Billionaire investor Jean Eric Salata's initial experience in Asia was marked by significant challenges, particularly in India where his investments resulted in five write-offs and losses amounting to hundreds of millions of dollars. During those difficult times, he even changed his computer password to "perseverance" as a daily motivation to continue forward.
From Early Struggles to Asian Dominance
Two decades later, Asia has become the primary growth engine for Salata's current firm, EQT AB, which is making waves in the private equity sector with substantial cash outs and exceptional returns. The Swedish buyout firm now aims to triple its Asia investments to $110 billion within five years, surpassing its deployment in its European home market.
According to insiders, EQT executives project an additional $10 billion in exits from the Asian region over the coming year. The 59-year-old Salata, who was recently appointed global chairman of the firm, revealed that EQT is benefiting from global investors' gradual shift away from US political uncertainty toward Europe and Asia.
"Being European, being Nordic in its roots and heritage, we have a good position globally in this new world order where we can be a little bit more neutral in the way we view things," explained Salata, who serves as EQT's second-largest shareholder after the billionaire Wallenberg family.
EQT's Growing Global Footprint
While EQT may not be a household name, it has expanded to become the world's largest non-US private equity firm with $310 billion in assets under management. Despite operating in the shadow of competitors like KKR & Co. and Blackstone Inc., EQT's total fundraising over the past five years nearly matches KKR's performance, according to Private Equity International data.
The firm's newest Asia fund, BPEA IX, has secured $600 million in fresh commitments from two major US pension funds during the last six months. This comes in addition to $200 million received from the New Jersey Pension Fund earlier this year. Repeat investors include the Teacher Retirement System of Texas and the Employees' Retirement System of Rhode Island.
Under Salata's leadership and new CEO Per Franzen, EQT is embarking on its next growth phase, targeting to raise €100 billion ($116 billion) in the current fundraising cycle while planning to invest $650 billion globally over the next five years. The firm has returned €25 billion to investors in the past 12 months, with Asia contributing significantly to this performance.
Asia Takes Center Stage
Asia is positioned to play a crucial role in EQT's expansion strategy. The merger with Baring Asia, which Salata established in 1997, has provided substantial access to the world's fastest-growing markets. Regional deal flow has more than doubled, driven by activity in Japan, Korea, and Australia, while India has maintained consistent activity levels.
Salata noted that EQT's pipeline includes $15 billion to $20 billion of "live opportunities" across the region. The asset manager generated $10.1 billion for investors from selling Nord Anglia Education Inc., ranking among Asia's top exits, bringing total distributions from the Asia fund and its co-investors to $16 billion in the past year.
BPEA's two most recent funds from 2018 and 2022 have delivered impressive results, achieving net internal rates of return around 20% and gross multiples on invested capital of 2.7 times and 1.3 times respectively. The newest Asia fund targets even higher returns of 25% gross returns with a 2.5 times multiple.
Overcoming Early India Challenges
Salata's path to success in Asia was paved with learning experiences from early missteps. His initial push into India proved particularly challenging with $360 million invested resulting in five write-offs and only one deal breaking even. The aftermath was severe, with Baring partner Kosmo Kalliarekos facing interrogation before his wedding and being barred from returning to India for over a year.
Recognizing the need for strategic change in 2002, the entire team traveled to Omaha, Nebraska to learn from Warren Buffett and Charlie Munger about discipline and value investing. Following this inspiration, the team developed a new strategy focused on "buying growth at a discount," moving away from spreading capital across small, minority stakes.
The turnaround began with the firm's $490 million third fund in 2005. A pivotal moment came with a $50 million investment in Chinese miner Hidili Industry International Development Ltd., which generated $604 million when the company went public. By negotiating an early release in October 2007, just before the financial crisis, the firm secured profits and protected investors from the subsequent market collapse.
More recently, EQT's successful Asia investments have concentrated in healthcare, technology, and education sectors, which remain largely insulated from tariff pressures. The firm's domestically focused portfolio, including hospitals in India and schools in Hong Kong and Vietnam, further reduces exposure to international trade tensions.
Despite strong returns and robust fundraising, EQT's public market performance hasn't matched its rivals. The company's Stockholm-listed shares have gained about 11% annually over the past five years in US dollar terms, less than half the returns posted by KKR and Blackstone.
However, Franzen emphasizes the long-term perspective: "We're in this business for generations. The mindset is not to maximize the share price in the next five to 10 years. It's to win in the very long term."
The sale of BPEA to EQT for $6.7 billion in cash plus shares provided immediate institutional strength and global dealmaking access. The transaction also proved highly beneficial for Salata personally, leaving him with a 10% stake valued at approximately $4.3 billion.
Salata considers himself fortunate to have found alignment with the Nordic firm, which shares his belief that each market requires unique understanding, especially in Asia's diverse landscape. "The cultural fit is a key reason why this deal has worked," he reflected. "I've had discussions in the past with American firms, and it just wasn't gelling for me."
