Welcome, everybody. Welcome to The Ned, welcome to EQT, welcome to our Value Creation Day. Today, we look forward to showcasing our portfolio companies, some of which might go public one day. We will also look at alpha generation and the AI opportunity from different lenses, the investment opportunity and infrastructure in our early-stage strategies, and the value creation opportunities within private equity. Since we arranged this event one year ago, a lot has happened. We invested more than EUR 30 billion, we returned EUR 38 billion to our clients. We also announced the combination with Coller Capital, a strategic leap into secondaries. Only this week you will have seen that the European Commission announced EQT as its preferred manager for the EUR 5 billion Scaleup Europe Fund. Our Value Creation Day is a way for us to bridge public and private market perspectives.
Over the last three years, more than one-third of our exits have been through public market transactions. EQT has been the most active sponsors in equity capital markets over the last two years, our IPOs have outperformed the MSCI World by 80%. Being public has been a catalyst for growth also for EQT as a company. Since our own IPO in 2019, we have delivered a total return of 390%, outperforming global public markets by more than 275%. We, as EQT, we're committed to creating these win-win situations for clients, for co-investors, and for public market investors. Turning to today's agenda, when we hosted this event last year, we had the pleasure of hosting the CEOs of IFS, Credila, Reworld, IVC Evidensia, WS Audiology, and Nord Anglia. Today, we have four companies across infrastructure and private equity joining us, representing Asia, North America, and Europe.
It's EdgeConneX, Straive, CFC, and Anticimex. These companies span data centers, insurance, pest control, and AI implementation. We will kick off with a presentation by Per, digging into our alpha capabilities and EQT's growth outlook. We then turn to infrastructure and Masoud and Randy from EdgeConneX will discuss how we build the infrastructure required to enable AI. Bert and Hari will talk about value creation and risk management in our global private capital platform, Straive will discuss how it works with blue-chip clients globally to accelerate AI implementation. In our panel this afternoon, Alexandra will challenge us to reflect on value creation opportunities, but also risks related to AI across sectors, including software. Carolina will then share her insights from our AI natives and our Ventures team.
Last but not least, you will hear from Anticimex and CFC before wrapping up with Q&A and discussions with Per and the entire team. Lastly, I hope you will all join us for drinks on the terrace outside later this afternoon for some nice music and continued discussions. With that, I hand it over to you, Per.
Thank you, Olof. A warm welcome also from my side. Great to see so many of you here today. As Olof said it's been a busy and a successful year for us at EQT in an uncertain geopolitical environment during a year when we saw really rapid advancements in AI technology. I think we executed well. We made strong progress against both our business priorities as well as our strategic priorities. As many of you know, we were founded some 30 years ago as part of the Wallenberg sphere of companies. That family heritage has really had a huge impact on how we've thought about building and developing our firm. The vision from the start was to create an institution that would outlive the founders. I'm happy to say that I think we've made excellent progress on that journey.
Today, we're a truly global platform, EUR 330 billion of assets under management, 2,200 employees in more than 25 countries. We've built a very strong, diversified investor base of more than 1,700 clients. From the very start, EQT was founded on the notion of being more than capital. This is, of course, also what we're focusing on today. Our differentiated alpha-generating capabilities, including our value creation capabilities. This is really what enables us to deliver performance for clients also in an environment like the one that we're seeing at the moment. In line with the Wallenberg family's philosophy, having a local presence in our target geographies is actually also an important part of our investment approach. We'll come back to that later. It's also part of how we create attractive returns.
Since inception, we've grown into a multi-strategy platform, one of the largest and most diversified platforms in our industry. Across strategies, we've delivered attractive and consistent performance. As a result, we've been able to significantly grow the fund sizes of our flagship strategies. We've also been able to successfully launch new funds and new strategies. Over time, we've managed to grow and strengthen our institutional client base. We're focused on broadening that client base further, and growing it also into private wealth and into retail. Post our IPO in 2019, we've used our balance sheet and our share-based currency wisely to participate in the consolidation of our sector. By joining forces with Barings and private equity, we've been able to build EQT into the global leader in private equity.
Post the acquisition of LSP, Life Science Partners in 2022, we established EQT as the European leader in early-stage investing across both life sciences and technology. That, of course, positioned us also really in an optimal way to win the Scaleup Europe Fund mandate from the European Commission that was announced earlier this week. I'd say really the ultimate testament to the quality and the breadth of our early-stage platform. We've also used our currency to grow into new asset classes, such as real estate and secondaries. Earlier this year, we announced the acquisition of Coller Capital. Secondaries is a market experiencing structural long-term growth. There's a number of drivers behind this. Firstly, the private markets have become more mature and more complex. Secondly, over the last couple of years, there's also been a lack of distributions in our industry.
Finally, we are also seeing a shift from clients towards a preference for longer-term ownership models. Investors want to find new ways of staying invested in their winners. All of these factors are leading to a growing client demand for solutions in the secondaries market to help investors manage liquidity, rebalance their portfolios, and achieve their long-term strategic objectives. At EQT, we want to be the most attractive strategic counterparty for investors in the private markets, and that is why it is critical for us to have access also to those secondary capabilities. Coller Capital is a global leader in this space, and together, Coller Capital and EQT will build a market-leading secondaries platform. We are off to a good start. The reception from clients, from employees, and from the broader market has really been overwhelmingly positive.
The strategic logic resonates. Coller will also help us actually accelerate our growth in private wealth and in retail. The secondaries product is just a great way for investors to get access to private markets. Business momentum at Coller is strong, and we have said previously that we aim to double fee-related AUM within four years. Over the last 30+ years, we have lived through multiple economic cycles, technology shifts, financial and geopolitical shocks. The dot-com bust, the global financial crisis, the Eurozone debt crisis, a global pandemic, just to name a few. From each crisis and technology shift, we have learned important lessons, and we have come out stronger every single time. At EQT, we cannot predict interest rate movements or the precise timing of an economic downturn, or how valuation multiples will develop over time.
What we do know is that our differentiated approach to sourcing, to future-proofing companies, our active ownership model based on a unique approach to governance and value creation, that is just a very attractive way to earn an attractive return on capital also in uncertain environments and in an uncertain geopolitical environment. To create attractive risk-adjusted returns over time, real alpha outperformance versus the public markets. We have a track record of delivering consistent performance across our four business lines in private capital, infrastructure, real estate, and now also in secondaries. The platform today is offering actually more than 30 distinct investment strategies for clients across the globe. What all of these strategies have in common is that we aim to deliver superior risk-adjusted returns, real alpha.
Over the past 30 years, we have built EQT to be the most attractive platform for talent in the private markets industry, a platform where dealmakers can create attractive returns for investors. Our philosophy is that everything can always be improved everywhere at all times. That is why we also continuously sharpen and invest into our capabilities. Across our active ownership strategies, there are several structural sources of alpha with the help of our setup, combining a global sector-based thematic investment approach with that strong local presence in our target geographies. That is how we source attractive investment opportunities. Often, we actually track these investment opportunities for years, sometimes decades, before we invest. Today, we have the largest investment teams on the ground across Asia and Europe, and we keep on investing into this presence.
For example, in Japan, which is a key growth market for us, here we've added four new partners in recent years, and today we have a team of 23 people on the ground in Tokyo. Over the past decades, we've also invested into our global sector expertise, our pool of buy-in chair and CEO candidates, and of course, also our value creation playbook. Future-proofing companies with the help of our sector-based toolbox, our digital AI capabilities, that's really core to what we do. Another important source of alpha at the fund level is also being smart about which investments that we hold onto for longer, whilst of course, staying disciplined in managing cash flows on behalf of investors for the long term. Staying invested in those one or two winners in every fund has historically had an outsized impact on overall fund performance in many of our flagship funds.
Finally, we really have best-in-class exit and monetization processes including, of course, an industry-leading capital markets team and Magnus Törning is here in the room, so you can talk to him directly about that. Our track record in the industry among public market investors is second to none. Over the past 24 months, we've been the most active private equity firm in the global equity capital markets. We're also driving innovation in our industry to find new ways to monetize investments and also to run with the winners. A great recent example in terms of that innovation that we've been driving in the public markets in terms of sell downs is the IPO of Galderma. In the private markets in terms of how we're staying invested in the winners, is around EdgeConneX, which is the seed investment for our new AI infrastructure strategy.
Just like in really any other industry, also in our industry, the private markets, scale matters. In light of the geopolitical volatility that we're seeing and the pace of change also driven by AI, actually scale today matters more than ever before. Investors in the private markets are reducing their relationships to a fewer number of more strategic partners that can deliver attractive risk-adjusted returns over time, and to firms that can be that real strategic counterparty that can deliver the right solutions for them and help them achieve their strategic portfolio objectives, including, of course, giving them access to attractive co-investments and geographic diversification. We've truly differentiated value creation capabilities. Since inception, more than 80% of our investment returns have been created through operational improvements. Looking at the industry as a whole in 2025, the top 10 funds represented close to 50% of total fundraising volume.
This is up meaningfully compared to the average over the last five years. In this environment, we've been one of the winners. We just closed BPEA IX at the hard cap, the largest pool of capital actually ever raised for the Asia region against a market backdrop of a 12-year low in fundraising volumes for Asia. We also just closed our European Value Add real estate fund at the hard cap in what's been a really challenging market for that asset class. Today, we're the largest private equity firm in the world outside of the U.S. Since our IPO, we've taken significant market share, and there's no other European firm that's in the top five. We see a similar development also in our real assets strategies. For instance, in real estate, our ranking has gone up from number 40 to number 10 today.
We expect the consolidation in our industry to continue and most likely actually in the near to midterm to accelerate. AI, it's the most important investment theme of our generation. We are today in an AI-driven CapEx super cycle based on a massive build-out of data centers, power capabilities, and connectivity. This super cycle is providing highly attractive investment opporturnities for us in our infrastructure business. You will hear later today more about this from Masoud, and also from the CEO of EdgeConneX. New value pools are emerging as the deployment of AI models becomes key. The CEO of Straive will talk more about this later. In order to realize the full potential from AI technology, enterprises will need to rethink workflows entirely. At EQT, we have a very high sense of urgency in our organization to operationalize AI capabilities across all our investments.
Having AI-centric CEOs and management teams is a top priority for us and something that we follow up on in our portfolio review committees. Christian is nodding here, so he can confirm this. We believe that truly integrating AI into business processes can lead to lasting competitive advantages. For the PE industry, we believe that this means that AI is likely to result in a higher dispersion of returns across managers going forward. I say this really with all humility, also given how rapidly the technology is advancing, but if I was asked today to design a private markets platform from scratch to best capture the AI investment opportunity, I would design it very much the way EQT is set up. Today, we're the only scale player in the private markets that has both a Ventures and a Growth strategy.
Out of those funds, we make attractive investments into native AI companies. Carolina, who's heading up our early-stage technology team in the U.S., will tell you more about this and provide some recent examples. Thanks to these early-stage investments, the overall EQT platform also gets access to native AI talent, valuable intelligence, and insights on where the technology is heading. We also allocate capital to AI across our infrastructure, real estate, private capital, and now secondaries business lines. This means we can invest across the entire AI opportunity spectrum, from the physical infrastructure that powers AI to the enterprise software companies that will diffuse AI into larger organizations. Thanks to joining forces with Coller, we're now also in a position to invest into the AI-driven market dislocation that we're seeing in parts of the private markets industry, private credit being a good example.
We combine our global thematic investment approach and AI-first mindset with a strong local presence in our target geographies in all of the countries where we're investing. Being local with locals really helps us position EQT as a preferred buyer, unlock attractive opportunities, and source investments at, relatively speaking, attractive terms. It's taken us more than 30 years to build this presence across Asia and Europe. Today, I really think it's impossible to replicate, at least in the foreseeable future. In Asia and Europe, we have a lasting competitive advantage when it comes to sourcing investments, and that's also a lasting true source of alpha for us. The U.S. is an opportunity for us. It's a growth priority, and we're going to continue to strengthen our presence also in that part of the world. We've been investing into our AI capabilities now for more than a decade.
We launched EQT Ventures and Motherbrain in 2015. Initially, Motherbrain was focused on AI-enabled sourcing for our venture strategy. A couple of years later, we built our in-house digital team focused on supporting portfolio companies with ambitious digital transformation plans and technology adoption. Having access to EQT Ventures, Motherbrain, and our digital team has also made us a better, more well-informed, and early investor into areas such as software technology, digital infrastructure, and now also AI. For instance, we were early investors into the data center theme. We invested into EdgeConneX shortly post the pandemic, when data center demand was actually still driven by cloud computing. We were also an early investor into native AI companies, into Sana, the first 1 billion dollar plus exit of a European-based AI company.
Today, our in-house digital and AI team includes more than 35 data scientists and digital experts supporting our portfolio companies and deal teams in due diligence, implementing ambitious AI transformation plans, and establishing also the relevant external AI partnerships. In addition to our internal capabilities, of course, we make sure that our deal teams and our portfolio companies also have access to the most relevant AI technology providers. We're in constant dialogues with all of the relevant players in the ecosystem, the large language model providers, and also others at the frontier of driving AI transformation. The combination of our internal capabilities, access to the relevant AI partners, but also AI startups and providing board-level training and support puts our deal teams and our portfolio companies in the best possible position to drive value creation.
After the break today, we'll have a panel discussion on how we do this in practice, and you'll also hear specific examples of this from our portfolio company CEOs. Our exit and capital markets capabilities are industry-leading. We have exit and liquidity review committee processes across the entire firm, across all of our business lines. We also constantly work on new ways how we can stay invested in our winners. We're launching new long-hold funds. We're launching new strategies such as the AI Infrastructure Fund, and we're also pursuing private market IPOs. Over the past 30 years, we've built a long-term track record of successful IPOs and an industry-leading in-house capital markets team. This puts us in that enviable position where we can pursue public listings also during tricky market environments, when many of our peers have been or are unable to do so.
Our exit routes are nicely diversified across strategic sales, public market exit, secondary buyouts. We're never dependent on any single route to create liquidity, and we can move quickly when the conditions are the right ones. Thanks to these best-in-class exit capabilities, we've been able to significantly outperform the industry when it comes to distributions. Over the last 12 months, we realized EUR 38 billion for our fund and co-investors. During this time in our equity strategy, we actually realized around 30% of NAV, three times industry average. Today, our key funds, all of them have top quartile DPIs. Thanks to also having had that discipline when it comes to exits, we also have a really young portfolio.
About 70% of portfolio assets have actually been held for less than five years, which means that we can continue to focus on driving value creation in the investments that really matter. Thanks to our investment approach, our ownership model, we keep on building these highly attractive businesses, companies with real scale that often also become global leaders. The four names here on this slide are great examples. These four companies have all become category leaders under our ownership, the result of a systematic, hands-on approach to value creation. At the end of the day, that is what EQT's active ownership strategies are all about, building and developing amazing companies. During the last 12 months, we realized minority stakes in EdgeConneX on behalf of Funds IV and V in the Infra strategies. We launched the AI Infrastructure strategy with EdgeConneX as the seed investment.
We completed the partial monetization of IFS, valuing IFS at approximately EUR 15 billion. In Asia, BPEA VI sold Nord Anglia to a consortium of investors, including BPEA Fund VIII, valuing that company at approximately $15 billion. Last but not least, following the successful IPO in March 2024, we fully exited Galderma in a record-setting transaction. Galderma is really the best possible showcase of how EQT is exceptionally well set up to create attractive risk-adjusted returns across our active ownership strategies. It's that combination of our unique sourcing capabilities, best-in-class sector expertise, our value creation toolbox, and those differentiated capital markets capabilities that really sets us apart. In 2019, together with our co-investors, we acquired Galderma and carved it out from Nestlé. We saw an attractive opportunity to transform an under-managed asset and turn it into a global leader in dermatology.
As part of the investment process, we mobilized our local team on the ground in Switzerland, our global sector team, and our pool of buy-in CEO and chair candidates. Our sector expertise, our track record, our ownership approach, those were all key criteria for Nestlé when they decided to select EQT as the winning bidder following a competitive process. Thanks to that really very strong buy-in CEO, complemented by a high-caliber board, we were also comfortable to underwrite a very ambitious transformation plan, a very ambitious value creation plan. This involved simplifying the organizational structure, freeing up resources to invest in growth. It involved recruiting a new management team with a focus on commercial excellence and accelerating growth. During our ownership, we really transformed Galderma into a global category leader in dermatology. We delivered double-digit annual revenue growth. We increased margins by 5 percentage points.
