EQT: Private Equity with a Purpose

16 Pages Posted: 3 Sep 2020

See all articles by Robert G. Eccles

Robert G. Eccles

University of Oxford - Said Business School

Therése Lennehag

EQT AB

Nina Nornholm

EQT AB

Multiple version iconThere are 2 versions of this paper

Date Written: Summer 2020

Abstract

The primary factors driving the remarkable growth of private equity have been the industry's attractive and stable returns in combination with its active ownership model. Nevertheless, critics have been questioning whether the PE industry can maintain its historic returns, and challenging its fee and incentive structures as well as its notable lack of transparency and diversity. And the alleged systemic effects of the industry on social problems like income inequality and climate change have become large enough to create a perceived threat to PE's long‐term “license to operate.”. In this article, the authors discuss the commitment of EQT, the publicly listed and Stockholm‐headquartered private markets firm (and eighth largest PE fundraiser in the world), to the “future‐proofing” of both its portfolio companies and the company itself. The company envisions itself as undertaking a “journey” toward sustainability and positive impact and, in so doing, furnishing a model that other PE firms might find useful in helping “future‐proof” the entire industry. As part of that commitment, EQT recently published a “Statement of Purpose” signed by its the board of directors that focuses a societal impact lens on its entire portfolio of companies and assets, reinforces its public commitments to diversity and other “clean and conscious” practices, and aims to leverage digital technologies to enhance financial returns and real‐world outcomes. Transparency and a mindset focused on achieving positive impact are the keys to PE's earning high and stable returns and to securing its long‐term license to operate.

Suggested Citation

Eccles, Robert G. and Lennehag, Therése and Nornholm, Nina, EQT: Private Equity with a Purpose (Summer 2020). Journal of Applied Corporate Finance, Vol. 32, Issue 3, pp. 73-86, 2020, Available at SSRN: https://ssrn.com/abstract=3685966 or http://dx.doi.org/10.1111/jacf.12419

Robert G. Eccles (Contact Author)

University of Oxford - Said Business School ( email )

Park End Street
Oxford, OX1 1HP
Great Britain

Therése Lennehag

EQT AB

Regeringsgatan 25
PO Box 16409
Stockholm, 103 27
Sweden

Nina Nornholm

EQT AB ( email )

Regeringsgatan 25
PO Box 16409
Stockholm, 103 27
Sweden
+46 8 506 55 356 (Phone)

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