Partners Group Holding AG · SIX:PGHN
Partners — FY2020 Earnings Presentation
36 slides from Partners's earnings presentation, Mar 16, 2021
Slide 1: Annual results 2020
Annual results 2020 Steffen Meister Executive Chairman | André Frei and David Layton Co-Chief Executive Officers | Hans Ploos van Amstel Chief Financial Officer Christina Han Head Investment Research | Patrick Xin Du Private Equity For Institutional Use Only – Not for Public Distribution
Slide 2: Table of contents
ANNUAL RESULTS 2020 2 Table of contents 1 Board & Executive Committee update 2 Perspectives on thematic private markets investing 3 2020 results
Slide 3: Rotation in our entrepreneurial Board team
BOARD & EXECUTIVE COMMITTEE UPDATE 3 Rotation in our entrepreneurial Board team Retiring from the Board after 10 years Nominated to join the Board Dr. Eric Strutz Joseph P. Landy • Currently Vice Chairman, Lead Independent Director • Impressive track record of private markets and Chairman of the Ris
Slide 4: Private markets approach to governance in a public markets context
BOARD & EXECUTIVE COMMITTEE UPDATE 4 We embrace the private markets approach to governance in a public markets context Strategy Investment Oversight Client Oversight Risk & Audit Nomination & Committee Committee Committee Committee Compensation Committee Proposed Board of Directors & committees1 Ste
Slide 5: Executive Committee evolution effective as of 1 July 2021
BOARD & EXECUTIVE COMMITTEE UPDATE 5 Executive Committee evolution effective as of 1 July 2021 Leaving Continuing Joining André Frei David Layton Kirsta Anderson Chairman of Sustainability CEO Chief People Officer (formerly Co-CEO) (formerly Co-CEO) (formerly Global Head HR) Dr. Michael Studer Juri
Slide 6: Table of contents
ANNUAL RESULTS 2020 6 Table of contents 1 Board & Executive Committee update 2 Perspectives on thematic private markets investing 3 2020 results
Slide 7: Innovation cycles are shortening and business models are developing at unprecedented speed
PERSPECTIVES ON THEMATIC PRIVATE MARKETS INVESTING 7 Innovation cycles are shortening and business models are developing at an unprecedented speed Example <5 years ~25 years +50 years Cobots Heavy Duty Robots Heavy Machinery These changes create many compelling investment opportunities which may be
Slide 8: Thematic investing approach starts with 3 giga themes
PERSPECTIVES ON THEMATIC PRIVATE MARKETS INVESTING 8 Our proprietary and systematic thematic investing approach starts with 3 giga themes 1 Automation/Digitization 2 New living 3 Decarbonization Three giga themes → many significant transformative trends → hundreds of material sector themes Select ex
Slide 9: We analyze an entire cascade of consequential trends and sector themes
PERSPECTIVES ON THEMATIC PRIVATE MARKETS INVESTING 9 We analyze and assess an entire cascade of consequential trends and sector themes Example Approach Why grippers? Automation/Digitization • Benefitting from larger forces and growth from Dark the overriding automation trend Factory • Sizeable niche
Slide 10: More than 50 themes in PE alone
PERSPECTIVES ON THEMATIC PRIVATE MARKETS INVESTING 10 We develop concrete investment opportunities in more than 50 themes in PE alone 1 Automation/Digitization 2 New living 3 Decarbonization Industrial Robot/ Web Biological / Robotic Process Humanization Emission Industrial Collaborative Data Analyt
Slide 11: Table of contents
ANNUAL RESULTS 2020 11 Table of contents 1 Board & Executive Committee update 2 Perspectives on thematic private markets investing 3 2020 results
Slide 12: This is how we deliver sustainable growth
2020 RESULTS 12 This is how we deliver sustainable growth Transformational Bespoke Sustainable investing client solutions returns David Layton André Frei Hans Ploos Transformative trends amplified USD 16 billion raised Strong performance fees in H2 Double-digit EBITDA growth1 16% AuM growth Stable E
Slide 13: Lower investment activity but solid portfolio realizations in 2020
2020 RESULTS 13 Lower investment activity but solid portfolio realizations in 2020 Investments1 (in USD billion) Portfolio realizations2 (in USD billion) Prim. 19.3 Sec. 13.4 Equity 14.8 Strong 11.8 11.8 13.3 pipeline 11.0 H2 brought 10.2 H2 11.7 into 2021 H2 H2 9.7 7.6 H2 H2 H2 8.6 H2 H2 H2 H2 H2 H
Slide 14: Select examples of successful asset transformations
2020 RESULTS 14 Select examples of successful asset transformations Delivering essential healthcare Generating clean power to Transforming during the Covid-19 pandemic support the energy transition urban infill Private equity Private infrastructure Private real estate • From a local, commoditized •
Slide 15: Transformational investing approach results in consistent and sustainable outcomes
2020 RESULTS 15 Our transformational investing approach results in consistent and sustainable outcomes Thematic sourcing Above-average growth, resilient sub-sectors supported Direct private equity portfolio by transformative trends EBITDA growth 1 +10% Platform building strategy 2 Acquiring add-on t
Slide 16: Overall strong portfolio outperformed public market benchmarks
2020 RESULTS 16 Overall strong portfolio outperformed public market benchmarks Net direct portfolio performance overview Full-year 2020 2016-2020 Reference index Outperformance Partners Group1 return2 p.a.1,3 Private equity 17.6% 15.9% +6.7% Private debt 2.0% 3.5% +0.3% Private real estate -3.3% -8.
