Partners Group

For anyone who missed our Global Co-Head of Private Wealth, Robert Collins, in his panel on 'The Case for Evergreen Solutions' at the CAIS Summit yesterday, see below for a deep dive on the topic that was recorded on the sidelines.

Last week Partners Group had the pleasure of hosting the inaugural PG Women's Academy for Merrill Lynch financial advisors at our Denver campus. While we regularly run PG Academies to share our private markets knowledge with financial advisors, this time we developed sessions specifically for women financial advisors to meet leaders from both firms and network with their peers. Like Partners Group, Merrill Lynch has a high focus on fostering a community to empower women throughout its organization. Partners Group and Merrill Lynch leaders shared their insights on private markets, with keynote speeches by Anne Lester, a member of the Partners Group Board of Directors, and sessions with trailblazers who drive our value-creation efforts. Our event provided attendees with a deeper understanding of how alternatives can support their clients' financial goals, and created a space for them to network amongst each other, fostering connections and encouraging collaboration.

We're back today for the final post in our series exploring lessons in evergreen investing. 𝐋𝐞𝐬𝐬𝐨𝐧 # 𝟓 𝐕𝐚𝐥𝐮𝐚𝐭𝐢𝐨𝐧 𝐚𝐬𝐬𝐞𝐬𝐬𝐦𝐞𝐧𝐭𝐬: 𝐦𝐨𝐫𝐞 𝐩𝐫𝐞𝐜𝐢𝐬𝐞, 𝐦𝐨𝐫𝐞 𝐨𝐟𝐭𝐞𝐧 In public markets, valuing a portfolio daily is the norm. Private markets do not operate on this frequency, which may present a challenge for evergreens. An important component of our investment monitoring process is the ongoing valuation of our private market investments. Many funds will post the net asset value (NAV) of their portfolios every month. However, how this pricing is determined may vary significantly by different managers. We think three factors are key to getting this right: • Evergreens require more frequent valuation assessments compared to traditional closed-end funds to align with the frequency at which liquidity is provided to investors. • A manager must have the experience to assess valuation-relevant events in real-time and reflect them in the valuation of a portfolio as appropriate. This is especially important for primary and secondary investments, where the manager relies on quarterly assessments conducted by the owner of the assets. • While being in control of the valuation process, a manager should engage independent third-party valuation experts to verify its assessments. This helps ensure objectivity and transparency in the process. Partners Group conducts monthly independent valuations of its underlying investments, employing a fair market valuation process compliant with IFRS and US GAAP. This process was initially introduced in 2003, and we have continually refined it based on feedback from our auditors. This post marks the end of our Five Lessons from 20+ Years in Evergreens series. Stay tuned for more insights about private markets investing from Partners Group! Visit our website for more: https://lnkd.in/e94d2WwR

Yesterday, Partners Group's portfolio company KinderCare Learning Companies, a leading early childhood education services provider in the US, began trading on the New York Stock Exchange, following the pricing of its initial public offering ("IPO"). KinderCare's stock is listed under the ticker "KLC". Partners Group acquired KinderCare in 2015, supporting KinderCare’s business transformation to optimize center footprint, drive compound same-center revenue growth, and increase same-center occupancy. Under our ownership, KinderCare has also invested in its curriculum, human capital, and technology infrastructure to accelerate growth and strengthen its commitment to quality. Joel Schwartz, Partner, Private Equity Services Vertical, Partners Group, adds: "KinderCare is a leading early childhood education provider with an unwavering focus on delivering the highest quality service. The growing awareness of the critical nature of early childhood education in the US should help underpin demand in the years ahead." Read the press release here: https://lnkd.in/em8eD5Ac

Partners Group has agreed to acquire a portfolio of prime residential properties in Milan, on behalf of our clients. The Portfolio has a Gross Asset Value (GAV) of over EUR 260 million and consists of six standing assets with 590 units. Following completion of this acquisition, Partners Group's total residential property portfolio in Italy will have a combined GAV of around EUR 800 million. Marco Denari, Member of Management, Real Estate Europe, Partners Group, says: "This acquisition is further confirmation of our thematic conviction in Milan's prime residential market. The Portfolio provides uplift potential, and its underlying rents can be re-aligned to market following a comprehensive refurbishment program. Our transformational value creation plan will focus on updating the underlying assets to be in line with our existing modern and amenitized offering in the city. Partners Group's local presence will help us stay in touch with changing tenant demands, efficiently manage these assets, and create value." Read the press release here: https://lnkd.in/eAyFrEEX #RealEstate

