Global stock markets have had 10 percent of their value wiped out already this year, but the Nordic region’s biggest buyout fund says smart money will sniff out the opportunities.
"There’s always these kinds of waves and cycles," Marcus Brennecke, deputy head of equities at EQT Partners, said by phone. "If there are market disruptions and a shaky market environment, that might be a good opportunity to buy again."
With China’s economic growth slowing to a 13-month low and oil prices continuing to plunge, corporate owners contemplating a sale face lower valuations. But broad market selloffs tend to lead to mispricing that can benefit buyers.
There are “quite a few deals and opportunities at EQT that we’re working on," Brennecke said. The fund is “pretty focused at the moment.”
There were almost twice as many public initial offerings Europe in both 2015 and 2014 as in 2013. This year, stock markets have gotten off to a rocky start, with the Bloomberg World Index tumbling 10 percent since the end of December.
Brennecke says much of the panic over China is overdone and the development has no strategy implication for EQT given the firm’s long-term views. EQT has even made a series of investments over the past few months. It bought Italian orthopedic device maker Lima, men’s shirt maker Eton and Swedish industrial vacuum-solutions provider Piab in December, and has bought 83 percent of Industrial and Financial Systems, a Swedish business-software supplier.
"We’re not looking at companies that only have a GDP-related growth, but we look at what we can do with innovation, products and how we can scale these businesses,” Brennecke said. “We’re not just arbitrage or GDP-orientated investors."