EQT expects to deploy more than USD 30bn in Asia over the next five years as co-investment doubles the amount of dry powder available to address an expanding regional buyout opportunity.

The investment firm has closed its ninth flagship pan-regional fund on USD 15.6bn – the largest pool of capital ever raised for an Asia private equity mandate. According to Hari Gopalakrishnan, deputy co-head of private capital Asia at EQT, the deal pipeline suggests there will be at least USD 1 in co-investment available for every USD 1 committed to the fund.

“Co-investment has been strong in Fund VIII; there was USD 1.6 of co-invest for every USD 1 invested in the fund. Even with 1:1 in Fund IX, we still have USD 31bn in dry powder,” he said.

“The combination of our buyout orientation and our thematic approach to investment creates a virtuous cycle of co-investment opportunities. LPs already know what sectors we’re looking at, we have the management teams and industrial advisor networks in place, and this gives us confidence to act. It’s not easy to replicate that.”

EQT’s eighth fund, which closed on USD 11.2bn in 2022, participated in a USD 14.5bn buyout of Nord Anglia Education last year. The USD 10bn equity cheque meant there was significant capacity for co-investment. However, while acknowledging the impact of this transaction, Gopalakrishnan noted that more than 120 co-investors participated in multiple deals alongside Fund VIII.

Fund IX, which reached a first close of more than USD 10bn in April 2025 against a USD 12.5bn overall target, is already 5%-10% committed across two deals: a USD 2.7bn privatisation of Japanese elevator and escalator manufacturer Fujitec and the USD 930m acquisition of a controlling stake in Korean enterprise software business Douzone Bizon. Both feature co-investment.

Buyout bonanza?

Gopalakrishnan said that deployment and pipeline development have not been slowed by economic volatility linked to conflict in the Middle East, adding that typical investment targets are domestically focused and have little direct exposure to fuel prices.

“Japan I would call out as a market with very strong deal flow, but we are seeing opportunities across India, cross-border, Australia and New Zealand, and Southeast Asia as well,” he said.

Technology, healthcare, industrial technology and services investments across those geographies are expected to account for much of Fund IX – much as they did in Fund VIII. India was the largest geography in that vintage, accounting for nearly one-third of the corpus, followed by cross-border deals involving businesses based outside of Asia that have a regional expansion angle.

All 16 Fund VIII investments are control deals, underlining a shift over several vintages. In Fund V, for example, it was about one-quarter. By Fund VII, most of the capital went into buyouts, but these made up about half of a relatively large 23-company portfolio, AVCJ Research’s records show.

“The base case is that we will not do a minority deal in Fund IX. We haven’t done any over the past five years in Fund VIII or in our mid-market fund. This differentiates us from our peer group of Asian private equity firms that may not be consistently doing them,” said Gopalakrishnan.

“For us, the motivation to focus on buyouts is a fiduciary duty to deliver value and exit in a repeatable way at the pace at which we underwrite. We can do that a lot more predictably when focusing on buyouts in our core sectors.”

There is also a conviction that Asia’s buyout market remains underpenetrated, which in turn supports the rationale for continued increases in fund size. Gopalakrishnan points to India and Japan, both USD 4trn-plus economies in which total buyout volume amounts to less than 1% of GDP.

“When we did our first buyout in India in 2013, the market was about USD 2bn and the company we acquired [Hexaware Technologies] was 25% of that,” he said.

“In 2023, it was USD 10bn and in 2024 it was closer to USD 15bn. If those USD 15bn of deals return 2.5x, by 2030 the buyout market will be more than USD 50bn. And then buyouts today are only about 40% of overall private equity in India. Even at USD 50bn, it will still be less than 1% of GDP.”

Asia’s relative appeal

Fund IX is not only Asia’s largest, but the final close comes at a challenging time for private equity fundraising. About USD 72bn was committed to US dollar-denominated funds focused on Asia last year, according to AVCJ Research. It represented an improvement on last year, but EQT and Blackstone’s first closes accounted for a disproportionately large share by historical standards.

Four-fifths of Fund VIII investors re-upped for Fund IX and increased the size of their commitments by an average of 13%. There were also more than 75 new LPs, including 45 that have exposure to other EQT products. The US remains the biggest contributor, but Asia is the fastest growing LP base.

Asked why the firm received strong support, Gopalakrishnan cited strong distributions, with USD 39bn returned to LPs from the Asia private equity business to date and USD 14bn in the last 12 months alone. He also observed that the region is viewed increasingly favourably by investors that are looking to rebalance developed markets-centric portfolios.

“Asia resonates well with investors. It is seen as more protected geopolitically and less volatile, it contributes about 50% of global growth, it offers fewer secondary deals and a lot more primary deals, and there are uncorrelated liquidity opportunities,” Gopalakrishnan said.

“We could get an IPO done in several markets, and I’m not sure you could say that about more advanced economies in the West.”