EQT seeks 4 bln euros for Polman-advised impact-driven fund

Investor AB

20/10/2021 09:56

* EQT Future fund to target environmental, social impact
    * Carried interest to be linked to impact targets
    * Fund to be advised by former Unilever CEO Paul Polman

 (Adds detail from statement, company results, analyst comment)
    By Simon Jessop
    LONDON, Oct 20 (Reuters) - Swedish private equity firm EQT
 EQTAB.ST  is looking to raise 4 billion euros ($4.6 billion)
for a fund aiming to create a positive environmental and social
impact at its portfolio companies through longer-term
investments.
    The fund, EQT Future, will invest in "mature companies with
market-shaping impact potential" through safeguarding the
planet's resources and climate, increasing mental and physical
health, and creating equality of opportunity, it said.
    Up to 20% of the carried interest - a measure of the fund's
profits - will be tied to the portfolio hitting impact-related
targets including reducing greenhouse gas emissions and
increasing gender diversity within the companies' top 20% of
earners, EQT said.
    Chief Executive Christian Sinding told Reuters the launch
was "an important strategic step". 
    While a typical private equity fund would hold an investment
for three to five years over a 10-year life of the fund, EQT
Future would hold positions for seven to eight years over the
maximum 15-year life of the fund.
    "It means you can think a bit differently about the types of
transformation you can actually drive. We'd actually like to
find industries and companies where, if we spend that time ...
we can impact that whole industry, not just the company,"
Sinding said.
    The fund would target companies in Europe and North America
worth at least 400 million euros in sectors including the green,
health and education technology sectors, health diagnostics,
financial inclusion and decarbonisation, Sinding said.
    Also on Wednesday, EQT updated the market on its
third-quarter performance, with total assets under management of
70.3 billion euros and investments during the period of 7.7
billion euros.  urn:newsml:reuters.com:*:nWkrb6f21w
    Commenting on the results, Jefferies analysts said in a note
that fundraising in the quarter had been "quieter", but the
launch of EQT Future and plans for a buyout fund, EQT X, would
likely see that "ramp back up".    
    EQT Future's investment team of 10 will be led by EQT
Partner Anders Misund, with fellow partner Andreas Aschenbrenner
as deputy head. 
    It will be supported by a board of advisers led by the
former boss of Unilever and U.N. Sustainability Ambassador Paul
Polman, and Jacob Wallenberg, chair of EQT's biggest shareholder
Investor AB and vice-chair of ABB.
    Investor demand for funds with a focus on fighting climate
change and boosting efforts at diversity and other social goals
is gathering pace.
    In July, U.S. General Atlantic said it was launching a new
venture entitled BeyondNetZero https://www.generalatlantic.com/media-article/general-atlantic-forms-beyondnetzero-to-invest-in-growth-companies-delivering-innovative-climate-solutions
 that would target growth equity investments related to climate
change.
    The shift comes as governments look to step up their efforts
to both cut greenhouse gas emissions and ensure the transition
to a low-carbon economy is equitable when they meet for global
climate talks in Scotland starting Oct. 31.
    ($1 = 0.8597 euros)

 (Reporting by Simon Jessop  Editing by Jan Harvey and Mark
Potter)
 ((simon.jessop@thomsonreuters.com; +44 (0) 207 542 5052;
Reuters Messaging: Reuters Messaging:
simon.jessop.thomsonreuters.com@reuters.net))