Good morning, everyone and welcome to the presentation of EQT’s First Half Report. We have set for 2023 to be the year of execution. And for the next half hour, we will provide an update when it comes to our progress in fundraising, thematic investments, performance, and of course, our financials. As always, if you’ve registered ahead of the call, you should have had received an e-mail with your personal PIN code to participate in the Q&A. You can also click the telephone conference at the top right corner of the live stream window to ask questions. So with that, I will hand over to Christian. Next slide please.

Good morning, everyone. We have continued to execute on our strategic plans during the first half of the year. We launched EQT Nexus, our first product to offer individual investors access to EQT’s diverse range of investment strategies. We have largely finalized the integration of BPEA and it’s gone quicker and smoother than expected. And we are realizing the benefits of having a global diversified platform. We are also the first private markets firm to set science-based targets. And now we take the next major step with EQT’s net-zero guidelines, whereby all of our funds portfolio investments should be on track to deliver on their own net-zero pathways by 2040 or before. Being at the forefront of sustainability will make our portfolio companies more valuable and it also strengthens EQT’s position as a climate leader in private markets. The fundraising environment remains challenging, but we are still making quite good progress. EQT X has reached over 90% of its target fund size and we expect to reach the €20 billion target. Infrastructure VI is currently at about €11 billion. We are also very confident in reaching the €20 billion target next year. However, the newer fund strategies are more impacted by the current fundraising environment in terms of time and size. EQT is now at €126 billion in fee generating AUM and €224 billion in total AUM. And we have more than €50 billion of dry powder to invest during these interesting times. EQT has invested €11 billion in H1 of this year, more than twice the capital compared to the first half of last year. And of course, we remain laser focused on performance for our clients and our businesses and our buildings. All of our key funds continue to develop on or above plan and we have taken action to manage higher interest rates to ensure portfolio companies can focus on strategic and operational long-term value creation and transformation. We continue to patiently explore exit opportunities. Halfway into this year, we are executing according to our plans with close deals of around €4 billion and announced a few – we have also announced a few that are not yet closed and working hard on the pipeline. Like-for-like including BPA, we have grown management fees by over 20% compared to the first half of last year, while remaining focused on costs and scaling initiatives. And this is now reflected in our improving margins. Next slide please. Since going public in 2019, it has grown to become a global leader and active ownership strategies. In PEI’s latest ranking, we are the top three globally in private equity and one of the only three firms in the world to raise more than $100 billion over the past 5 years. We have been taking market share steadily jumping from $30 billion to over $100 billion raised. In infrastructure, a business we started in 2008, we are now top five globally. And we are already one of the largest in the world in value-add infrastructure. In real estate, EQT Exeter is now in the top 10 having been number 486 when it was founded about 16 years ago. Our strategy is to become – is to be an active owner where we transform companies and assets to drive performance for our clients. This is why we are not in credit – asset class where we are not, one is not really an owner. And thus we are also not focused on accumulating insurance assets. We’d like to call ourselves performance chasers. Next slide, please. While challenging and taking more time, EQT’s growth is broad-based across private equity Europe and North America, private equity Asia with BPEA, infrastructure and real estate. We have already raised substantially more capital in EQT X compared to EQT IX. And BPEA was a record fund being one of the largest private equity funds ever raised by an Asian based private equity fund. And EQT Exeter’s latest U.S. value-add logistics fund flows at more than twice the size of its predecessor and almost 1 billion above target, again due to strong performance. We are continuously winning new clients having more than doubled our client base with 2019. And our clients are on average increasing the size of their commitments across vintages. This trend continues in our flagship funds despite the broader trend of clients now in the short-term decreasing commitments in the current market environment. Growth is underpinned by top-quartile top performance. And four out of four of the key EQT funds that are in realization or explode rank also in the top quartile of distribution to paid in capital, in other words, actual cash distributions to our clients, which is incredibly important to the cycle. Next slide, please. So, the market for actively managed alternative assets is expected to double by 2030 and then double again by 2040. Companies are increasingly staying private. There is a little bit of an echo from the studio teams. So, if you could fix that that will be great. So, companies are increasingly staying private. And in the U.S., the number of private equity backed companies has grown steadily, while the number of public companies has actually seen a long-term decline. In a private environment, we can take a long-term view and deploy capital to truly transform and build businesses. By developing rapid EV charging networks as in the case of InstaVolt are transforming transportation fleets while driving consolidation as we are doing in Nordic Ferry Infrastructure. We are automating in digitizing B2B and B2C relations as in the case of Billtrust in North America. Our overall portfolio is thus performing quite well, but there remain pockets of underperformance that we are attacking together with our industrial advisors. Looking at a different angle, all – across all of our equity funds since inception 1994, approximately 73% of our returns are attributable to sales growth and margin expansion, 25% is related to strategic repositioning and only 2% is attributable to debt pay-down. And in infrastructure and real estate, we transform companies and assets with a similar fundamental approach to value creation. Looking at our asset classes outperformed public markets across cycles for the past 20 years and more. And within private markets, EQT is a top quartile manager outperforming most of the private markets as well. Next slide, please. So, here we show the deal activity is cyclical as you have seen, but markets always come back and the long-term trend is upwards. So now, in the global economy, as we approach peak rates and inflation gradually coming down, we do see some indicators of confidence improving in the capital markets. Public equity markets are up year-to-date paced by big tech and volatility has come down a bit. Debt market conditions are gradually improving. Equity – capital markets activity, IPO activity has picked up slightly. And also as this overall sentiment continues to prove, we hope that buyers and sellers are increasingly able to meet. All-in-all, while investment needs an area such as infrastructure, energy transition, digitalization of societies, the changing healthcare infrastructure around the world, all those capital needs are still vast, so there is a huge need for private capital in the world. But uncertainty remains in the global economy, so we remain as we say internally positively paranoid, hoping for the best, but preparing also for the challenges that might be heading. So, EQT has a financial model. Next slide, please, where our management fees are contractually recurring, based on client commitments, which are typically 10 years or more in length. We are diversified across asset classes in regions. Our flagship funds are expected to deliver €8.5 billion of carried interest in EQT over the life of the funds, the flagship funds alone. And combined with our contractual management fees and our scalable cost base, it means we have a very generative – cash generative business model. And we are one of the few truly balance sheet light public alternative managers. We have a long-term opportunity to continue to scale our flagship funds and our recent initiatives as well as to launch new initiatives. For example, the growth asset class hardly existed 4, 5 years ago. And now we have a €2.5 billion growth fund. We are establishing a similar strategy in Asia and we are considering a healthcare growth strategy as well. In addition to these types of initiatives, we expect to grow through acquisitions, always with top performance and a great cultural fit being the key criteria of course. Next slide, please. Being in a growth industry doesn’t mean everyone will win. Larger managers like us are taking share with funds over $5 billion, raising almost 40% of capital in 2022 compared to only 20% in 2017. Last year first time fund launches were down by 40% and the spread between bottom and – top and bottom quartile performance is 18 percentage points. So being at the top of the performance league and the size league in combination is important. The foundation of our success of course starts and ends with our people and our culture. And we also have been able to strengthen our team for example, with Francesco Starace just joining EQT Infrastructure as a partner coming from Enel, one of the world’s leading alternative energy producers. And this is further strengthening our commitment and expertise in areas such as the important energy transition. And of course we are continuously developing the EQT network of industrial advisors to make sure that all of our portfolio companies are supported and challenged in the best possible way. Looking at future-proofing, we have been ahead of the curve in areas such as sustainability and digitalization and strive to remain there. For example, we are aiming to be the most AI Literate Investment Organization in the world, using our own in-house developed AI platform, Motherbrain to build on that something we have been working on for soon 10 years. But it’s also about developing new distribution channels, such as we are doing with EQT Nexus. And to hear more about that, I now hand over to Gustav. Next slide, please.

