Partners Group Shares Fall After Worse-Than-Expected Fall in Revenue, Profit

By Elena Vardon

Shares in Partners Group Holdings fell after the Swiss private-equity company reported first-half results below the prior year and market expectations.

The stock was down 7% at 1,134 Swiss francs shortly after market open, wiping its year-to-date gains.

The company reported a net profit for the first six months of the year of 508 million Swiss francs ($596.5 million), down 8% from the same period in 2023.

Revenue came in 7% lower at 977 million Swiss francs as a 4% rise in management fees was offset by a 39% drop in performance fees.

"While fundamentals gradually improved, transaction markets continued to recover more slowly than expected, affecting our performance fees," Chief Executive David Layton said. This environment led it to postpone asset divestitures across its private equity and infrastructure platform.

Earnings before interest and taxes was 605 million Swiss francs, down from 644 million, it said.

Net profit missed expectations taken from a company-compiled consensus by 2%, while revenue was 5% lower and EBIT came in 3% behind, Jefferies analysts said in a note to clients. Good cost controls limited the EBIT miss, they added.

Costs fell 9% to 371 million Swiss francs on lower variable performance fee-related personnel expenses, Partners said.

Layton flagged that the exit pipeline remains robust and highly diversified. "We are confident that our performance fees will materially increase as the exit environment begins to improve," he said. The group expects performance fees in 2024 to make up around 20% of total revenue given more muted market activity, rising to between 25% and 40% after 2025.

The Zurich-listed firm also confirmed its guidance for between $20 billion and $25 billion in expected gross client demand in the current year. This is based on an expected normalization of the investment environment, continued interest in its products and a significant pick-up in investment activity, it said.

The company said its assets under management grew 5% on year and stood at $149 billion at the end of the period.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

September 03, 2024 04:10 ET (08:10 GMT)

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