portfolio. It's deeply embedded in our DNA. I know Bahare is going to speak more about that. Similarly, we're thinking about what's around the corner for our companies. Pretty soon, Christian is going to join us on stage here.
And he's going to talk about some of the ways that we bring digitalization and AI along with sustainability to our portfolio companies. And those are all things that are appealing trends from a client perspective and that they want to gain more exposure to. Lastly, we have an incredibly robust culture, one that we'll probably talk about throughout the day. And that is often cited as a crucial factor by our clients and one of the things that most attracts them to our franchise. So I'm incredibly excited to be here with you all today and to be working at EQT and helping take the firm on the forward journey here. I'm out of time. So I'm going to hand it across to Christian Sinding, who's going to talk about how we create value in our companies. And look forward to coming back later for questions. Thank you.
Good afternoon. As said, I'm Christian Sinding. I'm Partner and Head of Performance. And in this role, I'm member of our investment and portfolio committees. And I oversee our digitization, sustainability, Motherbrain, and capital markets activities, part of our value creation teams. I'm very excited to share with you today a high-level overview of our value creation strategy. I think the legal team has been all over this presentation. But they forgot one disclaimer. This is just a summary. So don't try this at home. At EQT, we start our value creation process by selecting the best industries to invest in. So how do we do that? We look first at Megatrends like sustainability, like digitization, like changing demographics. And then we look at investment themes that relate to that.
When you look at both these trends and themes, we try to identify the industries and subsectors that will benefit most from those trends. That can be like vertical software serving the digitization wave. Or for infrastructure, it can be waste management, capitalizing on recycling and reuse trends. Or it can be advanced logistics, real estate, which benefits from booming e-commerce. Step one is to select the right industries. Step two then is to pick the companies in those industries or subsectors to invest in. We like to invest in market leaders or successful challengers. That can be national, regional, or global market leaders. It can be companies with extremely strong market positions in specific niches. Or for real estate, it's about selecting premium assets in optimal locations. We go for quality.
We much rather buy a good company for a fair price than a fair company for a good price, or let alone a mediocre business on the cheap. So in summary, we start our value creation by acquiring quality leaders in attractive sectors. Now, as soon as we own a company, we apply our value creation process for our investment. And that is underpinned by six key pillars. One, our proven governance model, which provides the fundamental framework for driving performance in our portfolio companies. And I'll elaborate on that later. Two, we work intimately with our unique network of Industrial Advisors. And these are current or former industry executives that help us in the process of diligencing, acquisitions. And once we made an investment, they join the board and become active hands-on supporters of a business.
The wonderful Sheri McCoy will have a conversation with Michael and Per about how we do that. Three, from the moment we sign, we apply the business mobilization system. This is a methodology that's been developed in EQT Asia,[read] Barings. It accelerates onboarding of our newly acquired companies. Our colleague Vijay will take you through a case study of that. Four, in close cooperation with management and the board, we develop a multi-year full potential plan, or FPP. In this FPP, we define the critical value creation levers. We lay out the strategic roadmap for optimizing performance. Five, informing every aspect on this page is our value creation toolbox, which I will cover together with our FPP later. Finally, we work hard to future-proof our businesses by embedding digitization and sustainability practices from day one.
Sven, Alex, and Bahare will cover those efforts in this area. I will delve deeper into three areas. We will start by governance. At EQT, we talk about portfolio governance as much as the American public—sorry? One more click. Oh, sorry. Yeah? No. Yeah. Here we are. We talk about our portfolio governance as much as the American public discusses their governance. This is super important. It's as important as Trump versus Biden. Who is the best to be in charge? Should we stick with current management? Or should we go back to the old management? Or perhaps there is a better alternative? For each investment, we carefully construct our board. We start with a chairperson, which is typically a former chief executive, not an EQT professional.
We then add other industrialists as board members who tend to have deep sector knowledge or have been through the kind of transformations that we plan for a portfolio company. A former or current CFO often leads the audit committee. Then we add 1 or 2 EQT partners. Crucially, the external board members invest their own funds and their own capital so the financial incentives are fully aligned. Now, in our model, we aim to make the CEO the hero. We provide maximum support and quick decision-making, like Chris referred to, for matters like capital injections or acquisitions so she can be quick and decisive. Alongside our board and board meetings, of which normally we have about 5-7, we have a Troika forum. This is where the CEO, the chairperson, and the responsible partner have informal discussions.
Those can be about all sorts of topics. It can be about an HR issue. It can be about an early-stage idea for an acquisition or an innovation. Or it is about the way that the EQT team works together with the portfolio. It's a way to relieve sort of the existential loneliness of the CEO somewhat. On top of that, we have a regular portfolio performance review, PPR, within EQT to monitor progress. Here, the deal team and often the chairman present the progress of their investment to a committee of senior partners. And this is one of my committees. Now, in our business, we take risks. And we're also human. So we make mistakes. So that means that sometimes investments are not going according to plan. When that happens, we get, as a PPR committee, more involved. We provide generally very wise advice.
We can also make resources available, additional money, additional people, to get an investment back on track because we work through those cases rather than drop them. Now, another aspect is our Full Potential Plan, which is developed with and by management and the board. In the development of the plan, we ask ourselves, how far could we push this business? What would happen if we double or triple the level of investment and innovation? What can we achieve if we remove certain barriers and limitations? We typically identify three to five value creation levers where our efforts and funds will yield maximum return. The FPP process, that's often facilitated by consultants, involves also revisiting and rearticulating the company's purpose, vision, and mission. We then work on sharpening the strategy to achieve that mission. Then, as you see below that, we have our toolbox.
This is a digital document library that details the value creation strategies and initiatives that we can deploy. Certain sections of that library are focused on specific industries, outlining proven playbooks that we've used many times and that we can use in the future to sort of have a repeatable model of value creation. The next level covers functional excellence. That can be around matters like procurement, like talent, like Salesforce effectiveness, and the like. It contains all the knowledge that we have on those topics. Then we have the two units around sustainability and digitization. Our combination of FPP and toolbox is something that we have developed over the past 30 years, continuously improved with this mantra from Conni, can always be improved. This is something we're actually happy to present because it's not that easy to copy.
We will continue to develop that long into the future. Now, this is an exceptional model. The results speak for themselves. I think we've shown that we've delivered very robust returns for about three decades for our investors, for the pensioners that depend on us. Now, if you break down those returns, you will see that about 50% of our returns is generated through sales growth. As I told you, we invest in growing industries. We do everything to accelerate growth. In general, companies can end up being twice the size as when we acquired them. About 20% of our returns comes from multiple expansion. During our ownership tenure, we steadily enhanced the market positioning and the financial profile of the businesses we invest in. As a result, the companies that we sell are better than the ones we buy. This is our job.
We take pride in that. 17% of returns is caused by margin expansion. That is often the result of operating leverage, shifting to more higher value add activities rather than pure cost-cutting. Debt repayment contributes only little. We prefer to reinvest cash that we generated back into the business to support further growth than stripping capital out. That's even more the case for our infrastructure business where we generally add additional capital for investments. These returns are driven by sharpening strategy, accelerating investments, driving M&A, and embedding digitization and sustainability. That creates better companies that deserve higher valuation. This is how we create value. This was a somewhat brief. I went a bit over time here. I would like now to hand over to Bahare, who will tell you everything there's to know about sustainability at EQT.
Oh, it is very bright out here. Great to see you. So my name is Bahare Haghshenas. I'm the Global Head of Sustainable Transformation. I will start with giving you some numbers. 32 of our companies have today set science-based targets. That equals 44% of our invested equity. You can see some of the logos up on the screens. In our pipeline, we have over 28 companies to come. You have heard the word science-based targets for a while now. What is it then? It's a global standard for carbon emission reduction. Our commitment to science-based target is one of our flagship climate initiatives. As Christian said, we were one of the first private market firms to do such a commitment. Our ambition was to deliver 40% invested equity by 2025. Now, two years ahead of time, we are already at 44.
With this commitment, we will have set hundreds of companies on a pathway to Net Zero by 2040. So the question comes: Why are we doing this? Why are we putting so much effort around this? For us, this is good business. This is an example of how we future-proof our portfolio, how we create resilient companies, how we make sure that we can exit companies at a premium, delivering superior returns to our investors. The future-proving formula is a bit like our secret sauce. In sustainability, it has two major ingredients. First, we help our companies to improve sustainability in their operations, in their internal processes, in the way they put their organization together, and in their governance. With a global set of nine value creation KPIs, we promote accountable leadership, regenerative processes, and an equitable business practice. Let me give you some examples on what that means.
Today, 88% of all our companies have appointed a sustainability champion in their board. 85% have set a business-specific transformational KPI, driving performance on topics that are material for that specific company. Starting this year, we will promote sustainability-linked incentives to our board and management teams. We do all this to ensure an accountable leadership at the highest decision-making bodies across all our investments. To ensure top performance in our board and management teams, we have accelerated our focus on D&I. To reduce homogeneity and increase diversity of thought, we will be aiming for 60% of the same gender, of the same cultural background, and of the same socioeconomic origin.
This is because studies show that if you have no more than 60% of the same around the table, in the same room, it leads to better performance and is the tipping point for better decision-making, increased innovation, resilience, and it actually improves profitability. So all the way back connected to performance. We will also steer towards a more equitable organization to promote gender balance among our top 20% earners and a top quartile engagement in all the companies we own. Of course, also for ourselves. We also are active owner-operators of real estate. And to just give you one example, we are driving regenerative processes in our buildings. And I think Chris talked about the solar on the roof. Today, we have 12 megawatts solar currently installed and over 100 megawatts in our development pipeline.
That one is operational, would produce an estimate of 140 million kilowatt of clean and renewable electricity. For those of us that are not good at numbers, to just put that in perspective, that equals emissions for over 2,000 homes, annual energy use full year. The cool thing is that our active ownership model allowed us to improve operational excellence by integrating sustainability in everything we do. We can take the learning from one company to the next, from one building to the next, and we can accelerate sustainable transformation at scale, making a very big impact at scale. That is really exciting. Yes, I did promise you to reveal two major ingredients in our secret sauce. You're probably very curious now to hear about the second. That is where the magic of thematic investment happens.
We do invest behind high-quality companies with great products and services. What we do during our ownership is that we double down on growing revenues from solutions that contribute to a greener economy, that can drive energy transition or improve health and well-being. The videos you have been seeing behind me all the time, they are all testaments on how we are putting this into practice. We invest through venture-to-buyout. We're shaping the future of transportation by air, by land, and by sea. From Candela's flying electrical vessels, making cities commute faster and climate-friendlier, to the Nordic Ferry Infrastructure that you will hear so much more about, providing critical infrastructure here in the Nordics, run on electricity and soon also on hydrogen. To scale in InstaVolt and putting First Student yellow buses on electricity, we are making journeys more sustainable for millions of people.
At the same time, we are future-proving our companies, creating better companies that deserve higher valuation. These are just some examples housed in our portfolio. We have much more to come and share with you, also today. I believe that we are so well positioned to future-prove our assets. With our secret sauce of improving operational sustainability and growing sustainable revenue streams, we are really creating the winners of tomorrow's economy. I'm also very proud and humble that our strong commitment to sustainability is being recognized in the market. We have been included in Dow Jones Sustainability World Index two years in a row. Last week, we were named Multi-Strategy Firm of the Year in ESG by the New Private Markets, a very prestigious award in our own industry. Our infrastructure platform was again, the second time, named the Global Sustainable Investor of the Year.
These are just proof points on our sustainable performance and how we are driving this change. We will continue to push the bar going forward. Thank you so much. With that, I think I will hand over to Sven and then Alexandra to talk about the other part of our secret sauce.
Thank you, Bahare. Hi everyone. I'm Sven Törnkvist. I'm head of EQT Digital. I'm here to tell you about EQT's other big passion/obsession: digital and AI. Our digital journey really was triggered by the start of EQT Ventures many moons ago. This meant bringing into the company a bunch of new people, tech entrepreneurs from the startup world. These people really had a significant DNA rub-off that we're still benefiting from today.
EQT's senior leadership, under the influence of EQT Ventures, came to recognize that when it comes to digital technology, companies that operate on the cloud and have digital operating models, they vastly outperform their more traditional incumbent peers. EQT, therefore, decided to implement the superpowers of the cloud as well as digital operating models across the entire portfolio. However, we didn't start there. We started with EQT itself. We recognized that we cannot credibly drive digital transformation across the portfolio without first doing it to ourselves. Today, EQT is, we believe, by far the most tech-forward private equity company in our industry, certainly among the scaled ones. Our ever-evolving cloud-based technology stack helps make EQT more efficient, our data more safe, our clients better served, and our employees more happy.
In fact, only yesterday, we launched a client-facing ChatGPT-powered conversational bot to aid clients in due diligence of EQT in an upcoming fundraise. Parallel to that, we've built two teams, EQT Digital and Motherbrain, with around 60 FTEs in each, sorry, together, and to drive digital in our investment core. EQT Digital is a team of digital-native former operators from places like Google, Microsoft, Spotify, Facebook, etc. These guys work day to day with portfolio company management teams to drive digital initiatives. EQT's AI-native team Motherbrain, on the other hand, are data people to the core. These are data scientists and data engineers. And Alex will tell more about that in just a few moments. To be clear, we have a certain level of obsession with digital technology. And there are, in fact, very good reasons for it. It is good business, same as we heard about sustainability.
What we're seeing here is a BCG analysis of the total shareholders' return indexed to the S&P Global 1200. On the right-hand side, we have two kinds of digital natives: the hyperscalers, Magnificent Seven, a.k.a. big tech, as well as the digital-native companies. This is a small portion of the total. They only represent 6% or 70 companies or so. On the left-hand side, the majority, we have two kinds of incumbents. The majority, two-thirds, are traditional legacy incumbents, companies with not that much digital in its core. But 28% are what BCG calls digital incumbents, companies that have invested in digital transformation and made it work. So interestingly, in terms of performance, the digital incumbents vastly outperform their analog peers. This is compelling. To make this concept come alive, let's visit a case study hot off the presses: Karo Healthcare.
Available in 90 markets worldwide, Karo's product portfolio consists of 80 original healthcare brands, both prescription drugs as well as over-the-counter products, you know, more like skin cream and soap, etc. At the time of acquisition, Karo was a classic incumbent. Its tech backbone was highly fragmented, and more than 95% of its sales came from traditional wholesale channels. Like many of its peers, Karo Healthcare didn't sell skin cream to consumers. It sold pallets of skin cream to wholesalers. But under our leadership, ownership, I should say, Karo Healthcare has transformed itself in two phases. First, laying the digital foundations, investing in a modern ERP, data platform, and lots of very modern cloud-based tools. Second, successfully implementing a modern omnichannel distribution strategy. In terms of developing Karo's in-house digital capabilities, a key initiative here was an acquisition of Sylphar, a smaller but digital-native competitor.
The Sylphar acquisition quickly, we refer to it as acqui-hires, quickly we could onboard 30 FTEs with very digital-native skills in digital marketing, paid marketing, Amazon marketplaces, etc. So the full direct-to-consumer toolkit. Especially the legacy Karo brands benefited from this. As an example, two legacy brands, E45 and Nailner, grew sales over Amazon marketplace by 72% between 2021 and 2023. This is far outperforming market growth rates. Currently, Karo is developing full-funnel marketing strategies for the entire brand portfolio, leveraging first-party consumer data. It now has that to boost consumer loyalty. Karo Healthcare's e-commerce revenue has grown to represent well over 20% of total sales and growing. The company's products are found on Amazon, e-pharmacies, online retailers such as Boots, as well as direct-to-consumers. And this case is a lighthouse example of what Christian explained before.
It highlights our conviction: investing in digital holds potential to unlock rapid and continued growth and even reshaping businesses. With that, over to Alex and AI.
Good afternoon. My name is Alexandra Lutz. And I am the Head of Motherb rain. It is the best title in the entire industry, of course. Motherbrain is EQT's proprietary AI-driven investment platform. And we like missions at EQT. Motherbrain, our mission, humble, we want to build the most AI-literate investment organization in the world. What that means is we want to give our investment organization and our portfolio companies a competitive edge by making sure they have the tools, the know-how, the psychological safety to be able to use AI to inform investment decisions and accelerate portfolio value creation. So unless you've been under a rock, you've heard a lot about AI in the last year and a half, particularly.
We all know it's becoming, I would say, more powerful and radically cheaper by the month. What was basically computationally impossible or would have cost $tens of millions not that long ago is now becoming widely available at relatively low cost. So we think what will separate the winners from the losers here is the ability to apply this technology faster than others. And that's very easy to say and very hard to do. We think our formula is all about pairing technologists with domain experts, with, in our case, investment professionals. But most important, it's about culture. It's about the ability to experiment. It's about the ability to take risks. It's about the ability to fail. The Motherbrain platform plays a role in delivering applied AI across the deal and ownership lifecycle.
But I thought it would be most appropriate today to dial in a little bit to how we create value in the portfolio. Here, Motherbrain's job is to be an accelerant. We work with the portfolio management teams, with our investment teams, with the EQT digital team to help management identify the best opportunities to apply AI to drive growth or to drive operational productivity and efficiency. And then we work alongside them to build and transfer AI capabilities and prototypes that not only deliver fast, tangible, and pragmatic value, but also help de-risk AI bets in the portfolio by giving them a blueprint or a recipe so they can move confidently and with conviction to apply AI to drive their business. So to make this very, very tangible, I want to share two examples of how this looks from recent work in the portfolio.
The first is Nord Anglia, which is a business in the Private Capital Asia portfolio. So Nord Anglia operates more than 80 schools across Asia, Europe, and the U.S. And M&A is a really important value creation lever for this business. But sourcing international schools is a competitive process. And interestingly, many of the players relied on one commoditized data vendor to identify lists of potential acquisitions. So with everybody looking at a similar list of targets, the winners end up being the ones who will pay the highest price. If you want to try and source independently, you have to rely on sparse, often outdated public information. Like you can see in this, it was a list of 11,000 schools in Italy provided by the Ministry of Education. So manually screening this list would be a tedious and expensive endeavor.
But based on some of the internal work we had done with M&A, we saw an opportunity to use technology to automate this. So the Motherbrain team, alongside with the Nord Anglia team, built a custom tool. And I can tell you all about this because it sounds easy, but it's actually really hard to do. We built a custom tool to scrape all those school websites and then use large language model agents to kind of pick out or extract the relevant data points and convert it into a structured format that a human could filter. So from the website, you can see curriculum, language of instruction, how the fees are charged, physical plant. And you drop that all into one place where a human can go through it. So an effort that would have taken weeks if anyone was crazy enough to try now takes minutes.
