Good morning, everybody, and welcome to EQT, and welcome to our first capital markets event here in New York. I'm Olof Svensson, I head up shareholder relations for EQT. This year marks 30 years since EQT was founded, and it marks five years since we listed on Nasdaq Stockholm. And, at the time of the IPO, we saw the listing, we said it was a watering station, a step on a journey that would not change our DNA, our culture, or our focus on investments and our clients. Instead, we set out to be the most transparent private markets firm and the best possible counterparty to our clients, portfolio companies, and the countries and societies where we're operating.
We went public for EQT to have tools to continue to grow, to initiate new investment strategies, and to be one of the consolidators of the global private markets industry. We've far exceeded those goals that we set at the time of the IPO. We quadrupled our revenues, and we tripled our client base, and we have continuously scaled with a well-invested platform. Our relentless focus on performance and on our clients has also been mirrored in our stock market development. Since the IPO, our market cap increased by 500%, and it's today around $40 billion. Today, we will focus on the future, the future of private markets, the future of value creation, and how we keep innovating, and how we develop our client relationships and our distribution channels.
And we will zoom in on our franchise here in North America and our ambitions for the region. We will have speakers who represent EQT's global leadership team, our heads of investment teams in North America, and we will run quick presentations for the next two hours or so with Q&A in between. And then before we invite you all for lunch, we will have our Founder and Chairperson, Conni, join us here on stage for a fireside chat. So stay tuned for what we think will be a very interesting morning. And with that, let me introduce our first speaker, Christian Sinding, CEO and Managing Partner of EQT.
Thank you, Olof. Hey, everybody, hope you're doing well. Great to see you. I love the space that we're in. It's very sustainable, very fresh, not too warm, even though we have an Indian summer here in New York. So, let me find the clicker. We'll take you through EQT today, and it will be interactive, probably not during the sessions, but if you have an urgent question, don't be shy. Otherwise, we'll do the Q&A, as Olof talked about. Now, EQT is a purpose-driven firm. When we were founded, we were founded with the moniker of being more than capital. And today, we've modernized that, and we say that our purpose is to future-proof companies and make a positive impact.
What we mean by positive impact is not just from a sustainability point of view, but it's a play on words. It's also that when you have EQT as an owner, whether it's a company or a building or infrastructure, you will notice we're active owners. We want to have an impact. We want to drive transformation and positive change in everything we do. When you think about our mission, our mission, of course, is to deliver superior returns, and we come back to that a lot in the presentation. That's ultimately what powers our business, is to drive superior returns to our clients. And we do that with a thematic investment strategy, and a deep-rooted value creation approach that comes all the way back from the Wallenberg family.
That's our biggest owner and has been investing in owning companies since 1856. And we, of course, do this with a global network of super talented people and advisors from all over the world. Our approach is a bit different than the other large firms in our industry, and I'll talk a little bit about that now. On the one hand, we have a thematic investment focus. We're investing in long-term secular trends that are the trends that are building society for the long term, and we do it by being local with locals. So we're local with locals in every single country we invest in.
That gives us a pretty unique access to finding deals, generating ideas and opportunities, and actually also working with our companies, working with our assets, to develop them in the local language, in the local culture, but with a global approach. We're now, I think, in 25 countries around the world. We have 100 different nationalities at EQT, and we're just getting started, as we like to say. The way we work with our companies, we have a very clear governance model. We don't step into the companies like some of our competitors do, we strengthen them. So we strengthen them. We bring in a board of super competent. We strengthen the management teams, and the management team's job is to deliver on the strategy and execution of the business.
So that when the companies leave EQT, that they're stronger, better, faster, and have a brighter future than when they came, and that, of course, creates value. Our advisory network is actually 600 chairpersons, CEOs, specialists from all around the world, and all the themes that are important, from AI to the pricing, you know, and everything in between, and like I said, everything we do has to do with active ownership, so we don't have any credit products, we don't have any insurance products, because those are fundamentally passive investments. Everything we do is active, and we find that to be engaging and a lot of fun, and we put a lot of resources behind continuing to build that...
Some of the themes that we're investing behind in society today, of course, one of the biggest is the energy transition. We'll hear from Sud a little bit later, or actually Alex, I think it is, actually, a little bit later around our infra strategy. But this is probably the biggest investment opportunity of our time. Just the transition alone is something like $275 trillion of investment needed by 2050 to transform the world, to decarbonize the world. And that goes for the energy system, the transportation system, the manufacturing system, you name it. Huge investment area, where we're already investing quite a lot, and about to build new strategies around, as well. So follow that one. Digitalization of society.
We have a big tech practice across private equity, growth, Ventures, and also in infra. We own one of the world's largest data center companies. This is a company called EdgeConneX. I don't know if Jan is here, but anyway, the responsible partner is here in New York. We more than tripled the business since we bought it, and it's now has an enterprise value of somewhere between $15 billion and $20 billion, and it's just growing like a weed, and there's so much capital needed, actually, just in that business alone, as a great example of platforms that we're trying to build or that we are building to drive transformation of society. Health and well-being. Actually, we're the largest investor in healthcare in the world, in private markets.
I think Eric will tell you, where is Eric? There he is, that we're the best. He's American, so he can say that. I think we are actually, I know we are. That's exciting, and we invest actually in healthcare all the way from life sciences, early stage through growth, into private equity, and also into infrastructure. We work a lot within changing value chains, particularly in real estate. You'll hear from Henry a little bit later. We're the third largest owner of warehouses in the U.S., just to give you some sense of the scale that we have, and I think we own some 2,000 buildings across the world.
And we have a really hands-on approach also in our real estate business to create value, hands-on. And then we have some of the more modern themes, if you wanna call it that, from an equity perspective, live experiences, you know, after the pandemic, in particular. So much is happening around entertainment, around sports, and in that whole area, we're doubling down on that. We already own United Talent Agency, Cast & Crew, Believe, which is the third largest music publisher in the world, and a number of other assets that are playing that trend. So that's quite exciting and something we're doubling down on and will grow a lot in the future.
Now, my predecessor, Thomas, always said to take the Pepsi Challenge, and I'm actually drinking a Pepsi here for some reason, so that's kinda weird. But the Pepsi Challenge was, yes, we talk a great game that we're really good at developing companies and at building businesses and driving growth, and the question is, do we have the proof? And the proof is here. So these are the growth numbers across our private capital business in Europe, North America, private capital in Asia, and infrastructure, revenue growth, and EBITDA growth, and this is for all the companies that we've sold since inception. So this is the test of whether we are actually developing companies in a good way.
So I guess the answer is yes to the Pepsi Challenge. Another dimension to that behind, you know, what does that mean when we're growing and developing our companies well? Well, it means that we also deliver superior returns to our investors. And for those of you who know the industry well, which I think is probably most of you, you know, if you look at all the rankings, we are top quartile or better in almost all asset classes, not just in returns, but also in DPI. And I had a very interesting exchange with Hugh MacArthur, who writes the Bain report on private equity, the Bible, as some call it, a couple of years ago, and he said, "Chris, it's all very nice that you have great returns, but so does everybody else.
So, you know, it's not that important. And if it's 15% or 19%, nobody really cares because interest rates were zero." And that was a bit annoying, and then now, he's changed his wording a lot, and we talked about this chart here, which shows that actually, investors are really starting to care about returns. And what this shows is the size of the current flagship fundraisers versus the returns over the last couple of generations. And you see, there's a direct correlation between higher returns and a larger fund, and weaker returns and a smaller fund. And you guys, if you were to do the research, you will know all these names. They're big.
So that is kind of interesting that the world, now that capital has a cost and investors are becoming more savvy, returns are actually gonna matter. That's why we focus so much on that, and it's pretty simple that you know, we're a company that delivering for our clients. What do our clients want? They want returns. Now, one of the big challenges in private markets today is the lack of liquidity, and the cycle that we've been through, where a lot has been invested, and we haven't, as an industry, been able to generate as much capital back to our investors as we would all like.
So we've doubled down on exits over the past 12 months in particular, but actually, over a long time, we've built a lot of capabilities in our capital markets team for public and private companies to find new and innovative ways to drive exits. Actually, when Jean joined us from BPEA, we became, you know, a really global player a few years ago. We sharpened our investment committees to have a particular investment committee just around exits and liquidity. And now we have a global capital markets team that's working on all this with us. And our goal is to become the best provider of IPOs to the market, and the best manager of exits in the market in all different ways.
You'll see a bunch of different types of exits and exit methodologies that we're working on today. And this is helping us drive top DPI. And another thing which is interesting to know, another proof point in the fact that we've exited a lot of our companies is the average age of our investments or our portfolio, which is significantly younger than the rest of the market. Good, and this results in us taking share. This is, I guess, the most researched ranking, the PEI ranking of private equity. So right now, we're number three in the world. Our ambition with our returns and our global approach is to become number one in private equity in the world.
That's, of course, gonna be a result of our returns, and so we need to continue to deliver. But if we do that, I think this trend will just continue. And we really see private markets in general and private equity even as still a business, which has a lot of growth potential across geographies, sectors, themes, you name it. And you'll hear a little bit more about that from some of my colleagues later. Now, you'll see Conni on stage a little bit later. He came up with this in the good old days, and it's really maybe our most important internal statement. And that is that we try to keep our feet on the ground, and we try to continuously improve.
When something is going really well, we're like: Why can't we do it better, eh? You know, and there's always that question that drives some forward motion. It also drives a lot of improvement without a lot of politics internally. It's actually quite a fun statement, although we usually say that, "Don't bring it home," which some of us do, and it's not that popular in the family, I can tell you, but at EQT it works well. Some of the things we're working on now are exits, of course I talked about. We have the way that we create value in our portfolio companies is a combination of mobilizing them super fast after we make the acquisition or even after we sign it.
Even before we own it, we start getting people ready, the board ready, the management team ready, the plans ready. We set up a full potential plan for the company. What's the dream that we can do with this business during our ownership? And then we have a lot of tools that help the board, the management, et cetera, to execute on that. We're sharpening all those, and in particular around talent. You know, it's one. We find over and over and over again that the CEO, the chair, the management team are critical for driving value creation in our industry, whether it's a growth case or a transformation case or whatever it may be.
We also talk a lot about future-proofing, and we're the only company in our industry in the world that's in the Dow Jones Sustainability Index and all the other indices, kind of proving that we're ahead of the curve. We've now taken 50 companies on their path to net zero, verified by the Science Based Targets, which is far ahead of anyone else in the industry. And we have a super artificial intelligence unit called Motherbrain. You'll hear from Alex later, who leads that. And that's both internally for AI and also with our portfolio companies and investments. And we've started that initiative already back in 2014, 2015, something like that? Yeah. So trying to think about what do companies need in the future to succeed, that's how we think about future-proofing.
Right now, it's about this. Tomorrow, it could be about quantum computing or other things. Good, and then when it comes to the client side, I talked a little bit about the innovation, for example, the private IPO. We also have new strategies. We launch a few new strategies a year. The big one coming is the transition strategy, and that's super, super exciting, which is an infrastructure strategy about around what I just talked about, the whole climate space. We're doing a lot of work in private wealth, and we'll come back to that. We have—we'll have five in a year from now, or less, we'll have five products in the market across the globe.
It's gonna take a while to ramp them all up, but we're putting a huge amount of resources behind really making sure that we access private wealth in other dimensions than in the past, which has been... In the past, it's been all about more larger family offices and closed-end funds. And then solutions. Solutions are a lot of these things that I talked about around creating liquidity, creating platforms for clients. So rather than a client just investing in infra transition, the client could invest in climate, for example, and you can invest in climate across EQT Ventures, across EQT Growth, EQT Future, EQT Infra. So changing the game a little bit and going from asset classes to themes is something we're also working on.
You could think about the climate theme, you could think about digitalization theme, you could think about the healthcare themes. This is still early days in our industry, but as the private markets and the public markets are converging, we believe this is what investors are gonna be looking for in the future. That's exciting. We're trying to build a lot of capabilities around here as well. As many of you know, you know, when we're looking at these types of initiatives, this is also where we're investing or driving organic growth, but we also may do some acquisitions or acquire teams or capabilities to help us accelerate that as well. Finally, some comments on North America.
We, you know, in relative terms, we're versus our American peers, we're, you know, we have a lot of growth potential in North America, if I can put it in those terms. We've invested quite a lot in the U.S., and we do that every single year, so we're probably bigger here than you think. We have about 450 people in North America, half of that in real estate, and the rest across infrastructure, private capital, and capital raising. We have 300 clients here, something like 50 portfolio companies, and a huge amount of real estate, of course, which is great. And we think that, you know, our approach moving into the U.S. is differentiated. We work differently with our companies. We approach the market differently.
You know, in Europe, it's hard to get deals done. There are not that many. It's broken down into different countries and different sectors, and it's a real fight, so we're out there, meeting every single company and every single owner. In the U.S., you can actually sit in New York, and the bankers will do that work for you. That's very nice, but that's not how we do business, so we're out there on the road, applying this European model to America, and it works well. Yeah. Am I wrong, Eric? We'll see what Eric says later. Good, so then a little bit about EQT internally, you know, these are our values.
We cemented these back in 2007, and some of them are a little bit different than what's typical in our industry. Transparent means that we're open, you know, internally, externally. We believe that information is power, so if you hide information, sometimes I go like this. It's not very nice. And then you go like that, and it's, you know, that's just the easiest example. If you're open to people, then you get more trust, and everybody performs better. Informal means that everyone's open, like we're accessible, down-to-earth, no prima donnas. High-performing gives itself. Entrepreneurial is pretty cool because it's really about moving the firm forward and being innovative, driving change, and doing it in our way, trying not to follow others, but forge our own path.
And then respectful, which is Conni's favorite, you may talk about that later, so I'll leave that for you. Well, good, and I have a video that maybe a couple of you have seen, but I wanna share it anyway because it's really, you know, it's really about who we are as EQT, so this is. My assistant actually asked a number of people randomly around the world why they like working for EQT, so here it is. One more or?
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 mind-stretching and yet exciting and impactful, and more importantly, the firm's value are aligned with my personal value as well.
I was attracted to EQT 'cause the super fast growth and developing strategies means there's a huge amount of opportunity for young people starting their career, like me.
I had 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.
That's cool, isn't it? So people. With that, I wanna introduce Suzanne, who is, you know, our super talented Chief Commercial Officer, and she'll take you through what's happening with our clients and many other elements. Welcome.
Thank you, Chris, and thank you, all of you, for being here today. We're pretty excited to be undertaking our first capital markets day in, of all places, New York City, so, which for me is home. So it, it's actually very nice to be able to tell the EQT story but have slept in my own bed last night. I'm sure you can all relate to that. Maybe by way of background, I serve as the Chief Commercial Officer for EQT and the head of our external platform, which is really an aggregation of several different groups within the firm.
Probably by people count, the client and capital-raising piece of that is the largest, but we also have responsibility for the business development function, which is where we do a lot of strategic and corporate development work for the firm, the branding and communications areas of the firm, and then also a part of our sustainability team. Most of our sustainability efforts are embedded within our investment teams, as you might expect, because they're a very big part of how we create value and future-proof the businesses that we own.
But as Chris referenced, we also care a lot about how we manage our own business and, acting responsibly with regard to all the stakeholders that we serve, and so, we have a team that helps make sure that we stay centered on those aspects at the group level, so to speak. I joined EQT early in 2023 after spending about 30 years at a combination of Goldman Sachs and KKR, and it's really been a refreshing and exciting chapter so far at EQT. We have a lot of growth in front of us, some of which I'm gonna talk about in a second, and we have a culture and a very high-performance dynamic at play in the firm, so it's an exciting place to be.
So I thought I'd start with: why do clients invest with us? I think the mind of the client is a pretty important thing for us to stay centered on, and some of these themes will become, we'll probably repeat them over a few different speakers today, but they're important to understand, what do investors look for from us? First and foremost, we're at the table with them because of the strong investment performance that our firm has been able to generate over three decades now, and it's a hallmark of what we do. As you saw, it's right at the centerpiece of our culture, and we remain very focused on that. We think it is the factor that is most correlated to our long-term success, and I think, frankly, the long-term success of our shares as well.
Our clients also see us as very thematically driven. They see us having deep investment teams that do a lot of work ahead of making an investment to develop a point of view about what companies and subsectors are likely to grow over the next window of time, and I think as my partners, Eric and Alex, and others talk about what we do, you'll get more of a feel for that. They also are very focused on having the right alignment of incentives, and that comes to play in a number of ways, whether that's in terms of the advisors that we appoint to work with us and sit on the boards of all of our companies or whether that's the alignment of our professionals inside the organization. They care, of course, about the team being a stable one.
I think they're attracted to how authentically we focus on sustainability as a way to make our companies more valuable over time, and also that we're very digitally forward and work hard to strengthen our culture every day. Now, if you have been following our public comments and working, taking a look at our shares, you know that we've talked a bit about what we see in this next fundraising cycle, which is the opportunity to gather $100 billion of capital over this next few-year window. There are really several components to that growth, and we're excited about each of them. While we have some sizable flagship funds, for context, we raised recently or closed recently on the EUR 22 billion EQT Ten fund.
We still see growth prospects available in the flagship space, and in addition, we see a continued development in a number of other areas, whether that's the creation of our evergreen strategies, which I'll touch on in more depth in a moment, a continued build-out of our real estate business, which I think Henry's gonna talk more about later, the development of new brand-new strategies that we, as Chris referenced, continue to work on each year, or the continued scaling of businesses that are in their first or second innings. So as we add all of that up, it means that we envision very material growth over the next several-year cycle, and it's exciting to be interfacing with clients and basically telling those stories to the market.
And when I think about that, when I think about the runway for growth in front of us, I think we have a lot of room to grow. Chris referenced that we had about 440, 430, I guess, investors at the time of our IPO just five years ago, and we have tripled that client count in what is, what's a relatively short window of time and also, frankly, what in a market cycle that hasn't been as constructive in the last couple of years. So I think we're very proud of the ability to extend our reach and to, work with the leading institutional investors across the world, but importantly, because so much of that growth has been recent, actually, about two-thirds of our investors invest with us in only a single strategy today.
So if you think about that, what is the hardest step when you break into a new client relationship? It's often opening the door for the first time. That's a process that, in my experience, can take, certainly takes months, often takes years, sometimes takes decades, and once that door is open, as long as the institution is performing, is attentive to what the clients have engaged with us for, the likelihood of us then being able to do more with them is very high. Now, we've referenced private wealth a couple of times. I would say to you that this is probably the single biggest growth initiative, and we've been making meaningful investments in our team and the resources and capabilities we have at EQT to really take advantage of the growth expected in this space.
Many of you may know that when we look at all the different segments of growth, the private wealth segment is the one we expect to grow most rapidly. It's expected to grow at about a 12% compound annual growth rate over the next decade or so, and forecasts would indicate that this is an area likely to add about $10 trillion in assets over the course of the next two decades, so a very big pie to play for. Importantly, also one I think with pretty high barriers to entry. So when you think about the scale of investment that a firm needs to have to do this seriously and well, there are not that many firms that are able to address the opportunity in meaningful scale, and that's something we're very committed to do.
So we have added significantly to our team, and we'll continue to build out in order to drive our brand into the space and really have investors all across the globe understand what we do in the private wealth space. And finally, I'll just spend a moment on the North America opportunity, maybe to make it a little bit personal. I remember when I was interviewing to join the EQT team, I said to Chris, "Okay, it's great that you've made me this job offer, but can I really do it from New York?" You know, as I looked at EQT, I thought, this is a firm with a big presence in Europe, big presence in Asia, but does North America make sense?
And Chris's response to me was, "This is our single biggest growth opportunity, and so we actually love the idea of you sitting in New York and helping to drive the growth of this business." And what I've found is it's, it's actually an excellent seat to be in. We have so much opportunity. If we think about the world's investors today, about 40% of the world's institutional investors are based here, so this is the single biggest market. And EQT today is still underpenetrated relative to that share. We have about 30% or so of our client base comes from North America, and so the opportunity to really scale up our presence here is significant. We also...
And that, that means both increasing the cross-sell with our existing investor base but also working with brand-new investors and finally accessing that private wealth opportunity, which is bigger here than anywhere else in the world. So lots to play for, and super excited that we have all of you here to help us have that story be better known in this country. And with that, I'm gonna hand it over to my partner, Eric Liu, who is the Head of Private Equity in North America and also our Global Head of Healthcare. Thank you.
All right. Good morning, everyone. As Suzanne said, my name's Eric Liu. I have two hats at the firm. I'm the Head of the North American Private Equity business, and I'm also Co-Head of our Global Healthcare sector. So I sit within the part of the firm we call private capital. So private capital actually comprises six different fund strategies. They each have their own limited partners, they have their own teams, and they have their own strategies, which are a little bit different. The original business line at the firm is what we call EQT Equity. This is a controlled buyout strategy for private equity. We closed EQT Ten earlier this year. That's a EUR 22 billion pool of capital that we've deployed about 40%-45% of to date.
That particular fund focuses on four sectors: healthcare, technology, business services, and industrial tech. They each have, they each have their own themes and very focused teams within those to execute on those strategies. But healthcare and technology combined are about 80% of what we've deployed over the last few funds. So we actually have other strategies specifically focused on tech and specifically focused on healthcare at different stages within the company's life cycle. So on the technology side, we have a venture capital fund, which invests in early-stage venture capital or early-stage startup companies, typically pre-revenue, maybe a little bit of revenue, typically minority deals. We also have our tech growth fund, which invests in high-growth companies. These could be... They're all generating revenue.
They could be profitable, maybe not, maybe trying to achieve profitability, and we're a bit more flexible about our ownership percentage and governance in the growth fund. On the healthcare side, two years ago, we acquired Life Sciences Partners, LSP, which is one of the leading biotech venture capital funds in Europe. We integrated them, and they're now what we call EQT Life Sciences. They invest in pre-revenue companies at entry, and those companies are actually still pre-revenue typically when we monetize as well. We're also currently developing our Healthcare Growth strategy, which will invest in high-growth companies focused on the healthcare sector. Similar to the tech growth strategy, these tend to be, as I said, high-growth companies. They're generating revenue, may be profitable, may be approaching profitability, and our ownership models are also a bit more flexible there as well in terms of percent ownership.
And then last, we have our Future fund, which is our long-hold strategy. So I sit within the private equity practice. I spend most of my time within the private equity practice. So this is the original fund line at the firm, as I said, controlled buyouts in North America and Europe or Europe and North America, probably in that order. And our historic stronghold in the sector has been because, you know, we're local with locals in Europe, which was quite unique when we started this fund. A lot of European firms will have people sitting in London, maybe the people sitting in London that are of different nationalities, but we have local teams in every country in which we operate. We see everything. We know everything. We've been following these companies typically for 10 or more years before they come to market, and that's a real competitive advantage.
We entered the U.S. in 2015, so I joined the firm in 2014. I spent my first year in Sweden. I think Conni and Thomas used to call it my brainwashing period in formal meetings, and then I moved back to the U.S. in 2015 to start investing here. So if you look at our track record in North America, we've been investing here for 10 years, and the funny thing is I hadn't actually aggregated the data in this way until this presentation. So when my associate sent me the numbers, I said, "No, no, no, it's equity value, not enterprise value." I double-checked all the numbers, and we've invested $40 billion of aggregate enterprise value over time since 2015... and $19 billion of equity, including some co-invest we later syndicated to some of our limited partners.
20 investments, healthcare tech companies, technology companies, services companies. The strategy is exactly what we do in Europe. The main difference, though, is in Europe, we have a very, very differentiated footprint. We are always the best buyer for any company we look at in any of our core markets. In the U.S., it's a more mature, it's a more competitive market. It's a newer market for us, so we're not always the best buyer. But what we try to do is we find the companies where we believe we're the best buyer for that particular company at that particular point in time. We have a differentiated value strategy for that company, and those are the investments we choose to do.
We've actually been quite active on the exit front as well, and so we've exited eight of the 20 companies that we've invested in since 2015 for a realized IRR of 3x . Now, turning to my other hat, Co-Head of Global Healthcare. You know, healthcare's always been a very special sector within the firm. I sometimes tell people, "Look, we have four sectors within the firm, but you know, like with children, you know, they're all supposed to be equal, but sometimes we like certain sectors more." And I think the healthcare sector of the firm has always been a very special sector for the firm, because when the Wallenberg family originally founded EQT, what they did with the proceeds from that investment was to donate to Swedish biomedical research.
It's a sector where you can invest in companies that are doing something good for society, while also generating attractive returns for our limited partners and our funds, and that tends to be the perfect type of EQT deal. So within this sector, we have the biotech fund, we have the healthcare growth fund, and we also have our dedicated resources within the private equity strategy. I think within PE alone, though, we've invested $24 billion of aggregate equity value within the healthcare sector. It's been about 40%-45% of our investments over the last few funds, making us one of the most active and largest healthcare private equity investors globally. I think in Europe, we're by far number one, and in the U.S., we're probably sort of top five, just depending how you measure things.