Slide 17: Track record and service excellence expected to drive future growth
2020 RESULTS 17 Our track record and service excellence are expected to drive future growth Breakdown of assets raised by asset class in 2020 Net AuM development by asset class (in USD billion) Private real estate (15%) 109.1 • Real estate opportunities Private infrastructure (22%) • Global integrat
Slide 18: AuM stem from an international and broad range of clients
2020 RESULTS 18 AuM stem from an international and broad range of clients AuM by region (as of 31 December 2020) AuM by client type (as of 31 December 2020) Asia Australia Distribution 6% 7% Switzerland partners / private Middle East 16% individuals Public pension 3% 18% funds & SWFs South America 2
Slide 19: AuM well-diversified across programs and clients
2020 RESULTS 19 AuM well-diversified across programs and clients Breakdown by private market programs and mandates1 Breakdown by client and program structure1 Largest client 3% Top 2-5 clients 7% Top 6-10 clients 5% Top 11-20 clients USD >850 other 7% 109 billion institutions USD 78% 109 billion (ar
Slide 20: Portfolio management enables clients to reach targeted exposure
2020 RESULTS 20 Our portfolio management enables clients to reach their targeted exposure Investment-level steering to achieve target allocation Risk Return potential management through asset allocation Cash management & Access to multi-asset FX hedging class platform Outperformance through relative
Slide 21: Leaders in constructing highly customized private markets portfolios
2020 RESULTS 21 We are leaders in constructing highly customized private markets portfolios Strong growth in bespoke solutions Sustainable growth in traditional offering Evergreen programs Mandates Traditional programs (in USD billion) (in USD billion) (in USD billion) 50 50 42 39 40 40 40 35 17% p.
Slide 22: Confident outlook on expected client demand in 2021
2020 RESULTS 22 Confident outlook on expected client demand in 2021 AuM, client demand and other effects (in USD billion) Full-year 2021 expectations 16 - 20 Client demand +16.0 109 +16.5 +15.7 94 Tail-downs & ~ -9.5 redemptions1 83 +15.0 74 -8.1 -7.1 +7.1 57 -5.6 +/- FX & others2 FX & others2 (no g
Slide 23: Commitment to responsible investment and stakeholder impact
2020 RESULTS 23 We remain steadfast in our commitment to responsible investment and stakeholder impact 2020 Corporate Sustainability Report Climate change ESG performance Diversity & Inclusion at measurement in Partners Group and private markets across portfolio Stakeholder Integration of ESG Benefi
Slide 24: Strong client demand and performance translated into robust 2020 financials
2020 RESULTS 24 Strong client demand and performance translated into robust 2020 financials AuM Mgmt. fees2 Revenues3 EBIT margin Dividend4 (in USD billion) (in CHF million) (in CHF million) (in %) (in CHF per share) +16% +1% -12% stable +8% 109 1’610 1’412 94 1’138 1’146 29% perf. 19% fees 62.6% +6
Slide 25: Management fees growth follows AuM development
2020 RESULTS 25 Management fees growth follows AuM development Revenues1 (in CHF million) 1'610 +21% -12% 1'412 Revenues1 1'326 69 473 (29%) 266 Performance fees 324 (19%) (24%) Other revenues & other 94 61 operating income 84 1'138 1'146 (71%) (81%) Management fees2 1'002 (76%) 2018 2019 2020 1 Rev
Slide 26: Performance fees normalized in H2; outlook reconfirmed
2020 RESULTS 26 Performance fees normalized in H2; outlook on performance fees reconfirmed Outlook on performance fees H1: 9% ~10% H2: 27% 20-30% Performance fees1 19% Management fees2 70-80% “contractually recurring” 81% ~90% 2006-2015 2020 long term 1 Assuming that the market is favorable to exits