Andre Burba, a Managing Director in our Infrastructure Americas team, spoke to PE Hub about Partners Group's recent investment in Gateway Fleets, a provider of electrification solutions for logistics fleet operators in the US, on behalf of our clients. Andre talked about how Gateway fits with our investment thesis for the electric vehicle space, why we think Gateway has a winning business model, and our value creation plan. You can read the full interview here: https://lnkd.in/ezd38Sfp #Infrastructure

Here's the next topic in our series about evergreen investing. 𝐋𝐞𝐬𝐬𝐨𝐧 #𝟒 𝐕𝐢𝐧𝐭𝐚𝐠𝐞 𝐃𝐢𝐯𝐞𝐫𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧: 𝐬𝐭𝐫𝐢𝐤𝐢𝐧𝐠 𝐭𝐡𝐞 𝐛𝐚𝐥𝐚𝐧𝐜𝐞 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐲𝐨𝐮𝐧𝐠𝐞𝐫 𝐚𝐧𝐝 𝐦𝐚𝐭𝐮𝐫𝐞 𝐚𝐬𝐬𝐞𝐭𝐬 The importance of having a diversified evergreen portfolio includes a specific dimension: the maturity of the underlying investments. Here is what we mean by this: • 𝐌𝐚𝐭𝐮𝐫𝐞 𝐚𝐬𝐬𝐞𝐭𝐬 – those investments made more than two years ago – are key contributors to a fund's performance. They compound returns at a relatively high rate and are likely to be divested sooner. • 𝐘𝐨𝐮𝐧𝐠𝐞𝐫 𝐚𝐬𝐬𝐞𝐭𝐬 represent investments made less than two years ago and represent the fund's future return prospects, functioning like seedlings for long-term performance. An overallocation to the latter may lower near-term performance and impair liquidity. Concentration on the former can compromise the future of the fund and lead to excess idle cash balances. Vintage concentration can occur, for example, when there is rapid fundraising without corresponding investment pacing. In practice, a manager who is quickly raising a substantial amount of capital may be forced to make several investments in a brief timeframe to fully deploy the funds. This can result in concentration and affect the fund's overall diversification and risk concentration. So, what must investors pay attention to when choosing an evergreen? Check if the manager adheres to a consistent fundraising and investment pace – not too fast, not too slow. At Partners Group, we limit net subscriptions from investors to 25% in order to build balanced portfolios. See the vintage chart on the second slide below to find out what Partners Group's evergreen diversification typically looks like. Visit our website to learn more: https://lnkd.in/etjvZk-y

The expansion of natural gas as a baseload fuel is likely to continue, particularly with the energy transition still at early stages. Within this theme, "drop-in" fuels, such as renewable natural gas, renewable diesel, and sustainable aviation fuels, which are replacements for more carbon-intensive energy sources, represent an interesting investment opportunity. In this interview with Infrastructure Investor, Andre Burba, Managing Director, and Matthew Lipton, Head of Infrastructure Investment Research, discuss which low-carbon fuels are suitable for investment, how these fuels contribute to the energy transition, and where they might be used. You can read the full interview here: https://lnkd.in/emaAa6Uw #Infrastructure #EnergyTransition

Partners Group, acting on behalf of its clients, has agreed to sell its majority stake in Techem Energy Services GmbH, an international provider of digitally enabled solutions for the building ecosystem, to TPG and GIC. The transaction values Techem at an enterprise value of approximately EUR 6.7 billion. As part of the transaction, existing co-investors CDPQ and Ontario Teachers' Pension Plan will also exit their stakes. Since acquiring Techem in 2018, Partners Group has overseen a period of strong growth at the Company, with revenues reaching over EUR 1 billion and EBITDA growing c. 50%. Kim Nguyen, Partner, Partners Group, says: "Together with CDPQ and Ontario Teachers', we have built Techem into a global energy management services provider, leveraging its strong foundations in Germany to expand into new markets and services. This sale is the culmination of over five years of intensive hands-on ownership and demonstrates that exit markets are open for the highest quality assets." Read the full press release here: https://lnkd.in/eEVjDq67 #PrivateEquity

Partners Group has invested in Gateway Fleets, a provider of electrification solutions for logistics fleet operators in the US, on behalf of our clients. We are acquiring a controlling stake in Gateway and will provide significant capital to support its future growth. Gateway's core value proposition for commercial fleet operators is resolving the capital and operational challenges of EV fleet migration at no upfront cost, while driving margin improvements and lowering corporate carbon footprints. Andre Burba, Managing Director, Infrastructure, Partners Group, says: "After reviewing a number of investment opportunities over the years, we developed a strong view of what a winning transformational business model should be in the EV fleet migration space. Gateway met those criteria due to its tangible contract pipeline with anchor customers and a repeatable development model with a visible opportunity to scale in the near term." Read the full press release here: https://lnkd.in/eSY76Zky #Infrastructure