Our realized returns in this market are 2.8x MOIC over time. Now, just as an example of what we do, so Certara was a company that we invested in in the U.S. in 2017. When we first met the company, you know, the way that you develop a drug, if you wanna sell it, say, let's pretend you have some potion that's gonna treat cancer. Like, you can't just sell it to people. Like, you have to go through an FDA process. You have to test it in animals, you gotta test it in a few healthy volunteers, and you test it in more people, and eventually you can get FDA approval. That is the standard of care for drug development globally today. That, that is how things work.
But Certara developed a software-based approach to simulate how drugs work in the body and what the body's gonna do to the drug. And they pioneered this model. It's a pretty niche market. At the time we bought the company, I think they had a $150 -ish of revenue. But it's really applicable in situations where either it's not ethical to test drugs in patients that way, or you just can't test all the different permutations. A lot of patients use multiple drugs, and you can't test every possible permutation within a clinical trial setting, and so that's when the FDA really likes Certara because it enables them to test things in a way that's both ethical but also more effective and helps get drugs to market more quickly. When we bought the company, it was run by a bunch of scientists.
I think 30% of the company at the time we bought it had PhDs, and we used to joke that it probably had the highest average IQ of any company in the EQT portfolio. But the issue is, when you have a company that has $15 million in revenue, $50 million in revenue, it can be run by scientists. When you're doing $100 million of EBITDA, or you wanna do a $1 billion of revenue over time, it just doesn't work as well. And so we had a very focused value creation strategy when we bought the company. We replaced the entire board of directors and recruited really world-class people across the software, healthcare, pharmaceutical industries. We replaced the entire management team. I think by the time we exited, every member of the management team was different other than the Chief Financial Officer.
We did a number of add-on acquisitions to both deepen what we were doing for our clients and also broaden the breadth geographically and product-wise in terms of what we were able to offer. And we took the company public in December of 2020, and over the next two years, we monetized our position, and it ultimately culminated in a multiple of investment of 5.4 x and an IRR of 49%. And now, not every company looks like this, and not all returns will look like this, but from a playbook perspective, this template of finding a science-led company and really professionalizing it over time is something we've done in other instances, and it's an example of why we can generate alpha or differentiated value creation in our investments.
Because every company is a little bit different, but sometimes the value creation path can be quite similar, and oftentimes we'll actually work with the same board advisors within these companies, and then lastly, to wrap on our ambitions in North America, one of the really unique things about EQT... You know, Chris posted a slide earlier with the PEI 300 rankings, where you saw the top eight funds having raised capital. We're really unique within North America. For almost every other firm on that chart, they're based in the U.S., the U.S. is their mature market. For EQT, the U.S. is our growth market. We only have 34 people here in our private equity business out of 140 total.
We've invested about 35% of our capital in EQT Ten, or that's probably where we'll end up, and that percentage should continue to going up over time. And so it's a really unique place to be as an employee. It's a great place to be as an investor as well. You know, people like working for growing firms. Growth creates opportunity. And so the second point here, we're gonna continue growing our team as we're investing more capital. And one of the great things about our firm is if you think about the types of people that we employ, we hire a lot of, you know, 23-, 24-year-olds out of investment banking or consulting. But what they really want to work at today is, look, people obviously want to get trained in whatever their job function is, but a lot of people are very purpose-driven.
They want to work at a firm that shares their culture and shares their values, and so for that reason, we're actually a quite attractive employer in terms of, you know, where people want to work these days, particularly people that are smart and have other options for where they can spend their time. And then lastly, if you look at the slide that I posted earlier, we have six fund strategies. Only one of those is really active in North America today, the private equity business. And over time, as we hire more people and we build our track record, we'd expect all of those fund strategies to be active in North America. So with that, I'll pause in North America, and I'm gonna turn it over to the other side of the world, and it's Jean here.
Good morning, everybody. I'm gonna talk about Asia this morning. I'm Jean Salata. I'm responsible for our Asia business. Our Asia business has its roots in Baring Private Equity Asia, which is a firm that I helped to found 27 years ago now, in 1997. That business developed for 25 years as an independent firm, and two years ago, we made the decision to combine our business together with EQT to create a global business, which now spans the U.S., Europe, and Asia. And now we're fully integrated as part of EQT, and we call ourselves Private Capital Asia, which is the business that I'm responsible for. Private Capital Asia right now is one of the most established firms in Asia. We have currently investing our ninth fund.
One of the numbers that I'm most proud of is that we've distributed $25 billion back to our investors over time, and that DPI, that distribution profile at industry-leading returns, is what's enabled us to achieve all the things that we've been able to accomplish as a firm and really differentiate our business. So what I'm gonna talk about today is why investors are interested in Asia, and why we at EQT think this is a tremendous growth market for us as a firm. We think that Asia has outsized investment potential, and there are four reasons here that I'm gonna summarize as to why we think it has this alpha, this excess return potential that doesn't exist in other parts of the world. Number one, we have much higher growth rates in the economies in which we're investing. So our largest market right now is India.
That represents about 35% of our Asia fund. We're currently investing out of an $11.2 billion Fund VIII, which is a regional buyout fund that has invested about 35% of its fund in India. India is growing at 8%, real GDP growth rate. That's a nominal growth rate of double digits of annual growth. So we're in a market that has much higher growth overall, and most of the region is growing at much higher rates. If you think about equity returns and what drives returns, it really is growth, and so we have that growth in the region that's gonna drive excess returns, we believe. The second point is that there's a lot more opportunity for value creation. If you think about what's driving real value, real alpha, real excess return generation in our industry, it's really around governance and value creation.
These are the things that create that extra return above and beyond what you can get in the public markets, and many of the assets that we find in Asia are actually undermanaged businesses or businesses that are still either family-owned or part of conglomerates, haven't been through the sort of efficiency gains that you've seen in developed markets. There's a lot of room to run here, and I'm gonna give a couple of examples later when we go to a case study. The third point has to do with liquidity, and if you're an investor with a portfolio of private equity funds, most of your portfolio is gonna be highly correlated to what's happening in the developed markets, particularly in the U.S. and in Europe, in terms of public markets, in terms of M&A activity.
Asia is actually quite an uncorrelated source of liquidity and has its own business cycles, particularly markets like Japan, like Australia, like India, all of which we're very active in, which tend to go in different cycles. And I'll give some examples later about how we've been able to get liquidity during times when you can't get liquidity in other parts of the global financial markets. And the fourth point here is that it is actually a very underfunded asset class. If you think about Asia overall, it represents, for most investors, something like 6% of their allocation to private assets, to private markets, but we represent something like 50% of global GDP. So there's a mismatch there between the size of the opportunity and the amount of capital that's targeting the opportunity.
So for these reasons, we're finding a lot of opportunity to generate excess return and alpha. And, you know, why is that relevant? Well, I think that's relevant because in the world that we're living in today, the S&P 500 has been a big driver of returns for all of us. It's really lifted all boats for a long time. That story has played out quite a bit already, and if you look at where multiples are today in the public markets, the S&P 500 is trading at something like a top ventile return, which is or top quintile return. It's basically the top 5% of its band, which, if you run that on a historical basis, the subsequent 10-year returns when markets are where they are today, is something like 3% annualized return over 10 years.
That's what you can expect in the public markets when markets are where they are today, public markets. So to generate the kind of returns that investors need, that pension funds need, that endowments need, you really need to look to private assets, and you really need to look for alpha because the beta is just not gonna be there the way it has for the last decade or so when we've had zero rates. And this is where we think Asia can really play a role in an investor's portfolio. So that's the potential. Here's the actual results that we've been able to deliver. Our Asian private equity program, if you compare it to the public markets, which in Asia have delivered about a 6% annualized return over this period, we've delivered over 10 to 14 percentage points of excess return.
And so we've been operating in an environment with this sort of single-digit public market returns and double-digit private equity returns, and I think that's really why we are very excited about, and we see with our investors, the amount of capital that we see flowing into our asset class is gonna continue to grow. And we think that what EQT has in Asia is quite differentiating, quite unique, and very attractive for our LPs and our clients.... The other point about Asia that's a little bit misunderstood and misconstrued is this idea that there's a lot of risk in investing in Asia, and so it's a riskier market. That's not been our experience.
The reason that we are where we are today as a firm and delivering the returns that we've delivered is because we've been able to deliver those returns without a lot of volatility, without a lot of risk. This chart basically summarizes the multiple of money on the investments that we've realized over the life of our investment program, and you can see that 92% of our investments have essentially returned more than 1x, have more than cost. Only 8% of our investments have returned less than cost, and in fact, half of our investments have returned more than 3x, so it's actually skewed to the outperformance with very limited volatility and risk on the downside. Why is that? It has to do with a couple of things. One is to do with our strategy. Our strategy is a control strategy.
We are buyout investors, so when we're investing, whether it's in our large cap fund, we also have a midcap fund, we're taking control of the companies, and we're controlling the management, we're controlling the strategy, we're controlling the timing of the exits, and most importantly, we're controlling the value creation program. That's where you drive these outsized returns. We're implementing digital transformation in our companies. We're upgrading leadership teams in our companies. We're now introducing a lot more sustainability goals and targets in our companies. As a result of the combination with EQT, we've really raised the bar on that, which also drives performance in businesses. So everything to do with value creation, with underwriting, with control and managing risk, while at the same time capturing this outsized opportunity that exists in Asia in terms of growth, but without the risk.
So let me give a couple of examples to finish up. One of the biggest opportunities that we're excited about right now in Asia, on a five-year forward-looking basis, is the Japanese market. The Japanese opportunity is massive. It reminds me a lot, actually, of what happened in the United States in the 1970s and 1980s, where you had a lot of conglomerates, you had a lot of publicly traded companies that were managed by managers for the managers and not for the shareholders. You're just starting to see now the wave of shareholder activism take root in Japan that's happened in the United States and Europe.
If you look at the recent regulatory changes and shareholder reforms in Japan, there's a new basically law that's come out, or ruling that's come out by this Tokyo Stock Exchange, which says that if your stock trades below 1x book value, you've got to do something about it, and you've got to be receptive to proposals from shareholders to improve the performance of your business. Right now, there are 1,000 companies listed in the Tokyo Stock Exchange that trade below book value. That represents $1.5 trillion of market cap. So $1.5 trillion addressable market of potential take private opportunities or other sorts of private equity opportunities. We've just closed one. It's a $1.5 billion investment of a company called Benesse. It's a 60-year-old company with a lot of cash on its balance sheet.
We were able to buy it at a single-digit EV/EBITDA multiple. It's third generation. The management is no longer really linked to the founding family. It hasn't been run to its full potential, but it's in a sector that we know a lot about. It's in education, and it's in nursing home and healthcare. These are growth opportunities that we see to really transform the company and to digitalize the business and to really ramp up the company to its full potential. So there's gonna be a wave of activity that we see coming into Japan to bring these undermanaged businesses to their full potential. It's gonna be take privates. It's gonna be buying non-core assets from listed companies.
It's gonna be succession and generational change happening, and we're already seeing that, and it's a very big opportunity that's really just getting started and just getting underway. And the last thing I want to leave you with is really our India opportunity and how we're executing on that. This is probably the single biggest opportunity that we're excited about and have been excited about with high conviction in Asia for the last really 10 years now. It's a market where we have an industry-leading track record. These are the numbers in our performance. We've delivered close to 4x MOIC multiple on invested capital and a 35% IRR on our realized investments. It's industry-leading track record. It's a market that right now is about a $10 billion a year buyout market.
Our forecast is that it's gonna be over a $50 billion buyout market by the year 2030. It's growing by 5x, and we are positioned very well in the market. Why do we like India? It's the most populous country in the world. It's also the youngest country, one of the youngest countries in the world. The median age in India is 28 years old. It's a growing population. It's a very dynamic country. It's got the highest GDP growth rate of any major country in the world, 8% real GDP growth rate. The sectors that we're investing in, like healthcare, for example, are growing at mid double digits, even 20%, some of the healthcare services businesses that we invest in. We just invested in the largest IVF business in India. They have a 50% market share across all fertility clinic businesses in the country.
We're gonna triple the size of that business during the period of our ownership. We're rolling out new clinics, also meeting an important need in society, as a result of that. If you look at healthcare expenditures in India, it's only 3% of GDP. In this country, healthcare represents 17% of GDP. Very, very under-penetrated, very early stages of development, and, you know, the question is: How do you access that opportunity? There's big opportunities there. How do you access it? The opportunity, it's really through a program that you can access through a control strategy that's very thematic, that's proven with the track record that we've been able to deliver, and as Chris mentioned earlier, with local team on the ground, local with locals approach. We have 25 investment professionals in India. We've been there since the 1990s.
We've been through multiple cycles together as a firm, and we think the market now is really poised for a tremendous opportunity and growth ahead of it. So this is probably our single biggest idea that we have that we're executing on, and it'll form an important part of our next fund investment program as well.