As a result, EBITDA is forecasted to have tripled between the time of our entry and 2026. This performance was delivered while we were investing significantly in science-based innovation, launching new products. We invested more than 1$ billion in R&D during our ownership. Following the IPO in 2024, Galderma's share price approximately tripled, and the sell-down process involved a number of public market stake sales, including a 20% sale to a strategic buyer, L'Oréal. The premium valuation achieved versus the peer group is, of course, the direct result of EQT creating a better business during our ownership, real alpha. The final $6 billion sell-down is the largest sell-down ever completed by a private equity player in the public markets. In less than 24 months, we sent back $26 billion to our investors, and we generated a capital gain of more than $20 billion.
This is the largest capital gain ever realized from a single investment out of a single fund in the history of private equity. Since our IPO, we've seen significant growth in our assets under management. We've created a much more diversified and well-balanced business mix. We've scaled our flagship funds, we've launched new strategies, we've grown through acquisitions to enter new asset classes, including Coller. As I said earlier, we now have 30 active strategies across our platform, in the years to come, I expect our business to become even more well-diversified as we are growing, relatively speaking, faster in secondaries and in our real estate business. Going forward, we see continued attractive growth opportunities across the platform. In private capital, we still have significant potential to expand in the U.S., to continue to build on our market-leading positions in Asia.
There's also an opportunity to cement our market-leading positions in Europe by also launching a mid-market offering and also to scale our early-stage strategies. We're also really excited about the growth potential that we have in our Riding the Winners strategy, EQT Future. In infrastructure, there's substantial room to grow, really across all of the strategies that we offer, including our value add fund. In this part of our business, the limiting factor is not the opportunity set, it's really access to capital. In our real estate business, we've so far been fairly narrow in our thematic focus. Here we see opportunities to enter new verticals also beyond logistics, including multi-family, student housing, and data centers. In secondaries, we're targeting to double our AUM.
We continue to have good momentum, here short term, in light of that AI-driven market dislocation, there's an opportunity to really also grow the private credit secondary strategy, which is something we're excited about. We also want to launch new products and expand our secondaries offering into new regions, Asia being one example, and into new asset classes, infrastructure and real estate being obvious opportunities. Growing in private wealth remains a top strategic priority for us. We want to continue to broaden, strengthen our investor base, we're going to make the necessary investments to be able to do this. Momentum in private wealth remains encouraging for us, over the last 12 months, we saw approximately EUR 2.6 billion of net inflows, we're in preparations to launch two additional evergreen vehicles this year.
At EQT, we want to continue the journey that we're on to build that most attractive private markets firm of scale that delivers industry-leading performance and solutions for investors. By continuing to be that client-centric platform focused on investors and performance, focused on delivering real alpha, we think that's a differentiated proposition that will also allow us to attract and retain the best people in our industry, both to the investment organization and to our portfolio companies. With that, I hand it over to Masoud.
Thank you, Per. Hi, everyone, also from my side. Thank you for spending the time with us today. I'm Masoud Homayoun. I lead our infrastructure business here at EQT. Been with the firm for 18 years and based in Sweden. There's two topics that I wanted to cover during this short presentation. One is to give you all an update on our infrastructure platform. Per touched on some of the points, go a little bit deeper on what we are doing, what we are seeing, and what our clients are experiencing. Secondly, really the topic for today is to focus on AI and look at AI through the lens of infrastructure as well. I know there's a lot of opportunity for a lot of asset classes. I would argue that the infra opportunity is the most attractive, you judge that at the end.
We started EQT Infrastructure back in 2008, really with two intentions in mind. One was to bring EQT's governance model and EQT's value creation approach to companies to infrastructure. These are not infrastructure assets like a road or a bridge. These are infrastructure companies. The second one was to leverage the entire industrial network that we have at EQT, had at the time, and currently have on infrastructure companies. Really also leverage the wider Wallenberg network of companies and the competencies that they have. These are companies such as ABB, who has built and operated a fair share of the world's mobility and power infrastructure. Companies such as Ericsson, who've built and operated a fair share of the world's communication infrastructure. That was the original intent. Now, since then, we've now built up a global platform.
We're almost 160 investment professionals solely focused on infrastructure and on the ground in Europe, North America, and OECD Asia Pacific. What started as the first fund was a EUR 1 billion fund. We now have roughly EUR 40 billion of fee-paying assets under management and a total of EUR 80 billion under the portfolio. Obviously a prerequisite for that has been very strong, consistent returns that we've been able to deliver to the clients through that value creation in this space. We started in the orange here, as always with EQT, the orange with value add strategy, really applying operational improvements and growth to established infrastructure companies. Over the last three and a half, four years now, we have launched three additional fund strategies within the infrastructure platform alone.
On the right-hand side, you see the Active Core Infrastructure strategy, where we are investing in and partnering with infrastructure companies that are even more de-risked, long-dated, and provide a yield to ultimately our clients. On the left-hand side, you see transition infrastructure, where we are teaming up and investing in companies that are earlier in their maturity, really poised for growth of infrastructure. That growth is very much capital intensive, once contracted, could be very attractive.
Even more recently, as Per alluded, we have this year launched our AI infrastructure strategy. I'll come back to that in just a second, what our intent is with that strategy. What we have now with these four different fund strategies is the ability to participate and invest in infrastructure companies across their maturity level, from less mature, higher growth infrastructure companies to very mature yielding infrastructure companies. From smallest scale to very large scale infrastructure companies.
Added to that, two out of the four fund strategies are now open-ended, which gives an added benefit to those clients of ours who actually prefer that way of investing. What is common theme along all of these fund strategies is that we are investing those in very essential downside protected infrastructure companies, but where there is this operational value creation potential and growth potential. I just wanted to put this up on stage just so you see and get a feel for what kind of businesses we are actually investing in. Just to run them very quickly, Reworld, one of the largest energy services companies in the U.S. They have 90 of these facilities taking care of waste in the U.S.
If you take the entire infrastructure portfolio, we are processing some 50 million tons of waste annually across the globe. Second, EdgeConneX, and we have the great pleasure of having Randy here today so I won't steal his thunder, but one of the largest data centers, developers, owners, and operators around the world teaming up with hyperscalers. Nordic Ferry Infrastructure, one of the largest transportation companies in the Nordics transporting people between countries and within countries with ferries. Again, if you look at the entire infrastructure portfolio, we have more than 300 million passengers annually in the transportation companies. Then lastly, Statera, flexible generation power business. As we're moving to a renewable energy system, the need for energy storage and flexible generation becomes even more critical. Statera owns, develops, and operates the largest battery storage facility in Europe, 25 miles east of where we are sitting today.
This gives you a sense of the type of investments we've done and continue to do in the infrastructure space. What's a common theme across all of these is they are sourced and vetted in our sector teams where we go extremely deep on understanding what's happening in each sector and having a value creation toolbox for each sector, locally sourced on the ground where we want to find those opportunities. Then we really leverage the EQT model of having industrial advisors with operating experience who've operated, run, founded these type of businesses in our companies. Then basically applying all the centers of excellence we have, whether it's digital procurement, operational improvement, financial markets, et cetera, across every single portfolio company. That's really our model to infrastructure investing.
The outcomes of that so far has been. Now I've put up the last 12-month numbers for the infrastructure portfolio, 11% top line growth, 16% bottom line or EBITDA. There's the operational improvement focus that we have, and then the returns that Per already shared, which has been very consistent and strong for our clients. Switching to the opportunity we see. I think right now, at least we are experiencing an opportunity set which is truly unprecedented. We have at least not seen it during our roughly 20-year history within EQT. There's two areas I would really call out. One is the energy opportunity. Because of rising energy demand, the retirement of legacy energy power production and power transmission, the energy transition, this is now equating to a trillion-dollar-sized investment opportunity just in the next four or five years.
On top of that, we obviously see what's going on in the world. Energy security has become an added accelerator of the investment need in energy. Equally or even larger is the AI development, which has its foundation in infrastructure. That, again, is a multi-trillion-dollar investment opportunity which goes across data centers, connectivity, as well as power, which is going to be the limiting factor in terms of the growth. To show that a little bit in numbers, there are many people who project or have their own estimate of the future, but just so you understand the direction and the scaling of this, within just the next four to five years, the expectation is a two to four times the data center capacity that is already in the ground. That's a massive build-out of data center capacity.
Equally, the limiting factor right now is access to power and large load power. Therefore, we're going to see a massive build-out and demand need for power in those locations that can serve as data center locations. By some estimates, more than 1,300 terawatt-hours of power demand just from the data center industry. Maybe that number doesn't tell you a lot, but just to put it in perspective, 1,300 terawatt-hours is basically the equivalent of the power consumption of the U.K., electricity consumption of the U.K., Germany, and France put together. That's the scale we're talking about here and the investment opportunity. With this backdrop of significant sort of AI power demand growth, we think that we're actually very uniquely positioned to capture that. Three main reasons. Number one is our presence in the data center market.
I won't steal Randy's thunder here, but there's clearly a few and a handful of operators that have the scale to be true partners to the hyperscalers of the world. We have the benefit of having teamed up with EdgeConneX to do that with more than 90 data centers already in place and many more to come. Secondly, we're one of the largest investors in fiber connectivity around the world, and that increasingly is becoming a key topic for connecting AI factories and data centers. Just to give you a recent example, one of our fiber businesses just contracted with a single AI customer a contract for connectivity worth $ 5 billion. A single contract of connectivity.
Thirdly is power and energy, where we have already a significant presence through the companies you see here, but more importantly, a significant pipeline of new energy opportunities, mostly renewable, to power that growth. That pipeline right now is roughly 100 gigawatts worth of power. Again, to put that a little bit in perspective of what 100 gigawatt is, that's roughly two times the total energy capacity of Sweden. The combination of these allows us to do and be two things. One is, I think we're actually one of the very few investors that has a global portfolio across all of the foundational layers for AI. That in and of itself is unique. What is equally unique, and you'll hear more from Randy about this, is we are offering that in an integrated solution to the hyperscalers. Very few, if any, are actually doing that.
By doing that, we can offer them three things. One is, it can be quicker to deploy their AI, which is right now a race and is critical for them. Secondly, it can be more cost-effective because we can come with a total solution. Thirdly, it can be sustainable because the bulk of those 100 gigawatts is renewable power. That's also the reason why we decided to, in order to give our clients even more access to this opportunity in an attractive risk-adjusted way, was to launch the AI infrastructure strategy. As mentioned, that is seeded with EdgeConneX, and you'll hear that in just a second.
The intent is to go and capture that opportunity that we just talked about, but do that in a sensible way, in a contracted way, and have real attractive returns in contracted cash flows as opposed to speculative cash flows. The seed investment for that is EdgeConneX. Per already mentioned it. We partnered with Randy, who's a co-founder and the CEO of that business, back in 2020. I think back then, the key thesis and the growth we were experiencing was the migration from premise to the cloud. Obviously, that continues first and foremost. Equally, that has now been accelerated with the AI deployments.
I think, from 2020 up until now, basically the contracted capacity that EdgeConneX has executed, I think during these years, have almost 20-folded, if I'm correct there, Randy, in just this period of time, and we are very excited that it will be continuing to grow going forward as well. I think two takeaways from my presentation here. One is, the infrastructure opportunity right now is quite unprecedented, and I think we are exceptionally well positioned to do that. Secondly, the AI opportunity is most exciting in infrastructure. Please remember that. With that, Randy, please.
I'm Randy Brouckman. [audio distortion] . Perfect. All right, we'll save my voice. Anyway, thank you. It's my honor and my privilege to speak to you today. The kind words from Per and Masoud, a lot to live up to. I hope to do a few things today. I hope to show you the opportunity that we're seeing around the AI infrastructure build-out, but also show you how a lot of the words that Per and Masoud were using, we've been able to put in action here at EdgeConneX to deliver the results we've been up to. Let me start with another view of some of the numbers you saw from Masoud, and the ones that we look at internally.
What you see on the left-hand side of this chart is, quite frankly, the growth in data center infrastructure capacity that's required. This is real. What I did was try to show you how to think of it, think of it in three Tiers. The green is the cloud continuing to grow. Masoud said it. It's a big business that continues to grow. If enterprises aren't in the cloud, they're not going to be enabled for AI. Kind of the way to think about that. If you don't get control of your data, you're not going to do a very good job of being able to run AI. AI and data, very synonymous. Clean data, required for great AI. The middle column, the middle blue, if you will, the more royal blue of the blues, is AI inference. Probably another big message.
You hear about large language models and training and stargates and mega campuses and all the rest of it. These are real. These are important. It's important to note that inference has overtaken training. As we sit here today, inference is overtaking it. As we sit here in Europe, that's particularly interesting because we're doing gigawatts of capacity in Europe and in the U.S. and in Asia. We'll get to that in a moment. In Europe this year, we saw from almost nothing in terms of large-scale AI deployment last year or the year before, for certain. Like it was a blip. To gigawatts being ordered in a week. We had our biggest year in a week just recently with Europe driving it on inference. Inference isn't just the chatty part of AI. Yep, that's part of it. Inference also is enterprise AI.
It's uploading that great data from the cloud, creating a model where you can have your private data interacting with your employees or driving and automating operations together with the large language models. It's agentic. It's the models around innovator models and now what they call expert models. All of that gets pulled into what you see here as inference. These are big darn campuses, by the way. These are hundreds of megawatts, some of these. Half gigawatts is what's required to do this at scale and serve things like Europe. You don't need thousands and thousands of them, but you do need them concentrated. Think of it as your brain, all of these things have to be somewhat compressed and connected because the signals are coming through. It's pattern matching. It's kind of synapses firing. It looks a little bit like that neural network.
That's why you end up seeing big campuses. Does training continue to grow and will it continue to grow? Absolutely. Is it ever important and will it help drive the foundational models? You bet. Right now there's five or six models in the U.S., one primary one in China. We'll see what happens in Europe. Those are going to continue to go and grow. There'll be a few emerging ones. There'll be some that will make it, some that won't. I think we're starting to get a clear view on how to separate those. On the right, I tried to show you where we're seeing it today. Now, this is a prediction of what's coming. We'll see how that really ends. Two flavors. You're obviously seeing a lot happening in the U.S. That's because that's where the training is happening. Separate training from inference.
Inference is going to happen everywhere. Training probably will be concentrated. It is tough in Europe to find the power and the land and the regulatory environment and the zoning environment to pull off giant training. Love it or hate that statement, that's the world that we lived in up until very recently. Hard truth. In the United States, little bit more buy-in and a little bit earlier timeline, and you see what that drives and what's going on there. Never count Asia out. It's coming, and it's coming big. It's important to note that this infrastructure is being built by the large hyperscale companies. When I say hyperscales, let's not kid ourselves, we all know who we're talking about. Microsoft, Google, Amazon, Oracle, Meta, ByteDance. You might say Tencent, Alibaba. Then these that are merging hyperscalers.
We'll see where these end, things like an Anthropic or things like an OpenAI. We don't count those as hyperscalers today, I think you'll see a new class of them emerging. We're seeing growth from folks directly in the hyperscale on the right-hand chart, as well as folks like us. It takes both of those ecosystems in order to deliver on this huge demand. Put these numbers in perspective. The U.S. hyperscalers alone, Microsoft, Google, Amazon, Oracle, are going to be spending nearly $1 trillion this year of CapEx on most of it on AI going forward. This year, $1 trillion. I think Per's number was low, to be perfectly honest with you, in $4 trillion. It was $1 trillion this year. I anticipate next year will be the same, if not slightly more. It's up, what, 30% this year from last.
I do think it hits a consistency level at some point, a couple few years out, consistency level in that kind of a magnitude. We've never seen this. We say we've never seen this. I've had the good fortune in my life to live through the PC, pretty major revolution, the internet, mobile phones, and I actually think this is the next one. Four interesting things that I've had, in my professional career, the opportunity to live through. Hopefully, this one, I totally nail it on living through it. I did okay on the other three, this one, I intend to be at the forefront. I put this slide up for a few reasons. Number one, to tell you it's not easy. If it were easy, there'd be a lot of us up on stage today talking to you. It's not easy.
While there are tailwinds in need, there are headwinds in execution, it's a pain in the butt sometimes to do these things. This is large infrastructure. Chart on the left kind of gives you a sense of how hard it is to get the utilities in their current form connected. By the way, I'd tell you this is optimistic. This is just to get them going, not to get them at scale. You can look across the regions here how long some of these things are taking in order to get grid connectivity. I'll just park that for a moment. We're going to come right back to it. On the right, kind of showing how the supply chain is not a slam dunk. Data center equipment, when you have $1 trillion of demand a year, guess what?
