EQT moves into turnarounds

Stockholm-headquartered private equity specialist EQT is in the process of raising a €250 million turnaround fund, the first of its kind in the Nordic region.

EQT, one of Northern Europe’s largest private equity firms and arguably its most innovative, is marketing a turnaround and restructuring fund to prospective investors.

The fund, which according to market sources has a target of €250 million, will be pursuing equity investment opportunities in underperforming Northern European mid-cap companies. In its efforts to originate deal flow, the fund will be negotiating directly with creditor banks of target businesses.

EQT veteran Håkan Johansson is expected to head up the investment team in  charge of the fund. A call seeking comment from EQT, which is run by Conni Jonsson, was not returned.

If the fundraising is successful, the turnaround vehicle will be the first of its kind in the Nordic region. According to a Nordic institutional investor in private equity funds, the offering has met with strong limited partner demand, in part because the fund will not have any direct competitors, at least not in the near term.

EQT was founded in 1994 by Investor AB, Scandinavia’s largest holding company which is controlled by the Wallenberg family.

The turnaround initiative is the second time that a new investment strategy is being added to EQT’s core LBO business. In 2003, the firm closed a dedicated mezzanine fund, which is being invested by a team of seven investment professionals led by Patrick De Muynck and Michael Föcking.

EQT’s LBO team is currently investing EQT IV, a €2.5 billion pool closed in August 2004.

Earlier this year, EQT made a number of changes to its senior management team. In September, the firm recruited Petri Myllyneva, a former lawyer and corporate executive, to take over the running of its Helsinki office; in July, partner Marcus Brennecke was appointed head of EQT in Germany, replacing Björn Höi Jensen in the role. Jensen remains a key figure at the firm.

In addition to Stockholm and Helsinki, the firm has offices in Copenhagen, Frankfurt, and Munich.