Bridgepoint has bought EQT’s private debt arm and merged it into its existing credit business.
Last year, EQT conducted a strategic review of its credit business, which was the smallest of its three business lines with €4 billion in assets under management at the end of 2019. The terms of the deal were not disclosed but the acquisition substantially increases Bridgepoint’s existing credit business to around €7 billion in assets.
Commenting on the acquisition, Bridgepoint managing partner William Jackson, said: “This moves our credit strategy and ambitions significantly forward and provides further diversification for the Bridgepoint Group. This is in line with our strategic objective of offering a broader range of compelling middle market focused alternative investment strategies.”
The deal also expands the geographic footprint of Bridgepoint’s credit business into Germany, the US and the Nordic region. The credit arm already had a presence in London and Paris.
EQT said its credit arm represented around 10 percent of its total AUM with annual revenues of €35.8 million. It employs 40 investment professionals including five partners. However, EQT said the firm wanted to focus on other priorities.
“This is an important step on our path of focusing on investment strategies which can fully utilise EQT’s governance and impact ownership model,” said Christian Sinding, CEO of EQT AB.
Andrew Konopelski, head of EQT Credit, said: “As part of EQT, we have developed a diversified credit platform capable of investing across the capital structure. We have grown and implemented a thematic and due-diligence focused investment approach and an operational mindset. The resilience of the portfolios during these unprecedented times demonstrates the strength of our model as we look toward the future.”
The deal is subject to regulatory and other approvals and is expected to complete in the fourth quarter of 2020. EQT said its credit operation will be reported as a discontinued operation in its half year report and stated the transaction will not have a material impact on its central functions.
JPMorgan provided financial advice to EQT while Kirkland & Ellis and Travers Smith acted as legal advisors. Bridgepoint was advised by Rothschild & Co, PwC, Clifford Chance, Simpson Thacher and Lockton.
Bridgepoint owns PDI‘s publisher PEI Media.