Partners Group Holding AG

Thank you very much. Good morning, everyone. Thank you for joining us for the 2026 interim results. I'm Dave, the CEO of Partners Group. Joris, our CFO, and Steffen, our chairman, will also present during the prepared portion of this call. We're hosting this call from our London office, and I've invited some select investors and analysts to our office for this call. Welcome. We also have a handful of other executives from the firm, including our incoming co-CEOs, and there could not be a more capable or ready set of executives than the two of them. And they'll be available for the Q&A portion if needed. Let me start here with the headlines and the key business updates. This was a strong first half. Fundraising was solid, $16 billion of new assets. That's up 31% year on year. We've been raising private capital now for 30 years. and this was the best H1 from a fundraising perspective that we've ever seen with record client demand. And on that basis and on the pipeline we currently see from across our increasingly diversified client segments, we're reconfirming our full year fundraising guidance. Management income came in at 905 million Swiss francs, that's growing 12% at constant currency. EBITDA margin was solid at 63%. Eva Da with 706 million Swiss francs. This margin highlights the predictability and stability of the underlying business. And on the portfolio, our more recent vintages in particular show strong momentum, which is the basis for value creation and performance in the years to come. You know, speaking about the last couple of years, I think it's notable that we raised $80 billion since 2023. And again, with a record first half in 2026. Now, looking at the bigger picture on the left side, we see that the overall industry fundraising is down about 15% since 2023, and we're up roughly 50%. And that's market share that we have gained during a difficult environment. On the right, you can see what drove it. Those share gains are diversified across asset classes. Private equity has raised $28 billion during this time period and is ramping up its next flagship fundraise. Credit has been strong. Most recently, we had record closing for our direct infrastructure fund, which closed about 50% higher than its predecessor. Across these more recent fundraisers, we've been particularly pleased with the healthy mix of new and existing clients. Again, this is market share that we've taken during challenging fundraising years for the industry, and these have potential to be some strong vintage years. At least they're off to a very strong start. On the next slide. As we mentioned on our last call, H1 was a highly selective period for us for new investments. However, deployment has accelerated into the second half. We've signed $5 billion of additional investments during July and August. Our core investment strategy remains unchanged. We deliver value to clients by identifying assets where we have deep thematic conviction and implement the value creation plan to drive transformation. Last year, our private equity team screened over 2,000 assets and only transacted on about 1%. We remain highly selective but are increasingly excited about the opportunities that we're finding. Five asset classes, five distinct strategies, and a dynamic set of investment engines supplying content for our clients. Next slide. This slide highlights some of the reasons why we believe that these more recent investment years, again, where we've been taking share with 80 billion raised in a material amount already invested, they have the potential to be strong vintage years. The operational performance of our direct equity portfolio from 2023 onwards is back to double-digit growth. Recent infrastructure and real estate KPIs are also solid. This is value creation and operational success, which ultimately lays the foundation for future performance Next slide. Among our clients, we're known for delivering consistent returns throughout cycles. We had a handful of idiosyncratic topics in the portfolio this period, coming out of the 2021 and 2022 time period in particular, but we believe that we're on track to achieve a net TVPI of over 2x in five of the last six vintage pools. Now returns alone are not the only factor that's important for clients. As an industry, we've been through several periods of limited distributions, and we've received good feedback from clients on our consistency of our distributions. We're proud to have delivered distribution levels above what investors have typically seen during the last few years. Next slide. It's a similar story for infrastructure, but with even stronger recent vintage performance. top quartile performance across a number of key vintage years. And again, here, our net DPI runs ahead of the market for that 2018 to 2020 vintage pool in particular. And these results help support the recent close of our largest ever direct equity or direct infrastructure strategy. Next slide. We remain highly confident in our ability to deliver on our full year fundraising target, which we established at the start of this year. and interestingly, our growth is coming from a much broader base of clients and investment strategies than in the past. Looking at these client segments on the left side, we're more diversified today in our fundraising than we've ever been. We have many different cylinders helping us to drive our client solutions engine. Zooming in on just a couple of areas here, looking at consultants for example, we have really invested into that channel, into those relationships. and this has been important to some of our recent successes. If I look at one of our recent flagship fundraisers, for example, we saw an increase of three times in the number of consultants that advise clients to invest with us and that helped to drive a