Partners Group Holding AG · SIX:PGHN
Partners — Investor Presentation (November 2023)
68 slides from Partners's investor presentation, November 2023
Slide 1: Update on Partners Group
Update on Partners Group November 2023 Private Infrastructure Solar
Slide 2: Table of contents
UPDATE ON PARTNERS GROUP 2 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 3: Partners Group is a leading global private markets firm
OVERVIEW 3 Partners Group is a leading global private markets firm TRULY DEDICATED TO PRIVATE MARKETS ONLY LARGE, INDEPENDENT AND ALIGNED WITH CLIENTS • USD 141.7 billion AUM1: USD 74.3 billion in corporate equity and USD • >USD 25 billion market capitalization4 and constituent of the Swiss 67.5 bil
Slide 4: Sustainable performance delivered across economic cycles through three key pillars
OVERVIEW 4 Sustainable performance delivered across economic cycles through three key pillars Transformational investing • Thematic investing 1 Generating superior returns by capitalizing on thematic growth trends and transforming attractive businesses • Entrepreneurship at scale into market leaders
Slide 5: Table of contents
UPDATE ON PARTNERS GROUP 5 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 6: Continued AuM growth
CLIENTS 6 Continued AuM growth Total assets under management1 (in USD billion) 142 74bn 29bn Private Private equity debt 22bn 17bn 11 Private Private infrastructure real estate 2008 2011 2014 2006 2007 2009 2010 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 H1 2023 IPO 1 Partners Group aims to m
Slide 7: We serve a global diversified client base of approximately 1,000 institutional clients
CLIENTS 7 We serve a global diversified client base of approximately 1,000 institutional clients Public pension funds & Insurance Private Banks & sovereign wealth funds companies pension funds distribution partners We are "responsible for the dreams" of our 200+ million beneficiaries Source: Partner
Slide 8: Our portfolio management enables clients to reach their targeted exposure
CLIENTS 8 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 value
Slide 9: Further building on our leading position as a global provider of bespoke solutions
CLIENTS 9 Further building on our leading position as a global provider of bespoke solutions Partners Group's assets under management development1 (in USD billion) Diversified platform with >300 142 programs and structures 33% Traditional programs 74 USD 142 billion 40% 67% Bespoke client solutions
Slide 10: Evergreen programs and mandates increase longevity of our AuM
CLIENTS 10 Evergreen programs and mandates increase longevity of our AuM Illustrative example Evergreen programs Mandates Traditional programs Investment decision Strategic allocation decision Commitment decision (in USD) (in USD or % of overall AuM) (in USD) Exposure invest more, Exposure re-up? in
Slide 11: Mandates: flexible asset allocation to realize return potential across private markets
CLIENTS 11 Mandates: flexible asset allocation to realize return potential across private markets Clients can have exposure to all asset classes by using single line investments to tailor allocation Evolution of portfolio NAV and asset allocation1 USD 1.5bn Infrastructure PE directs PE secondaries 2
Slide 12: Evergreens: providing diversified access to private markets
CLIENTS 12 Evergreens: providing diversified access to private markets An example of a global private equity program1 Comprehensive portfolio management focused on diversification across assets, industries, and vintages Asset allocation • Fully invested on day 1 to avoid complexity (Private equity I
Slide 13: 20+ year track record of providing leading evergreen solutions across market cycles
CLIENTS 13 20+ year track record of providing leading evergreen solutions across market cycles Selection Total of under assets evergreen funds by strategy, management initiation, development (in USD and billion)size • USD 41 bn in tailored evergreen solutions across1; inflows 1940 Act Global value M
Slide 14: AuM growth supported by diversified offering
CLIENTS 14 AuM growth supported by diversified offering Assets raised during H1 2023 AuM as of 30 June 2023 Private real estate Private real estate 13% 12% Private Private infrastructure Private equity infrastructure USD 15% USD Private equity 15% 40% 142 billion 8 billion 53% Private debt Private d
Slide 15: AuM stem from a broad range of international clients
CLIENTS 15 AuM stem from a broad range of international clients AuM by region (as of 30 June 2023) AuM by client type (as of 30 June 2023) Australia Distribution Asia 7% Switzerland partners / private 7% Public pension Middle East 17% individuals funds & SWFs 3% 22% 22% South America Germany & 2% US
