Partners Group: A Beacon of Resilience in Private Markets

The private markets sector has long been a haven for investors seeking stable, long-term returns. Amid heightened macroeconomic volatility—tariff uncertainties, currency fluctuations, and geopolitical tensions—few firms have demonstrated the resilience of Partners Group. With assets under management (AuM) surging to $174 billion as of June 2025, up 17% year-on-year, the firm's ability to navigate turbulent markets while expanding its footprint underscores its strategic advantages. For investors, this presents a compelling opportunity: a company undervalued relative to its growth prospects, fueled by a robust exit pipeline, diversification across sectors, and a dividend yield poised for further upside.

Resilient AuM Growth: Diversification as a Competitive Moat

Partners Group's $25 billion leap in AuM since 2024 reflects more than just market tailwinds. The firm's strategy hinges on strategic diversification and evergreen fund resilience:
- Sector Breakdown: As of June 2025, private equity ($83.3B, 13% CAGR over five years), infrastructure ($30.6B, 17% CAGR), and real estate ($22.4B, boosted by the Empira Group acquisition) form the core. These sectors are inherently less cyclical, with infrastructure and real estate benefiting from secular trends like energy transition and urbanization.
- Evergreen Funds & Mandates: These contributed 35% and 39% of new assets, respectively, in H1 2025. Unlike traditional fund structures, evergreen vehicles provide steady inflows, reducing reliance on volatile fundraising cycles. Their growing prominence positions Partners Group to weather market dips while compounding returns.

Performance Fees: The Catalyst Ignited by Strategic Exits

Performance fees—the “high-margin crown jewels” of private equity—are set to drive Partners Group's earnings growth. In 2024, these fees surged 38% to CHF 511 million (24% of total revenue). For 2025, the firm reconfirmed guidance for 20–30% of revenue, with a $19B exit pipeline (2025–2027) acting as a tailwind. Key catalysts include:
- PCI Pharma Services: The firm's partial exit in Q2 2025, where a consortium led by Bain Capital acquired a majority stake, marked a decade-long success story. Partners Group retained a minority position, enabling it to capitalize on PCI's growth in biologics and specialized therapies—a sector riding a $500B+ global CDMO market.
- Infrastructure Realizations: The sale of Greenlink, a critical subsea electricity interconnector, and secondary infrastructure assets in H1 2025 demonstrated the firm's ability to monetize “bankable” projects in regulated sectors.

Strategic Advantages: Navigating Volatility with Precision

Partners Group's edge lies in its “transformational investing” model, which focuses on undervalued assets and partnerships with management teams to unlock value. Recent moves highlight this approach:
- Data Centers: Over $4B allocated since 2021 to firms like Digital Halo (Singapore) and GreenSquare (Australia), capitalizing on the cloud infrastructure boom.
- Healthcare & Energy Transition: PCI Pharma Services exemplifies this, while infrastructure investments in grid modernization and renewable energy align with $40 trillion in projected green infrastructure spending by 2030.

Valuation: A Discounted Opportunity

Despite its strong fundamentals, Partners Group trades at a discount to its peers. At a 1.8x price-to-EBITDA multiple (vs. 2.2x industry average), the stock reflects short-term concerns over performance fee delays. However, this presents a buying opportunity:
- Dividend Upside: The May 2025 dividend rose 8% to CHF 42.00/share, yielding 2.4%—well above the 1.5% average for Swiss equities. With recurring management fees (76% of H1 revenue) and cost discipline, further hikes are likely.
- Tail-down Mitigation: While mature programs may reduce AuM by $9–10B annually, new client inflows ($26–31B in 2025) and tailwinds like the Empira acquisition ensure net growth.

Risks, but Manageable

• Currency Exposure: The Swiss franc's strength could pressure foreign-currency denominated AuM. However, Partners Group's hedging strategies and multi-currency fundraising (e.g., 33% of 2024 commitments from North America) offset this.
• Competition: Rising interest in private markets could compress fees. Yet, Partners Group's direct investment expertise and evergreen fund durability differentiate it from broader market entrants.

Conclusion: A Compelling Buy for Patient Investors

Partners Group's FY25 trajectory is underappreciated. Its diversified AuM, robust exit pipeline, and dividend growth position it as a rare blend of resilience and upside in a volatile market. For investors willing to look beyond near-term noise, the firm's valuation discount and long-term catalysts make it a compelling buy.

Investment Thesis: Buy Partners Group shares. The firm's fortress balance sheet, secular growth drivers, and undervalued stock offer a rare combination of safety and asymmetric upside. Hold for the long term.