EQT has held exploratory discussions with several firms, including Coller Capital, HarbourVest Partners and Pantheon. — Bloomberg
STOCKHOLM: EQT AB has been holding talks with potential acquisition targets, including Coller Capital, as the private equity firm seeks to expand its secondaries business, sources say.
Stockholm-listed EQT has held exploratory discussions with several firms, including Coller Capital, HarbourVest Partners and Pantheon, as it seeks to buy a business specialising in secondaries investing, the source said.
Secondaries firms buy second-hand stakes in private equity funds, credit funds and infrastructure funds at a discount from earlier backers like pension managers, university endowments and sovereign wealth investors.
They also buy stakes via so-called continuation funds, which let buyout firms extend their ownership of an asset.
The once-niche asset class is now booming in popularity as fund backers look for liquidity and alternative asset managers try out more creative ownership structures for their assets.
Secondaries deal volume is expected to hit more than US$200bil in 2025, by some estimates, adding to a series of record-making years.
Other investment firms have expanded in secondaries through acquisitions, with CVC Capital Partners Plc announcing a deal for Glendower Capital in 2021.
Ares Management Corp, which acquired Landmark Partners that same year, now manages almost US$34bil in its secondaries business.
EQT previously explored a potential tie-up with Arctos Partners, an investment firm best known for providing liquidity to sports teams and other alternative asset managers, Bloomberg News reported in May.
Discussions with Arctos have ended without an agreement, according to the source. Since listing in 2019, EQT has made several acquisitions to broaden out its range of offerings.
It bought healthcare-focused venture capital firm LSP as well as Asian buyout firm Baring Private Equity Asia.
EQT’s newly appointed chief executive officer Per Franzen told analysts on a conference call last week that the firm has to strengthen its capabilities around solutions and secondaries.
“This continues to be a space that is of interest to us. And we feel good about the conversations that we are having and also our reputation as a consolidator in the industry,” he said.
Coller Capital was founded in 1990 by industry pioneer Jeremy Coller, sometimes referred to as the “Godfather of Secondaries”.
It’s now one of the largest independent platforms in the industry, with US$46bil of assets under management.
Coller is generally seen as one of the more attractive targets among pure-play secondaries investment firms, given it’s still led by its founder and hasn’t publicly announced a detailed succession plan, some of the source said. — Bloomberg