Slide 16: Full-year fundraising guidance reconfirmed
CLIENTS 16 Full-year fundraising guidance reconfirmed AuM, client demand and other effects (in USD billion) 2023 guidance 22.3 17 to 22 Client demand 25.0 135 127 16.0 109 -10.5 Tail-downs & 16.5 -10.2 15.7 94 to -12.5 redemptions1 83 -8.3 74 -4.0 -8.1 FX & other2 FX & other2 -7.1 +1.6 +/- -5.6 FX &
Slide 17: Table of contents
UPDATE ON PARTNERS GROUP 17 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 18: Private equity returns have proven to remain healthy through macroeconomic cycles
INVESTMENTS 18 Private equity returns have proven to remain healthy through macroeconomic cycles Higher interest Dislocation Low interest rate Higher interest Dislocation Low interest rate rate environment and recovery environment rate environment and recovery environment Base rates GDP growth 8 US
Slide 19: Our proprietary and systematic thematic investing approach starts with 3 giga themes
INVESTMENTS 19 Our proprietary and systematic thematic investing approach starts with 3 giga themes Digitization & Automation New Living Decarbonization & Sustainability Three giga themes → dozens of significant transformative trends → hundreds of material sector themes Select examples Private equit
Slide 20: Transformational investing builds resilience across cycles
INVESTMENTS 20 Transformational investing builds resilience across cycles Thematic investing focuses on structural growth Entrepreneurial governance focuses on transformation 90+ themes across all asset classes Identifying areas of structural growth with potential for Taking the best from conglomera
Slide 21: Our distinct thematic sourcing strategy enables more than 50 themes in private equity alone
INVESTMENTS 21 Our distinct thematic sourcing strategy enables us to develop investment opportunities in more than 50 themes in private equity alone Digitization & Automation New Living Decarbonization & Sustainability Industrial Robot/ Web Biological / Robotic Process Humanization Emission Industri
Slide 22: USD billion invested into thematic investment opportunities
INVESTMENTS 22 USD 5 billion invested into thematic investment opportunities Partners Group's private markets investments (in USD billion) Prim. 31.7 Sec. Equity 26.0 • Lower deployment volumes as we applied a conservative 21.7 investment approach H2 Debt H2 17.0 • Direct assets represented 57% of i
Slide 23: Partners Group's entrepreneurial governance framework is the key driver of success
INVESTMENTS 23 Partners Group's entrepreneurial governance framework is the key driver of success Our board members are engaged, aligned, and accountable ✓ We own the board ✓ Our boards are close to our assets ✓ Our boards decisions are transparent to PG ✓ Board work is evaluated annually ✓ Board me
Slide 24: A look inside AMMEGA: building on structurally growing themes
INVESTMENTS 24 A look inside AMMEGA: building on structurally growing themes Generating revenues in areas of the economy profiting from secular growth 2022-2028 Proportion of Sector CAGR2 firm revenue1 Packaged food market +6.3%3 Increasing focus on safety and 25% hygiene requiring automation Indust
Slide 25: A look inside AMMEGA: taking a hands-on approach to transformation
INVESTMENTS 25 A look inside AMMEGA : taking a hands-on approach to transformation Creating a tailored board and senior management team… Value creation still in progress and driven by top-line growth and operational excellence +71% …with experience leading global firms, international expansions, Adj
Slide 26: Operational results drive investment returns
INVESTMENTS 26 Operational results drive investment returns Net direct portfolio performance overview Partners Group1 YTD Since inception p.a. H1 2023 as of 30 June 2023 Private equity 5.4% 18.5% Private debt 3.9% 6.2% Private infrastructure 6.9% 14.4% Private real estate -2.4% 8.3% 1 Partners Group
Slide 27: Realizations driven by direct infrastructure and portfolio assets
INVESTMENTS 27 Realizations driven by direct infrastructure and portfolio assets Partners Group's portfolio realizations (in USD billion) 29.1 • Elected to postpone divestments of direct lead assets to H2 future periods in order to realize full value for clients • Majority of H1 realizations driven
Slide 28: Table of contents
UPDATE ON PARTNERS GROUP 28 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 29: Partners Group has been committed to sustainability for more than 15 years