And with that, I'm going to, I think, open it up for Q&A. Olof, should I hand it over to you?
Yeah, I guess we'll hand it over to our audience. But thank you, Jean. Thank you. So we thought we'll.
Let's do it.
We'll do a Q&A session, and maybe we address any questions you might have. So I should probably stand.
We're about to explode.
Yeah.
Yeah. Okay.
Um-
You're steering it.
Yep.
Yeah.
Hi. Michael Cyprys of Morgan Stanley. Thank you so much for taking the time with us this morning. Just had a question on the Private IPO. I was hoping maybe you could elaborate.
Mm-hmm
... a bit more on the structure, how you see that mechanically working, and how you see that opportunity set unfolding-
Yeah
... as you look out over the next couple years.
Yeah.
Thank you.
Well, let's see where I should start the story. If you look at what's happened over the last 20 years in the capital markets, the number of public companies in the world have fallen dramatically. In the U.S., I think from 8,000 to 4,000 something, and the number of private companies owned by private equity has gone exactly the opposite. Now there are 8,000 private companies owned by PE in the U.S. alone, so almost twice as many as in the public markets. So, and a lot more capital is moving into our world, and we have... In the past, we've had kinda closed-end structures where you've made the investment, sold the company, and moved on. We found that there are a number of companies in our portfolio that we wanna run with and we wanna own for longer.
And I think Nord, which Jean has built actually, is this education company, is a great example of that, where we've been involved since 2007, 2008, and now it's a $15 billion company. What was it when we started?
When we first started, it was probably a $200 million enterprise value business-
Yeah
... and now it's $14 billion.
Exactly.
Had six schools, now we have 100 schools, so it's grown dramatically over the last decade.
But the growth story is still there. It only has 5% or 6% market share globally.
Yeah.
So there's a lot to do, and rather than selling that company to someone else or taking it public, we want to keep it. And then, so we're reinvesting now in the new fund in that company, but it's so large that we need to bring other capital sources in. And then we said, "You know, why don't we think of it as a private IPO to bring in all different kinds of investors into the equity once the equity is priced?
And then we can continue to manage this company and own it for the long term on behalf of our clients, and when they need liquidity, we can do that again in one year or two years or every second year, or whatever." That we create liquidity in the private markets while we own the company, and then we called it a private IPO, and we haven't done it yet, so, you know, this is something we're working on as we speak, but it's a parallel to continuation vehicles, co-investments, and all these types of solutions that are out there, so we're working with, you know, some of the investment banks that are here, on that strategy, and we'll see. This might be the first one.
Mm-hmm.
Yeah.
Yeah. It's a market-making, I think, mechanism for large assets where there's a going to be a lot of interest from buyers and sellers at different points in time, and then leading up to a public market IPO, which would be the ultimate liquidity event for those investors.
Yeah. Thank you.
I should start to say, Suzanne and Eric are, of course, also available for questions. Let's take the next one. Armin, please.
Thank you. Armin Keraj from Carnegie. So maybe the first one for you, Chris. You mentioned that maybe over time, LPs can invest directly in themes instead of funds. Could you elaborate a bit on that, how that would work then? Would you do mandates instead of closed-end funds, or...?
You wanna add something to that, Suzanne?
Yeah.
She's the expert.
I think really what Chris meant in addressing that concept is that as investor appetite shifts, as they get more thematic and maybe want to implement in a variety of different ways, that I think we're very open to the idea that we should be listening to that feedback and creating those types of solutions along thematic lines, and you know, there are definitely recurring themes as we look across the asset classes that we take responsibility for managing, so if I think about healthcare or I think about climate, those are themes that recur, whether it's in our ventures business, in our infrastructure business, in our buyout business, in our growth business, and so sometimes bringing those themes together can be an interesting way for an investor to express their own views.
We think we're well-positioned, given the culture of collaboration, given the willingness to custom-tailor for clients, to be able to do that over time.
Yep. Go ahead, Robbie.
Oh, back there? Oh, Beatrice.
Okay.
In the meantime, I see we have a few people who are still standing up, and there are some seats here.
Yeah, lots of seats around.
Brooks, everybody, please, feel free to join us up here.
He's a mountain climber. He doesn't need to sit. Go ahead.
Just ask a question on Asia. I'd just be curious, one, sort of the attitude of LPs towards China, how you're communicating your strategy here, if there's been any evolution. I mean, your performance has been great, so think that probably speaks for itself, and you have a big India focus. And then, as you think about EQT longer term, a lot of your peers have stood up infrastructure businesses in Asia. You know, you previously didn't have a big presence in Asia, and a lot of your peers have really tried to surround the private equity business that they have in Asia with an infrastructure business, a real estate business, now that you have Exeter.
So I'm curious, you guys have taken more of a one-fund approach on infrastructure and private equity prior to BPEA, where you've invested out of global funds. Do you see yourselves, over time, migrating, particularly given kind of the strength you have in Asia now, towards geographic funds around real estate and infrastructure and other things in Asia?
Sure. I'll take the first one. On the first one, we can both maybe cover the second one a little bit.
Yeah.
But I think the attitude towards China has obviously been evolving over time, given what's happening in the geopolitics, and also given what's happening macro cyclically-wise in the country. Our, you know, the way that we built our business over the last 27 years now is to be a regionally diversified business. That was actually one of the key value propositions of our program. And as a result of that, we built teams on the ground in eight different offices. We have 350 people now in total, including all the three business lines in Asia. And we are really covering the markets and are able to pivot and allocate capital to wherever we see the best opportunities at any point in time.
So as in the past, historically, we did invest in China, not that much because we have a control strategy, and it's harder to do buyouts in China. It's more of a minority investment market. But in the last fund cycle, which started in 2018, 2019, which is Fund VIII, we actually have no exposure in our China fund, in our fund to China. And that's really a mix of risk, return opportunities, and opportunities elsewhere in making the decision on how we allocate the capital. So we've been able to develop a very robust and attractive overall portfolio and return profile by looking to allocate capital wherever we see the best opportunities, and in this case, it's been without having any investments in China.
In my discussions with LPs, as we're talking about raising our next fund, there are questions about it, but it's not sort of top of mind. It's not, like, the first thing on people's minds. I think people realize it's the second-largest economy in the world. It's good that we're close to the market. We have a team there. We understand what's going on, and we can make the decisions on how and when we allocate capital to the different opportunities in the market. I would say, and I've said this before, that, you know, the bar is pretty high right now for us to commit new capital to the market there until we have more clarity on the macro, as well as on the geopolitical risks associated with investing there.
On your second question regarding infra and real estate, absolutely, I think it's a huge opportunity for EQT to be looking at regional products around these business lines. We already have an Asian real estate business and an Asian real estate fund. There's opportunities to expand our business in Asia into other areas that are more dedicated to, say, industrial logistics, warehouse-type investments, where Exeter has a very strong historical track record here. We've done a lot in Asia as well. We could create a differentiated product there, and we're looking at that. I think in infra, absolutely, it's a big opportunity, and right now, we are investing out of a global fund. We do have actually a very big footprint in Asia already as a result of the global fund being invested in Asia.
Australia, for example, we have probably 50 people now in our Australian office, 10 of which are in private equity, other 40, most of which are in infra-related roles. We have a big presence there as it is, and I think there is opportunity to, over time, roll out products that are more geographically focused on the region and infra as well.
Yeah. I think we'll leave it there. It's perfect. Thank you.
Scott Barishaw from Deutsche Bank. I just figured I'd ask quickly on private credit. I think in the past, you've made it pretty clear, at least investors think, that it's a no-go for you guys, but it is probably the fastest-growing asset class. Is there a change of thought? Is there something down the road? You know, how do you think about it relative to peers growing so quickly?
Yeah. You know, we have a crystal-clear strategy of building our firms surrounding what we call active ownership investment strategies, so all the way from ventures through growth to private equity, long-term private equity, infrastructure, real estate, anywhere we can have a hands-on approach. And actually, if you look at the global world of private markets, I believe actually infrastructure is growing faster than credit. We're, you know, we're top three in the world in infrastructure, on our way to become number one, and we've helped create that industry. Lots of opportunity geographically in different themes, digitalization, climate, you name it.
So we believe that within the spaces that we have, we think geography, themes, asset classes, et cetera, that we have a huge growth runway, plus the solutions that I talked about, that is also gonna create opportunities, whether it's in private wealth or otherwise. So, bringing into this mindset, a credit business, which is really a volume game, it's really a North American game, actually, and you're making tiny margins on a commodity product, if I may simplify life a little bit. And that's, but, you know, when you have $500 billion, $600 billion, or $700 billion, that's a pretty nice business, but this is not what we're good at, so there's no plans for us to move into that space.
And for the time being, there's no demand or need from our clients saying, "Hey, we're not gonna invest in your infrastructure strategy because you don't have private credit." There's plenty of private credit. You can go to the public markets, you can go to the banks, you can go to the private credit players, you name it, right? And a dollar is a dollar. There's no differentiation. So that doesn't really suit us, as our strategy is crystal clear. In 10 or 20 years, do we need to become a broader financial institution? Who knows? But that's too far away. Thanks.
Maybe just a quick question on the private wealth business. You know, a few of your peers have already launched private equity and infrastructure products. You know, they're sort of in that tier one A brand along with EQT. How do you think about differentiating that product, and what are some of the lessons learned from the private wealth growth with alternatives thus far?
So that's a great question. I think we're conscious that a number of competitors have started on that journey, but I would say we still see this game as one that's in very early innings. And, actually, there was an interesting study, I think Bain did it a year, a year and a half ago, looking at high net worth recognition of alts or private markets firms, and it was shocking how, you know, how few firms could be- people could summon up in their brain on an unaided basis. So, you know, we're conscious that we're at the front end of building our own brand here in America, for instance, where we're less well known than we are in our, in the firm's home markets.
But we think that there's a lot of room to run, and we also think that a number of the distributors and the advisors who ultimately make the decisions about which products get into client portfolios value diversification, they value performance, they value a deep origination network, all of which we have. And so I think what we're focused on is continuing to have them understand what makes us stand out, our different governance model, our different elements of our value creation toolkit, and therefore, why we should earn a place in their portfolio.
The other comment I'd make on that is that there is another way to look at this, is that because we haven't had all the plumbing in put in place over the last four or five years as our competitors have into these different private banking systems, we have a lot more flexibility on how we design our products and even the technology that we use to slice and dice all the deals and investments that we make, how we package them, how we distribute them. We can be a lot more flexible, I would say, and incorporate some of the latest thinking in how we approach that. We're not sort of weighed down by the historical distribution arrangements.
And given our size in private capital and in infra, you know, we are the third or fourth or second or whatever, depends on who you ask, but we're one of the biggest fee payers to Wall Street. We're now aware of that, we're managing it, and we're creating partnerships with you know, the big banks around the world and the big distributors. That's also quite exciting. So we're relevant in this space, both in terms of the capital that we're deploying, but also the distribution channels. So that's. So it's an exciting time.
We'll do more, one more question now, and then we'll do the infra and real estate sessions, and we'll continue with more Q&A after those sessions. I think you had a question here.
Yeah, I did. Yes, just a follow-up to the private credit question.
Mm-hmm.
I don't want to belabor it, but specifically selling into wealth management, I mean, to what extent is it a challenge from that whole, you know, one-stop shop mentality? That's number one. Number two, you know, the point on Asia being, you know, being inherently less risky is fine, but to what extent is Asia more transaction-oriented, and liquidity more of a factor there than your other two markets?
Mm.
The relative premium being put on-
Mm
... on liquidity.
Yeah. Your first question is good because, you know, the private market space to retail has been kind of paved, or that road has been paved by credit, which is lower risk. It has a yield. It's pretty straightforward to understand, and it fits nicely in investors' portfolios. And then there's been real estate, of course. We've just launched our first REIT, so we're, you know, we're about to to build that business. But what hasn't happened very much yet is actually accessing classic private equity growth, ventures, infrastructure. But of course, if you look at an investor's portfolio, you're not gonna have all your money in credit, and you're not gonna have all your money in bonds or money market. It's the same thing, whether it's public or private, right?
We think there's a very, very big space in our types of products that fit in individual investors' portfolios. That's just starting. As Suzanne said, you know, nobody's really taken that space yet. There won't be space for everybody, and not everyone has the breadth or the depth or the capital or the resources to do it. We do. We're excited about it, and I think it's gonna be, you know, if you take the five-to-10-year kind of timeframe, it's gonna be very meaningful.
I think maybe I'd just add to that, though-
Mm
... that we have enough breadth in our product lineup to be relevant to the advisor and to the d-
Mm
... the major distribution channels, and so that's the key. I wouldn't want us to build the resource base we have for a single fund. Instead, we have-
Mm
... you know, a number of asset classes that we're playing for, and there are spaces where the value being differentiated is very high. So, you know, we think we can stand out in that crowd.
