Partners Group Private Equity Limited

and thank you for standing by. Welcome to the PGPE Limited H1 2025 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you may submit your questions via the webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Andrea Martiescu. Please go ahead.

Good morning, and thank you for joining today's investor call for PGPE Limited. I'm Andrea Matejescu, and I'm delighted to be here with my colleagues, Dr. Cyril Vitli, Federica Cataniga, and Fiona Gillespie. Today, we'll be sharing an update on the NAF development and portfolio highlights as of 30th of June. But before we get started, just a quick note on the housekeeping. If you have any questions during the webcast, please use the Q&A tool available on your screen. and we'll address questions at the end of the presentation. Now, to ensure we cover as much as possible, we will group similar questions and respond to them in one go. And if you run out of time or you have additional questions afterwards, feel free to reach out to us via email or through the contact form available on our website. Let's get started. The first half of 2025 was characterized by volatility, escalating geopolitical tensions, trade disruptions, and rising concerns over the balance between inflationary pressures and the Fed fund trade path were key factors. These factors also weighed on the US dollar, which weakened against major currencies, including the Swiss franc, euro, and British pound, driven by growing fiscal deficits and policy uncertainty. Turning to performance, the net asset value, or NAV, of PGB Limited closed the first half of the year at €13.79 per share, reflecting a total return decline of 5.7%, which is inclusive of the first entering dividend. This was primarily driven by adverse currency movements, notably by the US dollar 12% depreciation against the euro, leading to a 5.4% negative ethics impact which outweighs the positive contribution from underlying portfolio value creation. Now, on the positive side, performance showed gradual stabilization with signs of momentum building in the second quarter. Now, total return improved to negative 1.2% compared to negative 4.6 in Q1. Strong portfolio value creation at 3% in the second quarter and almost 1% for the half year highlighted the resilience of our underlying investments. However, currency headwinds reduced performance by 3.6% in the second quarter and 5.4% during the first half of the year. In June, we distributed 26 million with the first interim dividend to shareholders, and this corresponds to 37.5 euro cents per share. This distribution aligns with the objective of paying 5% of the previous year and up in semi-annual payments. Over the past 12 months, dividends equated to a 7.5% yield based on the closing share price of €9.72. From a liquidity perspective, following nearly €40 million in distributions received, €80 million invested, and the interim dividend paid, the company had cash-in-cash equivalents of €8.3 million and €120 million undrawn credit security as of 30 June. Looking ahead, economic policy developments are accelerating global economic fragmentation, supporting partners' groups' brave new world essence of increased volatility and uncertainty. These shifts will reshape private market investments for the years to come. We anticipate increased transaction activity over the remainder of 2025 as trade policy clarity emerges, thereby reducing uncertainty. Balanced sector and regional diversification strategies will be important with potentially stronger performance from service-oriented businesses and those with domestic supply chain. So outcomes will vary significantly across sectors and individual companies. As partners group and consistent with our transformational investing approach, we continue to actively partner with portfolio companies to refine and adapt strategies. Our discipline risk management framework tested across multiple economic cycles remains central to this approach. Now, on the next slide. During the first half of 2025, we have received total distributions of 39.6 million. This includes 31.4 million from the gradual sell-down of several of the listed portfolio companies, such as Bischel and Galderma. Another notable contributor was the full sale of Tooth, a leading affordable luxury product retailer, which contributed 7.5 million euros. On the investment side, PGP deployed €18.3 million, with €13.6 million allocated to five new smaller investments. We also made several add-on investments in existing portfolio companies to support ongoing operations and strategic acquisition pipelines. One example of a new investment is Avid Biotechnology. This is a US biologics contract development and manufacturing organization, or CDMO. specializing in small batch production of complex mammalian proteins. It was founded in 1981, and Avid transitioned to a CDMO model in 2018 and now operates four facilities in California with over 370 employees. The company has a strong reputation in the niche sector and benefits from robust organic growth and revenue visibility. Partners Group has strong conviction in CDMOs, and interacts with such companies for several years now as part of the firm's thematic research under the health and life vertical. Maybe just a few words on this slide. Transaction volumes during the first quarter continue the positive trend established in 2024. The second quarter, however, saw another slowdown on the back of renewed macro and geopolitical uncertainty. Realization activity across the company portfolio while remaining below historical averages, showed improvement compared to the 2023 low. We're seeing encouraging momentum with mid-July exit announcement for two of our top 10 investments, PTA Pharma Services and Tekem. Those transactions, expected to close during the second half of the year, demonstrate PGP's ability to create liquidity and selectively reinvest in high-conviction assets, even in the current market. As we gain more clarity on the macroeconomic front, We anticipate cage-up in distributions and investment activity in the second half of the year, with contracted realizations providing comfort on reversion to more normalized levels over the next 6 to 12 months. With that, I would like to hand over to Fiona and Cyril for our special topic.