So beyond efficiency, in this example, we went from 11,000 schools down to 111 high-value targets for the Nord Anglia team. But beyond that, the team now has a strategic acquisition capability that differentiates them from the competition. And most importantly, this capability will stay with them and develop even after EQT's ownership period ends. We found lots of other examples of this, ways to apply this methodology across the portfolio. So we've looked for vet clinics. We looked for gyms. We looked for sustainable pest control businesses. It's a really effective and scalable way to identify proprietary niche under-the-radar M&A targets. So my next example, we've already name-checked InstaVolt quite a few times. And I think Chris referred to those very ambitious organic growth plans.
This was some work that we did to help them use an AI-first approach to site selection so that they can scale and grow that EV charging network across Europe. So here, we used a location intelligence platform to model a dataset that included both third-party data, like EV penetration data, population data, traffic data, combined with InstaVolt's internal performance data on existing sites in the network. So we then used machine learning techniques to find the patterns that are not visible to the human eye and in this way identify the key drivers of success, which they could then use to predict potential performance for new sites. And I think most importantly about this work, it covered everything from data procurement, so knowing what data sources are out there, to machine learning modeling, to visualization.
But it was completed in close partnership with the InstaVolt team on their data stack, in their systems, which meant that they were in the driver's seat. They weren't in the backseat. They were driving. And they could roll this initiative pretty much immediately into their own AI roadmap and will be able to own and develop the capability themselves, which will accelerate their journey to becoming a more AI-literate organization. So the common thread, I would say, that ties together these examples from the portfolio and what Sven was talking about for EQT, it's the importance of a culture that brings together diverse types of people and has them work in a collaborative, open, transparent, and trusting environment. Because as Charles Darwin said, it's not the strongest of the species that will survive, nor the most intelligent, but the ones most responsive to change. Thank you.
Okay. Thank you, Alexandra. So now we thought we'll open up for a Q&A session. And I would suggest, Christian, maybe you join on stage. And maybe we could start off with any questions for you, Christian. And then we'll see where the questions take us.
Okay. Here we go. Let me get my.
Magnus. And it's a bright future and it's a bright stage. So please wave if we can't see you. [crosstalk] We have a microphone somewhere in the room. I think it's coming your way. Or okay. Sorry. We'll start with a question over here.
Hi there. It's Bruce Hamilton, Morgan Stanley. Thanks for the presentations thus far. A question on the, I mean, clearly private wealth is a key opportunity. And the U.S. is a very large market. So I guess my question was, how critical is it going to be for you to crack the U.S. over the next, say, three to five years? Or is there enough growth in Europe? And in terms of getting your brand where it needs to be, how much of a lift is that? And what are the steps you're looking to take to get you there?
Thanks, Bruce. Can you hear me? Yep. I'm there. Good. Well, clearly the U.S. is, as you saw from the chart from Suzanne, and she can join me on the stage here, actually, by far already the largest market for private wealth. In the future, it's going to be by far the largest market for us in private markets. So we're putting a lot of efforts behind that. One of the lucky things that happened to us last year was that Suzanne joined us and that you actually are American and you've been through this journey before.
And living in New York.
You're much better at answering the question than I am. But it's ultra-strategic. And we're putting a lot of resources behind it.
Yeah. I guess what I might add is we do think the U.S. market is important. We find that some of the distribution platforms that we're seeking to partner with will make localized decisions. But some of them will make global decisions. So it is one of the reasons that we're making investments in that market. And those investments include everything from building custom product that will be available for sale in the U.S. to also building out the sales resources and servicing resources that'll help us to address clients there. I would say that one of the exciting things about this space is that even though we start as a European brand, initially as a Nordic brand, the reality is very few brands, if any, in the private market space today are actually well known by the typical individual investor.
When surveys are done of wealthy individual clients, then the result is that they're identifying brands that actually aren't even private markets providers today. So we feel like we're really in the opening innings and very glad to be engaging today in what we see as a 20-year growth trend where many in our space are just getting started as well. Did I get the whole part of your question there? Okay. Good.
I think we had a question over here for you, Magnus.
Yeah. Thank you. Hi. Magnus Andersson at ABG. First, a question to you, Christian, on a more general note. As you showed in your presentation, you've grown tremendously in a very short period of time just since the IPO. Could you tell us a bit about what the main challenges have been along the way? How have you dealt with them? And what is left to do in the current platform before you grow further that you are not 100% satisfied with?
Well, we're never satisfied, as you know. Everything can always be improved at all times. It's an important question. Actually, if you go back to our beginning, we've been growing every single year, either geographically or through asset classes or a combination of both. Even before we went public, we had some different teams join us along the way. We've been training for a long time to handle this super growth and also to bring in different thinkers into EQT. You heard now all the stories around Motherbrain and Digital and Ventures and also LSP, the same. We like it when new forces join us. This super growth that we've had now together with M&A has been challenging, I think, in two dimensions. One is, of course, on everything that has to do with integration: finance, legal, tech, all that kind of stuff.
But we were pretty well prepared. The fact that our tech platform is totally open in the cloud meant that the firms can just join us and plug right in. The fact that we have this capital-raising platform, which is global, same thing. We bring the talents that come along. We plug it right in. So it hasn't been without friction. But it's gone very well. And I think at the base of it is that we have very clear criteria. First of all, is there a cultural fit between us and whoever we're bringing in? Secondly, a strategic fit? And then thirdly, we want to make sure that the firms that we're partnering with are top-performing. Because we're not trying to buy something to fix it.
We're trying to buy and integrate and work with something that we together can make bigger and stronger and also benefit the whole firm. What's left to do now is not much, actually. I think we've done knock on whatever that is, plastic. We're ready. Maybe another way to say it is that during these four years, we've also been working incredibly hard on our platform to make that super scalable, digitized, have end-to-end processes. You might have seen that we got our first patent in AI here a few weeks ago. That patent actually is in our operations. So we're trying to really streamline that so that when we look forward, when new acquisitions come, we can handle those well.
Thank you. Perhaps a second question to you, Suzanne. You showed us the picture about how AUM in this industry is expected to grow until 2040, I think it was. And you highlighted the private wealth segment and institutional segment. We also talked about sovereign wealth funds. But just might ask, is there any type of client that you expect to shrink or diminish along the way? I'm thinking, for example, about should I put it less reputable sovereign wealth funds, et cetera? Is that included in the numbers there? Is anything expected to diminish compared to how it's been during the last 20 years?
I guess what I might answer is I think what we shared with you is industry data. So it's the growing trend across the universe of investors. I think we try to thoughtfully approach the building of our client franchise. So we think about being judicious about who we do business with. We certainly go through the practice of understanding who our clients are, then know your client standards, and making sure that the sources of their capital are ones that we care to associate with. And we'll continue to do that as we think about the growth of the client franchise, both in the sovereign space but also in pensions and in the individual investor market.
I think you showed that 20% of your AUM came from sovereign wealth funds.
Yes.
Do you think that share will increase or decrease?
I actually do think it will. Well, I guess it's a question of how much the other parts of the pie grow as well. I think we have the opportunity to continue to grow with the sovereign growth. As I shared, only about a third of our clients invest with us in multiple strategies so far because so many of our clients are fairly new to EQT. And so we do have an opportunity to work with them across a number of different disciplines. But I expect that we're going to enjoy pretty rapid growth in some other segments as well. And so it may be that that component becomes smaller as things like the wealth management space become larger.
Thank you.
Thank you. Thank you. I think we had a.
We have one over here.
Just turn over here.
Oh.
Yeah. Thank you.
Thanks. This is Isabelle Hetrick from Autonomous Research. So it looks like there's quite a large runway potential from cross-selling opportunities. So could you give some detail on the potential levers you have there to increase penetration? And then also, you've talked about how asset owners are trying to work with fewer asset managers. So do you think it is kind of one of the asset classes of the moment, not having private credit capabilities, hinders you in any way when winning large mandates if you can't offer that?
Sure. What I would say is on the cross-sell point, I think one of the biggest aspects of creating relationships is actually that first step. So it can take months or years to penetrate a new relationship. And you might take a decade to introduce yourself to an organization and actually get them to make that first buying decision. In my experience, once you're trusted by an organization, it may be a different individual in that organization. But the willingness to refer you, particularly if you have strong performance and strong servicing, is high. And so I am very optimistic about our ability to cross-sell given the footprint that we have and the strength of our platform.
While we aren't active in the private credit space, and so there certainly may be opportunities where we may not yet have the ability to play across the full range of alternatives, I think those are few and far between. I think more often, when departments are collaborating together for a mandate, it might be in adjacent areas. Maybe it's in private equity and infrastructure together or in the private equity and real estate space. I'm thinking about particular clients that I know of that actually group the decision-making under buckets like real assets, for example, infrastructure and real estate together, or where the professional expertise is developed in one department and then moves over to the next. Often, the private credit piece of the pie is kept in a distinct bucket with the liquid credit areas.
I don't see that as a big limiter to our growth today. I guess it could be something that we revisit in the future at some point but probably not in the wheelhouse in the near term.
Thank you, Isabelle. Pass it to you, Tom.
Thanks. Thank you. It's Tom Mills from Jefferies. When you were outlining the sort of strategic ambitions, I think you talked about moving from top 10 to top 3 in real estate. And that feels quite a big leg up. Is that something that you can do organically? And is it something you can do by continuing to focus on the sort of logistics and life science areas where you're kind of overweight at the moment? Or do you need to broaden out and acquire stuff to do that?
That's a super question. You'll hear from Paul here later. I haven't seen him yet. He's somewhere in the crowd. It's multiple dimensions. If you look at the difference between top 10 and the other seven firms or whatever, it's not mind-bogglingly different. So in other words, it's a very fragmented market. There's Blackstone that's mega large. Then it starts to be fragmented. So there is a real opportunity to take market share organically, a real opportunity to do some more M&A. We have a really amazing performance machine in Exeter that's built on logistics. Now we're building multifamily as well, which is a mega trend, and Life Sciences office. We're doing that first in the U.S. or we're biggest in the U.S. than in Europe, which is still quite fragmented, and then Asia even more. So all those dimensions come into that goal. Excellent question. Thank you.
Thank you. I'll come back to you, Luke. Everybody, please feel free, of course. Alexandra, Sven, Bahare, Christian are also available for questions. Whatever topic you may want to bring up, I'll pass it to you, Jacob.
Thank you very much for your presentation so far. Christian, congratulations. Your opening speech increased your market cap by almost $30 billion, which is quite impressive.
Euros? Euros would be impressive.
Just to maybe a follow-up on the earlier question about the 800 clients who only invest in one of your strategies so far, do you have any number or feeling of how many of these 800 invest in a different strategy but with a peer, which could easily shift to EQT maybe?
Oh, I'm going to guess it's almost all of them. So some of it's a function of newer strategies that we've created. And they've come to our platform as a function of that. Some of them, we've benefited by combining, let's say, with the Baring Private Equity Asia business or with the Exeter business, for instance. So they've brought new clients to the franchise. And now we have the opportunity to introduce them to other parts of EQT. But I think almost all of them invest across the asset class spectrum. So it's a real opportunity. And when you look at our performance Chris jumped through this last slide that was up. But it showed top quartile performance. And it showed across 8 different flagship strategies at EQT.
I think that is actually one of the most remarkable things about this firm is how consistently strong our investment performance is actually across the board, whether that's in infrastructure or in real estate or across the life spectrum of private capital. And so that really opens up the cross-sell opportunity as a result.
We'll bring it up in a second because it's a good slide.
Yes. It was a good slide.
Now we leave it for Conni's wrap-up.
Good. We'll take a few more questions. I'm going to assume that you all need a break as well.
There we go.
Yeah. Thanks. It's Luke Mason from BNP Paribas. Just two questions. One on private wealth. Can you give a sense of how big the client service team is that you have today? How big will that need to be in the future to service that private wealth channel? And similarly, on distribution partners, how many today in the U.S., Asia, Europe? Again, how big of an opportunity is there to work with more distribution partners? And how many products do you need to service that channel? You talk about new products in infrastructure and in the U.S.
Sure. Yep. So I'm going to wing it on a few of those questions. But it'll give you a picture. When we launched our Nexus strategy middle of last year, we talked about 50 people across EQT who had helped with the creation and construction and now sale of that strategy. So that gives you a sense of starting point resources, call it in the 50-person range. We do expect that we'll end up with a multiple of that number in the coming years. We'll phase that build-out based on a variety of factors, both the client demand when do we have clients saying we need more sales resources or more servicing resources and also being thoughtful about our margin targets and the firm's overall P&L. But we do expect that we will build a substantial effort in that space. In terms of numbers of distributors, I should know that.
It's in the couple dozen range right now. So the thing you should understand about where we are in this development is we're at the front end. And we're leaning into the largest distributors, those with the most reach. And we'll continue to do that for a period of time. But we also look to partner with local champions in different markets around the world. And then finally, on products, we have today created two semi-liquid strategies specifically for the private wealth space. One is the Nexus strategy I referenced. It's available for sale in EMEA and in Asia. The other is a non-traded REIT, which we've just begun in America. We have plans to multiply the offering that we have today. But one thing that we see we've tried to be very thoughtful about creating scale in those vehicles over time.
I expect us to have a handful or maybe two handfuls of those products kind of specialized for the individual investor but not dozens and dozens. What we've really done is created semi-liquid products that make use of the building blocks we already use for institutions and that really build on the capabilities and scale that we have in place already.
Great. Thank you. I could just follow up on the inorganic growth point. You mentioned a few different areas that you could move into. I guess what's the main focus? Would that be like Asia, new specific products? And is the focus still very much on Value-Add strategies? Would you move back into core real estate or core infrastructure or credit, for example?
Credit is not on the agenda. So that's an easy one. In the future, who knows? 10 years from now, whatever the other question that was asked might be relevant. But for now, we're razor-focused on active ownership strategies. And that range is from kind of Core, Core P lus up to Value-Add, that whole range across real estate, across infra, and across private equity, even though you don't use that terminology. I still think it works. We have our first long-term strategy that we just closed, EQT Future, in private equity. But we're going to try to innovate and continue to drive longer-term ownership generally. So there are a lot of different ways that we can go. But the thing about M&A is that this is not an industry where you can just vacuum up the next player. These elements I talked about earlier, they're quite sensitive.
When the stars are aligned, we'll make it happen. If not, then we'll build those strategies organically.
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Hi, everyone. My name is Masoud Homayoun. I lead our infrastructure efforts here. Welcome back after the break for what is arguably, in my humble view, the most exciting part of what we're doing at EQT, which is infrastructure investments. Now, I think a lot of people, when they think about infrastructure, they're thinking bridges or toll roads or very big construction projects. But actually, the opportunity set is much wider than that. We are investing in infrastructure companies, not projects. These companies have a few characteristics. They're providing an essential service to society. Think of that as your basic needs of electricity, communication, your waste being treated, transportation. In addition, these companies have an underlying growing demand, which allows for opportunity of growth and value creation. And then thirdly, they're usually in possession of strong asset bases.
The combination of these three makes them resilient and downside-protected investments for our clients, which they're seeking. At the same time, there's ample opportunity for value creation, growth, and returns, as we'll talk about so far and we'll mention again here. Now, EQT Infrastructure is today one of the largest and best-performing private infrastructure investors in the world. Only in the last few years, since 2019, we've doubled the size of our fee-paying AUM to reach $36 billion by the end of last year. We have a truly global organization with more than 130 dedicated investment professionals locally on the ground in Europe, in North America, and increasingly in Asia-Pacific who are sector experts in the different infrastructure sectors. We can source attractive investment opportunities in these markets. Through this, we are serving some 500 clients globally. As I mentioned, we invest in companies.
We're currently control or co-control investors in some 34 companies. Just to give you some perspective on what those companies are doing and I think Christian has referenced some of that already. Those are owners of almost 400,000 km of fiber. So if you use your phone here today, most likely, it's gone through the fiber of one of these companies. They are moving some 300 million passengers on an annual basis, some 5 GW of renewable energy, processing more than 20 million tons of waste in a sustainable way, and so on. So truly essential type of services. Now, why is this infrastructure opportunity so large and growing? There's a couple of reasons. Number one, there is a massive historical underinvestment just to bring the existing infrastructure we're all using up to par and what we expect. That's an opportunity in the trillions.
On top of that, we're going through two massive transitions in society. We're all feeling it in our daily lives. Number one is the Energy Transition and the path to get to Net Zero. And the second one is the digital transition and the adoption of high-speed, low-latency communication and increasingly AI. And both of these transitions are relying on a basis of existing and new infrastructure. Again, that's an additional opportunity of trillions of investment that is needed. Now, at the same time as this is ongoing, the public sector, who used to carry a lot of the investment, is burdened with heavy balance sheet, heavy government debt. That allows for the private infrastructure market to step in with both capital, know-how, and invest into these markets. So therefore, we see that the private infrastructure market is one of the fastest-growing asset classes in our sectors.
Now, we are investing throughout the maturity cycle of infrastructure. Starting from the left you see here in our Active Core strategy, which is a core, core, plus strategy, we're investing in the most stable and long-dated infrastructure companies, oftentimes providing an attractive yield to the clients. Think of these as infrastructure investments that last 10, 20 years. And the funds are structured accordingly. In the middle, you'll see our Value-Add flagship strategy. Here, we're also investing in stable underlying companies but where there is a significant potential for transformation. And that goes in growth, operational improvements, and repositioning of these companies. And then, as we have announced, we're going to increase our efforts into transition infrastructure. And that is to scale the infrastructure of the future primarily in Energy Transition. And Francesco will be up here in a second to talk more about that.
If you look at the performance we've had so far and it's been referenced here today, it has been consistent and very strong throughout the period that we've done infrastructure investments, with an average of 2.5x MOIC on invested capital for typical holding periods of five years in those companies and a net IRR of 16%. And that puts us significantly above comparable indices and top compared to similar type of funds. And bear in mind that these are very resilient downside-protected assets. So for our client base, this provides a very attractive risk-reward with that downside protection and this type of value creation potential. How have we got into this? I think Christian made an excellent job in explaining our value creation approach in each and individual company. And that applies exactly to our infrastructure companies as well, where we mobilize the governance.
We're working in tandem with our Industrial Advisors who are operating experts in these sectors that we're investing in. We develop Full Potential Plans for these companies, mobilize the value creation toolbox, and focus on value creation when it comes to sustainability and digitization. The outcome of that in our infrastructure portfolio has been that we've grown top line in these companies, on average, 12% per year. We've grown the bottom line or profitability in the form of EBITDA 16% per annum during our ownership. Equally, we're constantly reviewing what are the sectors and subsectors which are benefiting from these secular tailwinds that we've talked about, like Energy Transition and digitization. Specifically, within infrastructure, we're focused on four key sectors. It's the energy and environmental sector. It's digital infrastructure, transport and logistics infrastructure, and social infrastructure.
