Baar-Zug, 17 July 2014
Partners Group reports H1 2014 client demand and investment activities: EUR 2.9 billion raised and USD 4.2 billion invested
Partners Group, the global private markets investment manager, reports gross client demand of EUR 2.9 billion from its global clientele during the first half of 2014 across all private markets asset classes. Total assets under management (AuM) increased to EUR 33.8 billion as of 30 June 2014 (2013: EUR 31.6 billion), representing an annualized growth rate of 15%. Based on the current client demand pipeline and a strong first half, the firm reconfirms its expectation of gross client demand of EUR 4.5-6.5 billion for the full year 2014.
The breakdown of total AuM as of 30 June 2014 is as follows: EUR 21 billion private equity, EUR 6 billion private real estate, EUR 4 billion private debt and EUR 3 billion private infrastructure. During the first half of the year, Partners Group saw client demand across the entire spectrum of its investment offerings, ranging from regular private markets investment programs to customized mandates providing comprehensive one-stop private markets platform solutions. The latter have become increasingly important to the firm and its clients in recent years and represent today more than 20% of total AuM. Such tailored portfolio solutions allow clients to adjust their investment focus over time to capture the most attractive opportunities across equity and credit strategies in all private markets asset classes.
In line with Partners Group's relative value investment approach, the firm's investment teams remained highly selective in this heated market environment during the first half of the year, screening close to 1’700 direct opportunities during the period and declining 97% of them. Partners Group invested a total of USD 4.2 billion across sectors, regions and asset classes on behalf of its clients during the period. Of this, the firm deployed a total of USD 1.9 billion in direct transactions, of which USD 1.3 billion was invested in 17 investments across private equity, private real estate, subordinated debt and private infrastructure and USD 0.6 billion in 28 senior loan financings. The firm’s secondaries investment teams screened close to USD 60 billion in secondary deal flow and invested in USD 1.8 billion of secondary transactions.
In the first half of 2014, gross AuM growth was countered by cumulative effects of EUR -0.6 billion stemming from EUR -0.6 billion in tail-down effects from maturing investment programs, EUR -0.3 billion in redemptions in liquid and semi-liquid vehicles and EUR +0.3 billion in performance, foreign exchange rate effects and other factors. The firm’s estimates on cumulated negative effects for the full year 2014 have not changed and amount to EUR -1.5 billion of potential tail-downs (2013: EUR -0.6 billion) and EUR -0.3 to -1.0 billion of potential redemptions from liquid and semi-liquid activities (2013: EUR -0.6 billion).
André Frei, Partner and Co-Chief Executive Officer, comments: “We have seen increasing demand for specialized private markets mandates over recent years and these strategic portfolio solutions now represent almost half of the total new commitments to the firm. In these portfolios, we tailor risk/return profiles through a multi-asset class investment approach combining equity and debt markets, match asset/liability needs through cash-flow profiling and enable a fast portfolio build-up through investment level steering. We also offer various accounting, reporting and treasury management services to reduce administrative efforts and manage regulatory complexity. Today, we manage more than 60 separate account mandates and expect these portfolio solutions to become increasingly important to the firm and its clients over the next years.”
Christoph Rubeli, Partner and Co-Chief Executive Officer, adds: “In this current market environment, still characterized by low growth and assetflation, active value creation efforts in individual assets remain the key performance driver. In private equity markets, we are focusing on leveraging our sourcing strength to seek out mid-cap companies exhibiting value creation potential. We are looking for investments outside of the mainstream in liquidity-driven debt markets and focusing on tailoring mid-market ‘club style’ financing solutions for stable/cash flow rich businesses. In heated private real estate markets, we aim to develop high quality properties to meet increased demand for real estate in attractive sub-sectors and industries. We see bifurcation in private infrastructure markets, where valuations for core assets continue to edge higher, and are looking for development return premiums in greenfield projects, platform developments and availability-based brownfield PPPs.”
Partners Group’s senior management will hold a conference call today at 9 am CET. Dial-in details can be obtained by using the contact details below. The semi-annual results as of 30 June 2014 will be published on 9 September 2014.