Baar-Zug, Switzerland, 8 December 2015
Partners Group introduces private markets funds for the defined contribution market
Partners Group, the global private markets investment manager, has developed private markets offerings for the world's three largest defined contribution (DC) markets, the US, UK and Australia. The firm has secured the first client for the US fund, which launched in August.
Steffen Meister, Partner and Delegate of the Board of Directors/President, Partners Group, states: "This is a hugely important milestone in the development of suitable private equity and private markets offerings for the DC market, which is a key strategic initiative for Partners Group."
Partners Group's Australian fund is in ramp-up phase and is expected to open for client commitments in early 2016. The UK fund is in the final stages of regulatory review and is expected to launch in Q1 2016.
André Frei, Partner and Co-CEO, Partners Group, says: "Historically, DC pension plans have been unable to invest in private equity and private markets due to the illiquid structure of traditional private equity vehicles. These funds will change the status quo."
Partners Group's three offerings provide access to private markets investments, while at the same time providing daily liquidity and pricing and fulfilling the highly standardized purchase and redemption procedures that are requirements of the defined contribution system. They are designed to be adopted by professionally-managed or advised DC plans and incorporated in structures such as target-date funds in the US, default funds of work-place pension plans in the UK, and retail platforms in Australia.
Partners Group has over USD 47 billion in investment programs under management across the private equity, private real estate, private infrastructure and private debt asset classes. The firm is headquartered in Switzerland and has 18 offices worldwide, including three in the US in New York, San Francisco and Houston.
Steffen Meister explains: "DC pension plan managers have been evaluating how to include exposures to private markets in their professionally-managed portfolios, as they consider ways to improve the retirement outcomes for plan participants. Statistics consistently show that defined benefit plans (DB) outperform their DC equivalents and we believe part of that difference is based on the ability of DB pension plans to include more illiquid and long-term investments in their investment portfolios. DC has to-date been unable to do this, despite the long-term investment horizons of most plan participants."
André Frei adds: "As the proportion of pension assets invested in DC versus DB schemes has risen, so have the demands from consultants and plan managers for access to a more sophisticated set of investment options, including private markets. Given this demand-led momentum, we anticipate that, over the next decade, private markets will become as important a performance driver for DC schemes as they are today for many DB portfolios."