The growth companies defining the next decade aren't on the ASX

Something has shifted in the investing landscape over the past decade, and private equity firm EQT thinks it's one of the most important changes in markets today.

Companies are staying private for longer, and the best ones aren't in any rush to list.

So if this is a structural trend we will continue to see, what are the implications for investors who are only sitting in public markets? 

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The short-answer to this question, probably, is that they're seeing less of the best part of a company's growth journey.

As Frank Heckes, EQT’s head of private equity for Australia and New Zealand puts it: "The proportion of really interesting companies above a hundred million in revenue that have become long-term compounders in a private setting has grown substantially."

There is certainly an appetite to dial into the early innovation and growth stories. Against a backdrop of a 12-year low in Asia Pacific dealmaking, EQT closed what is now the largest private equity fund ever raised in Asia — US$15.6 billion. Heckes credits this to one thing above all else: actually returning capital.

"Like everything, performance at the end of the day is what drives demand," he said. "The single most important factor over the last few years isn't just creating value, it's the ability to return that cash to our investors and allow them to reinvest in other opportunities."

In the following interview, we discuss why active private equity matters when listed markets are concentrated, technology is rewriting moats, and more of the world's growth stays private for longer.

ANZ punching above its weight

Heckes highlights Australia and New Zealand as "lucky country" markets with strong demographics, supportive business environments, and founder-led companies that punch above their weight in healthcare, technology, industrial services, and infrastructure.

In an AI-driven world, what actually qualifies as a competitive moat? For Heckes, it means we are in an environment where no one can afford to stand still.

One of EQT's recent Australian investments is Compass Education, a cloud-based software business that helps schools manage their operations, from administration to parent communications. "A fantastic founder-led business where we've really tried to bring capital and global expertise to continue innovating that asset," Heckes says.

EQT focuses on AI-enabled moats and deeply embedded workflows, then invests in what accelerates the next phase of growth. A similar logic underpins EQT's investment in PropertyGuru, a leading Southeast Asian property technology company.

In South Korea, EQT recently backed Douzone, an accounting software business used by up to 70,000 Korean companies, whose deeply embedded position makes it a natural platform for AI agent adoption.

The EQT edge

Central to EQT's model is an active ownership approach rooted in the Wallenberg family's long-term industrial partnership philosophy.

"They've owned many of their companies in perpetuity for over a hundred years," Heckes says. 

"What that's been all about is thinking not just about the financial results, but the way that you conduct the business and create the value and do that sustainably."

The firm has a network of 700 experienced industrial advisers who work alongside management teams and EQT's resources in a three-way partnership.

This active ownership structure is how EQT differentiates itself as being more than capital - with a focus on operational growth rather than financial engineering. 

Low interest rates, rising multiples, cheap debt - the conditions that made private equity easy for much of the previous decade are gone.

"It's got to be about active management - pricing strategies, investing in new markets, thinking about sales structures, cost efficiencies, AI," says Heckes. "You really have to create that kind of long-term value."

What actually happens in the first 100 days

When EQT buys a business, the first 100 days follow a defined process designed to align management, the board, and EQT on a common plan.

"It's very systematic. And what we're trying to do is get the investment off to a fantastic start and the partnership off to a great alignment."

That alignment is built around a long-term vision, not just a three-year return target. 

"What's really important for the next decade? What is the full potential opportunity for this platform and this business?" 

From there, it becomes what Heckes calls a "full court press": board composition, management incentives, strategy, reporting timelines, cybersecurity, AI adoption, and data structuring. 

At the end of it, Heckes explains, the idea is that the company has the full force of the EQT's knowledge, system and network to be as successful as it can be.

"With private equity, we have the patience to invest through the cycle. Cash flow may dip in the short term as we invest in innovation but it’s that investment that helps create the conditions for a much larger exit story and a brighter future as a competitive player."

Good governance, the driver of returns

There's a tendency to frame good governance simply as risk management. Heckes argues it’s also a tool for driving returns.

"A business is all about the collection of people, and the idea of governance really is how do people interact with each other and what are the values and objectives that we're going to prioritise as an ecosystem."

When ownership, management, and the board are aligned on a shared vision, the practical payoff is efficiency. 

"As a collective, whether it's management, the board or the owners, we know how to go and execute efficiently in a way that we're going to be proud of." Heckes cites the Wallenberg influence and philosophy that lives inside EQT. 

"We have this saying that everything can always be improved at all times - or better never ends.”