Partners Group Holding AG

Dear shareholders and media representatives, we would like to present, express a warm welcome that you came to listen to our 2023 annual results presentation. My name is Philipp Sauer. I'm heading the Corporate Development Business Unit at Partners Group. And all of us today are very excited to share with you some of our highlights and achievements from the past year. Over the weekend, we returned from Miami where we held our annual general meeting for our clients. This was a great event with a new record. Over 300 clients from over 35 countries worldwide participated. In total, The clients in attendance represented more than $10 trillion of assets under management. We saw 45% representation from North America. We welcomed this because we aimed to gain further market share in that region. We also dedicated substantially more time in our agenda for our private wealth solutions and our distribution partners. Listening to their ambition to further increase the private market allocations of their private wealth clients provides us with enormous confidence about the future growth of our business. This is one of our more important growth segments. At the AGM, Steffen Meister, here on my right side, our executive chairman, took clients on a journey of what truly shapes the private market investment paradigm over the next decade, and that the only constant in our economy is the acceleration of change. Today, he is with us and shares with you the same perspectives as he shared with clients last week. Thereafter, we listen to Dave. He will provide us with a business update of 2023 and also with an update on the IOM outlook for 2024. Last but not least, we would like to welcome our new CFO, Joris Greflin. Welcome. He will explain our 2023 financials and give you more insights in our performance via outlook for the future. So without losing any more time, Steffen, the floor is yours.

Thank you, Philip. Good morning, everybody. It's great to have you. We really appreciate your time here. As Philip said, I'd like to kick this off with some perspectives on what's ahead of us in the next 10 years. What's the game changers for the investment paradigm in the next 10, 15 years? and what are not game changers. And I can assure you that last week in Miami, that is something very, very high on the minds of our investors and I assume also shareholders at this inflection point in this environment. So the four considerations that typically come up are around the macro economy, reset, geopolitics, and what are the potential implications on deglobalization, labor and demographics, and the next generation of technologies. Let me walk you a little bit through that. I'll do this somewhat briefer than in Miami. We don't have quite as much time. So bear with me. I'll not go through all the numbers, but you've got the materials. So the first question about the macro economy resetting, what you see here is on the left-hand side, the gray bars is fundraising that has been relatively insulated from market cycles. And also returns, that's the top line you see, is actually relatively independent. And there's a simple reason for that, and this is in the variations. So if you look on the right-hand side, what you see is a little math exercise here. If you take a, let's say, low double-digit growth asset, that creates 20% returns with a 50% leverage at 5% cost of capital. So it's a bit of bull market kind of asset financing. You bring down now the finance to 40%, double the cost to 10%, that creates a return of 17%. Now you fix the exit price, but you enter the asset at a valuation which is one turn lower, you'll be back at 20%, okay? And that's exactly what happened over the last 12 months. It's actually probably more than that. If you look at assets like... velvet care that's a specialist hygiene product business we bought at less than nine times or rosen rosen is a infrastructure inspection business think of it as robotics compared and combined with software okay that would have probably dealt with like 15 16 times like two years ago so we've seen a massive normalization of the variations and that is why we actually think the resetting is actually very helpful thing is clearly not a game changer for us What about geopolitics? What you see is clearly that so far there is no deglobalization. Everybody talks about it, but just measured by global trade, it's not there. No one knows what's ahead of us, but I mean, at least at the moment, this is not what's happening. What we clearly see is also from the headlines, there is issues around technology restrictions, there's issues around nationalism in consumer sentiment. So companies like Apple see a little bit of that in Asia these days, Huawei for quite some time. But I would tell you that that's probably not something that is a challenge for the broader market for smaller businesses unless they're super specialized in maybe certain high-tech fields. The bigger topic is probably the supply chains, okay? And what we have clearly seen is a rebalancing from, I would say, a pure focus on efficiencies towards efficiency combined with more independence and diversification. And this comes with... re-globalization, going from one low-cost place to another one, or near-globalization, coming back to home or near to home. And if you take a step back and if you think about it from a private market perspective and also from our portfolio perspective, that is anywhere between, I would say, neutral and in some cases positive. A company like Form, that's our metal component engineering business, they had a little bit of, I would say, a demand by their customers to be a bit more diversified. They just opened a new fab in Vietnam. But then you have also business like Sterling, It's a pharmaceutical contract development business, and they benefit from the fact that a lot of the large pharma firms for whom they operate want to really reduce some of the exposure to Asia, bring it back to Europe and the U.S., where they have a very strong foothold. So is geopolitics, is deglobalization a