Yeah, I think EQT stands for a firm that can deliver high equity returns to investors, so we're known as an equity house, and I think that's the brand image and brand reputation in the private wealth channel as well, as opposed to credit return levels of return. I don't. I'm not sure I understand the question regarding transactional nature of the Asian deals.
So more so the appetite for liquidity.
Mm-hmm.
Sorry. More so just the appetite for liquidity within the Asia market versus your other two markets. You know, we'd be pushing, you know, evergreen products. I'm not sure if that will have even more traction amongst the Asia clientele because of how they look at liquidity and look at, you know, closed-ended funds versus how you-
Are you talking about the marketing of our products?
Yes, exactly.
Maybe Suzanne can take that.
Yeah.
Yeah.
Sure, yeah. Actually, we're excited about the Asian market as a potential outlet for the build-out that we're doing in the evergreen space. We've seen the few competitors that are active have had excellent traction, actually, in Asia, and there's no reason, given 350 people across eight or nine offices in Asia and an embedded brand there, that we can't also be a winner in that market.
... Mm-hmm. Great!
I think we stop the Q&A here for now. We're gonna do infrastructure, we'll do real estate. Alexandra will talk to you about Motherbrain, and then we'll do more Q&A before we have a session with Conni to wrap things up. So, let's-
Great. Thanks
-do, infra.
One more time? He said one more time. One more time?
First Student provides full service transportation management, route optimization, and maintenance with a fleet of approximately 45,000 buses, and now, we're leading the industry by converting our traditional diesel school buses to electric.
Torghatten is the leading private passenger transport company in the Norwegian seas. Torghatten's ferry route network significantly shortens travel time along the coastline, making us a vital part of the country's domestic transportation system. And in the last 10 years, our goal has been to become the sustainability frontrunner in our industry, operating the world's largest all-electric ferry on Norway's busiest route, as well as developing green hydrogen vessels.
Cypress Creek develops, finances, owns, and operates utility-scale and distributed generation power plants across the United States, powering thousands of homes and businesses with clean energy.
One of the greatest challenges with renewable energy is intermittency. The sun doesn't always shine, and the wind doesn't always blow, so we're developing massive energy storage sites for energy storage at scale.
InstaVolt develops, installs, owns, and operates rapid electric vehicle charging stations across the UK, giving EV drivers seamless access to fast, reliable, and easy charging. InstaVolt's charge points are most often situated at retail food and beverage sites, like Costa Coffee and McDonald's, on or near to the strategic road network or in ultra-urban areas, offering a convenient service for the end user, who can combine their charge with other day-to-day activities.
Covanta is a leader in sustainable materials management, providing environmental solutions to businesses and communities around the world. Every day, our sustainable processes divert waste from landfills through combustion, which prevents the production of the climate-damaging gas, methane. This reduction in greenhouse gas emissions each year is the equivalent of removing 4 million cars from the road compared to landfilling.
Solarpack is a vertically integrated solar photovoltaic power plant developer and an independent power producer. We develop, finance, construct, operate, and manage utility-scale solar power plants, which convert sunlight to electricity. We originated in Spain and have a deep footprint in Latin America and Southeast Asia, with a growing presence in the U.S. and South Africa.
To us, sustainability isn't just the business we're in, it's also the lens through which we view the world and our place in it. At EQT, we're helping lead the world to a more sustainable future.
Such a good video. Gives me goosebumps every time I see it. So let's see. Chris said earlier that we're focused on our thematic trends and don't really talk a lot about asset classes. That's actually exactly what I'm gonna talk about to some extent right now. I'm Alex Darden, I'm a partner in the infrastructure fund, and I head infrastructure here in the Americas. Infrastructure, I am an unabashed supporter for this. I think it is the best asset class in the world, and I think we have one of the best infrastructure investment platforms in the world. You can see here the stats for the platform over the past 17 years, just to highlight the tenure there, and through more than 20 exits. So it's been time-tested.
We've generated this performance through consistent approach to the market and applying that business model that EQT has developed over 30 years. We have companies, just to talk about where we're focused, that are assets in essential services to society. So we are generating the electricity coming into your house, supplying the water that you're drinking, managing the trash that you're generating on a daily basis. It's very essential services for people living in and operating in society. We look for growing underlying demand with these companies, so companies with thematic tailwinds behind them, and we target well-protected business models that have strong asset bases. This generally gives our companies very defensive characteristics that provide mitigation in periods of high inflation, like what we've seen over the past few years.
As well as generally allowing for the pass-through, indirectly, of interest costs or higher capital costs that we see at times. Any of our businesses, we also need to be able to identify a value creation opportunity where we can utilize the EQT playbook to really drive commercial and/or operational excellence at each of our companies, and you saw examples of some of those companies just a few minutes ago, and I'll talk about a couple of them here in a minute also. That consistent approach, within very specific targeted sectors, that I'll show you in a second, is what gives us a real opportunity to be successful within the infrastructure space.
All right, now I want to spend just a couple of minutes on the infrastructure market itself and why it is the best asset class in the world, and why it creates such an opportunity for us. It is truly, and I don't think I can overstate this, an amazing time to be an infrastructure investor. There are certainly some headwinds in the market. We're all familiar with them: interest rates, which we all hope are coming down, supply chains, labor markets. But these are really generally short-term issues, and the tailwinds for each of our sectors are just massive. If you start, and you can see a few of them here, but if you start, the digital transition, and I like to call it a transition for this part because there really is an insatiable demand for data transmission and storage.
As people are moving to the cloud, as we're digitizing everything it seems, it, and generally creating applications that require more and more bandwidth, it's affecting many of the sectors that we're focused on. The second one, which I differentiate here versus what you see, is the AI transformation, and I really do call this one a transformation. This is a different category from the digital transition, and we are seeing it drive massive investment opportunities across multiple sectors. There was something I saw the other day that if you look at these two trends and what it's going to do for data centers in the U.S., if you take U.S. data centers as an electricity consumer and stack it up in the late 2020s against other countries, it's the 11th-largest consumer in the world of electricity.
It's sort of China, the US, India, Russia, and then you get down the list, and it's U.S. data centers. It is just a massive driver of investment opportunity across multiple sectors. The energy transition is another key driver across all of these sectors. In the U.S., we probably need somewhere between $200 billion and $500 billion a year to reach net zero by 2050. You can sort of debate the numbers. It depends on your source, what you put in there. It's a lot of billions that has to be invested every year in the U.S. in order to achieve those goals, and if you look at it on a global basis, we need somewhere around $300 trillion.
It's a lot that needs to be done over the next 20, 25 years in order to accomplish what we think needs to be accomplished in society. There's also a historic underinvestment in regular infrastructure, the everyday stuff that we're thinking about. One of my favorite things to look at is the American Society of Civil Engineers report. They do it every few years. The last one they did in 2021 or 2022, we got a C + for U.S. infrastructure, which is up from what we were at three or four years earlier, where we were at D -. So yay, we've accomplished a lot and we've advanced, but a C + is still nothing to write home about. The last thing is the public sector is not really in a position to solve any of these issues.
The good news on that is that the public sector is trying. The IRA here in the U.S. is a good example, somewhere around $400 billion that'll go towards energy transition as part of that bill. But if you think about the numbers I mentioned earlier, it's a drop in the bucket. So it leaves a huge opportunity for private sector investors in infrastructure. In addition to these high-level cross-sector trends, there also are a lot of micro trends within each sector. So if you look at Connected Society, all of us went through COVID and thought that we needed to be better connected in order for our kids to go to school. We're in the process of fixing that as a society and with some of our companies.
Decentralizing and hardening the grid, I think there's a fire every other week now in Texas or California or somewhere else on the West Coast. Development of the Circular Economy, which the private sector is actually leading here in the U.S. In Europe and Asia, they've taken different direction on that and have already gotten further down the path. And then the continued build-out of the 21st century logistics network. So to reiterate, there is a huge opportunity for private sector investors in infrastructure. These are the sectors we generally focus on. These are the same sectors we have been focused on since 2007 , 2008 . You can see here some of the key trends that exist within each of these sectors.
I'm not gonna go through each one of them, but suffice it to say, there are key thematic trends that we focus on which, within each sector, that then drives the investment theses that we have and, and the companies we look at. So on the introductory film that you saw, there was a company called Covanta. That company is now known as Reworld. We've renamed it, we've rebranded it, and we've repositioned it. It is a leading provider of sustainable waste solutions in North America. Responsible waste management is basically what it does. It handles about 20 million tons of waste per year, which is 5%-10% of the waste in the United States. Has about 4,600 customers and is responsible for diverting that waste I just talked about from landfills.
As an example, the company recycles about 500,000 tons of metals every year. It also generates enough power to light about 1 million homes in the United States. The company clearly lines up with our thematic strategies related to circular economy and has rapidly scaled it into a leader in the sector. We executed the EQT playbook at that company and achieved, as an example, pricing growth of 10%. As a result, we've recently been able to sell about a 25% interest in that business to a strategic partner. One other quick example, and Chris actually alluded to this earlier, so I won't spend too much time on it.
We have a data center business, premier data center business that is supporting this thematic trend of ever-increasing data storage that is being required right now. Our strategy was really to become a reliable and trusted partner to large hyperscalers. And we have seen EdgeConneX, you know, Chris sort of said growing like a weed, I think, was the way he described it. Maybe to put a little context around that, we bought the company a few years ago, and there's been a fivefold increase in the capacity of the business over that period of time, with recurring revenue increasing at a 38% annual CAGR. And sort of shows how the commercial excellence model playbook that EQT has can be put into execution.
So if I sum all this up, like I said, infrastructure, the best asset class in the world, I'm convinced. Two, it has its inherent defensive characteristics, and three, has massive growth tailwinds for almost the entire asset class. And hopefully, you've seen some of the examples of why we believe that EQT Infrastructure, utilizing the EQT playbook, and the consistent application of that, and mindset has been able to execute, building those companies for almost two decades now. So that, I'm gonna bring up Henry now, who's gonna walk you through real estate.
Okay, good morning. It may be tough to follow the best sector in history, but I will do my best. So good morning. My name's Henry Steinberg. I am the new Global Head of EQT Exeter, and while I'm new to this global role, I'm certainly not new to the firm. My history with many of our team members dates back 20 years to our predecessor company, and I've been a partner at what was originally Exeter Property Group and now EQT Exeter for 16 years. So I certainly know the DNA of the firm. And what is that DNA? It's that we're geo-sector specialists with a leading position in logistics. You know, I certainly inherit the business from a position of strength.
We've doubled our assets under management since the combination of the two firms in 2021. You know, I really think we're actually just starting to scratch the surface of the power of the combination of the two firms, and in a minute, I'm gonna talk about a case study that I think highlights the potential power of that combination. Our approach to value creation, again, as you've heard others talk about, it's locals with locals. I think this is a particularly important theme in real estate. We employ a decentralized operating model, where decisions are made close to the real estate. This is particularly important in real estate because local nuances, whether it be traffic patterns, taxing, local taxing issues, or school districts, have such an impact on property-level performance.
We also self-perform. We are true local real estate operators. We do our own leasing, our own development, our own design, our own property management, our own construction management. Oh, I'm sorry. We use a local operator approach across the globe. We do it across living and logistics strategies, and, you know, we're well positioned for revenue growth and AUM growth across a global platform. So, as I mentioned, a very brief case study. This is a site outside of Seattle, Washington, actually between Seattle and Portland. We bought the site in 2022, in one of our value add funds. The base case investment thesis was to develop across three or four buildings, about 3 million sq ft of logistics space.
The, I'll call it the upper end of the business case was to add power to the site and, upgrade it to, I'll call it, a higher and better use of data center use. Our local investment officer, again, important to be locals, you know, going into the investment, actually knew that there was a manufacturing company that had spent a lot of time working with the local utility to bring power to a nearby site, but he knew that that company pulled the plug. So we started a process after closing on the site, and fast-forward two years, and I'll oversimplify quite a bit, but we basically have will- serve letters. We worked very closely with the utility.
We did all kinds of power studies, and we have essentially will- serve letters for 480 MW, enough to power a hyperscale data center. We have interest from all the major hyperscale users, and you know, we certainly have added a tremendous amount of value to the land just by powering it. But again, when I talk about the potential power of the combination with EQT, we're working with our infrastructure team, and we're in early discussions with EdgeConneX about how to potentially partner and deliver a turnkey solution to these hyperscale users, which will not only drive returns for both sets of investors, but potentially be a framework for a future, I'll call it, platform, to combine our land bank, our land sourcing ability, with infrastructure's expertise in the data center space. So thank you, and I'll turn it over to Alex.