It turns out you've got a lot of supply chain challenges to navigate. Take a moment here, and I want to pause on this because think about this is putting Per and Masoud's words to work. How have we grown 15x since almost 20 now, but we haven't closed a quarter yet, give me a moment. How have we grown so much and been able to deal with some of these challenges? Masoud alluded to it. What we're doing in our data center offering is bringing a power first strategy. When you think about EdgeConneX being a large global data center player, we are, and being global, by the way, very important, as you can see from the earlier chart, and being at scale is important, but we're not doing it alone. We're bringing the power companies.
We're working with Zelestra, with Cypress Creek, with Scale. We're putting in BESS implementations. Let's put this one in perspective. Per campus of a gigawatt that marries up with these things. We are bringing connectivity, Zayo's connectivity, into these equations. We're offering an integrated solution, in particular, a power-led solution. The grid's not going to get there overnight. Period, full stop. We have to transition and help get the assets in place that will probably ultimately become grid assets between you and me, right? If I roll this forward, we're bringing the power to the data centers. Bring your own power, bring your own BESS, bring your own renewable power, do this in a sustainable way.
You can say a lot and grumble a lot, one thing you can say about Microsoft, Google, Amazon, Meta, Oracle, they do require us to be Scope 1 and Scope 2 carbon neutral. We are, at this scale, Scope 1, Scope 2 carbon neutral. We got there under EQT's watch and help and leadership a few years ago. In spite of the growth, we're maintaining it each year. Important to note. The chart on the right talks to the industrial advisors and that network and the relationship. This supply chain is Siemens, Vertiv, ABB. Right? You can go through it. Emerson. That's the supply chain we're talking about here that's so constrained. I cannot tell you how many phone calls we've had probably that make their way to Masoud and then over to the right advisor. "Hey, we need a global agreement." We have it with Caterpillar.
We want a global agreement. We have it with Vertiv. We have it with Siemens, we have it with ABB. We've pre-purchased or actually more locked up production slots, purchased where necessary, years forward of inventory, so we can deliver on this interesting opportunity. You don't do that with a vendor-supplier relationship. A transactional relationship doesn't take you there. You need to be at the C-suite. You need to have 20, 30 years of relationships, and you put these in as a partnership going forward. Every year, we're predicting what we need the next three years. We're committing to the next year forward, committing loosely speaking, because we've got pretty good insight what's coming, and then we're able to keep that supply chain going. That's the industrial network at work. That's making that supply chain predictable, knocking down that massive barrier to entry that exists.
It's why there's only four or five of us that are at this multi-gigawatt scale with customers that I'm going to talk about here in a moment. EdgeConneX today is a global company. This global nature is pretty darn important, as it turns out, even more so than I actually understood. We were not fully global by any stretch of the imagination when EQT bought us in 2020. We just didn't, frankly, have the ability to make the investments that we needed to make to do APAC, in particular. We needed to do much more land and power banking, and I'll talk about that here in a moment. We sit here today in five continents, 26 countries. I'm one up on EQT, by the way. They don't completely overlap. 90+ sites. It's 92, Masoud, hit the number, there'll be more coming. And 90% of our revenue of hyperscalers.
Stick with that number. We're coming back to that 90%. You can grow a lot of ways in this AI boom. Growing with discipline and growing smart is key, and this is going to separate the winners from the losers, and this is just religion to me. We're going to talk about this here in a moment. I guess we're going to talk about it on this slide. As I said, there's a tremendous amount going. You're going to hear about NeoClouds, and you're going to hear about pets.ai, and you're going to hear about really good companies. What we've held true to, and it started with our roots in the content and in the cloud space, is growing smart. Why do we win and why do we continue to feel good about the inevestment we are making.
First of all, most of our capital, by the way, like 90%+ of our capital, is success-based capital. We don't build it, and they will come. That, for those of you that were living in 2000 and working in the 1999, 2000, 2001, that was that era. Wrong era. Learn that lesson. It's not build it and they will come. It's a global, geographic, diversified business. That means when America's hot, 2025, 2026, and Europe's not, that tends to be about a year later or two years later. Comes Asia. You get a much more of a steady and consistent growth pace. Disciplined growth strategy. We stick to Tier 1 and Tier 2 markets. Never find yourself with an island asset. I'm not sure I want to go build a data center in nowheres land, United States, that only does training, right?
That is great for five, 10 years, maybe 15, but what happens after that? We only do Tier 1 markets. We make sure our customers, and our customers are the hyperscalers I talked about. We work with them to ensure that it's multipurpose. When I'm talking to a Microsoft, for example, we're talking about, does it support Microsoft AI? Does it support the Azure cloud? Does it support Anthropic? Does it support OpenAI? By the way, let's not kid ourselves. These are some of the best managed companies in the world. They don't buy willy-nilly content. You will hear about AI data center companies that will sell to non-investment grade customers in random places where they're selling to a GPU-as-a-service provider that has a five-year contract with maybe a foundation model creator on a 15-year data center deal. Yeah, no, that math doesn't work. Non-investment grade, fine.
Grow with the right customers in the right locations. Deploy your capital success-based with investment-grade offtake on 15 years where you're not single-threaded through the application. That's smart growth. That's good growth. There is tremendous amount of that $1 trillion is that growth. You could get bigger, but you could get there taking unnecessary risks. I mentioned the success-based CapEx. Our contracts are long-term contracts, like we sit here today with over $30 billion of backlog and 13 years of remaining contract revenue with no renewals. Think about that. You sit here today, I can tell you where the next $30 billion comes from, and over the next 13 years. That's assuming I don't do anything else or anything to get them to renew and expand or take a reserve or take a ROFR. That's how you grow the business carefully.
By the way, that discipline, we have it ourselves. It's part of the reason we married up with EQT to begin with. They think this way. This is how infrastructure thinks when they go about this. My thunder was stolen, I didn't use as much orange and I gave circles, I'm going to tell you how it happened. Since I got to live it day in and day out. When EQT bought us, we were 150 MW. I apologize, it's just how the data center industry speaks. We talked about terawatt hours being countries' worth of power. This would've been a small Tier 3 city worth of residential homes. We'll probably end this year at almost 3,000 MW, about a 20x growth. It was more than luck. Yes, we have great secular tailwinds, and the macroeconomics are in our favor.
It's important to note what we couldn't do before EQT came and what we were able to do after. I mentioned the first thing, we were able to go global. Very important. Turns out the customers that I mentioned to you, the typical hyperscalers, think global, act global, buy global, strategize globally, and are balancing those things on a global scale. Number two, power bank and land bank. I showed you the challenges. You need to work and understand what markets are those future Tier 1s or current Tier 1s. What are those future Tier 2s and current Tier 2s? Sure enough, if you do that, and you have the industrial network that we talked about, which also ties into the utilities as well as bringing power, we're able to do that.
To get from A to B, forward investing, expanding geographically, knocking down the supply chain barriers, bringing both grid and behind-the-meter power solutions. Bringing power to the data center. Not using resources that aren't available, but not inhibiting the growth. Let's not kid ourselves. EQT is one of these unique institutions where infrastructure is both a discipline but growth oriented. You don't find that every day. Infrastructure that's disciplined, yet very indexed on growth and growth oriented. As I look forward, I feel pretty good about the land bank, the power bank that we've built, and certainly about the macroeconomic conditions that we're sitting in. I have not bad visibility a little bit beyond 2026. These are long buying cycles. These are big one and two year capital project outlays. We think we see a lot of opportunity going forward.
What's one of these look like on a micro scale? This is Dublin. This did not sneak up on us. I'm going to look, showing you the picture here. That big one, well, that thing right in front of you is a substation, interestingly enough, with some batteries in it. The thing in the right-hand side of the photograph with all these things on the roof, that's a data center. That's a cloud data center, by the way. Reasonably large. It's like 35 MW, 40 MW of cloud data center. Thing to the left, it's kind of falling off the picture. You see four of the emission stacks. That's a power center.
Dublin, in 2015, we had to put our first behind the meter power plant in place because the grid was going to be, and I quote, "Six months to a year late." We looked at their development schedule and said, "Yeah, lucky." We put in a temporary on-site power solution. Anybody want to venture a guess how long it took to close their one-year gap? Seven. By the way, seven years late, the power showed up in Ireland. No Irish jokes, please, but that's just unfortunately the facts. Fast-forward, the good news is when we came to have to do this campus, and by the way, there's three more of those data centers on this campus.
We move forward, we fast-forward, they're like, "We now know we're not going to get power, and we need to be able to flex it because we need data centers to be able to come off the grid quickly, and we need to be able to flex the power." That's good. That's actually healthy relationship with things that need this much power to be able to do that. We have the capabilities to do that. We should be able to do that. We have the scale to do that. Then the second building, which you can't see, it's right around the corner. You can see a little nip of the corner of it there.
They're like, "We don't have any power for that, you have to bring your own anyway." We're like, "Okay, this works well." We did that starting in 2020, one month after EQT bought us. We had to go build this campus in that solution. I think it was a great wake-up call for both EQT and EdgeConneX to get going on it. It's a huge win and a huge opportunity, but it woke us up on how to do these behind the meter solutions. We've been doing this for five or six years. EQT together with us said, "Hey, look, we think this is going to be needed more. We actually think this is the right paradigm going forward." We invested in the people, the skills, the technology.
As it advanced, started to happen a lot more in the United States, even became a regulated solution in some states in the United States. You have to bring your own power. As we saw the challenges with the grid getting worse in Europe, not better, it became very clear we want to do that. They started to even acquire some companies to help us do that. We can put the right assets on the right balance sheet, work with the right skills and the right teams. This is actually the manifestation of it. When I look here today, I have the good fortune of actually spending a lot of time with the CEOs and leadership teams of these other portfolio companies. We actually work together. We actually have a few of our key product leads working as one product team right now.
It's kind of cool. We all have to answer to our own boards and deliver our own results. Together we're stronger. The rowers can row, the throwers can throw, the blockers can block, you get the right assets on the right balance sheet with the right returns. Right? Reality is energy centers trade at different values than data centers, trade at different value than fiber and connectivity. Right? Use the right money in the right way. It doesn't mean we're single-threaded. It doesn't mean we don't all work with others. I'm not trying to say that. We're all good capitalists here. All these are for-profit companies. We are able to have a differentiated offering. We're seeing that play out in Columbus, Ohio, in Austin, Texas, in Spain.
In Arkansas with giant all renewable powered data centers and BESS systems because they already had the relationship with a giant hyperscaler that needed multiple gigawatts of renewable power offtake, there was another gigawatt available. The hyperscaler said, "If you do that, I can put four products there and we can bring these things together." Power-led strategies that allow us to address one of the, let's call it really, the largest challenge and inhibitor to the AI infrastructure deployment is going to be power in a timely fashion. You bring these together. We provide an integrated set of solutions and ultimately the offerings and the partnerships kind of end up growing each of these companies and allowing us to work primarily with each other, but across the spectrum. Actually, you take the companies and it turns out it really does look like this.
If I can show you the picture. This is actually a manifestation of a couple of projects we actually have underway. You see EdgeConneX is the data center in the middle. I drew the picture. I get to put it in the middle. That's how it works. Like it just goes that way. You see Scale Energy sitting up there. That's one of our behind-the-meter partners. You see our work with Zelestra, OX2 and Cypress Creek. Two of those we actually have active projects we're working on. Combination of renewable and base load plus large BESS systems that allow us to do campuses where there were already big hyperscale offtakes. It was a natural extension to be able to bring those forward. Obviously Zayo bringing a lot of connectivity.
We've got GlobalConnect in Scandinavia, where in just this year alone we've expanded into Finland, Sweden and Norway. Inference, Europe, large growth, power challenges. You probably guess what's going on there. We're able to use GlobalConnect, driving a lot of that connectivity. By the way, the amount of data that goes into both the AI factories, and these AI inference engines is truly remarkable. Four feeds, thousands of fibers. Thousands of dedicated fibers into each of these facilities. Actually I even brought some of the water stuff in. We'll be using that in the United States to start. We don't use potable water. We are water positive providers. We do not use potable water. Data centers can use it, but we have to put more back if we do. In this case, we're actually going to go drill below the aquifer.
We're going to tap down into a brackish one, bring it up, do our own purification, cycle it through. We use closed system cooling. All EdgeConneX designs use closed system cooling. Keep the water inside the system. Kind of fill the swimming pool and then cycle it through is the way to think of it. Look, you do have to keep humidity going and toilets flush and all the rest of the things that happen. Put in perspective some of these campuses, I'm going to speak in U.S. terms, 4,000 or 5,000 acres. Small cities. We have to build the whole utility infrastructure there. This is a great example of actually live projects that we're doing right now that bring the infrastructure transition and some of the PE teams together into a combined solution.
In that, I am now in the red, and I think Masoud, you and I are supposed to have a little Q&A. With that, thank you very much.
Okay. I think we're asked to shorten the Q&A a little bit.
Perfect. I made it easy for you.
A couple of questions for Randy or obviously myself if anyone has it in the audience.
Hey, it's Oliver Carruthers from Goldman Sachs. Thanks, Randy, for the presentation. Really insightful. Could you just share a couple of thoughts on just renewal risk and obsolescence in the data center space?
Yeah.
Appreciate your contracts are very long-term, just would love your thoughts on that.
Question I think is a little broken up was, how do I think about renewal risk? I actually think it's something you need to be conscious about, and I think there's two or three things you should do to mitigate it. First, Tier 1, Tier 2 markets, pretty important. You're not in a situation where there's only one tenant that might be able to use it. Two, don't single purpose design and build. I didn't get a chance to talk about it because they really limited the amount of time. At EdgeConneX three years ago, I think we came up with something called an Ingenuity design. Great when marketing gets ahold of engineering work.
It was a design and remains our core design that allows our customers to run cloud regions and AI regions super high dense in the same data center, even the same hall or row, typically done at data hall level, that you're not stuck with a single application, which is something I mentioned before. Third, this is going to sound crazy. You saw the power challenge. Once you have the power, you can't move that. Remember, the power is tied to a physical location. Some of the risks that existed at maybe at the 10 MW or 20 MW sites where you might go find other pockets of 10 MW or 20 MW. These campuses for AI are 100 to a gigawatt. I think our largest will be 4 gigawatts. That doesn't move. That doesn't show up anywhere. That doesn't appear anywhere.
I talked about it in fibers, I'll give you an example of a social media hyperscale customer we have. The fiber vault is eight feet high and six feet wide. I don't know how many thousands of strands that is. I do. It's 96 6-inch conduits. 96 6-inch conduits of filled fiber that they're bringing in. I laugh about it's circle order of magnitude about $200 million of fiber just access, digging, conduiting, and pulling the fiber into a single data center. The good news is, I think with that infrastructure investment, you can't move the power, that kind of fiber, I think if you treat your customers right, don't gouge on renewal, you'll be good. I think we've tried to stay true to a wholesale model, a fair return. Do we get great development yields? Sure.
We are careful to not play the supply-demand game because that one makes it tougher to renew. When you see people say, "Oh, look it, there's an opportunity. I'm going to take advantage of my customer now." Oof. I'm kind of like, "Okay, that works one time, maybe two times, you'll pay for it on the renewal." I think those are the types of things we have to do. There is a risk there. I also think pick your customers carefully, right? There are some neo clouds I might not do. There are some emerging foundational model wannabes. I mean, we all remember pets.com, right? We're not selling to pets.ai, right? Others have to. Emerging companies do if you're not established. There's seven of us that are really big cloud providers. We're established. We have a track record. We've had to provide 100% uptime for 15 years.
It's easier for us to take this high road on our disciplined growth. If you're an emerging two-person and a truck, you may have to take those contracts. We're not doing that. I think it exists, but you can mitigate it. Depending on what you do, your choices will increase or decrease that risk. I guess there was another question there.
Yeah, I think we'll do one more. Olof?
Yes, sure. Let's do one more. Am I good?
Yeah, you're good.
You're the last. Make it good, you're the last question.
No pressure. All right. Nicholas Herman from Citi. The scale of this beast is hard to comprehend. Can you give us a sense of the CapEx needs you'll need over the next four to five years, as you move from 3,000 MW contracted towards 10,000 and beyond? I guess, how much of that do you expect to be able to fund through free cash flow versus extra needs? Thank you.
Well, the good news is, at 3,000 and even up before then, you do generate a lot of cash flow. The contracts that we put in place are also highly financeable. There's probably a guy from Goldman shaking his head, yeah. They are attractive to the debt markets. Basically, a small spread on a hyperscale bond is what you're talking about here in terms of investment credit. We're able to do that. I didn't talk about it, but this market is very robust for recycling capital, too. 15-year contract, two five-year renewals. The right question, high probability of renewal if you're in the right markets. You're seeing underwriting done, almost locking in those renewals for the right assets, leaving you with a spread on Microsoft, Google, Amazon, Oracle, Meta credit, even ByteDance or Alibaba credit, for a stabilized asset.