topic? Absolutely. Asset by asset, we have to look at it very, very carefully. But I would say at the larger scale, it is not something which we would see as a game changer at all. What about labor and demographics? If you take a step back and if you measure economic success by GDP, which is crude but probably the best we can do, I mean, you see that labor supply at the broad level has become less and less relevant. And what you see is in terms of outlook here for the next 10 years, I mean, it will actually be relatively marginal impact. Now, this is, in fairness, masking a little bit the fact that in some businesses, labor is actually a real issue. I mean, we had certainly one or the other company in our portfolio, physician practice management in health care in the US, for instance, where we clearly see challenges with labor. But again, here, if you look at the overall picture overall in power markets, but specifically in our portfolio, I would tell you that by large, it's much more a positive theme to be played by companies. It's positive for the portfolio, not negative. Because a lot of businesses that we own, version one in digital services or Omega, our belting businesses, they're exactly playing this theme of labor supply challenges, specialist labor workforce challenges. For instance, Omega, our belting business, they really sit in the middle of this entire manufacturing automation theme that helps companies to actually be less dependent on specialist labor in factories. So again, here it's something that we are very focused on. I mean, especially when we do due diligence of new themes and the new assets. But I would certainly not tell you that this is something which is a real game changer. Certainly not to the negative. So that leaves us with the next generation of technology. I'm sure you get every day 20 or 30 headlines and you see they span usually from a whole range from this is the end of the world to this is saving the world. And some of them like the FT quote here feel that it has no relevance. That quote reminds me a little bit of Paul Krugman's quote in 98 when he compared the Internet with the fax machine and also the economic impact. Now, the thing is, there's a lot of noise here, but if you cut through that noise, and I'll keep that a little bit short in this round here, we come clearly to the conclusion that for private markets, and for the economy overall, certainly also for private markets, certainly also partners group, the next generation of technology is a real, real game changer, okay? And that's sitting, this hypothesis is sitting on four pillars. One is we are convinced that technology, the next generation, will actually mean the next transformation of the economy, and I'll talk to that. And we believe that comes again with a reconfiguration of winning business models that comes to a redistribution of profit pools. And that's probably quite key. We believe a lot of that is happening in the next 10 to 15 years. OK, so that's a pretty bold assumption. And let me walk you through some thinking here while we believe it's not without merits, but also how we think that could unfold and what we could do about it. So I want to start maybe by addressing a myth here. You know, when people talk about change, and I'm sure you see that quote every day five times, people always refer to this like the only constant is change. And we think this is highly misleading, if not wrong, actually, because it suggests some form of a linearity in change that could translate into visibility and forecast ability. But that's simply not there. And we have seen this on and on and on. Economic transformation in the world in the socialization took 100 years. Service economy to be established 50 years. First digitization, we talk about that 25 years. In all kind of technology advancement areas, PC adoption 20 years, internet 12, mobile six years, there's an assumption that AI co-pilots will probably be broadly adopted in the next three years. And even if you go into AI, and AI is not the only of that technology that is relevant for the next 15 years, but even in AI you see a similar path from speech recognition to image to code generation to reading comprehension, it was essentially halving the development times in the last 20 years overall. So if we believe there's some merits in that assumption that we see that change continuing with further acceleration and a shortened timeframe, how does this look like? What does it mean actually for the economy, but then specifically also how should we think about it with our investment horizons that typically five, six, seven years? And I want to start maybe by looking a little bit back the last 25 years, because we feel that we can actually learn a lot. It doesn't give us a crystal ball, but we believe we can get a good sense of maybe a certain structure of how we should look at the next 10, 15 years. 25 years ago, we had two events coming together. We had the connectivity event, democratization of the internet, and we had computation power that was affordable. So suddenly, every business, even small businesses, they had a server in their basement, they ran software, they connected to other businesses, customers, supply chain. All of us had our devices. First, they were not mobile. Over time, they were mobile. So suddenly, the whole systems got connected. Every number that was shared was essentially digitized. That was the first digital integration. But the amazing thing was not just what happened on the technology side. The amazing thing is, and that was unforeseeable, if you look at all the other sectors, what happened there. Now, if you look back in the last 25 years, there was a bit of a structure to it, because a lot of these steps, they came in waves, in waves that depended on the actual technology advancements we've shown over the last 25 years. And we think that's not a bad model to think about the future. So what we have seen very recently is something similar, like 25 years ago, we saw the connectivity being replaced or added to by AI democratization. And AI