Swedish investment firm EQT AB has reached a deal to acquire San Francisco-based real estate investment manager Stockbridge Capital Group in a deal that could reach $550M.
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EQT agreed to pay $375M in cash to acquire Stockbridge and add its nearly $27B real estate portfolio to its growing asset pile, it announced Thursday.
If certain conditions are met, EQT could pay Stockbridge's owners up to $175M more between 2027 and 2030. Stockbridge will transition to the EQT Real Estate brand upon closing, according to a release.
Senior management shareholders in Stockbridge committed to reinvesting half of their proceeds in EQT AB shares, which will close in the market once the deal is complete. The shares, traded on the Nasdaq Stockholm exchange, are subject to lockup arrangements with portions expiring in 2029, 2030 and 2031.
"Our Real Estate platform is an important part of EQT's offering to our clients, and this combination represents a significant next step in the development of the business," EQT CEO and Managing Partner Per Franzén said in a statement. "Stockbridge has built an impressive track record over more than two decades and is an excellent fit with EQT Real Estate."
"The combination broadens what we can offer our clients: additional thematic strategies supported by specialist investment teams that will benefit from EQT's global sourcing, operating, and distribution capabilities," he added.
Stockbridge, founded in 2003, has $16.5B of fee-generating assets under management and owns nearly 93M SF of commercial space and nearly 20,000 residential units. The firm will become part of EQT's dedicated real estate division, EQT Real Estate, and boost EQT's position in industrial investments — including industrial outdoor storage and alternative living.
As part of the deal, EQT will acquire 100% of the Stockbridge management company and general partner entities. EQT will be entitled to invest in 35% of the carried interest in all future Stockbridge funds.
Existing employees in leadership, investment teams and decision-making will "largely remain in place," according to the release, but a few Stockbridge executives will assume new leadership roles within EQT Real Estate.
Stockbridge CEO Terry Fancher will become vice chair of EQT Real Estate, and Chief Financial Officer Kristin Renaudin will become EQT Real Estate's global chief financial officer. Stockbridge's executive managing director, Tuba Malinowski, is assuming the role of head of U.S. diversified real estate.
The transaction is projected to close at the beginning of 2027.
EQT Real Estate has been growing its logistics portfolio in the U.S. as of late with its EQT Real Estate Industrial Value Fund VI. The company acquired a 32-building, 5.2M SF portfolio in California from Rexford Industrial Realty in September, according to a release.
It has also been an active U.S. seller, offloading a 10M SF logistics portfolio in the Southeast to LBA Realty in August and selling 36 warehouses to Ares Management for $650M in March.
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