EQT has agreed to sell its credit business to Bridgepoint. No financial terms were disclosed. The deal is expected to close in the fourth quarter of 2020. JP Morgan served as financial advisor on the deal while Kirkland & Ellis and Travers Smith provided legal advice.
EQT AB (“EQT”) today announced that following the review of future strategic options for the business segment Credit (“Credit”), a definitive agreement has been reached to sell the Credit business to Bridgepoint (the “Transaction”). Despite the difficult market environment, there was considerable interest in the business. The sale ensures that Credit gets a new owner able to support its growth prospects and permits EQT to further focus its efforts on building scalable value-add strategies focused on active ownership.
Established in 2008, Credit is the smallest of EQT’s three business segments with approximately EUR 4 billion of assets under management (“AUM”) as of 31 December 2019 in three complementary strategies: Special Situations, Direct Lending and Senior Debt. This represented around ten percent of EQT’s total AUM. The Credit business segment had total revenues of EUR 35.8 million and a gross segment result of EUR 12.3 million in the financial year ended 31 December 2019. The business segment employs approximately 40 professionals, including five Partners. Since inception, Credit has raised over EUR 7 billion of capital and invested in over 180 companies.
Christian Sinding, CEO of EQT AB, said: “This is an important step on our path of focusing on investment strategies which can fully utilize EQT’s governance and impact ownership model. We are delighted to have found such a great new home for the Credit business segment and the dedicated team of credit specialists. Together with Bridgepoint, the Credit platform is well positioned to capture the future growth prospects and develop its offering even further. I would like to take this opportunity to thank Andrew Konopelski and the entire Credit team for their contribution to EQT. It has been a great collaboration over the last 12 years and I wish them well in the next stage of their journey.”
Andrew Konopelski, Head of EQT Credit, continued: “As part of EQT, we have developed a diversified credit platform capable of investing across the capital structure. We have grown and implemented a thematic and due-diligence focused investment approach and an operational mindset. The resilience of the portfolios during these unprecedented times demonstrates the strength of our model as we look toward the future. We are excited by the considerable opportunities that we see ahead for private credit. With Bridgepoint as our partner, we will undoubtedly continue our growth path together while sharing similar values. I would like to thank the entire EQT community for their support over the years.”
William Jackson, Managing Partner at Bridgepoint, added: “This moves our credit strategy and ambitions significantly forward and provides further diversification for the Bridgepoint Group in line with our strategic objective of offering a broader range of compelling middle market focused alternative asset investment strategies. It will also broaden Bridgepoint Credit’s geographic exposure with an enhanced presence in the Nordic region, Germany and the US, adding to our existing teams in London and Paris.”
The Credit segment will be reported as discontinued operations in the half year report. The Transaction is not expected to have a material impact on EQT AB’s central functions. The proceeds are expected to be used to continue to deliver on EQT’s defined growth strategy.
The Transaction is subject to customary closing conditions, including regulatory, anti-trust and certain fund investor clearances, with completion expected to take place in the fourth quarter of 2020. The parties have agreed not to disclose the terms of the Transaction. JP Morgan has acted as financial advisor and Kirkland & Ellis and Travers Smith as legal advisors to EQT on the Transaction.
EQT is a differentiated global investment organization with a 25-year track-record of consistent investment performance across multiple geographies, sectors, and strategies. EQT has raised more than EUR 62 billion since inception and currently has around EUR 40 billion in assets under management across 19 active funds within three business segments – Private Capital, Real Assets and Credit.
With its roots in the Wallenberg family’s entrepreneurial mindset and philosophy of long-term ownership, EQT is guided by a set of strong values and a distinct corporate culture. EQT manages and advises funds and vehicles that invest across the world with the mission to future-proof companies, generate attractive returns and make a positive impact with everything EQT does.
The EQT AB group comprises EQT AB (publ) and its direct and indirect subsidiaries, which include general partners and fund managers of EQT funds as well as entities advising EQT funds. EQT has offices in 17 countries across Europe, Asia Pacific and North America with more than 700 employees.
More info: www.eqtgroup.com