Within those, we're constantly, in our sector teams, reviewing what are the most attractive opportunities from a secular tailwind. So if I just take energy and environmental as an example, we are now clearly focused on the energy transition, clearly focused on moving to decarbonized energy production opportunities, decentralized energy opportunities, electrification of heat and transport systems, and resource efficiency when it comes to waste as well as water. To bring it alive with just a few examples and some of these companies have been referenced already, Cypress Creek is one of the leaders in the U.S. in terms of solar production and storage. It's a business where we've set out from the beginning to have a target of becoming a green super major. We've developed a Full Potential Plan, made a number of changes to the team, and accelerated the growth of that business.
It currently has 2.4 gigawatts of operating assets. During the last three years, we've added 1 gigawatt to this company already. More importantly, given the intermittency of renewables, we've developed a strategy together with the team there to go massively into battery storage to manage the intermittency of renewables. Perhaps most excitingly, this company had a significant runway of growth ahead of itself when we acquired it with 9 gigawatts of pipeline to be built. Three years later, that pipeline is now 30 gigawatts. We're focused on delivering that and scaling this business massively. The second one is EdgeConneX, which is our data center platform, global data center platform, catering to providing data center capacity to predominantly hyperscalers.
They currently have some 60 data centers in operations or being built, similar type of story in that we've developed a full potential plan, put the value creation themes in place, and supported the company with a significant amount of capital. At the time of acquisition of this business, they had roughly 150 megawatts of operating capacity. Today, that is 526 megawatts of operating capacity. They have a line of sight on some additional 900 megawatts of capacity. A lot of that is coming from the AI growth. What we've been able to contribute here is really to take this global platform and support them in each of the local markets where we're present across the globe. The third one is Nordic Ferry Infrastructure, which is an owner and operator of passenger ferry transportation here in the Nordics, in Sweden, in Norway, in Denmark.
That was one of their companies referenced in the video here, Torghatten. They own 110 vessels moving almost 30 million passengers annually. Here, the focus has been on operational improvement and really working in tandem with our digital team to maximize the yield on these ferries. Now, they're operating at industry-leading margins in their industry. Most importantly, we want to decarbonize this company rapidly. You saw the example here with having invested now in the largest electric passenger ferry in the world, occupying the busiest route in Norway. We're doing that continuously now throughout these 110 vessels, both when it comes to electric as well as hydrogen and other technologies, with the target to be carbon neutral already by 2040 in an industry which is difficult to abate.
So I hope this gives you an example of the type of companies we're investing in, the sort of secular trends that they're benefiting from, and also the type of value creation addition we're putting to these companies in order to create the returns that we are. So if I try to sort of round off how we see the infrastructure market, we think that the private infrastructure asset class is poised for growth for many years to come for very natural reasons because the opportunity set is massive. Secondly, I think we are exceptionally well positioned to participate and take benefit of that given our strong platform when it comes to sector competence, when it comes to value creation toolbox, and the consistent performance we've had to our clients.
So therefore, in terms of growth, we want to grow our existing strategies in Core and Value-Add, continue to scale those in terms of size, but also in terms of geography. We're very strong in Europe and North America. And we see that there's ample opportunity to grow that continuously in the APAC region as well, where we've only gotten started. We are committed to invest significantly in scaling the infrastructure of tomorrow as well, predominantly in energy transition. And we'll talk about that in just a second. And then thirdly, beyond these sort of existing strategies that we're exploring, we think there are several additional ones to explore, and predominantly around more permanent capital nature, continuation vehicles, and more long-dated infrastructure products which really match the type of companies and investments that we are doing.
So needless to say, we are in our team extremely excited about this opportunity. Hopefully, we think that you're there as well. With that, I want to switch over to the next topic, which is energy transition. I'll introduce Francesco. I'll let him introduce himself. But given his humility, I'll just take the opportunity to say we're extremely happy and proud to have Francesco join us last year as a partner in our team. Most recently, Francesco was the Group CEO of the Enel Group, one of the largest energy companies in the world and specifically within renewables. Really, he is considered a thought leader in the energy transition space. So we're very happy to have him here. And Francesco, most welcome.
Thank you, Masoud. So I can avoid the introduction. Fantastic. It's already a good step. Just let me add one thing to what Masoud said. I'm also chairing the Science Based Targets initiative, which many of you might know is an initiative that helps companies certify their decarbonization journeys to map their transition and track the way in which they go about it based on science and not on just goodwill and good intentions. So we are here to talk about the transition. Let me give you a little bit of a trailer. I will do it in one second.
I will just talk about the reason why the transition started, how it was triggered, what kind of attributes this transition has in the present time, why this is important for the infrastructure business of the energy sector, and why it's spilling over to other industrial sectors in the infrastructure space, why this transition entails benefits from an economic standpoint, and also climate. So for the time being, until now, there was a trade-off discussion. There is no more of that because of the way in which the transition is unfolding and what, of course, we at EQT try to do with that. That's the presentation. So now you can switch off if you want or just follow the details. So this is the first one chart that shows what triggered this transition. This transition was triggered by the things that you saw.
On the left-hand side, you see the massive decrease of installed cost per kilowatt of some renewable energy sources. These are basically solar and wind. On the middle, you see the improvement of performance of these same energy sources. At the end, on the right-hand side, the resulting decrease, quite spectacular decrease in the cost of the energy produced by these technologies. This was the ignition of the energy transition under your eyes. It was basically driven by two industrial factors that keep working at all levels in the energy space at the moment. One is the spectacular advance of material science, so materials with which things are made. They get better and better over time. The performance of the things improves. The second is digital. The digital world means more computing power, more precision, more efficiency, everything.
So this drives this is the reason why this happened. Because of that, we have in front of us an incredible opportunity. During the period that we are observing, we see that if you take the left side of the chart, during 2022, this is a figure of '22, we have all spent cumulatively about $8 billion using hydrocarbons. So you can see that big number over there. On top of that, most parts of the U.S. and Europe have also dedicated money, big money, actually. We're talking about $ trillions also here, to push for decarbonization, so getting out of that big spending into investing in renewables. You see that there is a clear indication that these lower electricity generation costs are going to continue. They are going to be supplemented by additional trends that start to surface now.
So it's not just renewables anymore, but something else coming up, big way. Batteries are also becoming less expensive. And hydrogen, there is some evidence that we are going to do that also there. So when we talk about the transition in general, we talk about a profound transformation of the energy systems of the world that progressively shift away from using fossil fuels for the energy purpose, not for chemical applications we're talking about energy here, and into other things, basically into electricity produced by renewable energy or nuclear energy, basically a decarbonized way. Now, what are the key attributes of this transition? You see them in this chart. This transition happens everywhere. It's a universal way of changing the way in which we use energy and land, both. Basically, we are shifting away from burning into building.
So we are moving away from OpEx costs into CapEx investments. This is the major shift of this transition. I think we should understand that very well because it has implications. It's a significant effort. We are talking about spending on physical assets, investing in physical assets and land use. The rate today is $3.5 trillion a year, growing to about $9 trillion a year between now and 2050. So this is a growing pattern that will keep moving ahead. It is front-loaded. That means the investment needs to be done upfront in exchange for a substantial reduction of running costs of our energy systems. It is uneven. It is not happening at every moment in the same time everywhere in the world. So it's a mix of geographies and time frames.
That means that basically, one has to be careful to understand that pattern and follow the investment and the way it goes. It exposes people that ignore it to risks. Today, we are looking at about $2.1 trillion of write-offs of power generation assets that will be stranded by the transition itself. This number does not take into account the write-offs related to the oil and gas industry that are even larger than that. It also will entail, if not managed properly, volatility in fossil commodities, energy supply volatility, and additional impairments that will require additional write-offs. So it has to be. It has its own traps and its own risks. It is, of course, offering a lot of opportunities. They go in three areas. One is the decarbonization of processes and products. The second is the replacement of high-emission products and processes with low-emission ones.
The third are new offerings that are not today conceivables, that will come up because of the change in supply chains in the whole infrastructure that goes around them. This basically means that in the next 3-5 years and we have to be looking only at this time frame. I think the time dimension is important. Christian has mentioned the future. The next 3-5 years, we'll see some investment teams becoming very important. They have to do with decentralization of energies, decarbonization, and resource efficiency. We need to take swift action because clearly, there is a clock, the clock of greenhouse gas emission reduction that is ticking. The 1.5-degree goal is not there yet. But we have to say there are some hopes for that. If we don't follow the science, if we don't do this properly, we might really go into a disaster.
But there are some encouraging signs. In the 10 years that passed, energy transition investment went up 700%. So it's a huge blow in this point. We have to say that the first time this is the first time that the International Energy Agency has finally released the data with a 60% increase in clean energy spending and investments in 2024. This is the first time that we are actually on par with the investment needed to reach the 1.5% goal, first time ever, which is not because we had the 30 years of QT, but it happened. Now, Masoud just spoke about the space. Here, you see a chart that shows the amounts. We are talking about current investments between energy and land use systems to about $6 trillion. They have to go up a little larger because we still need to reach this $9.2 trillion.
I put on the right-hand side of this chart the $8 trillion that we are currently burning on fossil fuel energy use only, just to let you know that this number seems a lot, seems very large. But they are the order of magnitude of the money we are every year spending to burn fossil fuels. So it's not something so crazy as it looks. It's possible. And I think it will happen. It is actually happening under our eyes. So to make a long story short, we have to do a lot of effort. Today, we have a lot of investments that are made to keep the warming pathway under the 1.5 degrees. More investments will be also needed to mitigate and adapt in those parts of the world where this thing is not happening at the right space, at the right speed.
So there will be a pattern of trying to avoid it and another path to say when you don't really invest, you have to pay the price because there will be mitigation and adaptation investment to be dealt with there. We see this transition as a very, very important thing for society to cope with. EQT has made so far its part, its share in the 16 years of history in infrastructure investment. EQT has invested around $12 billion in themes that were the energy transition in those years. So most of the renewable space and some of the stories that we have heard now from Masoud are transition investments. And I think EQT has done a lot in that, although probably not fully communicating it in this way. Finally, I think it's for the infrastructure business a huge opportunity.
I think you can say that in this space, the teams that we have identified are many. The examples that we have seen, the Nordic Ferry Infrastructure, the InstaVolt chargers, they, for example, go into the decarbonization and electrification field of this infrastructure team. Another one that was carried out by the EQT was the investment in the U.K. in a battery and storage business that helps the U.K. grid to balance the volatility of the systems. It is a major team. It is going to become larger and larger. It is a confusing word, transition. And the effort that we are doing here at EQT is to give it some definition, some content, and a time dimension. These two things are important to discriminate those that speak about transition knowing what it is and the transition word, which sometimes is a little vague. Thank you very much.
And now, Paul. Thank you, Paul.
First off, I want to apologize to everybody that's had to sit through a lot of AI, large language models, digitization, you know energy transition, high-tech value creation in corporations because I know you really came here to talk about sheds. You really came here to talk about warehouses, right? Four walls, a floor, and a roof. But it's pretty sexy, actually. My name is Paul Rubincam. I run the European real estate business for EQT Exeter. We merged forces about three years ago. And to me, it's been a marriage made in heaven. If you think about EQT's Active Ownership strategy and their hands-on approach to value creation, that's what we had been doing at EQT Exeter and previous companies for 50 years. So as I like to say, the difference really is it's quite simple.
What I like to say is we do real estate. Our competitors invest in real estate. We don't even use the term vertically integrated anymore because we think it's disingenuous and it's too many people it's lost its value. Too many people are using it. But we actually do real estate. And what does that mean? It means we source all of our own acquisitions. We do all of our leasing. We do all of our own in-house development and design. And it gives us tremendous. Let people talk about big data. Big data is really important. AI is really good at parsing big data. In real estate, as you know, it is the ultimate locals with locals game.
And we talk about little data because when you're leasing your buildings, when you're building buildings, designing those buildings, when you're close to the customer like that, close to the tenant, you have tremendous insights into demands and trends and opportunities. So the first thing I tell investors all the time is we are an operator, not an allocator. And we are hugely differentiated among around 550 real estate investment management firms globally by that. We also have a particular approach in terms of buying. Again, we don't think you can buy well in Munich, Germany, from London. And that allows us to source deals that the market doesn't see, that London doesn't see. I like to say we buy above the local heroes.
We sell to the big cap or we fly below the big cap that doesn't get out of bed for less than EUR 200 million-EUR 250 million. We do it at scale. We often say we don't lift heavy weights. We do a lot of reps. We also have a very firm conviction that you can't be a top performer in real estate and not be local and not be decentralized. So EQT Exeter looks nothing like its competitors in the sense that we have 460+ employees globally. We have over 50 offices. I like to say we're globally local. That's very important to our special sauce, again, about doing a high volume of smaller cap transactions. Again, it's really interesting listening to the other speakers and Masoud's talk and Chris's talk about where the value creation comes from.
There's so many synergies here because we're not trying to surf capital markets trends. Everybody did well in real estate, say, for the last two years in those eight years leading up to that. But literally, when Chris talks about generating the sales, the margins, and generating the operational gains, that's what we do in real estate. But we do it at the bricks and mortar. We do it at the bricks and mortar level. And that's why we say performance matters. I would say I'd take that phrase and modify it slightly and say this is why self-performance matters. And these are the inception-to-date returns across our real estate business in the U.S., Europe, and now Asia. The realized returns are even slightly better than that. Each one of our eight realized funds has been a top 5 or top 1% performance fund in its vintage year.
But we don't think you can do that again without being a self-performer and without being local in your markets. Two conviction themes for us, obviously, logistics, sheds, as they call them in the U.K., and the living strategies. And again, we focus on these themes like the infrastructure guys and like the buyout guys and others. We focus on the themes that have great long-term structural demand drivers. What do we see today? So in multifamily and living strategies, and that includes things like student housing and self-storage, but you could see tremendous affordability, demographic trends driving demand against a structural shortage of space, urbanization as an example. And then when you look at logistics, obviously, e-commerce is a big, big story. And I'll talk about that in a second. But as Chris mentioned earlier, nearshoring, reshoring, what we call supply chain resiliency.
Really, some of you may have heard this phrase, but just in time is now really just in case. And that's creating a tremendous amount of demand for logistics space. Now, where we are today, it's what I call choppy water time. The market was kind of sailing for a while. Then all of a sudden, we had rate rises, volatility in rates and cap rates and price corrections, oversupply in the U.S. in some pockets of logistics, in some markets in the U.S., some oversupply in multifamily, Europe, less so, and some reduction in demand in those markets. But from my perspective, choppy water time, that's our time. That's EQT Exeter time because that's operator time.
And again, when you're in your if I just took Europe as an example, 2021 offices, whatever we're up to now in Europe, and you're local and you're building your buildings and you're leasing your buildings and you're managing your buildings and you're talking to your tenants every day, you can react quickly. And this is a market where we've performed everybody's done pretty well. We've done very well. This is a market where I think we will particularly outperform. And again, just a little bit on e-commerce. You can see from the slide here the penetration rates, where Asia is today, where the U.S. has got to and is continuing to go. Europe is a really interesting story. It's trailing and lagging both Asia and the U.S. But this is a theme that's driving a tremendous amount of demand.
Retail or e-commerce takes about 3 times the floor space as traditional bricks and mortar retail. So you can understand reverse logistics, hugely problematic and difficult right now. Places like Europe, structurally undersupplied. Europe will be structurally undersupplied in logistics, I think, for the next 10 years. It just doesn't have the fire hose that the U.S. does to add supply. So there's tremendous growth potential there. And then it's things like automation and technology. I mean, there's a lot that's going on between the different divisions of the firm here that some great synergies. But the investments that these tenants are making in these boxes that you all came here to hear about Amazon will often spend twice the cost of the warehouse in the building just in technology, robotics, and material handling. That can't go into obsolescent, older, vintage space. So again, tremendous structural long-term opportunity in logistics.
Case study tells a thousand words. This is kind of what we mean when we say doing it. This is just an example of a deal that we would do 100 of in a given fund. Now, our fund's probably 30% of the fund is development. The other 60%-70% is buying existing assets. This is a deal that if you were sat in London as part of a big global opportunity fund, you wouldn't see this deal. It was a brownfield site on the edge of Barcelona, very high barrier to entry market. Our local Barcelona team, Román García Serrano, sat in Barcelona, sourced this off-market. We remediated the site, designed a state-of-the-art logistics facility here that would capture what we thought was the thick bit and the thick bit of the tenant demand, frankly.
And you wouldn't know that unless you're in that space and you're in Barcelona leasing warehouse space every day. We built a building, pre-let the building 15% ahead of budget in terms of the pre-letting. The building is zero-carbon operational. The building will produce 1 MW of electricity, three times what the tenant needs. So again, it's a perfect example of what doing it looks like. And we'll probably exit this a few hundred basis points above an exit cap rate. So we do this over and over again at scale, which is what's really interesting about our business and what is unique about our business when compared to our competitors. And then lastly, just looking forward, great growth opportunities still in the US to cement our leading position in logistics. Our multifamily living strategy team is really just taking the field.
So over the next 3-5 years, that business is going to scale up dramatically. In Europe, we're one of the leaders. That business will scale to the leadership position in logistics. Again, our multifamily living strategy teams are just beginning to take the field there. There's a really interesting lack of competition against that fragmentation in Europe that we will capitalize on like we've done with logistics. We're now opening the toehold through BPEA and that merger into Asia logistics, which is tremendously exciting. So great growth potential, highly differentiated way of going about it. With that, I'm sorry, guys. You're going to have to go back to private equity now. Per Franzén
Thank you, Paul. Good afternoon. Really good to see so many of you here today. My name is Per Franzén. I joined EQT beginning of 2007. So I'm in my 18th year as an EQTarian. I wish I could say the same as Chris, that I've spent half of my life here. But unfortunately, I'm not that young. My role is that I'm responsible for the Private Capital business in the U.S. and Europe. I'm looking forward to tell you a little bit more about this part of EQT now. As you've heard and as you know by now, we were founded 30 years ago in Sweden when we launched our first private equity fund. Since then, we've really been on a very ambitious growth journey. This growth has actually only just accelerated in our Private Capital business.