In particular, some of ours have all of the above that are sitting in them, you get an interesting spread on. You see a lot of interesting ability to take a great cloud or cloud and AI asset, recycle the capital. We maintain operational responsibility and control and some level of ownership, but we're able to cycle that capital back through. I think we'll continue to raise some primary, probably more of that in the next year or two. I think we sit in a good shape to be able to use existing cash, stabilized assets. The debt markets, knock on wood, interest rates stay rational, allows us to continue.
All right. That's an impossible act to follow. I also just got an email saying, "Hey, we're running a little bit late, and can you please speed it up? No need to stress out." I'm like, well, like golden rule, if you don't want people to stress out, don't tell them not to stress out. Good afternoon, everyone. My name is Bert Janssens. I co-head our Private Capital platform for Europe and North America. It's a pleasure to be here. We live in very extraordinary times right now, and you've heard about it today. There is a revolution going on, technological revolution. I haven't been as excited as I am today. I have to go back really to the late '90s when I started my career in early stage tech startups in the internet era.
It is also an extremely difficult time to generate returns. It's probably been as hard as I've seen it. We've got wars going on. We've got geopolitical disruption. We've got macro uncertainty everywhere. Deglobalization, inflation, you name it. It all piles up. You add to that the technological disruption that we've been talking about, and what does that mean? It means that there are no more free returns. Every basis point will have to be earned. Riding the wave is no longer an option in private capital. Today, I want to really talk about how are we set up to do that, and why are we confident that we will continue to generate those high returns, and not despite all of this uncertainty, but because we've made the right choices, and how we're responding to the current environment.
Let's start with a quick overview of the platform. It is a platform. We cover end-to-end from early stage to late stage. We manage about EUR 160 billion of AUM across the globe. We are truly global in all three regions. We have early-stage strategies as well as mature strategies. It means that we really know what's going on in the world. We know what's going on from a geographical perspective. The disruption that is happening today, we see that because we are investors in it, not only in the venture capital side, but also on the infrastructure side, and that is a huge advantage. We also have over 300 investment professionals. It's quite a unique platform. They sit in all these local geographies, so we know what's going on the ground. We have over 100 portfolio companies, mature portfolio companies.
If you add all the investments in early stage, it's obviously a lot higher. It's over 300. Earlier this week, we had some phenomenal news. We've been working on this for a very long time, but as you heard from Per, the European Commission selected us as their partner to really manage the Scaleup Europe Fund. We're obviously extremely honored to do that. It is really a testament to the platform that we have built. We have been backing early-stage companies for a very long time in Europe as well as in the U.S. We did think we were very well set up, but it was nice to get the confirmation from that group of countries, but also investors. It really is the next step in building our European platform.
We are by far the largest private capital investor in Europe, this is kind of just another testament to that. We've been doing this for 30+ years, we've generated 20% net IRR, you can say that's in the past, let's talk about the future. You're absolutely right. We are going to talk about why that is and why we have kind of the setup that is going to keep winning. It is important to look at the drivers of that. There are four reasons why we are set up for success, these things will continue to deliver the right returns. I will tackle all of them, I will obviously zoom in a bit more on AI, which is the theme of today, obviously the biggest opportunity that we have also on the private capital side.
The first one is really being diversified and being diversified in all the geographies that we cover with local teams. That is very important. Look, the world is a very uncertain place. We all know that. Conviction alone is not going to be enough. We obviously believe in what we're doing, we know what we're doing, we know where the disruption is. We think we know the direction of travel, you have to stay humble in this environment because everything is moving extremely fast. Nobody, literally nobody, has the monopoly on being right in this environment. It really means that we have to diversify, that's our target. We will continue to deliver a diversified portfolio across geographies, also across different sectors. If you look at kind of our differentiation today, this is what it looks like today.
Obviously we have a lot of dry powder, we also have quite a nice diversified portfolio. That will continue to be very, very important. The second advantage that we have, Per also talked about this, is scale, I often get this question from our clients. Like, "Why is scale good?" I say, "Well, first of all, scale is good in most businesses." In most of our companies, we're pretty happy that we back the scale winners in the space. The same applies to our business, it's a multifaceted thing, having scale. First of all, it is about having that network to source deals. We want to get the first call. We want to get the last call. That network is absolutely key, it is quite unique, it is really global. There's the value creation engine.
Today more than ever, we are investing in our value creation engine. This requires a lot of capital. Per, again, mentioned kind of he stole my thunder. He mentioned a lot of the resources that we have, 35+ digital people that are on the ground that are helping our portfolio. That requires scale. It's not only digital people. We have eight value creation teams in our business that help our portfolio. When you have to underwrite ambitious value creation plans, this is what you need to do. You need to drive the transformation. It's not selecting the right asset and sitting back and watching the show. Those days are long gone, unfortunately. You also need to have sector insights. Again, scale is very, very important. Like I said, we have venture capital as well as mature businesses.
You need to know what's going on on the venture side. Having a platform gives you a real advantage. We need talent. Talent is, in a way, all we have, we want to attract the best talent, we have a very interesting proposition. We are a growing firm. We cover all these different spaces. There's opportunities for everyone, that makes us truly unique. The result is transformation in our portfolio. It's value creation. We drive our businesses on sales and margin. We don't look for financial engineering. We basically try to move the businesses to the next level and get paid for that. We have a lot of examples, but you see a few here. You see that Galderma, actually, a big part of the value creation was strategic repositioning, which is a fancy word for multiple expansion.
They did it in an environment where indeed the multiples were contracting. It was truly a strategic repositioning confirmed by the public markets. This is really core to us as a firm, is to really drive the transformation. That's the only way to create alpha in this environment. Let's now talk about AI. You've heard a lot about it, we have a very strong philosophy about AI. You will hear a lot from investors about like, "Okay, we're going to avoid AI. We're going to invest in the halo assets, that's the way we're going to play this." We don't think that is right. We are in the risk-taking business, this is the opportunity of a lifetime. You have to lean in. You have to know what you're doing, but you have to lean in.
If you want to drive 20% returns, you better invest with that trend. If you're trying to avoid the trend, you might not lose your capital, but you will not generate the returns that we are supposed to generate. I think that is really key. We have decided, as we always do, to go with that trend, to be thematic, to really invest in the capabilities to really partner with the right people. That is very important. You will see that it is not playing out evenly in sectors. There will be winners there will be losers. That's why I started with diversification. The key will be to be diversified because it is a very fast-moving market.
We obviously want to use this technology not only to invest with the trend, but also we want to transform our companies with AI. I will talk a little bit about that later on. Maybe first, if you look at the sectors, right? How do you invest in sectors? Obviously the big debate has been around technology, we obviously have developed a framework to think about how do we think about investing in especially software. Our playbook, I think there's a panel later today that will also go into that, is around basically looking for businesses that have hard moats, a defined opportunity set, defensive market characteristics, but most importantly, execution capabilities. Driving AI through your portfolio, even if you have the right businesses, it's all about execution. We can talk in a lot of detail about this framework.
This is the highest level version that you will see. It is a very detailed framework. We think we know where the market is going, and it's going to generate some very interesting opportunities also on software. Not only on software, also on healthcare things are moving fast. We have, also there, kind of looked into what can we do with this technology and how can we really benefit from it. We invest across the value chain in healthcare from early stage to late stage. We're seeing some really important trends. Obviously, the data infrastructure layer is very interesting. You know that healthcare is driven by data, clinical data, all kinds of data. It's a very interesting industry to apply AI to because it's regulated and it has a lot of data. We're also powering products with AI.
WS Audiology is a good example of that. You will now have hearing aids with AI integrated in them. We are already integrating that into our products, and we have many examples of that. There is the care delivery, and you see some examples here on the slide. It is really kind of about the diagnostic accuracy that will improve with this technology, we're also there investing with the trend. We're obviously doing that not only with new businesses, but also with the current portfolio. You see a few examples here. We are doing this in a systematic way, and that is important. This is why the large LLM providers, they are teaming up with private equity. Why are they doing that? Because they know that we drive change, and we do it in a systematic way.
We are really making sure that we have the right setup, and it's all about execution and governance. You need to have the right governance to do it in your portfolio companies and then the right leaders. We have had to make some changes there, because really people need to move fast and not sit back and say, "This will not happen to my industry." It doesn't matter where you are, it will happen to you. We are really driving the entire portfolio, and we are measuring it, and we're making sure that we get a return on investment there. The last point where we think we're differentiated is obviously on the liquidity and also in private capital. That has been a very important element of our differentiation. In the last 24 months, we've generated very significant liquidity, and Per mentioned all the metrics.
They are best in class in the industry. We also had some Nice trophy assets and some nice exits that we can brag about. You see some of them here on the slide. Obviously, Galderma, Europe's largest IPO since 2022, also Sana, Europe's largest AI exit today. Tubulis, the largest ever acquisition of a European biotech company. We also raised the largest venture continuation vehicle in Europe. You see here that we master all exit routes, that is, again, a source of alpha for us. That is what we focus on to send capital back. We're investors, yes, most importantly, we send capital back. We're not measured on holding assets, we're measured on selling assets. To sum up, this is a uniquely difficult environment, as I said, we think we're uniquely well-positioned in that environment.
We are leaning in, we are driving the transformation. We have a diversified portfolio, and it will get even more diversified. We are trying to benefit from our platform, we are actually in the middle of a process trying to buy a supplier to EdgeConneX. Thank you, Masoud, for the partnership there. That is the power of what we have to offer. With that, I would like to hand it over to Hari.
Thank you. Thanks, Bert. Hi, everyone. My name is Hari Gopalakrishnan, and I am co-head of our Asia business. I would now like to talk to you about our market-leading platform in Asia and how what we do with Asia amplifies what EQT already has in Europe. EQT Asia today is the number one platform in Asia, the oldest, most established platform. We started three decades ago with $25 million. We just closed our BPEA IX flagship fund at $15.6 billion. It is the largest pool of dry capital in Asia. This is complemented by our mid-market fund, which is about $1.6 billion. We have about 350 people in Asia across nine offices, which means we are locals with locals. We have been in Southeast Asia for 30 years, we have been in India for 20 years, we have been in Japan for 20 years.
In an industry that is defined by pattern recognition and relationships, we have an average partner tenure of 17 years, and this is one of the factors that is special to us. We say in private equity, you cannot argue with the distribution. We have $39 billion of distribution, and that, again, is unique to us as well as EQT in Asia. One of the most important things about us is that we started life as Baring Private Equity Asia, and we became part of EQT four years ago. Every single person who joined EQT is still with us, which is really reflective of the cultural integration between the two firms. Today we feel is the most exciting time to be investing in Asia, and as Per mentioned, we can be a consistent source of alpha. In Asia, we think of four different sources of alpha.
One is intrinsically higher growth. Two-thirds of global growth today comes from Asia. If you look at markets like India, which is the fastest-growing large economy in the world for the last three years, and forecast to be the fastest-growing large economy for the next three years. If you have an economy that is already growing 7% real terms, 10% nominal terms, it is easier to underwrite a stronger revenue growth. Two, Asia is really underfunded. Of the total private equity capital that is allocated, less than 10% goes to Asia. If you look at Asia as a market, you have India, you have Japan, Southeast Asia, ANZ. There are only seven funds that have more than $10 billion, and two of them are BPEA VII and BPEA IX. When compared to that in North America alone, there are close to 70 funds that are more than $10 billion.
Asia is really under-penetrated. Third, we are buying assets from families and founders where we can apply a value creation playbook and capture returns quickly. We are buying from families in India and Japan, we are buying from conglomerates in Korea, so we are not buying primed assets from other sponsors. Finally, we feel that Asia can be a source of uncorrelated returns. Today, Korean stock market is doing well, Japanese stock market is doing well. Last year, Hong Kong was the number one IPO market in the world. The year before that, it was India. Even when markets are shut in North America and Europe, we can still get liquidity out of Asia. The interesting thing is AI can turbocharge all these four alphas.
Asia, with its engineering talent, with its established manufacturing base, we think AI can be a true driver of growth. We've actually consistently delivered alpha. If you look at across vintages, across long time periods, we have delivered 10 percentage points above public markets. This is actually distributed returns. These are not marks on a paper, which again shows to prove what I said before, we don't want to argue with the distribution. We've also delivered these returns with low risk. Two-thirds of our returns have come at more than three times MOIC. This is because, again, we're buying businesses from founders, we are investing into businesses which have higher revenue growth already. We can implement our value creation plan quickly. Consistent, repeatable playbook is what we're trying to do here. I see people taking pictures.
If you would like to click a picture, this is the page I'd urge you to look at. 74% of our value is created by revenue growth, 15% is from margin expansion. This is not multiple expansion, this is not deleveraging, this is by making companies sustainably better. The era of financial engineering is over, and being controlled investors, trying to make companies better is how we can consistently deliver on this going forward. Even in Asia, to Bert's point, we run a diversified portfolio. We have portfolio companies in Southeast Asia, ANZ, India and Japan, but we'd like to weight our portfolio into places where we see the maximum opportunity. Like Per mentioned, we see a huge opportunity in Japan today. In Japan, there's so much corporate governance that has come in over the last couple of years.
Families are looking for external capital and operational insight, and, in some ways, Japan today reminds us of Europe in the '90s, when there was a first wave of private equity successes. We are overweight Japan. We are making investments into a Japan team. Over the last 12 months, we've made three new commitments into Japan. Two examples of our playbook in action. Two different countries, two different industries. One is Benesse. It's a household name in Japan. It's an education service provider that is pivoting into nursing care centers. From the time we invested, nursing care EBITA has grown 23%, operational utilization has gone 400 basis points. Second example is AIG, which is a number one gastric center in India. Again, revenue growth of 23% for five years straight, 36% EBITA margin. Both these are businesses that we bought from founding families.
Both these are analog businesses where we are implementing AI and capturing low-hanging fruit in terms of value creation. Two different examples. The other interesting thing about our Asia portfolio is that structurally, we are underweight on software. That's another tailwind for us. Finally, we said we'll talk about Straive and AI. Straive was a traditional BPO business. When we acquired the business, we wanted to transform it into an AI-first tech services business. All AI needs data, and Straive is at the heart of that data ecosystem. When we bought the company, we wanted a leader who would step into the company, gain immediate respect, and transform it from within. That's what exactly Ankor Rai has done. When Ankor came into the business as CEO, our data revenue was 24%. Now, this year will be 50% at a growth of 32%.
Margins 27%, 700 basis points above the market. All this did not happen by accident. It happened because of our leader, who I'll just introduce you to. Over to you, Ankor, for the next session.
Yeah. In the last two years at conferences, with AI, I moved to kind of show, don't tell. We're going to go a little different way on this one, otherwise it's just AI at work. This one, we're going to use a little more PowerPoint. Is it set up? Oh, that's the way it is. Hari's very generous. He's not like that at board meetings. I've spent the last 26 years in data analytics and AI. When you go back to the early 2000s, data analytics and AI was working in a basement, and we were just nerds. I thought we had reached the high point when Harvard Business Review in 2012 called our profession the sexiest profession on planet Earth. Clearly, there was a way to go. I don't think one adjective is enough to describe what's going on today.
I'm going to cover three things today. First, very specifically, the market opportunity that we see, and what an AI service provider's lens is. Second, I'm going to talk about Straive and the momentum we have seen over the last three years. Really recent events in May have made it much easier for me to explain to all of you the market opportunity that we see, and we'll talk about that. Third, I'll make it real with what's actually going on in enterprises across the board. First, I said Hari was being generous. I think when EQT acquired Straive in 2021, we saw a white space. We recognized AI as a new technology, really, we saw the need for a specialist service provider, to really become a one-stop partner for enterprise clients. We think this was a new category. What is a new category?
Simply, a new category is if you need different skills, different methodology, and different tools. I won't go into the technicalities of why AI is different. I'll summarize it in two parts when it comes to enterprises using AI. How you build and how you use AI is fundamentally different from any technology over the past 25 years. First, how you build. The basic building block of any technology over the last 25 years was code. I don't need to tell you code has collapsed. Really, the fundamental building block now is context and reasoning, which is very different from people at a keyboard typing code. The second big difference between prior technology and AI is that no AI solution in the world today passes software testing.
Before you, in any enterprise, experience a technology application, it goes through one and done testing, and then it goes into production. An AI solution cannot pass through CI/CD testing today. Why? Because of the way it operates, it is probabilistic. Which is why you need to build verification architectures, and you need to have experts in loop. It's a very different technology because of these two reasons. Which is why it's going to fundamentally need a different service provider. This is the market opportunity we see. Typically, a company like ours talks about the market opportunity on the left of that page, which is enormous. A growing market to help clients build data and AI capabilities. That's not the market we think is of interest. The one on the right, the substantial disruption taking place in traditional service providers is what's of interest.