ESG 29 Partners Group has been committed to sustainability for more than 15 years Signature of the UN-backed Principles for Responsible First global private markets firm to be Launch of the PG included in the Dow Jones Sustainability Investment (UN PRI) LIFE Strategy Indices (DJSI) Publication of th
Slide 30: Our experience as a responsible investor allows us to be an ESG thought leader
ESG 30 Our experience as a responsible investor allows us to be an ESG thought leader Partners Group is one of the first private market investors to sign the UN Principles for Responsible Investments 2008 (PRI) and has earned the highest rating in the last six years in the UN PRI's annual ESG assess
Slide 31: Our Sustainability Strategy: launched in May 2022
ESG 31 Our Sustainability Strategy: launched in May 2022 Our vision is to become an impact leader in corporate responsibility to the benefit of our employees and other stakeholders Portfolio Sustainability Focus Areas (for controlled assets) Corporate Sustainability Focus Areas For illustrative purp
Slide 32: For our controlled assets, our aim is to build better and more sustainable businesses
ESG 32 For our controlled assets, our aim is to build better and more sustainable businesses through active ownership Traditional ESG through stewardship Strategic ESG through ownership Integrate Engage Enhance Transform Implementing Apply ESG avoidance Engage on ESG value Transform to be a minimum
Slide 33: Environmental highlights at portfolio level
ESG 33 Environmental highlights at portfolio level E Our focus Our progress 92% Climate Change Strategy Create long-term value by both % GHG footprint measured investing in the low carbon economy and leading assets on their path to net zero 80% Decarbonization Build more sustainable % with footprint
Slide 34: Social highlights at portfolio level
ESG 34 Social highlights at portfolio level S Our focus Our progress Social 65% Stakeholder Benefits Program % of our controlled companies which have a female Board representative • Striving for a more motivated, resilient, and therefore more committed workforce to further drive returns • Build comp
Slide 35: Governance highlights at portfolio level
ESG 35 Governance highlights at portfolio level G Our focus Our progress 100 Governance days Sustainability at Scale Expected time for our controlled Develop our assets with an portfolio companies to establish ESG entrepreneur's mindset Responsibles1 • Advancing sustainability and focus on positive
Slide 36: We measure and report transparently on our ESG progress and performance
ESG 36 We measure and report transparently on our ESG progress and performance G New ESG survey templates While we have made progress across several ESG 83% average data maturity meet various mandatory and dimensions, some indicators have yet to meet our across our controlled assets voluntary ESG re
Slide 37: Working towards our net-zero commitment
ESG 37 Working towards our net-zero commitment E Our focus Technology-based solution Strong partnership Climeworks will remove more than 7,000 metric tons of carbon dioxide from the atmosphere on Partners Group’s behalf Carbon Reduction Program Achieve net zero emissions for our Nature-based solutio
Slide 38: Fostering a strong people culture
ESG 38 Fostering a strong people culture S Our focus Our progress Social 71% Realizing employees’ potential Actively engaged employees in our Become an impact leader in engagement survey, with a 75% corporate responsibility to the target by 2025 benefit of our employees and other stakeholders Streng
Slide 39: Diversity & Inclusion remains a key area of focus for Partners Group
ESG 39 Diversity & Inclusion remains a key area of focus for Partners Group S Our progress Key target for promoting gender diversity Female Partners, Managing Directors, and Board Members by 2025 42% 38% 25 771 / 1'856 14 (56%) 3 / 8 members employees 2021 2022 2025 Female employees Female Executive
Slide 40: Table of contents
UPDATE ON PARTNERS GROUP 40 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 41: Continued AuM growth and value creation drive financials in H1
FINANCIALS 41 Continued AuM growth and value creation drive financials in H1 H1 2023 financial highlights Average AuM Management fees1 Revenues2 EBIT (in CHF billion) (in CHF million) (in CHF million) (in CHF million) +3% -3% +19% +13% 122 126 1'051 809 786 881 Incl. Perf. 79 45 late 8% 25% fees 570
Slide 42: Revenues underpinned by stable contractually recurring management fees
FINANCIALS 42 Revenues underpinned by stable contractually recurring management fees Revenues (in CHF million) 1'130 1'051 Revenues1 69 881 +19% 442 265 Performance fees (39%) 72 (25%) (8%) • 19% increase in revenues, 79 45 Other revenues & other supported by investment operating income performance
