Swedish buyout firm EQT plans IPO, asks banks to pitch - sources

By Dasha Afanasieva and Arno Schuetze

LONDON/FRANKFURT (Reuters) - EQT's owners have invited investment banks to pitch to take the Swedish private equity firm public following a strategic review, sources familiar with the matter told Reuters.

Banks are scheduled to bid next week for mandates on the potential initial public offering (IPO) of EQT, which was established in 1994, they said.

EQT, which is owned by senior investment advisory professionals of EQT Partners with Investor AB holding a minority stake, declined to comment.

Listed private equity funds are relatively rare in Europe, with the majority in the United States, where firms such as Blackstone Group (BX.N) and Carlyle Group (CG.O) have been able to diversify and style themselves as alternative asset managers.

While their structure as publicly traded partners is an impediment for many investors, KKR recently changed to a corporation structure.

Going public can help firms retain and hire staff, potentially give an exit route for retiring founders and boosting their ability to raise money to make acquisitions.

There is also a valuation premium for stable management fees over performance fees, which are much less predictable.

In Europe, Swiss Partners Group (PGHN.S) has risen almost nine-fold since its 2006 IPO, while Britain's 3i (III.L) has experienced a mixed performance, falling to an all-time low in the aftermath of the financial crisis a decade ago.

EQT, which owns retailer Flying Tiger Copenhagen, has around 50 billion euros (£43.64 billion) in raised capital across 27 funds. EQT funds have portfolio companies in Europe, Asia and the U.S. with total sales of more than 19 billion euros and around 110,000 employees.

EQT counts more than 600 institutional investors among its investors, including insurance firms, financial institutions, pension funds, sovereign wealth funds and family offices.

STRONGER BALANCE SHEET

Since 2014 EQT has begun investing in real estate, public companies and venture capital.

It said it has been looking at options of how to develop EQT into a more global and long-term sustainable business.

"We are continuously looking at ways of future-proofing EQT and have decided to review options to further strengthen EQT's balance sheet," Thomas von Koch, EQT's Managing Partner and chief executive said in a statement in September, adding:

"We need a stronger balance sheet to support EQT's continued global growth and make us resilient to weather tougher times."

($1 = 0.8761 euros)

(Additional reporting by Joshua Franklin in New York; Editing by Alexander Smith)