Partners Group Holding AG is reducing management fees at a key evergreen fund as it seeks investor approval to revamp the private equity vehicle. Earlier this month the Swiss private markets firm revealed it plans to turn the €6.6 billion Global Value SICAV fund into an "umbrella" structure overseeing two portfolios: a distributing fund with older, lower-performing assets and a compounding entity offering potentially higher returns over time. The fee reductions are designed to sweeten the deal for investors affected by the firm's response to a wave of redemption requests, potentially building support ahead of a vote next month. Existing investors will benefit from reduced management fees in the distributing fund and, upon conversion, on their converted holdings in the compounding fund.
Investors in the distributing fund will see their fees reduced by at least 25 basis points for three years, while investors in the compounding fund will see their management fees reduced by up to 75 basis points until January 1, 2030. Newly invested capital will also benefit from reduced management fees in the compounding fund. At the same time, Partners is reducing the ability of investors to withdraw cash from the fund, lowering the redemption threshold for some investors. The proposed move to an umbrella fund is subject to shareholder approval, to be sought in the week of Nov. 9, and the sub-funds are expected to be operational on November 30.
Until the changes to the fund are stabilized, Partners intends to reduce the ability of investors to withdraw assets even further. The net redemption threshold will be reduced from 5% to 2.5% of net asset value for new share classes from October 30, but following the split the compounding fund is expected to return to the standard 5% net redemption threshold as soon as practicable. The Global Value fund first imposed its redemption limit of 5% net asset value per quarter in June, after withdrawal requests had surged to an estimated 9.8% in the second quarter.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing