Good morning, everyone, and welcome to EQT's H1 announcement. Together with Christian, Caspar, and Kim, we will present the results for about half an hour before opening up for a Q&A. As always, in order to ask questions, you need to be dialed in to the conference line. With that, I hand over to Christian. Next slide, please.
Thank you. Thanks, Olof. Good morning, and welcome all. In the first half, we continued to take steps towards building a global leader in active ownership strategies. We announced the combination with BPEA, completed the smaller acquisitions of LSP, Bear Logi, and Redwood Materials. Investment and exit activity slowed down due to the market conditions, but we've also continued to make selective new deals and exits. In the busy fundraising market, we're making good progress, having already closed about two-thirds of the new EQT X fund. Overall, fundraising timelines are being stretched in this market. With regards to talent, we're happy to have secured strong talent during the past years. We always hire in anticipation of growth. We have great teams in place to invest our funds, manage our platform, and serve our clients. Given the more challenging economic environment, we're now being more restrictive in hiring, of course.
Our commitment to leading the way in terms of future-proofing and outperformance remains. Our key funds continue to perform well, but we are preparing, of course, for more challenging times. In sustainability, we've taken a further step by establishing a sustainability committee on the board. Similarly, we're continuously strengthening our digital approach, where Alexandra Lutz is now leading our Motherbrain team, that now consists of 28 data scientists. In terms of financials, we're about to take the next step in our development as we add EQT X, launch Infrastructure VI during the fall, and close the combination with BPEA. Next slide. We ended last year with preparing for higher inflation and rising rates. We now also see spiking energy prices, and the global economy is facing a number of uncertainties. Our senior team members have all lived through these kinds of economic cycles before.
We've dealt with the dotcom bubble, the global financial crisis, and most recently, the COVID pandemic. We've learned from every market downturn and come out stronger every time. Importantly, we've always supported our portfolio companies and protected capital for our clients. In fact, since inception, the key funds have all realized at least 2x gross MOIC regardless of cycles. Being a long-term owner with 10+ year funds means every fund will need to navigate different macro environments. It's really part of our model. We have generated carry in every single fund, every single key fund in our history. The fundraising support we see today, despite the market turmoil, is the result of EQT having delivered strong returns for our clients for almost three decades. Next slide, please. As mentioned, the environment we operate in has changed significantly and rapidly.
When markets were strong, we strived to never become complacent and to be prepared for any macro scenario is a part of our model. It's at the core actually of what we call future-proofing. We're entering this period of uncertainty stronger. Let me tell you why. First of all, we have a global platform solely focused on active ownership and diversified across geographies and asset classes. 32% of our AUM is infrastructure with 48% in private capital and 20% in real estate. Being active owners means that we can take action very quickly. For example, we started preparing our companies for a downturn already in early Q1 this year. We've had a very active exit agenda for years with announced realizations of around EUR 30 billion in 2021 alone. We can therefore be very selective when it comes to exits in this market.
Also, we have a young portfolio which has been invested thematically. In fact, the oldest fund in equity is from 2015, and Infra only has one company left in its 2012 fund. This means that we have the resources to continue to develop our companies. They're invested in long-term secular growth trends and have robust financing structures. It also means that we don't have a tail of older, often underperforming companies, which equally also are much more difficult to exit, in particular during more challenging times. Overall, given our track record of returns, we believe we're well positioned in this market. Post-closing of the BPEA transaction, we expect to have more than EUR 50 billion of capital to deploy, what we call dry powder, including Infra VI.
Most likely, the next few years will provide unique investment opportunities for our various funds, and I know that we have the right teams in place to find and develop those opportunities. Next slide, please. Across strategies, we've doubled down on our thematic approach in recent years. This is about finding industries and companies that are less correlated with the economic cycle. That's actually one of the key learnings we've had from previous cycles when we held, for example, building products investments or other cyclical companies as we entered a downturn. That's not the case now. We now clearly invest based on long-term secular trends. Deals over the past years have been within our connected world: software, e-commerce, logistics, and digital infrastructure. Health and wellbeing, radiology clinics, dental technology, for example, and climate and energy transition like renewables and EV charging networks.
These are market leading companies that are able to pass on price increases and thus many of our investments actually provide a natural hedge to inflation. As a result, we expect our companies to have a relatively lower correlation with the economic cycle. Of course, as active owners, we will continue to build them through R&D, add-on acquisitions and other future-proofing actions. In private equity, 90% plus is invested in healthcare, technology and tech-enabled services. It's a well-diversified portfolio mainly invested across the Nordics, U.S. and Europe. The investments in EQT IX have been underwritten on average at a 4x exit multiple discount to the entry level. We were somehow expecting that the high valuations we've seen over the last years would come down. We've stayed disciplined on leverage despite the very strong credit market seen in recent years.
In fact, the average level of leverage in EQT IX is lower than it was in EQT VIII. In infrastructure, we invest in companies and assets providing essential services to society. The companies are often asset-based or with long-term contracts with high cash flow visibility and inflation protection. EdgeConneX, for example, has contracted inflation protection and we're proactive in placing orders ahead of anticipated price increases. Another example is Evidia, whose contracts include inflation indexation clauses. The portfolio also includes several assets that EQT intends to transform into regional or global platforms like Saur, our water services business that we find a number of opportunities coming now in energy transition, digital infrastructure and beyond. In real estate, we're mainly investing in logistics where strong demand and low supply underpins rental growth.
Our model also here is hands-on and value added and local with locals with specialist investment teams focused by geography and property sector. This also includes driving more energy friendly solutions into all the buildings, which is increasingly important both for lowering costs with the energy crisis that we have, while also becoming more sustainable. Next slide, please. Over the past year, the portfolio companies in our key funds within private equity grew sales by 25% and EBITDA by 18% compared to the previous 12-month period. In infrastructure, the corresponding sales growth was 22% while EBITDA grew by 17%. If you look at the first five months of 2022 through May, the portfolio companies across private equity and infrastructure together grew sales at 20+% compared to the first five months of 2021, whereas EBITDA grew mid-teens.
Still strong operating performance. A majority of this growth is organic, further paced by add-on acquisitions and in line with our value creation strategy. Also importantly, the types of companies we invest in have long profitability track records. 98% of the capital and 96% of the capital in private equity and infrastructure respectively, you see it on the slide there, is invested in companies which were EBITDA positive over the past 12 months. As we showed on the previous page, about 95% of our AUM is in private equity, infrastructure or real estate. We've had some questions on this. Less than 5% of our AUM is currently in the ventures and growth business lines, where by definition many of the companies are not yet profitable.
Looking at invested capital across EQT, that number is even smaller and closer to around 3% of AUM. Having said that, this is an interesting environment for our earlier stage strategies to deploy capital. Some of the best investments ever in venture capital in Europe, for example, were made during the global financial crisis. Interestingly, we're yet to invest almost 75% of the EQT Growth Fund, and we're still fundraising Ventures III. Similar to EQT, BPEA is generally seeing strong operating performance in its portfolio companies as well in Asia. With an attractive portfolio, BPEA has had realizations this year to date, of $2 billion. As a result of those elements, BPEA's first half valuations also are robust, despite lower public market references. The fundraising of BPEA Fund VIII is going well.
Across all of our strategies, we're taking advantage of active ownership to create value. With that, I'll hand over to Caspar, and we'll talk about our fund valuations.
Thank you, Christian. Next slide, please. Fund valuations in H1 have remained largely stable, both at EQT and at BPEA, despite the market turmoil. There are various drivers, both positive and negative, behind the valuations, which I will cover in a bit more detail. Starting with factors impacting valuations negatively. First, most of the valuations in private capital are multiple based, with comparable multiples in our equity funds are down between 15%-20% in Q2 compared to the year-end multiples. Second, our listed companies are valued at the closing price at the end of the quarter. This impacts the valuations in private equity, whereas we have no listed holdings in infrastructure. In infra, valuations are to a larger extent based on discounted cash flows. A couple of factors are offsetting the negative valuations effects.
First, as Christian mentioned, operational performance across portfolio companies in private equity and infrastructure remains strong. We're continuously reviewing the outlook and budgets for the portfolio companies, which is accounted for in the valuations. A few portfolio companies are experiencing headwinds in this environment, but there are also some that benefit from, for example, higher energy prices. Second, we've secured exits at strong valuation levels. In EQT VIII, IFS and WorkWave were, for example, marked at 2.1x cost in our year-end portfolio valuations, and we realized the asset at 3.0x in Q1. Similarly, Facile.it was marked at 2.5 times the money at Q1 valuations, and we realized the exit at 3.2x now during the second quarter. Despite these strong exits, EQT VIII is now valued at 2.4x, down from 2.6x before.
This does not mean that we will always exceed fund valuations, but it does show that we tend not to have too optimistic valuation assumptions. More generally, I would characterize our valuations as being more resilient, both when the markets trade up sharply and when they trade down sharply. As such, we did not mark up valuations significantly in Q4 last year when public market rallied. This is now the third consecutive quarter of largely flat valuations. If you look at those sectors where we have significant exposure, the public market indices have actually been relatively flat when looking back to Q3 last year. Lastly, and I've said this before, we value entire companies, and the value of a company is different to the price of a marginally traded share in the public market. Next slide, please.
As Christian mentioned, we're always thinking proactively about risks. Clearly, not all risks can be anticipated, but it's important to have the right toolbox, competencies, and forums in place to identify and manage risks proactively. We've developed these tools based on our learnings over many cycles. To give a couple of examples, the EQT Global Investment Forum meets regularly to share insights from across our global platform, and this will be further strengthened as we add the insights and experience which the BPEA team brings to the platform. Our cybersecurity team has been working proactively across portfolio companies this year and many years before, for that matter. Our capital markets team continuously ensures that portfolio companies have strong financing structures in place. We've also selectively added competencies to management teams and boards to make sure portfolio companies have the right teams in place to manage a more challenging environment.
Let me share some perspectives on how we manage risks. We never had any meaningful exposure to Russia. We've had no companies headquartered there and has not been a target market for fundraisings. The few portfolio companies which have had any exposure, such as sales or service contracts related to Russia, were immediately recommended to wind down such operations, and affected employees have been relocated. None of the companies or assets in the main equity infra or real estate funds have any remaining material exposure. When it comes to inflation, the portfolio companies across private equity and infrastructure have a high ability to pass on higher costs. The portfolio companies have low exposure to raw materials. Transportation companies are, for example, affected by higher fuel prices, but on the other hand, we also hold power producers which are beneficiaries.
Similarly, we see higher staff costs in some of our social infrastructure companies which often have inflation-linked contracts. Exeter expects to be able to raise rents over time while construction costs may go up. This also supports valuation and rent level over time. Higher financing costs may also reduce supply and competition for new investments. We see continued strong demand for thematic assets such as logistics assets. When it comes to financing structures, most companies have no covenants or covenant-light structures. Financings are either fixed rate or hedged with interest rate swaps or caps. Debt financings typically cover the expected ownership period. The average debt maturity across the private equity portfolio today is over four years. In infra, it's over five years. Next slide, please. We have raised over EUR 14 billion in H1 2022, and EQT X is already two-thirds towards its fund size.
We expect active fundraising for EQT X to be materially concluded within 2022, with a final close expected in 2023. Similarly, while the combination with BPEA is yet to close, we note that fundraising for BPEA's eighth flagship fund is proceeding well. As we mentioned in the BPEA announcement, we expected them to reach about EUR 20 billion in AUM by 2022, which they have already reached. We anticipate healthy interest in infrastructure and real estate fundraisings. We expect to launch fundraising for EQT Infra VI in the third quarter, with most of the fundraising to take place in 2023. When we activate the fund for management fee purposes, will depend on the investment pace in Infra V, which is currently 70%-75% invested.
It's a busy fundraising market, which is evident primarily in the US, where some of our clients are already at their target allocation towards private equity, which is accentuated by the drop in public equity valuations, the denominator effect. As a result, new fund initiatives will take longer to raise in this market, and we expect existing clients to represent a large share of our ongoing fundraisers. While we have a clear ambition to continue to grow our client base in the US, it's a strength in this environment to have a diversified global client base. Many of our APAC-based investors are, for example, continuing to increase allocations to private markets. Looking ahead, we see a strong long-term growth in private markets, paced by rising allocations from both institutional investors but also private wealth and, over time, the mass affluent markets where access to private equity will increase.
This is an area we're looking at various structures to access new segments. I will now hand over to Olof.
Thank you very much, Caspar. As you just heard, we have a number of ongoing fundraisings which, together with our existing funds and the combination with BPEA, means we expect to have over EUR 50 billion of capital to deploy. On the sourcing side, we continue to combine our sector-based thematic strategy with our local-with-local approach. We have a long-term approach to new investments, often following companies for a long time before we invest. In EQT IX, for example, 12 out of 15 companies were acquired outside of broad auctions. The investment teams are evaluating a number of opportunities, including corporate carve-outs, add-on acquisitions to existing companies, and even certain public companies which we have followed for years. In private equity, a majority of the pipeline is in our core sectors such as healthcare and tech.
In infrastructure, we see interesting opportunities across our focus sectors. The energy transition in Europe further accelerates the shift from fossil-based energy production. The digitalization trend will continue to drive significant investments into digital infrastructure, and we see a significant investment gap in infrastructure across Europe and the US while public sector spend is constrained. Next slide, please. Investment and exit activity has slowed down meaningfully given the market backdrop. We announced investments of EUR 5 billion in the first half of the year, down from EUR 8 billion in the first half of last year, and exits of EUR 4 billion compared to EUR 10 billion in the same period last year. As Casper mentioned, we have had a couple of exits, such as Facile.it and IFS, at strong multiples.
We expect private market valuations for resilient, profitable, market-leading companies in our core sectors to continue to be robust. BPEA, as Christian mentioned, have closed two new investments in their eighth fund during the last quarter, and their fund is now around 15% invested. BPEA have seen realizations of about $2 billion across fund seven and six during the first half, despite the more challenging market conditions. Turning to the financing market, it's clearly important for deal activity. In this regard, the banks are much less active given the market environment. The liquidity pool, however, is open for well-structured credits in defensive sectors, which is typically the types of sectors we invest in. We have as such successfully placed recent financings with private credit funds.
When it comes to new deals, we run different financing tracks in parallel to make sure we find the best structure and terms. In Infra, the fundraising sources are more diversified as we also benefit from infrastructure-type style financings. All of the financings are coordinated by our capital markets team, headed by Jim Yu in London, and EQT Exeter has its own dedicated real estate financing team. As we look ahead, we have a number of exits and investment opportunities in the pipeline, including a few active situations. However, we will be patient to achieve the right terms. With that, I will now hand over to Kim.
Thank you, Olof, and good morning, everyone. Before I jump into our financial development during the period, I just wanna take a step back and walk through the key pillars of our financials. The bulk of our revenues are contractually recurring management fees. The investor commitments are long term, i.e., 10+ years, and our fee margin has been stable at around 1.4%.
From EQT X and the combination with BPEA and eventually the activation of EQT Infrastructure VI, we expect a meaningful increase in management fees. We have historically done a good job of creating value for our investors, allowing us to maintain a profit sharing in the form of carried interest. The profit split is generally 80/20, and of total carry generated, EQT AB gets 35% of the 20%. We thus have a sizable future carried interest if all of our funds continue to develop on or above plans. If all our key funds, including EQT X performs on plan, we will make approximately EUR 6.7 billion in carried interest. As of H1 2022, we had only re-recognized approximately EUR 0.8 billion. i.e., there's considerable upside potential. This excludes BPEA, where we're acquiring the right to carry in recent and all future funds.
Looking at our expenses, they are largely driven by our fee base. Personnel costs constitutes approximately two-thirds of the cost base, and our business model is scalable, but remember that we tend to hire ahead to secure future growth. Given the market conditions, we will continue to hire, albeit much more selectively. As a reminder, our target is to have between 55%-65% EBITDA margin over time. We use our balance sheet mainly for three purposes. One, we invest in EQT funds to get contractual right to carried interest. Two, we support new strategies with temporary capital. Three, we use our balance sheet for strategic M&A. We have a very modest leverage, and we have substantial cash, including the proceeds from the sustainability-linked bonds issued earlier in the year. The cash component of the BPEA combination is therefore fully funded. Next slide, please.
Following that introduction, I want to jump into our AUM development. AUM increased slightly in H1, driven principally by gross inflows due to the closing of LSP and new fund commitments in EQT Growth and Ventures III, along with Exeter Industrial Value Fund II . As you heard Christian mention, we've closed out about two-thirds of EQT X already as of today. However, investor commitments will only be included in our AUM from the first fee date. This is currently driven by the closing of the first deal in EQT X, which is expected during Q3. Another increase in our AUM will come with the closing of BPEA expected in Q4 2022. BPEA's fee generating AUM as of Q2 2022 was approximately EUR 20 billion, as already mentioned.
We may activate EQT Infra VI in 2022, but this depends on the investment pace of Infrastructure V. As Casper mentioned, most of the fundraising will take place in 2023. Next slide, please. Moving over to our financials. As you can see on the left-hand side, we have experienced significant growth during these last years, and 2021 was an exceptionally strong year with a significant increase in management fees from EQT IX, Infra V, and the closing of the acquisition of Exeter. We are expecting a similar step change with the upcoming activation of EQT X, the launch of Infra VI, and the closing of the BPEA acquisition.
Looking at the H1 2022, our revenues increased to EUR 733 million and carried interest during the first half primarily relates to EQT Infrastructure III, and thus to transactions which were signed prior to the period. Keep also in mind that we had a meaningful impact of retroactive fees in H1 2021 related to 2020 then. As a consequence of continued growth of our organization and in anticipation of the previously mentioned initiatives, H1 EBITDA decreased year-over-year to EUR 413 million. Our LTM EBITDA margin was approximately 62%, and looking at H1 in isolation, it was 56%. Next slide, please. As I mentioned before, we see that we have considerable carried interest potential if our key funds perform according to plan.
This slide simply illustrates how much carried interest EQT AB is entitled to if all of our key funds develop according to plan. Mind you, EQT VII, VIII and Infrastructure III are developing above plan and are continuing to experience resilient performance. As a theoretical example, if we were to realize the portfolio at today's valuations, we would be entitled to approximately EUR 1.2 billion in carried interest. Given that we have recognized approximately EUR 0.8 billion carry to date as of H1 2022, it implies that close to EUR 6 billion of carried interest is remaining to be recognized on our P&L in the coming years based on the current funds. Next slide, please. We've grown our total operating expenses by approximately EUR 100 million and added a total of 467 FTE year-over-year.
Focusing on H1 this year, we added roughly 300 FTE plus, of which about 100 joined from Redwood Materials, Bear Logi, and LSP. As such, we've had more than 200 new joiners so far. In addition to the employees needed to support the growth of our flagship strategies, we have hired talent for our new strategies. We have strengthened our central platform, including our digital and sustainability teams, and we have further strengthened our capital raising and fund operations teams. We are cautious of adding a lot of cost, but a large part of hires are connected in various ways to, excuse me, strategic initiatives such as the building of new distribution channels.
Post-closing of the BPEA transaction, we're about to grow the AUM meaningfully, and as Christian mentioned, we expect to have north of EUR 50 billion of dry powder to deploy. With our existing teams and recent hiring efforts, we now have great teams in place to manage the next leg of growth. The majority of our hiring for 2022 is done, and the hiring pace is set to slow down in the second half of the year for two reasons. First, we have actively hired ahead for the growth I just mentioned, and secondly, we will be more selective in hiring decisions given the market environment.
Something else to note is that we don't necessarily see costs per FTE increasing for the group as a number of the recent and planned hires are in our central operations or in EQT Exeter, which has a lower cost per FTE. Together with Christina, who has now joined us as COO, we will continue to optimize our operations, including our cost structure. We also look very much forward to welcoming about 250 people who will join us from BPEA once the combination closes. Next slide, please. I outlined how our balance sheet works a little bit earlier, but wanted to come back to this topic quickly. Looking at our assets, they include primarily financial investments into EQT funds and our sizable cash position.
Our liabilities, on the other hand, consist of the sustainability-linked bonds totaling EUR 2 billion with different long tenors. We're well-funded, and we have the BPEA cash consideration already financed. Our flexibility is thus high, and on top of that, we have a revolving credit facility of EUR 1.5 billion, which is undrawn. We have a solid credit rating with an A-minus rating from Fitch, and our leverage level is very low relative to our size. With that, I hand back to Christian for some closing remarks.
Thank you, Kim, for that excellent walkthrough. To summarize, we've seen a rapid change in the market environment this year, and activity levels have slowed down as a result. However, I do believe that we're entering this period of uncertainty stronger. We're well prepared for whatever may come. Our portfolio consists of thematic investments. Over 90% of the companies in private equity and infrastructure were EBITDA positive over the past twelve months. The underlying performance of the companies has been fairly healthy over the past twelve months, but of course, we are closely monitoring activity levels and demand and addressing risks and issues proactively. Fund valuations have been largely flat for three consecutive quarters despite the strong operational performance and also recent exits, which did exceed fund valuations, as Caspar described. Flagship fundraisings are progressing well at EQT and BPEA, despite being a busy market. Fundraising is...
Fundraising actually in general will take longer to conclude in this market. Furthermore, we expect to have more than EUR 50 billion to be deployed. You've heard that these are really interesting times to invest. To have that dry capital, the dry powder, is quite important. That's what we are building and will build during the rest of the year and into next year with Infrastructure VI. In terms of our financials, EQT is about to take the next steps in building its platform with the activation of EQT X, the combination with BPEA, and the upcoming launch of EQT Infrastructure VI in Q3. With that, I thank you for listening, and we now open up for questions.
Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Arnaud Giblat with BNP Paribas. Please go ahead.
Yes. Good morning. I've got three questions, if I may. Firstly, I was wondering if you could talk about the cost, give a bit more detail. You mentioned that hiring is gonna slow down in H2. Could you perhaps quantify that? And could you talk a bit about your plans for 2023? And also you said cost per head were due to the acquisitions were lower. So any quantification you could give us that could be helpful. Secondly, I was wondering on investment opportunities.
Your investment pipeline. How is pricing looking? I mean, usually I think it takes a few quarters for pricing in the private markets to adjust downwards. Is that something you're waiting on, or are there enough opportunities out there for you to execute at the right price to achieve your targeted returns? Thirdly, on M&A, corporate M&A, at the previous update in Q1 now you'd highlighted that there were a number of situations that you were looking at. Are these the ones you've closed on or are they further in the pipeline? Thank you.
Thank you very much. Kim, do you wanna start with the hiring and the costs question?
Yeah. Yeah, I can make that one. Roughly we've had about EUR 300 of increase during the course of this year. If you take away the EUR 100 that is acquired growth and assume there's no acquired growth during the rest of this year, with the exception of BPEA, then of course, when that closes, you have the EUR 200 of organic growth and our guidance is that this will be significantly lower during the second half of the year. It will not be zero, but it will be significantly lower than that. When it comes to cost, the current average levels is not a bad proxy for the cost for the year.
Obviously that will also depend on how the environment develops during the course of this year because the variable part of the compensation is not determined in many cases until late in the year when we see how things have gone.
Good. Thanks, Kim. With regards to the investment pipeline, you know, given that we're local with locals in every single country that we're investing in, and we have a thematic investment approach, you know, our pipelines typically always are quite deep. As you know, we follow companies for many years typically before we invest in them. Having said that, what's happening now is that we're of course very selective, and we're selective in terms of the sectors we're investing in, and the themes we're investing behind, and those companies we go after, like SPT Labtech, for example, that we acquired, you know, life sciences tools manufacturer in EQT.
Those companies are typically in strong, healthy markets where we can really add value through all of our, you know, future-proofing actions, and M&A, to really build the business to a whole another level. With regards to pricing, I'd say that as one of my colleagues commented on, you know, for healthy companies and healthy industries, multiples are still pretty good, and you can see that in the public markets as well. You know, the infrastructure comps are not down much, and neither are the ones in healthcare, which is our largest sector globally. We rather take a cautious approach at this point in time, making sure we really find the right opportunities, and to go after those.
There is a pricing difference for companies in, let's say, more exposed industries, which we're not typically investing in. There are, you know. There's been a lot of talk about public-to-privates. Not that many have happened yet. It does take time before, you know, owners of companies and buyers of companies will find that equilibrium. I do expect that to, you know, start being more active in the next six to 12 months. On the M&A at the corporate level, yes, you are right. You know, we've with Bear Logi and Redwood as smaller bolt-on acquisitions except in our real estate strategy. Those are the ones that we were referencing.
We do have, of course, some dialogues ongoing, but it's not a major priority at this point in time. Thanks, Arnaud. Anything else?
Great. Thank you very much.
The next question is from Armin Karic with Carnegie. Please go ahead.
Good morning. Thanks for taking the question. Perhaps just on the recruitment, a follow-up question there. Would you say you're mainly reducing the recruitment pace because you see it's a bit harder to raise capital for new strategies? Or is it more that you're kind of already right sized for all your needs now going forward for a while?
Well, I think what we said during the presentation is that it's twofold, the reasons. One is that we have already invested ahead of the upcoming fundraises and the upcoming size differential that we have. Secondly, this is a market where one wants to be cautious. We are taking a cautious approach and being very selective in the hirings we do from here onwards.
If I can add to that, you know, what's happening in.
Sure
In the market now is that timelines get more expanded. We're more careful in doing investments. The exits are gonna be fewer and slower. Fundraising takes a little bit longer. Of course, with that also it's natural to, you know, to slow down our hiring pace.
Got it. Thanks. Just on the carry, I think you mentioned that the majority of the carry in H1 comes from Infra III and the exits that were announced last year. Could you just help us on when do you typically dissolve that account and discounts you have for unrealized holding? Is it when you announce exit? Is it when they're actually closed fully?
No, when you announce it, you bring it up to the price level that you have signed with the selling party. Actually, the remaining discount you only typically do when you are certain that the deal will happen, i.e., at closing.
Okay. Exits from EQT VIII would then basically have an impact in next half year period.
Yes
Follow this.
Yes. Remember that IFRS carry is a function of both the valuation of the funds, which are not up in the period and removing the discount on the exited companies and there's been some. It will completely depend on how the valuation performance will be during the rest of this year and whether there will be further exits during the rest of this year if there will be carry in the future or in the next period.
Got it. Thanks. Just one last question on BPEA. So as you said on the announcement of the deal, you talked about having about EUR 20 billion being added in AUM by closing in Q4, and now they've already reached that mark. Is there further upside or is there fund number eight essentially closed now? So this is the level that will come in, but it's kind of de-risked or how should we think about that?
We need to be a little restrictive in commenting on fundraising. But I guess you could say that it's, you know, as you see in EQT X, you know, for high performing flagship funds with strong managers in this market, fundraising is going well. BPEA is, you know, now very near their target for that fundraise.
Perfect. Thank you.
The next question is from Hubert Lam with Bank of America. Please go ahead.
Hi guys. Good morning. I've got three questions. Firstly, a question on EQT IX. If I look at the fund valuation there, that hasn't changed at all, whereas for EQT VII and VIII they both come down. Any reasons for that, for EQT IX specifically? And if you could maybe also talk a bit about how the investments have progressed for EQT IX, just given that it seems like you deployed a lot of the capital there last year in that fund. Second question is on investments in infrastructure. EQT Infrastructure V is currently stuck at 70%-75% invested, and I don't think it's changed in the start of the year.
Can you talk about progress in terms of investments in the infrastructure side and why it's taking a little bit longer to invest for that fund? Lastly, for carry in the second half, should we expect carry to be higher than the first half? You've already announced exit in EQT VIII in June, and that will close in Q3. Assume that will drive performance in the second half. Just wondering how do you see the pipeline and outlook into the second half for carry? Thank you.
Thank you. Why don't we do this? Kim, will you take the carry question? I'll take the Infra question, and Casper can take EQT IX. Oh, we lost you. Hello? Stockholm?
Yeah, we can hear you, Chris.
Okay. I can't see you on video any longer, but hopefully the broadcast is still working. Can someone from the tech department confirm that the-
The broadcast is still working.
Very good. I mean, we don't give specific guidance on carry, as you know, and I wouldn't like to answer your question directly. I would rather point to what I said before, that carry is a function not only of the exits we've made, but also of the development of the valuations of the portfolio and as you've seen, the valuations are largely flat. You know, there would have to be movements both on valuations and exits in order for there to be carry.
I'd be cautious and I'd be following the market in order to forecast our carry.
Thanks, Kim. On Infra V, Infra V is about 70%-75% invested. The portfolio companies in that fund are performing well and actually have a lot of organic growth opportunities. You know, these are very often relatively asset heavy companies in terms of modern assets like you know we're one of the largest owners of digital broadband fiber in the world. So there's a lot of organic opportunities in those portfolio companies that need capital over time, which we think is an excellent risk reward. There's also quite a bit of M&A, like I mentioned. We've you know the water services company Saur, I think we've done three or four acquisitions there and we continue to build that business.
That means that, most likely, you know, we're not gonna make that many more investments in Infra V. That's the reason that you don't see a lot of new investments. It's rather the you know, the fantastic opportunities we have around the portfolio. We're in pre-marketing now for Infra VI. Caspar, do you want to take the EQT IX question?
No, I mean, on EQT IX there's no difference compared really to the other funds. You have a very strong underlying performance in the portfolio companies in general, offset by, you know, multiple contraction. In this case, the portfolio composition ended up being, you know, flat rather than down, as compared to EQT VIII. There is nothing in particular for the fund that is different from the other two. It's on the individual company levels.
Okay, thank you.
Maybe to point out, I think, you know, as Chris mentioned earlier, it's also in EQT IX, we have, you know, a multiple contraction assumed, when we've made the investments of four turns, which is, I would say, quite a bit. So, you know, it's already embedded in the expectations of those companies.
The next question is from Nicholas Herman with Citigroup. Please go ahead.
Yes, thank you for the presentation for taking my questions. Three from me, please. Just from a valuation perspective, Joe, just to follow up on this. It's not clear to me how much multiple contraction you put through your valuations, this quarter or half year. So if you could just help us understand that, please? Then secondly, a follow-up question on fundraising. You mentioned that the fundraising timelines are being stretched. Just to confirm, your comments relate to newer strategies rather than all strategies, or I have misunderstood that.
Mm-hmm.
I guess as part of that, how long do you see this congestion more difficult environment for fundraising lasting? Finally, just kind of follow up on a comment about the retail-driven growth. Just curious in terms of what structures you are looking at and leading towards at this stage, please. Thank you very much.
Yep. Thanks. I'll take the latter two, and Caspar can take the valuation question. With regards to the fundraising timelines, it's you know the market now is you know is changing as we speak. I would actually expect you know most fundraisings to take somewhat longer. As you've seen, we've already raised two-thirds of EQT X, so that's in accordance with plan. It's rather the you know the second part or the finalization of the last third, which we believe will take some more time than it would in a you know in a very strong market. For the newer strategies, it you know it's generally taking more time. I think I'll answer it in that way.
On the private wealth side, we have a number of activities, you know, across various distribution channels from private banks to a number of the digital channels, the independent wealth advisors in North America. We're working on, let's say, some structures which will make it easier for private investors to invest with EQT. We'll inform more about those kinds of initiatives, probably later this year, when we've made more progress.
Yeah.
Caspar, do you want to take the valuation?
Yeah, sure. As I mentioned in my presentation, I think, you know, when it comes to private capital, where we have, where the main, you know, methodology is really using comps traded and traded comps as well as comparable transactions. I think there we've seen, 15%-20% lower comparables, multiples. As I mentioned, being, you know, partly offset then by other things in performance, et cetera. On the infra, it's more flat. This goes both for comps as well as for the methodology where, DCFs are more commonly used.
Right. Thank you for that. Just, I don't have the data. Sorry, I'm struggling to process the data. You know, it clearly, your valuations are not off 15%-20%. Is it fair to say we can then just back out then kind of if we apply 15%-20% and then look at the difference in your valuations, we can kind of therefore back into how much value you ascribe to performance? Would that be a fair-
No, I think.
A fair thing to do?
I mean, let me take EQT VIII as an example just to, you know, talk a little bit about the complexity. Obviously, there we have some listed companies, and the listed companies are valued at, you know, the year-end, quarter-end valuations, basically, as they are. That's one component. There we have a quarter of the companies are listed. You know, you have natural fluctuations there. And then you have two exits. Obviously, they are, as Kim pointed out, valued at the exit values that were signed.
You have another set of companies that are based on comps. Those comps are, you know, the comps numbers are down 15%-20%, but then that can be outweighed also by strong performance. Strong performance is in growth in sales and EBITDA, as well as in debt pay down and cash flow generated by the companies. It's you can't really. It's a pretty complex picture, and I tried to explain it in EQT VIII. Despite two large exits, good exits in EQT VIII, we're still down with, you know, 0.2 on the values of EQT VIII.
Okay, thank you for the color.
Thanks.
The next question is from Oliver Carruthers with Goldman Sachs. Please go ahead.
Good morning, and thanks for the presentation today. A fairly broad question, but is there a distinction that can be made in the current deal financing conditions that you're seeing between the sectors that you focus on in private equity on one hand, and in infrastructure? If so, I would appreciate any color here. Perhaps if we look out over the coming months to any incremental deployment of Infra V and then on the activation of Infra VI, how is this feeding into your thinking in terms of the opportunities that are out there? I think you mentioned a possible activation in Q3 for Infra VI, if I heard correctly. Thank you.
Mm-hmm. Yep. I see Kim ready to answer question two. On the financing side, you know, if we take a step back, you know, infrastructure has a different risk reward than private equity. It's, you know, there are typically even more stable companies, long-term contracted cash flows, often asset-backed, inflation protected. Yes, you know, the financing market for those types of assets is somewhat more attractive than for the private equity assets. Although the types of companies that we're buying, like the ones I mentioned, are absolutely financeable in this market, either through, you know, the banking market or through private credit.
I think where we see the most of the weaknesses, you know, in high yield, which we actually don't use very much at EQT, or in the very large transactions. Very large transactions now, you know, in the many billions of EUR in financing is quite complicated. I would expect that these, you know, the kind of the very large deals, both in North America and in Europe and in Asia, will slow down due to just sheer size. In our sectors, actually across our investment strategies, also in real estate, and the sizes of deals which is our sweet spot, you know, we're able to still execute and, you know, and get attractive, I would say still attractive financing actually with the right partners.
It's, you know, more work, takes longer time, and it is a size question that I mentioned. Do you wanna take the other one? Yeah. Yeah. On Infra, I think what we've said is Chris mentioned that we are in the pre-marketing phase right now. What we also said is that it is likely to launch the actual fundraising towards the end of Q3 here. When it gets activated, we haven't really commented upon specific timing. It may be this year, but that is completely dependent on deal flow, not on the fundraising, but rather on when there is a deal that will be put into this fund and that's dependent on deal flow for EQT V, i.e.
Are there add-ons and are there deals that are of a size that still should go into EQT V or are there larger new deals which should already go into Infra VI. We cannot give you an exact answer because we don't know. Likely to be later this year.
If your question is how do you deal with that transition period, this happens in every single fund, actually. There's a transition period between the previous fund and the new fund. For a certain period of time, we can use a bridge financing, if the capital hasn't been raised yet. That's something that's continuously available and quite standard in the market even today.
Okay, very helpful. Thank you.
The next question is a follow-up from Arnaud Giblat with BNP Paribas. Please go ahead.
Yes, sorry. I just had a quick follow-up on the fund nine. You said that you assumed a full terms contraction multiple when executing on deals. I was just wondering if that contraction had been put into your valuations going into December or and that's why you kind of held multiples. I mean, there's been less of a fall off in fund nine. I just wanna follow up on that. Thanks.
No. I mean, it was more of a reference. Technically how it works, when you do a buyout model, is basically you buy something today, you make a projection of, you know, the P&L and the balance sheet over X years, and then you assume a future exit, right? The difference between the two is really, you know, how your investment is gonna develop and the IRR and MOIC. Then you can obviously, in your assumptions on your exit, you can look at what is your entry multiple, i.e. what are you paying in terms of, you know, EBIT multiple or whatever you want to use, and what is your assumption on the exit?
My reference was more that, okay, we are actually assuming a four-turn contraction. If we're, you know, entry at 20x, our exit assumption is at 16x. It doesn't really affect the current valuations at all.
It was more of a reference point to, you know, we have not invested EQT IX thinking that the world will continue to look as it looked a year ago. That was more of a reference point. It actually doesn't really affect the quarterly evaluations as such. They are based on the current, you know, valuations, basically.
Yeah. Philosophically, we, you know, we apply some kind of conservatism, as you saw from the two exits, for example. That's typically the case, but exits typically happen at higher valuations than we have the companies in our books, is because we apply these kinds of principles that Caspar's been mentioning.
If I could just follow up on that, what sort of uplift range do you typically have over the last two years?
Well, that's a big question in the sense that we know we have multiple different strategies. I don't think I wanna speculate on that number right now, but I'd rather answer in the same way that you know we try to be quite grounded in our valuations and apply you know a longer-term perspective to valuations. When we're underwriting and when we're valuing companies, we look at long-term multiples, not just current multiples. We apply discounts for various reasons and then we also look at the whole. It's not a formulaic type of approach.
Great. Thanks.
The next question is from Angeliki Bairaktari with Autonomous Research. Please go ahead.
Good morning. Thanks for taking my questions. Just a few follow-ups from me, please, if I may. Am I right to understand that the exits that you have announced on IFS and WorkWave and Facile.it are not yet fully visible in the carry recognized in the first half, and so we should see a further element from those two exits when they close? In terms of the fee margin, you mentioned that it's stable, it has been stable at around 1.4%, but in my calculations for the first half it's closer to 1.5%. I was just wondering whether there's anything in the AUM mix that justifies a slightly higher fee margin.
