Partners Group preps investor restrictions amid private market fears
Partners Group is prepared to restrict investor withdrawals across more of its funds, the Swiss private markets giant said Thursday, after capping redemptions in one of its European vehicles following a surge in exit requests.
The Zurich-listed fund manager warned that the spike in client withdrawals that upended private credit markets this year now appears to be spilling over into the private equity space.
On Wednesday, Partners Group said it was halting withdrawals from its Global Value SICAV vehicle at 5%, after redemption requests hit 9.8%.
It warned that another one of its funds — a Delaware-domiciled U.S. private equity vehicle — is also set to face redemption requests of about 6% of net asset value in the second quarter. Three other evergreen funds, whose assets together total approximately $9.7 billion, are also likely to experience second-quarter redemptions of 3.5%-5%, Partners Group said.
In a statement, Partners Group acknowledged heightened volatility across open-ended so-called “evergreen” funds, adding that it would impose 5% liquidity limits in such vehicles if withdrawal requests exceed that threshold.
The rush for the exits by investors is reigniting anxiety over pressures in the global private markets industry.
“Liquidity features are designed to protect long-term investors, and to ensure that returns continue to be driven by the quality of the underlying private assets rather than by short-term flow dynamics,” CEO David Layton said.
He said Partners Group’s portfolio companies offer “substantial upside potential,” adding that, since inception, its main funds have returned more than five times initial investments for clients.
Partners Group said that about 80% of its $185 billion in assets under management are from longer-term institutional investors, with 20% from private wealth investors.
Shares in Zurich-listed Partners Group plummeted more than 16% on Wednesday, while shares in U.S. private markets mainstays, including KKR, Blackstone and Ares, also finished lower on Wednesday.
Partners Group was trading more than 3% higher in morning trade on Thursday.