Partners Group Holding AG, long known for opening private markets to wealthy individuals, has pitched a two-pocket redesign for Global Value SICAV. Older holdings would be set in one portfolio, while a smaller sleeve would group newer investments that the firm sees as more likely to drive returns. That setup is meant to offer a clearer path to cash out for those who want it, while letting long-term investors stay tied to the deals Partners considers most promising.
The proposal went to investors last week and still requires shareholder approval. The firm says investors will retain the option to redeem out of one or both sub-portfolios. Partners also argues the approach could guide others, stating, "This evolution is not about liquidity considerations but rather about how the largest evergreen funds can continue to invest consistently in the growing opportunity set across private markets once they have outgrown their regular flow dynamics." According to a spokesperson, Partners believes the approach will serve as a model for the industry.
Executives have been searching for answers as some older portfolios underperformed peers and redemption requests piled up in evergreen funds that allow periodic withdrawals. The pressure coincided this year with a short seller's allegation of widespread overvaluation. So far this year, the shares have fallen 38%, the weakest performance in MSCI's gauge of European financial firms, and they were off 0.9% at 1:33 p.m. in Zurich.
In June, as the second quarter's withdrawal demands were estimated at 9.8%, Global Value introduced a per-quarter redemption cap of 5% of NAV. A notice to wealth advisers said third quarter requests hit the 5% cap again. Morningstar's Mara Dobrescu said the split can be sensible "to the extent that it is offering different investors different liquidity and return pathways," but she added that its success hinges on how assets are carved up and whether future sales validate current valuations.
The structure echoes a tactic sometimes seen at hedge funds to avoid forced selling of hard-to-move assets, a method that has at times trapped capital. Partners emphasized that investors can still redeem from one or both pockets.
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Leadership is shifting. Last month, Partners elevated veterans Roberto Cagnati and Juri Jenkner to the roles of co-chief executive officers, with David Layton moving into the chief investment officer post. Most recently, Cagnati headed portfolio solutions and served as chief risk officer, and Jenkner was responsible for business development.
The two-sleeve idea might not stop at Global Value. Partners is evaluating a similar approach for other large evergreen funds, including the $14.4 billion US Master Fund, according to a person familiar with the matter. In June, Chairman Steffen Meister said the firm had been considering trimming the overall size of its evergreen lineup.
Partners also said it intends to liquidate a distinct €469 million trust listed in London, following a majority of investors saying they would like to exit. The move targets the deep discounts plaguing listed private equity funds, and some investors have indicated they will allocate to the firm elsewhere.
Slower exits are hitting much of private equity, and Partners may feel it more because it has long sold access to wealthy individuals, who can be quicker to redeem when sentiment sours. Many holdings in its larger evergreen vehicles and in its investment trust come from the difficult Covid-era vintages. In Global Value, more than 40% of portfolio deals were struck in 2021 and 2022, a tough starting point versus younger funds at big US rivals such as Blackstone and Ares.
There are offsets. Across the firm's 30-year track record, a number of Partners' newer private equity deals have delivered the fastest earnings expansion, and a recent Goldman Sachs report noted that its fresh infrastructure evergreen funds have beaten many big competitors.
The liquidity push brings trade-offs. Peel Hunt analyst Markuz Jaffe wrote that the far larger Global Value SICAV creating a "distributing fund" may affect exits for the investment trust "due to perceptions of investors seeking liquidity from Partners Group managed vehicles." Five of Global Value's 10 largest portfolio holdings also rank among the trust's top 10, including DiversiTech and Emeria, which could heighten any signaling effect to buyers.
Partners said last week that the planned division does not alter its goal of tripling AUM, targeting $450 billion in 2033. Hitting that mark likely depends on continued demand from distribution partners such as UBS, Deutsche Bank AG and Erste Group Bank AG. Barclays analyst Michael Sanderson called the target "clearly going to be a stretch," pointing to potential years of low or no AUM growth in 2026 and 2027 as higher evergreen redemptions bite, on top of wider industry challenges in value creation, realizations and fundraising.
What it means for your money: this is a real-time experiment in balancing liquidity and long-term compounding. Keep an eye on how the assets are split, whether sale prices support current valuations, and if redemption pressure cools.
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