isn't new as internet wasn't new 25 years ago. And we see a new generation of computation as a service. And if you take this together, it's really intelligence as a service. So a bit like electricity that comes out of the power outlet, you have intelligence as a service that is sent to your laptop, your mobile phone, your car, your washing machine, whatever. So these systems will be better in not just supporting a lot of things we do in the economy, but in some ways they will actually run these things in a more autonomous way. And you will see very soon that these systems are pretty good in kind of self-correcting. So I think directionally, we go a little bit to this self-learning autonomy that is driven by the digitization next 10, 15 years. We believe there will be, again, three phases. And we believe it's very, very important to distinguish them, especially as we look at businesses and themes and understand what is actually ahead of us. So the first of these phases we call business process transformation. And that is essentially around co-pilots in all kind of applications. So co-pilot for coding, co-pilot for a customer chat bot, co-pilot maybe to draft legal agreements, things like that. Some of that stuff is already OK today. Some of that is still not yet that advanced, but it's probably making good progress next one or two years. Now, when people talk about AI applications, 80% of the comments you see is around process transformation. Now, that's important because that's really what's happening in the first wave. But the reality is that's not the big deal. This is going from the typewriting machine to MS Word. Productivity gain is maybe 2x. Everybody will do it. You cannot afford not to do it because otherwise you just give up margin. But I don't think you get actually much advantage over peers if you do it. It's just if you don't do it, you probably just are left behind. So what's the bigger deal is probably the second topic that people don't talk so much about business performance transformation. And why is this not so widely covered? There's a simple reason. While there's a lot of activity, there's not a lot of finished products. There's not a lot of results. But don't be wrong here. If you look at the few finished products that are out there, they're pretty breathtaking. And I don't have time for too many details here, but I want to just point to one here, EcoHealth. EcoHealth is an AI stethoscope that was approved by the FDA, and it saves you $2,500 six-month waiting time for a heart condition assessment procedure in the U.S., It comes with a prescription for medication without the need for a further specialist. Something completely unthinkable like three, four years ago. So these are the kind of things that are being developed. Now, they are much more relevant because they come with productivity multiples of three, four, five times, could be more than that. And they can make a real change to a business and certainly to the way the economy will work, not just in healthcare, but in many, many other fields. But the third one is probably the biggest one, and that's probably where people least talk about, business innovation transformation. What becomes more and more evident is that these tools, new technology and AI is part of that, are extremely effective in helping scientists. I'm on the board of ATL Foundation here in Zurich, and I can tell you, I mean, I have literally every few weeks a discussion with a professor, and the big thing that's always coming out is how much the new tools have tremendously accelerated their things. There was recently an example of some research. The project was designed to happen for five to ten years. It was finished after six months. Mostly because of AI. So there's amazing things happening. So if you think about 10 million scientists today that drive innovation on this planet, and if you suddenly have a multiple of four, five, six, seven times, you increase that to 40, 50, 60 million scientists suddenly. And by the way, much, much faster scientists. So that's the highest densification of research we've ever seen. We've never experienced anything similar. So why is this so important? Well, people don't talk much about it because you don't see so much about it, but it will probably change a lot of the business in many ways. And I want to give just one example here. In this round, this is material science. In material science, we have, in the last 50,000 years, cooked things. So, for instance, if you think about energy market, solid-state batteries, you have your anode, your cathode, you separate it, you embed this in an electrolyte. And the electrolyte is usually today liquid. That's dangerous. The density of electricity is not that great, so we think about these solid-state batteries. That's ceramics or glass. These things today are cooked by a system, and you can essentially test thousands of them in a few days. So you get much quicker to the actual final test phase in these things. So that comes with a proliferation of new materials. There is application in literally every manufacturing business, every energy business, from synthetic fuels to decarbonization assets, everything you need energy storage, or everything needs energy storage. Now, why don't you hear so much about it? Because there is a certain timeline until that actually hits the market. So if you look at the last example here, it's, I think, another good example in the pharmaceuticals industry. These tools are very effective to design, for instance, new proteins, new peptides. Okay, and the thing is now it takes maybe half a year instead of four years to design them, and many more actually, but you still have the in vitro phase, and then you have the clinical phase, that's three, four, five years. So the fact is, until you see medication on the market, that still takes five, six years. That's why you haven't heard all about that. But think of it in a metaphoric sense, really of a tsunami. It's under the surface. There's a tremendous amount of activity. I mean, all these new innovations, they travel like shock waves under the ocean surface. But when they hit the industries in four, five, six years, in some cases, this will be absolutely dramatic. So this is a little bit how we have to think about what's happening. And this is how we tackle on the investment side the different themes and try to understand whether we can create a hypothesis or not in these different fields. And I'll come back to that. So going back to the question of what that means then for the economy, because you might say, well, it was always like that. Now it's a bit faster. It's not a big deal. Good companies will always be good companies. I think that's a bit more complicated. You know, looking back last 25 years again, I mean, what we said is, you know, the economy changed. You see all these headlines about change. The problem is that change is something very abstract. Some people feel associated with something maybe worrying. Some people feel it's something positive, but it's very abstract. But it's a very easy way to make change visible. That's profit pools. So just take any kind of particular area you're interested in and just run the profit pools over the last 25 years. And you see very similar pictures across all sectors. So, for instance, music industry over the last 25 years, you see five waves. complete change in profit pools. What's also interesting is profit pool comes down before it goes up again. So change and the working economy doesn't always mean that the profit pool goes actually up. The margins might go up, but the profit pool might not always go up. The question with the profit pools is then, is it the same companies? I mean, how much has it really changed the leadership position of companies? And I'm sure you have looked at this first part of this slide before. What's the top 10 companies in the S&P 98 and today? And you see that everything has changed except for Microsoft. Now, the argument typically made is, well, that's because technology has essentially had such a good run, and that's why all technology companies are up there. But to be honest, that's too simplified. Look at different sectors. At the lower part, communication services, top five companies have completely changed. Insurance that most people would actually associate with something that is relatively resilient, a little bit more boring maybe than technology or pharmaceuticals, and take out Berkshire. They don't really belong in that. That's a technical thing. Their non-insurance business is so big, they would not be part of that actually. Insurance has completely changed. And now interesting, materials. Everybody talks about the fact that materials is at an inflection point. It was boring so far. Now it's changed. Well, but already last 25 years. It has completely changed. There's no firm left out of the top five of 98. So there has been a massive change, but that was 25 years, a bit long period. And that's why we tend to forget about these things. What's the natural reaction? If you feel like something like that or similar could happen in 10 to 15 years, the reaction often, even last week, I've heard this a few times from investors, is duck and cover. We go for the resilient areas. We go for where growth is, but no change. And it's a very charming idea. I mean, I wouldn't dismiss that. But the problem is the following. It's a little bit hard to hide. This is an overview of our so-called mega themes. Mega themes are ecosystems, private equity and real assets, where we see significant growth and profit pool growth potential ahead of us, where we believe that there's something interesting happening that will create returns for investors. And I'm sure many of you have a very similar way of looking at interesting sectors. Now, the problem is, if you look at these in more detail, you'll see that many of them have this little red wave attached to it. That means that they will probably be subject to major transformation in the next 10, 15 years. There's actually hardly anything that will have no transformation. Maybe a few of those have a little bit less than that. So the idea to actually try to just bet on the other things is probably a little bit of a naive idea. Now, going to, that's my segue, I guess, on the investment side here, going a little bit to the investment approach and why this is now so relevant also for our investors and for us is the following. If you look at the top line here, what you see is these 25 years, okay, in this timeline. And the color code change essentially describes a little bit this economic transformation last 25 years. Typical investments in that period were like Odlo 25 years ago. BAT, our VacuumVolves business that we bought 10 years ago, we hold for 4, 5, 6, 7 years, and we sell it. In both businesses, we had done quite a bit of transformative work, actually. But if you look at the change of the color code in these holding periods, there's not a whole lot happening. So the reality was that the economic change during that holding period wasn't that significant. So transformation investing was really an optional thing that produced, in both cases, maybe a 4x instead of a 2x, but it wasn't absolutely necessary. That is very different going forward. Now, if you look at the new timeline here, if you assume there's some merits in that hypothesis, 10 to 15 years, look at a business like CloudFlight we bought last year, that's a digital service business. We have to assume, that's our assumption actually in our underwriting, in our modeling, in our hypothesis, that CloudFlight's clients in 28 will be different to some extent. They will have different needs, different products. They have different clients. We will operate with them differently. And our own supply chain, meaning how we produce products at Cloud Flight, will also look quite different. So in other words, Cloud Flight will go through a massive transformation, has to, to stay relevant in the next five, six, seven years. So to do that, you have to be very clear at the outset about a hypothesis of what's the winning business model, where this industry is