(Bloomberg) -- Swedish private equity firm EQT AB is looking to take advantage of an improving mergers and acquisition market to monetize assets and return capital to its own investors, following a prolonged slump in dealmaking.
“We are confident about exits,” Chief Executive Officer Christian Sinding said in an interview Thursday, after the company reported first-half results. “We have a large number of exits that are currently active or in preparation.”
The private equity firm in the first six months of the year, agreed to sell a majority stake in online real estate platform Idealista and completed the initial public offerings of skin-care company Galderma Group AG and health-care payments software maker Waystar Holding Corp.
“IPO market is still fickle but getting better for good companies,” Sinding said. All credit markets, meanwhile, are open and the pickup in dealmaking “is a reflection of improving debt markets,” he said.
Improving conditions for dealmaking are providing a welcomed respite to private equity firms, which have been facing pressure to put capital to work and generate returns for investors and so-called limited partners.
EQT is deploying more, putting €12 billion ($13 billion) to work in the first half, compared with €9 billion for the same period last year. “We expect to see a gradual normalization in activity levels over all,” Sinding said. “The exit activity that has started and will continue is delivering more capital to LPs, which is helping fundraising overall.”
The company expects its new infrastructure fund to reach its fundraising target of €20 billion. It also plans to to kick off fundraising for its ninth Asia-focused buyout fund by the middle of August.
EQT reported adjusted Ebitda for the first six months of €609 million, missing analyst estimates of €690.1 million. Its shares dropped as much as 8.2% in early Thursday trading, before paring losses to trade down 4.9%.
Report Highlights:
- Adjusted Ebitda EU609 million, +9.7% y/y, estimate EU690.1 million (Bloomberg Consensus)
- Adjusted Ebitda margin 56% vs. 54% y/y, estimate 59.1%
- Management fees EU1.05 billion, +13% y/y, estimate EU1.05 billion
- Adjusted operating expenses EU479 million, +3.2% y/y, estimate EU477 million
- Adjusted net income EU500 million, +11% y/y, estimate EU570.3 million
- Assets under management EU133 billion, +5.6% y/y, estimate EU133.24 billion
- Total investments EU12 billion, +33% y/y
- Adjusted diluted EPS EU0.422 vs. EU0.379 y/y, estimate EU0.48
- Adjusted total revenue EU1.09 billion, +6.8% y/y, estimate EU1.17 billion
(Updates throughout with CEO interview.)
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