Swedish private equity firm EQT announced in its year-end 2024 report that it has discontinued its U.S. multifamily fund and also has “decided not to pursue further investments in the office and life sciences property sector for the time being.”
Formerly known as EQT Exeter, the company will use the EQT Real Estate brand going forward and focus “primarily” on industrial and logistics real estate.
PERE noticed that Chicago-based multifamily manager Redwood Capital Group, which EQT acquired in 2022, no longer has a working website. The profiles of some of its executives aren’t on EQT’s website any longer.
The private equity firm said that the costs associated with the former multifamily fund, such as redundancies and revaluations of some investments, is a total of about €80 million (about $83.36 million), net of tax.
During the earnings call, chief financial officer Kim Henriksson said EQT had reduced its employee headcount in the U.S., “following the decision to discontinue the initiative related to the U.S. multifamily fund and thus to optimize team size.”
Henriksson said that the reason for the multifamily discontinuation was “a challenging fundraising market.” He also said that the life sciences activities “will not scale to the same levels as our flagship, but they do support our platform through sector knowledge sharing and complement our overall offering so that we can provide our clients exposure to companies from emerging to mature.”
The CFO also explained that typically a fund should operate at a 1.7 to 1.8 times gross multiple on invested capital in four to six years of its life cycle. “Taking a closer look at Infra IV and EQT IX, these funds still need to execute exits material for the fund,” Henriksson said. “And given the slower deal environment in recent years, it's reasonable to expect recognition for these funds to start towards the back end of our rule of thumb. So, 6 years-plus rather than 4 years. We're not expecting to recognize carry for these funds in 2025, and thereafter, timing will depend on the exits and the pace of value creation.”
Gustav Segerberg, the company’s head of business development, said that “2024 was a continued tough fundraising year and fundraising timelines remained extended.
"We do not expect any significant improvement in the overall fundraising market during 2025, and our expectation is that it will take until 2027 before we are back at the same fundraising levels as we saw in 2021," he said.