EQT's Exit from Colisée and Strategic Implications for Private Equity in Industrial Real Estate

EQT's decision to exit its majority stake in Colisée, a European provider of elderly care, marks a pivotal moment in the private equity landscape. This move, driven by a lender-initiated recapitalization plan, underscores the challenges of balancing operational growth with financial sustainability in a sector marked by margin pressures and liquidity constraints. While EQT's exit may appear as a singular event, it reflects broader trends in private equity capital recycling and market positioning amid shifting economic conditions.

Strategic Rationale and Operational Legacy

EQT's initial investment in Colisée in 2020 was rooted in the firm's alignment with sustainability goals and the long-term care sector's growth potential. During its ownership, EQT supported Colisée's expansion from 270 to nearly 400 facilities, alongside investments in staff training and quality standards. The firm also status, emphasizing social purpose. However, margin deterioration since 2022-driven by market headwinds and delayed asset sales-forced EQT to pivot from its original recapitalization strategy.

This outcome highlights a critical tension in private equity: the interplay between operational value creation and macroeconomic pressures. As Bloomberg notes, Colisée's liquidity issues and broader financial strains ultimately compelled creditors to pursue an ownership transition. EQT's exit, while strategic, underscores the fragility of capital structures in sectors where pricing power is constrained by regulatory or demographic factors.

Broader Sector Trends: Capital Recycling in a Shifting Landscape

EQT's experience with Colisée aligns with broader challenges in private equity capital recycling. In 2025, high interest rates and economic uncertainty have dampened exit activity, with U.S. private equity deal volumes declining by 14% in the first half of the year compared to 2024. Exit deals fell from 997 to 637 in the same period, forcing firms to extend hold periods and prioritize operational improvements over rapid divestitures.

Industrial real estate, however, presents a contrasting narrative. The sector is witnessing a post-2022–23 correction recovery, with net operating income (NOI) growth averaging mid-6% due to lease mark-to-market gains. Yet, success hinges on asset selectivity, as the performance gap between premium and lower-tier properties widens. For instance, Blackstone's £489M acquisition of UK industrial landlord Warehouse REIT and Vantage Data Centers' $1.6B Asia-Pacific expansion illustrate private equity's focus on high-quality, next-gen infrastructure.

Strategic Implications for Market Positioning

EQT's exit from Colisée signals a recalibration of priorities in a capital-constrained environment. Private equity firms are increasingly prioritizing sectors with resilient cash flows, such as technology and healthcare, while industrial real estate remains a focal point for capital recycling. This shift is driven by the sector's alignment with operational value creation and its potential to generate stable returns amid rising capital costs.

Moreover, the rise of "waste-to-value" strategies-converting waste streams into renewable energy or byproducts-offers a new frontier for private equity. These investments, with their localized execution and low political risk, align with sustainability goals while addressing global waste management challenges. As the U.S. Environment Programme notes, waste-to-value could generate a $108.5B annual net gain by 2050, presenting a compelling case for capital reallocation.

Conclusion

EQT's exit from Colisée is emblematic of a sector in flux. While operational improvements and sustainability initiatives remain critical, macroeconomic pressures and capital recycling challenges demand strategic flexibility. For private equity firms, the path forward lies in balancing sector-specific opportunities-such as industrial real estate and waste-to-value-with disciplined capital structures and a focus on high-quality assets. As the market navigates normalization of interest rates and geopolitical uncertainties, firms that prioritize operational excellence and thematic alignment will emerge stronger.