Thank you, Andrea, and also hello to everyone from my end. So as Andrea alluded to, the first half of 2025 was challenging at the macro level with the complex interplay between trade tensions that span globally, fiscal policy shifts, especially relating to strict immigration policy in the US, and also continued geopolitical tension. However, trade deal announcements with some of the US's key trading partners are bringing more clarity to the outlook, both for the remainder of 2025 and for 2026. This said, domestically to the US economy, We continue to see tariffs as a stagflation-like force, as inflation is expected to creep up from here, albeit without reverting back to the highs related to pandemic disruption, and also in a more tolerable fashion. Now, for growth, tariffs act as a headwind, which is in large part driven by eroded purchasing power among consumers, fears over job losses, that we're driving up precautionary savings, and capex growth, which is still on the lower side, with firms reporting still weak expectations over the next six months. But despite this stagflation-like near-term economic backdrop, we continue to expect the Fed to cut two times 25 basis points over the remainder of the year, with the first cut in September. This comes as upward inflation from tariffs is expected to be temporary, given it is a price-level adjustment upwards that should phase out of year-on-year inflation calculations over a 12 to 18-month period. Also, leaving rates in restrictive territory would likely be unhelpful to a large extent in moderating inflation from tariffs, but would rather risk being a more prominent drag on economic activity. This is especially important given the significant downward revisions to the payroll figures for much of 2025 year to date. Recall here, the Fed has a dual mandate of employment and price stability. So while in the near term we continue to expect growth headwinds from tariffs at a global level and from strict immigration policy in the US more specifically, we see some factors that should support growth in 2026. In the US, this stems from the signing by President Trump of the so-called One Big Beautiful Bill Act. This new budget encompasses front-loaded tax cuts, especially for higher income earners and corporates. This, alongside the expected moderation in interest rates, should prove supportive to consumption and investments. In Europe, the significant fiscal shift out of Germany, away from fiscal conservatism and efforts across the region, both in response to tariffs and also the Draghi report, to boost investments and innovation should also be a tailwind to growth next year. This should come with spillovers to other European economies. Europe also stands to benefit from past ECB rate cuts that continue to feed through to lower rates on consumer and corporate loans. We therefore see Europe's outlook as being stronger than before, given a push for structural reforms and lower rates. To conclude on the investment backdrop, we have gained more clarity on the way forward for the remainder of 2025 and have also grown more constructive for 2026. This said, given the inherently long-term nature of private equity investment, we maintain our thesis of the brave new world in which we expect to see continued, albeit more moderate, macroeconomic volatility, geopolitical fragmentation, and a strong drive for tech accelerations. This stresses the importance of a hands-on active ownership approach with transformational investing. I will now hand over to Cyril to walk us through what exactly this means.

