Baar-Zug, Switzerland, 15 January 2019
- Gross client demand of EUR 13 billion in 2018
- Total of USD 19 billion invested in 2018
- Gross client demand of EUR 13-16 billion expected in 2019
Partners Group, the global private markets investment manager, received EUR 13.3 billion in new commitments from its global client base across all private markets asset classes in 2018. This demand for programs and mandates brings total assets under management (AuM) to EUR 72.8 billion as of 31 December 2018 (31 December 2017: EUR 61.9 billion) and represents net growth of 18%.
The breakdown of total AuM as of 31 December 2018 is as follows: EUR 36 billion private equity (49%), EUR 15 billion private debt (21%), EUR 12 billion private real estate (17%), and EUR 9 billion private infrastructure (13%).
AuM development in 2018
Gross client demand of EUR 13.3 billion in 2018 (guidance: EUR 11-14 billion) was well-diversified across regions and type of client. The demand was balanced between investment programs and mandates and derived from a wide spectrum of offerings across all private markets asset classes.
Tail-down effects from mature private markets investment programs and redemptions from liquid and semi-liquid vehicles amounted to a total of EUR -4.8 billion in 2018 (guidance: EUR -4.5 to -5.5 billion). Given that 36% of Partners Group's AuM is USD-denominated, the appreciation of the US Dollar against the Euro by 5% during the year positively affected the firm's total AuM in Euros. Foreign exchange effects amounted to EUR +1.1 billion. Furthermore, a positive contribution of EUR +1.3 billion stemmed mainly from performance- and investment-related effects from certain investment vehicles. Overall, this resulted in net AuM growth of EUR 10.9 billion during the period.
USD 19 billion invested in attractive and resilient businesses and assets in 2018
Partners Group invested a total of USD 19.3 billion on behalf of its clients across all private markets asset classes in 2018, including the reinvestment of distributions in evergreen investment programs. The firm continued to take a highly disciplined and prudent approach to investment and maintained its high standards of selectivity in a competitive market predominantly characterized by high valuations.
Partners Group's investment professionals screened more than 2,800 potential direct transactions across all asset classes in 2018, investing in 78 of them and registering a decline rate of 97%. USD 11.5 billion (60% of total investment volume) was deployed in direct assets, of which a total of USD 6.3 billion was invested as equity in individual businesses and USD 5.2 billion was invested in corporate debt. To complement its direct assets, the firm invested USD 7.7 billion (40% of total investment volume) in portfolio assets. These portfolio assets include secondary investments in globally diversified private markets portfolios and select primary commitments to private markets managers.
David Layton, Partner and Co-Chief Executive Officer, comments: "The potential for more challenging macroeconomic conditions demands disciplined asset selection for downside protection. In addition, in this late stage of the economic cycle, we focus on businesses and assets that are well positioned to withstand a variety of alternative economic scenarios and our underwriting for new investments includes prudent assumptions that market valuations will come down. Nonetheless, we believe that through our entrepreneurial ownership of companies and assets, which focuses on strong governance and hands-on value creation as the drivers of returns, we will continue to generate strong outperformance for our clients."
Client demand 2019
For 2019, Partners Group expects gross client demand of EUR 13-16 billion, together with EUR -6.5 to -7.5 billion in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs. The higher projected tail-down effects in 2019 relate to a select number of larger closed-ended programs that will reach the end of their lifetime.
André Frei, Partner and Co-Chief Executive Officer, comments: "We are pleased with the solid fundraising in 2018 and continue to observe a strong structural trend of increasing allocations to private markets. For 2019, our aim is to capture further client demand through a series of flagship programs across all private markets asset classes. Furthermore, we continue to offer bespoke solutions to our mandate clients and actively manage and steer their exposure to private markets in line with longer-term investment horizons."
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 2018 will be published on 19 March 2019.
19 March 2019
Annual results and report as of 31 December 2018
15 May 2019
16 July 2019
Announcement of AuM as of 30 June 2019
10 September 2019
Interim results and report as of 30 June 2019