Partners Group Private Equity Limited

Welcome, everyone, to our annual results presentation. My name is Dave Bladen. I'm the CEO of Partners Group. I'm joined by Yoris, 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 are 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 and 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 programs. 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 I 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 here. 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. uh 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 um 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 the noise that's weighing on uh i think the space is uh 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 are 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. A strong driver of other operating income was treasury services rendered to our products. Let me talk about our management fee margin on the next slide. Again, in 2025, our management fee margin was stable at 1.24%. This is well within our historical bandwidth of 1.18% and 1.33% since IPO. Slight variances between years may be driven by the timing of when fees are activated in investment program or when we realize transactional fees, both being an element of our one-timer fees and how our asset classes mix is influencing our recurring management fee. So we expect this stable development to continue also in 2026. On the next slide, I will discuss our performance fee. 2025 saw strong realizations and value creation throughout the year, bringing performance fees to the 32% of revenues. Private equity was the largest contributor to performance fees, with several exits driving the increase of 45% compared to the previous year's period. Infrastructure contributed 219 million Swiss francs, increasing 82% year-on-year. And performance fees from private credit increased by 112%, a result of our consistent approach on diversified portfolio and low default rates. Performance fees from real estate increased 73%, but were the lowest contributor to performance fees as the industry continues to be in a state of transition. Let me turn to the next slide for our outlook on performance fees. From 2023 to 2025, we generated 1.7 billion Swiss francs in performance fees, highly diversified across asset classes and strategy, representing 26% of our overall revenues. While the majority came from private equity with 56%, we have seen an increasing contribution from infrastructure with 31%. From a strategy perspective, our mandates and traditional programs contributed 64%, while our evergreens contributed 36%. Our performance fees are therefore driven by these two factors. Firstly, evergreens where the asset value is linked directly to performance fees. So with the growing asset base and positive performance, we steadily generate higher performance fees. And secondly, the exits from our portfolio. Today, we see a dynamic pipeline of mature assets, which we plan to exit over the next three years and beyond, both private equity and infrastructure. So based on this bottom-up analysis of this current exit pipeline, we expect performance, fees and income to account for 25 to 40% of our revenue going forward. As mentioned in our interim results call and our January business update call, we expect to be in the lower part of the range for 2026 due to the already mentioned pull forward effect from 2025. So basically we confirm the outlook and performance fees that we've given in the January call. Let's move to operating costs on the next slide. Let me give you more details on the development of our total operating costs. 86% of our operating costs are personnel expenses. As you can see, increase in performance fee revenues also triggered an equal increase of variable performance fee from the personnel expenses. This is because we allocate a fixed proportion of up to 40% to our employees. Regular personnel expenses increased 10% and other operating expenses increased 14%. In 2025, we maintained our strong cost discipline, and these increases were both entirely driven by the EMPIRA acquisition. This resulted in 1.61 billion Swiss franc of EBITDA for 2025, an increase of 19% over 2024. Now let's move to the next slide. Profitability remains strong with an EBITDA margin of 63%. Over the last year, over the last years, our EBITDA margin has been stable at around the 63%. And we continue to invest into our future growth at an operating margin of around 60% for newly generated management fees and performance fees, assuming also stable foreign exchange rates. Now, speaking about exchange rates, if we go to the next slide, we are a global business reporting in Swiss francs. However, most of our revenue comes from US dollar and Euro denominated funds. So the strengthening of the Swiss franc created the negative translation effect on our EBITDA margin of approximately half a percent point in margin. If we look on the next slide at our financials balance sheet and liquidity. As mentioned before, our EBITDA in 2025 increased by 19%. As mentioned before, our EBITDA in 2025 increased by 19% to 1.6 billion Swiss francs. deducting depreciation and monetization, financial results and taxes coming in at 18%, well within our guidance of 18 to 19%, net profit was at 1.26 billion Swiss francs, an increase of 12% compared to 2024. This translates into a return on equity of 55%. And at year end, we held 3.7 billion of Swiss francs of available liquidity. Last Friday, we got our second credit rating confirmed. We have now a Moody's rating for our firm with A3 and a Fitch rating with A-, both with a stable outlook. The investment grade ratings we have received from both agencies underline the financial stability of our firm. With two public ratings, we have increased the flexibility in funding our growth. Let's move to the last slide. The board proposes a dividend of 46 Swiss francs, representing an increase of 10%. It bases the proposal on the solid development of the business and its confidence in the sustainability of the firm's growth. Following this dividend, Partners Group will have generated a dividend growth of 60% per annum since our IPO and will have paid back 5.8 times the price of its IPO share price in the form of dividends. Now, treasury shares are an important instrument we use for our long-term oriented compensation. We have been buying shares for this reason in the past, as you have seen, and will continue to do so going forward. With our stock trading yesterday and a dividend yield of really attractive 5.7%, this allows us to create immediate value. This brings me to the end of our presentation. I would like... to hand over to Dave to quickly sum up the main points.

And my understanding is we had a little bit of a blip in the microphone during the first slide. So let me just kind of go back and recap the key message there. And that is that this was a year where you saw significant outperformance from Partners Group versus the industry, whether that's from a fundraising perspective, whether that's from an investing perspective or from a realization perspective. And all of those factors, I think, came through to translate to a highly differentiated year for the firm with management fees up 12% year-over-year on a constant currency basis, performance fees at 32% of revenue, a meaningful step up from where they were in the past, EBITDA at 19% growth year-over-year, and a very solid dividend that continues that long-term trajectory of dividend growth that you have seen from our firm. And so maybe any other topics that were missed on the phone, AP?