EQT has agreed to acquire Baring Private Equity Asia, a private markets investment firm in Asia. The purchase price is $7.5 billion. The combined Asian private capital business will be rebranded as BPEA EQT Asia and will continue to be led by BPEA CEO Jean Eric Salata and BPEA’s senior management team.
EQT takes the next step on its strategic journey – joins forces with Baring Private Equity Asia, creating a scaled active ownership platform in Asia
EQT AB (publ) (“EQT”) has reached an agreement to acquire Baring Private Equity Asia (“BPEA”) (the “Transaction”), a leading private markets investment firm in Asia with EUR 17.7bn of assets under management (“AUM”).
· The combination with BPEA, a leading Pan-Asian private markets firm, provides a step-change to EQT’s presence in Asia, and ideally positions EQT to execute on the structural growth opportunity in Asian private markets
· Asian private markets are expected to grow at almost twice the rate of global private markets and investors are set to materially increase their private markets allocations in the region
· With an exceptional cultural fit, a strong performance track-record, aligned approach to thematic investing, and a commitment to accelerate digitalization and sustainability, the combination provides an opportunity to leverage the strengths of both organizations to create one of the leading players in active ownership in Asia
· Following the combination, EQT will be local-with-locals in 25 countries, representing ~80% of global GDP, thereby creating a truly global platform poised to expand EQT’s active ownership strategies across its core markets
· The combined Asian Private Capital business will be rebranded as BPEA EQT Asia and will continue to be led by BPEA CEO Jean Eric Salata and BPEA’s senior management team
· Total consideration of EUR 6.8bn, consisting of 191.2m new ordinary EQT shares, valued at EUR 5.3bn, plus EUR 1.5bn in cash
· The combination is expected to be immediately high single digit accretive to EQT’s EPS
Expanding in Asia is a strategic priority for EQT, as the region accounts for more than a third of global GDP today and is expected to contribute 40%+ of global GDP growth by 2030(1). With 24% CAGR since 2015 and reaching ~USD 2.1tn in 2021, Asia is the growth engine underpinning global private markets (compared to 14% CAGR for Europe and North America combined). This trend is expected to continue as Asian private markets benefit from favorable long-term structural tailwinds. Global private markets firms are increasingly taking share in the underpenetrated Asian private markets, but still only represent 34% of the total market. With this combination, EQT is ideally positioned to take market share in and capitalize on the Asian growth opportunity with its truly global reach and scaled active ownership platform in Asia.
BPEA is a top-3 private markets investment manager(2) in Asia with EUR 17.7bn AUM, currently investing from its flagship Private Equity Fund VIII, which had its first close in September 2021. Operating since 1997, BPEA has built a platform with deep sector-based expertise and a value-driven active ownership approach, investing in mid to large-cap companies in Asia, mainly focused on Private Equity, but also Real Estate and more recently Growth. With 10 regional offices, BPEA combines local execution with a Pan-Asian reach (236 FTE+ as of 2021), mirroring EQT’s local-with-locals approach. BPEA has made 100+ Private Equity investments since its inception and has a track-record of generating strong returns for its clients, with 2.6x realized gross MOIC since inception(3). With its deep, long-standing relationships with 300+ clients and best-in-class fundraising ability, BPEA is well positioned to capitalize on the outsized Asian growth opportunity.
The combination represents a step-change in EQT’s global reach with immediate Pan-Asia presence at scale and with its thematic investment approach, supporting companies from early stage to maturity, EQT will continue to scale and expand its range of strategies across its European, North American, and Asian core markets and deliver for its clients.