Baar-Zug, Switzerland, 14 January 2015
Partners Group reports gross client demand of EUR 6.1 billion and new investments of USD 7.9 billion in 2014
Partners Group, the global private markets investment manager, saw record client demand in 2014, with a total of EUR 6.1 billion received in new commitments from its global client base across all private markets asset classes. Total assets under management (AuM) stood at EUR 37.6 billion as of 31 December 2014 (2013: EUR 31.6 billion), an increase of 19% year on year. The firm also successfully increased investment activities across the entire private markets spectrum in 2014, investing a total of USD 7.9 billion on behalf of its clients during the year. Looking ahead, Partners Group expects client demand to further develop, driven by its solid pipeline of investment opportunities, and thus for 2015 has shifted the anticipated bandwidth for gross client commitments upwards to EUR 5-7 billion.
Client demand increased across all asset classes in 2014
Strong client demand from around the world was seen across all private markets asset classes in 2014, resulting in EUR 6.1 billion in new commitments, at the upper end of the communicated range of EUR 4.5-6.5 billion.
As expected in 2014, next to the gross AuM growth of EUR 6.1 billion, there were EUR -1.5 billion in tail-down effects from mature private markets programs and EUR -0.6 billion was redeemed by the firm's clients in liquid and semi-liquid programs. The total amount of EUR -2.1 billion also came within the communicated range of EUR -1.5 to -2.5 billion. Given that slightly more than 30% of the firm’s AuM is USD-denominated, the strengthening of the US Dollar against the Euro by 14% had a positive impact on EUR AuM growth in 2014, contributing EUR +1.7 billion. A further positive contribution of EUR +0.4 billion stemmed mainly from performance-related effects from a select number of investment vehicles. Overall, the negative effects were neutralized by these positive factors.
As of 31 December 2014, the breakdown in AuM across the different asset classes was as follows: EUR 23 billion private equity, EUR 7 billion private real estate, EUR 4 billion private debt and EUR 4 billion private infrastructure.
Strong client demand expected to continue into 2015
For the full year 2015, Partners Group expects higher projected gross client demand of EUR 5-7 billion (2014: EUR 4.5-6.5 billion) together with EUR -2 to -3 billion (2014: EUR -1.5 to -2.5 billion) in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs.
USD 7.9 billion invested in 2014 across the entire platform
In 2014, Partners Group's investment teams continued to identify attractive opportunities in private equity, private real estate, private infrastructure and private debt and invested a total of USD 7.9 billion globally across all asset classes on behalf of the firm's clients (2013: USD 7.7 billion).
During the year, the firm's over 500 private markets professionals screened more than 3'600 direct investment opportunities across all asset classes, investing a total of USD 2.7 billion into 34 individual assets, as well as USD 1.0 billion into 46 senior loan investments. At the same time, Partners Group remained highly selective, with a 98% decline rate on all direct investment opportunities screened. Furthermore, USD 108 billion in secondary opportunities were sourced and analyzed across all asset classes, resulting in invested capital of USD 2.9 billion. Overall, direct and secondary opportunities represented 83% of the total amount Partners Group invested in 2014. To complement its direct and secondary investments, the firm invested USD 1.4 billion with select private markets managers.
Partners Group continued to dedicate substantial resources to further grow its investment capacity and enable the firm to absorb a larger and steadily increasing opportunity set, with a particular focus on the extended middle-market.In line with this aim, the firm expanded its platform to 746 employees (2013: 701) across 18 offices worldwide in 2014.
Investors continue to seek tailored portfolio solutions
André Frei, Partner and Co-Chief Executive Officer, comments: "I am pleased that we are able to report another year of significant progress within our organization, both in terms of increased demand from existing and new clients as well as growth in investment activity across the globe and asset classes. We expect 2015 to be another year of strong interest for our investment programs and tailor-made mandate solutions, which continue to be the preferred investment strategy for large institutional investors. Our platform offers clients the flexibility to build private markets portfolios to suit their specific risk/return requirements across private equity and private debt, as well as real assets such as infrastructure and real estate."
Asset prices are expected to remain at elevated levels in 2015
Christoph Rubeli, Partner and Co-Chief Executive Officer, adds: "In 2014, we saw asset prices climb further, despite continued low global economic growth – a phenomenon we have referred to in recent years as assetflation. In 2015, we expect assetflation to start to slow down and valuations to plateau around current levels, albeit with higher volatility due to increased geopolitical risk. With this outlook, it remains imperative to focus on quality, defensiveness and value creation and to combine proprietary deal flow with a stringent selection process. We are confident that the breadth of our investment platform and capabilities can deliver long-term outperformance in this uncertain environment."
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 2014 will be published on 24 March 2015.