Thank you, Fiona. In times of high volatility and uncertain outlook, it makes sense to look back much longer than just one quarter or six months. In times of uncertainty, values like trust become much more important. In a bull market, the saying goes that the tide lifts all boats, but in challenging times, you need to trust to whom you entrust your money with. You need to trust the ship, in our case, the portfolio, and you need to trust the captain, which means the manager, that the captain brings you safely home and going on a cruise ship journey, regardless of the weather is now sun is shining or there's a storm coming. And I would like to do this a little bit more personal, So I'd like to elaborate a bit more why me personally, I trust Partners Group, but then let you be your own judge. So let me for a moment leave P2P Limited, but talk about Partners Group as a platform. Partners Group was founded in 1996, and I've seen many market crises. The dot-com bubble, global financial crisis, UB debt crisis, Brexit, COVID, war in Ukraine, Trump tariffs, many more in between. In 1999 to 2000, we had the dot-com bubble. During that time, I was working for a venture capital company trying to profit from the dot-com bubble, and I was writing in the evenings and the weekends and during holidays my PhDs, thesis, and evaluations of private equity companies. Part of this group supported me by providing financial data of many of their portfolio companies being boring buyouts. I had a feeling about venture capital, a bad feeling about it, and the dot-com bubble, and I left this sector in 1999 and worked for McKinsey Management Consulting for two years. And when the dot-com bubble burst in 2000, I was so impressed that Partners Group's boring buyouts actually highly diversified globally, performed much better than the sexy VC investments we did between 1996 and 1999, that I actually joined Partners Group in 2001. I started in a private equity direct team, but soon learned the primaries and secondaries business as well. I learned that the other managers, which were established in the 80s in the USA, they also only cook with water. And our track record on the private equity direct side was actually not worse than the US gods of the time. But we can save one fee layer if we invest ourselves directly versus being a funder fund. So like me, also our clients worldwide started to trust us more and more. And unlike in the beginning, in the late 90s, when the clients asked us to build fund-to-fund portfolios, in the 2000s, more and more clients trusted us and requested private equity direct portfolios managed by Partners Group. In 2008, it was the global financial crisis, which Partners Group weathered really well, actually, better than many of our peers, because Partners Group exited the global financial crisis in 2009, stronger than we entered it in 2008. And more and more clients worldwide have done their due diligence and decided to entrust their private equity direct money with Partners Group. Thus, we must have done something right. And as a manager, you need to have good performance, otherwise clients do not entrust you with their money. I personally was the responsible project manager for the IPO in March 2006. I did investor relations for Partners Group for 10 years, of which seven years as the CFO of Partners Group Holding. It was my pleasure to hear from external shareholders that they trust Partners Group to do a good job. And to be honest, we are a very self-critical firm. And of course, performance can always be better. And thus, internally, we are never happy with what we have achieved because we always want to do better. Thus, I loved going on roadshows and meeting external people telling me that we actually did a lot of things right, even better than many of our peers. As of June 30th, 2025, Partners Group had 174 billion of assets in management, of which half is private equity, which makes us one of the largest, most successful private market asset managers worldwide. So if over 800 institutional clients and thousands of private individuals can trust us, you can too. Partners Group Private Equity Limited is roughly one percentage of Partners Group's private equity AOM. Thus, PGP Limited gets its fair allocation, meaning a pro rata share, to all private equity direct investments the Partners Group platform is doing. The investment approach of Partners Group is very structured. We source our new investment opportunities through a process we call thematic sourcing, which dives deeper into all five verticals being technology, health and life, goods and products, and services. We analyze each on the several dimensions of which three giga themes are digitalization and automation, new living, decarbonization and sustainability. We have specialized investment professionals which need to convince the specialized investment committee in a structured approach from teaser to first check to preliminary investment recommendation of the final investment recommendation. But on top of this, we also have a global investment committee, which benchmarks all investment opportunities across all themes, verticals and regions. Once we decided we wanted to own a company and we managed to buy it at the price, which is in line with what we are willing to pay for, then we create value in a process called entrepreneurial ownership. This goes way beyond the industry standard first 90 days action plans, but it's based on a philosophy we call transformational investing. We actually work on value creation initiatives led from the top, meaning the board of directors of the portfolio companies. We use a dynamic operating playbook to scale strategies. And we are not alone. Yes, we have 1,800 employees, but we also have a network of over 500 industry experts we can draw on. Of course, we focus on operational improvements. But as a former McKinsey management consultant, I can tell you this does not mean cost-cutting because it means increasing the revenues. You cannot double or triple the value of a company by taking out costs. But if you manage to double or triple the revenues of a company and you keep the costs under control, then also the net profit and thus the value of the company will double or triple during the holding period. On top of organic growth, we also look at M&A growth opportunities. We call this platform building. taking advantage of many industries being fragmented and are thus ideal candidates for consolidation by M&A, meaning smaller tuck-under acquisitions, also called bolt-on acquisitions. To enhance returns for our clients, the capital often comes not from an additional equity injection, but actually from the debt markets. Rodrigo will talk more about this later on, actually. I would like to give you now two illustrative examples to show you what this PG investment approach means in practice. Foundation Risk Partners is the outperforming example and Premistar is an example which initially performed below expectations, but we worked hard on changing this and we managed to turn the ship around. I have to admit I'm biased. My father was the CEO of the second largest insurance broker in Switzerland, so I love this business. Foundation Risk Partners is an independent insurance broker in the USA. It primarily focuses on B2B segments, meaning small and medium-sized companies, commercial property and casualty, and employee benefits insurance. It has today 2,500 employees and 180 offices across the U.S. It is an example of a platform-building investment because since 2017, over 190 acquisitions have been made. But the plan is that acquisitional growth will only account for half of the value creation, with the other half is planned to come from organic growth. Now, the insurance industry experienced a strong tailwind, growing by 4% annually. Our partner school, Private Equity Directing, tracked insurance business in general since 2018, and tracked financial risk partners in particular since May 2021 as a high priority pipeline, and we established active dialogue with the CEO and the management. Finally managed to buy the company in September 2022 as a MyGeorge shareholder at an enterprise value of 2.8 billion. The value has grown since then to 4.8 billion in line with EBITDA growth of more than 50%. The key value creation initiatives are to develop strategic initiatives with key carrier partners to drive enhanced growth and profitability, geographical expansion, speciality platform expansion, drive efficiencies through outsourcing of non-client-facing transactions, differentiate technology platform that supports organization and strategic initiatives. Now, of course, not all investments go well all the time, thus I wanted to talk about investment which performed behind glass. If I had taken an example of a company which struggled in H1 this year and then tell you what initiatives we are doing to turn the ship around, then basically I would have been selling you hope. But I don't want you that you need to believe me. I want that you trust Partners Group that we as the manager of PGP Limited are doing a good job with our portfolio companies. Thus, I decided to take an example of an investment made in 2021. The investment initially performed behind the plan in 2022, but we successfully turned around the ship in 2023. And since then, in 2024 and 2025, the company has performed very well. The example I will speak about today is Premistar. Premistar is one of the largest independent providers in the U.S. of aftermarket maintenance, repair, and replacement services for commercial heating, ventilation, and air conditioning, also known, abbreviated as HVAC. As you know, we have another company in the HVAC space in the U.S., which is called Diversitech. Diversitech is a leading manufacturer of HVAC equipment paths, and the manufacturer and supplier of components and related products to the HVAC and refrigeration industry. So, in other words, in the HVAC industry, Diversity Tech is the manufacturer, while Premistar is the service provider. Premistar has 2,800 employees, of which 2,150 are field service technicians. When we invested in Premistor in 2021, the management team had just completed two acquisitions which were performing below initial expectations. As a result, shortly after investment, the TVPI, meaning the total value overpaid in, fell by 20% down to 0.8x. The underperformance was driven by negative performance of a construction-heavy branch, and the pull forward of selling general and administrative expenses in anticipation of outsized growth in the future. We then successfully turned the business around by, A, improving project selectivity and controls, B, shifted revenues, the revenue mix towards more recurring services in priority end markets, and C, tightened the M&A quality filter. Today, Pringistar serves 11,000 customers per annum, and the revenue has almost doubled from 450 million in 2021 to 820 million last 12 months as of June this year, and EBITDA grew in line because cost kept under control, and thus TVPI also doubled from 0.8x to now 1.6x. Each such investment case deepens our turnaround playbook that can be deployed at any future underperforming business. With this, I hand over to Frederica from Portfolio Management to talk about the portfolio and give you some good news and distributions.

