Ambitious and Unyielding: Conni Jonsson and EQT's $50 Billion Mission
Title: Unveiling EQT's Strategy: $250 Billion Plan to Rule over Asian and European Private Equity
Hailing from a humble rural background in Sweden, Conni Jonsson grew up milking cows and working the fields, harboring dreams of expanding his family's agricultural operation. Faced with disappointing test scores, he adjusted course and pursued accounting and finance at the University of Linkoping. This unexpected route inadvertently set him on a path to becoming one of Europe's top private equity trailblazers.
Founding EQT in 1994 with backing from Investor AB, Jonsson transformed the firm into Europe's largest private equity player. Now managing a colossal $248 billion in assets, EQT is currently spearheaded by the founder, who remains a billionaire worth an estimated $1.7 billion. Jonsson's driving forces have always been adaptability and creativity, amply demonstrated by his relentless pursuit of success against all odds.
In 2014, Jonsson transitioned from CEO to chairperson, still serving as a managing partner. His ambitious vision for EQT sees the firm becoming the number one buyout firm in Asia and Europe, aiming to surpass giants like Blackstone and KKR. Since EQT's 2019 IPO, its assets have ballooned sixfold, with strategic acquisitions such as Pennsylvania-based Exeter Property Group and agreement on a $7.5 billion purchase of Baring Private Equity Asia anchoring its growth.
Jonsson's inspirations have been large American private equity firms like Blackstone, Apollo, and KKR. He first immersed himself in the buyout scene during a New York stint with Investor AB, and this experience laid the groundwork for his professional ambitions. After returning to Sweden, he successfully pitched EQT's buyout-focused firm concept to Investor AB's CEO, Claes Dahlback, and family patriarch Peter Wallenberg. Dahlback recalls the purchase of heavy-duty diesel engine manufacturer Tognum as one of EQT's most successful deals, praising Jonsson's boldness and intution.
EQT is now outcompeting those American giants for deals. Its tenth flagship fund closed at an impressive $22.5 billion, while its targets $12.5 billion for its next Asia fund. Its earlier funds have posted impressive annualized returns, with its infrastructure funds netting IRRs ranging from 11% to 22%. The Swedish firm is now especially eyeing opportunities in India, the world's most populous country and fastest-growing major economy.
Despite its current success, EQT has encountered roadblocks. Its shares, traded on Nasdaq Stockholm, saw a 500% gain within two years of its IPO but shed half its value during a grueling 2022. Its stock has since rebounded, but it has lagged peers like private credit specialists Ares and Blue Owl. Driven by a conviction in owning companies, not papers, EQT has shunned private credit and sold off its small credit business.
Jonsson views borrowers' reliance on private lenders and lesser regulatory guardrails with caution, while private credit funds' dependence on insurers raises concerns. He believes that firms like Apollo and KKR, with their significant ownership of insurers, could risk conflicts of interest.
Equipped with $50 billion in dry powder and a resolute vision, Conni Jonsson and EQT are poised to challenge the private equity landscape, remaining unwavering in their pursuit of glory and dominance across Europe, Asia, and ultimately, North America.
SIDEBAR: FACTS & ENRICHMENT
- Investor AB, a holding company for the Wallenberg family, initiated EQT in 1994 with additional backing from AEA Investors and SEB.
- EQT spent its first decade predominantly operating in Sweden and the Nordics before venturing into Germany.
- Tognum, a heavy-duty diesel engine manufacturer, was one of EQT's first significant deals in Germany, which it acquired in 2006 for $1.9 billion.
- EQT AB's shares made a remarkable 500% gain in the first two years following its 2019 IPO, but this uptrend was followed by a significant drop in 2022.
- EQT also established EQT Ventures, a venture capital arm aimed at investing in tech startups, in 2016.
- In 2021, EQT acquired Life Sciences Partners, and in 2022, it agreed on a $7.5 billion purchase of Baring Private Equity Asia, expanding its portfolio and capabilities.
- EQT has a regional focus on sectors like Healthcare, Technology, Tech-Enabled Services, and Industrial Technology in Europe and North America.
- EQT Partners AB projects a $12.5 billion target for its next Asia fund, BPEA Private Equity Fund IX (BPEA IX).
Conni Jonsson, being inspired by American private equity firms like Blackstone and KKR, sought to transform EQT, which was initialized by the Wallenberg family's holding company Investor AB, into a formidable player in European private equity. During his tenure, EQT's Wallenberg family affiliate, Conni Jonsson and EQT's European private equity, aggressively pursued deals, outcompeting giants such as Blackstone and KKR, demonstrating its financial prowess.
EQT's success in Europe has encouraged the firm to expand its reach, with ambitious plans to become the number one buyout firm in Asia, surpassing competitors like Blackstone and KKR. The Wallenberg family's commitment to the firm extends beyond Europe, as they have invested in EQT's venture capital arm, EQT Ventures, and other strategic acquisitions, further solidifying EQT's position in the global private equity landscape.
