EQT to acquire Baring Private Equity Asia for $7.5 billion

Swedish-headquartered private equity firm, EQT, last week announced an agreement to buy Hong Kong alternative investor, Baring Private Equity Asia (BPEA). The deal is valued at €6.8 billion ($7.5 billion) and consists of 191.2 million new ordinary EQT shares and €1.5 billion in cash.

Following the acquisition, EQT’s Asian private capital business will be rebranded to BPEA EQT Asia. Subject to customary closing conditions, the transaction is expected to close in the fourth quarter of this year.

The deal allows EQT to significantly strengthen its position in Asia by integrating BPEA’s €17.7 billion assets under management (AUM) into its portfolio. EQT will subsequently have more than €20 billion of invested AUM in Asia, across private capital and real assets.

BPEA is currently deploying from its flagship vehicle, $8.5 billion Private Equity Fund VIII. EQT will be entitled to 35% of the carried interest in BPEA Fund VIII and all future funds, the announcement said.

Expansion into Asia was one of the strategic objectives set out by EQT during its IPO, said Christian Sinding, CEO and managing partner of EQT, in the announcement. The firm listed on Nasdaq Stockholm in 2019.

The region accounts for more than a third of global GDP today and is expected to contribute more than 40% of global GDP growth by 2030, according to the announcement. Additionally, Asian private markets are expected to grow at almost twice the rate of global private markets and increasingly, they are attracting investors’ private markets allocations.

The latest purchase follows two major acquisitions by EQT last year, notably US real estate investor, Exeter Property, rebranded to EQT Exeter, and European life science venture capital firm, LSP, rebranded as EQT Life Sciences.

Following the transaction, BPEA’s real estate business will be integrated into EQT Exeter.

Upon completion, EQT Private Capital will have two divisions: BPEA EQT Asia, comprising the combined BPEA Private Equity and EQT Asia Pacific Private Equity teams; and EQT Private Capital Europe & North America. Jean Eric Salata, CEO and founder of BPEA, along with his senior management team, will continue to lead BPEA EQT Asia, reporting to Sinding. Salata will also join EQT’s Executive Committee.

EQT Infrastructure will continue to operate on a global basis.

Morgan Stanley is acting as financial advisor to EQT. Kirkland & Ellis International and Vinge are acting as legal counsel.

JP Morgan and Goldman Sachs are joint lead advisors to BPEA. Simpson Thacher & Bartlett; Paul, Weiss, Rifkind, Wharton & Garrison; and Mannheimer Swartling are acting as legal counsel to BPEA and Salata.

EQT declined to comment beyond the release.