Baar-Zug, Switzerland, 12 January 2017
Partners Group reports gross client demand of EUR 9.2 billion and new investments of USD 11.7 billion in 2016; total AuM up 18% to EUR 54.2 billion; guidance for 2017 gross client demand increases to EUR 8-10 billion
EUR 9.2 billion gross client demand in 2016
Partners Group, the global private markets investment manager, received EUR 9.2 billion in new commitments from its global client base across all private markets asset classes in 2016, corresponding to the upper end of the communicated expected bandwidth of EUR 8-9 billion for the full year. Total assets under management (AuM) stood at EUR 54.2 billion as of 31 December 2016 (2015: EUR 46.0 billion), an increase of 18% year on year.
USD 11.7 billion invested across the entire platform in 2016
The firm further built out its global sourcing platform across the entire private markets spectrum in 2016, allowing for a continued high level of selectivity and a focus on attractive corporate, real estate and infrastructure assets where active value creation remains the key driver of returns.
Partners Group screened 3'794 direct transactions across asset classes, investing in only 74 of them, resulting in a decline rate of 98%. Partners Group's secondary investment specialists screened USD 129 billion in private markets assets and invested in less than 2% of these. In total, the firm invested USD 11.7 billion on behalf of its clients in 2016, including the reinvestment of distributions to evergreen investment programs.
A total of USD 7.6 billion (65% of total investment volume) was deployed in direct transactions, of which USD 4.4 billion was invested in 33 individual assets across private equity, private real estate and private infrastructure and USD 3.2 billion was invested in 41 credits. The firm's secondaries investment teams invested a total of USD 1.8 billion (15%) in globally diversified private markets portfolios. To complement its direct and secondary investments, the firm committed USD 2.3 billion (20%) to select private markets managers.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: "In 2016, we grew our platform to 930 employees worldwide with the aim of systematically sourcing and ultimately investing in an even larger opportunity set, while remaining disciplined in an uncertain market environment still characterized by elevated valuations. In 2017, we will remain highly selective in our investment process and actively work together with our portfolio companies and management teams to create lasting value in our invested assets for our global clientele."
AuM development in 2016
Next to gross client demand of EUR 9.2 billion in 2016, there were EUR -2.0 billion in tail-down effects from mature private markets investment programs and EUR -0.6 billion in redemptions from liquid and semi-liquid vehicles, amounting to a total of EUR -2.6 billion for the full year. These effects were in line with our communicated expectations of EUR -2.5 to -3.5 billion. In addition, foreign exchange effects amounted to EUR +0.4 billion in 2016 following the further modest appreciation of the US Dollar against the Euro, while performance-related and other effects from certain investment vehicles contributed EUR +1.2 billion in 2016. As a result, AuM increased by EUR 8.2 billion for the full year.
The breakdown of total AuM as of 31 December 2016 is as follows: EUR 30 billion private equity, EUR 9 billion private real estate, EUR 9 billion private debt and EUR 7 billion private infrastructure.
André Frei, Partner and Co-Chief Executive Officer, adds: "In 2016, we received a variety of mandates from large and sophisticated private markets investors in private equity and infrastructure strategies and gained additional clients in our flagship global credit and direct programs. These investors decided to allocate a more significant part of their assets to private markets due to their superior risk/return profile relative to public bond and equity markets. During the year, we also advanced our global offerings for defined contribution pension funds and private investors through the creation of new and innovative programs that cater to specific regulatory requirements and investment needs."
Strong client demand expected to continue into 2017
For the full year 2017, Partners Group expects higher gross client demand of EUR 8-10 billion (2016: EUR 8-9 billion), together with EUR -3 to -4 billion (2016: EUR -2.5 to -3.5 billion) in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs.
Conference call today
Partners Group's senior management will hold a conference call today at 9am CET. Dial-in details can be obtained by using the contact details below. The annual results as of 31 December 2016 will be published on 21 March 2017.