Company Reports

We initiate coverage with narrow moat ratings on all three major European-based private market firms: CVC Capital Partners PLC, EQT AB, and Partners Group Holdings AG. We expect all three firms to remain highly profitable, and the private market industry benefits from established secular growth trends. However, the eye-watering mid-20s EV/EBITDA multiples the firms trade at currently suggest that the market already prices in these strong fundamentals. We do not believe that higher interest rates mark a structural change in the industry, but we expect near-term dealmaking to remain muted.

EQT has made a name for itself as a thematic specialist with sector expertise, especially in healthcare and technology. Initially, it invested mainly in Europe, but it is one of the most prolific global private-market firms today. In many of its investments, it straddles the gap between startups that tend to attract mostly venture capital funding and the mature firms that buy out funds tend to target. EQT offers direct private equity, real estate, and infrastructure funds. It sold its private credit business and does not offer fund of funds to institutional clients.