Ooh, I don't know the women in here. If I look like I'm shaking like a leaf, it's not because I'm scared, it's because I'm freezing. So I will do my best. I'm just clicking forwards. So my name is Alexandra Lutz, and I lead Motherbrain, which is EQT's applied data science capability, which uses AI, of course, machine learning, and advanced analytics, to help the EQT investment organization and our portfolio out-compete their peers and drive value across the deal lifecycle. So there's been a lot of conversation, I would say, in the larger AI community, about what they're calling the promise-to-performance gap. And you all know, I think, about the promise.
I mean, every day we're slugged over the heads with stats about how AI is coming for our jobs, and it's gonna change the way we work, and I do believe that's fundamentally true. I think on the performance gap, part of it is about how humans think. People tend to overestimate the impact of new technology in the short term and dramatically underestimate it in the long term. But the other part is really just about proficiency and expertise, and I think this performance gap is a really good way to think about the role of the Motherbrain team.
We talk about driving AI literacy, both inside of EQT and also for the portfolio, and what that really means is just making sure that our teams, they understand the technology, they're proficient with it, they have the tools and the expertise, and they know how to put it to work. Working closely with them side by side, we've been at this, as Chris said, for quite a while. That's remarkable, like achievement, I think. And it also... What we do has changed so much over the last nine years, but what hasn't changed is that close collaboration with the investment organization and one portfolio company, which is actually how we convert that AI ambition into measurable, real-world impact. So let's take a look at Motherbrain in the deal lifecycle. So I'm gonna start with sourcing.
It was our original use case for ventures when we started back in 2016, but we have changed quite a bit how we think about sourcing in the world of generative AI. It wouldn't be a presentation on AI without a copilot, so this is it, our copilot. It's a generative AI tool that we developed in-house to help both internal teams and the portfolio source add-on opportunities. The Motherbrain database, we've been building it for years. It has more than 15 million companies in it, and each company profile has a lot of information, both from external data sources and from internal data sources, on the company's performance, on the management team, on competitive set, on the sector.
So the copilot lets deal teams use generative AI to quickly search through these companies and find the ones that meet their investment criteria the best. So it works best when you have a very strong sense of what it is that you're trying to find, and then you can use generative AI to find it. The best parts, we deliver the results not in a fancy new tool, but into a spreadsheet, which is where deal teams like to work. And then they can use generative AI, which you can see, it's a little bit blurry on the side, but you can see, they use generative AI to talk to the spreadsheet. So they take that initial set of companies and results to a search, and then they can refine it and optimize it using natural language prompts.
So not only do they get a better list, they also learn what, what this technology can do. How do you get the most out of it? How do you ask a good question? What makes for a good prompt, and so now the process of coming up with a list of M&A targets, which not that long ago would take maybe a week or two weeks, and was often done with consultants, so maybe it wasn't just gonna be your list. Maybe that list would show up somewhere else. Now our teams can execute this process independently and in minutes, and I love kinda watching the spreadsheet populate itself 'cause it seems kinda magical.
But what's really magical is when deal teams spend, you know, a couple of hours and can walk into a management meeting with a list of targets, and they often find that there's a huge degree of overlap between the ones that they've identified and the ones the company is tracking themselves. So this is a really scalable way, I think, to use the new, very, very new technology to do a thing that is well known in private equity, and we've done it about 50 times over the last, six months within EQT. So the next example, actually, Henry and Alex both teed it up beautifully, for me. This is some work that we have done, with the Real Assets team, and we've talked a lot about today, about EQT being a thematic investor.
One of the real big benefits of being a thematic investor is that you have pretty unique data from the things that you own. But in the not-so-distant past, a lot of times this data, it's scattered, it's siloed, it lives inside different systems and inside companies, and it makes it hard to identify patterns and find synergistic value creation opportunities, so together with Henry, with Alex, and their teams, we built this geolocation platform, which makes it easy to load in portfolio company data, so all of the information we have about the built world, their physical presence, where they are, and all the metadata, and then pipe in other data sources like demographics or those utility maps or road traffic, and run analysis on top of it.
Now you can see this. It's hard to make sense of this, but this is all of the different locations of the U.S. infrastructure portfolio. Now every deal team within Real Assets can see how their company or a target they want to acquire sits within that broader EQT environment. This is an example where they can drill in to find relationships and new areas of opportunity. This shows fiber lines owned by EQT businesses and their proximity to Exeter buildings. You can imagine it's a very powerful way that you can inform partnerships, you can inform sales opportunities. We use it for diligence. It's a very valuable data asset that can be used across EQT and creates kind of a proprietary and compounding way to deliver value on our active ownership and thematic investing.
So the final example is. I think one that's really. It's pretty simple to understand, and I think it's very illustrative of how we work with portfolio. If the first two that I showed you are for both internal teams and also now with portfolio for M&A, this example is some work that we did with IVC Evidensia, which is our veterinary business. And it's a great model for how we work with our portfolio companies, because our team, fantastic technologists, terrific data scientists, generally kinda clueless about how businesses work and operate and what matters. And so we do our best work when the management team or the deal team knows exactly what they're trying to solve for, but doesn't know that there might be another way to solve for it.
So here, IVC Evidensia is. They're doing a big program to try and kind of optimize the clinics, improve throughput, improve vet, you know, quality of life, improve patient satisfaction. And one of the things they really wanted to be able to do is understand opportunities to optimize the kinda daily calendar. It was really painful for our team to see, 'cause they were doing it originally in a pretty manual way. But they asked us to come in and see if we could try and automate their calendar optimization. So over the course of a few weeks, literally a few weeks, hand in hand with the IVC management team, we built this tool, which uses data to help clinics see patterns and spot opportunities to optimize their schedules.
So it gives them an aggregated view of the diary for the week. It helps them to spot the days and slots that might require improvement or could be optimized. For example, they can identify times when vet availability is limited, which they could never see across clinics. Or they can see when non-patient activities are being scheduled in key slots. The tool does not take action on behalf of the clinic. You know, it is very much about empowering clinic operators and vets, giving them the visibility they need to find the opportunities to improve scheduling efficiency. So the original pilot, and this is how we try to work, a focus question, a time box experiment, very clear criteria for what success will look like.
So the original pilot was run in a handful of clinics, and has now been expanded. It's working now in 95 clinics in the U.K. And in the clinics where it's deployed, they are seeing a 4% increase in that critical metric, which was vet utilization, because actually that is the most scarce and precious resource they have. It's the time of the vet. So you can imagine that has pretty powerful implications for both sales growth and EBITDA growth. And so now this will be scaled out to the rest of Europe and Canada after the successful implementation in the U.K. So a lot of people ask, and someone asked me this morning, like: How do you know it's real? Like, everyone talks about doing AI. How do you know?...
'Cause sometimes it looks like this. Like, we think it's gonna look like something super slick and super snazzy, but a lot of the value that we deliver to the portfolio, we try to do it in their term, in their tools, in their systems. We pipe it all back in. It's not about being sexy, it's just about being valuable. So thank you very much. I'm gonna turn it over, I think, to Kim.
Thank you, Alexandra. That's amazing, and hello, everyone. I am Kim, the CFO. It's great to be here, and not only to be here today, but also to be in New York. I just moved here a month and a half ago, so it is super to start with this capital markets event here. Let me start by summing up a little bit what you have heard from the team here today, so firstly, we have a very long runway for growth. We believe that the private markets will continue to grow for a long, long time. You have heard how we believe that there's underinvestment in society that can only be taken care of by private capital over time.
And you have heard how private wealth and the retail space will continue to grow for a long time. We also believe that performance matters, and that we have a repeatable approach to value creation involving the best governance model around, involving our way of thematic investment, of local with locals, of sustainability, digitalization, et cetera. We have a well-invested platform, and we believe that we are well-positioned to continue to grow, both organically and inorganically in the sectors that we choose to grow in. We aim to scale our business. We aim to scale the flagship funds that you have heard about today. We aim to scale the strategies that we have recently launched.
We aim to launch new strategies over time, and we will have new products and distribution channels and grow the private wealth business. So that's a summary of what you've heard here today. But on the financial side, you will have seen that we have grown significantly since our IPO. But not only is it growth, it's also diversification, and we have a completely different profile now than what we had at the time of the IPO. We have this amazing business model with funds that have contractually recurring management fees for 10 + years, and those. And then in addition to that, we're gonna increase that by performance over time.
There's some additional revenue opportunities that parts of which we have discussed here today as well. Our platform is built for scale. You can see that we are already scaling, and that is showing up in our EBITDA and EBITDA margin. But we're also a growth-oriented company, and we will continue to recruit the best talent around and invest in our growth levers. Therefore, you shouldn't expect the sort of it to be a straight line, but you should expect the trajectory to be there for growth in margins also over time. Performance is at the core.
You heard earlier, early on here that we are not AUM chasers, we are performance chasers, and that's really at the core of how we operate internally. It also means that carry is an important element of our business. We feel we have a very high conviction that we will deliver on our carry promises as well. There's a solid bottom-up plan and value creation plan for each company or each asset in the portfolio, and we have the history of always delivering on our carry promise.
There's the exit market may not have been as conducive in the last few years than it was in some of the prior years. It will eventually change, and we will be in a position to then deliver on our carry promise, as you can see here, EUR 8.5 billion in the current funds, if they deliver on plan. And what does that mean for our financial targets? We are a long-term business, and we have not changed our financial targets really since the IPO. We think they are still fit for purpose.
So, we're gonna grow faster than the market. We're gonna have an EBITDA margin of 55%-65%, and we're gonna have a continuously growing dividend stream. Some nuances to that, though, is that we are going to grow faster than the market, i.e., take share, which means that already our management fees are gonna grow faster than the market. And in years of substantial carry, which there's going to be, we're going to be above this margin range. We also are clear on that, that the scaling of our business will lead to us being even at the FRE margin level within the earnings range or the EBITDA range here that we have mentioned. And further, we are...
We will be, and we are, always very sensitive to how we use the shareholders' capital, and therefore, in years of significant cash carry, we will absolutely consider augmenting the dividend stream that we have with share buybacks. So there are no news here today on that, but I think it's an important reminder of how seriously we take delivering on our financial targets. With that, over to Olof and Q&A.
Thank you, Hugh. So I think we'll do 15 minutes or so of Q&A, and then we'll have Conni join us also for the final discussion that we'll host on stage. So this time I come equipped with two of these-
The whole gang here.
Uh-
Suzanne and Jean, too, so...
Jacob, I think you had one before. Who?
Thank you. Jacob from SEB. So last week and today, you talked about raising EUR 100 billion in the next fundraising cycle, which is up from the EUR 75 billion in the last round. You did mention that you are looking at new strategies. Could you help us understand what type of strategies you believe you could grow in or where you could take market shares? And a follow-up, on the EUR 100 billion, how large share do you expect to be from the private wealth segment? Do you have any internal targets or anything? Thank you.
I'll start. You want... And, and then you can take it away. I'll start, and then, and Suzanne will, will join me in a second. You know, if you look at the next three-year cycle, and, and that number, which nicely, rounds to 100, is actually existing strategies, the ones that we're just about to launch that you know about, and expansion of, of our flagships across the world, including also in real estate. So, in that number, there's nothing, you know, completely new that's off, off the map. What we also might look at is, you know, variations on a theme. So, so if you think about our Asia flagship, for example, we have a lot of investment opportunities in India.
Could that mean that we might have a separate India sleeve at some point in time? Quite possibly, or in infrastructure. You know, we have a lot of climate investments, so we're starting an infrastructure transition strategy. We also have a lot of digital infrastructure that we can invest in. There's a lot of capital, might have structures around that. We might do more like EdgeConneX that Alex and I talked about. So it's really... There are many dimensions to how we may grow. But in that number, it's more what you probably should expect or-
Yeah.
You can go on.
I think that's well said on the, it's kind of what's on the table or what's in our sights in the near term. And then, I guess to go to your second question, today, our contribution to our, our capital base from individual investors is just below 10%. And, what I would characterize that as is, you know, families that EQT has done business with over the course of our 30-year history. We have bought and sold many businesses from families, and they've gotten to know us and wanted to invest with us as a result. So that's primarily through our drawdown vehicles, and I think we've shared in the past that, our ambition is to take that asset contribution from the, call it 10-ish%, up towards 15%-20% over time.
It'll take us a little while to get there, but as we think about, you know, how to define success, that is our, call it, near to medium-term objective.
Hey, great. It's Oliver Carruthers from Goldman Sachs. So, question for you, Suzanne. So you had that amazing stat, right? I think it was two-thirds of your investors are invested in just one fund.
Right.
