EQT AB warns of the “false reassurance” offered by diversification ... private markets are the source of returns [fn Market Watch]

[Financial News] EQT AB, a private equity firm affiliated with Sweden’s Wallenberg family, said on the 28th that “even portfolios that appear diversified can be exposed to the same shocks,” identifying “False Reassurance” as the biggest risk. The assessment is that the era supported by stable geopolitical conditions, abundant liquidity and low financing costs is over, and that going forward, returns will have to be generated through operational capabilities in private markets.
In its recently published Global Alpha Report 2026, EQT AB outlined developments reshaping investment risks and return structures. It noted that even investments diversified across regions through globalization can ultimately be exposed to the same bottlenecks and policy risks. It also said artificial intelligence (AI) can boost value creation while creating new bottlenecks. The International Energy Agency (IEA) has forecast that global data center electricity demand will more than double, from about 415 TWh in 2024 to around 945 TWh in 2030.
EQT AB identified the emergence of new industries without established winners, the shift of value to private companies, and the arrival of new sources of capital. The number of companies listed on U.S. stock exchanges has fallen by about half over the past 30 years, reaching roughly 3,900 at the end of last year. EQT AB noted that public markets serve largely as an exit route for later-stage investments, while transformative value creation at earlier stages takes place in private markets. Sovereign wealth funds, insurers and channels serving individual investors are also gaining influence. Sovereign wealth funds, in particular, are reducing their exposure to listed equities and shifting toward private equity, private credit and infrastructure.
EQT AB warned that when shocks originate in the real economy, it becomes difficult to rely on correlations among asset classes. With multiple expansion and low-interest-rate leverage harder to count on, disciplined deal sourcing, operational improvements and systematic exits are the sources of returns, it said. It identified power grids and energy, digital infrastructure, defense, housing and healthcare as areas where demand for capital is set to surge. The agreement by North Atlantic Treaty Organization (NATO) member states to raise defense spending to 5% of gross domestic product (GDP) by 2035 is also part of this trend.
EQT AB identified localization, an edge in value creation through scale, access to liquidity and the consistent generation of high returns as capabilities that will determine future competitiveness. EQT AB’s moves are also seen as aligning with this direction. In August, EQT AB completed its acquisition of Coller Capital, a specialist secondary-market asset manager. The base purchase price was $3.2 billion. The deal is seen as a strategic move amid growing demand for liquidity, as global secondary transaction volume in the first half of this year reached a record high for a first half. At the end of the first half of this year, EQT AB had total assets under management (AUM) of 291 billion euros, up about 9% from the same period a year earlier.
[email protected] Kang Gu-gwi Reporter