Slide 43: Platform diversification and value creation drive performance fees
FINANCIALS 43 Platform diversification and value creation drive performance fees across multiple programs and assets Performance fee contribution Performance fee contribution by investment program Top 1 25% • Across investment programs, infrastructure was the Rest (6-80+) 37% largest contributing as
Slide 44: Outlook for performance fees in the range of 20% to 30% of revenues confirmed
FINANCIALS 44 Outlook for performance fees in the range of 20% to 30% of revenues confirmed Performance fees in % of total revenues Performance ~20-30% Full-year 2023 fees1 guidance 20-30% ~10% 29% Performance Management fees2 fees supported by 6% More direct, solid 86% exit more control, pipeline a
Slide 45: Performance fee potential is expected to follow AuM growth over time
FINANCIALS 45 Performance fee potential is expected to follow AuM growth over time AuM and performance fee development 142 135 140 1500 AuM (in USD billion) 127 Performance fees (in CHF million) 120 109 1'197 1200 …translates 94 into future 100 83 performance 900 74 80 fee potential Past AuM… 57 60
Slide 46: Continued stability of management fee margin
FINANCIALS 46 Continued stability of management fee margin Revenue margin1 2.41% Performance fees Management fees2 1.89% 1.82% 46% 1.74% 1.71% 1.67% 30% 29% Performance 1.51% 1.51% fees as % of 1.36% 1.39% 25% 1.35% 1.36% 1.33% 1.39% 1.38% 24% 14% total revenues 1.25% 1.26% 1.23% 30% 19% 1.30% 1.31%
Slide 47: Total operating costs driven by performance fee-related costs
FINANCIALS 47 Total operating costs driven by performance fee-related costs Revenues, costs and EBIT development (in CHF million) H1 2023 H1 2022 Revenues1 1'051 +19% 881 Total operating costs, of which -407 +31% -311 Personnel expenses2 -339 +37% -247 Personnel expenses (regular) -244 +11% -220 Per
Slide 48: Strengthening of the CHF negatively impacted EBIT margin
FINANCIALS 48 Strengthening of the CHF against the EUR and USD negatively impacted EBIT margin Currency exposure in H1 2023 AuM ≈ Costs2 Management fees1 GBP Others 6% • Strong CHF against other major 6% GBP SGD currencies affects management fees 11% 11% Others 6% EUR • 61% of cost base outside Swit
Slide 49: Continued investments at ~60% target margin to support growth
FINANCIALS 49 Continued investments at ~60% target margin to support growth EBIT1 margin development Foreign exchange effects impacted the EBIT margin by ~2%-points in H1; platform growth accounts for the rest 65% 65% 63% 63% 65% 60% 61% 62% 60% 61% 59% 59% 58% ~60% target EBIT margin for all perfor
Slide 50: Strong financials, balance sheet and liquidity
FINANCIALS 50 Strong financials, balance sheet and liquidity Key financials (in CHF million, except for earnings per share data in CHF) Balance sheet (as of 30 June 2023) H1 2023 H1 2022 Revenues1, of which 1'051 +19% 881 Management fees2 Performance fees 786 265 -3% +270% 809 72 2.4 50% Total opera
Slide 51: Table of contents
UPDATE ON PARTNERS GROUP 51 Table of contents 1 Overview 2 Clients 3 Investments 4 ESG 5 Financials 6 The new traditional asset class
Slide 52: Public and private markets are changing roles in financing the economy
THE NEW TRADITIONAL ASSET CLASS 52 Public and private markets are changing roles in financing the economy… Public Markets Private Markets Traditional IPOs as strategic corporate development Long-term, driving the broader economy • Mature and proven companies • Focus on profitable companies and asset
Slide 53: Dividing between those backing 'Spotlight' vs. 'Foundational' businesses
THE NEW TRADITIONAL ASSET CLASS 53 …and are dividing between those backing 'Spotlight' vs. 'Foundational' businesses Spotlight: Focused on delivery of end-customer branded/IP services and products, high public Example: Modern Food Value Chain awareness, often less human and capital intensive Public
Slide 54: With a 'Spotlight' focus, IPOs now feature more unprofitable businesses
THE NEW TRADITIONAL ASSET CLASS 54 With a 'Spotlight' focus, IPOs now feature more unprofitable businesses… Number of IPOs, 1990-20221 % of IPO-ed businesses with positive earnings , 1990-20221 800 More Small Companies Avoid I.P.O.s, 100% Broader economy Sapping U.S. Economy’s Vitality 85% Nov 2018
Slide 55: 'Foundational' businesses are now primarily built in private markets
THE NEW TRADITIONAL ASSET CLASS 55 …whereas 'Foundational' businesses are now primarily built in private markets Private Equity Private Infrastructure and Private Real Estate Goods & products Distribution Industrial Food Value Social Public Last Mile Disruptors Automation Chain Infrastructure Transp