To put this a little bit into context for you, the size of the Private Capital platform today only in the U.S. and in Europe is actually larger than the size of all of EQT at the time of our IPO less than five years ago. Let me now walk you through some of the milestones that got us here. During the first 20 years in EQT Private Equity, we were really focused on geographic expansion. In 1999, we, for the first time, entered continental Europe when we opened offices in Germany. It actually wasn't until 2014 when we decided to launch EQT Equity also in North America. Initially, we entered the U.S. only in healthcare, our strongest sector. But today, the mandate also includes the technology sector and tech-enabled services. Entering the U.S. was really a critical milestone for us.
I think it really marked the beginning of our evolution to becoming a global sector-based thematic investor. In 2015, we took another important step on this journey when we launched EQT Ventures. The realization was that having an early-stage technology strategy simply makes us a smarter thematic investor. It gave us insights into the digital and the AI revolution and the impact that it would have on all of the industries, really, that we're targeting. It also enabled us to attract talent to EQT that we otherwise wouldn't have had access to. In connection with launching ventures, we started the build-out of our future-proofing capabilities, putting together the Motherbrain team, the digital team. Today, this team includes more than 50 professionals that are working hand in hand with the investment organization to future-proof our companies.
Five years later, we decided to pivot our private equity mid-market strategy towards controlled growth investments. By adding a growth fund to Private Capital, we created an integrated technology investment platform where we have the ability to invest into the most attractive opportunities irrespective of the maturity of the target company. In 2021, we launched EQT Future, our longer-hold buyout strategy. In this fund, we have the ability to remain invested in our winners and to develop them to their fullest potential. EQT Future also helps us drive impact and sustainability innovation and gives us the tools and the expertise to create sustainable value in our crown jewel investments. The future fund is also an excellent way for us to build even closer, more strategic partnerships with our most important investors. We've done three investments so far in this fund.
In these three investments alone, we've already produced approximately EUR 5 billion of co-invest opportunities. Of course, there's no better way to build trust and to build partnerships than making investments together. Approximately two years ago, we made our first acquisition out of the Private Capital platform. Chris mentioned it earlier when we decided to join forces with LSP, Europe's largest life sciences investor. The strategic rationale behind this acquisition was that we wanted to replicate the same setup that we have in the technology sector, also in healthcare. Healthcare is our most important sector. The philosophy is that just being invested at the forefront of clinical innovation, it just makes us a smarter investor. It also helps us attract the best talent in the industry.
An important part of the strategic rationale was that it would also put us in an even better position to launch a growth fund also in healthcare. Two months ago, we announced the official launch of this new initiative in connection with a first investment for the fund in a life science tools company called Mabtech. We're very excited about this new strategy. This is what it looks like today, the Private Capital platform. We've close to EUR 100 billion in total assets managed by 220 investment professionals. In this platform, thanks to the early-stage strategies, we have more deal flow in healthcare and technology than any other private equity player in the world. More deal flow gives us more insights and makes us more relevant for advisors and intermediaries.
Most importantly, it helps us attract the best people, the best talent, both to the investment organization and to our portfolio companies. In the platform, we collaborate closely in our sector teams. That's really where we share best practices. We share experiences. This is also how we support each other in driving performance across strategies. Our top priority remains to deliver the most attractive risk-adjusted returns across strategies. We know that if we do that, we will continue to comfortably outperform public equity benchmarks. We will retain the license to grow. We will continue to attract the best people in the industry. We will cement our market-leading positions. There's still significant room for growth across really all strategies. You saw the announcement last week. We closed EQT X at EUR 22 billion of commitments, a 40% increase compared to the previous fund.
This is really one of the largest private equity funds ever raised. But despite our already large size, we still see substantial growth potential in coming fund generations. The way I think about it is that we've been able to achieve these attractive returns in the past, even though we have been largely confined to and focused on Europe. In the past couple of funds, North America has represented between 25%-30% of invested capital. Mid- to long-term, we really see no reason why North America shouldn't represent closer to 50% of our funds. We have an excellent track record in the U.S. We have a fantastic team on the ground. We're continuing to invest into this team. We will continue to grow it going forward. This will allow us to continue to produce superior risk-adjusted returns.
It will allow us to continue to grow our fund sizes. In the newly launched growth strategies and in EQT Future, we also see significant growth potential. Based on relevant peer benchmarks, we think that over time, we should be able to at least double the fund sizes in these new strategies if we perform and if we deliver attractive risk-adjusted returns. That is what we are focused on, making sure that we deliver those returns. We believe that we're really perfectly set up to do so if we leverage our experience, if we realize the synergies between our flagship private equity fund and these newly launched initiatives. Let me give you just one example to illustrate those synergies a little bit better for you, the synergies that we see when it comes to sourcing, sharing sector expertise, and value creation.
In Healthcare Growth, the typical investment that we will be targeting will be a controlled growth investment in Europe in healthcare with an equity ticket somewhere between EUR 75 million-EUR 300 million. This is very similar to the type of investments that we would be targeting in healthcare out of the private equity strategy when the fund sizes were smaller. Two examples: Atos Medical, a 2011 investment out of EQT VI, EUR 150 million, globally leading MedTech business in its niche, generated a 4x gross MOIC for investors. A more recent example: Igenomix, a globally leading IVF testing business headquartered in Spain. We did that investment out of EQT VIII, EUR 200 million equity ticket, realized a gross MOIC of more than 3x in a short holding period of approximately two years. Very attractive IRRs. The point being, we have the experience. We have the tools.
We have the processes to be able to produce these types of outsized returns also in our newly launched strategies. Healthcare and technology, these are our two most important sectors. In both sectors, we have a strong track record, market-leading positions. In healthcare, we're really the global leader. In technology, we're a top three player. In the tech sector, we've invested EUR 14 billion so far, realizing a gross MOIC of 3.2x. In healthcare, we have invested EUR 24 billion in equity to date and realized a gross MOIC of 3x. So now, I'd like to hand it over to Michael Bauer, who's the co-head of the healthcare team. And Michael will tell you more about our investment strategy in healthcare and how we will continue to deliver those 3x returns. Michael?
Thank you very much, Per. Hi, everyone. Healthcare represents 49% of Private Capital Europe and North America's portfolio, making it the single largest sector in which we invest in. Why do we like investing in healthcare so much? Well, there's mainly two reasons for that: growth and resilience. When it comes to growth, there are several underlying fundamental growth trends in the healthcare industry that will support growth for many more years to come. Just to take one example, which I think is quite impressive, the share of people above the age of 60 is set to double by the year 2050. And I just realized when I put my notes together that I will contribute myself a little bit to this trend.
Combined that with the increased prevalence of chronic diseases that we're seeing in the Western world, it becomes evident that the healthcare industry is set to grow significantly above the GDP rate in the years to come, as it has already done over the past 30 years. The second reason: resilience. Spend in healthcare products and services is not that dependent on where you are in the economic cycle. We've seen that in times with macroeconomic headwinds, as we've seen over the past two years, with rising interest rates, inflation rates, and slower economic growth. Our businesses in healthcare have actually been doing quite well. And we have seen a strong activity level in our business, both on the new investment side and on the exit side in healthcare. So those two reasons, growth and resilience, make healthcare a very attractive sector to invest in for us.
Within healthcare, we focus on four subsectors, which are pharma products and services, medical devices, life science tools and diagnostics, and healthcare IT companies. Based on 30 years of experience in investing in the healthcare industry, we believe those four subsectors offer the most attractive risk-adjusted returns for our clients. Another attraction of the healthcare sector is that one can have a major positive impact on patients and society at large while realizing an attractive return at the same time. We at EQT, we believe that those two things are not mutually exclusive. In fact, we believe that they're closely interlinked with each other. Doing good is simply good business. And this philosophy particularly applies well to the healthcare industry. And any of our companies that we have invested in is backing one of the themes that you see here, five themes that you see here on this slide.
Address unmet medical need through innovation, for instance, is the key theme in which our early-stage EQT Life Sciences strategy invests behind. They seek to back teams of researchers and entrepreneurs that are looking for novel breakthrough therapies to cure diseases for which there's no disease or no effective disease available today. Of course, that involves investments in early-stage companies, companies that are at the pre-revenue stage. On the other side, the equity business line seeks to invest in companies that are at the more mature stage, that typically command a market-leading position in their area in which they are active in, benefiting from high margins and high cash conversions. The themes in which the equity business line invests in are in companies who help to reduce the inefficiencies in the healthcare system and to increase access to and the affordability of care to a broader set of the population.
These are some of the biggest challenges that the healthcare systems around the world are facing today. Our portfolio companies help to address those challenges. I wanted to finish off with a short case study on one of our investments in Schülke to illustrate the type of healthcare investments that we do and the impact and the value add that we can bring as an active owner to our companies. In 2020, EQT VIII carved out the infection prevention solutions business from Air Liquide. We put in place a board of directors with strong industrial expertise to help the company on the transformational journey that lay ahead. During our ownership, Schülke developed from an underinvested corporate orphan with a very complex organizational structure and dispersed set product portfolio to a high-performing company entirely focused on the most attractive healthcare markets.
To get there, we divested the non-core personal care business. We did a creative M&A. We focused on operational excellence in order to improve the cost base of the business. We also agreed with the management team to put sustainability at the very top of the strategic agenda, launching several biodegradable products and defining a pathway for the company to net zero. This delivered a 12% growth rate per annum and a 5 percentage points margin increase during our ownership period. Thanks to all of these future-proving initiatives, we were able to exit Schülke at the premium valuation last year, delivering 4.8x gross MOIC and a 50% IRR. Not too bad.
More than 3x.
Sheri, warm welcome. Thanks for joining us.
Thank you.
As you've heard from previous speakers, a fundamental pillar of our ownership model is really the access that we have to world-class buy-in Chair and CEO candidates. We work very closely with our buy-in Chairs. They help us underwrite ambitious value creation plans. They help us drive transformation during our ownership period. They also help us prepare our investments for exits. One of the best buy-in chairs that we have, in our most successful buy-in chairs that we have at EQT, is Sheri. Sheri has been involved in a number of highly successful healthcare investments for us. You've been chairing our investment into Aldevron, Certara, both of them delivering between 3-5 times the money. Now, most recently, you've also taken on the chairmanship of Dechra, our largest investment so far out of EQT X.
So, Sheri, maybe you can tell us a little bit about how you're working as an IA with EQT and how you're working as a buy-in chair with us.
Sure. First of all, it's a pleasure to be here. I'm delighted to have the opportunity to have spent, I guess, the last several years working with EQT as an Industrial Advisor. As I think about how I spend my time, most of it's around portfolio companies. I do have it in three buckets. I spend time with the Healthcare teams on due diligence as they're looking at assets. Obviously, they're really bright. They've done all the work. But I have real-world experience. Most Industrial Advisors have real-world experience of what it looks like and what it means. How do we think about the opportunities? How do we think about the risks? I spend a portion of my time on due diligence. Some of the deals make it. I end up either being on a board or chairing it.
A lot of them, we walk away from. So that's one part of the role I play. The other part is I would call myself sort of a people resource. And that works both ways, where a lot of times, we're trying to get CEOs to come in and lead the EQT portfolio companies, being able to outreach, work with them, and get them to come in is one way. Sometimes, it's identifying new board members and chairs. So I'll do that. At the same time, I get called all the time from different folks within EQT, particularly Ventures Group will be looking at an AI technology in drug discovery. I get those calls. I get calls, obviously, from the portfolio groups just to kind of steer people in the right direction and find resources for them.
I see that role of kind of going back and forth between how I can bring people in from the outside to EQT, but also be a resource to EQT as they're looking for talent. Then portfolio companies is really where I spend the majority of my time. As I think about the chair role, particularly early, if I'm in early, which I generally am doing the due diligence and then go right into the chair role, the opportunity there is to help shape the management team, shape the board, and really think about the value creation plan and bringing that and making that real. Because a lot of times, on paper, you develop these strategies and plans. But real life happens. And people are real-life individuals and have their own views about how things should happen.
A lot of what I do is, particularly at Dechra, which you saw earlier from Christian, is working between the CEO and the partner and myself and making sure we are all aligned on that value creation plan, making sure people can go ahead and implement against that. It's a broad array. But again, most of my time is on the portfolio companies, which I thoroughly enjoy because it's all about creating value and particularly being in the healthcare space, seeing things like Aldevron come to market, where we're actually part of the whole mRNA vaccine piece and helping with gene therapy. Quite a rewarding role for me.
Thank you, Sheri. Speaking of value creation and portfolio company work, can you give us some concrete examples of initiatives that you've implemented and the investments that you've been involved with, just to make it a little bit more concrete for everyone?
Sure, I will. I would say the one thing, though, that is common across all of the portfolio companies, whether I chair it or I work with Michael on Galderma as a director, is the greatest amount of value creation occurs if we have the right CEO and the right management team. Because ultimately, the EQT model is it needs to be run by the management team. And so, often, I think if we're late or we don't have the right CEO, it can delay the value creation. And so, I think fundamentally, one of the biggest value creation drivers is to get the right CEO and management team. And that's across all of the different groups. But if I give you a specific example and again, the value creation model varies by the diversity of the companies that we're working with.
But if I take Aldevron, the first thing we did was get a management team in that knew how to scale. It was basically a company that they made plasmid DNA, which is it was a startup company. It was very early. They were doing a lot of clinical research on gene therapy. And we recognized that we needed to get a team in place that understood the manufacturing, the quality, be able to contract. We were working with the big pharma companies as well as a number of smaller biotechs. And we didn't have that in place. By getting the team in place, it enabled us to then drive one of the key value creation themes, which was, how do we scale the manufacturing? How do we make sure that we're reproducing and getting consistent quality?
Because as we're going into phase three clinical trials, we need to make sure the products are safe. We had sort of a passion to make sure that we could get some of these muscular dystrophy drugs approved. We put a plan in place. The board aligned on, we need to actually invest more heavily in the capabilities as it relates to manufacturing. We needed a completely revamped focus on quality and partnering with the FDA and the other regulatory bodies around the world. We ended up bringing in a Kaizen group that did a whole root cause analysis to figure out how we could actually get more volume out of what we did. At the same time, the management team came forward and said, we want to invest in a second plant. I guess the board held hands and said, well, we're investing.
We don't even know if this is going to be approved. We don't know what's happening. Luckily, we made that investment. And as it turned out, there were a number of companies that you know them all today that were looking at mRNA technology for vaccines. And this happened right during the COVID pandemic. So we actually hired the new CEO during the pandemic, everything. But as it went forward, we were able to actually get because we had focused on that value creation theme and everyone was accountable for, how do we make that happen? We were able to actually capitalize on that. And this product was actually used in the mRNA vaccines. And if we had not done that or if we were late and hadn't made the management change, there was no way we could have scaled the business that way.
That's a very good example of it. If we have time, I can give you one more.
Yes, please go ahead, Sheri.
I love talking about this stuff. The other one is in Certara. Certara was a modeling and simulation company. It was made up of PhD scientists. Really, what they did was modeled, particularly in clinical trials, you can't test on pregnant women. You can't test on babies. So, they would do a lot of modeling and simulation to figure out what's the appropriate dose in terms of how the drug interacts in the body. One of the things that became apparent to the board was a lot of these tools that developers need, pharmacists need, et cetera, needed to be much more databased. We had a lot of data. But we hadn't really figured out what was the best way to develop the tools against that.
And so, the management team came forward and said, “We need to have a whole separate arm that looks at software and technology and marry that with the PhD scientists.” By doing that, we then opened up a whole different area and came sort of forward with an inorganic plan looking at, “What are all the different tools that could be used in drug development to help scientists model so that we can get drugs to market more quickly?” And that was another example where, by investing and understanding that and getting the capabilities, we were able to drive that. And it varies across. Some of the things that we do are much more aligned with what you heard earlier on the digital side of just getting good at what people do as it relates to customer orientation.
But some of them were fundamental in terms of value creation and making those decisions early on with leadership from management and support by EQT and the board.
Great examples. Thank you, Sheri. Maybe one or two questions for you also, Michael. As the head of the healthcare sector team, you've, of course, been intimately involved with the launch of the Healthcare Growth strategy. Maybe you can tell us a little bit more about that strategy and how it came about.
Yeah, happy to do so. So I think the Healthcare Growth strategy intends to make investments in companies, innovative, high-growth healthcare mid-market buyouts, predominantly in Europe. And so in the four subsectors that we already cover out of the Private Capital platform, so we seek to leverage the insights and the know-how that we have built in the team across the four target subsectors and leverage and apply that to high-growth mid-market companies. These companies, they are typically, they already have products in the market generate revenue. So they are de-risked from a clinical or product development point of view. They're also de-risked from a regulatory approval point of view. But they're at the stage in their development where they are looking for a partner and for capital in order to initiate the next phase of growth.
So that's typically a situation where they are trying to build commercial muscle or expand into a new market or launch a new product generation. I think those are very typical examples. And I think that's where we believe we can add some value to those companies. We've done that again and again, as you have mentioned in your presentation also, in previous funds out of EQT with mid-market high-growth healthcare companies. And I think that's where we see an opportunity for us to play. And I think with that, it sits nicely in between the investments that EQT Life Sciences does on the earlier stage side and below kind of the investments that we do on the equity side in the larger healthcare companies. And it will allow us, through that new strategy, really to cover and support companies in the healthcare industry throughout all stages of their development.
It will just make us a much more relevant partner to healthcare companies in Europe.
And given the overlap in terms of the thematic focus areas, right? I mean, that also tells you something about our right to win in this strategy and then helping those businesses scale. That's, of course, also exactly the type of capabilities that we have in our toolbox. So yeah.
Yeah. I mean, I'm hearing that question often about our right to win going, so to say, into a new market. Well, I think we have proven our right to win in that market already, given that we have made exactly these type of investments. If you go two, three fund generations back in EQT, and we have been tremendously successful in doing so. So I think the right to win is, in my view, we have proven that in the past already.
One last question for Michael, if that's OK, Olof. Tell us a little bit more about the first investment that we've done out of the Healthcare Growth fund, Mabtech.
Yeah, very excited about that. So we've recently announced that Mabtech is a Swedish company headquartered actually not too far here. I think it's a couple of kilometers here in Nacka Strand. And it's a provider of immunoassays and antibodies to study immune responses in human cells. And that's predominantly used in research, vaccine research, infectious diseases, and oncology research. It's a high-growth market. The company has a very strong market position in that market and is seeking our capital and the partner for the next phase of growth, which includes kind of building commercial infrastructure and presence in the single largest market in the healthcare, which is the U.S. And I think that is something that we have done multiple times before with our portfolio companies. And we believe that we can add value there and generate, ultimately, great risk-adjusted returns for our investors.
I'm sure we will. Thanks for that, Michael and Sheri. With that, I hand it back to Olof for the Q&A session now.