Great. Thank you, Christian. So as we talked about in our Q1 announcement, we continue to see very interesting long-term opportunities in the private wealth space. Private individuals historically faced difficulties investing into our industry due to ticket sizes, complex liquidity management and longer low caps. However, this is changing with more appropriate structures and we expect allocations to increase in the coming years. From an EQT perspective, we are attacking this on multiple fronts. First of all, we are aiming to increase the share of private wealth capital in our traditional closed standard strategies through deeper ad new distribution relationships. Secondly, we are launching broader semi-liquid strategies such as EQT Nexus in order to create solutions, which are suitable for private individuals. And thirdly, we are looking at launching asset-specific strategies tailored for private individuals looking for specific sector exposure. In order to be able to capitalize on this significant market opportunity, we are also strengthening our capabilities. During the last 2 years, we have built a strong team and we now have around 50 employees working with private wealth across client coverage, product development, brand and operational excellence. And we are expecting to further build out these capabilities in the coming 12 to 18 months. Next slide, please. We are excited that we now have launched our first semi-liquid strategy, which offers easy access to a range of equity strategies through one single investment. EQT Nexus will invest across our value-add strategies, with the key benefits being lower investment amounts, the possibility for periodic liquidity and a simplified way to be fully invested from day 1. We started off in mid-May, so still early days, but we are off to a very promising start both from an incline perspective as well as the interest from distributors. However, as we said before, this is a long-term opportunity for us and it will take time to scale. As a reference, we have one peer that launched a fairly similar product approximately 4 years ago, which is now at around €3 billion in AUM. EQT AB has made balance sheet investments, which has now been transferred to EQT Nexus in order to see the fund. This means that EQT Nexus starts off with an NAV of around €350 million and underlying EQT fund commitments of around €700 million. Going forward for EQT Nexus, the rule of thumb is that approximately two-thirds of the NAV will be fund commitments and hence included in the fund sizes for the underlying funds, such as EQT X or Infra VI, while approximately one-third will be investments outside of the funds and hence fee-paying AUM on a standalone basis. And with that, let’s move into an update on the fundraising side. Next slide please. Despite the tricky market, we have raised more than €10 billion across the platform during the first half of ‘23. In EQT X, we will close out more than €18 billion and we are highly confident that we will reach the €20 billion of target fund size, even though the tail end is taking slightly longer. Certain clients, including several private wealth platforms have communicated that they require additional time to finalize their subscription and that the fundraising will therefore continue into early 2024. Infra VI has ended first close with approximately €11 billion. A significant majority will be raised in ‘23 and the fund will be open well into 2024 when we expected the fund to reach its target fund size. Newer strategies such as, for example, EQT Future, an active core infrastructure, continue to progress, but more slowly, and hence it’s also harder to reach the target fund sizes in today’s market. EQT Exeter U.S. Industrial Value Fund VI held its final close at $4.9 billion exceeding the target size of $4 billion and close to 2.5x the size of Fund V driven by the top decile performance and the scaling benefits for Exeter being part of the EQT platform. However, also in real estate, we sense that the fundraising pace has slowed. We continue to focus on the current fundraisings of U.S. Multifamily II and European Logistics Core Plus II which will both continue well into 2024. Finally, the EQT Public Value Fund has decided not to raise additional commitments, effectively moving into a closed ended structure. This means that the fund will discontinue further fundraising and return proceeds to clients as value is realized. There is no time limit for exiting the portfolio companies and public value will still be able to support the existing portfolio companies with additional capital if needed. As a reminder, the Public Value Fund represents less than 0.5% of our fee-generating AUM. However, our approach to this topic is in line with the way – in line with our way of developing the business, where we try new things and not everything will be a homerun, but we always take responsibility and address issues directly in order to ensure the best outcome for our clients and other stakeholders. And with that, I will hand over to Olof. Next slide, please.

