Partners Group preps investor restrictions amid private market fears
Partners Group The Swiss private markets giant said on Thursday it was ready to restrict withdrawals from more of investors’ funds, after capping redemptions at one of its European instruments following a surge in exit demands.
The Zurich-listed fund manager has warned that the spike in client withdrawals that have roiled private credit markets this year is now spilling over into the private equity space.
On Wednesday, Partners Group said it had halted withdrawals from its Global Value SICAV instrument by 5% after refund requests reached 9.8%.
It warned that another of its funds, a Delaware-based US private equity vehicle, would also face redemption demands of about 6% of its net asset value in the second quarter. Three other permanent funds, with assets totaling about $9.7 billion, are also likely to experience redemptions of 3.5% to 5% in the second quarter, Partners Group said.
In a statement, Partners Group acknowledged increased volatility in so-called open-ended “evergreen” funds and added that it would impose a 5% liquidity limit on such instruments if withdrawal requests exceed this threshold.
Investors’ rush to exit is reigniting concerns about pressures on the global private markets industry.
“Liquidity features are designed to protect long-term investors and ensure that returns continue to be driven by the quality of the underlying private assets rather than short-term flow dynamics,” said CEO David Layton.
Partners Group’s portfolio companies offer “significant upside potential”, he said, adding that since its inception, its main funds have returned clients more than five times initial investments.
Partners Group said about 80 percent of the $185 billion in assets under management comes from long-term institutional investors and 20 percent from private wealth investors.
Shares of Zurich-listed Partners Group fell more than 16% on Wednesday, including shares in mainstays of U.S. private markets. KKR, Karataş And aresIt also finished Wednesday with a decline.
Partners Group was trading up more than 3% in morning trading on Thursday.
