EQT targets healthcare, technology, business service providers in Korea

EQT, the largest private equity firm in Europe, is setting its sights on healthcare, technology companies and business service providers in South Korea. The Swedish investment firm is also looking at companies with room to grow through digitalization, or by enhancing management efficiency, said Jean Eric Salata, chairman of EQT Asia.

This year, he expects Korea’s M&A market to create opportunities for private equity investment as the country’s leading conglomerates work to shed non-core assets to survive a sputtering economy and a slowdown in the electric vehicle industry.

“We have about 40 investments that we’re actively reviewing right now,” Salata told The Korea Economic Daily in an interview this week. “Of course, very few of them end up getting closed at the end of the day, but we have a big pipeline.” 

LONG-TERM APPROACH

EQT, under the umbrella of Europe’s powerful Wallenberg family, takes a long-term perspective — typically a five-to-seven-year horizon. So it does not hesitate to pay a high entry price for valuable companies, said its Asia head.

In 2023, it acquired SK Shieldus Co., a Korean security service provider, for more than 2 trillion won ($1.4 billion).

Last year, EQT purchased KJ Environment and affiliated companies for about 1 trillion won, an investment aimed at establishing a waste treatment platform in Korea. The same year, the investment firm also took over SecuLayer Co., a Korean cybersecurity company, as a bolt-on investment for SK Shieldus.

OPPORTUNITIES IN MATURE MARKETS

South Korea is a mature market compared to other Asian countries. However, there are still good investment opportunities in Asia's No. 4 economy, said Salata.

"Healthcare, medical devices for example, skincare is quite advanced in this country. We look at these kinds of businesses that are servicing this global marketplace from a position of strength having differentiated the business here," he explained.

The Scandinavian investment firm is zooming in on companies in areas such as cloud computing, artificial intelligence, electric vehicles and renewable energy.

Among traditional businesses, it is eyeing companies that are gaining market share from rivals.

VALUE CREATION

EQT focuses on improving sustainability and digitalization, along with aligning its interests with the companies it invested in.

“We believe in digitally transforming companies as a way of creating value. We have a whole digital business development team internally that helps companies digitalize," said Salata, a veteran Chilean investor based in Hong Kong.

It also employs a thematic investment strategy and tries to bring efficiency gains by helping companies to have better management and governance.

“There are still a lot of inefficiencies . . .  Efficiency gains and improving businesses is one opportunity,” he noted.

In 2024, it executed about 22 billion euros ($21 billion) worth of private equity investments globally. That represented a 27% increase from 2023.

In terms of assets under management, EQT is the world's third-largest private equity firm. It manages 269 billion euros in assets via 50 active funds as of December 2024.

(Updated on Feb. 15 to improve clarification in some sentences)

Write to Da Eun Choi and Kyung-Mok Noh at max@hankyung.com
 

Yeonhee Kim edited this article.