Thank you very much, Gustav. We increased the investment pace somewhat in the first half of the year. Notable investments include Radius Global Infrastructure by EQT Active Core Infrastructure, three investments by Infra VI, Lazer Logistics, SK Shieldus and Wind Tre and IMG Academy and HDFC Credila by BPEA VIII. Investment levels in EQT’s key funds are now at 20% to 25% in EQT X, 15% to 20% in Infrastructure VI, and 25% to 30% in BPEA VIII. Our investment pace is never linear, but overall, we are trending towards a 3-year cycle. Looking at exit activity, we signed the full exit of Vistra from BPEA V and VI following its merger with Tricor in BPEA VIII, EQT’s mid-market funds, realized Ellab and BBS Automation in Europe and VBill in Asia. We also tapped the equity markets in the first half of the year with EQT IX having its first realization with a partial sale of [indiscernible] and in the U.S., we priced the IPO of Kodiak. Turning to financing and the interest rate environment, existing portfolio companies have increased focused on cash and profitability. And in certain companies, we have strengthened capital structures to ensure financing does not limit the ability to realize the full potential plans be through continuous investments or acquisitions. For existing portfolio companies, the maturities are mainly in ‘26, ‘27 and ‘28. And where applicable, we are already now addressing some of the 2026 maturities. Financing conditions are constructive for the types of companies we own often being market leaders providing essential services are being supported by secular growth trends. We see the non-investment grade bond and syndicated loan markets performing relatively well with investors in these markets being enthusiastic for new supply given limited recent issuance. Commercial banks are open for lending and the private credit market is open with competitive terms. For new financing, given higher base rates and wider spreads, we see approximately twice the cost compared to the levels we saw before inflation and rates started to increase, although margins and coupons in the capital markets have actually moderated somewhat versus last year. Next slide. Fee-paying AUM increased by approximately €13 billion during the first half and we reached €126 billion of AUM by the end of the quarter. Gross inflows in the first half was primarily related to EQT Infrastructure and EQT X. EQT Active Core Infrastructure contributed approximately €1 billion of gross inflows as well. And we have had some smaller impacts from ongoing fundraises in EQT Exeter with most of the Industrial Value Fund VI already being in our AUM at the start of the year. Investments in portfolio companies and funds charging on invested capital also contributed to the higher AUM. Realization activity was relatively low and some exits are yet to close, which means those companies and assets are still part of our AUM. Looking at the year-over-year figure, we had a meaningful increase with €65 billion of inflows, largely consisting of a mix of combination with BPEA as well as EQT X and Infra VI and other fundraisings. Next slide, please. Let me next provide an update on a few different topics. We announced this morning a buyback program of approximately 1.8 million shares or less than 0.2% of our share capital. We expect to run these types of buybacks twice a year with the objective of keeping the number of outstanding shares flat over time in relation to EQT’s equity-based incentive programs. When it comes to the 2021 lockup revision, partners committed to reinvest half of the net proceeds into EQT funds over fund cycle. More than 95% of these commitments have already been made. Since the lockup revision in ‘21, the stock liquidity has doubled approximately. Today, EQT is included in most major indices, including the MSCI ESG Leaders Index and the Dow Jones Sustainability Indices. Over time, we think it will be positive for the share if we had a higher free float and additional liquidity and higher index weights. Under EQT’s science based targets initiative, 21 portfolio companies have validated science-based targets and additionally 32 have started the process to set their own science-based targets. Taking the next step in our decarbonization journey, we recently published EQT’s net-zero guidelines available on EQT’s website. All of the EQT funds, portfolio investments, except smaller investments, should be on track to deliver on their own net-zero pathways by 2024. This is step change from our previous targets that mainly addressed setting the targets. I will now hand over to Kim. Next slide, please.

Thank you, Olof and good morning everyone. Fund valuations were for the most part flat or marginally positive in the period underpinned by continued underlying operational performance and supportive public market valuation benchmarks. Looking across key funds on an aggregated basis or value increase year-to-date was around 8%. Operating performance remains healthy across the portfolio despite the inflationary headwinds and rising interest rates. Performance in our infrastructure portfolio companies remains robust. We’ve seen lower EBITDA in certain companies due to the time lag of inflation pass through however, we expect margins to stabilize and improve in these companies. In our private equity funds, we see strong growth with technology services and industrial technology companies performing well on both top line and EBITDA. In healthcare, EBITDA is not going as quickly as top line but it’s still at very attractive levels. In BPEA EQT, we also saw strong continued earnings growth in tech services and services. Variations are somewhat impacted by some of the listed companies in the portfolio. Within real estate valuations came down last year as we saw tougher markets, markets are still weak, but in general around the levels from Q4. Our real estate portfolio is approximately 90% invested in logistics and predominantly in the U.S. and to some extent Europe. Occupancy remains high mark the market rents are strong and valuation write-downs have stabilized in ‘23. We see continued pressure in in office life sciences sector at this comprises only a small part of the portfolio overall. We’re starting to find interesting investment opportunities in real estate again. Next slide please. Since our IPO we’ve had two step changes in our revenues, first in 2021 from the acquisition of EQT Exeter and the fundraisings of EQT IX and Infra V. In 2022, we were approaching a similar step up with full year effects from BPEA from Infra VI and EQT X. In ‘23 and ‘24. And in H1 2023 that trend became visible with management fees growing substantially to €930 million. Like for like this implies a growth of more than 20%. There’s a mix effect visible in the first half revenue, where the first closed discounts on the flagship funds kick in which we expect to normalize over the year. The step up in management fees comes with an expansion of our EBITDA margin excluding carried interest and investment income, which expanded from 44% in H1 ‘22 to 50% in H1 2023, a testament to our scalable business model. Our EBITDA margin in H1 was 54% compared to 56% in H1 ‘22. Carried interest and investment income in H1 of this year was off to a slow start based on a combination of flattish valuations and no significant exits in flagship funds that are in carry mode. Carrying the period was largely driven by Infra III, BPEA VII and EQT VII. Our long-term carry expectations remain and we are working to execute certain exits in the coming quarters if markets remain supportive. We’re in a strong position looking into H2 and as Infra VI and EQT X continue closing out capital. We will get retroactive fees throughout the year from these fundraisings. The ongoing fundraising and capital we’ve raised in our other funds implies we have a large base of contractually recurring management fees for the coming years. Next slide please. During H1, the number of FTE+ increased marginally from 1,790 to 1,814. Year-over-year, our FTE+ increased by more than 300, which was largely driven by the combination with BPEA in H2. The increase during H1 is to a significant extent attributable to hirings within private wealth. As we previously said, a slower hiring pace will continue with selective hires to secure growth in focus areas such as private wealth and the regions of North America and Asia continue. These are also regions and areas with higher than average compensation levels. But we are actively working with both our end-to-end processes And with our cost base so as to be able to show further proof of our ability to scale over time. With that, I hand back to Christian for some concluding remarks. Next slide please.

