EQT raises €1bn for special situations fund – UPDATE

Credit Opportunities III targets European companies with excessive leverage. 

EQT’s latest special situations credit fund is closing in on its fundraising target of €1.15 billion in capital commitments, regulatory documents showed.

The Stockholm-based investment firm has raised approximately €1 billion for EQT Credit Opportunities III, according to filings with the US Securities and Exchange Commission and UK Companies House.

The Credit Opportunities III fund targets medium-term financings for mid-market European companies, including firms experiencing distress due to excessive leverage, according to the firm’s website. The fund has already invested 15 percent of committed capital, according to a source familiar with the matter, and held its first close last June.

EQT declined to comment.

Limited partners that have committed to the fund include the Fresno County Employees Retirement Association ($40 million), the Finnish Local Government Pensions Institution, and Nordea Bank, PDI data shows.

The Alameda County Employees Retirement Association also approved a $38.4 million commitment to Credit Opportunities III in November, pension meeting minutes noted. The firm expects to hit the net internal rate of return target of 15 percent, EQT representatives said during that meeting.

The firm’s previous Credit Opportunities II fund, launched in 2012, closed on €845 million, PDI data shows. 

On top of the credit opportunities funds, EQT operates a direct lending EQT Mid-Market Credit platform, which held a final close on €530 million last year, as well as its EQT Senior Debt strategy. Both focus on the European market. The firm’s credit team has over 20 people, executives told PDI this month. 

Since its beginning in 1994, the Swedish firm has raised 22 funds with €35 billion in committed capital and has invested more than €22 billion in 170 companies, according to its 2016 annual report.

Editor’s note: An earlier version of this article published the amount raised for the fund reported to the SEC only, not the SEC and UK Companies House.