Today, if you look at deployed, outsourced IT, KPO, BPO spend, as well as SaaS, we expect that to gradually plateau or degrade. Really, there's a new category of helping clients deploy AI into their workflows. It is nascent. There are so many names for it. You hear services as software. To us, that's operationalized AI. That's the big market opportunity over here. I said, events over the last couple of weeks have helped me explain this, because over the last three years, only clients understood what we were really offering. Because we were solving problems and actually helping them create impact from AI while there was a lot of failure elsewhere. Over the last two weeks, Anthropic and OpenAI have made big investments onto the services side of helping enterprises deploy AI.
That is the most significant recognition of, first, a gap in the provider market and second, the large market opportunity that exists. This is Straive. We are a one-stop partner for helping clients operationalize AI. What we do is actually very simple. We bring two diverse capabilities together. At the top is really the cool stuff which all of you hear about. We help clients build cutting-edge data AI capability. At the bottom is the work in the trenches, which actually creates the impact. We help clients run and evolve those AI solutions in their environment. We invest a lot in R&D. Our core focus is really ensuring speed to impact for our clients. I told you these days, conferences, it's really show, not tell because of our capabilities.
It takes us one to two weeks to take a complex client problem to working AI, not Figma, not PowerPoint, not documents, working AI. Then it takes us about eight to 10 weeks to deploy that and create real impact in an enterprise workflow. What is really important is on the left side. We are doing this at scale. We are over $400 million of revenue. We are very profitable at over 25% EBITDA. We have got 4,000+ masters and PhDs across the world. We have got a delivery footprint across the world because that is what it takes to basically help large enterprises deliver on the AI promise. In terms of markets, we are where our clients need us to be. This is really the proof of the pudding. I have been in this industry for the last 25 years.
Never has it been easier to enter large enterprises, because the enterprises are hungry, and the speed with which we have been able to penetrate enterprises is pretty substantial. I wanted to use this page to actually talk about how AI is really the ultimate horizontal. I am going to take a few examples. We work in financial services, the direct-to-consumer part, and we have helped financial services market better. One of the largest energy majors, so that is on the top right-hand corner there, had a pretty significant issue. They were spending hundreds of millions of dollars with their digital agencies building campaigns, and then almost an equal amount taking that campaign to different parts of the geography. We used our capability from financial services to really help them disintermediate the amount of effort that had to be conducted with the digital agency.
Another great example, we do work in media and entertainment, so with large broadcasters, helping them with audience analytics. That helped us get a foothold in sports. We work with some of the largest sports leagues and sports teams in the world. Why? Because five years back, a large amount of revenue for sports leagues came through four revenue lines, television channels. Sports has moved where individuals are clicking to buy individual telecasts, and therefore sports teams and sports leagues need to understand the end consumer. We are deploying the audience capabilities that we developed in media into sports. The last example of this horizontal nature, we work in pharma. We have built visual AI for surgery environments. Those same capabilities helped us get into the manufacturing assembly line for defect identification.
The reason I am giving you these examples is, to us, we love the idea that the frontier models are expanding intelligence because that is the fuel that helps us deliver on the promise of AI to our clients. The numbers. What we did after EQT acquired us, we focused our data AI-first capabilities outside of our traditional strength in education and research.
Because the true proof of a capability is if we are able to independently go and build revenue outside of our traditional strengths. Really, we are growing at about 29%. That is about half our business, as Hari talked about. At an overall level, we continue to maintain our high gross margins and profitability. We are very proud of that, because we are a service provider who is investing significantly into R&D, and we run our business commercially and operationally to be able to deliver continuous high profit.
Now, I'm going to go a little deeper into some stories. I'll focus on the first two panels. Really, the theme is rapid revenue growth. The first example, we're working with one of the largest digital content and e-commerce platforms in the world. They came to North America, and we started by helping them build their data foundation. What that means is bring together commercial data, financial data, content creator data, e-commerce data to answer questions like abandoned baskets, to identify creators who were going to basically deliver a larger revenue. We built the semantic layer to help them understand their data. The next question was, because we understood their data, we helped them build fraud models because they were seeing an increase in merchant fraud. What's the type of merchant fraud they see?
When you have these sorts of e-commerce channels, merchants stand up, these are kind of fraudulent merchants, stand up, garner a lot of transactions, and go down again. In a limited amount of time, you've got to detect these merchants. We build AI solutions to detect it. All of this is happening in 24 months. The next step was every time you put an AI model in place, it sometimes generates accept a transaction, sometimes reject, but there's a lot of review. In the traditional fraud world, a lot of the operations were actually run out of Philippines with another partner. Our client realized that it was critical to run a closed AI loop, which is the person who's building the model needs to run the operations, and that Philippines work collapsed into us. Here's a differentiator.
They could only do that with us because we actually had the bottom part, the work in the trenches to be able to run and evolve the operational model. Just last quarter, we are now running their global financial crime operations and embedding AI into that. The reason I gave this example is one is the rapid revenue growth, but it is also how we're able to penetrate leveraging data and AI, different parts of an enterprise which traditionally would have felt very SME or subject matter specific. The second example is very interesting. It's one of the largest asset managers in the world. We started helping them with private credit. The problem they had was when it comes to private credit, there wasn't enough data.
They were looking at a lot of deals, and they needed to monitor this portfolio, and they had a large amount of teams doing this on an ongoing basis and still missing signals. We deployed AI to basically provide them monitoring across their portfolio. That was the start. Next, we moved into, they are one of the largest real estate portfolios in the world. We started helping them better manage their real estate portfolio. What that means is not just on the investment side, but also on the operational side. Third, they're investing in the Middle East, and they felt that they were substantially hampered because they did not have good sales intelligence. We've deployed AI to provide sales intelligence directly into their CRMs. Again, started in one area of private credit, moved to real estate, moved basically to the Middle East.
That's kind of the growth we're seeing across these enterprises. There are numerous other examples, but I will move on. They're slightly more deeper in the weeds page, what actually are we building? I talked about speed being what we invest in. The first part is within one to two weeks of a client problem, we generate working AI capability. I don't think that should astonish any one of you. I think there's enough marketing around AI that shows that that could probably be done. Then in eight to 10 weeks, we take that AI solution and deploy it in the client workflow. I think the diagram in the middle is really, it shows what we are putting in place. We hear a lot about AI agents.
There's a lot below, there's a lot above the agent that needs to be done to actually ensure that you can create impact. Below the agent, we build the orchestration layer, we build the data, we connect it to the systems. Above the agent, we redesign the workflow, we build a completely new user experience, and as I said, because of verification architecture, we design experts in loop. That's the operationalized AI stack that we're putting in place in a client's enterprise. What you see on the right- It's actually got quite blurred. Really, the frontier models are our fuel. We track the frontier models, their expanding capability, and we help clients deploy that into their workflows. The last piece, this is not a one and done. It's not about building a capability and moving on.
We help the clients first remediate and evolve the AI. Any AI solution that goes into production is typically about 50%-60% accurate. Continuously, it learns and evolves, you basically need to stay with the solution to improve it. We create new functionality, we become the enterprise data AI provider. What does that mean? Moved from data to fraud to ops to financial crime. That's the kind of flywheel. The last piece is what's interesting. We are becoming the services alternative to a traditional BPO IT partner, I wanted to take a few examples around that. I was just looking at the time. Let's start with the first one, the financial services one. This is one of the largest custodials in the world, and we were helping them with what I would call meat and potato stuff, data engineering.
For entity management, they need to bring in a lot of external data so that when they're dealing with a particular enterprise in one part of the world, they're able to figure out whether that's an enterprise they should be doing business with or not. This was in there where we were helping them, and what happened was, as we expanded their ability to consume data, their demands from their data service provider expanded. Their data service provider was in a kind of a traditional architecture. What does expansion mean? For every company, the provider gave them 10 fields, they needed 50. The provider gave them data once a month, they needed data once a day. That entire service is now being delivered by us. The service provider who was downstream of the data AI capability collapsed into the data AI capability.
I talked about the fraud example where the ops work in Philippines collapsed into the model. I'll pick the logistics one. This is actually with one of the largest European third-party logistics providers. We helped them build a compliance solution. They were auditing 5% of their transactions, the custom forms, we helped them build an AI. Very simple stuff. What they wanted us to do, because we built compliance, the flip side of a compliance solution is actually production. We deployed that same AI capability into production, their point to us was, if you can run the production using AI, you can actually run the operations which are downstream and continue to transform it.
Really, this is a very interesting flywheel for us because it helps us faster penetrate large parts of traditional wallets, increases our TCV, increases the longevity and duration of the revenue, and helps us create more value for our clients. I'll end by bringing us back to kind of the opportunity page. We strongly believe every technology creates the need for new specialists. It does not mean that the incumbents don't figure out a way. As we go back, every technology has created new specialists. To us, we see significant parallels from the IT transformation of the early 2000s. When the underlying market grew about nine times, at the beginning of 2001, there were several $200 million to $400 million companies that expanded between 10x to 40x over the next 10-year period. We think the opportunity for AI operationalization is very similar.
There will be specialists, now it's kind of very clear, OpenAI, Anthropic have entered into the fray. We think there will be specialists while the incumbents pivot, who will capture pretty significant pieces of this opportunity. That's all I had. I'll take any questions.
Putting the glasses underneath the knocking over of glasses, I think will probably continue throughout the panel. I think those of you who've been with us for the last hour and a half have already seen several tortured attempts to come up with a way to talk about this moment in AI. I think we've all run out of metaphors. I'm personally going to go with, we had our best year in a week, from the infrastructure proof point conversation. We're not going to spend a lot of time kind of dimensionalizing the opportunity. I think what we can take away is that AI changes how a company looks, what a good company looks like. It changes how companies operate. For good companies or great companies, they will become dramatically better.
The gulf between the winners and losers is probably going to continue to exponentially widen as well. As long-term active owners, I think we know that AI benefits do not come just from the technology. They come from the operating system that you build around them. How do you create frameworks to pick the right companies? How do you develop an approach to work with the companies to actually execute and rewire the way that they operate? How do you have the right governance to ensure that this is compounding across the portfolio? That's deal selection, that's execution, and that's governance, and that's the panel that we have assembled today and the lenses that we're going to use to go through the conversation. Rob, let's start with you. I think Bert's already teed up what this moment feels like a little bit in software.
What has changed about how you evaluate and assess potential targets?
Well, just to introduce myself, I run the software sub-vertical within the technology group in the equity fund. How I look at software, I think, is just simply put entirely differently. I think every leader of a vertical within the buyout fund has had to define exactly what AI means for them and try and build a framework for how they should think about AI. Obviously in software, we were probably one of the early adopters of trying to build such a framework. About two years ago, we tasked two different teams. We actually wanted to make sure that we had two differing opinions and then brought them together. We tasked two different teams of deal professionals, investment professionals, together with our industrial advisors, folks like Mircea, our chairman, our CEOs, and our closest advisors on the consultant side.
Those teams worked to build a framework to think about how to invest in software and mature software companies in the world of AI. After about six months, we brought those two teams together and merged the ideas into a single framework that we refer to as the MODE framework. We did struggle to try and find a four-letter acronym that fit together six months of work. It's slightly bastardized.
It sounds action-oriented.
It works well.
Not panicked, right?
Look, at its heart, what it is is just a way to think about both asset selection and then value creation, which are the two key parts of what we're trying to do. On the asset selection side, what we try and look for is hard moats, and this is really companies with things that are irreplaceable from AI. Data network effects, and then also defensive market characteristics, so either compliance-driven or niche vertical markets. The reason we want those two things is not simply to be defensive. It's actually that AI at its heart needs context. A lot of those characteristics gives you both the time to make change in the companies as well as the context to leverage value from AI. Then on the value creation side of the house, what we're really looking for is defined opportunities.
We want those businesses with large adjacent services TAMs that we can accelerate growth into. Ultimately, that's how we think that we're going to get paid for the increased risk premium that's now applied to the software industry as a whole. Most effectively and most importantly, we're focused on execution, which is where our governance model comes into play. I'm seeing one of my portfolio company CEOs smiling at me there, so hopefully the governance model is working well. Then we actually built a framework underneath those initial four pillars of 17 quantifiable ways to think through each of those characteristics. We then put that across the deal teams. Surprise, surprise, when individual deal partners ranked their deals on this new framework versus our peers, we got a slightly different answer, and bias started showing up.
We then decided that we'd build our own agents and sub-agents to do this work for us. We trained 17 different agents to look at each of those scores and then aggregate it into a single agent. Now, we get a truly unbiased view of every company we look at. We can deploy those agents over just a website, and it'll go and do the analysis, or we can deploy it across an entire data room where it'll read every legal contract. We get a real sense therefore of what the protection is. It's a different way of working, it's a different way of thinking, but ultimately we think it'll lead to great returns for us going forward.
Mircea, you work hands-on in the portfolio, so you are on the receiving end of the assessment and the evaluation, and you then go in and are the first person to really understand what's actually going on. Tell us about the reality of the stats that we read about all the time about how hard it is to actually deliver AI impact. What do you see? What do you experience?
I'm double-clicking into the E of the MODE, into the execution. I, just to introduce myself, I've been a software engineer for more than 30 years. I still spend more than half of my time coding, and what I've seen.
Even now?
Absolutely, even now. Yesterday night I was coding, absolutely. Not this morning. I'm coding on my phone, by the way. This is something that happens these days. With proper verification, which is one of our speakers was saying, you can get a lot of work done in very different ways. I would say that this is a hard problem to solve, but it's not complicated to solve. The main challenge I see is, to quote Per, actually, let me literally quote him. He said, "Enterprises will have to rework workflows entirely." That's 100% correct. When companies don't see that clearly, they treat AI adoption as a procurement problem. They buy the licenses, they secure the budget, and then to some extent, the functions are allowed to figure it out on their own. That creates very uneven adoption. People like myself are at the forefront.
Everyone else is lagging. Functions aren't doing what they should be doing. Eventually, AI kind of stabilizes into a system that does only isolated part of the work rather than an end-to-end workflow. Now, I spent about two years before joining EQT as an advisor, figuring out how to get through this problem, how to break through it. We have a framework in place, which is like the double-clicking into the E. Three fundamental principles that companies and functions need to apply as well. Number one, you need to treat agents as almost like an employee, so you need to create the right work environment for them. You wouldn't have an employee sitting up without an office, without a laptop, without connectivity, so you can't do that with an agent, but many companies do that initially. You need to create the right environment.
You need to give agents the right context, institutional context, operational context, historical context. That context that was also mentioned earlier in the Straive presentation, you wouldn't have someone off the street starting doing critical work in your company. They take years to accumulate that knowledge. That's something that agents need to do. Creating that context is a crucial operating principle, building the context, providing the right environment, and finally creating an environment where both human, but especially agents, can verify their own work because that closes the loop where agents are really excelling. An agent can run 100x or 1,000x faster than a human, but if you don't allow the loop to close and self-adjust, they are going to run into a tree, and you're not going to have good adoption.
Yeah, I think we saw a great example of that in the Straive presentation.
Exactly.
Someone described agents to me once as the brain of Einstein, no eyes and no ears.
Yeah.
What you're talking about, give them eyes and ears. Maybe we can make this a little bit more concrete. I know the two of you have worked together on AMCS. Talk to us about what your assumptions were going in, then talk to us a little bit about how that worked out in practice.
Yeah. For those that don't know AMCS, it's an enterprise software company. It sells to waste management companies. Think Veolia, would pay them EUR 15 million a year. All of the operational data, the billing data, the customer data, everything would sit within the core AMCS platform. Look, when we bought the company, I'd say it faced two significant headwinds. The first was they were just spending too much on engineering. They had a lot of different solutions. They were trying to be a lot to many, many people, and they were spending 27% of their revenue on their engineering bill. In addition to which, they were running into productivity issues within the engineering team. They were late on new products. They were falling behind on implementation. Ultimately, that was just showing up in the P&L as less revenue growth.
We identified this problem in engineering, and we wanted AI to help us solve the problem. I'd say we worked on it as sort of the deal team, with the management team for the first six months post-acquisition and bluntly made limited progress. There were lots of licenses. There were lots of money being spent on ChatGPT and Claude, but limited progress. At that stage, we teamed up with Mircea. I'd say we're now in a very different place, Mircea, why don't you-
Yeah.
-Cover what you've actually done with them?