Good morning, everyone, from my end as well. As usual, I will take you through portfolio composition, performance, and the series mentioned also some notable activities took place during the quarter. On this slide, I won't really report much change from a portfolio composition perspective, especially in the pie chart on the left-hand side, as really the diversification that is embedded in the portfolio is really the foundation of how we build a portfolio for PGP Unlimited. So I will divert a bit my attention to the right-hand side of the page, where we look at our top 10 companies. and where the list continues to feature very well-known names to our regular listeners. Especially in the top two positions, we see PCI and Vishal. These two companies not only represent obviously our largest exposures, but they also continue to be our largest performance drivers. and in 2025 also our top distribution drivers. Visal in particular also takes the crown for our top value creator within the portfolio year to date. The company continues to report solid financial results and the most recent report at quarter end 31st of March, the company recorded revenue growth of over 20% year-on-year while adjusted EBITDA expanded over 75% in the period. The stock price continues to be up over 20% year-to-date through the end of June and even further since the beginning of the third quarter, that's contributing positively to the company performance. While our top five holding continue to represent 30% of NAV approximately, this has remained relatively stable, As usual, change in the top 10 list comes at the bottom of the list where we have a number of names as around 2 to 2.5% of portfolio NADs. Last quarter, we welcomed Clario in our top 10 and this time around, we have Galderma leaving the top 10 list as we continue the gradual sell-down of this list, including the company NAD for Galderma has been reduced to just under 2.2% of NAD. While not part of our top 10 anymore, I just want to spend some word on Galderma, which is now our 11th largest holding, because since listing the company in early 2024, PGP Limited has received over 16 million euros from the gradual sell-down of the listed shares. The stock continues to perform strongly and it's up over 35% here today. And this has also partly offset the profit taking with the stock maintaining a relatively stable positioning amongst our top holdings. So not top 10 anymore, but very close to that part of the list. Instead of Galderma, we are pleased to welcome Fortero to our top 10. So you'll see now making it top 10 position. Fortero is a London-headquartered but pan-European software provider to the industrial mid-market that specializes in mission-critical solutions, especially for manufacturing small and mid-sized businesses. Fortero was founded in 2012 and now operates from over 40 locations worldwide, serving more than 25,000 customers. Partners Group invested in Forterra in 2022 after closely tracking the company for over two years. And since our first investment, we've been actively working on several value creation initiatives alongside Forterra management, with a focus on driving organic growth, strengthening the quality and sustainability of revenues, as well as platform expansion via accretive acquisition. Fortero has double key metrics in Sentry, expanding geographical reach and strengthening AI capabilities, as well as forming strategic partnerships with Amazon Web Services, enabling rapid cloud deployment and scalability for Fortero's customers and leading their ERP transformation. We therefore welcome Fortero in our top 10 and look forward to seeing continued value creation for the portfolio as Partners Group continues working on the execution of this transformational strategy. To dig a little bit deeper on vintage diversification and operational performance for our portfolio companies, we look at this one slide. On the left-hand side, the vintage profile continues to incorporate younger vintages as we invest proceeds from realization. and with older assets being realized, now the pie chart shows an even more balanced allocation across the integers. Notably, as average holding periods continues to extend across the industry, for our portfolio in particular, H1 realizations have resulted in a stable holding period. for PGP Limited just over 5.2 years unchanged effectively over the quarter. And this is expected to come down further in H2 on the back of announced sales of PCI and Techem, who are both pre-2019 vintage investments. Looking at portfolio health, on the right-hand side, These also remain solid and broadly unchanged quarter on quarter. As a reminder, we compile here metrics on our top 20 holdings, which represent approximately 80% of our portfolio in AD. And we continue to exclude listed investments to provide a better picture of our privately held assets. This results really in valuations that are stable quarter over quarter just below 18 times EBITDA multiple and also net debt to EBITDA remains stable just below six times. Last 12 months EBITDA growth remains in double digit territory at around 10%. Slightly coming down from previous quarter and this was mainly driven by a basis effect whereby some of our top 20 companies recorded lower LTM growth versus previous quarter, however, remaining in mid-teen growth territory and in line with our expectations. During relatively challenging 12 months, we've navigated thus far, over 75% of companies by NAD weight in the portfolio reported positive EBITDA growth on a last 12-month basis and just under half of the portfolio grew in excess of 10%. So looking how this feeds into portfolio performance, please do report that rolling last month performance excluding currency effects increased from 6% at the end of Q1 to over 8% at the end of Q2 2025, and this really reflects a positive Q2 performance that was driven by continued operational value creation, also supported by multiple recoveries, as well as strong contributions obviously from our listed holdings. At the same time, that change remained broadly stable on the quarter. Perhaps here the most notable change versus last quarter is the recovery in multiples. So column number two on the slide, which was clearly negative in Q1 following contraction. Now public market re-ratings supported also our listed holding, Bischal and Gardelma, more prominently, who continue to report solid