EQT AB Earnings Call: Scale, Exits and Secondaries

EQT AB ((SE:EQT)) has held its Q4 earnings call. Read on for the main highlights of the call.

EQT AB’s Earnings Call Signals Confident Growth Amid Manageable Risks

EQT AB’s latest earnings call struck an upbeat tone, underscored by record realizations, strong investment activity, accelerating fundraising and solid revenue growth. Management portrayed a business gaining scale and diversification across strategies and regions, while openly acknowledging pockets of underperformance, the pacing of carried interest recognition and execution risks around the acquisition of Coller Capital. Overall, the message was one of strong operational momentum with risks that appear controlled rather than structural.

Record Exits and Realizations Highlight Portfolio Strength

EQT delivered its most active exit year ever, with total realizations reaching EUR 34 billion in 2025. More than EUR 19 billion came from fund exits, roughly 70% higher than the previous year, while a further EUR 14 billion was realized for co-investors. A standout driver was Galderma, which generated more than EUR 9 billion of proceeds in 2025 alone and has produced over USD 20 billion in capital gains to date, underscoring EQT’s ability to create and crystallize value in marquee assets. Management emphasized that its equity strategy returned close to 30% of NAV to investors, nearly three times the industry average, reinforcing the firm’s franchise as a top-tier realizations engine in an otherwise mixed exit market.

Robust Investment Activity and Co-Invest Engine

Despite the busy exit calendar, EQT kept capital deployment running at high speed, investing EUR 16 billion across strategies in 2025. Alongside this, the firm facilitated around EUR 14 billion of co-investment opportunities for its clients, keeping the co-invest ratio near 1:1. Co-invest volumes rose from EUR 12 billion in 2024 to EUR 14 billion in 2025, a roughly 16.7% increase. This co-invest platform is strategically important: it allows EQT to scale deal sizes, deepen client relationships and keep headline fund sizes more disciplined, while still accessing large transactions that can move the needle on performance.

Fundraising Momentum: Inflows More Than Double

Fundraising emerged as one of the most striking positives. Gross inflows more than doubled year-on-year to EUR 26 billion, signaling strong investor demand across EQT’s product lineup. Flagship progress included BPEA IX, which has raised USD 14 billion so far and is expected to close at its USD 14.5 billion hard cap, demonstrating continued appetite for Asian-focused strategies. Healthcare Growth and Transition Infrastructure strategies added about EUR 3 billion combined, reflecting the appeal of secular growth and energy-transition themes. On top of this, EQT’s push into evergreen and institutional open-ended structures is gaining traction, with around EUR 2 billion of evergreen inflows and NAV of about EUR 3.5 billion by year-end, giving the firm a more stable, recurring capital base.

Revenue Growth and Improving Fee-Related Profitability

On the financial side, EQT reported total revenue growth of 16% in 2025, driven by continued scaling of fee-paying assets and performance-related income. Fee-related revenues increased by 9%, and the company recorded a healthy fee-related EBITDA margin of 52%. Management reiterated a medium-term ambition to push this margin above 55% as the current fundraising cycle completes and operating leverage kicks in. Carried interest and investment income rose to EUR 448 million, and a total of EUR 1.3 billion of carry has been recognized from the four funds currently in carry mode. This mix of steady fee income and episodic carry underpins a robust earnings profile, although management was clear that the timing of carry recognition remains lumpy by nature.

Fund Performance and Embedded Valuation Upside

Underlying portfolio performance supported the upbeat narrative. Key fund valuations increased by 8% on an FX-neutral basis in 2025, while the latest generation of flagship vehicles delivered a stronger 15% uplift excluding FX. Four out of five funds raised in 2019 or earlier are tracking ahead of plan, and the 2020–2021 vintages are largely delivering value creation north of 10% on an FX-neutral basis. These numbers suggest meaningful embedded upside in the portfolio, especially as exit markets gradually normalize. For investors, the performance data reinforces the view that EQT’s core franchises are executing well despite macro and market volatility.

Strategic Coller Acquisition Expands into Secondaries

The planned acquisition of Coller Capital was framed as a transformational move into secondaries and private-wealth channels, two of the fastest-growing segments in private markets. The base consideration is USD 3.2 billion, paid entirely in newly issued EQT shares, with an additional contingent consideration of up to USD 500 million tied to achieving high-20s fee-related revenue growth through 2029. EQT will receive 35% of carry in future Coller funds and acquires 10% of the carry in Coller Private Equity Fund IX. Management positioned this deal as a way to broaden the firm’s toolkit across the full ownership cycle, deepen relationships with LPs and wealth channels, and diversify revenue streams toward more recurring, fee-based income.

Scale and AUM Expansion from Coller Combination

Coller brings meaningful scale to EQT’s platform. The transaction adds roughly EUR 28 billion of fee-paying AUM and EUR 42 billion of total AUM, taking the combined firm’s AUM to an expected EUR 312 billion. Coller’s flagship secondaries strategy is already sizable: Fund IX closed at USD 10.2 billion, more than 35% larger than its predecessor, while Coller’s private credit secondaries funds total around USD 5 billion. The evergreen business is also material, with NAV above USD 4 billion and inflows of roughly USD 200 million per month. For EQT, this injection of secondaries and evergreen capital provides a powerful additional growth pillar and a more balanced AUM mix, with management explicitly targeting a doubling of Coller’s fee-generating AUM in less than four years.

Shareholder Returns and Capital Allocation

EQT combined growth investment with meaningful shareholder distributions. The board has proposed a dividend of SEK 5 per share for 2025, an increase of 16% year-on-year. Over the year, the group returned approximately EUR 460 million in dividends and repurchased about EUR 300 million of its own shares. This capital return approach signals confidence in the firm’s long-term cash-generation capacity while still leaving room to fund strategic initiatives such as the Coller acquisition, AI investments and expansion into new distribution channels.