Overall, our industry is growing over the long-term. And in that industry, we’re taking share across strategies are now top three globally and private equity, we are top five in infrastructure and top 10 in real estate. We are performance driven. And our growth is based on strong and resilient returns for our clients. The value creation model we apply rests on real underlying operational strategic improvements, growth and future proofing. Thus, the higher interest rates we now see means financing costs are higher. But we’ve been through that before. And for us, it’s not about financial engineering. EQT nearly quadrupled the EBITDA since our IPO, and we have contractually recurring management fees based on 10-year plus client commitments. In addition to the carry from performance, EQT is on track to reach our performance targets across all of our key funds, or even exceed them. And we continue to build EQT for the long-term for growth by scaling our flagship funds, driving our recent initiatives, introducing new strategies and distribution channels, and through M&A. And finally, we have a capital light business model, driving a strong return on equity. Meaning we will also expect to generate substantially and strong cash flows over time. So those words, I’d like to open up for the Q&A. Thank you.

[Operator Instructions] The first question from Hubert Lam from Bank of America. Please go ahead.

Hi, good morning. Thank you for taking my questions. I’ve got three of them. Firstly, can you talk about your fee margin? I saw that’s come down from 148 bits last year, down to 145. Just wondering why is that the case? Is because the mix or anything else? And what are the expectations about going forward? Thank you. The second question I have is on fundraising. Some of your other peers are talking about improvement in terms of client conversion over the last couple of months. In terms of fundraising, just wondering if you are also seeing the same improving trends. And also tied to that I know your target is still hit it trying you’re still targeting your to hit the targets for your two flagship plans. But just wondering for the hard capital, is that something that is possible or are you just sticking to the target for now? And lastly, question on costs. Just wondering how we should think about cost of the second half? Is it fair to analyze the first half? Or should we expect possibly a pickup in the second half? Just because it seems like that FTE hiring has been a bit slow and maybe expect that to ramp up more in the second half? Thank you.

Thank you, Hubert. Kim, you take one and three. It’ll take two.

Yes, yes. And the first one was on the fee margin. And yes, the fee grids are set at the commencement of a fee – of a fundraising. So there hasn’t been any changes to the fee rate. What you see there is a mix effect, two things, basically. One is that in the early parts of the fundraising, you’re going to have first class discounts. And secondly, you’re potentially having larger tickets at the earliest stage of the of the fundraising. So those would be the effects and just commenting quickly on costs as well. Yes, we are not – I think you should use H1 as a reasonable guideline for the future of the [indiscernible].

Thank you, Kim. When it comes to fundraising, we have – the question on the hard cap. We typically actually don’t comment on the hard cap. But of course, we never give up until the last minute. So for now, we’re just saying that we’re confident that we will reach the target for the two flagships that we’re raising. And I think in this market that’s quite strong, very few of our competitors are in that same scenario. Client, it’s hard to generalize. I know which comments you’re referring to. And depends, as we’ve talked about before, there are certain clients in North America that are further time being in the short-term over allocated to private equity or private markets. There are many other clients around the world and Canada or in the Middle East or Asia or parts of Europe where they’re under allocated private wealth. Of course, it’s coming. So I don’t see a trend shift in the short-term. But given our performance, our positioning and our way of raising capital, we are – we have that confidence that we mentioned on being able to deliver on our plans.

Great, thank you very much.

Thank you.

Thank you for your question. [Operator Instructions] The next question from Oliver Carruthers from Goldman Sachs. Please go ahead.

Hi, there. Oliver Carruthers from Goldman Sachs. Question on real estate looks like there was an SEC filing published last week for the potential launch of an EQT Exeter non-traded REIT. Appreciate this is just an initial public prospectus. But are you able to talk to your ambitions here at this stage? It looks like the fund size is up to $5 billion. Thank you.

Thanks, Oliver. For the for the time being the way we’re communicating around those types of initiatives is that we are going to be continuing to build products for the private wealth channel that will be open ended in long-term in nature. So doing that, we started in New Europe with EQT Nexus. And they’ll be probably more types of Nexus is over time here. And assuming that strategy that was filed, it’s launched, the first strategy that we launched with the North American base would be a real estate strategy. And as we get closer to sharpening the pencil, and all the elements like we’ve done with EQT Nexus will inform more and more about the targets, the timing, the structure of that investment strategy.

Got it, clear. Thank you.

Thank you.

Thank you for your question. [Operator Instructions] And the next question go to [indiscernible]. Please go ahead. Your line is open.

