Perspectives
Quarterly Loan Market Commentary
July 2020
EXECUTIVE SUMMARY
In this issue, we examine the continued uncertainty created by COVID-19 in the US and Europe. Despite challenging headwinds, numerous loan issuers were still able to access liquidity through drawing on revolver facilities or incremental loan or bond issuance, while some other companies found sufficient investor demand to clear new issues tabled in Q1. A combination of improving investor sentiment, massive governmental market intervention, and some promising medical advances toward COVID-19 treatment and vaccines prompted a surprising “risk on” mentality to sweep through the US loan market.
Partners Group Q&A
The secondary approach: maintaining discipline during a crisis
EXECUTIVE SUMMARY
As investors absorb the impact of the COVID-19 global health crisis, many perceive secondaries investments to be a rare bright spot in an uncertain market. Anthony Shontz, Managing Director and Co-Head Private Equity Integrated Investments Americas at global private markets investment manager Partners Group, explains how discipline, creativity and flexibility are key to successfully navigating a global private equity secondaries platform through today's unprecedented environment.
Partners Group Q&A
Steering the Global Investment Committee through rough seas
EXECUTIVE SUMMARY
As Chairman of Partners Group's Global Investment Committee, René Biner not only evaluates hundreds of new investment opportunities every year, but also keeps a close eye on the firm's existing portfolio of companies and assets spanning multiple sectors and geographies. With the COVID-19 global health crisis affecting almost every segment of the economy, neither of these tasks has been easy. However, while René believes social distancing may be around for longer than we might wish for, he has reason to be optimistic about the future of private markets investments.
Partners Group Q&A
How to stay cyber safe during a global pandemic
EXECUTIVE SUMMARY
One of the side-effects of the COVID-19 global health crisis has been a large spike in online criminal activity. Cyber attackers are using every conceivable strategy to take advantage of the crisis, from fake Coronavirus cures and ransomware attacks on vaccine test centers to attacks on the World Health Organization itself. In our latest Q&A, we speak to Patrik Bless, Chief Information Security Officer at Partners Group, to understand what the risks are and how businesses and private individuals can continue to protect themselves against them.
Quarterly Loan Market Commentary
April 2020
EXECUTIVE SUMMARY
In this issue, we report the impact of the COVID-19 global health crisis on US and European loan markets. While the first quarter of 2020 began with strong new loan issuance volumes, the outbreak of the pandemic brought the market to an abrupt halt in both regions. With no reliable timetable as to when commercial activity will normalize, we believe it is critical for investors to focus on debt issuers' abilities to prudently manage cash and financial resources, maintain adequate liquidity and service debt obligations until economies can move into recovery mode.
Quarterly Loan Market Commentary
January 2020
EXECUTIVE SUMMARY
In the latest issue of our Quarterly Loan Market Commentary, we highlight leveraged loan investors' increasing focus on US loan default rates as fears of the next recession linger. But as long as default rates remain range bound and well spread across multiple industries, could the US expansion have further to run?
Private Markets Navigator 2020
Offense is the new defense
EXECUTIVE SUMMARY
Against a challenging backdrop of low growth and geopolitical uncertainty, we believe “offense is the new defense” in private markets investing. We seek opportunities to build resilience instead of buying it by focusing on assets with value creation potential in sub-sectors with above-average growth rates.
Quarterly Loan Market Commentary
October 2019
EXECUTIVE SUMMARY
In our Quarterly Loan Market Commentary, we highlight the rising trend for loan market investors to adopt a bifurcated approach to credit risk across their portfolio. In search of both higher yield and reduced credit risk, many investors are supplementing higher yielding, lower rated loans with lower yielding, higher rated loans. Could the bifurcated approach be a prudent way to prepare for the next credit downturn?
Partners Group Q&A
How to build an effective board
EXECUTIVE SUMMARY
As former CEOs and current portfolio company board members, Christoph Rubeli and Christian Unger know a thing or two about corporate governance. Today, they lead the Operating Directors & Entrepreneurial Governance business unit at Partners Group, which has been tasked with unlocking the full potential of private markets governance across the firm’s portfolio. In a Q&A, they share with us their insights into what makes an effective board and how and why you should evaluate board performance.
White Paper March 2019
The current state of the leveraged loan market
EXECUTIVE SUMMARY
In this White Paper, Partners Group analyzes the growth in the leveraged loan market and looks at how credit conditions have changed in recent years. Our conclusion is that while growth has been rapid in the leveraged loan market and certain credit metrics have weakened, there is no resemblance to the 2008 subprime market, as some commentators have suggested. Moreover, we see recent market volatility as more of a welcome correction – one that may generate attractive private debt investment opportunities – than a threat.
Private Markets Navigator 2019
Entrepreneurial ownership holds the key to private markets outperformance
EXECUTIVE SUMMARY
While our base case economic outlook projects a period of continued modest growth, we are aware that the ride may become bumpier as multiple challenges emerge. In this environment, we believe entrepreneurial ownership and strong value creation skills are the only way to generate outperformance.
White Paper 2018
The Rise of "Governance Correctness"
EXECUTIVE SUMMARY
This paper provides a practitioner’s perspective on the increasing divergence between the corporate governance regimes of public and private markets and the resulting impact on value creation for investors.
Private Markets Navigator 2018
Leveraging the winds of change
EXECUTIVE SUMMARY
As the chances of a deviation from our base case macroeconomic outlook of low but steady growth continue to rise, we are focusing on sectors benefiting from the global megatrends that we believe will continue to generate attractive investment opportunities in the long term. These include digital transformation, new generation living and consumption, and the energy revolution.
Private Markets Navigator H2 2017
In search of platform-building opportunities
EXECUTIVE SUMMARY
We continue to believe in a base case macroeconomic projection of sustained low but steady growth. However, after nearly a decade of rising markets and with a shift away from extremely loose monetary policy, there is the risk of a deviation from our base case. Identifying anchor assets with platform-building potential in above-average growth segments and testing their resilience to adverse economic scenarios is key to outperformance in this environment.
Private Markets Navigator H1 2017
Investing in stable assets and transformative growth
EXECUTIVE SUMMARY
The global economy continues to expand at a modest, yet resilient pace. However, since our last relative value assessment, a number of unexpected geopolitical events have further increased uncertainty as well as volatility in capital markets. In this environment, we continue to center our investment strategy around predictability and stability on the one hand, and transformative trends on the other. We focus on value creation strategies as the principal means of generating sustainable returns and look for assets characterized by valuation resilience.
Research Paper January 2017
Adding private markets to DC pension plan portfolios
EXECUTIVE SUMMARY
For decades, investments in private markets have been a performance driver for defined benefit (DB) pension plans. However, they have not yet been widely adopted as a component of an investment strategy for defined contribution (DC) pension plans.
Private Markets Navigator H2 2016
The tide is high and waters are rougher: seek stable assets and create value
EXECUTIVE SUMMARY
While global economic growth remains modest but solid, we expect to see increased volatility in capital markets going forward. In this environment, we are focused on finding more robust assets that can hold their value throughout economic cycles on the one hand, and that offer the potential to create value on the other.
Private Markets Navigator H1 2016
In search of transformative growth
EXECUTIVE SUMMARY
The general pace of economic growth remains low on aggregate and markets have become increasingly volatile. In this environment, we believe that the search for growth-focused investment opportunities must go beyond sectors or regions and into the specific trends that are transforming our industries and consumer habits.