Managing Pockets of Underperformance

Management acknowledged that not all investments have been winners. A subset of portfolio companies has underperformed, consistent with EQT’s historical pattern that around 10–15% of investments return less than 1x gross MOIC. In 2025, the firm chose to exit some of these weaker assets, cleaning up the portfolio and recycling capital into higher-conviction opportunities. This candor on underperformance, and willingness to take losses rather than “extend and pretend,” is important for investors evaluating the quality and discipline of EQT’s underwriting and portfolio management over the cycle.

Carry Recognition: Strong Potential, Slower Near-Term Pace

The call highlighted a nuanced picture on carried interest. While EUR 1.3 billion of carry has already been recognized from funds currently in carry mode, only about EUR 600 million remains to be recognized from those specific vehicles. The next wave of large flagship funds, including Infrastructure IV and EQT IX, is not expected to enter carry mode in 2026, implying that carry income could be softer or more back-end loaded in the near term. That said, management pointed to an illustrative remaining carry potential of around EUR 9 billion in activated key funds, subject to performance and exit timing. For equity investors, this suggests an attractive long-term carry backlog but potential volatility in annual earnings as realizations unfold over several years.

Near-Term Cost Pressures from Strategic Investments

EQT is leaning into growth investments that will pressure operating expenses in the short run. The firm is spending aggressively on AI capabilities, building out private wealth and insurance channels, and preparing for the integration and expansion of the new secondaries business. Marketing and brand-related costs are expected to rise meaningfully as EQT positions itself more visibly in global capital markets and retail-like channels. While headcount (FTEs) is expected to remain broadly flat due to efficiency measures, management guided to mid-single-digit total OpEx growth in 2026, with savings partly reinvested into these growth initiatives. The message for shareholders: margins may be capped in the near term, but management views this as a deliberate trade-off to secure future growth and competitive advantage.

Execution Risk Around Coller’s Contingent Consideration

The contingent consideration linked to the Coller transaction introduces a clear execution challenge. Up to USD 500 million of extra payment is tied to delivering fee-related revenue growth in the high-20s percent range through 2029, effectively embedding an ambitious growth hurdle into the deal economics. Coller currently operates with a fee-related EBITDA margin of roughly 50%, slightly below EQT’s 52%, and will need to both scale and improve efficiency to converge margins with the group. Management argued that the earn-out structure aligns incentives, but investors will need to monitor integration progress, growth delivery and margin trajectory closely, as underperformance could dilute the expected economic upside.

Macroeconomic and Geopolitical Headwinds Remain

Against this upbeat operational backdrop, EQT’s leadership repeatedly flagged macro and geopolitical uncertainty. The firm operates in a landscape marked by slower dealmaking over the past few years, a more complex regulatory and political environment and a growing convergence between public and private markets. These dynamics can influence fundraising speed, exit windows and valuations. Management suggested that well-capitalized, diversified platforms like EQT are relatively better positioned to navigate this environment, but they did not downplay the potential for volatility to affect transaction timing and investor sentiment across private markets.

Dilution and Timing Considerations in the Coller Deal

The structure and timing of the Coller acquisition carry implications for existing shareholders. As an all-share deal, it will see Coller shareholders own around 6.5% of EQT at closing, implying some dilution for current investors. The transaction is expected to close in the third quarter of 2026, meaning that both the financial benefits and the integration work lie ahead rather than immediately impacting 2025 figures. Cash accretion will therefore be delayed, and the market will need to bridge a period where EQT is investing in integration and build-out without yet fully realizing the revenue and margin upside. Management, however, positioned the long-term strategic and financial benefits as outweighing this near-term dilution.

Forward-Looking Guidance: Active 2026 and Coller-Led Acceleration

Looking ahead, EQT guided to continued strong growth and further diversification. The firm expects 2026 to be a very active fundraising year, with three flagship funds and several other closed-ended strategies targeting new capital. Management anticipates that activated AUM will rise from roughly EUR 100 billion to around EUR 125–130 billion, supported by gross inflows that build on the EUR 26 billion achieved in 2025. The realizations pipeline for 2026 is guided to be similar to 2025, at around EUR 20 billion, indicating another year of meaningful exit activity. On financials, EQT expects fee-related revenues to continue growing, aided from day one by the consolidation of Coller’s fee income, and aims to expand the fee-related EBITDA margin from 52% toward 55%+ over the current fundraising cycle. Operating expenses are forecast to grow in the mid-single digits in 2026 due to ongoing reinvestment in AI, private wealth and secondaries. On carry, management highlighted the EUR 9 billion illustrative remaining potential in activated key funds, but reiterated that realization of this value will be spread across multiple years. The Coller transaction is expected to add roughly EUR 28 billion of fee-paying AUM and EUR 42 billion of total AUM, bring in an evergreen inflow run-rate that was around EUR 4 billion annualized in the second half of 2025 and rise materially in 2026, and contribute fee-related revenues with margins converging toward EQT’s own. The firm’s capital return policy remains intact, supported by strong cash generation.

In closing, EQT’s earnings call painted the picture of a firm in expansion mode, with record exits, solid performance, accelerating fundraising and a transformative secondaries acquisition reshaping the growth profile. Management did not shy away from discussing underperforming assets, carry timing, cost pressures and integration risk, yet the overall narrative was one of confidence grounded in numbers: rising AUM, strong realizations, improving profitability and a deepening product toolbox. For investors watching the stock, the key questions will center on execution — particularly around Coller, cost control and carry conversion — but the earnings call suggested that EQT is emerging from a challenging market phase as a stronger, more diversified player in global private markets.