Good morning. Thanks for taking the question. Maybe first, a follow-up just on costs. So that H1 is a reasonable starting base is that despite bonuses coming in and H2, are the typically dries up [indiscernible] seasonally H2 or higher costs, and then maybe also on cost with regards to your initiatives on private wealth. So currently, you have about 50 FTE, focusing on it. How do you see that scaling in the coming years? And how’s the compensation level compared to the rest of the group there? And then lastly also on Nexus to €700 million in commitment, is that external client money commitments OR is that kind of [indiscernible] capital from EQT AB? And then one last question would just be on Exeter. How much dry powder is left there? That’s not FTE. Thank you.

I think the cost one, do you take that?

Yes.

Private wealth related ones?

Yes, well, yes, the cost that we are accruing for bonuses during the course of the full year. So as mentioned, the H1 number is a reasonable starting point to estimate H2.

Yes, and I would say on, let’s say, private wealth, in terms of the development on FTEs. So what we said is, we’ve scaled it up from zero to 50. We’re not going to give an indication on how much it will continue to, let’s say grow, but it’s an area which we are continuing to investing. Especially, of course, as we launch new product, it will add people over time in it. But then of course, it will also add ad revenues also over time. And on EQT mix, so the reference to the €700 million is commitments to the underlying funds. And the NAV of 350 is then the combination of right now of external capital as well as partly EQT AB and then over time EQT AB will go out of that strategy.

And on the Exeter question, there’s about €4 billion of capital available that is currently committed, but not fee paying.

That’s very clear. Thank you.

Thank you.

Thank you for your question. We’re now taking the next question. And the next question from Arnaud Giblat from BNP Paribas. Please go ahead. Your line is open.

Good morning. I’ve got two questions, please. First one on Nexus, could you indicate perhaps, in which distribution channels have already signed up to distributing the product? And also, I’m wondering, the one-third, two-thirds from visible from underlying funds and incremental AUM in terms of growth. Do you have the option to have a further incremental AUM, if it’s successful, for example, by co-investing more in funds on co-investment – in co-invest bucket? The second question is on exit [indiscernible]. You are applying to during the call, that time there were a number of Nexus [indiscernible] potentially coming up, I was just wondering if you could perhaps quantify the – how much ramp up wished to expected in Nexus? And finally, on deployments, you’ve done well, in deploying quite a lot of capital in in H1, I’m just, again, if you could talk a bit about the outlook for deployments coming into H2 and beyond. Thank you.

Thank you. Gustav, will you take the first one? And then I’ll take one with – together with Olof.

Yes. And on Nexus, we’re not going to let’s say comment on which distribution partners that we work with, I think in general, what I can say is that it will be a few selected in the beginning. So often there is some form of exclusivity period either for a region or similar in the beginning and then over time, the plan is to be broader and have multiple distribution partners in different regions. But initially, it will be fewer, and then on the second question related to Nexus, so there is absolutely a possibility. So what I talked about was only a rule of thumb, so to speak of being the two-thirds and one-third, if it would be that we would see a lot of inflows and we have of course the possibility to do more if we want to.

Good. And when it overall comes to the starting with exit market as your question, it is possible to make exits happen these days, either in sectors that are those stable growing, with strong cash flows, certain software assets, healthcare, healthcare, IT that certain infrastructure businesses, for example. And there, it is possible to execute on smaller IPOs. So we did one earlier this year, or just a few weeks ago, and we have one that’s active now in Japan. So we expect this kind of market to continue. Not a fantastic market for exits, but possible to execute with a very sharp strategy. And when it comes to investing, we said at the beginning of the year that we think disruptive times are more, are actually an interesting time to try to find companies and assets that maybe otherwise wouldn’t be available. And when we own companies and assets, we do that for 3, 4, 5, 6, 7 years. So the most important element is actually finding the businesses, being able to acquire them and then driving that value creation for the long-term. We think this continues to be a time where those opportunities will be exciting to go after actually. Maybe Olof can give some more meat on the bone on some of those points.

Sure, Christina, I think if you – you think about the deployment phase, if you look at our flagship funds it was actually to see that you will have one fund that is slightly ahead of being on the 3-year pace that we’ve talked about, you will see that one is slightly slower than a 3-year pace, but overall, you will never have kind of linear investment periods across this flagship fund. So that’s why we said generally we are probably trending towards the 3-year cycle across the flagship funds and maybe to add on the exit side, as we also note that we are further strengthening the global capital markets team that EQT has established. And we’ve also implemented practices from BPEA to run across the global equity platform. And I think there is also an opportunity for us to think a bit more creatively in terms of the exit processes, and how we transfer ownership of assets in various ways. And we may not solely be dependent on M&A processes or traditional types of IPOs.

That’s helpful. Thank you.

Thank you for your question. [Operator Instructions] And the next question from Magnus Andersson from ABG SC. Please go ahead. Your line is open.

Yes, thank you and good morning. Just starting with a follow-up there on the previous question on deal activity, if you could say something about how the bid offer spreads have developed through the first half of 2023. And whether there was any change towards the later part of the 6 months that could have an impact on the second half of the year. And also Olof your sounded a bit more upbeat on the financing market conditions placed. Lately, if you think that’s something that we improve further, during the second half, just the first question?

Should I?

So Magnus, I’ll start, Olof can compliment, when it comes to the – I would say that the as time goes by, the equity markets have improved somewhat. The IPO market is called partially open, the credit markets have continued to improve even though spreads remain significant interest rates are up. And I’d say all the players are a bit more careful than they were in the past. The market is overall a bit better. And therefore, you have seen more transactions from us and other players. We’ve seen one or two larger deals actually happening in the private markets, which is a sign of strength. So hopefully that trend will continue during the fall. But I think we’re still living in a world where interest rates are continuing to rise, particularly in the U.S. The global economy is uncertain, there are geopolitical issues, etcetera. So that’s why we try to remain pretty grounded and really go after companies where we have a crystal clear value creation plan, but also some form of downside protection. Olof?

