Swedish PE group EQT has closed its new EQT Mid Market Europe Fund on a hard cap of €1.6 billion, a pool of capital that will be used to back companies in Northern Europe worth between €100 million and €300 million. The EQT mid-market team's recent investments include German cybersecurity provider Utimaco and Adamo, a Spanish telecom offering services related to fiber optics.
Those acquisitions are indicative of EQT's shifting sector focus. Since the start of 2010, the percentage of the firm's new deals that involve IT business has
more than doubled, per the PitchBook Platform, with that rate rising to nearly 30% last year. This broadly mirrors the wider trend for PE on the continent, where deal flow in the IT vertical
is on the uptick as a share of overall activity.
That increase has largely come at the expense of B2B, as you can see in this chart mapping yearly totals for the percentage of all private equity deals in Europe taking place in the industry's three most-popular sectors:
YoY % share of European PE investment
The new fund continues EQT's separation of its mid-market strategy into geographically focused vehicles. Last September, the firm closed its first EQT Mid Market US fund on $726 million; before that, the firm had closed a more general middle-market fund on €1.1 billion in 2014. The new fund's increase in size to €1.6 billion could be seen as a vote of confidence in the health of Europe's corporations.
Investors will certainly hope the elder fund’s success carries over into the new pool—according to PitchBook data, EQT's 2014 mid-market fund had an IRR of 14.59% as of the end of 4Q,
placing it second among its peer benchmark of nine vehicles.
PitchBook subscribers can access more info on EQT's past funds, investment history and more.