EQT Partners CEO Per Franzen speaks to BTV in Davos
Key Takeaways
- 1EQT is pivoting its strategy toward thematic investing, specifically targeting the energy transition and digital infrastructure as core growth pillars.
- 2The firm acknowledges that higher-for-longer interest rates necessitate a shift from leverage-driven returns to deep operational value creation.
- 3EQT remains one of the largest global alternative asset managers, benefiting from a flight to quality as institutional LPs consolidate their GP relationships.
- 4Management suggests that the gap between buyer and seller expectations is narrowing, which could lead to a significant uptick in deal volume throughout 2024.
- 5The firm is increasingly focusing on the 'mid-market' and 'large-cap' segments in Europe and North America to leverage its local-with-locals approach.
In an interview at the World Economic Forum in Davos, EQT Partners' Head of Private Equity, Per Franzén, outlined a stabilizing environment for the private equity sector following a period of valuation adjustments and rising interest rates. This narrative is critical for investors as it signals a shift from defensive posturing to active deployment of 'dry powder' in high-conviction thematic areas such as digitalization and decarbonization. Franzén emphasized that while the era of cheap leverage is over, value creation will increasingly depend on operational improvements rather than financial engineering—a trend that separates top-tier alternative asset managers from their peers. This aligns with broader industry trends where firm-level scale and specialized sector expertise (Healthcare, Tech) are becoming the primary drivers of Alpha. Investors should monitor EQT's exit activity as a barometer for the IPO and M&A markets; a successful flurry of divestments in 2024 would validate the firm's portfolio valuations and likely bolster its share price. Furthermore, his comments suggest that the private equity secondary market and private credit will continue to gain market share as traditional bank lending remains selective. The overarching takeaway is a move toward a 'new normal' where disciplined capital allocation and EBITDA growth are the focal points for private market returns.