Yes, I mean, the only thing I would add is that we’re, of course active in the debt markets across the globe. And at the earlier parts of the year, you saw, for example, Asia being more stable availability of [indiscernible] stronger there compared to other regions, I think what you’ve seen is probably a slight improvement, both in terms of the different sources that indicate that they are willing to provide credit and lend to us in both our existing portfolio companies and for new financings and maybe a tad bit better pricing also than what we had at least, in the earlier parts of the year or late last year.

Okay, so would you say that the conditions remain as they were towards the latter part of the past 6 months, then the second half is likely to look better in terms of deal activity than the first off? Is that a fair conclusion?

If you’re talking about the overall market, I would say I would…

Yes, yes, transaction activity. Yes.

Okay.

And I would add also, as we’ve said in the first half of the year, it’s not necessarily that safe financing markets have been the gatekeeper for us to do to do this, right? So the types of companies that we are investing in and that we own, we have had financing available in the sweet spot size of the investments that we do throughout the year. Frankly, it we’ve had to work harder at finding the right structures, the right sources of capital, but that in itself has not been the only determinant of the slowdown in activity that we had, especially last year. And maybe a final and the example of that is our offer for Decorah in the UK, producer of pharmaceutical products for pets, one of the global leaders in that field. It’s a £5 billion ish type of transaction with several billion in financing and several billion in equity. And we are quite proud that we are able to launch that transaction and raise the capital in this market. And I think that is one sign that that deal activity is slowly, but surely increasing.

Okay. Thank you. And then second one just don’t on Nexus. You mentioned, for example, that the competitor started 4 years ago now had €3 billion in commitments. And if you could say something more about your own volume expectations, and also perhaps some competition, because you are definitely not the only one that has discovered the Private Wealth segment as a way of tapping funds lately. Thanks.

Yes. And we will not give them, let’s say, an outlook on our expectation. And so I think the reference that we made is a reference to some extent, also what we think is possible in the market. But I think with that said, I think that we are not going to say more on our expectations. And I think as you say, there are more players in the market going after this. I think we see that the ones that like us are able to do this with our own funds, i.e., that do it directly with internally so to speak, have certain benefits with the single layer of fees compared to other founder funds. So, we think that this will be a compelling competing offer on the market.

Okay. Thank you. And finally just a follow-up on cost and have compare since like you or your mix is getting more tilted towards actual own FTEs rather than consultants, will that have any impact on your average cost per FTE going forward?

It’s a good observation. That is true. We have had historically more consultants as part of our overall FTE plus structure. And in the last year, we have had a plan to convert those into employees, either those or others. That just means that the costs move from one line to another, per se. It’s typically not because of extreme cost savings that we do it. It’s for other operational reasons. So, it doesn’t dramatically change the picture.

Okay. Thank you very much.

Thank you for your question. We are now taking the next question. And the next question is from Angeliki Bairaktari from JPMorgan. Please go ahead. Your line is open.

Good morning. Thanks for taking my questions. First of all on Infrastructure VI, I was wondering whether there is any seasonality in terms of the fundraising potential, meaning potentially a slower pace in the second half. As I would assume that most LPs now have made up their minds in terms of their 2023 allocations. And then hearing what you mentioned today, it looks like EQT X and Infrastructure VI are both going to remain open for some final commitments, a little longer than anticipated into 2024. Does that mean that we should not expect the next vintages EQT XI and Infrastructure VII to launch before 2026? And last question on AI, you did mention in the beginning that you aim to be the most AI literate investor. Does that mean that you are now focusing a bit more on artificial intelligence as a theme within your investments? Thank you very much.

Thank you. I will take the last one and Gustav, you can take the first two. When it comes to artificial intelligence, I was primarily commenting on our own capabilities. We created our Motherbrain’s AI team back in 2014, when we launched our EQT Ventures strategy. And we have been working on our AI for the entire time to build capabilities, both to find new investments to help us and due diligence to help us track decision making. And actually the way that we work internally to make that the working environment around deal making more efficient and an easier in terms of information sharing. Now, with generational AI coming in, we can actually accelerate the Motherbrain’s capabilities. And we are doing that. We have around 30 data scientists internally plus our digital business development team, plus our tech team, that are all working together to drive that. So, we think there will be lots of benefits in terms of, let’s say, speed of execution, improving access to knowledge, better decision making, etcetera, slowly but surely over time. And in our newer strategies, or let’s say, our strategies that are focused on younger companies, and cutting edge technologies like EQT Ventures, certainly AI has been and will continue to be an important investment theme. And I am sure, also as AI develops, there will be opportunities also for our companies to drive positive change in those areas.

Can I just jump in and mention that Angeliki on the 5th of September, we will do a webinar with Turnquist and Alexandra Lutz who had EQT Digital and who had Motherbrain. So, I hope you can all participate in that webinar. We will share some more details and you will get to hear more about AI at EQT. Gustav?

And when it comes to the first two questions. So, I would say that when thinking about the next generation of funds, you should mainly think about it from when are they started from an investment point of view. And that’s what we said that we still expect that to be around 3 years. So, the final close timing is no, it’s to a lesser extent impacting that, so to speak. And then when it comes to Infra VI, specifically, so to speak, I would say that, of course, there might be, what we have said is that we just recently did the first close of €11 billion. And of course, there is an incentive related to that in terms of, which means that that combined with a little bit of summer period, you might have a little bit of slower pace in the coming, let’s say one month to two months here. But what we also said is that we expect it to be, let’s say majority down by this year. So, I think you should expect that we will continue to raise capital during the second half for Infra VI, and then that we will be reached the target fund size by 2024.

Thank you.

Thank you for your question. We are now taking the next question. And the next question is from Jakob Brink from Nordea. Please go ahead. Your line is open.