financial and operational results, but also soft price increase, as mentioned earlier on in the call. The negative impact on that change remains, again, overall stable quarter-on-quarter, driven by the same dynamics we highlighted last time around, where some of our companies have undertaken refinancing at lower spreads and borrowed to pursue inorganic growth initiatives. While leverage has increased overall on a year-on-year basis, the marginal change has been minimal most recently, and thereby being a lower offsetting effect to our other positive value drivers. Looking just beyond portfolio performance, I want to touch on the liquidity aspect of the portfolio, which is really our other key dimension that we monitor closely and are pleased to report on. At the beginning of the call, Andrea mentioned how distributions level bottomed in 2023 at really exceptionally low level. However, momentum picked up in 2024, at least losing some steam in the first part of 2025. Despite that, over the past 12 months, we have partially or fully realized the number of investments generating liquidity for approximately 10% of total company and I've listed some of these examples here on screen. For example, in partial realisation, obviously, gradual sell-downs, but also dividend recaps in rosings and kinder care. Andrea mentioned the full exit of TOOTH out in global blue. But notably, the second half of 2025 has already given us reasons to be cheerful with the announcement of PCI and TECM exits that provide clear evidence of the ability of our portfolio to generate liquidity and to support the consolidation of this positive realisation trend. So maybe let's look at these two transactions a little bit more closely. These two transactions were both announced in July and are expected to close during the second half of 2025. generating over 100 million euros in growth proceeds in 2025 for the pgp limited portfolio first of all we touch on techem this is a company where partners group first invested in 2018 and a company that really was transformed into a leading provider of a broad range of digital solutions that drive and support energy efficiency in buildings all across Europe. You might recall an agreed sale of the company was initially announced in October 2024. However, due to regulatory reasons, the transaction could not be executed as originally structured. In July 2025, however, a Partners Group announced the formation of a new Partners Group-led consortium that will acquire at Techem, with Partners Group retaining majority ownership NPGP Limited reducing, yet maintaining, parts of its exposure to techem, which in the meantime has continued to boast solid operational performance. The new ownership consortium, again led by a partners group, will implement a value creation plan focused on strengthening the company's position as a leading digital first provider of submittering solution across Europe. We'll continue to digitalize operations, add complementary offering and enabling other digital services focused on improving building efficiency. The other exit we announced just at the beginning of the third quarter is the one of PCI Pharma, which represented 7.6% of PGP Limited portfolio value at the end of June. PTI is one of our longest-held and best-performing investments, as I already mentioned, and Partners Group commenced its ownership of the company in 2016. Over the past nine years, the company transformed from a regional commercial packaging organization into a leading global CDMO, serving as a strategic partner to the pharma and life science industry globally. After a partial realization in 2020, PGP Limited will further realize a portion of its stake alongside other programs managed by the investment manager. PCI will therefore remain as part of the PGP Limited portfolio as the new ownership group will continue to execute a value creation plan to further expand PCI's competitive position in the market. That's why we not only focus on realization, we are also very mindful and stand ready to execute on maintaining an investment level that we promise our shareholders. And we do so by leveraging the Partners Group platform, which Cyril touched on, which is currently looking at over $45 billion in investments at first screening. On this slide, I only just list the more actionable investment opportunities as we see ahead of us and are surprisingly all focused on mission critical services and on companies with growth potential is underpinned by secular trends like supply chain optimization, demographic shifts from Asian population and urbanization. I must say that some of these secular trends can seem somewhat abstract at times, yet sometimes they also come right into our households, and this is the case for MPM products, the latest addition to PGP Limited portfolio that would come during this quarter. The first one on this slide, and on the following slide, we take a closer look to MPM products. Partners Group announced the acquisition of this company at the beginning of Q3. So while not being part of the portfolio as of the end of June, we expect the company to officially enter the portfolio in the coming weeks by the end of the third quarter. MPM Products is a UK-adquartered but truly based global pet food business, which has its main focus on premium segment of cat food. This acquisition is the result of partner group long-term thematic work on the pet food segment, which we see supported by underlying secular drivers like ongoing premiumization, pet humanization, and rising pet ownership. Notably, the sector exhibits strong fundamentals and resilience across cycles, including recessionary and inflationary periods. However, not only is MPM positioned in one of the most attractive and resilient segments of the pet care market, the company is also winning more than its fair share of new customers and converting them into heavy users, supporting revenue visibility. Partners Group will work with MPM's experience management team to accelerate the company's future growth, with key value creation initiatives focusing on further expanding sales in the company's largest markets, building operations in new markets, and also reinforcing supply chain resilience. We stand ready to welcome MPM to the PGP Limited portfolio and look forward to discussing the company more in detail in the future. I will now hand it over to Andrea to conclude the call.

