EQT has agreed to acquire Stockbridge, a US real estate investment manager with about $16.5bn of fee-generating assets, as the Swedish group widens its real estate business. The deal could be worth up to $550m, including up to $175m more payable between 2027 and 2030 if Stockbridge meets targets for raising fee-paying commitments in new products. EQT is buying all of Stockbridge's management company and the general partner entities that control its funds, and will be entitled to invest in 35% of the carried interest in all future Stockbridge funds.
Stockbridge's senior managers have committed to reinvest half of their cash proceeds in EQT shares, bought in the market after closing, with lock-ups expiring in stages in 2029, 2030, and 2031. Part of any earnout payments must also be reinvested in EQT shares on similar terms. EQT Real Estate has more than doubled in size since 2021 and now aims to build a more diversified and globally scaled platform.
Stockbridge's open-ended core fund is the centrepiece of the deal. The diversified fund ranks in the top 5% of its peer group over one, three, and five years, and will become EQT Real Estate's flagship diversified core strategy. EQT plans to grow it through its client network, particularly in Europe and Asia. The deal also strengthens EQT's position in industrial property, combining Stockbridge's industrial capabilities, including industrial outdoor storage, with EQT's existing platform. Stockbridge also brings experience in manufactured housing, providing a base for a broader alternative living business that could later extend into senior and student housing.
EQT expects Stockbridge to generate $35m to $45m of fee-related EBITDA in 2027, at a margin of about 30% to 35%, with growth of 15% to 20% a year after that. Because Stockbridge focuses on lower-fee core and asset-value strategies, the deal will initially lower the blended fee rate and margin of EQT's real estate business, which EQT expects to improve as fund-based strategies grow. Stockbridge will operate as a separate business line, with chief executive Terry Fancher becoming vice-chair of EQT Real Estate. The deal is expected to close in the first quarter of 2027, subject to customary conditions, including investor consents.
Source: PE Insights · Summarized by HeadlinesBriefing