I almost suggest you stay in case there are some questions for you. We'll keep you on the stage in case there are questions for the three of you. Please also for Paul, if you love buildings, and for energy transition, and Masoud. I think I can see I'll pass. I think this is mic number 1. Please.
Thank you. It's Hailey Tam from UBS. Yeah. Can I ask two questions, please? One on the performance track record, which is obviously very impressive. And secondly, on the range of strategies we've heard about just now. So with the performance, thank you for all those presentations. It's clear it's a key differentiator for EQT. I just wondered if you could remind us what the target rates of return were for each strategy so we can contextualize those wonderful numbers that we've seen. And perhaps a cheeky question. When you are out on the road seeing investors, are you being asked to raise those targets, given this is your differentiator?
Great question. The returns that we target out of the equity strategy, they've been largely unchanged, I would say, for the last couple of fund generations. We target gross IRR of 20%-25% and a gross MOIC of 2x-2.5x at the fund level. Those are the base case returns that we target. Some of the existing active funds are performing above those targets. We've communicated that to the market, EQT VII and EQT VIII. The other funds are performing in line with those targets. To the second part of your question, yes, of course, the overall risk environment, the overall interest rates environment do have an impact on where exactly in that range we price investments. In the current market environment, we're certainly not at the lower end of that range in terms of pricing new investments.
Thank you. Then, if I can, the second question about the range of strategies we've heard about. If I try and think about the shape and the timing of your growth opportunity and marry that with the targets that have come out in the press release today, should I be interpreting the shape being more focused towards sheds and real estate and the new equity strategies? I thought you might say that, yes. So any comment on that would be great. Then the second question in terms of timing is, do we need to wait for distributions to come back to your EQT Equity investors before they will then perhaps invest in healthcare? Is that how I should think about that? Thank you.
Yep. I can maybe take this second part of the question. And then maybe you, Michael, can touch on the growth strategy. So we do see a pickup right now in deal activity in the marketplace. And there are some encouraging signs of the IPO markets reopening, as you saw earlier today. We launched the intention to float for Galderma, one of our largest, most important investments. And typically, if and once the IPO markets reopen, that tends to be a good sign also for other monetization alternatives, routes becoming more active and more attractive. We try to maintain a disciplined pace in terms of driving exits across our funds. But of course, the external market environment does play in, right? And historically, I would say that we've been pretty good at, pretty smart at really pushing and driving exits when the exit window is attractive.
We're invested in the most resilient and the most attractive sectors. We do that deliberately because that gives us the confidence then also to hold on to these investments, to work for longer with those investments, to generate the returns that we're targeting, even if the exit environment is not as attractive as we would like it to be, right? Which happens from time to time. It's a bit of a cyclical industry in that sense. Then maybe on the growth strategy, yeah.
Yeah. I'm not 100% sure whether I understood the first part of the question correctly. But if it relates to—is the launch of Healthcare Growth strategy—is that related to a strategy shift that we have on the equity side to kind of cover a space that we have left? I think it's not related to a shift in strategy on the equity side. We continue to pursue the same themes that we have done already over the past two, three fund cycles on the EQT Equity side. It's related to size to a certain extent, as we have moved away from a certain part of the market where we have done very successful investments.
So in subsectors that we cover with the existing Private Capital Healthcare team, where we see opportunities every day and where we have the relevant senior and Industrial Advisors that can help us create value in the companies, but we kind of, given the size of the investment opportunities that we see in that segment, we cannot invest in them. And I think that's something that we want to cover with a new strategy.
Haley, I think a part of your question was also related to the overall EQT growth targets and how that stacks up versus real estate, et cetera. I suggest we park that and have Kim address that when he wraps up everything a bit later today. Angeliki, you had a question.
Thank you. It's Angeliki Bairaktari from J.P. Morgan. A question on EQT IX. When I look at public sources, I see that the net IRR of this fund at the moment is around 12%. Obviously, this is a younger vintage launched in 2020. I was just wondering, one of the sort of concerns that we hear from investors is this fund was deployed at the time of peak entry multiples in 2020, 2021. How have the multiples developed in this fund today? Have you actually taken some haircuts in terms of the multiples versus initial entry? And given that fund has a lot of healthcare exposure but also a lot of technology exposure, I mean, we've seen sort of public valuations for technology increase a lot year to date. Do you tend to then mark up after marking down?
Or are you sort of, how are you thinking about the multiples in there?
Great questions. Many questions in one. I'll try to unpack it a little bit. But so first of all, starting with the vintage, yes, I think this is a more difficult vintage because it was a high valuation environment. We knew that we were investing in a high valuation environment at the time, which is why we were really targeting the most resilient sectors and strong market-leading companies with pricing power. And of course, we're targeting absolute returns. But to some extent, it's also a relative game, right? And I would say that for this vintage, we feel comfortable that it will be a well-performing fund. We actually stayed disciplined in terms of our pacing. So we invested EQT IX across three vintage years. So there is some vintage diversification also in there. And we've done a recent re-underwriting exercise of that entire portfolio.
So we're comfortable that we are performing in line to reach our return targets in that range, 2-2.5 times Gross MOIC. The other part of your question, are we going to mark up the portfolio and the fund? Yes. I mean, it's, of course, helpful that the public market comps have re-rated. What I would say, though, is that because we were aware that it was a very high valuation environment and because we were aware of the fact that the biggest part of the bubble was within software, we actually only have three software investments in EQT IX. So relatively speaking to maybe some other funds, the share of software is actually lower in EQT IX. So that's good news, I think.
But of course, the flip side to the other part of your question is, we're not going to have a lot of software investments that we're going to mark up also. But one of the best-performing investments in the fund is actually IFS. And that will certainly deliver a very attractive return once we exit it. Does that answer your question?
Yes. Thank you. And a follow-up. How does the carry allocation work for industrial advisors? Is it the same as the deal team? Or are there any differences?
The compensation model for our Industrial Advisors, it's separate from the deal teams. The Industrial Advisors, they, and people like Sheri, they mostly get compensated through the board incentive programs that we offer in our investments, right? Those are typically very attractive programs to participate in. The investment organization is not participating in those but is participating at the whole fund carry level instead.
Thank you. I have a question on infra, but I guess I ask it later.
No, please. Is it for Masoud?
Yes, I think.
Yes, please.
In terms of infra sort of fundraising, I mean, we have seen, obviously, it has taken longer to raise the current Infrastructure VI fund. And when I look at industry stats as well, in 2023, it feels like infrastructure fundraising was down quite significantly, maybe according to some sources, even further down than PE. And that was quite surprising to me because I thought that PE is already quite well-penetrated with LPs, whereas infra is not. So I would begin to hear your thoughts about fundraising and sort of where do you see that dynamic going forward? Do you see some reallocation out of PE into infra? Or is that not really happening?
Again, a couple of questions there. So I think the overall trend is from other asset classes to private. I think that's the major shift. And hopefully, you saw that from Suzanne, who talked about that. So I think that's the predominant long-term trend. Inter-year, that can obviously play out in slightly different. And I think the last year or two, obviously, we've seen everything taking longer. In terms of our fundraisings, I mean, we raised fund number 5 at roughly 15.5%. I think we communicated after year-end here, we're already at 14.5% raised for infra six, and see very good momentum to reach the target this year. So I see that our clients and clients in general are looking to reposition to private. And within that, it is absolutely, with certainty, in my view, that they will increase their allocations to infrastructure markets.
So obviously, things are taking longer, as you mentioned. But I feel very confident in the overall trend line that we're seeing, both for private equity but also for infrastructure. OK. We'll let Armin ask a question, please.
Thank you. Eirik Andreassen, Chair from Carnegie. So maybe following up on infrastructure, have you seen competition increase? We've seen quite a few of your large peers do acquisitions to increase their footing on the infrastructure side.
Sorry. Have we seen?
Competition increase generally?
I think competition, there are more folks that are investing in infrastructure. So from that perspective, I think there are more investors. And thereby, you can see it as more competition. But if you look at some of the presentation that I gave or Francesco gave, the opportunity set vastly outpaces the competition here, vastly. So I don't think, I mean, I've been with the EQT for 16 years. I've never seen us have such a strong pipeline as we have today. Our sourcing capability is much stronger than ever before. Our Industrial Advisor network is stronger than ever before. And the opportunity set, given the megatrends we were seeing out there, is stronger than it has been the last decade. So from an opportunity set and the competition for that opportunity set, I don't see that becoming worse but rather better.
Perfect. Thank you. And then a few questions on the private equity side. So first off, are you thinking about doing the same local with locals approach in the US as well? Or is that more sector-based themes that's working there? And then the second thing would be, given that the buyout fund has become so large, are you looking at doing more holdings in each fund? Or are you increasing the size? And I suppose if you're increasing the size, do you see a risk that you're reducing the number of exit channels you can go for?
Very good questions. So starting with the U.S., I mean, the U.S., it's one country, right? One language. There's not that many cultural differences in terms of how you do business. That is very different, of course, in Europe and in Asia, as you will hear later on from Jean. So this local with locals model, it's really in Europe and in Asia where we see it as a significant competitive advantage, at least in private markets and in private equity. Then when it comes to the, so yes, we will be very sector-focused in our approach in the U.S. When it comes to the second question, EQT X investment strategy, how will we invest it? What's the portfolio construction?
The reality is that we will continue to target the same enterprise value range in EQT X as we have over the last couple of fund generations in EQT IX and EQT VIII. We believe that the most attractive risk-reward for us can be found in the enterprise value range EUR 1 billion-EUR 5 billion, right? Of course, with a larger fund size, with a EUR 20 billion-plus type fund, we have more ability, more capacity to play at the larger end of that range. We will also have more conviction, if opportunities come up, to be able to underwrite investments at that larger end of the range. I think a very good example is the investment that Sheri is chairing now, Dechra. That was a public-to-private in the U.K.
During last year, many of the businesses in our target industries that happened to be U.K. headquartered were trading at a and were publicly listed, started to trade at significant discounts to their relevant peers, right? That was the case with Dechra. That's why we launched the public-to-private. That was a EUR 6 billion enterprise value deal. We got EUR 1.5 billion of debt. So together with one of our closest investors and clients, we were able to underwrite that investment out of the fund. We would not have been able to do that in EQT IX and EQT VIII, right? So we took that underwriting risk. Then we had a very, very successful syndication. Many of our investors joined us then directly also in this investment.
To answer your question, from a portfolio fund construction point of view, you should still expect 15-20 investments in EQT X, very similar to what we had in the previous funds.
OK. I think we'll pause there. Thank you, everybody. Special thanks to you, Sheri, for coming here and joining us for this session. We will be back.
Well, hello, everyone. Thank you for those of you that have stayed all this whole afternoon to hear about Asia and the rest of the agenda today. I'm going to dive right in. I'm Jean Salata. I run our Asian private equity business. What I want to do today is discuss a little bit about our history but also about the opportunity, which we think is a very exciting and a really big opportunity for EQT. The history of our firm goes back 27 years now. What is now EQT Private Capital Asia really began as Baring Private Equity back in the mid-1990s. We've been building the business step by step, country by country, in a local-with-locals approach.
Over the past 27 years, we've built what is now one of the largest and most established firms in Asia and, most importantly, one of the best-performing firms in Asia in terms of investment returns. We're now fully integrated into EQT. We are one of the business lines at EQT focused on Private Capital and focused on Asia. I'm going to talk about some of the benefits of that and how that's made us more competitive and how strategic a move that has been for the business. As a result of our strong performance and our strong position, we've been consistently able to raise larger and larger funds. This is our track record of fund-size growth going back all the way to 2005. You can see the average growth is over 60% per fund vintage.
Our most recent fund, which is BPEA Fund VIII, which was raised in 2022, just about two years ago, that was 72% larger than our predecessor fund. So that is obviously a franchise that's a strong franchise that's a key advantage and a key differentiator for us and I think underscores the strong performance that we've delivered for our clients. We also have the MMG, what's called MMG, which is the Mid-Market Growth Fund, which I'll talk about in a moment. That's a new product line extension that we've just recently launched since our merger with EQT. So today, we're one of the largest and most established firms in the region. We have eight offices across the region from Japan down to Australia to India and China, Hong Kong, Singapore, Korea. We cover the entire region. I'm based in Hong Kong.
I lived in Hong Kong for 35 years. The team that we have on the ground is a local team in every market. We've made over 150 investments since inception. One of the things I'm proud of is that the average partner in our firm has worked with us for 15 years. It's a very stable leadership team. That is quite unusual, I have to, in the Asian context where there's been a lot of movement, a lot of instability. We've been able to maintain a culture of stability. That's really resulted in the success that we've had and led to the ability to learn from our mistakes, take on those lessons, and continuously adapt and adjust our strategy to the changing market conditions and take advantage of the opportunity.
And then one number that I'm also very proud of there is that $25 billion number. That is the total distributions that we've delivered back to our LPs, to our investors. And that is, again, a very unusual number because one of the problems that you hear from people who invest in Asian private equity is that they don't have enough liquidity or they don't get much in the way of distributions. And that's another area and way that we've been able to differentiate our performance is through realized returns. I mentioned earlier that we have now a second strategy. So we have our flagship fund, which is a large-cap buyout fund. That's the $11.2 billion fund that we're currently investing. That invests generally equity checks of $300 million and above, targeting an enterprise value of, call it, $1-$2 billion, generally that size of company.
Then we've launched a mid-market fund, which is going to target that white space underneath that we are leaving behind in the market, which is actually very exciting where there's a lot of high-growth businesses and where we've traditionally done very well. That fund launched with a $750 million target last year. It's been very well received. We've just now recently increased the hard cap from $750 million up to $1.4 billion. We hope to close that out sometime in the middle of this year. The Asia story is something that many of you are probably familiar with. It is an exciting story. It's half the world's population. Our main market, which is in India, I'll talk about in a moment. That's the main market that we invest in. That has 1.4 billion people, 100 million middle-class consumers.
So it's a large economy, large market with large GDP. And if you look at the growth in the world and where growth is coming from, which ultimately is what drives returns, is growth, much of the growth in the world is going to come from our region. It's something like 3.7x the U.S. growth in absolute dollars over the next 14 years, so up to 2040. You're talking about $20 trillion of incremental GDP that's being created in Asia. And that, in absolute terms, if you compare that to the size of the private equity industry, it's really, we're really quite tiny. We're just scratching the surface of the potential there. We also have over 2 billion new middle-class members across the region by 2030, 2.2 billion new middle-class consumers. We have 12x the number of millennials. So it's a young population versus the U.S.
That's a very strong demographic. Then we have over 60% of the world's renewable energy capacity is being added in Asia, which is a great opportunity for our infrastructure business. All in all, it's a very strong macro story. Interestingly enough, despite the strong macro story, the region is actually underfunded and underpenetrated when it comes to private equity. We're really just getting started. If you look at some of the data on this, only 6% of total private equity capital right now is flowing into the region. Only about 10% of global private equity investor allocations for buyouts are to the Asia region. It's a really disproportionate percentage of funding and allocations compared to global GDP and the opportunity. That's why we're so excited about the next 15, 20 years and the runway that we have for developing our business in Asia.
Like EQT, we are also thematic. So we invest across three key sectors: business services and tech services being the largest, technology and health care are the other two. So between technology, health care, and services, that really covers about 90% of what we do. Most of it is, I would say all of it, is non-cyclical. It's very much a cash flow-oriented investment strategy, not asset-heavy, and high-growth companies that we target. And then geographically, you can see on the right there that our primary market is India. That represents close to 40% of our current investment portfolio. And we're extremely excited about the potential there. That is a market that we're very bullish on, very high conviction. The economy there is growing at over 6%.
There's some tremendous investments that have gone into building a digital infrastructure in the country, lowering the cost of wireless bandwidth, which is democratizing access to the internet and to digital services across the country, young population. More than half the population is under the age of 30, stable political leadership. You can go on and on and on. It's a very favorable backdrop. And it's also where our strongest performance has been. And Vijay, who's going to follow me shortly from our India operations group, is going to talk about our tech services strategy in India and also talk about our track record in India and how successful we've been investing there. So the point about being thematic and about the region, first of all, we operate in a region, as I mentioned earlier, that's already higher growth than the rest of the world.
So we are growing at between 4% and 6% across the region from a GDP standpoint. But the sectors that we're investing in are growing at 3-4 times GDP growth. So these are areas like health care is growing at 15%. This is our portfolio companies. So EBITDA growth CAGR within our portfolio companies within these sectors is growing at 15% and 20% in tech services, 4-5 times the growth rates of the economy. So it's sort of the double layering of growth, higher growth in the region combined with higher growth sectors in the higher growth regions is what attracts investors into our funds and why people want to have exposure in our investment program in Asia. The combination with EQT that we completed, well, we signed it about two years ago now. We completed it about 1 year ago, is done.
I mean, we've fully integrated our business. It's gone extremely well. I mean, I couldn't be happier with the way it's gone. It's exceeded my own expectations. It's really delivered a material step change in our capabilities as a firm in terms of our resources and our capabilities in these five areas. Number one, sectors. So our sector teams and the sector teams working with BPEA's business are actually fully integrated and fully collaborating on opportunities. I'll give you one example in a moment here as to how that gave us a competitive advantage in the market in Asia.
But the ability for us in Asia to get sector insights from Michael Bauer's team in health care or the tech technology team in the United States when we're making an investment in Asia is making us a smarter and more competitive investor than we would have been otherwise, and particularly now that businesses are becoming more and more global and sectors are global. The second point is in terms of talent. If you look at our industrial advisor network, and we also utilize industrial advisors, as Christian mentioned earlier, we're utilizing that same network of industrial advisors. We have our advisors in Asia. But we also utilize a lot of industrial advisors from the global network.
By bringing together that combined, I think it's something like 600 IAs now, we're able to get insights and be able to create value in our boards and make better investment decisions through due diligence than we would have been able to without access to this kind of deep talent of industrial advisors that we work with. Digital, you saw Sven earlier presenting about the capabilities that we have and Alex with Motherbrain. We're rolling all of that out across Asia in our teams. We have a digital business development function. We have our Motherbrain up and running in Asia. We're fully part of Motherbrain now. So that's been a big step change. And again, having the resources that we have now as a global business is very different than what we would have been able to do as a standalone.
I think it's quite differentiated from many of the local players that we would go up against in the region as well. Sustainability, you heard from Bahare earlier about how important that is to our strategy and how we look at that through the lens of value creation. We're doing the same thing in our Asian portfolio with taking all of those learnings, all of those capabilities, and rolling them out across the region. And then lastly, the value creation toolkit. It's really merging the two best practices from what we used to do at BPEA and what EQT was doing prior to the merger. And we've now created a sort of consolidated version of that that takes the best of both. And we continue to learn, continue to develop, and continue to implement that across the whole portfolio.
So I would say that overall, the combination and the merger has resulted in a huge increase in our competitive advantage as a firm in the marketplace and should make us an even more attractive fund for our LPs to continue to support and invest in going forward. And lastly, just as an example of this, we recently announced, and this deal has actually just closed as well, that we've invested in a company called VetPartners in Australia, which is the largest number one veterinary services provider of vet clinics in Australia. And we would have never been able to do this deal really had we not been combined with EQT. EQT actually has invested over $20 billion into the sector in Europe in companies like IVC Evidensia and Dechra and zooplus.
All of those learnings, a lot of the sector expertise, we actually had people from the deal teams at EQT in Europe helping us in Australia. We were able to get ahead of the process. We were able to preempt the process. And we were able to be really the preferred buyer in a business where you need to have a lot of credibility because you're dealing with doctors and vets who care about who the buyer is and making sure that we have the industry experience. So this kind of global collaboration of real industry expertise and pulling in seasoned executives, industry insights is the way forward for us to remain competitive and to continue to excel in our region. So with that, let me hand it over to Vijay, who's going to talk to you more about what we're doing in India in our tech services practice.
Vijay? Thank you.
Thank you. Thank you, Jean. Hi, everyone. My name is Vijay Raghavan. I lead our operations team in India. I'm really excited to talk to you about the opportunity we see for EQT both in India and in tech services. India, as you may be aware, is the fifth largest economy in the world. We clocked a GDP of like $3.4 trillion a couple of years ago and have been one of the fastest-growing economies since. And we also represent, as Jean mentioned, a sixth of the world's population, so pretty hard to ignore. But what's really exciting is, as you look ahead in terms of what's the opportunity, at a 6.5% growth rate, which the countries are expected to clock over the next years, we will represent about $11 trillion of opportunity, which is the growth opportunity in Germany, Japan, and the U.K. combined.
So we're sitting here on something massive. But EQT has actually been deploying capital in India since 1998. And we had a team on the ground for over 15 years. And we were well poised to take advantage of this opportunity. As Jean mentioned, we were one of the first funds in Asia to really start thinking about thematic investing. And the India team was one of the first to do that as well. We started identifying three sectors as targets for investments: tech services, health care, and financial services. We identified these very carefully based on what sectors have really been good for private equity returns and exits, sectors that had strong underlying growth, limited regulatory overhang, talent availability, and of course, extensive deal flows. And through that, we've actually, over the years, deployed $6.4 billion of capital.
We expect to deploy another $1.1 billion shortly as one of our deals closes in the coming days. We've already returned about $6.9 billion at a net IRR of 18% across economic cycles. And one of our strongest sectors has actually been tech services, which is a core sector for us in India. To give you a little bit of context around tech services, technology itself represents $5 trillion in our global economy. And 29% of that is actually tech services. You might know that it's actually bigger than software. And in terms of dollar amounts, in the last year, this was $1.364 trillion, and it's been growing at a robust rate of 7% over the last four years. So a pretty massive sector.
If you look at some of the structural tailwinds that we see, we think there's going to be an opportunity for continued growth and an opportunity for us to be able to invest behind this. Some of the tailwinds are a fragmented market. The largest player in tech services in the world is Accenture at $64 billion in revenue. Compare that to the market size overall. We also think it's significantly underpenetrated. Only about 10%-12% of the total spend is actually outsourced to India today. There's a long way to go. There's been a continued shortage of talent in the West and complemented by talent availability in Asia. For example, in India, you have about 1.5 million engineers graduating every year. You also have a deep bench of senior management talent. Many of the Indians actually run global firms in this space.
There's also an interesting sustainability angle here with over two million women employed in the workforce in tech services and bringing with it the associated societal development as well. Then lastly, there's been a pretty mature exit market with several funds exiting tech services investments through different routes. Our conviction in tech services also comes from our track record. We have deployed $4.8 billion in capital, returned $6.9 at a Gross MOIC of 3.9x and an IRR, a net IRR of 3.4. So it's been a sector where we've actually invested across a spectrum of investments. Through our institutionalized value creation program and particularly the business mobilization system that Christian talked about earlier, we've actually been able to deliver the returns. So let me share with you a case example of Virtusa to bring that to light. Virtusa is a global digital engineering and tech transformation service provider.
They have about 35,000 people around the world in 25 countries. They actually have a bulk of the delivery coming out of India. When we looked at this deal in the summer of 2020, they were actually listed in the NASDAQ. They were underperforming. Their revenue growth was low. Their EBITDA margin was among the lowest that we'd seen in the business. There was an activist investor that had taken a stake in the business saying the board was not expecting accountability and performance. But as we conducted our diligence, we saw a business that was playing in really attractive segments, had deep domain capabilities in some areas, and actually had a cash flow generation profile that was very annuity-like. So we thought, if we were to this was undermanaged business.
And if we were to take it private, we'd be able to execute a transformation with speed. So in September 2020, during the peak of the first wave of COVID before there were any signs of vaccines or any of the signs of the digital wave that followed, our investment committee approved this deal together with a couple of key co-investors. And we got in. In the three years since, the business has grown to $1.8 billion in revenue. The EBITDA has grown at a 37% rate. And the EBITDA margin right now is at 18%, a testament to the mobilization program. Let me share with you a little bit about the mobilization program. The objective of this program really is to drive predictable, repeatable, and scalable outcomes across our portfolio companies, across sectors, across geographies. So we developed this program over the years.
I've been continuously refining it based on what we learn from our industrial advisors, our own hits and misses, and also all the developments that are happening in the outside world. We describe this as essentially six pillars that together help accelerate our time to value while avoiding pitfalls. It starts with governance. At Virtusa, from our network, we brought on board a new CEO, Santosh Thomas, who'd actually run a business four times the size of Virtusa in his previous role. We brought on board a Chair, Raj Mehta, who had actually previously helped deliver a 3.6x return for us in Hexaware. Both Santosh and Raj really took ownership of the mobilization program at Virtusa, which was one of the keys for its success. As part of pillar two, creating transparency, we reviewed all of the key processes within the company to ensure no gaps.
We invested in sustainability, including signing up for science-based targets for carbon reduction. We invested in digital, both in cyber and in internal systems. We then worked with the CEO and his top 200 leaders to put together a five-year full potential plan to achieve our investment thesis based on a methodology that we call the OGSM. This inclusive process was really instrumental in aligning the organization towards the full potential plan and in actually accelerating execution of the plan. We invested in talent using a methodology to link talent to value. We used that approach to identify the critical roles that we absolutely had to get right. This included roles like the CFO, the COO, and the CIO, but also several roles beneath within the organization. We invested behind those.
We put in place a cadence of reviews, really, to drive results and ensure that the company stayed on plan. As part of our tech services playbook, we have a customized forecasting process by which we can assess where the company is headed versus our budgets and where there's a gap, put together what we call a roadmap to cover that gap. Through that process, we've been staying on track. Lastly, we implemented a management incentive plan covering 80 roles and ensured that the individual value creation for the executives in those roles was linked to achieving the Full Potential Plan. As we went through the deployment of these six pillars, the CEO and the chair of the business appeared before our portfolio or performance review committee every six weeks, sharing updates on progress. Through that process, the mobilization system became theirs.
It became part of their vocabulary and how they run the business. We then actually, to execute on the Full Potential Plan, we had to undertake a business transformation, which cut across five significant initiatives that you see at the bottom. We executed on these first against the backdrop of COVID and next, the digital growth wave that happened, the great resignation that happened after, leading us to today where the company is performing ahead of our ambitions. I hope that gives you a flavor for the types of opportunities that we see in India and in tech services and how we are well positioned to invest behind them. Also, I hope you got a flavor for the value mobilization program and how we aim to deploy that with consistency and rigor to get our investment outcomes. Thank you. Let me now pass it on to Olof Svensson.
As a testimony to Vijay's systematic approach, the time is exactly 0:00. You were spot on in terms of timing. Impressive. We will now completely switch gears. We will go back to EQT again, EQT AB, and our platform. Our next presenter is Christina Drews, our Chief Operating Officer.
Great. Thanks, Olof. So as Olof said, my name is Christina Drews. I'm COO of EQT. And today, you'll have heard quite a lot about our growth journey and, in particular, the fact that we aim to continue to grow. It is incredibly bright, actually. So I am going to move a little to the left. And the fact that we want to continue to grow means that it's really important that we think about whether we are fit for purpose in terms of managing that growth going forward without skipping a beat. And you'll have heard from a bunch of presenters about the value creation and the digitalization of our portfolio companies. And what I would like to spend a few minutes on is the value creation and digitalization of ourselves, of EQT. So what is the EQT platform? Well, it is not a specific set of teams.
It's not a specific set of subprocesses or a specific set of IT systems or anything like that. What it is, it's an integrated end-to-end approach or a way of working across every single thing that we do. So when we want to maximize for deal execution, we need to really look at how a deal is launched all the way through to closing. When we're looking at client service, we need to really think about the entire lifecycle around the client. And when we're looking at our funds, we need to look at how we raise, manage, but also liquidate those funds. So really look at things from the very beginning to the very end.
It is this which allows us to effectively launch new initiatives, to launch new strategies, or access new geographies in a very, very scalable way so that when you increase AUM and when you increase complexity, it does not mean that you have to increase headcount and you have to increase costs. And really, the focus at the moment of the EQT platform is a focus on transformation. We call it future-proofing, the platform. But really, it is a very, very strong transformational agenda. Now, you might think, when you think of transformation, that technology is a really great place to start for transformation. But in actual fact, the opposite is true. If you apply technology to really bad processes and really poor data, if anything, you've made the situation somewhat worse. You have digitalized what you should really be moving away from.
So technology should only really be applied once you have maximized for ways of working and you have established a single source of truth. Now, when you look at the effort or the time that goes in, on the one hand, working with people, making sure you break down silos, finding the single source of truth, changing processes, all of that good stuff on one side. And then on the other side, digitalization, it is broadly 80/20. So 80% ways of working and single source of truth and 20% digitalization. But somewhat unfairly, actually, the uplift that you get or the hockey stick impact that you get from applying technology is far in excess of all the work that is being put in on people and process and data. But such is life.
The good thing is that when you apply great technology to great processes and to great data, then the sky's the limit. So what I'm going to do is actually share a very specific real-life example of this approach to make it come to life a little bit. So 1.5 years ago, we tried to transform the client reporting experience. And that's a super, super complicated process. It has so many stakeholders. It's got the investment teams, valuation teams, client relations, fund operations, our fund admins, just a huge bunch of stakeholders working quite manually and working in silos. So the very first thing we did is actually look at, how did these teams collaborate? How do we actually transform the process of how they're all working together?
While we were very busy breaking down silos, we also took a step back and said, what should we actually be focusing on? Sometimes it's really good to take a fresh perspective on what we've been doing for years. What really matters? What is important? And there was this one section in the client reports and the send-out, which was a 57-page section, which seems really hefty for a normal quarterly report. So when we looked at it, as it turns out, only 12 pages were truly relevant for our clients. So all this great work to no avail. So for the next 11 weeks we started one week late for that quarter. For the next 11 weeks, we worked very hard. And we had daily stand-ups at 6:00 p.m. every single night to look at, what were the blockers? Who was not so happy in collaborating?
How could we bring them over the line and address all of these various points? And all the time, we had the goal in mind for our quarterly deadline. So what happened? Well, after that period, the timeline for the reporting went down by just under 20%. And that's actually really interesting because the only thing that was done in that period was one thing, which was changing ways of working. And when you look at this graph, you can actually see that tiny little bump right there under number 1, which shows you the bump, the uplift that you get before you've done the really great stuff, which is just through changing ways of working. So what came next?
Well, next, we focused on establishing a single source of truth, and absolutely crucially and very importantly, on technology, on digitalization, on really investing in that after we fixed the ways of working. So fast forward 1.5 years later, where are we now? So if we go back to the original timeline, the actual decrease in timeline is now 50% from 1.5 years ago. But of course, things have happened in the past 1.5 years. Time didn't stand still. We continued to grow. And that meant that the actual sheer volume of client reporting continued to increase exponentially. What else happened? Well, we launched a private wealth product called Nexus, adding quite a lot of complexity into this entire space. Now, on top of everything, we also had to do monthly reporting. So effectively, we were scaling while there was a moving target.
That in itself is quite powerful because that 50% decrease was achieved with all of that without adding a single headcount. That shows the power of the approach that we're taking in transforming the platform. We're applying this to lots of things, the employee lifecycle, to liquidity forecasting. The truth remains that with this approach, if done in a very, very diligent and strong way like this, we are able to access new geographies or launch new products or new strategies in a way that is truly, truly scalable and that does deliver true value to EQT as an engine for growth. So on this very high note, I hand over to my great friend and colleague, Kim Henriksson.
Thank you, Christina. Thank you for great work and great collaboration. So I am Kim Henriksson, CFO at EQT. Wow. What have you heard from the team here today? How to summarize that? We will continue to grow our flagship funds. You have heard that we will continue to grow our recently launched initiatives. You have heard that we will continue to launch new initiatives. You've heard that we will invest in new client relationships. We will invest in new distribution channels, including private wealth, of course. And you've heard that we have a long, long runway for growth. You've heard about performance, how performance matters. And you've heard that we have a repeatable value creation process and processes, really, in the portfolio companies, in the real estate assets that we own and manage. You've heard that our platform is well invested.
It's being built for scalable growth, both organic and inorganic. What has happened? Let's consider what has happened since the IPO. We have had a revenue growth of about 40% per annum since the IPO. Now, there have been significant mergers and acquisitions involved in that. The corresponding number, if you look at it only organically, is around 25%. So still significant. The growth has not come at the expense of profitability, as you know. On the contrary, you could say. Revenue growth is not a straight line, however. And our growth targets should also not be applied to any given year. You should think about them across a fundraising cycle, at least. For example, 2023 was a step-change year. 2024 is not a step-change year. We have.
During this time, the organic and the inorganic growth has also led to a much more diversified fee base of these long-term, contractually recurring management fees. About 75% of these management fees are based on AUM that was raised in the last five years, which means that we have many, many years of stable revenues to come, many years to come with stable revenues. Of course, we will continue fundraising as well. In the current market environment, we plan for approximately 3-3.5-year time period between our key flagship funds. That's more or less in line with the long-term average.
And on top of that, there's further revenue potential from some largely untapped sources, private wealth, which we've talked about quite a lot here today, but also some of the new and recently launched strategies, including the long-hold strategies with their compounding effect on management fees. And lastly, on capital market initiatives, which we have just recently started with. You've heard from many, many speakers today that performance is at the core of what we do and how focused we are on performance and how focused we are on creating lasting value in the companies and the assets that we own during our ownership period. And we have very, very high conviction that our key funds will eventually deliver significant carry. Our historical track record supports that.
But we also have tangible value creation plans, like you've heard from the team here today, on each and every company in our portfolios that show that we will, over time, deliver that carry. We have about EUR 8.5 billion of carry to be realized in the funds that we are currently managing. And that's if the funds perform on plan. Now, several of the funds are actually performing above plan. So it could be more than that. However, it normally takes 4-6 years and a few exits before we can realize any of that carry. And you know that the exit markets have not been supportive recently, but that will eventually change. Eventually. There's quite a lot of exits required in order for us to book significant carry.
In the appendix of the material, those of you who are numerically interested, can have a look at an example about how the exits turn into booked carry. Short term, we are cautious. Long term, we have very high conviction that our business model works and thus that we will be able to create a lot of carried interest. We are scaling. As we grow our business, that scaling is also reflected in the margins that we have. In 2023, the EBITDA margin was 58% compared to 46% at the time of the IPO. The fee-related EBITDA margin was 54% compared to 43% at the IPO. The direction is clear here.
But if you look at the individual years in between that are not on the chart here, you will see that our margins vary based on the relative growth rates in AUM, in carry, and the more gradual growth of the cost base we have. So in years of larger fundraising, larger flagship fundraising, it will have a positive impact on our margins. Years of significant carry, obviously positive impact, whereas you see the more gradual slope of cost. So take that into account. Our margin target should thus also be not considered in any one specific year, but across a cycle. We commit to growing our business both long term while also increasing our efficiency at the same time. It means that we will continue to make investments in the top talent that we need in order to create the returns to our clients.
It means that we have new initiatives ongoing that require new capabilities. It means that we still have markets where we can grow significantly. So our headcount will grow. Our headcount will grow. But we will be selective. And we will be very targeted in our recruitment. And we will also work smarter. We will be we see further opportunities. And you just heard about that for productivity gains, both on the investment professional side and on the more support and the various supporting functions. So from year to year, the hiring intensity and the efficiency gains will again vary. But as evidenced by the very high-level, admittedly, KPIs here on the screen, you see the direction also here is clear with some 30% increase in productivity over this time period.
Our capital structure and our balance sheet is a key enabler for our growth since the IPO, both the inorganic and organic ones. New funds can be brought to market quicker with a team in place, with seed investments. Any acquisitions we made will largely be share-based. They will also require cash. We think it is prudent to retain our solid investment grade rating that we have so as to be able to capture any opportunities that arise in a very fast-moving industry as ours. We are a growth-oriented company in a growth industry. We will always prioritize growth. We also have an operating model that is very cash-generative. This leaves room for further increasing the distribution to our shareholders. We are in the business of long-term active ownership. We drive value in our companies on a long-term basis.
That's also how we work ourselves. The financial targets that we set at the time of the IPO are still valid. We still expect to grow faster than the private equity or private capital market overall. We expect to have an EBITDA margin between 55%-65%. We expect to be able to grow our dividends year over year. Let me provide a bit more color on that. As you heard earlier today, we do expect to take market share in the Private Capital industry. Therefore, it really means that also our management fee growth will be higher than the industry as a whole. That's one comment. We will outgrow the industry not only on total revenues, but also on management fees. As we've hopefully demonstrated today, we will create value in our portfolio companies.
Eventually, the exit markets will be there. And at that point, there will be room for significant carry realization as well. And in years of significant carry realizations, we will be above the target range. The scaling that we have and the productivity improvements we have means that over time, our fee-related EBITDA margin will also reach this range. We are at 54% last year. And again, do not think of this as a short-term target, but as a medium to long-term target across a cycle. Our slightly refined dividend policy just refers to growth in dividend per share instead of total dividend. But we intend to be efficient with shareholders' capital. And we intend to ensure that in years of significant cash carry, there may be room for additional distributions either in the form of... excuse me...
in the form of dividend or in the form of share buybacks. With that, I'll now hand over to Olof. Or yeah, the panel. The panel. It's time for the panel.
