We value EQT primarily on a sum-of-the-parts basis, albeit after also taking into account peer earnings multiples and EQT's own historical multiple. For the SoTP valuation, we value management fee-related earnings (FRE) and performance-related earnings (PRE) using a discounted cash flow and then add to this financial investments on the balance sheet as well as an estimate for cash requirements for ongoing operations. For the DCF, we use WACCs of c9-9.5% for FRE and c14% for PRE (consistent with peers), and apply a 4% terminal growth rate for both. Together, this approach results in a fair value of SEK380, which we set as our target price.

We highlight the following risks to achievement of our target price.
1. Underperformance of funds. With funds in more mature strategies having reached significant scale, carried interest will account for an increasing part within the Group’s earnings mix. Underperformance of funds would impact future potential for carried interest generation.
2. Lower than expected fundraises. We note ambitious fundraising expectations for EQT. Whilst overall the market remains supportive of these ambitions, lower than expected fundraises would immediately impact the Group’s topline and future potential for carried interest.
3. Failure to improve operating margins. EQT has grown its cost base to support future growth. The Group’s EBITDA margin target implies strong margin accretion. 
4. Timing of fundraises. EQT, in comparison to the other European alternative asset managers, raises fewer funds at larger scale. The increased product concentration bears the risk of fund raises slipping into later years, which would affect nearer-term forecasts.
5. Unexpected outperformance of funds: Current volatility in markets drives  overall uncertainty that also comes with opportunities. Better than expected performances of funds would drive higher performance fees and, hence, pose an upside risk to our target price.
If the impact from any of these factors proves to be more negative than we anticipate, the stock will likely have difficulty achieving our financial and price targets. However, if any of these factors proves to have less of an effect than we anticipate, the stock could materially outperform our target.