I started in January this year, it hasn't been a long time. Made quite a big impact, together with the team. Initially, my approach was I had the framework, I had done it in the past on a single company, AMCS. When I deployed myself there, some music on the background. I made a mistake, I started as a consultant. I had my framework. I started presenting it to the management, then I realized change doesn't happen. Right? Change will not happen. It took me a week to pivot. I went into their Ireland offices. I came back in 10 days, I completely changed the model. I started going both bottom up and top down.
That was the precursor of what we are now calling almost like a forward-deployed engineer model, where I actually worked with groups of 20 to 50 engineers, two days locked in a room with agents, unlimited tokens, burning through problems. When you do that, you realize on those three principles what is the work environment gap that you have? What is the friction that you have on that environment? What is the context that humans have that agents don't have? In every workshop with these teams, we build software that goes to production. I would say that it was not only engineering, but product and engineering. We now have product managers that never touched code in their lives. They're now building capabilities next to engineers. The approach was completely changed. It is both bottom up and top down as well.
In some other companies that we are working with, we have actually COs coding with their engineers and experiencing the friction and the context firsthand.
That was a big change.
Yeah.
I think that alignment and that-
Yeah.
-Problem definition and alignment around what the operational realities are because I think a lot of times people don't understand. They abstract away the operational realities, and then it becomes very clear when you're trying to solve the wrong problem.
Yeah. Three months later, I'd say productivity is now up 50% in engineering, and costs have been taken down by 25%. It's pretty meaningful in three months post Mircea going in, and hopefully we can continue that.
Fantastic. We have heard a little bit of how it works on the deal level, about deal selection and then execution. Christian, as head of the PPR committee, you have a role that is across the whole portfolio.
Yeah.
How has the governance process adapted to the environment that we are in?
Yeah. Does this thing work or not? Not sure. Can you hear me? I think you can. I think to a certain extent, the governance process has not changed. The PPR was always already set up to make sure that we followed companies and made sure that they would adapt to change. The content of the discussion has altered quite a bit, and AMCS is a good example of that because historically, it would have been pretty easy sailing with a software company like that, and now it is a bit different. Lots of change. What we do, and facing reality is sort of a key point here. What we start off with in our PPR, and that is explicitly or implicitly, is that we check, does our original investment thesis still work? Is the market what we thought it was? Is growth the same way?
Is our competitive position the same as what it was when we made the investment? What is changing? What are competitors doing around AI? If you think then three years ago or so, AI was a factor in a handful of companies, and others it was mentioned, but not really a big thing. Now, it is really in a majority of PPR discussions. It is a big part of the discussion. The way we started, actually, we did an outside-in scan with our Digit team and some consultants, focused on AI and checking what the opportunities were, what the risks were, what the capabilities were of the companies. That really created a focus that I think that bottom up, we would not have achieved.
Where we are now is really that in every PPR, we have a standing item where we talk about the value creation plan, that we talk about the capabilities that the portfolio company has, and of course, where we're tracking the KPIs themselves.
Maybe a more sensitive question, but a direct one. We all know, and you were saying, Mircea, that kind of top-down plus bottom-up is really what makes it work. You need that. What if you have a leadership team that you don't feel can actually drive the transformation? How do you know that, and what do you do about it?
The way we know it, we have, of course, quite a few lenses on this. The deal team, they are interacting with the portfolio companies, as you know, almost daily. We have a board, and we try and make sure that we have on the board people like Mircea who really understand AI very well. Then, of course, we have our PPR meetings where generally the chairperson will present as well and the CEO will come. We get a decent sense of the quality of what's going on there. In the past, in our PPR, we always talk about how suited is the current chair, how suited is the current CEO. Now, we have a lot more focus also on the CTO. We dig in. Is this person really the right one to take us to the next level?
Because there's a real change in capability requirements there now.
Finally, not to pick on you, but third question to you. Everything that you do is about making things systematic. It's not ad hoc, but systematic. How do you keep track of what's happening, monitor? How do you learn? What tools, technologies are you using to make sure that you keep up to speed on what's happening in the portfolio?
Well, I mean?
Now, it sounds like you're swimming. It sounds like you're swimming underwater.
Yeah. No, I think we have our own systems of keeping track of everything, in terms of performance and in terms of KPIs. What we build as well is our own sort of AI system called Cortex. Cortex is a system that draws in information from the outside world. Trying to understand what is happening in the competitive field of our portfolio companies. What has the portfolio company gone through in the past? Basically access all the documents if we've had many PPR sessions in the past. I think a big thing also, it draws on the experience of EQT globally, this is really where the scale comes in, our scale benefit. That has really elevated the discussion that we have, but is also a tool that we use to keep track on everything that's going on.
It's a perfect example of how important context is to let AI help us make great decisions.
Something I would add to that is the concept of an observable function or an observable individual also applies to companies. The notion of an observable company now generally is mentioned for AI-native companies, but I believe it applies to any company. For the work that I'm doing, where I'm kind of effecting change of a number of functions, I have sensors deployed within the company that can report back metrics, and you can aggregate insights, and I think this compounds at the level of EQT, or will compound, because what you learn in one company can apply to others, right? Then you can feed back those insights into the company as well. That's the loop I'm also building right now.
That's really interesting because I think one of the things that we all grapple with, it's one thing if you're an AI-native company and you were built for this moment.
It's another thing if you're an incumbent. You have existing process. That's a legacy. You have people who have a way of working, maybe not always the most optimized way of working. Figuring out how to help those companies and making things observable, to your point, even just understanding people's process in an abstracted way, I think will be a really important part. I want to make sure that we leave time for questions, but I thought maybe, I know that we're going to have the CEO of CFC come up here. I wonder if the two of you, since you both also worked on CFC together, maybe you could give us just a little bit of overview from your side, how you would set up the conversation.
I'll cover it very briefly because Louise will do a much better job than I will shortly. Look, I think CFC is one of our true AI winners in the portfolio. I think the opportunity and the reason it's so exciting is there's both thematic tailwinds which support the company, significant revenue opportunities, and significant sort of cost opportunities. I think there's the kind of the perfect three wins supporting the company. On the sort of revenue side, look, ultimately, we all know that AI is changing the cyber world. It's increasing the number of threat vectors out there. That's driving demand. It's also driving pricing, and CFC runs a commission-based revenue model where as pricing hardens, then the revenue growth accelerates. They also had a first, I think last week, where they wrote the first fully agentic insurance policy in the specialty insurance space.
There were some eyes on it, I gather, it can be done agentically, we're just going to have some human eyes over it for a little bit longer before we write too much business on it. The capability is now there, and that's super exciting and should allow us to move fast and gain rapid market share gains. Then on the cost side, we have 120 software engineers. The company runs its own development stack, its own application stack, and has always used proprietary technology to give it the position it has. That's maybe the one area of the company that wasn't operating quite as seamlessly as it could have been. On that note, Mircea was once again deployed to try and help speed things up a bit.
I think the first five words I heard from the CFC team when I started doing this was, "Be careful, we are highly regulated." The assumption was that deploying AI will be more difficult.
The exact opposite happened. When you're highly regulated, you have a number of constraints. You have to do citations, verifiability.
Good documentation,
Auditability, good documentation, verification loops very tight. All of that are essential for a good AI deployment. I would say right now that if you treat in any company deploying AI as if you are regulated, you would gain far more benefits. One metric that, Rob, you haven't mentioned, we improved productivity by 50% in AMCS, but their error rate, their change failure rate, was also cut in half at the same time.
With AI, quality can improve. I think what my takeaway so far from CFC, if you treat your business as if it was regulated when you do AI deployment, that verification loop will be much stronger, and it will allow you to get even more benefits.
That's a very interesting insight and also probably something interesting for how you think about choosing companies, right?
Yeah.
I think that's a nice insight. I want to make sure that we leave time for questions. We have about two and a half minutes. Are there any questions on the floor? If not, I will always have Yes.
Hi, it's Oliver Carruthers from Goldman Sachs. Rob, you gave, I think, a four-part criteria of how to think about valuing software businesses in an AI world. What creates value? From a buyer's perspective, what is the current landscape for deploying capital in the software space?
Yeah. We're seeing a lot of very, very interesting opportunities. I think, as I look at the software landscape, I think there's been a fundamental shift, which is a lot of the way value has been created in the private equity industry, investing in software, has been kind of taking advantage of a lack of innovation in software. It's been super sticky. Customers don't change. We can increase prices. We can do other things. I think the industry has now fundamentally changed to being a highly innovative industry. That changes the way you run companies. It changes the leaders you need in those companies. It changes the pace. I think the good thing about EQT is we've always been focused on those more innovative companies in software.
We'll continue to be focused on that, which makes the shift towards this AI workflow that Mircea is talking about less compared to some of the more profit-focused, value-focused incumbent vendors out there. I think we see a lot of opportunity. That being said, the bar is pretty high right now. I think there is a higher level of risk in the industry than there has been, and I think we need to be rewarded for that commensurately. There's a lot of opportunity out there.
Just shout it out. We'll hear you. There you go.
I'm Dina Dede. I'm leading the AI infrastructure and strategy between Microsoft and the London Stock Exchange Group. We're working there on deploying agentic AI on a regulated environment. Sorry we're looking at you, but you know what's coming.
Wow.
You said that the regulated environments are actually easier for AI deployment because the process and the documentation already exists. Just to challenge there, but in my experience, that's usually the problem, that you have legacy data, inconsistent formats, siloed systems. How you can have a clean enough view of the data foundation in order to have that documentation in place to deploy in a regulated environment?
This also happened with CFC, and we found the data that was inconsistent and duplicated in some places. The insight we had was humans held the knowledge that was helping iron out all these issues, right? The friction of checking and using your own intuition how to normalize the data and so on. Remember the three principles, and one of them is creating the institutional context. We started pulling knowledge out of people's brains into context. We used agents to normalize the data, clean the data, because clean data is essential for any AI deployment, and then agents were able to run at full speed. What happened before doing that was agents were stumbling and creating hallucinated results because humans knew better than agents. When we got human knowledge to be persisted on this, and then we got the agents to read it, things dramatically improved.
This is not the case for just regulated companies. Any company that is negligent with their data integrity will have issues, and that's a foundational thing to fix first, not rely on humans to close the loop. If you break the loop of an agent with human intervening, then you're not going to get where you need to be.
Super. That was a tough question. I'm glad you had a chance to ask it.
Unfortunately, we're going to call it there, but everybody will be around, so if you have more questions, please do follow up with us after the panel.
All right. Hi, everyone. It's been an exciting day. I'm here on the tail end. I'm Carolina, and I'm the head of EQT Ventures and also of EQT Growth in the U.S. We are, I'd say, the tip of the tech spear, which makes this an incredibly exciting point in time to be investing. First things first, maybe just a little bit of a step back in what we do and what we're looking for across EQT Ventures and EQT Growth. We start investing basically from pre-seed in the venture fund, really our sweet spot is seed to Series A, looking for amazing management team in markets that are either nascent or really prone for disruption. Entrepreneurs that are incredibly ambitious and are looking to create what we call generation-defining companies.
Our typical equity check tends to be EUR 10-EUR 15, but it could be EUR 2-EUR 30. We're mainly a European fund, but also investing in the U.S. as well. EQT Growth picks up where Ventures leaves off, investing in companies post-product market fit, when companies are ready to scale, either from a product perspective or a geographical perspective. Of course, as of Monday, EQT Growth is also lucky enough to be selected to run the European Scale-up Fund that'll be investing in critical infrastructure, data, and healthcare in Europe. That's been a very exciting week for us. We really benefit, and this is really one of the key differentiators to us, is we really benefit from all of EQT in everything that we do. This is a right to win. It's how we win deals.
We not only get to leverage our 26 offices globally and all of our teams, but we also leverage all of our portfolio companies. When we're going head to head with someone like Sequoia in a deal, we're not trying to be Sequoia. It's actually incredibly powerful to be EQT. If you think about what AI companies are trying to do today, they're trying to sell into a lot of companies that look like our portfolio companies in other parts of the firm. They're trying to get to companies where our industrial advisors sit on those boards. This is actually incredibly differentiated. We are a generalist investor in the sense that as a fund, you would get exposure to everything tech. As people, we do divide ourselves by sub-sectors.
This is important, of course, because as small squads, you can prosecute deals with a little bit more of a thematic lens. Then it's extremely important in the value creation phase. It is very different scaling a robotics business than a consumer business than an enterprise business. So this is what allows us to then really try to add as much value as we can to our portfolio companies. I'll spend a little bit of time in a bit going through some examples. Of course, sticking to the theme of AI, we have the benefit in EQT Ventures and EQT Growth to be investing in a lot of AI-native companies. What we're seeing now is companies that are being formed and growing faster than ever before.
I've been doing this for almost 20 years, and I've never seen so many companies going from zero to 10 million in less than a year. It's really kind of extraordinary, and it's just a reflection of the fact that there is such a big demand to adopt these technologies now that are coming from the CEO into companies. Also, with users, vibe coding, for example. Mircea had the excellent example of vibe coding on his phone, I think, last night. These are some examples of some of our AI-native companies. Lovable, out of Sweden, is growing incredibly fast and is a leader in vibe coding. Harvey is dominating the legal industry. If you think about repetitive tasks that cost a lot of money, I think you need to look no further than legal tech.
Parloa, which is originally from Germany and is increasing customer satisfaction and lowering cost in customer service. Starcloud, this is one of my favorites to talk about, is trying to put data centers in space. The bull case there, of course, is that one of the challenges with data centers is energy, if you were able to put them in space, you could constantly have access to the sun. I'll let you guys talk about the bear case later. Then, of course, 1x, which is a Norwegian company that is looking at putting humanoids in your home. So if you've come to any EQT event, you might have seen Neo running around. It's very different and much more challenging to put a humanoid in a home than in a factory, because in a factory, it's doing something incredibly repetitive, and it can be really heavy.
In a home, you need dexterity, you need to be much more light, because if you touch a pet or a child, you can't injure them. Not only is it cool in a way of you grew up watching "The Jetsons" and you always wished that you had a robot in your home, it's also breaking into the world of physical AI, of capturing data about how we live, which goes beyond the human training that a lot of the labs are actually doing with their LLMs. Then we have, of course, particularly in the growth fund, companies that were born before AI. I think this ties together with one of the questions from the prior panel of how are companies well-positioned that are non-AI native companies to take advantage of this.
Of course, because our companies are all technology companies and most of them are founder-led, these founders really moved a lot into AI very heavily already a few years ago, of course, had the teams and the engineering talent to lean in. Maybe if I give you one example here, it'll be Perk. This is a travel and expense management solutions for SMEs. They're mostly capturing customers that are going from travel being unmanaged. You or I going on booking.com and then EasyJet to buy our work trip, to then having something that is a common portal that also connects to the office of the CFO. You might imagine, historically, this business was a very heavy services business. A lot of people in call centers changing your flights, your onward booking if something went wrong, et cetera.
When GenAI happened, the founder had the idea of sitting his best AI people next to his best customer service people, he was able to build a platform that automated almost entire parts of the workflow. The company's gross margins went from 40% to actually 75% today, just as an example of some of the things we're seeing. Here are other highlights from the portfolio. I've talked about Starcloud. Parloa, again, really transforming conversational AI. One of the things that I'll mention on Parloa, outside of the incredible growth, is that the retention is very strong. I think sometimes one of the questions we have with a lot of these new AI companies is it sticky and is it really working, or are people just testing?
One of the things that we see with Parloa, we see this with Harvey as well, is that the gross revenue retention is incredibly strong. The GRR for this business is actually 99%. Then you can see here the NRR number. Then Vinted, of course, which if you haven't heard of or used, I highly encourage you to download the app after this event. Circular economy, consumer-to-consumer marketplace for secondhand goods. When we invested, they were in six markets. Today, they're in about 16. They were burning a lot of capital, now they're incredibly profitable. This is a business that now at scale and with AI, is actually accelerating. These numbers are public. They're at about EUR 1.2 billion top-line revenue, they're still growing at 65%, that's an acceleration on prior year also.
Finally, a lot of people will ask us, what are we looking for? What do we think is around the next corner? We pulled four themes that we see. The first one I talked about, which is physical AI. It is LLMs today are mostly being taught by people, by humans. The next frontier we really think is AI being in the real world through hardware, and how that teaches AI and software. In Europe, of course, a new geopolitical reality. We are seeing the topic of sovereignty loom very large and drive a lot of capital into European businesses, which we think is super exciting. The third one is what we call the Palantirization of everything. A lot of companies want to use AI, they have no idea how.
