Time to partner up

Partners Group is a good example of where a difficult cycle can create an interesting opportunity.

The shares are down around one-third YTD and around 60% from their 2021 all-time high, while the company has also announced a CEO transition at year-end. The backdrop remains challenging: a more difficult exit environment, lower performance fees and significant redemption pressure in some of its evergreen funds.

Yet the underlying franchise remains solid. Partners Group raised a record USD 16bn in H1, taking AUM to USD 186bn. Management income grew 12% in constant currency and the EBITDA margin remained around 63%.

What interests us most is valuation. We look at market capitalization relative to recurring management-fee revenue — essentially a price-to-sales multiple for the core fee-generating franchise, stripping out the volatility of performance fees. On this basis, Partners Group trades at around 10x expected 2026 management fees, compared with a historical median of roughly 15–16x.

The risks around redemptions, fee pressure and realizations remain, but the current valuation appears to discount considerably more stress than we see in the underlying business. We have therefore started to build a position in Partners Group in our European Value Fund.

Léon, with great help from Mohamed Afifi from our PM team

Disclaimer: This communication is for information purposes only and does not constitute investment advice, an offer or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.