Yeah, please bear with us for another half hour. I know you are all keen to get dinner. But I think it'll be worth it, hopefully. I won't bother introducing Christian and Suzanne. I think at this point in the day, you'll know or should know who they are. But I'll just briefly introduce myself. My name is Pablo Mayo Cerqueiro. I'm the EMEA Capital Markets Reporter at Reuters. And that increasingly means also Private Capital markets. I almost feel redundant because the questions during the Q&A today were so good that I had to rewrite my own questions and get a bit creative. But let me just set the scene real quick.
Then we'll go on to the questions, which is the interesting part. Basically, I think it's fair to say that we have seen an explosion in the Private Capital market since EQT's inception. You saw some industry data today as to where the market stands right now in terms of assets under management and where it's supposed to go. The expectation is that the market will continue to grow very much so. However, a lot of this growth happened during the years of the ultra-low interest rates. The change in the rate cycle has had important impact and effects on the industry. Fundraising across the board has been constrained. I mean, obviously, EQT is an outlier there. You guys managed to buck the trend with your latest flagship fund. Deal activity has been slow in the last couple of years.
So I'm really keen to hear from you two today as to a little bit what the journey has been, but perhaps more importantly, what lies ahead. And perhaps we can talk first about the short-term future and then the long-term trends. And without further ado, I'm going to kick it off with a question perhaps for you, Christian, because you've been at the company a long time. But what do you think are EQT's biggest successes? And any regrets or anything that you think could have been done differently? Just to reflect a bit on your journey.
On my 26 years?
Yeah.
That's a big question. I think our biggest success is actually that we're... as we've been growing and developing the firm, that we've been able to keep our culture, stay true to our values. And that means that we're a place which is fun to work, actually. And I think the way I think about it now in my soon 27th year, why do I still come to work? And it's because EQT is also a place where you can be yourself. We don't try to mold anyone. We're not trying to force anyone into any single way of thinking. We're actually trying to get people together to solve problems. Because owning companies, owning anything, owning a house often involves problems. Lots of opportunities too. And then we have to come together and solve those problems or find those opportunities and go after them. And I think that's our biggest success.
I think that's going to be the key for the future too, is to keep that entrepreneurial spirit, the openness, this lack of hierarchy, if you want to call it that, or more flat organization where the best argument always wins. That's, I think, really, really important. We're a company where there are a lot of talents. And that means that we're also... none of them... we're not dependent on any single person. We don't follow any prima donna or anything like that. We really try to find the best talent and help them grow and develop. And hopefully, they'll be able to lead the firm also in the future. So I think that's got to be our biggest success and our biggest area of focus also for the future, to stay true to ourselves and differentiated. In terms of mistakes, that was your second question.
We've done lots of mistakes. That happens all the time. In every fund of 15-20 companies, unless it's ventures, then it's 50 or something like that. We're going to make mistakes either in due diligence, execution, choice of governance, choice of people. The key is that you learn from those mistakes. The thing... what we try to do is, when we do something well, we, of course, try to replicate it. When we make a mistake, we analyze it. We put it on the table. We try to learn. Okay, we had a failed exit here a few weeks ago. Why? Why did the exit fail? Or what were the elements that contributed to that? Of course, it starts already probably when we bought the company. Lots of things.
And the team actually takes a step back very transparently and says, "Okay, well, here's the fact pattern. And here's what we learned from that situation. So that when we come to that situation next time, maybe we don't buy that type of company. Or maybe we run a different process or whatever it might be." So we make mistakes there all the time. The key is to fix them and make fewer of them, of course. And then strategically, we've started a couple of funds in the past, the Opportunity Fund, which I was tasked with winding down right after the financial crisis. Sometimes we go into a strategy or an area where we don't... I hope we don't do this very much anymore.
But in the past, at least, where we tried to be maybe a little bit too opportunistic and didn't bring the best teams together, didn't use all the EQT DNA and all the EQT learnings. And then we've had one or two fund strategies that haven't been successful. Now we have like 20-something, I think. So that's okay. The key is, again, to learn from those and to try not t o repeat it.
Yeah. I wanted to ask you about sort of like the nearer-term kind of like outlook. So if I remember... correct me if I'm wrong. But your latest annual results, a massive increase in revenues driven by an increase in management fees. But realizations were a bit slower because there were fewer exits across the market. So maybe, Suzanne, you can take this one. What's the next year... like the coming 12 months going to look like? Obviously, you guys launched... you issued the IPO for Galderma today. So it seems like there's some green shoots. But really keen to hear from you as to what's to come.
Sure. Yeah. Well, it's obviously been a more challenging market for public markets, as you know well. And so that dynamic and perhaps the mismatch between pricing expectations and where buyers and sellers are ready to come together, I think, has been a factor for the market as a whole over the last 18 months or 18-24 months. It does feel to us like the markets are healing. I don't think we're ready to be exuberant yet. But we are keen to make sure that we're participating as markets open back up. I think that's what the Galderma IPO represents as an example.
When we think about what can one expect, I think we hope to see progress on the exit front this year. Reality is, though, that it will probably take a couple of years to see markets fully normalize and to see... I'll call it distributions back to LPs also normalize. Now, I do think that as public markets have rebounded a bit, it's addressed some of the denominator issue, which was at play last year. And so it feels to us like, well, it's not easy out there on the liquidity front yet. There are reasons to be optimistic about the direction of travel. Obviously, one of the things, as you point out earlier, is that we've seen people be more discerning about the strategies that they will back now in today's market.
And there'll be a tighter correlation between those managers that have delivered top quartile investment performance and then those managers who are able to fundraise with success. And so we're glad for that. We have always thought that there should be a correlation between the results you deliver for your clients and the reinforcement that that brings to your franchise value. But I think through the easy money environment, there were many strategies getting funded. And that seems to be evolving in our direction at this point.
Yeah. And that brings me to this idea of... that we hear all the time these days, the asset gatherers, this concept that we're perhaps walking towards an industry where there's a few asset aggregators that have different strategies, different asset classes. And it seems like data suggests that LPs are perhaps choosing fewer managers than they would before. So I'm curious if that's where you think the industry is headed. And where do you see EQT in that scenario?
Sure. Yeah. I do think that many clients, as I talked about earlier, are looking to consolidate relationships. But I don't think that means they don't care about investment performance. I think they still care quite a bit about that. And I think for those managers that may have a diversified set of strategies, their challenge is to remain in the top group performance-wise. And if they don't, I think we will see them lose share. I think because our approach is so focused on Active Ownership and on continually refining the value creation toolbox that we use. And honestly, because we have this mantra of everything can always be improved at all times, it does create a mindset about continually improving our processes.
And so I'm hopeful that that is really going to allow us to stay at the edge of performance and to keep delivering for our clients.
Do you see space for smaller boutiques to coexist with groups like?
Yeah. Absolutely. I think what we expect to happen in the industry is that the niche players, the specialists, whether you're a specialist in a sector most likely or even possibly a geography, they're going to have their niche and they're going to be really good at what they do. And then you have players like us that have both the breadth and the depth. So we have all these resources to build Motherbrain and sustainability and value creation playbooks, etc. And then bring that down into sectors, into companies and geographies. So we don't call ourselves an asset gatherer because we think of ourselves as performance gatherers, actually.
But of course, we have a lot of different strategies now. They're all very performance-oriented and premium-oriented. And then you have a lot of firms that are stuck in the middle. And this will be like a classic MBA case at some point in time. If you're stuck in the middle, you're not going to win. And that's also going to drive this consolidation. And actually, we just heard it from Michael Bauer, who was on stage here earlier, that one of the preeminent firms in Switzerland and the German-speaking region that was probably the number one firm there 15 years ago is now winding down. Because they actually lost, even though they were strong in that region, they lost their edge. And that's, I think, is going to happen more and more. Some will slowly but surely peter out. Some will be consolidated.
You'll have in this industry, like in all the other professional services industries and the asset management industry in general, you'll have some big players and you'll have niche players. If you don't have one of those edges, then you probably won't do very well. The niche players won't get all of them hoovered up by the bigger ones. Yeah. Unless they want to stay independent. Because this is still a people's business. I think there's still going to be lots of entrepreneurial firms that say, "Hey, I just want to stay small and lean and mean." Some will join forces with players like us. Hopefully, we can then really play well together.
Yeah. Just wanted to kind of follow up on that aspect of consolidation that was also brought up during the Q&A earlier. Can you give us a bit more color as to what role you see EQT playing? Are you thinking about more like a bolt-on kind of like here and there? Or could you try something bolder again? Like, for example, the BPEA deal, something a bit more aggressive, so to speak.
That's actually on now. Well, I think the... I think we have the capabilities to do both. Maybe that's the way to answer it. If we were to do something larger like BPEA or Exeter, then there would have to be a superb fit in the same way that I talked about earlier with culture, with strategy, with performance, and preferably very little overlap. So that becomes... It becomes a little... in some areas, possible. In other areas, not possible. Because then we're just adding one plus one and it becomes less than two. So it's possible.
We have the capabilities to do it. I think we have the currency to do it and the experience now. Maybe more likely, or at least there'll be more of it, will be smaller or medium-sized bolt-ons that will fill either a geography or a sector or a competence that we don't have. And that's what actually we have... very interestingly, we have a workshop tomorrow on this exact question. I mean, it's obviously a continuous effort. But something that we talked about it earlier, now in 2024 and into 2025, we're ready. The platform is ready to do something. That does not mean that something will happen tomorrow. Because this is a very sensitive kind of thing to do M&A in people's businesses. So we have a lot of respect for that.
I was just wondering if you guys saw, for example, the BlackRock deal and you're like, "I'm going to do the next one."
No. It doesn't really... Well, of course, we know a lot of the players in the industry. We knew BlackRock was talking to different players. We knew GIP was for sale. So that wasn't really a secret for us. That was a firm that needed a succession. BlackRock wants to get more into private markets, which I think generally is good. It shows that the biggest asset manager in the world needs more competence and more access to the industry we're in. I think that's great as a signal. But it didn't really impact our strategy or the way we think. We're crystal clear in what we want to do. We just continue with that.
I might add that when I think about transactions like that, in the near term, they can create disruption in the competitive set. I actually think we can take advantage of that. Because we have enormous stability in our platform. If I think about what Masoud said when he got up here and he told everybody, "Infrastructure is the most interesting asset class there is." I know on the one hand, that drew some laughs. I will tell you, it's a pretty exciting asset class right now. To be one of the players with the strongest performance, we operate in the high value-add space. We have a lot to bring to the table. That stability relative to several other firms with transactions kind of stirring up what's going on, I think, means good things for us.
I've got a question for Christian. It's a question that I wanted to ask for a while. There seems to be a theme among private equity companies or alternative asset managers thinking about going public like you guys did or like Blackstone and KKR and others did in the past. I want to ask you, so what sort of advice do you have for those peers that are considering following the same steps? Is this the right call for an alternative asset manager? Then once you make the call and you decide to list, how do you go about managing the interests of the shareholders who perhaps want to see predictable management fees versus the LPs that probably just care about their returns? So I'm just curious about how you navigate that. And looking back, what's your advice?
Yeah. There are several dimensions to that. I think the most important is that as a public company, don't run your company according to what the public market wants. Because if we were to do that, then we would have jumped back into credit. And we would have turned upside down and followed some short-term trends, for example, in the last 24 months or whatever. And I think the best companies in the world, obviously, and we are too, focusing on delivering for our clients, for our customers, do the best that you possibly can for your customers.u
And ultimately, that will benefit the firm. The firm will get stronger and stronger, be able to deliver new products, new services, expand into new areas, will hopefully prosper. And then the shareholders will be happy. That's how we think about it. And it's very easy, though, in the public markets when you're reporting... Now, we report semiannually.
But we also have this KPI statement quarterly. It is easy to start to think about business in a short-term sense. And we have to resist that. I think that's incredibly important that we're building this. We're building this ship. And Kim just said it. All the goals we talked about today, none of them are short-term. I don't think we talk about the short-term at all. This is a particularly long-term industry. So that's maybe the first piece of advice is that stick with what you're good at. Develop that. And if you do it well, that will be good for the shareholders. And the other thing is, if I just break it down into two, and there are probably more, is it's helpful to be of a certain size and breadth and diversification that you can actually manage being a public company.
Because there are a lot of stakeholders that pull in different directions. I'm super lucky that Olof and Mathilda and Kim and a huge team around us and Gustav's team and business development, we have actually quite a lot of people working on being a public company. Josefine, you name it. Being a public company, existing as a public company, communications, you name it. And if you're a smaller firm, those resources will be harder to attract. And therefore, more of the work will end up on the rest of the management, who actually should be working on building the business, delivering for the clients, and all that stuff. So those two things I've reflected on.
Suzanne, I've got one for you. Because we talked a lot today about private wealth. I just wanted to kind of ask a follow-up. Can you give us an idea of how much or what portion of the pie private wealth will represent versus institutionals in the future, maybe for EQT or the industry in general? And how do you think that's going to shape the industry? Because it's an industry that traditionally has been reserved for the pension funds, the insurance companies. And now it's becoming a bit more retail, if I can use that word. So how is that going to change the business?
Its a great question. It's actually really fun to dream about it a bit. Some of the charts we shared earlier, I think, if my memory is right, would show you that the individual investor could be as much as 50% of the pie in 20 years' time. And so that's a pretty different landscape, to your point, than what has historically been the reserve of institutional investors.
I think that's going to spur a lot of innovation in types of products in the way people access the private market. That will mean that different companies prosper. They need to be able to innovate, deliver vehicles that investors find easy to buy and easy to own. I also think it means that brand will matter more than maybe has been the case in the past. And so that will create a little bit of a different dynamic, a different landscape. That may be one factor that may inure to the benefit of bigger firms who can afford, in the same way that Chris mentioned, about thinking about what are some of the parts of an organization that you need when you're bigger, when you're public. I think to support a brand-building effort, you need to be of a certain scale.
So that's likely to matter as well. I think there's just going to be a lot of creativity at work. Thinking about how is a message delivered to end consumers who may not today know a whole lot about the private markets, but who are eager to learn, they're eager to benefit from the exposure that private markets can bring in the same way institutions have been for many or have benefited for many years. If you think about the end consumer experience, there are many people in the world that may have benefited from a defined benefit pension, where a steward on behalf of a company set an asset allocation and accessed illiquid markets and ended up driving a more attractive return profile.
Because he or she had the power to do that on behalf of an aggregated group of individuals and to make long-term decisions that ultimately meant they could deliver a richer set of benefits to those workers, in effect. And now, more of that burden is falling to individuals to make those decisions on their own. There are fewer people who have access to a defined benefit pension, as an example. And so it's up to them to find those alternatives on their own. And the companies that do the best job of making it accessible, that care about educating the market and their clients, I think, will be those that win.
So we're excited about all the stages of that journey, the ability to make the alpha in the first place, make the return, and then also to bring it to the market and to have it be an understandable product for them to invest in.
I'm conscious we're going over the allocated time. So I'll just have one last question to tie to this. So we're seeing this trend of more retail exposure on the investor side of things. Some of these alternative asset managers are actually getting quite big as well. So I wanted to ask you about regulation. There's changes coming out of the SEC in the U.S. that are arguably controversial. There's obviously a bit of pushback from industry over there. In Europe, you have the update of the AIFMD directive, which, I mean, notably affects private credit funds. But it's designed for all alternative asset managers. So I'm just curious, what sort of interactions are you having with regulators? And what are you hearing in terms of where are you headed? Are we headed towards more bank-like regulation? What's on the horizon?
Yeah. You want to start or do you want me to start?
I can start. I think you'll complement it sharply and well. But philosophically, if you look at where EQT comes from, we're physically on the ground in every jurisdiction where we invest. We're part of society. Actually, 12, 14 years ago or something, we moved our funds offshore to onshore, meaning we actually moved into regulation rather than out of regulation. And we're not part of the groups that are now suing the SEC for this new regulation. Because we pretty much follow it already. So I think we're thinking there are probably some good elements around regulation.
Because what we want is more people to access our industry. And if regulation helps that, we're in a way a public and transparent company. We're not so worried about it. Now, there are probably some deeper questions that you can complement with, Suzanne.
What I was going to reference is really that transparency is one of our five core values. And to me, the job of a regulator is to help consumers stay safe in financial markets. And so our own ethos of being very clear and disclosing on the tin, so to speak, what it is that people are investing in, I think it's very aligned with where regulation will go.
I don't think most regulators would look at the asset management business or the private markets investing business as creating systemic risk, which is, to me, the reason why the banking sector had such a sea change in regulation in the crisis era. So while we play an important role and I think can really help people provision for better futures, we do so in a format that contains the risk. And we typically do so with a ton of diversification, we and our industry peers. And then we, in particular, focus on doing it in a way that's very upfront and very transparent. And that makes me proud as an organization that any question an investor would like to ask, we're happy to hear. We're happy to answer it. And I hope that we'll continue to have that approach into the future.
Any concluding remarks? Where do you want to see EQT in, say, five years' time?
Well, in five years' time, hopefully, we'll have more than doubled the size and scope of the firm and that we stay true to our culture and values, as I talked about, and that we continue to build the platform for the long term. I was talking to Conni earlier and another journalist, actually. We reflected on it, again, about 15 years ago or something, when we saw the opportunity to really grow. We said that we wanted to create an institution that lasts beyond any individual. That's kind of a strange thing to say when you're a small partnership. But that's what we're trying to create. So hopefully, today showed a little bit of that future potential.
Very good. I think we give him the last word.
OK. He's the CEO. All right.
Exactly.
I'm happy for you to come.
No, no, no. I think you said it beautifully.
OK. Thanks. Thanks a lot, Pablo. It was great.
Thank you. Thank you very much. Thank you.
But Jean Eric, do you think there is a max AUM size in future buyout funds? Or how large do you think the BPEA fund number nine, for example, could be in Asia?
I'm not able to talk about the target fund sizes for our current funds or our new funds. But what I can tell you is that my personal opinion is that I don't see any reason why Asian funds should be any different in size than a European or an American fund. Because the addressable market and the GDP and everything is comparable, if not larger. I think what's happened historically is that our industry is probably 10 or 15 years behind Europe and the U.S. in developing. So it's just playing catch-up. But ultimately, I don't see any reason why the sizes should be any different in Asia.
But we do see a bit more competition coming into Asia. And I mean, we saw the example from India before with all the fantastic macro trends, et cetera. Do you see it being more challenging to sign deals or pricing coming up? Is it more difficult?