What a lot of these AI businesses are having to do is actually send forward deployed engineers to figure out what's the best use case, and then also help handle change management, which needs to happen in these businesses as well as a result of AI. Finally, in the consumer economy, we are seeing a lot of growth in real-life marketplaces. So things like Vinted or events, things that drive us closer together, things that connect us to the real world. In a world where potentially we have more time, maybe we will be doing more shopping, more going to events, more going to the gym. There we see, in especially skilled marketplaces, a real acceleration from AI. So I am 25 seconds over, so I will wrap us up here. Thank you.
Okay. Thank you. Are you guys ready for the pest control AI presentation? Good. Something different. I am going to tell you about pest control market and Anticimex and how we operate there. My name is Jussi Ylinen. I am the CEO and the president for the Anticimex group. Okay, so what is Anticimex? What are we? We are the global leader in pest control. We are driving the transformation from reactive to preventive pest control services through innovation in environmentally friendly and digital solutions. It is a nice wrap-up in a nutshell, but I will try to explain what it means in practice. First, a bit of the pest control market globally. We estimate the size of it at over $26 billion, and half of it is in U.S., North America, Canada as well. Maybe 25% in Europe, another 20% Asia-Pacific, and 5% rest of the world.
We estimate the market to grow around 5% annually. The drivers for the growth has been the same for a while. Those are the global mega trends. First of all, there are more pests at all times now. The drivers are urbanization, so people moving into cities, creating great opportunities for pests, all kind of animals, to reproduce, shelter, food, and of course, being closer to the people. At the same time, the globalization, so people and goods are moving around. So the bedbugs are traveling in the suitcases, if you remember the stories from the Paris Olympic Games. Of course, all the goods, all the logistics are, of course, great opportunities and customers for us. At the same time, the climate warming, the global warming is working for us.
The summers are longer, meaning that the pests can actually move from south to north, new species at all times. We take the dengue fever, which is carried by the tiger mosquitoes that used to be in Asia, Southern Asia, and Africa, and today they are in Central Europe and Netherlands. We're treating those things, so it's good business. At the same time, we don't want to see, we don't tolerate pests anymore the same way. The younger generations don't actually. There's a cultural change. My kids won't take the wasp nest anymore. They're calling the pest control company. At the same time, people have more money. The standard of living is going up, so people have more money to spend on services, and they do that. The regulatory requirements are getting tighter.
If you take the food industry, there's a lot of hygiene regulatory requirements that only professional pest control companies can tackle. At the same time, the environmental regulatory is also getting tighter, so you cannot just throw poison anymore to the environment as someone did in some decades back. That's the environment we work with. Let's see how does Anticimex fit into it. Today, we operate in 22 countries. We have over 12,000 employees. We operate in the decentralized model. We have over 250 branches, actually 266 today. Revenue of SEK 17 billion , $1.7 billion maybe, and growing 350% since 2015. Today, we operate at the 21% EBITA margin. Again, a huge improvement since we started this new journey in 2015. We are the global leader in digital pest control, something I'm going to tell you a bit later on.
We have over 600,000 smart digital online devices installed at our customer premises, communicating at all times to us. We're definitely the market leader in digital pest control. We have done over 400 acquisitions over the past 10 years, adding SEK 10 billion to our revenue. Basically, 30 or 40, up to 50 acquisitions every year, once a week. The whole Anticimex journey started 1934, 92 years ago, being just a local player in Sweden until basically 2012 when we got to know EQT and being part of something new, a new era, and really set the target to be a global leader in pest control. Few years later, we introduced the Anticimex model, the operating model, decentralized model that has been enabling us to grow and scale up. We also entered the Pacific market.
2016, we entered into Asia and U.S., the biggest market, of course, 2016. 2017, we established our innovation center, our R&D, being base for the whole digital offering. Just as a proof of the resilience of the whole pest control business, 2020, the whole pandemic time, we actually improved our margins and we were growing organically. It was actually not a bad time for us. If you look at the whole revenue and profitability development over the past decade, with the revenue growth of CAGR of 16% and the EBITA CAGR at 22%. All the time improving the margins while we're growing, both organically and of course, also through the acquisitions. Where we are today, almost 40% of our business is in U.S. We started there 10 years ago. Not covering all the states, but they are good coverage.
50% still in Europe, strong in all the markets that we operate. The Asia Pacific, another 13% of the business today. A bit of the building blocks of how we are able to maintain the growth and also maintain the profitability improvement. Everything is based on our decentralized branch-based model, the Anticimex model. The brands and the customers are at the center. We have the quality and efficiency. We call it measure, monitor, manage. Every branch will incrementally improve every year what we do. We grow organically through both a price increase and, of course, the volume increase, both as important. We have the Anticimex Smart, like I mentioned, and also the M&A machinery. Those building blocks, of course, are paving the way to become the global leader in preventive pest control. This is all supported by the sustainability policies we have.
That's nothing separate. It's tightly implemented, the way of operating. I'll have an example of that later on. I haven't held any of the presentations so far without telling about the Anticimex model. I just have to tell it because this is the base for everything what we do. It's the branch model, the branch and its customers at the center. We keep the local responsibility for this branch manager. He or she has the key of the business, as they're running the business locally. This is how we operate. We unbundle everything what we do, whether it's the sales or the customer retention or the employee satisfaction, to the branch level, so that we always know what's good and what needs to be improved. We simplify the value drivers.
It's not that every branch manager need to work on 20 different KPIs and improve all of those, but we select those most important for that branch at that moment. We do the measure, monitor, manage, so we understand what of the KPIs needs to be measured. We monitor whether we are on track or do we deviate, and if we deviate, we do the management, and that's taking the actions. Very simple. Everybody knows it, everybody is following this. There's a best practice sharing. Of course, at all times, a branch manager or some branch manager are better than the other ones. We try to capture what are they doing the best, why are they better. We try to take that knowledge and transfer this to the other branch managers. Best practices.
Every year, 20 best branch managers are awarded. We go for luxury long weekend with their spouses and have some fun and a little bit of work. Best week of my year. Actually, that's why I was not here last year, because that was the week I couldn't come. The Anticimex Smart, the modern technology, this is a bit complicated to explain in one slide, but I'll try. It is a combination of those hardware IoT devices. Some devices that are killing and catching or monitoring pests, typically rodents. On the other hand, we have a software part of it. We need to have a software to manage all the data that we get from those 600,000 devices.
We need to have an operational tools for our field technicians, we need to have operational software for the back office people. We need to build an environment where we can actually plug and play new devices and new solutions. We do this for the customers, what's in it for the customers? On the lower part of the slide, you see these white areas. That's a traditional problem with the customers. Over time, the pest infestations are only detected too late. The problem is already high, and it takes a lot of time and effort to fix the things. With the 24/7 constant monitoring, we detect the problems earlier. They are smaller. They are easier to fix. Over time, there will be less of those. This is what we sell, and the customers love it.
It's more on the internal journey that we need to convert all the internal people from the traditional to a new way of thinking. How is the AI fitting into the picture? I've divided into three steps. Of those 600,000 devices, we get over 10 million data points every day. Every five minutes, they're sending some information for us. It's been quite difficult or impossible to manually understand what does it tell us. We need to work smarter. At the same time, we get maybe 50,000 site visits, customer visits per day, also sending information to us. Who are the customers, what are the problems, how did we solve that, and what will be the next steps? Also, create a lot of information, almost impossible to manually put that into a bucket and try to make something good out of it.
The first thing for us is to start building a shared data foundation, common data model. I just thought that we operate the decentralized model, every data is existing at the local level. Now, with an AI, we can build models, we can actually have access to this. Once we get access to the data, we can actually start building something usable. If there's something good, we can test it, we can sell it, we can make it available for other branches and countries we operate. This is different. In the old world, it would have been that we need to build a SAP system that everything's operating under one system, today we have an opportunity of utilizing the data model and scale it up. What we have today, just last year, we launched a battery prediction AI module.
Sounds like a small thing, these 600,000 devices are operating with the battery power. You need to go and do maintenance. Depends on the activity, the temperature, humidity, everything, when is the right time. With this module, now we can optimize when do we send technician out in the field, not too late, not too early, optimized. Just a small example. Next thing that we are working on today is that when we are monitoring, our monitoring devices are any animal walking through the device leaves a pattern. The cats and the mice leaves a different pattern. In order to understand what's important, what is not, we need a bit of help from the AI. We're building now these modules. Again, that we send at the right time to the right place our technicians.
We use utilizing AI in our software development, in our customer service, et cetera. Today it's more of the more efficiency to the operations. It's not going to change everything. Over time, we also see that we could be more autonomous, we can automate even more, and we can make faster and better decisions than earlier. Few words on the sustainability. This is also important when I said that the sustainability is something that we build on. This is the Anticimex methodology. We inspect, we monitor using our devices, we do the prevention. Our job is to not to be reactive but actually fix the customer problems. We're fixing the holes, make sure that there's no future problems. We use the right amount of chemicals to the right places.
What's in it for the customers, of course, is the less biocide harm, less contamination, and of course, less pest damages. For the world, we are protecting the biodiversity, we're reducing the risk of pest-borne diseases, and we are reducing the food of property losses. We can just see the middle one there with the reducing the risk of pest-borne diseases. We all know about hantavirus, and they're coming from the rodents. This is where we are. We have a mission here in the world. Then just a few words on the M&A, how does it work. Our local teams, they're building the pipeline. They're having the morning coffees. They're building the trust with the sellers. When they're ready, then we launch the whole process with the governance. Of course, then we control it. So far, this machinery is working.
Once a week, a new proposal comes to my desk, and then we see if this is still good, and typically is. Then with the help of the owners, we get some funding, and then we get the approval and we move on. If I summarize the success story here is that the pest control market is just great, very resilient. It's growing, and it's just great to be part of it. Then we have the Anticimex model, so we can scale with the business within this environment, adding new branches as we grow. Thirdly, we have the modern technology. We are the leader in the digital pest control in the world. We combine that with the biology knowledge we have in-house and turn this into customer success and customer value. Thank you. That was all what I wanted to say.
If there's any questions, I'm open for that. Are we running this? Typically, I get always good questions. Okay. Yep. Okay, good, thanks.
From pest control to insurance, EQT really did save the best for last, didn't they? There's actually quite a few common themes between what you just heard about moving from reaction to prevention. Let's see if we can draw those out. Look, as an introduction, I'm Louise O'Shea, CFC's CEO. I want to leave you with one clear message, and that is that CFC is very different. Let me explain exactly what we do. We're a managing general agent. Here we go. Oops, hang on. We basically design, we price, we service, we distribute, but we don't take underwriting risk in the insurance market. We are an extremely capital light business. Okay. I'll explain exactly how we do that, but ultimately, we're partnering with big brands that you would know and recognize. Zurich, Beazley, well, they're now one, but many big companies that you'll recognize.
We're leaders in a very large global market. Not quite as big as the pest market, I now understand, but SMEs, they're not pests, they're wonderful people. Small, medium enterprises. It is a huge market and it is growing. There's lots of tailwinds, and I'll take you through some of them. Obviously, AI is a big one. It is increasing demand, as Rob said, for our business. It's also creating new risks. Every single company which is implementing AI has just introduced new risk into their business. Therefore, as an insurer, a new opportunity to help them. We have a very differentiated proposition.
What we do and how we do it from our proprietary tech platform, which has got more efficient very quickly, to our huge proprietary data asset, 16.7 billion data points per quarter that we're collecting on companies around the world in our target markets, assessing their cyber hygiene before they even ask for a quote. That type of data asset is significant and it enables us to improve what we're doing day to day, and it creates an amazing flywheel for the business. I'll talk to you more about that. The result, these are numbers that make Rob very happy, make my board meetings pretty easy, relatively. We're talking about 30% CAGR growth on income over the last 10 years. Over 50% EBITDA margin. Cash conversion, near 90%. We grow whatever is happening in the market.
In insurance, for those of you who might have dabbled, you'll be familiar with terms like hard and soft markets, when prices are going up, when they're coming down. Throughout all of those periods, CFC has continued to grow, and I'll explain exactly how. I truly believe. I had to write truly believe rather than CFC is because the lawyers pored over what I'm writing. CFC is the most differentiated business in the global specialty market. One thing I haven't mentioned yet is cyber insurance. We are the market leaders in cyber insurance for SMEs. What we do there is preventative. We're preventing the pests from attacking those SME businesses. It's super exciting stuff, which I will tell you all about. Let's get into it. How do we actually unlock this flow of specialty risk for our capital providers?
We're the MGA platform. We're playing this really pivotal role. I want to start with the most important people in the room. That's our customers. Over 200,000 SME customers globally. We're able to write business in over 100 countries. We focus on industry groups, many diversified groups. We focus on ones that are also growth industries. E-health, fintech, education, life sciences. All of these industries we look at and we bundle up mission-critical products for them to help them with their needs. I mentioned cyber briefly. I'll get into it in more detail. Just to give you a sense, we're stopping the attacks before they happen, that preventative cybersecurity, which we are world leaders in. We're doing this in partnership, hand in hand, with over 4,000 brokers worldwide. We're making their lives easier. Anybody spoken to a broker recently?
They want things to be easy. They want things that will help them to grow. That's exactly what we do. We give them brilliant products, we make it super easy for them to connect with us in any way they want. We're enabling them to grow. We don't go into those meeting rooms saying, "How can we get more share of your wallet?" We go in saying, "How can we help you to grow?" That's why the number of brokers that we work with is increasing over 10% per annum. They absolutely love operating with CFC. As I mentioned at the very beginning, we're a very capital light business. We're not taking the underwriting risk. We're not funding the payment of the claim. We're writing risk on behalf of 36 A-rated capital providers.
Like I said, big insurance companies you might have heard of, as well as other capital providers such as OTPP, for example. They're trusting us to select the very best risk. We're so good at this, they're signing up for long-term agreements because they really want to make sure they can keep having some of CFC's business coming through to them. They couldn't reach this type of business themselves because they don't have three things that we're able to deploy in order to reach the SME market at scale. That's our proprietary technology platform, that's that huge proprietary data asset that I've mentioned. It's also the speed and the quality of the innovation, which enables us to deliver these incredible products and these incredible services that prevent the risk in the first place.
That means that the claims that we're paying out are so low it creates fantastic profit for these partners. Let's just talk about the market that we're in. SMEs. This part of the global specialty market of insurance, it's growing faster than any other part of the insurance market. You can see there, double-digit growth compared to the rest of the insurance market. I tend to say we're on a rising tide. That tide is being further accelerated by significant global mega trends. Clearly, AI has been a big topic all day. It is a big topic for everybody. Not only is it creating new opportunities for us to take away risk from our SME clients and ensure that risk for them, but it's also leading to an increase in cyber attacks.
The tools that can now be employed by cyber hackers mean that they can increase the frequency and the severity of the attacks. Luckily, it is also enabling us to fight those attacks more quickly and more effectively. Fundamentally, what we will see, sadly, is an increase in cyber attacks. Happily for CFC, that also means we will see an increase in demand for cyber insurance. This is a market that is highly under-penetrated in the SME market. Cyber insurance, for example, in the U.K. for SMEs, is sitting in terms of about 15% penetration. It is very low penetration. This is a product that everybody should have. CFC has been built over 25 years as an innovation machine. Up here is just a bit of the history of our innovation. We chose a few things. We couldn't put the whole thing on a slide.
The print would be far too small, and I'm very blind. I want to call out one particular year for you, which is 2019. Two things, I like this vintage. Two things happened, and that was no-touch underwriting. Rob earlier on mentioned agentic underwriting. Today we've taken it to a level where we are taking a broker's submission and getting back to them within seconds. We're reducing our cost of processing from GBP 12.50 to GBP 0.75. This is significant what we can do. The other thing that launched back in 2019 is Proactive, which is what I mentioned in terms of 24/7 surveillance. This is our very differentiated cyber proposition. It's got three key aspects to it, prevent, respond, and recover. We will work tirelessly to prevent an attack before it happens.
Able to scan from the outside all of our customers and see what is vulnerable from the outside and work with them directly to get that fixed. Remember, these are SMEs. They don't have CTOs or CSOs. They need this help. These services, if they went out to try and buy these services on the open market, would cost them tens of thousands of GBP. We're including this in their insurance premium. Respond. We can't stop people all the time getting through. I'm actually looking at a lot of vulnerabilities today. You will all fall for a phishing attempt at some point. We're very mindful that we need to be able to get in and help our customers in the event of an attack, even getting in within minutes and repelling the attackers if they're still in the system.
