Baar-Zug, Switzerland, 21 March 2017
Partners Group reports strong 2016 financial results and proposes an increased dividend of CHF 15.00 per share
- USD 11.7 billion invested across all private markets asset classes in 2016 (2015: USD 9.7 billion) on behalf of the firm's clients
- Gross inflows of EUR 9.2 billion in 2016 (2015: EUR 8.4 billion) across regions, size and types of clients; expected range of EUR 8-10 billion in gross client demand reconfirmed for 2017
- Revenues increased by 57% to CHF 973 million (2015: CHF 619 million) and EBITDA increased by 63% to CHF 601 million (2015: CHF 367 million), attributable to solid performance fee development and a continued increase in revenues from management fees
- EBITDA margin at 62% (2015: 59%), modestly above the target EBITDA margin of ~60% mainly due to foreign exchange effects
- Financial result of CHF 38 million (2015: CHF 29 million, excluding a one-time gain of CHF 52 million from the firm's holding in the investment program Pearl)
- IFRS profit increased by 41% to CHF 558 million (2015: CHF 396 million) in 2016, marking a new record for the firm
- Based on the strong financial performance, Partners Group's Board of Directors will propose a dividend of CHF 15.00 per share (2016: CHF 10.50 per share) to shareholders on 10 May 2017, representing an increase of 43% and a dividend yield of 3%
In 2016, Partners Group recorded very strong growth across all metrics and further consolidated its position as one of the world's leading private markets investment managers, with EUR 54.2 billion in assets under management (AuM) and 930 employees in 19 offices worldwide as of 31 December 2016.
The firm's global client demand in 2016 was spread across all asset classes and highly diversified across regions, size and types of clients. Corporate and public pension funds continued to be the key contributors to AuM growth, representing the majority of the inflows. The remaining demand stemmed from other institutional investors, such as insurance companies, sovereign wealth funds and endowments, as well as from Partners Group's distribution partners.
Summary of financial figures
Key figures 2015 and 2016
(in CHF m)
1 Revenues from management services, net, including other operating income and share of results of associates.
2 Management fees include recurring management fees and other income, including late management fees.
3 In 2015, the investment program Pearl generated an additional CHF 52 million gain in the context of its conversion into a closed-end structure, giving an adjusted financial result of CHF 81 million.
Financials: revenue growth outpaces AuM growth due to higher performance fees
Revenues increased to CHF 973 million (2015: CHF 619 million) for the full year 2016. Management fees increased by 22%, in line with the growth in average AuM, and amounted to CHF 679 million (2015: CHF 554 million). Performance fees climbed to CHF 294 million (2015: CHF 64 million), representing 30% of total revenues in 2016 (2015: 10%). In the long term, management fees will remain at the core of the firm's business model, with an expected revenue share of 70-80%.
André Frei, Partner and Co-Chief Executive Officer, Partners Group, comments: "The strong growth in performance fees in 2016 was driven by the increasing maturity of our portfolios and the solid performance achieved over the last six to nine years. While clients will remain the principle beneficiaries of the returns generated in the underlying portfolios, higher performance fees stemming from such returns also benefit the firm's shareholders."
In 2016, Partners Group's EBITDA margin modestly increased above the target EBITDA margin of ~60% mainly due to foreign exchange effects, bringing it to 62% (2015: 59%). The firm's EBITDA amounted to CHF 601 million (2015: CHF 367 million), an increase of 63% during the period, attributable to the strong contribution from performance fees. Going forward, and assuming that foreign exchange rates remain stable, the firm will continue to target an EBITDA margin of ~60% for newly generated management fees, as well as for performance fees, on existing and new AuM. Partners Group's IFRS profit increased by 41% in 2016, to stand at CHF 558 million (2015: CHF 396 million), setting a new record for the firm.
Based on the strong development of the business in all asset classes and regions, the operating result and continued confidence in the sustainability of the firm's growth, Partners Group's Board of Directors will propose a dividend of CHF 15.00 per share (2016: CHF 10.50 per share) to shareholders at the Annual General Meeting on 10 May 2017. This represents a dividend increase of 43% year on year and a dividend yield of 3% as of 31 December 2016.
For the full year 2017, Partners Group expects client demand for its investment programs and customized mandates to continue to be spread across all asset classes, regions and types of investors. The firm reconfirms expected 2017 gross client demand of EUR 8-10 billion (2016 guidance: EUR 7-9 billion), together with EUR -3 to -4 billion in tail-down effects from the more mature Partners Group programs, incuding potential redemptions from liquid and semi-liquid programs (2016 guidance: EUR -2.5 to -3.5 billion).
Christoph Rubeli, Partner and Co-Chief Executive Officer, Partners Group, states: "Valuations have been pushed up in all markets, in certain segments to record highs. Headwinds stemming from high valuations have also had a lowering impact on prospective future returns in private markets. These effects can be mitigated by the traits of private markets investment management, such as active ownership, a long-term investment horizon and the ability to create value by implementing strategic or operational improvements."
Press conference and Annual Report 2016
Partners Group's senior management will hold a press conference to discuss the annual results today at 9.00am CET at the SIX ConventionPoint in Zurich. Dial-in details for the conference can be obtained using the contact details below.
The Annual Report as of 31 December 2016 was published today at 7.00am CET and is available for download at www.partnersgroup.com/financialreports.
Key dates 2017
10 May 2017
Annual General Meeting
15 May 2017
16 May 2017
Dividend record date
17 May 2017
Dividend payment date
13 July 2017
Announcement of AuM as of 30 June 2017
12 September 2017
Interim results and interim report as of 30 June 2017