Slide 56: 10 hypotheses for the future of private markets: key takeaways
THE NEW TRADITIONAL ASSET CLASS 56 10 hypotheses for the future of private markets: key takeaways Private Markets growth Offense is the new and role change is defense structural Private markets is the Completely re-think asset Agility is the new new 'traditional' asset allocation resilience class 'C
Slide 57: The rise of private markets and its role change with public markets is structural
THE NEW TRADITIONAL ASSET CLASS 57 1 The rise of private markets and its role change with public markets is structural Private markets have grown independent of a low-rate environment Private markets drive outperformance through (graph showing industry growth with selected trends) active EBITDA grow
Slide 58: Democratization of private markets will lead to new market entrants
THE NEW TRADITIONAL ASSET CLASS 58 2 Democratization of private markets will lead to new market entrants… Three pillars are driving broader …which will push traditional asset managers to include access to private markets... private markets in allocations3 AUM Private Markets 1 Growth of Wealth Manag
Slide 59: Significantly develop the private markets investor landscape and DNA
THE NEW TRADITIONAL ASSET CLASS 59 3 …which will significantly develop the private markets investor landscape and DNA… Largest asset managers will enter private markets Private Markets AUM growth and investment DNA with varying public markets approaches with new entrants1 AUM (USD tn) BlackRock outl
Slide 60: Active vs. passive bifurcation in asset ownership
THE NEW TRADITIONAL ASSET CLASS 60 4 …and further accentuate an active vs. passive bifurcation in asset ownership Passive Spectrum of private markets investment approaches Active Transactional approach / "Aramco closes gas pipeline deal with "Partners Group's hands-on approach Thematic approach / fi
Slide 61: Parts of private markets will resemble public markets' passive DNA
THE NEW TRADITIONAL ASSET CLASS 61 5 Parts of private markets will resemble public markets' passive DNA… For corporates, 'Core' assets and businesses resemble larger enterprises in public markets, need less business building, and are more 'finished'. 'Non-core' assets and businesses are often smalle
Slide 62: Passive investing in many private markets assets faces crowding and disruption
THE NEW TRADITIONAL ASSET CLASS 62 6 …but passive investing in many private markets assets faces crowding and disruption Core Asset characteristics / strategy Non-core Three 'Giga Crowding as new Themes' will Large drive change for entrants compete decades… Digitization & opportunity set to New Livi
Slide 63: Offense is the new defense: transformational investing builds resilience
THE NEW TRADITIONAL ASSET CLASS 63 7 Offense is the new defense: transformational investing builds resilience Strategic rigor De-centralized, Strong focus on Best-in-class Best-in-class 'Transformational and strong entrepreneurial operational systems and leadership and investing' is based industrial
Slide 64: Active growth is key in a new era with higher rates
THE NEW TRADITIONAL ASSET CLASS 64 8 Active growth is key in a new era with higher rates and without valuation tailwinds 2017-2022 Real Assets returns excluding multiple expansion1,2 2017-2022 Equities returns excluding multiple expansion1,2 Public Public +133% Performance PG Direct Infrastructure P
Slide 65: Active private markets governance and stakeholder concentration will lead ESG impact
THE NEW TRADITIONAL ASSET CLASS 65 9 Active private markets governance and stakeholder concentration will lead ESG impact ESG reporting standards between public and private …but ESG and stakeholder impact could be increasingly markets are converging… driven by select active private markets firms Par
Slide 66: Significant scale of private markets will require new allocation strategies
THE NEW TRADITIONAL ASSET CLASS 66 10 Significant scale of private markets will require new allocation strategies Private Markets Allocation: ~15-20% ~2x Private Markets Allocation: ~30-40% 8% 2% 3% 10% 15% 15% Government Fixed Income 15% Government Fixed Income 15% Corporate Fixed Income 15% Corpor
Slide 67: Contacts
67 Contacts Zugerstrasse 57 Philip Sauer 6341 Baar-Zug Head Corporate Development Switzerland T +41 41 784 66 60 T +41 41 784 60 00 Email: [email protected] [email protected] Danica Ruso www.partnersgroup.com Corporate Development T +41 41 784 67 67 Email: danica.ruso@partn
Slide 68: Disclaimer
IMPORTANT NOTICE 68 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
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