We have one of the largest in-house teams in the world that do this on a day-to-day basis. It's brilliant what they do. It's absolutely fantastic. It's all about recovering, getting them back up on their feet. That's what an SME business owner wants. They want to get back to doing what they do. To be honest, we don't want to be paying a significant business interruption claim. It works for everybody. What is the result of all of this innovation and all of this hard work? Well, it's these very diversified parts of our business. 75 products across multiple lines of insurance cover, bundling to meet the customer's needs. It's coverage across over 100 countries. Though you'll see on there, the U.S. is a big market for us, which is great because it's also a huge market.
We have got so much runway in the U.S. ahead of us. Over 4,000 broker offices. We work with so many different businesses globally. This gives us lots of opportunities for more growth. Capacity providers. 36 high-quality capacity providers. All of this provides optionality, diversification, and opportunities for future growth. I'll talk you through some of those pillars of value creation. I've mentioned the distribution network. There's a lot more we can do to increase the reach that we have globally. We have over 4,000 brokers, the top 10 of which have been working with CFC for over 16 years. I've already said they love what we give them. We give them a seamless experience, great customer service, and fantastic products for their customers, helping them to grow. Ultimately, brokers want growth.
At moments when, which we're in right now, for example, prices in many insurance product lines are coming down, introducing new products such as cyber cover is a fantastic way for our brokers to go out to their clients and give them something they need. Continuous product innovation. 75 products. Last year alone, we made 90 upgrades, improvements, or introduced new products. The speed and the pace of that, the ability to get an insurance, a highly regulated product, to market, that takes a lot of knowledge, a lot of data, a lot of technology, a lot of know-how, a lot of expertise. That's exactly what we've got at CFC. We deliver consistently superior underwriting results.
That's partly in terms of our risk selection, identifying customers who we believe are going to not have as many claims or incidents, but also helping those customers who may have one and managing their risk with them hand in hand and being their partner. It's that fantastic underwriting results that mean that those capacity providers I mentioned are really keen to work with us. They sign up to long-term agreements, which is very unusual and rare. Most underwriters want to re-underwrite every year and check what they're doing. We've delivered time and time again for them, and they trust us to write business on their behalf. Proprietary technology platform. We've mentioned this. This is a continual investment in CFC.
To be able to operate 75 different products with 4,000 different brokers in 100 different countries from one platform, having one data asset, which, yes, needs a little bit of cleaning and tidying up, but fundamentally, that is a huge benefit, especially when you're wanting to deploy AI over your business. AI is not only accelerating demand for our products, it's also enabling us to do more and grow more quickly, and do it more efficiently and effectively. Underpinning all of that is this very entrepreneurial, highly engaged, talented team. CFC is absolutely the place to work in the specialty global market. Our management team is highly expert in what they do. Personally, I'm just very impatient and dissatisfied all the time. I just want more. Rob likes that. Moving on, I mentioned that strong growth track record. You can see it here.
I mentioned in insurance, we have these moments of prices going up, prices going down. You don't see in CFC's growth trajectory that we miss a beat. Whatever the macroeconomic conditions, whatever's happening, we're able to grow and trade through that. It's a combination of what I was talking about. It's innovation. It's moving into new products, new territories, working with more brokers. It's all of the things that I mentioned before. It's using that incredible data asset. It's building from that proprietary tech platform, enabling us to get more efficient and effective with what we're doing. It's that incredibly engaged team, which has got 50% of our team have equity. We have complete alignment of interests across the CFC group with our shareholders.
Talking through those numbers in a bit more detail, over the last 10 years, we have grown policy count by 20% CAGR, and that's mainly because we focus on those attractive growth markets, and we're consistently taking share. Our gross written premium is growing faster than that. That's over 25% CAGR. That's tripled over the last five years, and that's because we're constantly improving our products. The clients are SME businesses. They want to buy more of them, and as they themselves grow their businesses, it means the cost of the insurance to them increases. Trading income. That's increased at 30% CAGR. The quality of that underwriting that I mentioned, that's very well evidenced over many years. The capacity providers, those 36 big insurance companies, they will pay us more to have access to it.
The result is EBITDA growth at well over 30% to EUR 180 million in 2025 and an EBITDA margin over 50%, though Rob does keep asking me for more. All of this superior growth has been delivered organically, and it is capital light. It's driven by those many levers that I've already talked you through. When I look out to the future, I see that the best is yet to come. We will continue to do more of what we are very, very good at. We will continue to benefit from structural market growth, which is accelerated by those big mega trends, AI, SME digitization. There are so many more opportunities for us as a company. In addition, our propositions, our innovation, all of that just happens at pace every day. The teams are close to what the brokers need. They're close to what our customers need.
Naturally, our business has operating leverage that increases. The majority of our costs are people and some technology. As we grow, we don't need to add as many heads for each EUR 1 million of premium that we write. The future, there are so many more things that we can do as an organization. We recognize we've built this business from London predominantly. Our most recent years, we started to put teams into new geographies, Canada, the U.S., Australia, and start to service those geographies onshore. We've got a huge runway in the U.S. market and a new leadership team in place there. In addition, we recognize that there are many other geographies that we would love to have time to grow in, but we're going to tackle those in different ways through partnership. Austria is a great example. We've partnered with a brilliant insurance company there.
They benefit from our platform, our product. We benefit from their brand and their distribution network. New products. One mega trend that I haven't mentioned, climate change. Last year, we launched a new product in that space. This is brand-new premium that had never been written before in the insurance market. We're helping our brokers to grow. Most importantly, we're helping customers to take risk away so that they can continue to innovate. Our own implementation of technology and AI is enabling us to quote quicker, be more efficient, be more effective. Most excitingly, from my point of view, it's enabling us to grow with new opportunities and new demands for insurance cover. I hope I've impressed on you that CFC is different. We play a pivotal role in the insurance value chain, bringing value to every single stakeholder we have.
We are benefiting from powerful market tailwinds in an already huge market. We have an extremely differentiated proposition that customers love and brokers love that is delivering incredible results, making my performance reviews of EQT relatively easy. I look forward to answering any questions you have. Thank you very much. Got away with it. Thank you.
Thank you, Louise. What an amazing business, yeah, one of the winners in our portfolio and at the right time, I'm sure, will also be a very attractive IPO candidate. I know that Magnus and the team are very excited about it, are looking for more EQT IPOs so that they can beat their world records that they've set in terms of sell downs and capital gains generated. Thank you all for joining us today. I hope you've had a good day, that you'll take with you that we're a learning organization, that we've been through multiple economic cycles, technological shifts, that every time we've come out stronger out of those cycles. AI for us is a generational investment opportunity. Our platform is really very well designed to capture this opportunity even more so now after the acquisition of Coller Capital.
We will continue to invest into our capabilities, our value creation capabilities, our alpha-generating capabilities so that we can also in the future deliver superior risk-adjusted returns performance for investors, building on this strong track record that we've produced over time that we can be that scale player in the industry that remains focused on performance, that remains client-centric, that global provider of international alpha to private market investors. If we do that, we think that's going to be a really differentiated proposition that will allow us to retain, attract the best talent to our investment organization, our portfolio companies, also in the future deliver that performance for investors, as a result, also going forward produce very attractive returns for our shareholders. With that, I suggest that we open it up for questions and maybe all of you want to join me here on stage.
Yes, Hubert, please.
Hi, it's Hubert Lam from Bank of America. A couple questions. Firstly, you mentioned at the beginning of the presentation the Europe Scale Up Fund. Maybe you can talk a bit more about it in terms of what types of investments you plan on going into it, the ramp-up, the economics behind it. That's the first question. The second question is on your early stage and ventures business. I know today is mainly focused in Europe and mainly in smaller ticket sizes. Do you have any ambition to expand that to possibly growing more in the U.S., bigger investments there? Just given your strength and expertise around tech and AI, is that something that you can probably do more with in the future? Thanks.
The Scale Up Fund and the investment opportunity there.
Yep.
Secondly, the growth fund and the opportunity for the U.S. is really your question, right?
I'll start and you fill in, Olof. In terms of the Scale-up Fund, initially the fund size target is set at EUR 5 billion, a large part of that has already been secured thanks to commitments from the anchor investors, the European Commission, and also a commitment from our own balance sheet. We see strong interest in— I'm choosing my words carefully enough. We see strong interest in this fund, we'll see where we set then the final fund size target for this initiative. We're very excited about it. The focus areas will be AI, deep tech, clean energy, but also life sciences and medical devices. We've really built our platform to invest into this opportunity over the last decade. We're today Europe's largest early-stage investor in healthcare and technology.
Not only do we have a deep track record, but of course, we've also built an attractive pipeline of near and mid-term opportunities. From our perspective, we are ready to start investing really as soon as early Q3, and we hope to be able to do that. In terms of what this means for our ventures and growth strategies, and our life sciences strategies, they've so far been focused on Europe. We don't think that it will really impact our ventures funds and our life sciences funds in Europe. We will continue to invest those based on the same strategy and focus areas that we've had in the past. What it does mean, though, is that the scale-up opportunity, the growth opportunity in Europe for us will now be invested out of the Scale-up Fund rather than the EQT Growth Fund.
Of course, establishing also a growth fund in the U.S. over time would be something that potentially could be attractive for us and is something we're evaluating. Yeah.
You have-
In terms of financials, maybe. Yes, the financials for the Scaleup Fund. Do you want to say something about that, Olof?
Yeah, very happy to-
The terms.
As Per indicated, it has a target size of EUR 5 billion. With us looking to activate it this year, we will see a decent share of that adding to our fee-paying AUM already this year. Perhaps not all of it, but a decent chunk of that we'd expect. As Sid said also in the press release, this is a fund that is going to be based entirely on commercial terms. That goes both in terms of the investment mandate and how this will be run in terms of the investment philosophy and the evaluation of investment opportunities. With that, we also expect that there will be a market standard fee rate and also incentive components as part of the structure, quite similar to our closed-ended fund structures. I believe you had a question, Ermin.
Ermin Keric from DNB Carnegie. You're soon approaching when it's time to do the kind of second generation of some of the new strategies you've done after the IPO. Could you talk a bit about where you see the most growth potential? I'm thinking of EQT Future, Active Core, all of those.
Yeah.
You also mentioned the mid-market Europe fund.
Yeah.
When could the timing be for that? How should we think about it, just in terms of modeling?
In terms of the second generation, we also think that we see some of the capital that used to be allocated to the private credit asset class also flowing to cash-yielding infrastructure strategies such as our open-ended Active Core second generation. That's very exciting. The growth fund I just touched upon. That will now become the Scaleup Europe Fund, which is fantastic. The first generation of that fund was just above EUR 2 billion and now we're targeting EUR 5 billion or more. You also touched upon the EQT Future strategy, which is our long-hold strategy for our private equity business. Performance in the first generation is excellent. On the back of that, we're also here thinking about what is the right structure and setup to really maximize the opportunity for this strategy going forward.
Should it be also, again, a longer hold closed and sort of 15-year type of structure, or would it also make sense to instead change this to an open-ended fund for the second generation? These are conversations that we're having right now with some of our investors.
Was also just the mid-market fund.
The mid-market opportunity. What we are seeing is just a very strong interest from really all of our larger global institutional investors to provide them with more deal flow in the mid-market space in Europe. They see us as the blue chip, high quality, private equity platform in Europe. They'd like to do more with us, and they'd also like to get more exposure with us in the mid-market space. Very strong inbound and interest from investors for us to do more in the mid-market space in Europe and that's what we're thinking about now and that's why I mentioned it as a growth opportunity for us.
Maybe to take a step back to this year is a very significant fundraising year for us. We're going to have more than 10 of our closed-end fund structures that are in fundraising and we have all of our three flagship funds that are at different stages of fundraising and having just completed the Asia fundraising. Yes, please. There's a question over here.
Yeah. Hi. Russell Quelch from Morgan Stanley. Maybe I could ask you what your thoughts are around scaling up in the secondaries market, where you see opportunities across maybe different asset classes where you're not in on the secondary side at the moment, geographies where perhaps there's an opportunity as well and I'd love to hear you talk more broadly in secondaries about how you think about the evolution of that market over the medium term from a size perspective. Thanks.
The growth opportunities that we see for the combined Coller EQT platform is in terms of scaling existing strategies, in particular in the private credit strategy. There's a clear opportunity now to unlock alpha in that part of the industry. That's something we're focused on. Coller today already has one of the largest or if not the largest credit secondary strategy. Near term, we see an opportunity to raise a new, even larger fund to invest into that market dislocation. Of course, an obvious opportunity would also be to launch products in new asset classes. We're a big investor in infrastructure. We're a big investor in real estate. That's something that we're looking into. We also have a really differentiated market position in Asia.
To launch a dedicated strategy towards Asia is also something we're assessing and that we're excited about. Momentum in the business continues to be excellent. Our ambition is to at least double fee-related assets under management in the next four years. What I'd add is that we also see a very nice momentum in the insurance channel and so that's also a growth opportunity for the business.
Over the medium term, how do you think that business evolves? Is this the single biggest opportunity across the sector over the medium term?
We think it's a part of the market that is just structurally growing for all of the reasons we've touched upon today. The private market's becoming larger, more complex, the emergence of zombie funds, that is just going to increase. How do you work with clients, with investors to discontinue zombie fund relationships while staying invested in the gems that some of these firms might be sitting on? Create win-win situations. That will also lead to the GP-led part of that market growing maybe even faster. We believe continuation vehicles are here to stay if structured in the right way with the right incentives and alignments and done in a long-term responsible way. That's how we look at that part of the market.
Thank you.
We have a question from Haley over here.
Thank you. Thanks. It's Haley Tam from UBS. Just one question please. We've talked about AUM diversification being a key differentiator in difficult times. I just wondered if you think you're now complete in terms of diversification. Are there any other asset classes we should still be looking at?
Diversification geographically or across asset classes or everything?
Everything.
Yeah. Geographically our strategy, our approach over the last 30 years has been that the Anglo-Saxon markets, New York, London, a lot of competition, many firms focus there our focus initially was winning Europe and after we won Europe we wanted to win in Asia. We've done that's good. The U.S. continues to be a growth opportunity for us and we will continue to invest into that market. When it comes to asset classes, I think we're really nicely set up to capture the growth opportunity ahead now. We can also provide investors today access to private credit whilst delivering real alpha also through our secondaries strategy with Coller. We don't see a near-term need to enter private credit.
Having said that, if you take a very long-term perspective, I would never rule it out but for us it needs to be at the right time on the right terms. In terms of where we see the near-term diversification increasing, it's by continuing to scale our secondaries strategy, but also by broadening the thematic focus that we have in our real estate business, where performance is excellent, world-class team. Here we see an opportunity to grow that part of our business both organically, but of course also through acquisitions.
Thank you.
I was struck by one of Bert's comments about how he made the point that you're very keen to lean into these mega trends, which makes total sense, but also the need for increased diversification as well to protect yourself too. Particularly for the private capital strategies, are you evolving how you think about portfolio construction for some of these funds and for, say, Fund XI compared to prior funds?
No, not really. I think probably what you picked up was that we are always focused on having an appropriate diversification across regions, subsectors, vintages. For all of these flagship funds. That's the same for Asia, Europe. It's the same for our infrastructure strategy. In the private equity part of the business, typically, we've done, call it 15 to 20 investments per fund. That's how we will also invest EQT XI going forward. From a subsector perspective, we just always keep an eye on not to overexpose any fund to a specific subsegment. No changes there, and that will be the same going forward for EQT XI and then in terms of the geographic split, really delivering on the promises that we made to clients.
The EQT equity strategy, EQT XI, has been always a strategy that's been mostly focused on Europe whilst providing also the most attractive deal flow in our target subsectors in the U.S. We're going to do that also in EQT XI.
Thank you.
Maybe one last question. Yes. Sorry, one more over here.
Thank you. Sharath from Deutsche Bank. I had a question on Asia. Given the current market dynamics, particularly the underperformance of India's public markets and the perception of it being in AI losers basket. Do you think your portfolio construction strategy for BPEA IX will meaningfully change versus your previous strategies? Thank you.
I just chatted a little bit to Hari about this. Some of those dynamics that you just mentioned, we also believe could create opportunities for us to source attractive investments in India. IPO candidates that might not be coming to market now and where we could acquire majority control instead. What we did say before we raised EQT IX, and what we did communicate to our investors, in previous funds, the exposure to India was as high as 40% of certain funds, and it served us incredibly well. Performance has been unbelievable. We said that for EQT IX you should not expect that high exposure, slightly lower, call it 25%. Yeah, I'd probably stick to that estimate. That's what we communicated to investors also.
Great. Okay. Thank you everybody for joining. We hope you will stay with us a bit longer. We've arranged some nice music and even better drinks out. There is a terrace over there. I'm trying to keep the rain away. I'm not sure if I've been successful, but please join us for some drinks. Thank you.