• Management Fees: CHF1.6 billion, grew in line with AUM.
• Management Fee Margin: 1.25%, stable and recurring.
• Performance Fees: CHF511 million, up 38% from the prior year, representing 24% of revenues.
• EBITDA Margin: Approximately 63%, stable with prior years.
• Profit: CHF1.1 billion, up 12% year-over-year.
• Dividend Proposal: CHF42 per share, an 8% increase.
• Investment Activity: $22 billion, up 66% from the prior year.
• Realization Activity: $18 billion, up 53% from the prior year.
• Fundraising: $22 billion, up 18% from the prior year.
• Assets Under Management (AUM): Grew 4% year-over-year in both USD and CHF.
• Total Revenues: CHF2.1 billion, increased by 10%.
• Operating Costs: Increased by 9%, with 85% being personnel expenses.
• Tax Rate: 18% for 2024, with an anticipated range of 18% to 19% for 2025 onwards.

• Warning! GuruFocus has detected 8 Warning Signs with PGPHF.

Release Date: March 11, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Partners Group Holding AG (PGPHF) achieved CHF1.6 billion in management fees in 2024, demonstrating stable growth in line with AUM.
• Performance fees increased by 38% to CHF511 million, contributing 24% of total revenues.
• The company maintained a stable EBITDA margin of around 63%, reflecting disciplined cost management.
• Investment activity grew by 66% to $22 billion, with realization activity up 53% to $18 billion.
• US market presence strengthened, with US fundraising up by more than 50%, now representing 24% of the total mix.

Negative Points

• The private market industry experienced mixed results in 2024, with some areas contracting.
• Management fee growth was slightly impacted by currency fluctuations, growing at a lower rate of 3%.
• The industry is still in a period of relatively low liquidity, affecting distribution activity.
• Real estate contributed the least to performance fees due to ongoing industry transitions.
• The company faces competitive pressure in the US market, requiring significant investment in distribution and private wealth initiatives.

Q & A Highlights

Q: Can you discuss the outlook for activity and performance fees this year, considering the industry's slow start due to market volatility? Is the upper end of the 20% to 30% performance fee range still achievable? A: David Layton, CEO: The industry is in a gradual recovery, with activity levels slightly up in 2024 compared to 2023. We observed improved investor sentiment towards the end of the year. Our exit pipeline is mature, with 24% already in public positions. While market support is needed, we feel confident about the elements we can control.

Q: How do you view the competitive dynamics in US distribution, and are there plans to invest further in this area? A: David Layton, CEO: The US market is competitive, but we've had our strongest year in US distribution, particularly with wealth-related evergreen products. We've made significant investments in US Private Wealth, which is our largest investment focus currently. We continue to develop new products, including a direct lending-focused PDC and exploring asset classes like royalties.

Q: With the shift to EBITDA margin guidance, does this indicate a greater openness to M&A? A: David Layton, CEO: We are indeed more open to M&A. The shift to EBITDA margin is to provide a clearer view of actual results, considering recent M&A activities and real estate investments. This change aligns with the European standard for financial performance measurement.

Q: How do you recognize performance fees on IPO transactions? A: David Layton, CEO: Performance fees are based on cash distributions, not mark-to-market volatility. For IPOs, only the portion sold off is recognized for performance fees. Evergreen structures with high watermark features may recognize performance fees upon NAV appreciation from IPOs.

Q: What is the outlook for management fee margins, and are there any pressures due to competition in evergreen products? A: David Layton, CEO: We expect management fee margins to remain stable. The evergreen market is competitive, but we feel confident in maintaining our historical fee margins through direct and customized client solutions. Our approach has historically mitigated fee pressure in the industry.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.