Partners Group Holding AG · SIX:PGHN
Partners — H1 2020 Earnings Presentation
31 slides from Partners's earnings presentation, Sep 8, 2020
Slide 1: Semi-annual results 2020
8 SEPTEMBER 2020 Semi-annual results 2020 André Frei, Co-CEO | David Layton, Co-CEO | Hans Ploos, CFO Keeran Kang Private Real Estate Europe | David Layton Co-Chief Executive Officer For Institutional Use Only – Not for Public Distribution
Slide 2: H1 2020 key highlights
SEMI-ANNUAL RESULTS 2020 2 H1 2020 key highlights Strong portfolio performance & resilience Successful management of COVID-19 Stability further impact for people & portfolio strengthened client trust Sustained client demand USD 8.3 billion in Across asset classes and new capital commitments capital
Slide 3: Table of contents
SEMI-ANNUAL RESULTS 2020 3 Table of contents 1 Investments 2 Clients 3 Financials
Slide 4: Early signs of recovery in transactional markets?
INVESTMENTS 4 Early signs of recovery in transactional markets? Global private equity buyout investments1 (in USD billion) Announced global M&A transactions2 (in USD billion) 946 900 883 114 116 106 105 100 As of 663 31 Aug. As of 550 31 Aug. 68 61 414 290 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2
Slide 5: Investment activities in H1 2020
INVESTMENTS 5 Investment activities in H1 2020 Partners Group's private markets investments1 (in USD billion) Portfolio Sec. Prim. 8% 19.3 assets 27% Prim. Direct 19% USD Equity Sec. Equity assets 4.3 billion 56% 73% 14.8 13.3 Debt H2 17% Debt 11.7 H2 9.7 H2 H2 Europe H2 32% 4.3 H1 H1 North USD H1 H
Slide 6: Overall strong portfolio outperformed public market benchmarks
INVESTMENTS 6 Overall strong portfolio outperformed public market benchmarks Portfolio performance overview YTD as of 30 June 2020 Reference index Partners Group¹ return² Private equity (direct) -0.5% -5.8% Direct lending -4.1% -3.9% Liquid loans -3.7% -4.2% Private real estate (direct) -5.1% -20.9%
Slide 7: Amplification of key fundamental themes drives performance of existing portfolio
INVESTMENTS 7 Amplification of key fundamental themes drives performance of existing portfolio Software product engineering / digital outsourcing Submetering & energy efficiency solutions Increased need for software Trend towards remote monitoring and digital product benefits larger players with a h
Slide 8: Corporate assets: focusing on sub-sectors benefiting from transformative trends
INVESTMENTS 8 Corporate assets: focusing on sub-sectors benefiting from transformative trends Healthcare Business & fin. services Consumer Industrials TMT Transformative care Non-bank financials Conscious consumer: wellness & Dark factory Explosion of data ✓ Diagnostics ➢ Lender specialty finance su
Slide 9: Real assets: infrastructure sub-sector matrix and investment focus themes
INVESTMENTS 9 Real assets: infrastructure sub-sector matrix and investment focus themes Power Energy infrastructure Communications Transport / logistics Social infra / PPPs Ancillary power Energy management Specialty communication Transport logistics Public services Services ➢ Distributed generation
Slide 10: Meaningful recent investment examples
INVESTMENTS 10 Meaningful recent investment examples Investment rationale Industrials • Resilient agricultural sector that is uncorrelated with economic activity, given the stable global demand for food Future Agriculture • Favorable market tailwinds due to the long-term demand ✓ Bio-solutions drive
Slide 11: Table of contents
SEMI-ANNUAL RESULTS 2020 11 Table of contents 1 Investments 2 Clients 3 Financials
Slide 12: AuM stability in H1 2020; our long-term prospects expected to remain strong
CLIENTS 12 AuM stability in H1 2020; our long-term prospects expected to remain strong Total assets under management1 (in USD billion) 94 96 Private 14 83 infrastructure 74 Private 15 real estate 57 50 Private 43 45 22 debt 37 31 24 28 18 22 Private 11 45 equity 6 2005 2006 2007 2008 2009 2010 2011
Slide 13: Full-year guidance on new gross client demand in 2020 confirmed
CLIENTS 13 Full-year guidance on new gross client demand in 2020 confirmed AuM, client demand and other effects (in USD billion) Full-year 2020 expectations 12 - 15 Client demand +16.5 94 +15.7 83 74 Tail-downs & +15.0 -7.5 to -9.0 redemptions1 -7.1 +10.1 57 -5.6 50 +1.4 +/- FX & others2 -4.0 FX & o
Slide 14: AuM stem from an international and broad range of clients
CLIENTS 14 AuM stem from an international and broad range of clients AuM by region (as of 30 June 2020) AuM by client type (as of 30 June 2020) Asia Australia Distribution 6% 6% Switzerland partners / private Middle East 16% individuals Public pension 3% 18% funds & SWFs South America 24% Germany &
Slide 15: AuM well-diversified across programs and clients
CLIENTS 15 AuM well-diversified across programs and clients Breakdown by private market programs and mandates1 Breakdown by client and program structure1 Largest client Top 2-5 clients 3% 7% Top 6-10 clients 5% Top 11-20 clients USD >850 other 7% 96 billion institutions USD 78% 96 billion (around 30
Slide 16: We are leaders in constructing highly customized private market portfolios
