Amidst global economic volatility fuelled by geopolitical tensions and rising energy costs, EQT, a global investment organisation, sees opportunities for growth and consolidation. EQT establishes its Australian presence in 2020 and has invested $13 billion from its private capital, infrastructure and real estate funds across 15 companies and assets. The firm differentiates itself through its heritage with the Wallenberg family and emphasis on environmental, social, and governance factors.
EQT’s CEO, Christian Franzen, notes that clients and investors are increasingly seeking firms with proven track records. He believes EQT is well-positioned to gain market share and deliver returns due to its demonstrated ability to manage capital. Franzen anticipates industry consolidation, with scale becoming a crucial factor for success. This environment also presents opportunities for EQT to acquire assets and participate in this consolidation, particularly as more firms struggle to raise capital.
Franzen also addressed concerns surrounding private credit providers, suggesting the sector may face a reckoning. He notes that some players have taken on too much risk, potentially leading to consolidation. However, he downplayed fears of systemic risk, citing ample liquidity and well-capitalised banks. Despite potential turbulence from global events, Franzen sees opportunities in public-to-private transactions and corporate carve-outs.
While acknowledging the challenges of pricing assets during market volatility, Franzen remains optimistic about the long-term outlook. He views the current interest rate environment as more normalised and highlights the potential of artificial intelligence, where EQT is already heavily invested. Despite some setbacks in the Australian market, EQT remains committed to the region, viewing its capital markets as attractive with sophisticated institutional investors.
