Our latest evergreen investment strategy, EQT Nexus Infrastructure, is a response to a few interesting trends.

We developed these strategies, including the EQT Nexus Infrastructure strategy we’ve just launched, following feedback from our private bank partners. These partners had asked if we could help their clients — wealthy individuals — gain access to EQT portfolios in a more convenient way than via our traditional funds.

What has become clear is that — as well as attracting the individuals we’d had in mind during the design process — our evergreen strategies are winning over institutional investors, such as pension funds and insurers. The changes we’d made to cut complexity and increase flexibility appealed to institutions as much as wealthy individuals.

The appeal of evergreen

Feedback from our institutional clients suggests that four factors make evergreen strategies particularly appealing.

First up, they offer less complexity. Large investors appreciate the simplified process — avoiding the complexity of subscription documents, capital calls and reinvestment cycles — as much as smaller ones.

Secondly, they provide compounding returns, as EQT immediately reinvests any proceeds.

The third attraction is immediate exposure. Unlike traditional strategies, evergreen strategies eliminate the so-called J-curve effect, where a private equity investment will initially fall in value before climbing over the longer term. Evergreen strategies provide instant exposure to a diversified portfolio of private market assets.

Finally, there’s flexibility. These evergreen strategies allow for ongoing contributions and withdrawals, combining long-term potential with mid-term flexibility.

These four factors make evergreen strategies a natural choice for investors seeking efficiency and high-quality exposure to private markets.

Trends in infrastructure

Beyond the broad attractions of evergreen strategies, there are also specific reasons why EQT has chosen to launch an evergreen strategy focused on infrastructure investments.

In the world of infrastructure — data centers, renewables, recycling facilities and so on — it is almost impossible to get access unless you invest in private markets. There are many exciting trends that our team is monitoring, primarily driven by global, long-term trends such as the transition to a decarbonized and circular economy and the digitalization of society.

In digital infrastructure, the continued expansion of data centers, fiber networks and 5G technology is revolutionizing connectivity.

Then there’s net zero. Tech innovation coupled with a steady reduction in costs, together with digitalization, drive the need for a transformation of our energy systems and the economy.

On the social side, providing essential services to society along health & wellbeing and education themes, all demand sustainable, long-term solutions.

Countries’ historical underinvestment in infrastructure has led to an investment gap of $2.7tn in Europe and the U.S. This gap is only expected to grow, reaching $15tn by 2040.

These trends underscore the critical role of infrastructure in driving both economic growth and societal progress. The digital and energy transition sectors alone represent a $300tn opportunity over the next 30 years. If you are a private individual, a way to gain exposure for your investments is via an evergreen infrastructure strategy.

Exposure to private markets

As with most things in life, balance is important. Close-ended funds have a role to play but it is increasingly clear that evergreen investment strategies also have advantages for clients of all shapes and sizes. The convenience factor coupled with immediate exposure to a diversified portfolio is relevant for all investor types and probably the most frequent feedback we receive when speaking to clients.

One of the main reasons for seeking exposure to non-listed companies is to expand the investment universe outside of the public markets. Remember, after all, that the non-listed market for companies with revenue above $100m is nearly 10 times bigger than the listed market.

The evergreen space is a dynamic one. We’re excited to keep innovating.