Established in 1999 and listed on the London Stock Exchange since 2007, Barnes Group Private Equity Limited has successfully navigated multiple market cycles. Today, the portfolio comprises over 70 direct investments across diverse industries and geographies and a good vintage diversification. These investments are backed by Partners Group, one of the world's largest private market firms, managing over 174 billion USD in assets, including $83 billion in private equity. And this means that an investment in PGP Limited enables shareholders to invest alongside Partners Group other clients and access a global portfolio of private companies that's not directly accessible to investors in public equity markets. Over the past 12 months, PGP Limited has distributed around €50 million to shareholders through interim dividends. For the current financial year, the prospective dividend yield is around 7.5%, a compelling differentiator within the European listed private equity space, reinforced by consistent shareholder feedback value in predictable income. The first half of 2025 was shaped by trade tensions, fiscal shifts, and geopolitical uncertainty, contributing to a weaker US dollar. Despite this headwind, PGP Limited has delivered consistent long-term performance with an average annual NAV total return of over 9% and the share price total return of over 8% over the past decade. Looking ahead, we expect increased transaction activity as policy clarity improves and uncertainty recedes. Over the long horizon of private equity, the ongoing reconfiguration of the global economy presents compelling opportunities for value creation. Over the years, we've experienced both bull and bear markets. During bull markets, our discounts typically range from 0% to 10%, and in more stable normal years, it was between 10% to 20%. But today's discount, around 30%, is almost unprecedented. It's well below our 10-year average of 19%, and this creates what we believe is a compelling value proposition. What's particularly noteworthy is our portfolio strategic transformation during the last decades. Ten years ago, a third consisted of fund-to-fund investments. Today, 99% are direct investments where we have more control and transparency. And I believe this context matters significantly when considering our current market valuation. I am also pleased to share that PY, or PGP Limited, is indicated for inclusion in the FTSE 250 Index as a forthcoming review. And this milestone should benefit shareholders to improve trading liquidity and increase visibility among institutional investors, potentially helping to narrow the valuation gap over time. And with these last words, I would like to open for questions. So I see we have a number of questions in the tool. And as mentioned at the beginning, in the interest of time, we will group similar questions and answer in one go. If we don't manage to take all your questions in time or you have follow-up questions, please don't hesitate to reach out to us. We're more than happy to continue the discussion. So I see now a first question for you, Fiona. How do you factor tariff implications in your underwriting these days? Can you provide a relevant example?

