Baar-Zug, Switzerland, 13 July 2017
Partners Group reports H1 2017 client demand of EUR 6.9 billion, investments of USD 5.6 billion, and increases full-year guidance for new client commitments to EUR 10-12 billion
EUR 6.9 billion gross client demand in H1 2017; AuM stands at EUR 57.8 billion
Partners Group, the global private markets investment manager, received EUR 6.9 billion in new commitments from its global client base across all private markets asset classes in H1 2017. This demand for programs and mandates brings total assets under management (AuM) to EUR 57.8 billion as of 30 June 2017 (31 December 2016: EUR 54.2 billion) and represents a net annualized growth of 14%.
The breakdown of total AuM as of 30 June 2017 is as follows: EUR 31 billion private equity, EUR 10 billion private debt, EUR 9 billion private real estate, and EUR 8 billion private infrastructure.
Full-year guidance for new client commitments adjusted; skew to the first half expected
Based on robust client demand for programs and mandates and driven by a steady increase in investment capacity, Partners Group has adjusted its guidance for the anticipated bandwidth of gross client commitments for the full-year 2017 from EUR 8-10 billion to EUR 10-12 billion. The firm expects client demand to be skewed towards the first half of the year given successful fundraising for a number of flagship programs in private equity, private infrastructure and private debt in H1 2017. Client demand for private real estate is expected to increase in H2 2017 with the launch of the latest flagship program. Partners Group's full-year estimates of tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs have not changed and amount to EUR -3 to -4 billion.
AuM development in H1 2017
Next to gross client demand of EUR 6.9 billion in H1 2017, tail-down effects from mature private markets investment programs and redemptions from liquid and semi-liquid vehicles amounted to a total of EUR -1.9 billion in H1 2017. Given that 36% of Partners Group's AuM is USD-denominated, the weakening of the US Dollar against the Euro by 7% in H1 2017 negatively affected the firm's total AuM in Euros. In H1 2017, foreign exchange effects amounted to EUR -1.7 billion. A positive contribution of EUR +0.3 billion stemmed mainly from performance-related effects from certain investment vehicles. Overall, this resulted in a net AuM growth of EUR 3.6 billion during the period.
André Frei, Partner and Co-Chief Executive Officer, comments: "In the first half of 2017, we saw record demand for our three flagship direct programs across private equity, private debt and private infrastructure, which represented around 40% of all client demand during the period. We have also seen accelerating demand from larger clients for highly individualized private markets portfolios, which afford greater flexibility in targeting specific risk/return profiles."
USD 5.6 billion invested across the entire platform in H1 2017
In H1 2017, Partners Group continued to take a highly disciplined and prudent approach to investment and was able to lead a significant number of transactions despite full valuations across all private markets asset classes. With a continued focus on attractive corporate, real estate and infrastructure assets where active value creation remains the key driver of returns, Partners Group invested a total of USD 5.6 billion on behalf of its clients during the period.
A total of USD 3.2 billion (57% of total investment volume) was deployed in direct transactions, of which USD 0.9 billion was invested in individual assets across private equity, private real estate and private infrastructure and USD 2.3 billion was invested in corporate credits. The firm's secondaries investment teams invested a total of USD 1.0 billion (18% of total investment volume) in globally diversified private markets portfolios. To complement its direct and secondary investments, the firm committed USD 1.4 billion (25% of total investment volume) to select private markets managers.
High level of selectivity key to identifying assets with stable valuations
The firm's global platform of over 950 employees, its extensive industry network and proactive sourcing efforts allowed Partners Group to maintain its high standards of investment selectivity in H1 2017. Investment professionals screened 2'211 direct transactions across all asset classes, investing in only 42 of them and registering a decline rate of 98%. Partners Group's secondary investment specialists screened USD 73 billion in private markets assets and invested in less than 2% of these.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: "We continue to focus on identifying assets operating in sub-sectors that benefit from transformational trends, such as changing customer habits and technological advances, or structural drivers, such as demographic shifts and changing wealth patterns, which make these assets more resilient to economic downturns. Sectors offering these attractive opportunities include healthcare, business services, renewable energy and logistics."
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 firm's semi-annual results as of 30 June 2017 will be published on 12 September 2017.