Baar-Zug, Switzerland, 14 January 2016
Partners Group reports gross client demand of over EUR 8 billion and new investments of close to USD 10 billion in 2015; total AuM up 22% to EUR 46 billion; gross client demand guidance for 2016 increases to EUR 7-9 billion
Over EUR 8 billion gross client demand in 2015
Partners Group, the global private markets investment manager, received EUR 8.4 billion in new commitments from its global client base across all private markets asset classes in 2015, modestly exceeding the anticipated bandwidth of EUR 6-8 billion for the full year. This record amount was based on strong demand for programs and mandates and a solid pipeline of investment opportunities. Total assets under management (AuM) stood at EUR 46.0 billion as of 31 December 2015 (2014: EUR 37.6 billion), an increase of 22% year on year.
Close to USD 10 billion invested across the entire platform in 2015
As a lead investor in a significant number of transactions, the firm successfully increased investment activities across the entire private markets spectrum in 2015. With a focus on attractive corporate, real estate and infrastructure assets with high development potential, Partners Group invested a total of USD 9.7 billion on behalf of its clients. A total of USD 5.6 billion (58% of total investment volume) was deployed in direct transactions, of which USD 3.0 billion was invested in 26 individual assets across private equity, private real estate and private infrastructure and USD 2.6 billion was invested in 48 credits. The firm's secondaries investment teams invested a total of USD 2.2 billion (22%) in globally diversified private markets portfolios. To complement its direct and secondary investments, the firm committed USD 1.9 billion (20%) to select private markets managers.
Strong client demand expected to continue into 2016
For the full year 2016, Partners Group expects higher projected gross client demand of EUR 7-9 billion (2015: EUR 6-8 billion), together with EUR -2.5 to -3.5 billion (2015: EUR -2 to -3 billion) in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs.
AuM development in 2015
Next to the gross client demand of EUR 8.4 billion, another factor supporting the firm's AuM development in 2015 was the strengthening of the US Dollar against the Euro. As 36% of Partners Group's AuM is USD-denominated, the 11% appreciation of the US Dollar during the year supported the firm's EUR-denominated AuM. Overall, foreign exchange effects amounted to EUR +1.8 billion in 2015. A further positive contribution of EUR +0.6 billion stemmed mainly from performance-related effects from a select number of investment vehicles.
Next to the gross AuM growth in 2015, there were EUR -1.8 billion (2014: EUR -1.5 billion) in tail-down effects from mature private markets investment programs and EUR -0.6 billion (2014: EUR -0.6 billion) in redemptions from liquid and semi-liquid vehicles. This amounted to a total of EUR -2.4 billion for the full year, in line with our expectations of EUR -2 to -3 billion. As a result, the positive effects of EUR +2.4 billion neutralized the negative effects of EUR -2.4 billion.
The breakdown of total AuM as of 31 December 2015 is as follows: EUR 27 billion private equity, EUR 8 billion private real estate, EUR 6 billion private debt and EUR 5 billion private infrastructure. Appetite for customized mandate offerings continues to account for a significant proportion of client demand, confirming the demand for non-standard solutions from larger institutional investors.
Continued ramp-up of global investment platform allows high level of selectivity
In 2015, the firm expanded its platform to 840 employees (2014: 746) across 18 offices worldwide with the target of being able to screen and ultimately invest in an even larger opportunity set, while remaining disciplined in a market environment characterized by elevated valuations.
Through the firm's global platform, extensive industry network and pro-active sourcing efforts, Partners Group was able to continue its selective investment process and screened 3'851 direct transactions across asset classes, investing in only 74 of them with a decline rate of 98%. Partners Group's secondary investment specialists screened USD 125 billion in private markets assets and invested in less than 2% of these.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: "In an environment of increased market volatility and without significant growth, our investment strategy is focused on the search for transformative market trends. We have globally invested in assets that are either active in growth markets or that provide solutions to a fundamental demand-led market trend in a specific sub-sector. Examples include the high demand for both renewable and conventional energy infrastructure in the United States, the need for mixed-use residential and retail real estate assets in European urban centers, and the rise of consumption-led sectors in private equity in Asia and South America, such as the maternity and baby products retail industry or the health food sector. We aim to invest in quality assets that are set to benefit from such trends and are actively involved in our investments to support their development."
André Frei, Partner and Co-Chief Executive Officer, adds: "We celebrated our 20th anniversary at the end of 2015 and are proud to have built one of the world's leading private markets investment managers. Our achievements in 2015 further strengthened our positioning: we continued to grow all of our core private markets businesses with existing and new clients and entered into new collaborations with some of the largest and most sophisticated institutional investors globally. We remained an innovative thought leader in our industry as evidenced by the fact that we are the first manager to develop investment solutions for the defined contribution markets in the US, Australia and the UK. We look forward to continuing to realize the potential of private markets for our clients and their beneficiaries."
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 2015 will be published on 22 March 2016.