So, could you help us maybe understand how harmonized is the fundraising process across all of EQT strategies today? And, you know, what are you doing to address that two-thirds number? And then maybe, you know, are there any internal metrics or targets in terms of where you think that number could glide to over time, and what you're implementing to get there?
Sure, yeah. So it's a great question. I think the way you should understand that two-thirds number, so call it roughly 800 clients investing with us in a single strategy, is it's a reflection of our recent growth, right? We had 430 clients at the time the firm went public, and we had a much narrower set of strategies then. Now we have a broadened set of strategies, and a number of those clients have really become clients in the last year or two years or three years. In my experience, what happens with a client is, you work hard to form the relationship.
It may take, you know, let's say, a year or so to onboard them, and then they wanna watch you and make sure that you're delivering on what you've talked about and acting according to what they expect. And presuming you do, you preserve that license to operate with them, then they're quite open to the next thing, particularly if performance is very strong. So to go to the heart of your question about how integrated are we, we have one integrated capital-raising team. We have specialization within that team, and I expect that as our strategies grow, we will continue to enhance the degree of specialization that we have. But it's really a common team that works very collaboratively together, and we are measuring all the time.
We have KPIs to really track our progress, to track our, you know, our external focus, our meeting count, our number of opportunities that we're introducing to specific clients, and make sure that we're making headway on that, on that cross-sell. Now, it's also an interesting thing to track because when you're still growing very rapidly, growing the aggregate number of clients, every year, you're adding new ones into that count. So you may be cross-selling very effectively, but if you're also adding new clients, then it takes a little while to move the meter on that, but that's a good problem to have. We, you know, we love the idea of continuing to add new clients to the franchise as well.
Great, thank you. Michael Cyprys, Morgan Stanley. Just a question on the Motherbrain side. I appreciated all those use cases that you walked through. Just curious if you could maybe elaborate on what's changed now versus, say, two years ago, and what has changed versus, say, eight years ago. Clearly, there was a lot of hype, or maybe not, 12 months ago in the marketplace around AI. Just curious how you're seeing the sort of reality versus the hype. Where do you see, if anything, is overhyped, and how do you sort of think about the opportunity set as you look forward from here? What's gonna change as you look out next five years?
Yes.
Sorry, there's a lot there.
Yeah, I know, and there's actually, if you're interested, I would recommend the CEO of Anthropic just wrote, like, a massive tome about this, which is really interesting, with lots of very granular observations and predictions. I'm not trying to deflect the question. I would say if I look at today versus two years ago, so let's take the hype thing first. What I said is what I believe. I can already see directly and indirectly how AI is starting to change the way people think about work, plan work, execute work. I really do think that conversation about, you know, again, I...
There's also, like, to reel off stats, but there was a recent, I think it was Goldman Sachs report on AI, and they talked about the workforce, and they said, basically, 100% of the workforce is gonna have at least 50% of what they do affected either directly or indirectly by AI in the next 10 years. I believe that that is true. However, we know that the future. We talk about, one of our kind of internal sayings in the digital and data team, is that the, "The future is already here, it's just not evenly distributed." And so, I believe that there will be a massive advantage to people who understand, appreciate, and embrace what is coming, and prepare. So, that is my view.
I have, I think, lots of proof points that make me feel confident that we're heading in that direction. What's different between now and two years ago? I think the crest of the like, "This is just gonna be magic, and we can do nothing, and great things will happen," like, that wave has passed. If you haven't been eating your vegetables, taking care of your data, building infrastructure, like, incorporating this kind of work into the way that you work, then it's unlikely that you're gonna be able to wave a magic wand and have magical things happen. Generative AI has a tremendous potential to summarize, synthesize, aggregate information, but you have to point it at things that are real in order to get real results.
So when I think about our journey at EQT, you know, we started doing this. We had a totally different, like, different engineering approach. We had a different focus area. We were doing, like, really heavy machine learning, modeling, company growth trajectories, et cetera, none of which is really that relevant for what we're doing today. But what we started doing then is building a proprietary internal data set, which already is structured because it follows the structure of the organization. And so now we are finally, and I'm really happy because I've been talking about all the great things that we're going to be able to do, and now we're finally in a place where the value of that database is just exponentially higher because this technology can go and find those patterns through text, through numbers, and surface them.
So, like, the in our own world, the kind of potential to performance gap, I think, is shrinking a lot. Versus eight years ago, I mean, we've had massive changes on the team in terms of we don't really build a lot of models now. I mean, that is originally what the team was constructed to do. Now, it's about applying the right model to the right use case, understanding what you're trying to accomplish, having a very clear view of what success will look like and how you'll measure it, and these are things that we've learned, I would say, over the last eight years.
Thank you for the presentations. This question actually is for Alex. I was hoping if maybe you could provide a bit more color on the exit strategies associated with the infrastructure funds. Just curious if comparison to the private capital funds, if there's any differentiation between how long you tend to hold the investments within infrastructure, given that they tend to be longer-lived assets that some investors do tend to hold for a bit longer. Appreciate any insight. Thanks.
Yeah, I think the approach is very similar across all the business lines. I think Chris has said it once today, that value creation mindset, that entrepreneurial mindset, sort of permeates throughout all the business lines, and so that's really the same way that we operate in the infrastructure business as well. We have many of the same paths to exit as on the private equity side, and it's more about: Have we executed our plan? Have we created the value that we want, and is there opportunity to create incremental value? We have the benefit that they're longer-lived assets, potentially, from a mindset standpoint, so investors are accepting of the idea of holding them for a longer period of time. And if we find incremental ways to create value, then that's what we wanna do.
Hi, Toussaint Campbell, reporter at With Intelligence. I guess just looking at... And this is probably more focused for Henry. Looking at private equity, real estate-type strategies and REITs, are there any sectors or geographic focuses you're looking at? And I guess, how are you evaluating those, return profiles, given the distress in the market, at the moment and the direction of interest rates? And just then to follow that up, how are you looking at introducing that to those private wealth channels?
Sure. So, I don't know if it's on. To address the first question about geography, you know, again, we're a decentralized operating model, and we do it across the globe. So, you know, we have a very established flagship business in the U.S. in both our flagship business in logistics and growing and living in Europe, and we're growing in Asia. As we, you know, think about the risk-return spectrum, you know, we have a value-add profile or value-add fund in each region that is adding value through development, vacancy risk, short-term leases, and, you know, increasing NOI through those real estate-level, property-level activities.
We also have a core plus fund, and when you think about your question as it relates to relative opportunities and what's going in the market, the market today, it's a pretty unique time. We're finally seeing, you know, distress in the marketplace, and the way I define distress is that people actually have a need to sell. So we're seeing, whether it be open-ended core funds with redemption queues, we're seeing maturity issues, and recapitalization issues. That's leading people to say, "Okay, I need to sell," and the, you know, the relative value really makes a lot of sense across the platform. At the most core end of the platform is the EQRT, the non-traded REIT, where, again, we're using our property-level people to evaluate which even core buildings are the best to buy.
When you look at the local nuances of each building, we're not just looking at the return profile and saying, "Oh, it's a six yield, and that's compelling." It's really about what is the real estate? Are you getting a six yield because it's a really high above market rent and a very specialized building, or is it a six yield, and if you ever lose the tenant, it's very replaceable? So we're always asking ourselves that question at a very granular level, which is no matter how good the credit is, no matter how long the lease is, do we wanna get this building back, and can we replace the revenue, and can we do so without incurring a tremendous amount of re-leasing costs?
Anyway, when we look across the platform, we think we compete in core, core plus, and value add, and we do it across geographies and product type.
This is for Suzanne.
Thank you.
Could you spend a second and just talk about kinda capital formation in infrastructure? You know, it's a very hot asset class from a high-level perspective. It's also an asset class where there's not a lot of return of capital. So, you know, typically, you raise a fund, you know, every four or five years, and 60% of it is money you've given back to people, but infrastructure doesn't have as much of a fast turnover, and there's people are raising a lot of money around it. You guys have kind of Active Core, transition now, and the flagship, and I'm kinda curious, as you look over the next five years, do you see the kinda capital formation around the space matching the hype?
Where do you sorta see what strategies do you sorta see taking off? Do you see huge opportunity for digital strategies from a capital perspective? You know, where do you what sort of strategies do you see all the capital forming around in the space?
Yeah, those are great questions. I'll, maybe I'll start, and Alex may have things to add.
Hopefully, my presentation gave you my view on where it's going. I think there's hype.
I think-
Go ahead.
No. Well, you-
I was just gonna say, hopefully, my presentation laid out what I view as the opportunity set there, and I don't think sort of the way you phrased the question, I don't think there actually is hype. I think it's real demand-driven growth for infrastructure assets, and infrastructure's an interesting... I'm not gonna go too long, I promise. Infrastructure as an asset class is an interesting thing because you don't just have the opportunity to focus on commercial excellence, operational excellence. There's fundamental investment need that exists within these companies and within the industries that these companies are operating in. So it's a very unique opportunity to really deploy capital across the entire asset class. Sorry.
Well, this is actually a great test 'cause I missed Alex's presentation. So, I don't really know what he said, but I think I share the same view that I don't think it's hype. I think there's a few factors that will contribute to a strong capital-raising profile for infrastructure. One is that generally, investors are either below their targets to infrastructure, or maybe they're at their target. But unlike private equity, where there have been investors who've been over-allocated over the last couple of years, and they're having to manage that exposure, and in some cases, move it back, infrastructure is still an area that people are growing into.
It's, it's even an asset class that's not fully present in many portfolios, and so you have whole swaths of investors that are massively under-allocated if you step back and say, "Where, where should this sit in an investor portfolio?" And, the individual investor market is one example of that, and then, when I think about the characteristics of infrastructure, it often has a yield component, not in every strategy within infrastructure, but in many infrastructure-related strategies, it has both a yield component and a growth component.
And so if I look at that the world and think about investors in maybe a less high-returning macro environment, Jean referenced that at one point in his comments. I think it's the combination of yield and growth as a way to continue to add to one's portfolio but do so in a risk-adjusted way that's pretty thoughtful. It has a lot of natural appeal, and that's before you even get to the points that Alex made around the need for private capital, the compelling growth characteristics of areas like digital infrastructure, where we've really excelled, and so we have a lot to be excited about. I'd also say that about 60% of capital in infrastructure historically has gone to the core, core plus space. That's an area where we're really in the very early innings.
In the marketplace, we're probably best known for our strength in value add infrastructure, where we're one of the highest-performing managers, and so we wanna continue to lean into that expectation of delivering strong performance and, you know, grow the value add franchise but also extend our reach into transition, as an example, and then participate in the growth, the continued growth in the core space. So we're super excited, and we have a great team that people will wanna partner with.
Thank you, everybody, for your questions. Suzanne is super excited, and I'm super excited to introduce Conni and Dani Burger, who will join us on stage, and for a fireside chat, and then we will invite you all for lunch, and would love to continue these discussions and questions and challenges from you all. Thank you.
Thank you.
Thank you.
Hi, everyone. I'm so pleased to be having this conversation right now. Thank you, Conni, so much for sitting down with me on your Capital Markets Day.
My pleasure.
So I think we need to just take a second and sort of reflect where we've been. Not only is it your Capital Markets Day, this year also marks your 30-year anniversary since co-founding EQT. Since then, you've had a tremendous amount of growth, nearly EUR 250 billion in assets under management. 30 years ago, did you ever have any idea that this is where you would be today?
Yes. Of course not. Not a clue. We didn't even know what to do, actually, so
So in this era of exponential growth, as you see it, has this not just for EQT, but the industry, have you had that period of exponential growth, or is there still more to come?
I think the industry is changing a lot. We are growing because we're moving our attention into other sectors as an industry.
Mm.
If you take the asset that we have invested and keep investing in private equity, that growth is pretty much sort of as it has been. But what has happened is that people invest in so many other things, that is not private equity, it's asset management, and that is why the growth has been so exponential. And it will reach a point where the regulator says that, "Mm, maybe it needs to regulate this little loan business." So those things will come to impact what the industry in general is doing going forward.
When it comes to EQT's growth in those different asset classes, you have done acquisitions, you have asset classes like that. Real estate is a fantastic example, but at the same time, you sold off your credit business, and this is something other industry players have seen growth in. Is it for concern of that regulation? Is it for something else? How do you grow without that sort of powerhouse, that, for example, Blackstone saying recently that it's become their biggest asset class?
Yeah. No, we are maybe different in the way we think about what we're here to do. We are owners of companies. We buy companies. We don't buy paper. So we buy companies to care for companies and to create value by developing those companies. That's our mantra, that's our soul. We had the credit business, but it was so annoying sitting there looking at what happened, and you were completely unable to impact or do anything.
