Banking Circle (A): EQT, a global investor in private equity, infrastructure, real estate and venture had a long track-record of supporting the development of companies with significant growth potential. Its Venture equity unit had discovered Banking Circle, a fintech involved in the underlying payments infrastructure and disrupting the traditional correspondent banking industry. However, it passed on the investment. After Banking Circle showed significant growth, EQT Private Equity unit re-looked at the potential investment and had to figure out the right structure to hold the investment. Banking Circle (B): EQT invested in Banking Circle, and held it across two of its funds – a Venture fund and a Buyout Fund. It also led to a Growth strategy. After good growth from EQT, it was time to decide what to do with the investment – take profit and sell, or hold for the long term.
The aim is to illustrate the path to a buyout of a start-up, from the point of view of a private equity investor and what is considered: growth, exit multiple expected, how to hold the investment. The next step is then to think of what to do when the investment matures – is it time to take profit, or to hold on as it continues to grow.
- Correspondent Banking