Partners Group Holding AG

Welcome, everyone, to our annual results presentation. My name is Dave Layton. I'm the CEO of Partners Group. I'm joined by Joris, our CFO. We'll start by giving a brief presentation. We'll then hold a Q&A on the financials-related questions, and then we'll move on to our Capital Markets Day, and we hope most of you can join us for that. Starting on page two, our platform had a very robust 2025. We generated 1.7 billion Swiss francs of management fees, quite a stable management fee margin at 1.24%. We had 12% growth in management fees on a constant currency basis and we had I think a very diversified group of assets that generated those management fees. We also saw $819 million in performance fees. That's about 32% of revenues and that was driven by strong exit activity and value creation. There's no change in performance fee guidance from what we had talked about on our last call in January. We also generated 1.6 billion Swiss francs in EBITDA. That's 19% growth year over year and quite a stable margin at 63%. You saw a lot of continued discipline on the cost management side of things from our leadership team. We also generated 1.26 billion in profit. That's up 12% year over year. And we proposed a dividend of 46 Swiss francs per share. We've delivered on our 2025 objectives in terms of new investment activity. This has been an environment where you see many firms challenged to put new capital to work. But this is a year where we saw a 26% improvement in new investment activity. 65% of that was from direct investments. We also had an increase of 47% in exit activity and largely achieved what we wanted to achieve when we set out at the start of the year. And if you remember some of the objectives that we talked about in our capital markets today last year from an exit perspective, we largely executed on that. Many of the exits that we had, the vast majority of them were also from pre-2022 vintages. There's a lot of questions about will those pre-2022 vintage companies be able to be exited, and I think we proved in our portfolio that we can drive strong results. And from a fundraising perspective, this was a very strong year. From a fundraising perspective, $26 billion organic fundraise, $30 billion of total new assets, including acquired assets. From an organic perspective, that's an increase of 22% year over year in client demand. And that was led by Bespoke Solutions. Our bespoke solutions, I really do think, differentiate us significantly in this market and have allowed us to continue to drive growth in a differentiated way. You do see that Partners Group has continued to take share, and that taking of share has even accelerated over the last couple of years. We have exceeded our prior peak 2021 fundraising this year, and we're in an industry that continues to operate below peak levels. We also have seen an increase in our investment activity that's significant. The industry has been more flattish. and from a realization perspective, you see significant outperformance in our ability to drive exits in the current market environment. I really do think we are a firm that's built differently and you start to see that differentiation really come through. With regards to those exits, one of the things that's notable here is that we saw a pickup in the value that we were able to exit these companies at versus where they were in the books just six months prior. It's about a 10% improvement in valuation from their marks at six months prior for the 10 largest positions that have most recently been exited. And that's something that I think is notable. And overall, you saw our direct asset realization up about 54% year over year. and essentially all of those exits were pre-2022 vintage companies. Businesses like PCI, businesses like Techim, like Apex Logistics. These are companies where you see meaningful transformation taking place within those platforms from the time that we invested in them. I think really our case studies of partners, groups, value creation efforts at work. Here's a snapshot of the performance fees that we've been able to generate. $819 million in performance fees. Most of that came from our private equity business, where you saw most of the most significant exits take place. But also infrastructure came in for 27% of the mix. Private credit accounted for 13% of our performance fees generated. You also had good diversification across evergreen programs and mandates and traditional programs. So 75% of the performance fees that were generated were generated by our mandates in our traditional programs. One of the things that's notable is that we have one of the most diversified investment programs that's out there. About 350 Live Investment Vehicles Running Right Now. And we had 80 different products that contributed to our performance fee generation in 2025. I think that level of diversification is one of the things that allows us to, I think, navigate the current environment and to continue to generate consistent performance fees is the fact that we don't have all of our eggs in one big fund basket. We have a very diversified set of programs. and that has really helped us. We also see that opportunity to generate performance fees increasing over the last number of years. And many of you who have followed us for a long period of time know that years ago we affected a mixed shift from more indirect investments to more direct investments. And the assets that are in realization right now are the start of a broader trend towards more direct investments that are coming up to harvest and we believe will lead to a meaningful increase in performance fee potential over the coming years. And so we have increased the range of performance fees and performance income that we expect to generate in the coming years. We've increased that from from 20% to 30% where it's been historically to 25% to 40% where we expect it to be in the coming years and believe that we're well on track for that. You see here from a fundraising perspective, we are a highly differentiated firm from a new asset raising perspective. Our mandate business is a gem. and you've seen that business emerge from a much smaller segment years ago to today a $69 billion asset base for