going. And of course, you never have a crystal ball, right? You have to just do this directionally as good as you can. And you have to pace this development of the firm because five, six, seven years is actually not an awful lot of time if you assume there's a lot of change. So if you feel there's some merits in our hypothesis here, I think you easily come to the conclusion that the times when you just bought resilience or bought defensiveness, that's probably over. We're not going to work anymore. So you have to buy businesses, anchor businesses, that allow you to develop them according to your hypothesis of what's the winning business model, at least directionally. That's why you have to go. And this brings us to what was the big topic last week in Miami. That's the other two days we spent there after my introduction, transformational investing. That is a very thematically oriented sourcing approach where we define these ecosystems, where we believe we understand them well enough to actually build a hypothesis. for the industry for the winning business model and then once we own a bad asset, I mean through this entrepreneurial ownership being very active in pacing the value creation initiatives and the steps to actually go through that winning business model journey. So that was kind of the main part of the introduction. I want to add maybe a few considerations on the scope of the industry and maybe some of the public private market dynamics that play a little bit into that to some extent. Private markets today account for about $15 trillion of assets under management. You see the split between the different asset classes. This is just the latest information that's up from about $12 trillion when we talked about this the first time in this round two years ago. We have last year given a little bit of a journey or shown a little bit of a hypothesis of where we believe the additional money in the next cycle is coming from. And I think we clarified that not only existing investors, but maybe even more so new investors, new type of insurances, traditional investors, money market firms, traditional large money asset managers will probably contribute quite a bit towards that $30 trillion maybe off the next cycle. But there was always the question in the room, can we actually invest $30 trillion, or is the industry actually, from an asset perspective, significant enough to actually provide opportunities here? And I think the answer is very clearly yes, and I want to just give you, just very directionally here, some numbers. So private equity, we assume that growth will come down a bit, actually, but that's also from a relatively high base in the meantime, about $20 trillion. It's clearly still more than GDP. And why is that? We think there's three reasons here. One is businesses that don't see a future as a six, seven, eight billion dollar business in the midterm, they don't do an IPO anymore. They should stay private in most cases. Even those businesses that see themselves being on a track to maybe six, seven billion, and they would actually do an IPO at one stage, they might IPO 20%, stay for a while, maybe the asset is still owned by private markets in the majority for three, four years, so the whole process is much slower in the meantime. And third, you see clearly a next wave of divestitures. In this environment that we just talked about a minute ago, you will clearly see a lot of pressure on many mid-sized firms, 20, 30 billion dollars, that cannot afford to have four areas of focus. The world is just too complicated and too fast for that. And very often private markets will be the beneficiaries here. In infrastructure, it's a bit of a similar picture, maybe a bit a different driver. We see that infrastructure today or next generation infrastructure, as we call it, these new platforms, whether that's social decarbonisation or digital data centres, for instance, is typically built in private markets. It's not done by the government. But at one stage, of course, I mean, they will have a certain size when they will eventually go to the public market again, because that's the better holders for some of these assets of a certain size. But in the meantime, there's so much need for the building that we believe that the growth will actually stay quite high in infrastructure, higher than in private equity. In real estate, it's a bit of a similar picture. The growth will probably stay relatively high. It might surprise you because you have probably seen last year was a very tough year for real estate, and we'll talk about that. You know, we had in our portfolio great operational results, but the pure valuation side of things, cap rates and so have clearly gone up, right? So valuations have come down. Now, the thing is, there's a reason for that because there's the biggest ever transformation in real estate going on. That's driven by three things. One is the new workforce transformation. It's new living trends. You know, people cannot afford houses anymore. All of these things. I don't go into details here. And there's certainly a lot on the logistics side that is not yet done. So all of these three will mean a lot of transformation in real estate. That transformation historically has never been done in the REIT market. or in pension portfolios. That's usually happening in prime markets that serve a bit as a conduit for these changes before these assets are sold again to REITs or to pension funds over time. And then finally, on the credit side, again, here we believe that the growth will probably stay relatively high. One reason is simply because it grows with the private equity context, but there's two other areas here. That's market share wins. Market share wins from the banking side, we believe, especially in Europe, actually, in the next 10 years, which is very bank-heavy on the lending side, but then also from the public market side, which will add to that higher growth of credit. So last work on public markets. I mean, there has been also in the last year from our investors, a lot of questions around how should