Partners Group is restructuring its €6.6bn European private equity fund for wealthy individuals, months after capping redemptions at 5 per cent. The Swiss firm plans to split the fund into two portfolios: a "distributing" pool of older, underperforming assets and a "compounding" pool of newer investments. Existing investors would have roughly 75 per cent allocated to the distributing fund and 25 per cent to the compounding fund, reflecting the current asset mix.
The move follows client pressure to withdraw cash after a period of weak performance. Partners Group, which pioneered selling private equity products to wealthy individuals, has faced aggressive competition from larger US groups such as Blackstone and KKR. The firm is considering applying the same structure to other older evergreen strategies.
The overall 5 per cent redemption cap would remain, applied equally to both sub-portfolios. Investors may eventually reallocate cash from asset sales in the distributing fund into the compounding fund, though they cannot switch existing shares between the two. The plan requires shareholder approval.
The private equity industry struggles to exit older investments made at high valuations in a low-rate environment, complicating returns. Partners Group's restructuring aims to balance liquidity demands with performance preservation.
Source: Financial Times Companies · Summarized by HeadlinesBriefing