EQT Exeter, the real estate business of Swedish private equity firm EQT, has dialed up its fundraising efforts for Asia real estate despite expecting limited fundraising activities for the asset class outside of the region.
The private equity giant has begun fundraising for its first Asia-Pacific logistics fund, Gustav Segerberg, head of business development, said during the firm’s Q1 2024 earnings call last week.
While the firm did not disclose further details about the Asia logistics fund, PERE reported earlier that the fund was expected to inherit the flagship value-add strategy of Bear Logi, a Japanese value-add logistics investment manager acquired by EQT Exeter in January 2022.
EQT Exeter has been actively scaling up its Asia real estate business via mergers and acquisitions. Apart from buying Bear Logi, it merged with pan-Asia real estate platform BPEA Real Estate as part of EQT’s €6.8 billion purchase of Hong Kong-based private equity firm Baring Private Equity Asia in 2022.
Following the merger, the firm reorganized its business into two pillars, namely a diversified and a logistics strategy respectively, Mark Fogle, head of EQT Exeter’s Asia business, told PERE in an interview at the end of 2022. At the time, he noted the firm had a similar timeline for launching dedicated funds for each strategy.
Outside of Asia, the firm does not have immediate plans to launch additional real estate funds, according to Olof Svensson, head of shareholder and bondholder relations at EQT Exeter.
“Exeter has some $12 billion of dry powder,” he said. “Having held off investing for most of last year, whilst also having completed a few fundraisings over the past couple of years, they are now in a position where the fundraising need is relatively limited.”
“Hence, there will be some time before we raise the next round of flagship logistics funds,” said Segerberg. One of the firm’s most recent real estate fund closes included its US logistics fund EQT Exeter Industrial Value Fund VI. With a $4 billion target, the firm raised $4.9 billion for the fund in June 2023.
On the deployment side, the firm held back on real estate investing for most of 2023 but Svensson expected to see activity return this year.
“In real estate, the slight pickup in investment activity that we saw in Q4 last year has continued into 2024. In fact, our investment levels in Q1 have already surpassed the very low volumes that we saw in 2023,” said Svensson.
Having said that, real estate still represented a small fraction of the firm’s €4 billion in investments in Q1 2024. Instead, the majority of deployment was in digital infrastructure, education and vertical software.
Within real estate, some of the investments EQT Exeter made in 2024 included the $61 million acquisition of an industrial property in Texas on behalf of its non-traded real estate investment trust, EQT Exeter Real Estate Income Trust, according to a PERE report.
EQRT is one of EQT Exeter’s latest real estate products, with Segerberg expecting to begin fundraising for the private REIT shortly. The vehicle was listed in August 2023 after its formation in September 2022. The same PERE report noted the firm’s plan to raise up to $5 billion through sales of common stock shares in EQRT.
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