In terms of the Infrastructure VI fund, is it fair to assume that it will be higher in terms of size than the EUR 16 billion of Infrastructure V? Perhaps a last more general question. You mentioned that fundraising is slower now, and you also mentioned that most of the commitments you expect to get are from your existing LPs. Do you want to give us some color with regards to what you hear from existing LPs in your current strategies, but also prospective LPs that you talk to with regards to future fundraising? We have heard some U.S. peers mentioning that U.S. pension funds in particular are very squeezed and do not have any liquidity to allocate to the asset class. Would you confirm that? Thank you very much.
Thank you. Very good questions. The first two, Kim will take, Infra VI and fundraising, Caspar can take VI and I'll take the fundraising question. Starting with that, I don't think we said that we don't expect new clients to EQT, at least we didn't mean to imply that. It's rather that our existing clients are supporting as well, and we are adding a number of new clients, both organically, but also as we've made, you know, acquisitions of combinations with, you know, LSP and BPEA, we're actually increasing the size and the number of clients. Plus we're reaching new clients through the private wealth channel. So it's actually based on multiple different avenues how we're building the fundraising for the long term.
The slower element is, you know, really driven by two things. It's one, there are quite a few funds out there raising capital, so the clients are quite busy. That's nothing new, but that's one element. The second element, of course, is the uncertainty in the market. The reason that our fundraisings are going well is that we have a, you know, a razor-sharp performance focus. You know, we have been delivering superb returns for, you know, almost 30 years now. If you look at our, you know, us versus our peers in our key funds, we are outperforming. We believe that performance over time will be a key determinant of, you know, of attracting private capital.
The reason that people invest in our industry is, of course, to generate these longer-term, higher returns. That's why you hear us talking a lot about our, you know, all of our capabilities around future-proofing, around value creation, on acquisitions, how we work with sustainability on our companies, to really make them stronger and better and more resilient for the long term. Digitalization and even AI, which is, of course, still quite new in private capital, but we think is gonna be important for the long term. That's really how the whole, that whole market situation looks. Just when times are more complicated, things will stretch out a little bit, but we're still confident that we're gonna meet our goals.
Maybe I'll take Infra VI. You know, normally we don't comment on the size of our key funds until we actually take a decision. That decision is based on the pre-marketing that's done and meetings with clients and discussions with clients and the opportunity set for that fund, which is obviously quite strong for Infra VI. We will, once we're through that process, we will, in the normal way, announce the target size for that fund. I'll let Kim take it from there.
Thanks. Starting with the carry question, again, we don't have deal by deal carry. It's... You need to look at it over the whole fund and including also the valuations of the fund. In this particular case, you should not be assuming that it's a similar situation as we had in Infra III, i.e., that we had deals that were signed and waiting to be closed and then we had carry from that. It is not a similar situation here. Also you will have seen that on the private equity side the valuations are also down more often than on the infra side. On the fee margin, there's some... There's...
There may be elements where certain clients come in earlier in a fund or certain clients come in later, which distorts the fee margin in a specific time period. That is why we calculate the underlying fee margin for you and provide it in the material. There is no change to the underlying fee margin. It's at 1.4% with a couple of decimals exactly there.
Thank you. Any further follow-ups on those questions? Okay. Let's go to the next one.
The next question is from Tom Mills with Jefferies. Please go ahead.
Hi. Good morning. I think you referenced earlier the role of private wealth channel in relation to fundraising for EQT X, and it sounds like you're gonna tell us more about your ambitions there later in the year. Just for now, I'd seen a Wall Street Journal article suggesting you guys have been one of the biggest hires of private wealth talent globally over the last year, among the alts players. Just wondered if you could give us a bit of a preview there, given it sounds like quite a big investment you've been making. Thank you.
I'll start, and then Caspar, you can add. Private wealth is something we've been working on for some time across various channels. You know, as those channels multiply and as we become more global, we need more talent. I don't think it's been as significant as you might imply from that article. But we are building capabilities, you know, digitally, and with people to make sure that we can, you know, structure this approach in the right way. As you know, that, you know, over time, we expect, you know, trillions of dollars actually to come from private wealth into the private capital industry. This is a. It's a very important space to build a strong position in.
As you saw, you know, a month or so ago, we hired a new global head of marketing and communications in Ricardo Reyes to also help make sure we strengthen our brand and our brand positioning as we move into those channels in a bigger way. In terms of fundraising, percent, we're probably more than doubling or maybe even tripling the, you know, the size of private wealth already now in EQT X versus, you know, previous fund generations. Progress is already being made. Caspar, anything to add?
No, not really. I think maybe just to give a little bit more color to the hiring. I think, you know, we've been doing private wealth for a long time, but we haven't had dedicated resources, and now we do. It's really the way to work with that channel. You need to have dedicated resources working only in that channel, and that's what we're building up. We're not talking about a huge amount, but it's still needed.
Thank you.
Thanks very much.
The next question is from Jakob Brink with Nordea. Please go ahead.
Thanks a lot. Just coming back to the FTE development, please. I was just re-reading the transcript from Q1 where Kim, I think you sounded quite bullish on you taking sort of your part of hirings going forward. Also you said something about the total FTE number would land materially above 1,400 at the end of the year. I guess you could argue it's already materially above, but I was more thinking about sort of the implications for the rest of the business since it seems like you're somewhat more conservative on the hiring path going forward, or am I reading too much into it?
Kim?
No, I think you should read in that we will be more conservative on the hiring going forward. I think that is a fact. I think that the market environment has changed dramatically from the start of the year to the Q1 to now. That will be reflected also in our hiring pace. Fortunately, we've done a lot of good hirings. We are very well prepared for the uplift that we will have in our business operations with EQT X, with Infra VI, and with BPEA coming on board. We're well prepared for that. You will see a slowdown clearly in our hiring pace.
Also, maybe worth, again, pointing out that approximately 100 of those are from acquired businesses of the increase.
Yeah. Just to follow up, I'm just looking at consensus here. They have 150 and 200 FTE plus being added in 2023 and 2024 respectively. Does that more sound like the old plan or is that still in line with what you think?
No, I don't wanna comment on 2023 and 2024 hirings here in the H1 2022 call. We are well prepared for the strategic, sort of, moves and the strategic initiatives we have with now. We will of course continue to hire just to build the pyramid always and to ensure we have the right talent to the private wealth channel that was just mentioned, et cetera. I don't wanna give exact numbers for 2023 and 2024. The environments change, we are agile. It's not clear as of yet.