Sure. For this one, we need to also just take a step back to before tariffs. So the long investment horizon of private equity investments really warrants thinking in top-down economic scenarios. This is especially true in environment as what we've seen in the last few years, starting from COVID, the lockdowns, the supply chain disruptions, where uncertainty is high, but news flow can also very quickly shift the situation. For this reason, we apply what We call or refer to as asset testing scenarios to prospective investments to provide comfort against possible downside negative scenarios. Now, when it comes to tariffs more specifically, we actually have been taking a rather similar approach. So the rhetoric on the US administration's tariffs has gone through what we can agree is or has been a rollercoaster with aggressive Liberation Day announcements, subsequently followed by the introduction of the 90-day pauses and a de-escalation tone, but before seeing a renewal of threats as we approach the end of these pauses. For this reason, well, we can attempt to take a view on where tariffs ultimately land. It's really anyone's best guess, if I'm honest. And so therefore we also take a more quantitative approach in this exercise where we apply sensitivities to these assets as it relates to tariffs to give comfort on both the profit margins that we can expect, but also as it relates to the price elasticity of the end consumer. So maybe if we take here as an example, the use of MPM, which Federica just went through. So while the company is based in the UK, it distributes globally. with the US being one of its markets. However, Thailand is a key source of the pet food, especially for cats, so that premium cat food. So here we included some tariff sensitivities to gain comfort, and we would only really underwrite such assets if we gain that downside kind of comfort or at least confidence that this isn't going to deteriorate too much. And another key factor as it relates to all of this is also considering the broader macroeconomic backdrop where there is a clear divergence within the consumer base. So when we talk about premium pet food, we are expecting more price elasticity, but again, we caution and we have done those asset testing scenarios and tariff sensitivities.

