EQT AB Earnings Call: Galderma Windfall And AI Push

EQT AB ((SE:EQT)) has held its Q1 earnings call. Read on for the main highlights of the call.

EQT AB’s latest earnings call struck a distinctly upbeat tone despite choppy markets and pressure on software valuations. Management leaned on a series of landmark wins, from the record Galderma monetization to a hard-cap close for BPEA IX and booming evergreen inflows, framing recent volatility as temporary noise rather than a sign of weakening fundamentals.

Record Galderma Monetization Sets Industry Benchmark

EQT completed the final sell-down of dermatology group Galderma, including a $6bn sponsor-backed block trade, fully exiting a flagship investment. The deal returned about $26bn to investors and generated roughly $20bn of capital gains, which management described as the largest single-fund capital gain ever seen in the private markets industry.

BPEA Fund IX Hard-Cap Close Underscores Scale Advantage

The Asia-focused BPEA Fund IX closed at $15.6bn, with $14.9bn in fee-generating commitments, hitting its hard cap and marking a near 40% step-up versus Fund VIII. EQT attracted more than 75 new investors into the vehicle, while over 45 existing EQT strategy clients contributed about a quarter of total commitments, showing strong cross-platform support.

Evergreen Vehicles Deliver Record Private Wealth Inflows

EQT’s evergreen vehicles aimed at private wealth clients reported record quarterly net inflows of €1.0bn in Q1 2026, up sharply from roughly €200m in the prior quarter. Redemptions remained exceptionally low at below 0.5%, underscoring sticky capital even as headlines around private credit created some drag on potential inflows.

AI Infrastructure Strategy Launches With EdgeConneX Seed

The firm formally launched a dedicated AI Infrastructure strategy seeded with EdgeConneX, a major data center and digital infrastructure platform. EdgeConneX operates more than 90 data centers globally and controls about 29 million miles of fiber and large-scale energy assets, supporting a development pipeline above 100 GW and a combined enterprise value over $100bn.

Fundraising And Fund Activation Show Broad Momentum

Management reported that flagship buyout vehicle EQT XI is on track for a strong first close around midyear, maintaining momentum in the core franchise. On the infrastructure side, Infra VI is roughly 75–80% invested, paving the way for Infra VII activation around year-end, and EQT expects to be in market with more than 10 closed-ended fundraises through 2026.

Robust Dry Powder Positions EQT For Market Dislocations

Firm-wide dry powder now stands at over €40bn, excluding the upcoming EQT XI commitments, giving EQT significant flexibility to capitalize on dislocations and attractive entry points. Management emphasized that this capital base provides a competitive edge to lean into opportunities as valuations reset across segments, particularly in infrastructure and technology.

Software Portfolio Outperforms Operationally Despite Multiple Pressure

EQT highlighted that its software holdings posted low-to-mid teens net sales growth in 2025 and operating profit expansion of 20–30%, even as sector multiples compressed. The firm completed four software exits with a weighted average gross MOIC of about 5x and underscored IFS, which has crystallized a gross MOIC above 7x and is targeting ARR growth above 20% alongside up to €100m in annual AI-driven savings.

Exit Activity Remains Broadly Diversified

Quarterly exits included Galderma and specialty chemicals distributor Azelis, both from EQT VIII, supporting strong cash returns to investors. After quarter-end, Infrastructure funds IV and V sold minority stakes in EdgeConneX to the AI Infrastructure strategy, while Infra V also sold a minority position in Nordic Ferry, contributing to a pipeline aimed at roughly 30 exit events in 2026.

Coller Capital Combination Progresses As Secondaries Scale

EQT’s planned combination with secondaries specialist Coller Capital is progressing on schedule, with closing expected in mid to late Q3, and both sides showing commercial momentum. Coller has launched new private credit and private equity secondaries funds, recorded over $400m of private wealth net inflows in Q1, and aims to double fee-paying AUM within four years under the combined platform.

Carry And Capital Returns Support Earnings Visibility

Management pointed to four key funds currently in carry mode, with roughly €600m of carry yet to be recognized over several years, implying a multi-year earnings tailwind. EQT VIII alone is expected to generate about €500m of cash carry, with a substantial portion anticipated in the first half of 2026, while shareholder distributions over the past 12 months totaled around €800m via dividends and buybacks.

Market Volatility Highlights Valuation Sensitivities

The firm acknowledged that sharp Q1 market swings hit valuations unevenly, especially in listed software names that serve as benchmarks for private funds. Some private capital portfolios experienced lower marks driven by declining reference multiples and public share prices rather than any weakening in underlying earnings or operating trends.

Software Multiple Compression Weighs On Marks, Not Fundamentals

Private software holdings were marked down in the quarter as public peer multiples contracted, temporarily dampening reported valuations for vehicles such as EQT X. Management stressed that software comprises less than 30% of EQT X and that portfolio companies are still delivering strong growth and margin expansion, suggesting room for valuation recovery if markets normalize.

Fee Revenue Recognition Skewed Toward 2027

Due to the timing of closings and fund activations, much of the management fee income from new vehicles, including BPEA IX, will be recognized from 2027 rather than 2026. This creates a lag between fundraising success and financial statements, tempering short-term fee growth even as the firm significantly scales its assets under management base.

Private Credit And Evergreen Channels Face Sentiment Headwinds

Management noted that negative news flow in private credit has weighed on investor sentiment and created some dislocation in evergreen distribution channels. While evergreen inflows remained strong in absolute terms, the firm believes they would likely have been even higher absent this sector-specific volatility, indicating latent demand for private wealth products.

Carry Timing Uncertain For Certain Flagship Funds

EQT cautioned that Infrastructure IV and EQT IX are unlikely to be in carry mode in 2026, as distributions to paid-in capital need to be well above 1x before carry can be recognized. This makes carry-related earnings sensitive to exit timing and market conditions, adding an element of uncertainty around the precise trajectory of performance fees.

Investment In Growth Drives Modest Cost And Hiring Pressure

The firm added about 10 full-time employees in Q1 and expects mid-single-digit operating expense growth this year as it invests in AI capabilities, Asia, the U.S. and private wealth distribution. Management acknowledged that these growth initiatives and AI build-out may raise near-term costs but expects efficiency benefits and scale economies to protect profitability over time.

Guidance Highlights Strong Deployment, Fundraising And Liquidity

Looking ahead, EQT reiterated that 2026 exit volumes should broadly match 2025 levels, with around 30 exit events planned, underpinning liquidity and carry potential. The group flagged over €40bn of dry powder, a pipeline of large fundraises including EQT XI and Infra VII, record evergreen inflows, a Coller closing targeted for Q3 and guidance that includes roughly €600m of remaining carry, modest OpEx growth and a 55% fee-related EBITDA margin target.

EQT’s call painted a picture of a manager leaning into AI, infrastructure and private wealth growth while navigating macro and valuation headwinds with a long-term mindset. For investors, the combination of record realizations, sizable dry powder, a deep fundraising slate and disciplined cost guidance supports a constructive outlook, even as earnings timing remains partly tied to markets and exit windows.