Thank you. Just coming back to the fundraising on a more sort of top-down level, could you maybe, so I guess the Infra VI pace was relatively strong, at least compared to what I would expect and I think also consensus. Also listening to what is happening on some of your peers in the market, it seems like fundraising in Q2 has been quite slow, and you are actually accelerating the pace of fundraising in Infra VI, could you maybe give some details on where the money is coming from, is it existing clients, is it new clients, is it yes, basically what is the – what’s the trend of the years, the drivers of this growth, please?

Yes. Should I take that, Chris?

Yes. Go on Gustav.

I would say that on a general level, I think we see a little bit of a mix on it, so to speak. So, we both see, let’s say a large chunk of our existing clients actually stepping up and increasing their allocations. As we said, there are a number of our – also our existing clients that have, let’s say, the denominator effect and liquidity issues, which means that it will take slightly longer for them to commit to the fund. And so I think in general, what we have seen in this, let’s say in this first half of them of Infra VI is that we have a number of existing clients that have stepped up a little bit. But then also that we have, let’s say, a very comforting level of new clients stepping in and taking a little bit more than I think we would expect in this early stage of it, which is encouraging.

Maybe I missed the number, but do you disclose the number of clients now?

No.

In Q2?

No.

Okay. But has the pace continued from what we have seen in recent quarters in growth in new clients?

Lower Infra VI.

Now, so comment on a group level, or in total?

I think of course, we have had a number of new clients coming into Infra VI. I don’t think it’s let’s say it’s higher or lower in terms of a trend in it. It’s of course a little bit volatile, depending on if we have a large fundraiser or not. So, I wouldn’t say that there is any trend in it.

Okay. Fair enough. Thanks. And then just on exits place. So, basically you have done quite a few acquisitions yourself in the flagship funds, but also other funds while exits in activities best on the flagship funds has been relatively muted that’s we already discussed, why do you think that is? Is it because you could see has better access to funding and reasonable levels, or is it because it’s like you said, Christian, that you could see it’s among the top fundraisers in the world or globally over the past years, or why do you think there is this difference? And what does it take to kind of kick-start that peers can do like you?

No, that’s a big and broad question. I think if you look back 5 years or something like that, what we – we try not to be market timers in terms of our philosophy. But what you can see in terms of the market, you can see when the capital markets are excellent, when the macroeconomic situation is excellent, and when our companies are performing, that is of course, a really good time to drive exits. It’s also actually a good time to drive exits of companies, which are not performing so well. When times are tougher, and capital markets are tougher, you will kind of hold back some of the exits, because you want to make sure you maximize the value of the best companies, and it’s harder to sell the underperforming companies. So, we drove a huge amount of exits across the firm, and so did BPEA EQT, actually during that time. So, that’s also why we are top quartile in DPI, which is an important measure. Actually, the industry is starting to say now that DPI is the new IRR. How are we actually delivering cash back to investors, just started the cycle. And what we have also learned is, is to prepare very early so we start to prepare companies much earlier for exit than we did in the past so that when the market conditions are there, or when you get momentum with a strategic buyer, whatever it might be, that we can more effectively execute. So, there are kind of multiple parameters around, the size of our portfolio, the use of our portfolio, our DPI, and our fundraising momentum. And of course, our overall returns are also solid. But that’s really strengthened by DPI. And I think that’s becoming more and more important to investors as they go through their cycle as well.

Okay. Thank you. And then maybe more detailed question on Slide 28, to give a summary of the performance of all your funds and the carry left to be booked. I guess I was just wondering, just to make sure when you write that carry that is left to be booked, is that you write that it’s on the target level. So, let’s say that you have a font, you could see seven for example, above target to actually assume that it will come down, or do you expect it to be flat here. And then secondly, can you just remind me how many more exits is needed in EQT IX before that could come into carry mode?

Yes. I can comment on that. First of all, this is just mathematically using the target rather than whether we are on plan or above plan, so it is to simplify the analysis. And on the second question, as you know, it is a function of both exits and value creation. And it’s not possible to give a sort of a number that so and so many deals has to be done before you get to carry mode. Historically, it has typically been in the region of three to four, but that could change and we just made our first now, so we are not there.

Okay, very clear. Thank you.

Thank you.

Thank you for your question. We are now taking the next question. And the next question is from Nicholas Herman from Citi. Please go ahead. Your line is open.

Yes. Good morning. Thank you for taking the questions. Just a couple of follow-ups, please and then one other one. So, just two follow-ups, one on fundraising, the comments that you expect to see the target fundraising for EQT X and Infra VI. But equally that you also don’t want to give up on the hard caps yet? I guess just with those two sharpies having been activated in mid ‘22, and in ‘22, respectively. Once you get – once you reach the target levels, at what point do you stop fundraising? Is there a contractual point at which you kind of need to stop after a certain amount of time has passed beyond fund activation or closed, or is there no such limit and you are just stuck on, basically limited chance of bringing in new money, so that’s the first one. On the second one or the second follow-up on costs, so again take your comments on the cost. And that’s off being a good guide for the rest of the year. But just from hiring, you have hired, quite strongly. In central that’s mostly for private wealth. But investment teams are flat, I think real estate is even down modestly. So, could you talk about the outlook for hiring into the second half, or maybe even 2024, please? And that’s just one, actually one we will take is on cost? I mean ultimately, that cost per head actually looks like it rose in the first half, despite U.S. dollar weakness. Just what drove that, please, beyond maybe some conversion from consultants into internal employees? And then just finally, on M&A, I think I heard you referenced that you would consider acquisitions? Do you see opportunities, it looks as the strongest than I was kind of expecting? So, do you see opportunities in the market? And do you see the potential to act over the next, I don’t know, 6 months, 12 months or even 18 months? Thank you.

Thanks. I will take the last one and then Kim and Gustav can share the others.