CLIENTS 16 We are leaders in constructing highly customized private market portfolios Strong growth in tailored private markets programs Continued sustainable growth Evergreen programs Mandates Traditional programs (in USD billion) (in USD billion) (in USD billion) 40 40 37 40 36 35 35 35 30 30 17%
Slide 17: Value creation through portfolio management can lift investment returns
17 Value creation through portfolio management can lift investment returns Addressing typical challenges of private markets investing: Investment- Cash dilution level steering Cash Optimization management of asset Portfolio build-up & FX hedging allocation Private markets Portfolio portfolio Re-inve
Slide 18: Partners Group retains high scores from UN PRI for Responsible Investment
CLIENTS 18 Partners Group retains high scores from UN PRI for Responsible Investment Partners Group's 2020 UN PRI report for Responsible Investment Partners Group Median score score Strategy & Governance A+ A Direct private equity A+ A Direct lending A B Direct private infrastructure A+ A Direct pri
Slide 19: Table of contents
SEMI-ANNUAL RESULTS 2020 19 Table of contents 1 Investments 2 Clients 3 Financials
Slide 20: Management fee and EBIT margin stability
FINANCIALS 20 Management fee and EBIT margin stability H1 2020 financial highlights Management fees1 Revenues1 EBIT margin EBIT (in CHF billion) (in CHF million) (in %) (in CHF million) +3% -9% stable -10% 682 567 623 552 130 Perf. 63% 63% 56 fees 432 390 H1 19 H1 20 H1 19 H1 20 H1 19 H1 20 H1 19 H1
Slide 21: Revenues underpinned by stable, contractually recurring management fees
FINANCIALS 21 Revenues underpinned by stable, contractually recurring management fees Revenues1 (in CHF million) 659 +4% 682 -9% 623 Revenues1 69 130 56 175 (19%) (9%) Performance fees (27%) Other revenues from management 42 51 services & other operating income 34 567 Management fees2 552 (91%) (81%
Slide 22: Management fees are expected to continue to be the main source of revenues
FINANCIALS 22 Management fees are expected to continue to be the main source of revenues Outlook on performance fees ~10% 9% 20-30% Performance fees1 5-15%1 full-year 2020 expected Management fees2 70-80% “contractually recurring” 91% ~90% 2006-2015 H1 2020 long term 1 Assuming that the market is fa
Slide 23: Performance fee potential will grow in line with AuM
FINANCIALS 23 In the mid to long term, our performance fee potential will grow in line with AuM AuM and performance fee development 800 94 96 100 ~20-30% AuM (in USD billion) of total 90 700 83 revenues Performance fees (in CHF million) 80 74 600 70 500 473 57 …translates60 Past AuM… 50 into future5
Slide 24: Highly diversified performance fee contribution in H1 2020
FINANCIALS 24 Highly diversified performance fee contribution in H1 2020 Performance fee contribution by investment programs & mandates in H1 2020 Rest (55) Top 1 • 75 investment programs & mandates 13% 13% contributed to H1 2020 performance fees Top 11-20 • Dozens of direct assets across many 15% C
Slide 25: Continued management fee margin stability in H1 2020
FINANCIALS 25 Continued management fee margin stability in H1 2020 Revenue margin1 1.89% 1.82% 1.74% 1.71% 1.35% 1.36% 1.39% 1.25% 1.26% 1.36% 1.33% 1.39% 1.38% 1.35% 1.23% 9% 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% 1.23% 1.18% 91% 2006 2007 2008 2009 2010 2011
Slide 26: We continue to balance cost discipline with investments into growth
FINANCIALS 26 We continue to balance cost discipline with investments into the growth of the business Revenues, costs and EBIT development (in CHF million) H1 2019 H1 2020 Revenues 682 -9% 623 Total operating costs, of which -250 -7% -232 Personnel expenses -201 -11% -178 Personnel expenses (regular
Slide 27: Continued EBIT margin stability; target EBIT margin reconfirmed
FINANCIALS 27 Continued EBIT margin stability; target EBIT margin reconfirmed EBIT1 margin development 80% 70% 65% 65% 63% 63% 60% 59% 59% 61% 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 H1 2020
Slide 28: Increasingly diversified FX exposure on costs expected
FINANCIALS 28 Increasingly diversified FX exposure on costs expected Currency exposure in H1 2020 others 6% GBP 9% Others EUR EUR 7% 4% SGD 47% 12% USD 27% AuM ≈ ≠ GBP Management 12% Costs2 fees1 USD 38% CHF 38% EUR/USD foreign exchange fluctuations have a greater impact on CHF management fees than
Slide 29: Our strong balance sheet allows us to realize the potential of private markets
FINANCIALS 29 Our strong balance sheet allows us to realize the potential of private markets in different economic environments Key financials (in CHF million, except for per share data in CHF) Balance sheet (as of 30 June 2020) H1 2019 H1 2020 Revenues1, of which 682 -9% 623 Management fees2 Perfor
Slide 30: Contacts
30 Contacts Zugerstrasse 57 Shareholder relations contact: 6341 Baar-Zug Philip Sauer Switzerland Head Corporate Development T +41 41 784 60 00 T +41 41 784 66 60 Email: philip.sauer@partnersgroup.com partnersgroup@partnersgroup.com www.partnersgroup.com Media relations contact: Jenny Blinch Global
Slide 31: Disclaimer
IMPORTANT NOTICE 31 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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