very healthy level of demand from new clients into that strategy. Asia and the Middle East, we've seen a pickup in activity here. In the last two periods, we've closed more than five Asian mandates. We have a unique value proposition as we're able to construct tailored mandates with a specific geographical allocation for each client. And that's a region that really appreciates this feature of our mandates in particular. And insurance is increasingly relevant. Let's do a deep dive on insurance on the next slide. Some of you may recall that we've worked to broaden our mandates over the last couple of years and to make these customizable mandates. available to an even broader set of clients. We've lowered the minimum size for mandates, and we've broadened the number of client coverage professionals capable of establishing new mandates. And insurance clients have been some of the most eager adopters of these flexible structures. Insurance clients are some of the most complex in terms of regulation and capital requirements, and traditional fund structures have not been particularly helpful in addressing their needs. We've seen opportunity across four main insurance segments to provide PG-style solutions that are built for purpose for insurance company needs. They often allow insurance clients to dynamically shift allocations to meet their strategic and their tactical objectives period to period. We've also successfully expanded our rated fund offering in the U.S., closing several vehicles that support insurers' needs for greater capital efficiency, paired with strong risk-adjusted returns. Our solutions here are sometimes also differentiated because of our ability to deploy meaningful capital at the onset of a rated vehicle investment period, providing near-term efficiency relief and investment return. We could foresee many of these clients becoming long-term partners, and we have the ambition to quadruple our insurance AUM to $100 billion. That's an incremental $75 billion by 2033. and that'll be an increasingly relevant building block to help us achieve our 450 billion AUM target. And with that, let's shift our focus to the financial update. Joris.

Thanks Dave. Let me now connect the strategic progress you outlined with the financial performance that we delivered in H1 2026. The key message from this slide is that our financial profile remains strong. We showed double digit management income growth in constant currency. We improved the profitability in our management income. Management income EVDA grew by 15% year-on-year in constant currency, with the margin rising to 63%. Our overall EVDA margin remained in line with our historical average at 63%. So taken together, our half-year results show resilient and high-quality earnings profile, continuous growth in management income and profitability, and stable overall margins even with lower contribution from performance income and adverse ethics impacts. I will now go through the key drivers in more details starting with the revenues on the next slide. Now management income represented 81% of our revenues in half year one 2026. It grew by 12% as constant currency in H1 2026 and 6% as reported in line with the average AUM growth. Thanks to the successful closes of our direct infrastructure program and private equity secondaries program in H1, late management fees, which is part of other operating income, came in very strongly and contributed positively to our management income growth. Let me talk about our management income margin on the next slide. We are a diversified platform. Our managing income margin has shown resilience over time in changing markets and despite ethics conditions, evolving within our historical bandwidth of 1.18% and 1.33% since the IPO. Slight variances between years may be driven by the timing of when fees are activated in an investment program or when we realize transaction fees and how our mix in product and asset classes is influencing our recurring management fee. In H1, We again demonstrated that we are within the bandwidth with a stable management income margin at 1.24%. Let me briefly speak about the FX impact on the next page. As I told you before, we grew our management income by 12% in half year one 2026 on a constant currency basis. Now looking back further, this is in line with the growth rate we have achieved over the last five full years, removing the FX effect. This highlights the consistent growth of our platform's recurring revenue base. A double-digit management income growth rate at constant currency has been and will be our continued goal for the mid- and long-term, even though there may be temporary deviations in periods from time to time. Now let me turn to the performance income on the next slide. With the mandatory adoption of the new IFRS 18 standard, the performance income is a combination of performance fees, the main driver, and other performance-oriented income on our assets on the balance sheet that are directly attributable to our private markets business. In H1 2026, we generated 233 million in performance fees, highly diversified across asset classes and strategy, leading to a performance income representing 19% of our overall revenues. Private equity, as our largest asset class, continued to contribute the most at 48%, while infrastructure accounted for 40%, reflecting the increasing share of infrastructure AUM of our platform. Across both asset classes, performance fees were mainly driven by direct exits from our pipelines, This clearly demonstrates that our own realizations are above the industry overall. We are currently in the sales process of a number of direct assets, with some being quite sizable investments. While we expect attractive outcomes for our clients and shareholders, the actual closing of the realizations may slip into next year for