I can start on the fundraising. I think that this answer is yes, there is a contractual, let’s say agreement with the clients how long we can fundraise. So, for EQT X that is in let’s say the first quarter of 2024. While for Infrastructure, there is a longer time period just given that we just had the first close, so that will that will continue well into 2024 before we would be at that end. And I think it’s always a combination of when do we see – what clients do we have left, what do we see, let’s say in the pipeline, and when do we think it’s an appropriate time if we haven’t reached the hard cap to close the fund. So, there is no specific timing other than…

Just to clarify that, is that – so you are saying that it’s basically a 20 months or 24 months stop after the first close, did I understand that correctly?

There is a contractual level depending on when the first close is, yes. And then it’s different depending on fund.

I see. Okay. Understood. Thank you.

So just, we will take some of the detailed questions. Well, we have been running over an hour or so, I would suggest we would try to focus on the conceptual questions and then we can follow-up on details separately as well.

I will be brief on costs. But essentially, I think our guidance or whatever you want to call it remains there that we will be very restrictive in hirings in all other aspects than private wealth to a certain extent North America and to certain extent Asia. Those are the areas that we are. And when you see that central has increased it would, we were basically keeping the rest of central flat with the exception of private wealth. So, there shouldn’t be any other increases there. And when it comes to – yes, so that really should give you a sense for the cost increases as well.

M&A?

But when it comes to strategy and growth, then we do grow in multiple ways as we said, we scale our existing funds, we would start, of course want to grow and build our newer fund strategies. And then we launch also strategies beyond that. And then we look at M&A. And we know if you look at what’s happening more broadly in the private markets, we see here the same thing that we have seen in other professional services and investment banking, or consulting or accounting or whatever, that there is a trend towards 5 or 10, or whatever the number may be global leaders. And then there are a number of niche winners either geographically or in certain sectors. And the ones that don’t have either of those edges slowly, but surely get consolidated out. So, we do have a number of approaches and conversations all the time. And when and if any of those are converted, that really depends on the combination of our strategy, the strategic fit, the cultural fit, and we like to partner with firms that are top performing. So, I think that’s all I can comment on for now. But then I think you understand the long-term trend.

Helpful. Thank you very much.

Thank you.

Thank you for your question. We are now taking the next question. And the next question is from Jacob Hesslevik from SEB. Please go ahead. Your line is open.

Good morning. Thank you for taking my question. I think most has already been answered. But one last conceptional one for me is how should we, or maybe how are you thinking about return expectations going forward? I mean the increase in new debt, so I guess you use less today in your acquisitions than a few years ago, but equity ticket on the other hand have come down a bit. So, should we still expect returns to be similar to what we have seen during the last 5 years, or how are you thinking about this?

Yes. This is a very important question. We, as opposed to some in the industry did not reduce our return requirements when interest rates were very low or even negative in some areas. So, we are also not making any changes to them now. We continue to want to deliver on our target returns in this cycle, just as every cycle. And the way we do that is being active owners. Yes, of course we have to choose and win the right companies and assets. But a huge part of the value creation is actually driven through the ownership period through all the actions that we have talked about before with driving, consolidation, innovation, digitalization of the companies making them more sustainable, more future proofed. Whatever it may be, so that when we exit the companies and buildings into a more even more attractive business than it was when we acquired it. So, we are not that dependent on the financial side on the interest rate side. But it is that debt markets are important because they enable us to use a bit less equity capital of course than we otherwise would have. So, it’s an important leverage element. But the cash flows and the interest rates etcetera is not the determining factor of how EQT creates returns.

Alright. Thank you so much.

Thank you.

Thank you for your question. We are now taking the next question. And the next question is from Isabel Hetrick [ph] from Autonomous. Please go ahead. Your line is open.

Good morning. Thanks for taking my questions. I have two please. So, the first is on acquisition of personnel costs. So, we saw €240 million charge for this half falling €201 million in the second half of last year. So, do you expect similar charges going forward and for how long? And what kind of magnitude would they be? And then secondly, just following up on that M&A point. So, private credit is one of the alternative asset classes where there is again, long-term structural growth, and in the U.S. we have seen TPG recently reenter the market and is this something you would consider or is private credit now definitely off the table for you?

Let me take the first. It’s a pretty technical one, so I have to go into more detail at a different occasion. But essentially under IFRS, the proceeds that employees have received in the context of these acquisitions that we have made historically and where these employees are subject to some sort of retain, the contractor to stay on is considered under IFRS, a personnel cost. So, that’s why we have those charges. So, they are non-cash. They are things that have already been paid predominantly in shares to these employees. And they will continue until the lockup or the periods when these people have to be retained are over, so that’s 3 years to 4 years.

To the guide on our website, which is a guide to get these financial statements, which has a very logical explanation of how the various adjustments work in our financials.

Now, when it comes to the strategy question on credit, we had a credit business some years ago. And we divested that, because we are, as you know razor focused on strategies where we can drive the value creation ourselves, with all of our capabilities, with our industrial advisors, etcetera. That goes across from ventures through growth, through private equity, long-term the infrastructure strategies, and the real estate strategies. And we think there is a large opportunity to continue to grow all those strategies. In particular, if you think about the long-term the need for driving change in the society, whether it’s digitalization, or the energy transition. So, infrastructure itself has a huge capital need for the long-term. Real estate is the biggest asset class in the world. Actually it’s bigger than all other asset classes combined. So, we feel like that we have a very significant long-term growth opportunity in the asset classes where we can really drive the hands on value creation. Well, the credit side of the business or our industry is by nature more passive, you are providing credit to a third-party and they manage the business and they drive it. So, for the time being, we are going to kind of remain razor focused on our active ownership strategies.

Okay. Thank you very much.

Thank you for your question. There are no further questions at the moment.

Okay. Very good. Thank you for all the questions. Thanks for the engagement. And I will wrap up the Q&A and wish everyone a very good summer. Thank you.

Thanks everyone.

Thank you. Bye.