we think actually about the role of public markets and kind of the interaction between private and public markets, you know, because we talked a lot about the fact that small businesses stay private and these kind of things. So I think we're an interesting inflection point here where you see actually a new area of, I would say, a little bit of a coexistence, a very synergetic coexistence between public and private markets. I don't think it's a competition anymore, actually. Small businesses, one, two, three billion dollars, they simply stay in private markets. Unless they have a clear valuation arbitrage in public markets, maybe for growth capital here and there, for some fancy spotlight company, but that's probably more the exception than the rule. But there's a certain size, you know, and forget now about the bull market 21 when even 10, 15 billion dollar private market business were sold in private markets. In a more normalized environment, I think we see that companies that will eventually go to that five, seven, 10, 15 billion dollar kind of size, they will start to do an IPO. Maybe 20%, 30%, as I said before, they will do it slowly, carefully. The interesting thing is that IPO will often, even if it's a primary issuance, need or the capital will be used to repay the debt on the private market side. So it's not the public markets will actually finance the real economy, that happens actually in private markets, but it's just the ownership structure is much, much better in public markets for some of these assets of that kind of size. And then you have, as we said before, a lot of the large companies that will divest and the assets might end back in private market. So very, very synergetic going forward. The kind of ironic thing about that is, if you think about where private market comes from four years ago, I think the public market IPO activity will be driven by a very large extent by proud markets, VC, growth capital, and buyouts on that path. And then very similar, we discussed before, infrastructure, next generation will be built in proud markets. At 10, $15 billion, we have, for instance, data centers that have now the second funding round, 10 billion, so they will eventually be like $20 billion assets. Prime market is not a good place for that, so they will eventually be put in some form of REIT. I think there's a bit of like a new generation of large-scale utilities actually coming. So we saw a lot of utilities spinning off, disappearing, or being reduced in size, becoming more consumer businesses. I think now you see actually a next generation of infrastructure utilities that will be brought to the market next 10 years. And then we discussed about real estate before. So I guess what I want to leave with you is, first, private markets continue to outgrow public markets. We didn't go through the numbers here, but you might have seen that yourself. IPOs were down to about 10% of 21 levels. Private market, we'll talk about it, down maybe 50%. So much, much more active, actually. Fundraising in private markets last year was three times as much as global equity issues. So we see that gap actually widening last year. We believe the big thing ahead of us, certainly from an investment perspective for private market firms like Partners Group, is actually this change that's coming with technology. So it's not about the technology per se. It's like the last 25 years about what's happening on the economy overall with that trigger through that next generation of technology. We believe transformation investing is the only answer to that. And we are not worried about the investment opportunity set with $30 trillion. So we should probably have enough interesting assets that we can invest in the next years. So I realized that was relatively fast, but I thought we want to give you a little bit of that overview too that drives a lot of our thinking, how we think about businesses, our teams, maybe on the companies, consideration, all of these things. So thanks for bearing with me.

Thanks, Stefan. And you can see from those remarks why we've put so much emphasis over the last number of years on transformational investing. This is not a passive investment activity. This is truly finding businesses that we believe that we can transform to maintain or to obtain leadership positions. You'll note that we have a little bit of a updated look and feel as a firm. We used that client event that Philip talked about last week as a catalyst to launch this update. Same firm. One of the things that we found is that the people that spent time inside of our walls, the clients that really knew us, many of you that have known us for a long time, walk away from those visits and say, that is a different kind of organization. And as we looked at our company materials, they could feel perhaps a bit corporate. and a bit one of many. And so we have updated our look and feel to reflect the differentiation that is in fact present within our organization. We are built differently, have a different origin, have a different mindset, have a different organizational structure. And that gives us the ability, we think, to transform these businesses in a way that we've outlined. It gives us the ability to solve problems for clients in a way that's unique and special. And we also build careers in a very different way than many of our peers. So you'll see that reflected in many of the things that we talk about. 