November 29, 2018 / 4:38 PM / 12 days ago

Goldman Sachs, Morgan Stanley top picks to lead Swedish buyout firm EQT's IPO: sources

STOCKHOLM (Reuters) - Goldman Sachs (GS.N) and Morgan Stanley (MS.N) are expected to lead preparations for the planned IPO of Swedish buyout firm EQT, two sources told Reuters, after the company earlier this month invited banks to bid for the mandate.

The firm, founded in 1994, invests in public companies, real estate and venture capital and manages about 50 billion euros of raised capital under 27 funds. Its CEO, Thomas von Koch, wants to strengthen its balance sheet to support its global growth ambitions.

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

EQT is in no hurry to finalize the banking mandate or go to the market and would “definitely not” list in the first quarter of 2019, said one of the sources, who declined to be named as the information is confidential.

The company was instead considering the second or third quarter of next year, the source added.

While other private equity funds have exited investments through IPOs, EQT has opted against an IPO of its portfolio firm IFS and will instead seek to refinance the enterprise software maker in early 2019 after bolstering its equity this year, a second source said.

That source added that Goldman Sachs had been selected to raise 100 million euros by selling a 10-15 percent stake in IFS to one or two limited partners, a strategy EQT has applied before.

The first source said this strategy was more pertinent now as private equity investors have been struggling to find good enough companies to snap up and were choosing to hold “good assets” for longer.

EQT, whose companies include pest control firm Anticimex and data communications provider IP Only, is also working on raising more funds to use to bulk up its assets under management before listing, the first source added.

EQT, Goldman Sachs and Morgan Stanley declined to comment.

EQT is owned by senior investment advisory professionals of EQT Partners. Investor AB (INVEb.ST), founded by Sweden’s wealthy Wallenberg family, is the firm’s anchor investor with an ownership of about 10 percent in its most recent funds.

Uninspiring economic data, political uncertainties and poor stock market performance has pushed many to postpone European floats in 2018, but bankers are cautiously optimistic that next year may improve. refini.tv/2ztIA7y

Reporting by Esha Vaish in Stockholm; Editing by Elaine Hardcastle

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