Partners Group reports gross client demand of EUR 13 billion and new investments of USD 13 billion in 2017; total AuM up 14% to EUR 62 billion; guidance for 2018 gross client demand stands at EUR 11-14 billion
EUR 13 billion gross client demand in 2017; AuM stands at EUR 62 billion
Partners Group, the global private markets investment manager, received EUR 13.3 billion in new commitments from its global client base across all private markets asset classes in 2017. This demand for programs and mandates brings total assets under management (AuM) to EUR 61.9 billion as of 31 December 2017 (31 December 2016: EUR 54.2 billion) and represents net growth of 14%.
The breakdown of total AuM as of 31 December 2017 is as follows: EUR 32 billion private equity (51%), EUR 11 billion private debt (18%), EUR 11 billion private real estate (17%), and EUR 8 billion private infrastructure (14%).
AuM development in 2017
Gross client demand of EUR 13.3 billion in 2017 moderately exceeded the communicated expected bandwidth of EUR 10-12 billion for the full year. This record amount was based on the combination of a solid pipeline of investment opportunities and strong client demand for the firm's flagship programs and mandates. Tail-down effects from mature private markets investment programs and redemptions from liquid and semi-liquid vehicles amounted to a total of EUR -4.1 billion in 2017 (guidance provided: EUR -3 to -4 billion).
Given that 36% of Partners Group's AuM is USD-denominated, the weakening of the US Dollar against the Euro by 12% in 2017 negatively affected the firm's total AuM in Euros. In 2017, foreign exchange effects amounted to EUR -2.9 billion. A positive contribution of EUR +1.4 billion stemmed mainly from performance-related effects from certain investment vehicles. Overall, this resulted in net AuM growth of EUR 7.8 billion during the period.
USD 13 billion invested in a highly disciplined manner
In 2017, Partners Group invested a total of USD 13.3 billion on behalf of its clients. The firm continued to take a highly disciplined and prudent approach to investment and maintained its high standards of selectivity in a market characterized by full valuations across all private markets asset classes. Investment professionals screened 3,843 direct transactions across all asset classes, investing in only 77 of them and registering a decline rate of 98%. Partners Group's secondary investment specialists screened USD 137 billion in private markets assets and invested in less than 2% of these.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: "Our investment approach across private markets is guided by both structural change as well as transformative trends. In particular, we focus on sectors benefiting from the global megatrends we believe have the ability to support assets in generating higher top-line growth than the rest of their industry. These include digital transformation, new generation living and consumption, and the energy revolution."
Of the total amount of USD 13.3 billion invested, USD 8.3 billion (62% of total investment volume) was deployed in direct transactions, of which USD 4.1 billion was invested in individual assets across private equity, private real estate and private infrastructure and USD 4.2 billion was invested in corporate credits. The firm's secondaries investment teams invested a total of USD 2.2 billion (17% of total investment volume) in globally diversified private markets portfolios. To complement its direct and secondary investments, the firm committed USD 2.8 billion (21% of total investment volume) to select private markets managers.
Client demand expected to be strong in 2018
For the full year 2018, Partners Group expects gross client demand of EUR 11-14 billion (2017: EUR 10-12 billion), together with EUR -4.5 to -5.5 billion (2017: EUR -3 to -4 billion) in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs.
André Frei, Partner and Co-Chief Executive Officer, comments: "Client demand in 2017 was characterized by the successful closing of a number of flagship programs across all private markets asset classes. We have started 2018 with a sustained pipeline of demand from clients across the globe, and expect the supportive fundraising environment to lead to similar results as last year."
EUR 13 billion gross client demand in 2017; AuM stands at EUR 62 billion
Partners Group, the global private markets investment manager, received EUR 13.3 billion in new commitments from its global client base across all private markets asset classes in 2017. This demand for programs and mandates brings total assets under management (AuM) to EUR 61.9 billion as of 31 December 2017 (31 December 2016: EUR 54.2 billion) and represents net growth of 14%.
The breakdown of total AuM as of 31 December 2017 is as follows: EUR 32 billion private equity (51%), EUR 11 billion private debt (18%), EUR 11 billion private real estate (17%), and EUR 8 billion private infrastructure (14%).
AuM development in 2017
Gross client demand of EUR 13.3 billion in 2017 moderately exceeded the communicated expected bandwidth of EUR 10-12 billion for the full year. This record amount was based on the combination of a solid pipeline of investment opportunities and strong client demand for the firm's flagship programs and mandates. Tail-down effects from mature private markets investment programs and redemptions from liquid and semi-liquid vehicles amounted to a total of EUR -4.1 billion in 2017 (guidance provided: EUR -3 to -4 billion).
Given that 36% of Partners Group's AuM is USD-denominated, the weakening of the US Dollar against the Euro by 12% in 2017 negatively affected the firm's total AuM in Euros. In 2017, foreign exchange effects amounted to EUR -2.9 billion. A positive contribution of EUR +1.4 billion stemmed mainly from performance-related effects from certain investment vehicles. Overall, this resulted in net AuM growth of EUR 7.8 billion during the period.
USD 13 billion invested in a highly disciplined manner
In 2017, Partners Group invested a total of USD 13.3 billion on behalf of its clients. The firm continued to take a highly disciplined and prudent approach to investment and maintained its high standards of selectivity in a market characterized by full valuations across all private markets asset classes. Investment professionals screened 3,843 direct transactions across all asset classes, investing in only 77 of them and registering a decline rate of 98%. Partners Group's secondary investment specialists screened USD 137 billion in private markets assets and invested in less than 2% of these.
Christoph Rubeli, Partner and Co-Chief Executive Officer, comments: "Our investment approach across private markets is guided by both structural change as well as transformative trends. In particular, we focus on sectors benefiting from the global megatrends we believe have the ability to support assets in generating higher top-line growth than the rest of their industry. These include digital transformation, new generation living and consumption, and the energy revolution."
Of the total amount of USD 13.3 billion invested, USD 8.3 billion (62% of total investment volume) was deployed in direct transactions, of which USD 4.1 billion was invested in individual assets across private equity, private real estate and private infrastructure and USD 4.2 billion was invested in corporate credits. The firm's secondaries investment teams invested a total of USD 2.2 billion (17% of total investment volume) in globally diversified private markets portfolios. To complement its direct and secondary investments, the firm committed USD 2.8 billion (21% of total investment volume) to select private markets managers.
Client demand expected to be strong in 2018
For the full year 2018, Partners Group expects gross client demand of EUR 11-14 billion (2017: EUR 10-12 billion), together with EUR -4.5 to -5.5 billion (2017: EUR -3 to -4 billion) in tail-down effects from the more mature Partners Group programs and potential redemptions from liquid and semi-liquid programs.
André Frei, Partner and Co-Chief Executive Officer, comments: "Client demand in 2017 was characterized by the successful closing of a number of flagship programs across all private markets asset classes. We have started 2018 with a sustained pipeline of demand from clients across the globe, and expect the supportive fundraising environment to lead to similar results as last year."
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