us. And when we go and see clients, when we sit down with them, We're not selling them a fund alongside other people. We're solving problems that they have and we're building solutions. They're specifically built for that institution. We're managing oftentimes towards their NAV targets as opposed to putting them in traditional drawdown structures. highly differentiated, and you saw 72% of our assets come into those programs. Much of our evergreen business, or sorry, much of our mandate business is also evergreen in nature. which means that the asset bases there compound as opposed to tail down over time and I think this is a highly attractive mix. You've seen those bespoke solutions increase from 39% of our assets years ago to 67% of our assets today and there's a lot of continued potential for both the mandate segment as well as the evergreen segment to continue to grow. Now there's a couple of topics that are out there weighing on the industry that I want to address as CEO before moving on to the financials. The first is with regards to the private credit sector. There's been a lot of noise around redemption levels within the private credit space. We're a firm that does have a quite significant amount of evergreen assets. But interestingly, we have grown our evergreen business in a quite differentiated way versus the industry. You have seen a big spike in private credit evergreens the last number of years. The vast majority of our evergreen assets are equity in nature. Private credit evergreens is only 10% of our evergreen business. So we have 33 evergreens today. Only three of them are focused on private credit. Out of those, the vast majority of clients in those segments interestingly are institutional in nature. We have not levered those funds the way that some of our peers have been a little bit less aggressive how we've gone after that market. And so we've had five times more out in more inflows than outflows within our private credit evergreen segment of our business. So some of the noise that's weighing on I think the space is is misdirected at Partners Group. The vast majority of assets that we have in that evergreen business are equity in nature, and there is somewhat of a different dynamic taking place within that business. We actually see improving dynamics from a redemption perspective within some of our large evergreen funds, Q3 to Q4, and then we expect further improvement Q4 into Q1. If you look at the software exposure, software has been a topic that's been weighing on the space for some time. Again, most of our clients that we're sitting down with, we're building custom portfolios for them. And one of the things that they always tell us is that they are overexposed to technology themes within the public market segment of their portfolios. And they're looking for private markets to be a diversifier for them. And so when we sit down with our large clients to construct their portfolios, oftentimes they're telling us that they're looking for exposure to the real economy, not for a doubling up of exposures that they're getting in the public markets. And so as we've constructed these portfolios for our clients, we have done so in a way that deliberately underweights Technology Exposure. And so if you look at our software exposure for our private equity business, 3.8% of our private equity NAV is software direct lead assets. Now, we also purchase portfolios in the secondary market and things like that. And so you will get some exposure that's a little bit more typical to the industry as you're buying portfolios of other managers. But still there, it's only about 9.9% of our private equity exposure or partnership investments with the software asset classification. And then within our private credit portfolio, about 3.3% of our private credit portfolio is direct lending. and then you have about 6.6% of that portfolio that's liquid software. And when you translate that into a percentage of our total AUM, only 1.8% of our assets under management are direct lead software investments and again less than 2% of our overall assets under management are credit related software investments. And so even if you expect complete carnage within the software space, You're talking about basis points of return erosion, assuming that that carnage is spread over multiple years in terms of how it would impact our client portfolios. We think that this risk as it relates to Partners Group is wildly overdone and has weighed on the space kind of equally across all the different players. And you haven't seen, I think, sufficient attention on where the exposures actually lie. And at Partners Group, we have been underweight technology as opposed to doubling down on our clients' exposures. And so with that, I'll hand over to Joris, who will talk more about the financials.

Thank you, Dave. It's a pleasure to be here with all of you and let me walk you through the Financial Partners Group's 2025 financial results. I will start with our assets under management. As you have heard, these are diversified across asset classes and regions. In US dollar, our AUM grew 21% year over year. In average AUM in Swiss franc, this translated to a growth of 8%. Total revenues increased 20%. to 2.56 billion Swiss francs. Performance fees contributed meaningfully, increasing 60% year over year and representing 32% of total revenues in line with our guidance. EBITDA followed revenues, increasing 19% at a margin of 62.8%. Our EBITDA margin remains stable and in line with the five-year average of 63%. We propose a 46 Swiss franc dividend per share. This corresponds to a 10% increase in Swiss franc and a 19% increase if you look at it in US dollars. The proposal reiterates the board's confidence in the strength of our business and the solidity of our balance sheet. Now, let's have a look at our revenues in more detail. We have two sources of revenues. We have management fees and performance fees. I will start with management fees. Management fees represent most of our revenues and are recurring in nature. Management fees grew by 12% at constant currency in 2025 and 7% as reported in line with our average AUM growth in Switzerland.

Other operating income positively contributed to management fee growth in 2025.