Slide 27: Performance fees are well diversified across programs and assets
2020 RESULTS 27 Performance fees are well diversified across programs and assets Contribution by investment programs & mandates Contribution by single assets Top 1 Rest (>50) 7% Top 2 13% Top 1 4% Top 3 29% 3% Top 4 Top 11-20 Dozens of 3% 14% CHF direct assets CHF Top 5 266m and hundreds of 266m 3%
Slide 28: Performance fee potential will grow in line with AuM
2020 RESULTS 28 Performance fee potential will grow in line with AuM over time AuM and performance fee development 109 800 ~20-30% AuM (in USD billion) 94 of total 100 700 revenues Performance fees (in CHF million) 83 600 74 80 500 473 …translates 57 400 Past AuM… 50 372 into future60 43 45 324 perf
Slide 29: Continued stability of management fees
2020 RESULTS 29 Continued stability of management fees Revenue margin1 1.89% 1.82% 1.74% 1.71% 1.51% 1.35% 1.36% 1.39% 1.25% 1.26% 1.36% 1.33% 1.39% 1.38% 19% 1.23% 1.30% 1.31% 1.33% 1.29% 1.29% 1.25% 1.24% 1.23% 1.26% 1.26% 1.23% 1.24% 1.22% 1.22% 1.18% 81% 2006 2007 2008 2009 2010 2011 2012 2013 2
Slide 30: Stable EBIT margin; operating costs in line with revenues
2020 RESULTS 30 Stable EBIT margin; operating costs developed in line with revenues Revenues, costs and EBIT development (in CHF million) 2019 2020 Revenues 1'610 -12% 1'412 Total operating costs, of which -603 -11% -537 Personnel expenses -490 -12% -430 Personnel expenses (regular) -306 +8% -329 Pe
Slide 31: Continued EBIT margin stability; target reconfirmed
2020 RESULTS 31 Continued EBIT margin stability; target EBIT margin reconfirmed EBIT1 margin development 80% 70% 65% 65% 63% 60% 61% 62% 59% 59% 58% 60% ~60% 50% 1.06 40% target for newly 30% generated management fees and all 20% performance fees 10% 0% 2012 2013 2014 2015 2016 2017 2018 2019 2020 1
Slide 32: Increasingly diversified FX exposure on costs expected
2020 RESULTS 32 Increasingly diversified FX exposure on costs expected Currency exposure in 2020 Others 6% GBP 9% Others EUR EUR SGD 6% 5% 47% 11% USD 27% AuM ≈ GBP Management fees1 ≠ 12% Costs2 USD 38% CHF 40% EUR/USD foreign exchange fluctuations have a greater impact on CHF management fees than o
Slide 33: Strong balance sheet and liquidity
2020 RESULTS 33 Strong balance sheet and liquidity Key financials (in CHF million, except for per share data in CHF) Balance sheet (as of 31 December 2020) 2019 2020 Revenues1, of which 1'610 -12% 1'412 Management fees2 Performance fees 1'138 473 +1% -44% 1'146 266 1.1 35% CHF billion return on Tota
Slide 34: Proposed dividend increase of 8% to CHF 27.50 per share
2020 RESULTS 34 Proposed dividend increase of 8% to CHF 27.50 per share (payout ratio of 91%) Dividend payment since IPO USD 109 billion 30.00 Total AuM (in USD billion) 1 27.50 120 Dividend/share (in CHF) 25.50 25.00 100 22.00 20.00 19.00 80 15.00 15.00 60 10.50 10.00 8.50 40 USD 11 billion 7.25 5.
Slide 35: Contacts
35 Contacts Shareholder relations contact: Zugerstrasse 57 Philip Sauer 6341 Baar-Zug T +41 41 784 66 60 Switzerland [email protected] T +41 41 784 60 00 [email protected] Media relations contact: Jenny Blinch www.partnersgroup.com T +44 207 575 25 71 jenny.blinch@partners
Slide 36: Disclaimer
IMPORTANT NOTICE 36 Disclaimer NEITHER THE INFORMATION IN THIS DOCUMENT NOR ANY RELATED MATERIALS MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES OR DISTRIBUTED OR REDISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN. This presentation is strictly confidential t
Partners Group Holding — FY2020 Earnings Presentation on 6ix