some of them. This brings us to guide towards a range of around 20 to 25% for 2026. Looking at our current exit pipeline of roughly 75 billion US dollars that we are actively working on, we are confident to generate performance income of 25 to 40% of our revenue over the next three years and beyond. Let me now move to operating costs on the next slide. One of the points that as the CFO I am most happy about was the solid growth of our management income EBTA and margin. This is a direct result of cost discipline in our management income funded expenses which are fully in our control. Our performance income related expenses are variable and are a direct reflection of performance fees during the period with up to 40% of performance fees allocated to employees. This resulted in 706 million Swiss francs of EBTA for H1 2026 at a margin of 63% as shown on the next slide. Our profitability remains strong and best in class across the industry. Over the last five years, our EBITDA margin has been always above 60%. This is a range I am also very comfortable with going forward. Let us have a look at our profits and balance sheet on my final slide. In H1 2026, we generated a net profit of 502 million Swiss francs, which was flat year on year on a constant currency basis. This translates into a return on equity of 55%. As you have seen, we have generated strong operating cash flows in H1 2026, adding to our overall liquidity of 2.9 billion Swiss francs. Now, given our financial profile, We remain confident in our ability to paying dividends that are stable or growing year by year. This brings me to the end of the financials update. Let me now hand over to Steffen.

Thank you David and Joris. Good morning everybody also from my side. So let me finish this presentation part of the session this morning with a couple of high level perspectives and let me start maybe with Some thoughts on the H1 financials and like the short midterm outlook. Maybe moving to the next slide, please. I think it's important to recognize that the environment still is not straightforward. I mean, we have political uncertainty, geopolitical macro uncertainty, big thoughts of public markets. As you will recognize, there are priced imperfection, which is a little bit hard to reconcile with the environment, to be honest. And against that backdrop, I think we can only conclude that the first six months financial show that our business has just become extremely resilient over the last few years. But maybe more important, if I look at the four, I would say, key operational dimensions of our business, that gives us a lot of confidence for the midterm. So these are one, the operational growth in our portfolio, and Dave talked about that. We see for a very big part of our portfolio, especially the younger vintages, we see extremely good growth rates. That will produce very good outcomes for clients in the long term. The second one is the investment pipeline. There wasn't a shortage of investment pipeline for the last 12, 24 months. You know this. But we were clearly cautious in the last six to nine months specifically at a time when, you know, we had these uncertainties and valuations were high, bid offer spreads were high. Here we clearly see some normalization, some more realism coming in. We've signed just $5 billion in the last few weeks. We have a good pipeline for the next few quarters. We're quite hopeful to realize on these investment opportunities. These are great businesses. They're reasonable. They're not cheap. They're at reasonable prices, but it's businesses we really want to own. We know exactly how we want to develop these businesses. The third one is the exit side of things. Again, here, I mean, there's no shortage of successful business that we can sell, but also here we clearly see an environment which makes it easier to advance in these exit processes, and we should see a number of really nice exits in the next six to 12 months. As Juri said, if you sign contracts in September, October, there's a good chance that they slip into next year. We'll figure it out. But, you know, for us, the client results is our first priority. And so we'll optimize these exits in a way to optimize the results for clients. And that will certainly be beneficial for shareholders in the long term. And maybe as a fourth point, I mean, I really want to stress that it's not just about good fundraising or record fundraising. It's about market share that we win in a very deliberate way. In segments that we decided in the last two or three years to strengthen, this is our teams in Asia, in India, for instance, in particular. It is in the Middle East, not only in the client side, also in the investment side that we build up there. I would say, broadly speaking, with some wealth fund coverage, it's on the insurance side, and Dave did a little bit of a deep dive there, and on the consultant side. These are the segments that we expect to grow faster than, I would say, the more traditional pension fund sectors in Europe and the U.S. in the next few years, and this is where we think we are really well positioned. So if I look at a short to mid-term outlook, overall it's fair to say that the activity in our industry is far away from the peak levels that we have seen maybe a number of years ago. We're not back there. And everybody in the industry has their share of topics to work on, including partners group, and we've been very transparent about that in our July update. But clearly, if I look at the four dimensions here, We have all the confidence that in the midterm we actually gain speed and we really are on our track to achieve our 2033 vision that we have laid out to you one or two years ago. So moving a little bit from the short to midterm to maybe the mid to long term outlook, if I can ask you to maybe change the