2023 was a down year. for our industry. Indeed, if you look at activity levels this last year versus peak activity in 2021, across the different categories of performance for our industry, generally measured by capital raised, investment activity, and exit activity, we saw things were down meaningfully from the peak. At the same time, it also hasn't fallen completely off a cliff. Today we have activity levels that are on par with the activity levels that we saw in 2018 and 2019. And we, in fact, have taken market share again this past year from public markets. One area, though, that is a meaningful point to note is is that distribution activity, cash sent back to investors this last year, was at a trough point, unlike many years that we've seen in the past, comparable really only to what we saw in 2008 and 2002. Now, it's not the case across asset classes. Our experience was infrastructure and credit, was much less dramatic than that, but private equity and real estate certainly followed that pattern. This was the driest year from a distribution perspective that our industry has seen in some time. And indeed, that did have an impact on things like performance fees. However, we continued, I think, to demonstrate a lot of resilience. We raised 18 billion in assets last year, had 8% asset center management growth, The vast majority of assets under management that we hold today are in bespoke client solutions, something that's very unique to us. And in fact, the incremental funds raised this past year were at 72% of our new asset mix was in bespoke solutions. I think that's an important point of our differentiation. And this past year, we actually had the strongest year that we've ever had for new mandates. These are all important factors that have helped fuel, I think, our historical growth rate, and we think our growth rate moving forward, which as we look into the future, we see every bit of opportunity that we've had in the past to continue to grow our asset base at between 10% and 15% per year. This past year, in addition to the 18 billion in funds raised that we talked about, we invested 13 billion dollars into new portfolio companies. We also had about 12 billion in exits. Now, the vast majority of investment activity that we undertook this past year was direct investments. This is a type of market environment where we really want to own the underwriting process and own the risk assessment. We felt that that was the right thing to do. And we do think that that investment activity has the potential to generate some really attractive and strong returns. We've had somewhat of a correction in valuations. We talked about that on our last call, and Stefan referenced that in his remarks as well. And we feel like the entry points into many of these new platforms that we've invested into in 2023 are quite attractive. And so we think that 2023 has the potential to be a very strong vintage year. Many of these new positions that we put into the portfolio this past year were born out of these thematic efforts where our team has spent a year, two years, three years digging into a particular subsector, getting really, really savvy, really, really smart, and coming up with a thesis on the best way to play that space. And we think that these are some really attractive parts of the portfolio. Within our private equity business, we had a solid year from an operating results perspective. We saw double digit revenue and earnings growth this past year, relatively stable margins. If you look at the distribution of outcomes for our exited investments, they've historically generated strong returns. We've had 91% of our exits that have generated north of a two times return for clients. And indeed, it's a up and down market environment, but we feel like if we can consistently compound earnings at a double digit rate, we can earn solid results across the cycle, regardless if it's raining outside or not. Infrastructure has a slightly different return profile. We give up some upside. for some downside protection. In fact, we've never had a exit on the infrastructure side below a one and a half times result. uh... now we're not investing into treasuries for earning double-digit returns here and we are taking risk and so i'm sure we'll see losses in the portfolio at some point in time uh... but this is just to illustrate a slightly uh... more uh... uh... capital protected investment philosophy where we really focus on downside protection you give up some upside in order to have those contracted revenues. Again, strong operating results out of the infrastructure portfolio this past year. 150 different value creation initiatives that are going on across those platform builds. Within private credit, we're not trying to be everything to everyone. It's actually quite a selective process for us. We decline about 90% of the opportunities that come through our door. And we focus on picking the gems out of the opportunity set that we see. As a result, we have, I think, a very attractive underwriting outcome, very, very low loss rates. We've had solid outperformance versus the US loan index and solid returns in that part of the business. Real estate this past two years has been challenging for the real estate market. Indeed, there's no segment of the private markets that's more sensitive to rate changes in the real estate market. It is the most capital intensive of private markets asset classes. And while we're quite pleased with the underlying portfolio performance, we've had NOI growth and we've had occupancy improvements across the portfolio, We mark these assets as if we were going to sell them today. And we had a 13% loss in the real estate results as a result of those updating the marks on those portfolios. Now, I think that this, we tend to under-promise and over-deliver, and this kind of take the pain this year and then build back from there is what we've done in that, and I think it's the right thing to do. If you look at the growth that we've had historically, we have had a unique approach to growing our business. We have largely done that by providing custom solutions for our clients. Our bespoke solutions, which include mandates and evergreens, has grown disproportionate to the rest of our asset base. Traditional fundraising has grown at about a 6% growth rate historically. Mandates grew at a 19% growth rate, and evergreens at a 20% growth rate. That means over the past 10 years, mandates and evergreens have increased by six-fold, and traditional funds have increased in two-fold. We are one of the most diversified platforms out there within the private markets. We have today 350 live investment vehicles running. with I think one of the most diversified offerings out