Thank you, Fiona. Given the positive realization momentum, can we expect share buybacks to take place anytime soon? I think this one for you, Federica.

Yeah, I can take this one. Yeah, definitely. We've seen strong momentum in recently announced exit transactions, as I covered. And this also translates in encouraging signs in the trajectory of the company's free cash flow. Anticipated distribution from TESM and PCI Pharma are not the only ones, so there are other potential additional distribution sources that could come through, and this could indeed result in free cash flow available for buybacks during the second half of 2025, with the next test date for free cash flow being at the end of the third quarter. The capital allocation policy of the company prioritizes shareholder returns when share price trades at meaningful discount to NAV. And despite positive price action most recently, the company still trades in the 25-30% discount range. So should the discount persist, any positive free cash flow generated may well be utilized for share buybacks in the coming quarters.

Maybe a follow-up for this, for PCI and TACM, why would one perhaps not recycle? Why were the proceeds recycled versus the insured buyback? Maybe Cyril also to give some color.

Yeah, PCI and TACM is actually not a full exit. It's a re-underwriting. And so that's why to actually take part into the new transaction partially was a necessity to enable the exit. And that's why it was actually necessary to do that. I think it's also from a portfolio management point of view, actually, we like that. PCI was 7.5%. We like to have a portfolio of 60 positions. If you have 60 positions, one position is 1.5%. So if we actually can downsize the position from 7.5 to 1.5, that's actually very welcome. We still can ride the winners longer, So, that was the reason why it was actually not a full exit, but a re-underwriting and we kept part of it.

Okay. Now, what is the right way to think about the 41% of the portfolio in vintages from 2019 and why has it taken so long to exit some of those positions? Federica, would you like to comment on this?

Yes, we talked about in previous quarter how normally holding periods have extended in general across the private market. Head transaction activity was subdued for the past couple of years, 3D22 and 2023. That said, the companies continue to perform well operationally. There's no concerns in terms of our 2019 and prior vintages. In fact, I touched on this during the call, some of our longest-held companies are also our best performers, so if I look at the companies that are marked highest in the portfolio, these include Vishal, PCI, and they are clearly amongst our pre-2019 So, no concerns there. I'm actually encouraging that our average holding period is coming down, and realization should support further a reduction in the average holding period going forward.

Perfect. And maybe also on the listed a little bit, can you give some color if there is a timeframe when these are expected to be realized?

Yes, we typically set a time frame at exit at leasing, but this is also obviously dependent on the share price after listing, which might accelerate or slow down the realisation. So overall, we've seen a relatively accelerated timeline for both Vishal and Galderma in terms of the sell-down. Both have already provided significant liquidity. I'll say if stock performance continues to outperform the base case, then we might exit sooner rather than later. But it would be still very much dependent on the prices we observe in the market, in the sentiment, and also on company performance more broadly.

Great. Maybe somehow on the topic and on the realizations, maybe... Could you cover a bit more on what could be expected over the next year? Maybe would it be rather through IPOs or M&As?

Yes, in terms of realizations, we're now standing at roughly 10% of any we realized over the past 12 months. This is below what we would expect on average, but significantly higher than what we've seen in the past couple of years. Our expectation is for this figure to revert to more normalized levels, so in the mid to high teens, in terms of any realized over the next 12 months. And in terms of exit options, we continue very much to explore all avenues. Some of the most recent announcements of BCI and Tech-M have been M&A sales, but IPO remains a viable exit option, especially for how it's best performing and larger companies that are more mature for a stock listing.

Okay, and maybe one more question for you, Federica. What would roughly be the investment volume, maybe also in the context of the opportunities you touched based on the pipeline slide?

Yeah, so historically, on the back of an average 20% distributions per annum, that's the historical average, we typically reinvest 10%. in new investments. So that is my sort of long-term guidance of what we target to reinvest on a rolling 12-month basis. Now, if I look forward the next six to 12 months, we're probably going to be at around 8% to 10% of NAD reinvested. Now, the opportunities I showed on the slide probably cover 3% to 4% of NAD. to be reinvested in the next six to 12 months. But again, these are only the most advanced and actionable opportunities. There's much more being screened, being due diligence, being reviewed by our investment committees. And we're super comfortable that that will support an investment level returning in line with the historical average.

Thank you very much, Federico. And while we run over time, so thank you very much for your questions. We will come back to you, or as I already mentioned, please don't hesitate to reach out to us. We thank you very much for joining us today. We thank you for listening, and we're looking forward to meeting you or discussing with you during the virtual meeting. Thank you, and I wish you a wonderful day ahead.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.