next slide. Let me talk a bit about investment strategy and give an update here. So why is it important to talk about that investment strategy and that outlook? This is again, I want to reiterate that very strongly, because our industry will see fundamental changes. We will have a profound economic transformation ahead of us in the next 10 years. There's no doubt about that. No one knows exactly how the industry and how the world looks like in 10 years. I don't think we ever had that actually in history, that looking 10 years ahead, there's such a lack of certainty in the outlook, maybe except for peace of work. But we have a pretty good hypothesis how we should think about this unfolding of that economic transformation to happen and how we should react to it in different asset classes. So I don't want to dwell on that too long. We spoke about that on a corporate day. But just to recall, we see there is three waves here, you know, that will bring this transformation. In the middle of the first wave, that's the one which is actually the most irrelevant one. It's about using some of these new technologies to just become more effective, okay? The second wave is about to happen for a number of sectors. In some sectors, this will probably be out there three, four years from now. This is when we go from support systems to much more autonomous systems and agents, have a much, much more fundamental impact on the businesses. And then we shouldn't forget that there will be a third wave. There has always been a third wave in business model transformation through economic transformation periods. And the third wave is really about these new scientific methods, complete reconfiguration of ecosystems and business models. That's in most cases only starting in the 2030s, but that's still within that 10-year period. So think about these three waves a bit like the, I would say, intense period of industrialization to 100 years, but essentially happening in 10 years. So we believe that these three waves will give us enormous opportunities, and we have clearly defined key focus areas across the asset classes, and I want to give you a little bit of an update of what we're doing here and how we're preparing for that. We can immediately move to the next slide here. So if I say these are the immediate focus areas, important to acknowledge that this is not the only thing we're doing in these areas. I mean, this may be defining 50, 60, 70% of the focus. We are nimble, we are opportunistic, so there will be certainly interesting areas also around them. So clearly private equity, the main story is that there will be hardly any business that can succeed without business transformation. Very different from the private equity industry in the last 20 years, when I would argue that 90% of the investors, they were looking actually to buy businesses, do more of the same, slightly more efficient, scale it up and finance it in an attractive way. This is a very different business going forward. How do we respond to that? We have built over the last few quarters a team of about 150 AI experts, internally and externally. We have our existing, but similar sized, bench of operators, internally and externally. What the next few years is about is really marrying the digital transformation capabilities with the operational transformation capabilities. The big difference is going forward, there isn't anything like a digital transformation that is separate from operational value creation. This is one and the same across the different verticals and dimensions. This is what we're working towards. now started to give regular updates on what we do on the portfolio company side and will continue to do so to give you a bit of a sense and make this more changeable. I believe that we will create absolutely a leading effort in that space. On the infrastructure side, if again we look a little bit at the future, of course we'll still have roads and bridges and I would say the more traditional kind of infrastructure. But a big part of infrastructure investing is not going to happen in these areas. It's going to happen in, I would say, a very interconnected are playing between power, data, mobility, logistics. And it's this interconnection that is needed because it's the efficiencies that you need to create between those, A. B, it's the advanced technologies that change year by year that you need to use actually to build the best next generation utilities. And therefore, the next generation infrastructure is really a combination of, I would say, traditional project finance, It's private equity, it's in for asset management, and it's sort of business development. This is exactly the team we have built up. We've built several of these platforms. We're in the process of buying two, three additional platforms just in the next six months. We believe that we have built a team here that is second to none in building these next generation utilities. We talked about private equity, private credit at our Thank you very much. AI and data centers and chips next year. That's not traditional private credit. So what we are focusing on in this world of bifurcation that's coming with this transformation of the economy is really PE style, entrepreneurial style of credit underwriting. In the extended middle market space, we're building this out in the U.S. We already have a leading team in Europe. We're building it out in Asia, and we add these adjacent relative value strategies around it. That's our focus, and that's why we're growing quite heavily also in private credit. In real estate, I think we see a similar transformation as in infrastructure. It's also a real asset class. Now, in real estate, historically, I guess we had a kind of a horizontal layering of the value creation between the planning and engineering and the development