there in the market. This truly is a differentiated profile of programs, and that diversification comes through in performance fees. We had over 90 different programs that contributed to our performance fees this past year, and also with regards to track record diversification as well. Now, on the mandate side in particular, I mentioned that this was one of the strongest years we've ever had from a conversion perspective on mandates. And why that's important is because a mandate relationship is a very sticky, very embedded relationship. A new mandate client that just signs up with us, we would expect to grow by about 3x over the life of that relationship. Indeed, that's what we've seen happen historically. And that happens a couple of ways. Number one is their portfolios grow. They tend to consume more services from us. 81% of our mandates have multiple asset classes housed within their mandates. And it's not uncommon for us to start a mandate relationship with maybe one or two asset classes, and then to expand that relationship over time. We've been doing mandates since 1998. We have over 100 mandate relationships, and we build differentiated mandates. A lot of people who talk about custom solutions, but they largely use their limited partnerships from the different parts of the business as the building blocks for those mandates. We do line by line allocations for our mandate clients and we give them the ability to steer their portfolios in a more dynamic way. It really is a differentiated solution. In addition to that, we're a pioneer in democratizing private markets with evergreen solutions. We have a longer track record in doing that than just about anybody and we have more coverage within Evergreen Solutions and within the Wealth Channel than just about anybody. We think that this is a great tool for individual investors to get broad diversification and to get their capital at work and their capital compounding. And if you look at the growth opportunity within Evergreens, we think we're very, very well positioned to capture more than our fair share of that. In addition to the asset classes that we've built Evergreen Solutions in historically, One new topic that we're excited to build new evergreen solutions in is around royalties. Private credit has been such a huge topic the last number of years. There's been a lot of interest, a lot of capital flow into it, good returns where you could get that capital to work. But I think a lot of people have realized they have a lot of undrawn commitments within private credit. Transaction activity has been at a relative low point even though demand for credit has been high. And so you start to see capital looking for alternative yield or alternative credit options. I think infrastructure is a big beneficiary of that and royalties has the potential to be a big beneficiary of that as well. And so we're going to build a royalties platform in true partners group style that's unlike other offerings that are available out there. If you want to invest into royalties today, you're largely investing into niche products. A music royalties fund here or a pharmaceutical royalties fund there. And we're going to build our clients the ability to get relative value exposure across royalties topics. And we're going to do that with direct positions where we can drive alpha in the portfolio. We use secondaries to get interesting exposures built for them over time and primary business in order to cover all the bases within that category. We think that this is going to be a highly differentiated partners group style offering within the royalties market, not a niche offering, but broad relative value play, and we're excited about launching that. We launched that last week with our clients in Miami, and I think there's going to be a lot of demand for that. As we look out into the future, we reaffirm our fundraising guidance that we shared a little while ago that we expect to raise this year between $20 and $25 billion. As we look across the fundraising results from this past year, highly diverse from a geographical perspective. And indeed, when we look out into our pipeline of opportunities, similarly diverse. We are not a one trick pony who has one set of clients in one region that we're dependent upon. We really do have a broad set of clients that span categories of investment and span geographical location, and that gives us a lot of comfort in our ability to meet our objectives. As we look out for this twenty to twenty five billion in client demand, we also provide guidance on tail downs. We have a lot of visibility around tail downs. We expect for that to be between eight and nine billion dollars this next year. We're no longer going to provide guidance around We're no longer going to provide guidance around redemptions. I think in doing so in the past, number one, we didn't have that much perspective on it Anyway, in a really rocky economic environment, redemptions will be high. In a benign environment, they'll be relatively low. But also, I think it created a misperception in some people's minds. Some people looked at the redemption guidance and felt like there was some form of a decay rate on these assets. In fact, that is not the case. As their name suggests, these are evergreen structures that tend to compound over time. And what we've found is that performance and redemptions largely net themselves out, and we have not seen any form of material decay within those evergreen solutions, even through some pretty volatile times over the last couple of years. And so we're going to... moving forward, not provide guidance there and just assume that the two net themselves out over the long run. And we think that's largely the right way to think about it. We don't talk much about sustainability And our ESG initiatives in this session, we do have a separate presentation for that. Our sustainability report comes out on April 24th, and we'll have a separate call for those of you that are interested in that topic. And with those messages, I'll hand it over to Yoris for the financials.