Yeah.
Of course, we can have a credit business if it facilitates the other businesses.
Right.
But as a business in itself, we are not a lender, we're owners of companies.
There's some things that you've done that are contrarian, this being one of them, listing in Sweden when the others are in America. Is there a value to being contrarian? Is this on purpose?
Ooh. Maybe. I haven't thought of it that way. We have done what we have felt was the right thing for us to do.
Mm.
A lot of the value of EQT is our culture and our basic values, and they are very much grounded in where we come from. We are a Scandinavian firm. We care for Scandinavian basic values. Most of us are sort of seen as socialists, but we're also capitalists. Those kinds of things is very, maybe, unique.
Mm.
It's not so that we have chosen them. It's just that we had them, and we thought they were very beneficial for us, and we can leverage them to be a good employer, to be a good magnet for talent, also to be a good partner for everybody. Because the way we think about things, that whatever we do, wherever we do it, we do it as partners with others. Could be investors, could be sellers of companies, could be management teams, could be basically anything. Because we are not strong enough coming from a small country in the northern part of Europe to go out and tell people what to do. We need to listen, we need to reflect, we need to find ways to collaborate and work with others as partners.
It's sort of part of our DNA rather than a choice for the reason of the choice.
So being a Scandinavian company is part of your DNA. Can I ask you why we're here in New York today then?
Yeah. Because U.S. is one of our biggest market opportunities, both in terms of, like we see it today, with shareholders to buy our stock, but also to invest in and to get funding from.
Mm.
We like to be everywhere. We like to be in the U.S., we like to be in Europe, we like to be in Asia. We think for us, the opportunity we have in the U.S. and in Asia is so interesting and so attractive for us, so we must do whatever we can to exploit them. Europe is pretty much of our home turf.
Well, we also heard from your CFO earlier, who moved here about a month ago. Do you see your DNA as becoming more American?
Well, we hopefully would be a big cocktail of everything. You know, we have like close to 100 nationalities in EQT.
Mm.
Do we see it as a problem? No, we see it as an asset, because that makes us understand others more, and be a bit smarter than the rest that is maybe more monolithic in their way of thinking.
So in that idea of being smarter than the rest, and in the history of zigging when others are zagging, is there anything else that this industry is doing now that you wanna take the opposite tack, that you see others doing, that you say, "This is not our DNA, we wanna move away from that?
Yeah, I don't really have much views on what others are doing. I observe what they're doing and then I try to figure out together with the team around me what we should be doing.
Mm.
And I think we should be doing what we have been doing, because it's been pretty, pretty, pretty okay. Worked out fine, so why not continue?
What about listing in the U.S.? Would you ever do something like that, a cross-listing?
I think cross-listing was something that we did in the 1980s. This multiple arbitrage and, you know, it normally works for a while-
Mm-hmm.
but, you know, if finance is like nature, the water finds its way. And
It goes on.
Yeah.
In terms of... I know you pay attention to what others are doing. I understand you don't want to quite comment on them, but you and your American competitors, the criticism of often lobbed at the American competitors is that they have just turned to be asset gatherers, that they're growing in size, and that's what's most important for them, and in this way, they kind of become a factory. I wonder if that's a fair criticism.
The share price does seem to do well, so some people likes it. I think that everybody have to do what they think is the right thing for them. For us, it's not to go in that direction, at least not right now. Maybe in five, 10 years it might be, but now it's not. There's so much more we can do in being honest to what we think we're good at, being owners of companies.
Can I just ask, what sort of is the driving force behind that? I mean, if it's good for the share price-
Mm
... and you can retain some of your DNA, why not kind of go into asset gathering mode?
Because I think what you should. My conviction is that you should do what you think and are convinced that you're good at.
Mm.
Even though you might sort of put lipstick on a pig or do things that cosmetically works for a while, but if you're not able to deliver something that is uniquely better than anybody else can deliver in doing so, it's not a long-term proposition.
Right.
You know, if you grow the assets and you grow it into a sector that might either be commoditized or regulated, will you be able to create outsized return in that sector long term? Probably not.
Mm.
I think if you have a unique ability, continue to work on that and make sure that you are best in doing that.
Mm
... and leverage that, rather than to go into something because now it's the grass is slightly greener there, let's go there for a while.
Mm.
I think that you need to have a long-term view and think about the consequences, the long-term consequences of what you're doing. Just the fact that you can do it, and that it gives you some kind of short-term gain, is not justifying it long term.
One thing that you and your colleagues have been really outspoken about, and I think quite good on, is where this IPO market is going and the sort of limitations of an IPO market with a shrinking public market. You've done some really great work in terms of trying to look at sort of other forms of liquidity for different companies. Not to compare you to any of your competitors, but Mark Rowan, the Apollo CEO, said that public and private markets are converging. Would you agree with that?
Number one, I think the reason for this happening is not is driven not by what people are talking about today. The reason it's happening is the indexation of the public market. The indexation of the public market takes away the role of the public market as a price of capital, and that, in the end, leads to the consequence that we see today. And I think that even BlackRock and Fidelity and the other guys, they're also realizing now that if the whole market is indexed at some point in time, the functionality of the capital market has gone away. So there is a bigger discussion to have around it. What we deal with here is a consequence of that. And I think that, yes, the private market has a better governance model.
The public markets has become less risk. The public market has got less risk appetite-
Mm
... than what is good for an ownership model to build businesses.
So what is EQT's role then, as someone who manages many companies, that in a world that's increasingly private, is less public?
Yeah.
What does your role become then as a steward of these companies?
We can arbitrage between the markets.
Mm-hmm.
We can do P2Ps and keep companies private, or then take them back if the circumstances are right, so we are an owner agent that we find the ways to exploit where market opportunities are, and then, of course, our theme and our way of doing things is that by building better companies, but in doing so, we can arbitrage the market where it's not functioning well. You know, there's a lot of P2Ps. In Britain, people are so concerned because there are so many British companies taken private by private equity. Why? Because their stock market doesn't function.
Mm-hmm.
So we're happy to exploit that, like in all other markets, and if that exploitation leads then to the public market, and maybe it becomes better, that's good for everybody.
Mm.
So we are a owner agent in this, but we are clearly a owner agent, not a paper investment agent, because they have their role to play.
Right. So you talk about P2Ps as one of the big opportunities right now with the transforming market. What else do you see as the big opportunities for growth?
When we have any recession, we have seen the bubbles on the screen. There are so many things happening in the world, so I think the issue is not opportunities.
Mm.
The issue is to be able to do it correct, to build up the competence, and to get the support, and get the support also from the communities in which all these things are happening. I think private equity still has a little of a legacy of a bad thing, especially in Europe. I see some of it in the U.S. as well, where we are seen as very aggressive, very greedy, we don't really care for the consequence of what we do, and some of those comments are absolutely correct, but so that's a challenge also to make sure that we are seen by the communities in which we operate as a good force, as a good owner-
Yeah
... because that will justify us, that will facilitate us doing more. So I think those areas are more important for me to work on, rather than to care for what competition is doing.
Right. I mean, and so this just comes around, back around. I hate to bring it up again, but to the issue of regulation, if there are concerns about bad actors. I mean, is this a big risk for this industry?
Absolutely.
-more regulation?
Absolutely.
What does that look like?
Well, there is sort of lot of discussions about, we are consolidating certain industries.
Mm-hmm
... and taking away competition. Typical FTC thing, and they should be, they should be looking at it, of course. They, they're doing their job. But we should be sensitive, and when we do these kinds of things, we should not sort of misuse the power we have. And you have case after case after case where we have done so, and that's also part of the transformation that we are part of. But we should be a bit more sensitive, I think, to us going too far too fast.
Mm.
because it will create a negative connotation around this industry, completely unnecessarily, because there's no reason why it should be that way.
I could argue that it's gone pretty far, pretty fast-
Yeah
... already.
Yeah, and it's. There's... I don't really see any turn in sight.
Mm.
That's pretty sad.
That is. Shall we talk about something a little bit more... maybe not more joyful?
Mm.
But I do wanna ask about this current environment, because again, 30 years you've invested through some different cycles. There's gonna be young people coming up in this industry who haven't invested in different cycles. There are people who've never seen high interest rates before, and they've never seen what at least seems to now be a cutting cycle and embarking in a different interest rate.
Mm.
I wonder what you think of the preparedness for this industry as we kind of waffle between expectations of cuts, of easing, of potentially more tightening, of potentially more inflation, just this very volatile macro environment. How prepared is it, and how do you see sort of EQT navigating that macro environment?
I think the macro risks we have been dealing with all the time.
Mm.
But, you know, it's always so that when you are in something, what you feel, it's there now, it's completely new, it's scary, it's risky. But looking back to the 30 years we have been operating, we have been through a lot of different things.
Mm.
We had the pandemic not too many years ago. Everybody thought the world was supposed to go, go out of business, you know? We managed that. We're here now. So I think that the cyclicality and the overshooting and the stupid thing with no interest rates and with the correction back to some kind of normal state, I think those things we can manage. I think the risk that I'm most concerned about are the geopolitical risks right now-
Mm
... because that's, you can easily paint a very negative geopolitical scenario. And in such a scenario where the whole logic for trade, for international cooperation, if that goes away, goes back to where we came from, those risks, I would say, is more severe and difficult for us to manage than all the other things. I think we can manage all the other things.
The industry's gone through it before. Ukraine, Russia, is a great example, especially in-
Yeah
... Russia. Do you think private equity is better capable of those large disruptions, of handling them now, or still not?
I think we have learned from previous years. I'm less concerned about young people haven't experienced cycles because there is enough many old farts around that can guide them.
Mm.
We can attract really good people, and that is what it all boils down to in the end, to be able to attract the best talent, and I think we can.
Mm.
As long as our reputation, to go back to what we discussed before-
Right
... doesn't get too bad. But for us, for EQT, you know, the key, the most important war for us is the war of talent.
Mm.
If we can win the war of talent, we would clearly be here to succeed. And therefore, we are so concerned about our name, our reputation of what we do, our values that we all the time uses to make sure that whoever works for us is doing that in a fair, respectful, and transparent manner.
Mm
... which is maybe not what the industry is known for, but for us, this is religion.
I also wanna ask you about your name, your reputation.
Yeah.
Some of your competitors, I won't name names here, but they've struggled with the idea of succession, of when a co-founder becomes a chair, of how much they interact with people, if they micromanage, if they don't. I wonder how you see that balance, how you strike that balance of still being present at EQT, but not being sort of the co-founder, the chair, who's ever present and doesn't let people operate on their own?
Mm-hmm. You should ask them. Not me.
Come on up.
No, I think I am smart enough to figure out that I cannot do everything, and if I try to micromanage and check and tell everybody what to do all the time, you know, it wouldn't work. So I think the success of EQT is a proof that we have a different philosophy. And we come from a place with very few people having operating global empires of industrial companies, so it's part of our DNA a bit as well.
Mm.
Because we cannot sit in Stockholm and tell what the people should do in São Paulo and in Sydney. You know, they need to do their things there. But we need to set up a framework within which they can operate and feel at ease and confident to operate there.
Mm.
And we need to assist them to make sure that if they do something that is outside that framework, and that's not only a financial framework, that's also a behavior framework, then we need to figure that out and go in and take action, but allow them to be empowered and do the business locally. That is, and I think I'm a bit lazy as well, so it's.
If it works, it works.
It is.
Okay, Conni, I have to squeeze just one more in. We have to talk about ABBA, I think-
Yeah
... before we get off the stage. So you, of course, have Poph ouse, ABBA Voyage. I was just telling Conni I haven't been there, but I've heard it's amazing, so of course recommend anyone to go see it. Just on a quick note, I mean, how do you see... This was a really hot asset class, especially during the pandemic. How do you just see the evolution of music rights?
The journey has just started.
Anything else?
No. Well, it's driven by logic-
Where does the journey go?
It's driven by logic. It's driven by technology.
Yeah.
You know, when you do something with the music catalog, with the help of the streaming data, you get instant data of exactly what happens with the use of your product.
Mm
... without you paying for it, so it's a global system, and it scales in a nanosecond, and it doesn't cost anything because Spotify and Apple and Amazon is making that to happen for us.
Mm.
It just started. Then you have, if you add AI to it, you can turbocharge it. So it's a super interesting industry where there is so many opportunities, and it's been a industry managed by a bunch of lawyers, basically, and maybe unethical managers here and there. We have seen one big case now in the U.S. So it's a super interesting industry with good underlying growth that will be transformed with the help of technology.
All right, well, you're lucky I didn't get time to ask how many workers at EQT AI is gonna replace. I know you mentioned AI. Conni, thank you so much.
Thank you.
Everyone, please join me.
Thank you.
Thank you.