and the real estate services. The future will be a complete vertical integration between exactly all these aspects. Why is that? A lot has again to do with data, with technology, with a very dynamic behavior of tenants and buyers of these assets, where the time when you build something is final. These times are completely over. And this is where we decided to buy Empira, our first large M&A transaction, which is very successful. It was a modest-sized business, but with an incredible technology platform. This is now really bearing fruit. This is what we're expanding. We're leveraging. That's where the growth is coming from in real estate that we've seen in the last six, 12 months. And we have a similar effort going on in the industrial sectors platform. Then on the royalties side, you know, we have also mentioned that for a while. Royalties is a financing tool first and foremost, like private credits. And I think what we see is similar to private credit 20 years ago. We see that royalties will expand beyond the more traditional areas of focus. like IP ownership in pharmaceuticals or in exploration and things like that. Like in private credit, we expect royalties to have applications across all private equity sectors but also across infrastructure and other real asset sectors. We're building up this heavily and we clearly want to be a leading institution when it comes to royalties financing. So in the mid to long term, I think the world in private markets or industry will look very different. and clearly there's uncertainty how that exactly looks like. But I think we have a very clear hypothesis. We have a clear focus area. We know what assets we want to buy. We have a very clear conviction how we want to develop these assets. And I think we have a real, real good team to do that. And maybe that team is sort of the key word, the segue here to talk about the last topic. This is our leadership rotation. Now, whenever I use that word rotation, I know the reaction sometimes is, I mean, rotation is a strange term when it comes to a successful CEO that is sort of stepping down and, you know, not continuing that function. Because most companies, if that happens, the CEO would, I don't know, go on retirement or competition or whatever. That's not PG style. You know, we have much more as a tradition or rule than the exception that, you know, successful teams isn't firm. When they step back from their functions, they usually continue in other functions, other key roles actually in the firm. I'm very happy to announce this kind of rotation again today. So Dave Layton, after nearly eight years now, as a great CEO, successful CEO, you built with your team that resilience in our business, is going to transition in another role back into the investment side of things. and becoming the, well, I guess most senior person on the investment side of things as the CIO and chair of the investment committee. Now, many of you will know that Dave, before he became co-CEO in 2019, was actually instrumental in building up our private equity franchise over many years. He led it over many years, so that's why I'm very excited, actually. The board is very excited to have Dave in that new role from January 2027. Now, importantly, Stefan Schäli, our CIO today, René Wiener, our Chairman of the Investment Committee, again rotate, so they are not leaving the Investment Committee, they stay in very important key roles on the investment side, spend more time also on the portfolio side, on boards, and on sourcing of assets. I'm also very happy to announce that we have great talent to succeed Dave, with Juri and Roberto stepping into the role as co-CEOs. Juri and Robert, you both joined us for more than two decades ago, maybe starting with Juri. Juri, you started in the credit team. You were very quickly identified as a key talent there, and you were actually very instrumental in building that credit team. You eventually led that credit team for a number of years before we asked you to take over the infrastructure business. You built that to a very decent size, very successfully. You had that for a while. and when Dave started to spend a little more time in 2024 on the investment side, on M&A, we asked you to become president of the firm and become the wingman of Dave and help on business development side on some of the corporate operational areas and now you're stepping from that president role in a co-CEO role. And your new wingman is then Roberto. Roberto, you have spent your time at PG, I guess always with the intersection between Portfolios, Investments and Clients. You were very instrumental in building up our portfolio solutions efforts, the team. You eventually led that team for a number of years. So you are certainly one of the key architects of our mandate and evergreen franchise, structural products franchise, which is probably one of the key distinguishing areas of the firm. Both of you, you have been very successful leaders. You have demonstrated great entrepreneurial leadership. You carry really the PGDNA. So with that, we are super happy, you know, as a board to have you as partners, you know, of us as co-COs in the years to come. So to conclude that presentation part, we feel very good about the resilience of the business, A. B, we feel very good about the midterm outlook. Yes, we have signaled softer growth in this year and next year, in July in the update. But we're very, very confident for the midterm outlook and for the 2033 goals. We're very confident about the investment strategy and how we build our teams and the assets we look for and how we build them. And we're very confident that with this trio at the helm in this new constellation, we have a great setup in the next years to come. So with that, I conclude this formal part and I guess we'll open for some questions.