EQT Taps Top Microsoft Dealmaker to Hunt for Growth Investments

(Bloomberg) -- EQT AB hired Microsoft Corp.’s long-time dealmaker Marc Brown to lead a new growth investment team, adding to signs that private equity firms are seeking new strategies to diversify and boost returns.

The move will give Stockholm-based EQT a foothold in a lucrative pool of companies -- ones that have gone beyond initial funding rounds and scale quickly but don’t yet have the profile of mature firms with years of revenue and profitability, Chief Executive Officer Christian Sinding said in an interview.

“There’s this whole space where we missed out on a number of opportunities that we could’ve gone after and I think a lot of the LPs have the same feeling,” he said.

One of Europe’s few listed PE firms and with about 40 billion euros ($47 billion) in assets under management, EQT will focus on “opportunities between venture capital and private equity” by partnering with founders and management teams, according to the company.

In addition to Brown, the new group includes Carolina Brochado, recently hired from Softbank Investment Advisers in London, and EQT veterans Victor Englesson, Dominik Stein and Johan Svanström.

LinkedIn and TikTok

Brown, who worked at Microsoft for more than two decades, oversaw the software maker’s mergers and acquisitions, including its purchase of LinkedIn and investment into Flipkart. He was also involved in Microsoft’s attempt to buy TikTok’s U.S. operation, which fell short as the social media app’s parent company ByteDance Ltd. selected a different type of deal with Oracle Corp.

“We will be one of the few private equity firms in the world that have venture capital, growth and private equity,” Sinding said.

EQT is planning to make the initial investments for the growth strategy from its balance sheet, one of the reasons why the firm went public last year. The move may result in a formal fundraising at a later stage but Sinding declined to comment further on any concrete plans or decisions.

Private equity firms have kept up their fundraising efforts throughout the pandemic. EQT is raising a buyout fund while peers including Nordic Capital and BC Partners have raised or are still raising money.

At the same time, private equity firms are under pressure at multiple levels; to manage the economic fallout from Covid-19 at their portfolio companies, deploy record levels of capital commitments, and return cash to investors. EQT reported a drop of 40% in adjusted profit for the first half of this year.

Ahead of Rivals

Since its IPO in 2019, the firm has sold its credit arm to Bridgepoint and is now focused on private equity and real assets. It started raising its ninth buyout fund this year as well as a new infrastructure fund. EQT is also running a venture fund.

Analysts at Morgan Stanley said recently in a note that EQT is ahead of sector peers when it comes to earlier stage investing and development support for companies.

“In Europe there’s no clear leader in the growth space,” Sinding said.

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