Okay. Fair enough. On debt maturities, I believe you said in your presentation that private capital had four years average and infra five years. Could you tell us how much this is maturing in 2022 and 2023, please?
No, I think I mean, in, I don't even know that figure, to be quite honest.
Yeah.
I think what we're saying is that the average tenure of the debt is that. It means that typically you put one debt package in place for one company, and it means that that debt package is typically a seven to eight-year long package, with amortizations, you know, suited for the business, meaning that you know, the businesses are also generating cash flow and that cash flow is partly used then to make amortizations. Exactly what amortizations we will have in those numbers, I don't know because it's built up from, you know, 70 or 50 different companies and different financings. What we're trying to say is that we are very confident and feel very good about the debt packages that we have.
I think we've also been, you know, quite transparent that we've been using the very good debt markets that we've had in the past two years to renegotiate debt packages at better terms, at less covenants, at lower interest rates, at less restrictive amortization schedules, et cetera. I think in general terms, we're in a good shape when it comes to our debt packages.
Great. Thanks. Sorry to come back to these questions once again, but on carry, just a bit confused. I think to Armin's question in the beginning, I heard it as if you have or your discount to keep on companies until they're sold has actually been canceled or dismantled in EQT VIII. Is that correctly understood? What's left for H2 is the difference between the values in the fund and the exit value. Was that correctly understood?
No, I don't think so, but let me explain once again. When you sign a transaction, you cannot use your old valuation anymore in after that. You will use the valuation that you have agreed with the buyer in your valuation between signing and closing. However, we apply a discount on the overall on the fund and that discount, of course, goes away when the deal is closed. It goes away for that particular deal because then you get the cash for it for that transaction. That's the mechanics around it.
Basically the difference between EUR 2.5 and was it EUR 3.2 you showed, that one will be written up immediately and it's included in the H1 numbers, but the discount disappears when you get the cash in Q3.
Correct. When we are sufficiently sure that the closing will take place. We have some leeway there. If it's completely certain, we can take it. We cannot leave sort of a risk that it will have to be reversed at the later stage. Now we're getting into very technical questions. Happy to take that also offline with you.
Yeah. Fair enough. Thanks a lot for the answers.
Thank you.
The next question is from Jacob Hesslevik with SEB. Please go ahead.
Hi, good morning. I just have a question on MOIC. I mean, you have a reduction of 0.1x in your chart, but I mean, presumably comps are down 15%-20% this year. How do you get to just 0.1? That's my question. First one.
Yeah. I think I've been trying to say that it's multiple sources here. Of course,
Multiples coming down, comparable multiples coming down is one part of the equation, and it's a big part of the equation. You have other parts as well. One of the bigger ones is the underlying performance in the companies. If you apply a lower multiple but to higher earnings numbers, you will end up being more flat when it comes to value. I mean, just from a mathematical point of view. You have some realizations, as I mentioned in EQT VIII , as an example. I mean, that's basically where we end up. 15-20 is really where we have our comps figures being traded down in the multiples, but then outweighed by other things.
Okay, thank you. At the risk of sounding like a broken record, when we think about the deployment pipeline, maybe could you give us a bit of flavor of some of the geographies and sectors that you guys are investing into? Or maybe let's put it this way, any particular areas that you're avoiding, actually, on the profitable companies or specific geographies and maybe how that has evolved in this market spectrum?
Mm-hmm. You know what? Our approach is quite consistent actually over time, and becoming more and more so. You know, we choose these long-term themes that we're investing behind, that are driven by secular growth, driven by, for example, the energy transition or by demographics or by regulatory changes or lifestyle. Not necessarily connected to the economic activity. You know, we break it down into, you know, various areas of healthcare, various areas of, you know, TMT, various areas of tech-enabled services, and of course, essential infrastructure for society. You know, thematic real estate in areas that are growing, mostly logistics, but also multifamily, again, back to lifestyle and trends.
You know, the pipelines are still quite active across all of our strategies. It's rather now to find the right opportunities that have the right risk-reward in today's market. You know, we wanna be thoughtful and careful, and make sure that when we do deals, like I just mentioned, you know, SPT Labtech or Envirotainer, for example, in private equity, then we wanna make sure that those companies are the ones we can work with. If it takes longer, let's say we need to own these companies for longer, that we can really add value to them across multiple dimensions. It's rather that.
You know, we do stay, you know, we just generally have stayed away from since many years, you know, more cyclical companies, capital intensive companies related to the cycle, companies with very complex and long, you know, large value chains. We have little consumer exposure as well because that's also quite volatile, as you see. That's what we mean by thematic investing. We believe it's quite robust, and that's also what you see in the performance of our companies across cycles. It doesn't mean we're totally insulated. Of course, if we go into a complete recession, you know, all industries will be impacted in some form. We don't see that yet.
Thank you for the clarification. Just one last question from my part, and it's basically on your ESG approach, how it's progressing. You had your first portfolio companies set science-based targets, but what's your timeline here? How many companies do you expect to have its targets in place at this year end? Secondly, some peers are raising their first climate fund, et cetera. Do you also have any plans on raising this type of fund in the future?
With regards to our, as you know, science-based targets, we've committed that every single portfolio company will set their own science-based targets. It's based on a timeline per company. We own 180 companies, so it's quite a job. It's happening on a timeline. I don't have the exact goal for the end of the year. It is, you know, that something that our teams and portfolio companies are working very hard on.
With regards to those types of funds, if you think about our investment strategies that encompass you know, venture capital growth, private equity, but in particular actually also infrastructure and active core infrastructure, and if I take those two as the example, if you look at the investments that we've been making in you know, the infrastructure strategies, it's a lot about energy transition. We have electric vehicle charging networks. We have solar and wind manufacturers. We have waste to energy. We do a lot with actually transportation. You know, we own two you know, three actually really interesting companies. Two ferry companies in the Nordic region that are leaders in electrifying ferries, which is really great for society.
We own the world's largest yellow school bus company in the United States, 60,000 buses that we're also committed to electrifying and driving transitions that way. We're doing a lot in this space already. To have a dedicated fund towards it would be just too complicated actually. We're already all over it. Thanks.
All right. Thank you so much. Wish you all a nice summer.
Thank you. You too.
Thanks.
Good questions. It seems like those are the last questions that we've been asked today. Thanks everyone for an engaging session and wish you all a continued great summer. Thank you.
Thank you.
Bye then. Thanks.