Baar-Zug, 15 January 2014
Partners Group reports record year in both private markets client demand and investment activities: EUR 5.1 billion raised and USD 7.7 billion invested in 2013
Partners Group, the global private markets investment manager, has seen record private markets client demand in 2013, with a total of EUR 5.1 billion of new commitments entrusted by clients. Total assets under management (AuM) stand at EUR 31.6 billion as of 31 December 2013. Client demand was spread across all private markets asset classes and regions across the globe.
The firm was equally successful in seizing numerous attractive and significant investment opportunities across the entire spectrum of private equity, private real estate, private infrastructure and private debt. With now over 700 professionals in 16 offices, the firm continued to apply its highly selective investment approach with a 97% decline rate on investments screened. Yet, due to the scope and breadth of its global reach, Partners Group invested a record sum of USD 7.7 billion in 2013 on behalf of its clients.
Next to significant interest in its regular open private markets programs, the firm has seen a particular and further growth of commitments to customized individual mandates. This increasing interest in mandate solutions underlines the firm’s capability to offer a comprehensive one-stop private markets platform solution. The mandates secured in 2013 are expected to unfold their full positive financial effects in the years 2014 and beyond, while the impact on 2013 financials is less pronounced as they are still in their portfolio ramp-up phase. Based on its strong pipeline, the firm expects client demand to strengthen and thus has shifted the anticipated bandwidth for gross assets raised upwards to EUR 4.5-6.5 billion for the full year 2014.
Gross AuM growth was countered by EUR -0.6 billion stemming from tail-down effects in older private markets programs and by a further EUR -0.6 billion redeemed by the firm’s clients from liquid and semi-liquid activities. Overall, the negative effects totaled EUR -1.3 billion and were within the communicated anticipated range of EUR -1.0 to -1.5 billion. In addition, and as also previously announced, the sale of Partners Group’s interests in two affiliated companies with a focus on public markets activities further had a one-time extraordinary impact on AuM of EUR -0.8 billion.
In 2014, Partners Group expects the higher projected gross client demand of EUR 4.5-6.5 billion for the full year to again be impacted by other factors such as those above. Tail-down effects should continue to increase in the future and are expected to amount to around EUR 1.5 billion in 2014. The firm does not provide guidance on factors it has no visibility on such as foreign exchange effects or potential client redemptions from liquid and semi-liquid activities, which form a smaller part of the firm’s overall focus on private markets.
The investment teams continued to identify attractive opportunities in all sectors around the globe and invested a total of USD 7.7 billion across all private markets while executing on the highly selective investment approach employed by the firm. Partners Group’s over 450 investment professionals screened more than 3’300 direct opportunities during the year, selecting 41 of these with a total invested of USD 2.1 billion and in addition 45 senior loan investments amounting to USD 0.7 billion. Furthermore, USD 93 billion in secondary opportunities were sourced and analyzed, resulting in invested capital of USD 2.7 billion. Overall, direct and secondary opportunities represented 73% of the total amount invested. The firm has dedicated substantial resources over the past years to further growing its investment capacity to absorb an even larger and steadily increasing opportunity set, and has now cemented its standing as a true global investment powerhouse with particular strengths in the extended middle-market.
To further sustain this increased investment capacity, the firm continues to develop its team around the globe and in particular outside of its headquarters in Zug, promoting a number of individuals in its senior management team as of 1 January 2014.
Juri Jenkner, co-head of private debt and based in the Zug office was promoted to Partner. In addition there were a number of promotions to Managing Director: Gilbert de la Ferrière, head of investment solutions France and head of the firm’s Paris office; Gonzalo Fernandez Castro, head of private equity in Latin America and head of the firm’s São Paulo office; and Benjamin Haan, head of private infrastructure in Asia-Pacific and based in the firm’s Sydney office. The firm congratulates these individuals on their achievements and is proud to see its global footprint increase its impact.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: “We look back on a highly active investment year, and are proud to have seized this record amount of opportunities for clients while sticking to our conviction of remaining very selective in our approach. Our global setup with local people on the ground on four continents has proven to be the ideal structure to fully penetrate the entire private markets spectrum. The intense strategic work we have put in during the past three years has now resulted in a significant increase in investment capacity, demonstrated by the USD 7.7 billion we invested prudently in 2013. We now intend to concentrate on further building out our investment capacity and are pleased to be on track to reach our long-term goals.”
Dr. Marcel Erni, Co-Founder and Chief Investment Officer, adds: “In this demanding market, investing an amount of this size has required strong discipline in terms of selectivity. As asset prices plateau at high levels across the spectrum, we will continue to emphasize value creation in the individual assets at the micro level. In private equity, the middle market remains attractive provided one possesses the necessary global presence to identify businesses that can be transformed and where value can be added. In private real estate, we aim to build or redevelop properties to suit end users in local markets that stand to benefit from favorable demographic trends or appealing real estate fundamentals. Private infrastructure offers potential in capturing attractively priced greenfield premiums as well as excess returns through value creation with platform growth initiatives and improvements in terms of assets’ operations. In private debt, we arrange and underwrite transactions in the mid cap segment, where CLOs cannot play and high yield is not available.”
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 annual results as of 31 December 2013 will be published on 25 March 2014.