In a way, it's actually the opposite at the moment. What's happening is that our industry is consolidating. And it's a little bit about the haves and the have-nots where the fundraising environment's been challenging. And so what we're seeing is sort of the larger groups and the more established players are getting the lion's share of the fundraising. And some of the purely regional or pure country funds, especially, are struggling in the current market environment.
So I think over time, that consolidation trend should lead to fewer larger players in the market. And in the market, a little bit like what Masoud said earlier about infrastructure, I think the market is growing faster than the capital being allocated to the region is growing. So I think deal flow and pipeline is increasing at a higher rate than the increasing size of the fund sizes in Asia.
Thank you. And one last question for Kim. In your updated financial targets released today, you wrote about buybacks as a possibility or extra dividends going forward. Which of the two methods do you believe would suit EQT the best?
I don't think we have a strong preference for any of them. What we've said is that we want our ordinary dividend to have a sort of stable growth profile on it. That's sort of our main financial target on the dividend side. The rest would be added sugar on the cake and more a question of the shareholder perspective rather than EQT's perspective.
Before passing to the new question, we have great questions from the analysts covering EQT. But feel free, anybody in the audience. I know we have 10 students from the Stockholm School of Economics here today, et cetera. So everybody, feel free to ask your questions. But I'll pass it to Hubert.
Sorry, analyst questions. Hubert Lam from Bank of America. Kim, I've got some questions for you. Firstly, on the EBITDA margin target on FRE, currently, last year was 54%. And now you're saying that the target of 55%-65% is a medium-term target. So why are you being cautious on this? Do you expect it to go down before it goes up? Or because of more investment spend? Just wondering why you don't think you hit there.
Well, I don't think we said the FRE target is 55%-65%. I think we said that the FRE will reach that range. That's a slightly different nuance to it. That's one observation. The second observation, I'd go back to what I mentioned before about that flagship fundraises happen in steps. Carry comes in steps, whereas the costs go up more gradually. So yes, there are years when the FRE margin will be down.
OK. But you're still targeting mid-term. You're targeting mid-term to be 55%-65%. But
We're targeting it to reach that range within the mid to long term. Yes, absolutely.
OK. Good. Second, sorry, on the capital returns question. So why are you now introducing potential for specials and buybacks? What's changed? Do you just see that you've already grown enough in investments internally, that you've grown enough?
No, no, no, no, no. That would be the wrong reading of it. I mean, we listed about five years ago. At that point, it wasn't on the agenda. We are a different company today. It will be on the agenda eventually when we have $8 billion, as I mentioned, $8.5 billion of carry coming through. That it may well be on the agenda. I'm not saying we will do it. I'm saying that it's an opportunity and that we will be sort of considerate about shareholders' money. Growth is sort of the top of the list when we're using the cash available.
OK. Sorry, I have one final question. I guess another trend we're seeing in the industry is greater co-investments. Obviously, the Future fund had an element of co-investments as well. Do you see this trend continuing where your larger partners want to do more co-investments, which is good for fundraising but also leads to potentially less management fees for you?
Maybe I'll take that question. There we go. We have a mic. I do see the trend of co-investment continuing, both because the sophistication of our clients increases. So they've built more capability to do that. Actually, as bigger and bigger companies remain private for longer or end up wanting to be private, you actually need the capacity sometimes to speak for an equity check of significant scale. So I think that'll continue to be an important part of our toolkit. That creates different opportunities. We try to be thoughtful about the overall economic picture. I think actually, EQT has done a nice job of managing that balance of premium pricing and availability of co-investment.
Yeah, just one comment on that is that I think the ability to deliver large-scale co-investment flows is a huge competitive advantage for the firms that can do it. And I would say that we're one of the firms that can do that across all regions. The bigger your fund sizes, the larger the companies you're going after, the more capacity you can offer your clients. That is an attraction that differentiates you from the pack. So I think it's actually a big plus. The more LPs value co-investment, I think that plays to our strengths.
Yeah, it's a little bit like your VetPartners' example, right? In Australia, maybe that transaction would have been hard to do in an earlier fund size.
Yes. Yeah. You can offer more co-investors to come in on that.
Yeah.
I had a question via email, actually, on Asia. It's for you, Jean, especially on India. Very excited for that market. Do you think the market is mature enough to have a fund on its own?
Well, I think we're always looking at different expansion opportunities across the firm. The market right now in India is about a $25 billion-a-year buyout market. The numbers that I've seen forecast that to become something like a $50 billion-a-year buyout market by 2030. So it could double in size. That's a very substantial size for a market. So it's possible. We don't have any immediate plans for that. But we're always looking at ways that we can expand our footprint.
There was also a question for you, Kim. Given your capabilities to deliver outsized returns for clients, has there been a temptation to shed the balance sheet light model and adopt a KKR model? Or is the balance sheet light model important to you?
Temptations abound. This is being brought up every now and then. But we are staying very firm on the balance sheet light strategy of ours. That's a commitment.
Thank you.
Thank you. I just have kind of a follow-up question to Jean and potentially Masoud. If you could tell us a bit about the potential you see for EQT Infrastructure in the APAC region. I mean, you talked about infra as a very attractive asset class and the huge potential in Asia. When will we see your first infra strategy there? Do you have any tangible plans for it? And if so, what about the target?
I'll have to give you a mic, Masoud.
Let Masoud take that one.
There we go. Mathilde has one.
No, that's the one. I shared it. I'll bring you one, Masoud. There we go. We put this one away forever.
Maybe I'll start and you can chime in.
[crosstalk] But you go.
I mean, I would say so far, we've invested around 10%, 15% of the existing funds in the Asia-Pacific region. We've taken the time to two things that have happened the last five years. One is we've taken the time to really build our local connections with infrastructure folks in select markets. So we're now, in the last five years, now locally on the ground in Australia, in Singapore, in Korea, in Japan, and so forth. And if you think about the size of those markets, they're similar to what Jean said.
They're as big as Europe and North America in terms of infrastructure. So that's one. The second thing is obviously the team-up we've had with Jean and his team is that we now have hundreds of folks in the Asia-Pacific region in order to drive insights and source opportunities. So if your question is, do I see much more potential in the Asia-Pacific region for infrastructure, it's an absolute yes. It could be as big or bigger than what we're doing currently. And if you think about the energy transition and digitization, that's going to be massive in the Asia-Pacific region as well. So that's something we're clearly exploring. And we're exploring together to drive the synergies we have between the Asian presence we have on the buyout side but also on the infrastructure side.
Yeah. I'll just add to that. I think that I completely agree. It's a huge opportunity. I think the execution there is really about pulling together our country knowledge and in-country presence that we now have, which EQT had to some extent before but now has on a much larger scale by combining with our private equity business in Asia. And how do we leverage the scale that we have on the ground and the know-how and relationships that we have on the ground to also build a much larger infrastructure business over time? And I think one of the big opportunities, actually, for us is how do we drive efficiencies in our go-to-market strategy, in our cost base, in our margins by utilizing our resources across both private equity and infrastructure in a more cohesive and integrated way without having to duplicate resources when we already have deal teams on the ground?
Conceivably, you could share resources in some areas in some ways that would drive efficiencies beyond where we are today. So I think there's big opportunity on the market side. And there's big opportunity on the efficiency side as well. And I should just mention that as I also play the role of Asia chairman. And what I'm trying to do there is we have something called the Asia Investment Forum. And we're trying to actually, in each country, look for ways to drive synergies between our infrastructure business, our private equity business, and our real estate business by having the teams communicate more, work together more, come together to talk about strategy, talk about relationships, talk about pipeline. And I think over time, that will be hugely valuable in releasing some synergies that today we don't yet have.
Thank you. It's Angeliki from J.P. Morgan. You mentioned that you expect the management fee growth to be faster than the industry. If I look at consensus management fee compounded annual growth between now and 2026, that's at around 8%, which to me feels slower, actually, than what is forecasted for the listed peer universe. So what are we missing here in terms of sort of what is consensus missing?
We're missing the long-term perspective that I mentioned. We're thinking long-term here, medium to long term. We just had a few large flagship fundraises. It's going to be 3-3.5 years between those fundraises. So you shouldn't look at it on that short time period. Longer period, yes, we will outgrow the market.
Yes. But at the same time, I think I heard Christian say that in five years' time, you expect to have, hopefully, doubled in size. So how do we reconcile the long term with the five years doubling in size, which is clearly not in consensus estimates?
26. It's not five years. But the industry is growing somewhere 6%-9%, something like that, or at least our part of the industry. And we think we can, over time, grow faster than that. If you look at EQT, you'll still see that our flagship funds still have a material impact on year-to-year and even over a 2-3-year time frame impact. So you have to look at this over a bit of time and through this fundraising cycle. And hopefully, that will help sharpen the pencil a bit. Yeah.
The time frame we have in mind should be more around 2030, really, from 2024 today.
Well, if you break it down, our typical fund cycle is around three and a half years. And that goes for the flagship funds and for the younger strategies. So it's actually. You should be able to kind of create this wave. And hopefully, it'll all come together. Oh, it's not you. Call Kim.
And the question on Active Core. Can you comment on the fundraising progress in that fund, if there's any update there? I think the initial target there was $4 billion-$5 billion. But then you said that first-time strategies are harder to raise in this environment. So any update here?
I don't think we have any update since the quarterly results.
We're going to have a final close this year. We're still working hard to get as far as we can. And in the same way that we announced Future recently, we will announce it when it's ready. But as I think we've stated before, we're not going to reach target for that fund. But it's off to a great start anyway, which is super.
Olof, there's a question here. I don't know if you can see it.
Yep, there are plenty of questions, actually. And my plan is actually that we take one more question here. Then I want to pass the word to Conni. And then we can continue the discussions. Or maybe I take two questions. There are quite a few of them.
First question on private wealth, potentially for Suzanne. There's obviously a lot to go for here. I think that you said in your remarks that I think investment performance, product development, brand are going to be kind of three key ingredients of success among the industry. But what does success look like for EQT?
What are you kind of envisaging in terms of what a successful outcome could be over the medium term in terms of relative to your peers here? And the second question, potentially perhaps for Christian, are you able to expand a little bit on the private IPO comments that you made? It sounds a little bit like this is minority equity sales to co-investing LPs. Is that right? And presumably, if you were to help arrange that, it would come with some kind of transaction fee. So was that what Kim was alluding to when he talked about capital markets revenues in the future? Or is that something else entirely? Thank you.
Well, maybe we'll start with private wealth and then turn to Christian for private IPOs. The way I think about success in that space is that we will be among the leaders in providing private markets exposure to individual investors. What I can't predict is the speed with which the industry takes up that exposure. We know that it's going to grow. Because the typical wealth platform, even the most sophisticated wealth platforms, have low single-digit exposure across their high-net-worth clients to private markets. Their targets are in the mid, call it 10%-20% on average. If you think about where the institutions are, institutions can have some of the biggest endowments in the world have 50% exposure to private markets. Now, I don't think anyone would expect that that's the central case for individuals.
But to grow from 2% or 3% toward 10% or 15% over time, that's really the tailwind that the industry is investing behind. Really, the hard part is calling how fast it moves. Our mindset is to be a leader in that space at whatever pace it's going. So we'll be making investments to ensure that that positioning is possible for us. Over to Chris.
Yep, I'll try to keep it short. Now, the concept of the private IPO comes from the fact that we have a view on the public markets and on the IPO market being relatively dysfunctional. We realize that with our scale now, we have 1,200 institutional investors, as you heard, now lots of private wealth investors over time. We own some fantastic companies that we, rather than taking them public, we would rather keep for the long term.
In theory, you could take one of these companies and say, "Hey, we're going to make a market in the shares of that company annually, for example, or every two years or whatever, with a price-setting mechanism. And then we can make a market among those 1,200 LPs and the private wealth players plus maybe even outside investors." And as long as we do that in a fair way, maybe with some advice to make sure that it's done 100%, then that could be a wonderful way for us to continue to run with the winners, to choose some of the companies that we really have long-term conviction in, which may be one or two companies per fund, and have more control of that business, create an opportunity for our clients, and avoid all the complications of going public. So that's the idea there.
Capital markets revenues is coming from the fact that we built up a pretty large team around capital markets, both in equity and in debt, everything, co-investments, private IPOs, structuring, restructuring, and all these things. As we use less and less investment banking services, for example, some of those revenues will accrue to EQT.
I mean, you had a question.
Eirik Andreassen, Carnegie. Maybe continuing on private wealth, you've mentioned a bit that branding is a little bit of a challenge. A lot of households don't necessarily recognize any of the players. Could it be of interest to do a strategic partnership with some asset manager to piggyback their brand?
I think anything's a possibility is the way that I would answer that. In today's world, that isn't the way that we're thinking about it. We're thinking about investing behind the EQT brand and building our own capability to address the market. But I do think it's a pretty dynamic industry. And so there could be a partnership at some point that brings capability to us that we haven't yet built ourselves. And I think we'd be pretty open to that.
Thanks. And then one final question. I think, Christian, you had one slide which showed that you expect to triple the AUM from recently launched strategies. Over what time horizon was that? And could you give us any more flavor to that? Not short term. It wasn't short term. I'm confident of that. [crosstalk] Maybe we're talking about a five-year. Five years.
If you look at the experience from newer fund strategies, typically, the first fund is organically between kind of $1.5 billion-$3 billion or so for the newer strategies. Second generation, hopefully, will be $4 billion or $5 billion. Third generation, those that can scale, it could be maybe $7 billion or $8 billion. So it's kind of our experience and our conviction behind these strategies that are behind that.
Isabelle, you had a question, right?
Thanks. It's just more a clarification question for Kim, please, on the FRE mid- to long-term target range. So it's just to be sure that you expect this margin improvement from scaling effects and efficiency improvements rather than fundamentally changing your compensation mix like we've seen a few of your American peers announce in recent months. And if it is distinct, that leaves EQT retaining a higher share of carried interest than quite a lot of your European-listed peers. So is that something you could maybe take a look at in the future? Or do you think it would, if you changed that balance, upset the dynamic of the company and culture too much? Thank you.
On the first part, I'll confirm your assumption there, i.e., it's based on scalability and efficiency improvements and not on any change of mix. I would not rule anything out. But I'd say that basically, what our peer group is, parts of the peer group is now doing, is moving to the position that we already did at the time of the IPO. So I think we are well-positioned. And we want to be a company with a significant part of the carry to the investment professionals, which I think we already are and have.
Hi, guys. I won't keep you long, promise. Thank you for being here. I would say this is a long-overdue event. So apologies for that. I think it's time that we become much more open and live up to one of our core values, transparency in telling the market, telling the people, telling the different stakeholders what we actually are. I think this has been a great day. I hope you agree with me. Taking into consideration the number of questions we got here in the end, it seems to confirm it. I'd like to take some step back and look at sort of the journey we have been on and where we are on it. 30 years is a long time. I think the first years are very much kindergarten years. Now we are grown up.
I think the IPO we did was a very, very important moment for us, not so much in terms of what we did with the business. The business was, as it is now, pretty much as it was then. We like to buy good companies.
We like to not buy. And I think that's a very important distinction. We do not invest in securities. We buy companies. So it's very important that we get people to understand that that is how we create value. That is how we create return for our investors by being the best possible owners of the companies we have invested in. And the only chance for us to be the best possible owners of the company we have invested in is to be talenting or to have the people working for us being the best possible talent around to do exactly that, manage and develop the companies. And I think we are pretty well-positioned there.
Everything we do, we touched upon a number of areas today, is there for one purpose only: to make sure that we can continue to be the best possible owner of the companies we have in the portfolio. We can only do it with the best people working for us. It's basically more of a headhunting firm than an investment firm. Because if we have the right people working for us, they do the work for us. We have 300 companies. We have typically between three and five professionals, not being EQT employees, but on the board doing the work for us, coaching, managing the companies, securing that we have the right management team, changing when there is a need for that. That is actually the machinery. Our role is only to safeguard and secure that they are doing their job.
If they do the job, the company will do well. The performance will be there. It's not more difficult than so. The other thing that I think is important to point out, we are now so big. We are as big as we are thanks to the IPO. Without the IPO, we wouldn't have a chance to be where we are today. It's a bit cumbersome to be listed, as I'm sure you know, several of you. But the benefit we got of it was to get on the stage, to make sure that we are a grown-up company that behaves in a grown-up manner. We are transparent. We take responsibility. We share what we do with everybody that is interested. I know we, as an industry, have not been that good at that in the past.
But we should be on the forefront and continue to be on the forefront on being transparent, open, and honest with what we do. Because with scale comes a responsibility. And you can see the responsibility as something negative. I see it as a great opportunity to change things in a positive way. We call it doing good business. We think that doing good business with the scale we have is not only beneficial for us and for the return we're delivering, it's beneficial for the societies in which we operate. And we are prepared to take that responsibility, not because we are some kind of religious believers, but we think that good business creates the best return. We are here to buy companies, manage them, grow with them, and then eventually monetize.
I can assure you, it's much easier to monetize or exit a well-functioning, a good-performing business than the opposite. To be able to secure that, we need to be prepared to take a long-term view on managing that company, to invest in the company, to invest in things that in some areas still today is a bit mystique, like ESG. I think we are reasonably well aligned in this room. But that's not the case everywhere. But we are willing to invest in those aspects. We are willing to invest in securing that the company works on a positive way on sustainability, as you have heard today. We measure, we follow up, we make investments because we think it makes the company better and easier to monetize.
In addition to that, most of the money that we invest comes from institutions that themselves care for these kinds of things. So if we care for our customers, we should also care for these things. And that's also very, very important for us. And for many, many years, we thought, and most people thought, that ESG and sustainability, it's a cost thing. First, it was a cost. Then it became a tick-the-box thing. And then after some time, people realized, "No, it's not that. It's actually good business." And that good business creates the best possible return for us and for our investors. And we are here to continue to deliver on those beliefs and that we think will give us the best possible development for our customers. And long term, we think that will deliver the best possible return for our shareholders.
People think that there is a conflict between shareholders and customers in private equity. I think it's not. All companies have customers. All companies that are listed have shareholders. Who do you think is most important in the way we think about our business, the shareholders or the customers? Comments? Of course, our customers. Because they are happy. If we deliver good things to them, then our shareholders will be happy. We cannot have any other priorities. We cannot see it in any other way. That's for all companies. There is no conflict of us being a listed company. It's like running any company, being listed. With those words and those reflections, I won't hold you longer. Thank you for being here.
I can promise you, this is not, it might be the first, but not the last capital markets you will be invited to. So great to have you. And drinks and dinner. Thank you.