Message from the Chairman and the Co-CEOs
We start this letter by acknowledging the unprecedented events of the past year, precipitated by the outbreak of the COVID-19 pandemic. Safeguarding the health and safety of our employees, and those of our portfolio companies, was our first priority in 2020.
In parallel, we drove forward performance in our investments for the benefit of our clients. With double-digit EBITDA growth across our direct private equity portfolio, we are proud to report strong portfolio performance last year. The foundations for portfolio stability were laid by our emphasis on thematic sourcing coupled with our disciplined asset selection and value creation approach.
Towards the end of the year 2020 markets turned more active and our investment activity has increased again considerably. As we transition into 2021, our transformational approach to investment and our entrepreneurial approach to governance remain at the core of our activities. This gives us confidence that with our investment strategy we are well positioned to continue to grow and provide our clients with sustainable returns.Message from the Chairman and the Co-CEOs
2020 at a glance
We are proud to report strong portfolio performance in 2020. We broadly outperformed relevant public markets benchmarks and delivered superior returns for our clients, despite the economic uncertainty caused by the COVID-19 pandemic. Our transformational investing strategy provided support to our portfolio in H1 and facilitated a rapid return to growth in H2. The foundations for portfolio stability were laid by our emphasis on thematic sourcing coupled with our disciplined asset selection and value creation approach.Investments
In 2020, we saw continued strong client demand across all private markets asset classes despite COVID-19. Structural growth drivers continue to be the increase in institutional assets under management, the rising allocations of institutional investors to private markets and the outperformance of private markets against public markets. Moreover, we observe a concentration of private markets allocations with those managers that have the capacity and ability to onboard sizeable commitments and deploy larger amounts of capital as well as providing an all-encompassing service catalogue.Clients
Our transformational investing strategy provided support to our portfolio in H1 and facilitated a rapid return to growth in H2. In H2, more favorable exit markets enabled the firm to realize several assets and performance fees recovered strongly to 27% of total revenues, up from 9% in H1. In H1, the firm had to postpone several divestments due to the weak exit environment caused by COVID-19.
Total revenues from performance fees therefore decreased by 44% to CHF 266 million and led to a decrease of total revenues by 12% to CHF 1,412 million. Total revenues from management fees increased marginally by only 1% to CHF 1,146 million.
Our EBIT margin remained largely flat at 62%, confirming our disciplined approach to cost management. Profit decreased by 11% to CHF 805m, in line with revenues and driven by lower performance fees.
The Board proposes a dividend of CHF 27.50 per share (+8%) based on continued average AuM growth in CHF and a confident growth outlook across all business lines.Financial Report Financial Statements
Total assets under management(in USD bn) See breakdown
In this report, the Nomination & Compensation Committee (NCC) outlines the philosophy and principles behind our compensation structure and discloses the compensation paid to the members of the Executive Committee and the Board for the fiscal year 2020.
The NCC strives to continuously improve the transparency and clarity of the firm’s approach to compensation and, in 2020, reached out again to key shareholders and proxy advisors to reflect on industry trends and gather outside perspectives. These periodic reviews of compensation structure allow the NCC to continuously enhance the firm’s approach to compensation and further align the interests of clients, shareholders, employees and other stakeholders.Compensation Report
Corporate Governance Report
Partners Group is committed to meeting high standards of corporate governance, with the aim of guiding the firm to further success. As a company with its shares listed on the SIX Swiss Exchange AG, Partners Group is committed to pursuing an open, transparent and consistent communication strategy vis-à-vis its shareholders as well as the financial community. It therefore prepares its Corporate Governance Report according to the “Directive on Information relating to Corporate Governance” issued by the SIX Exchange Regulation and also takes into account the “Swiss Code of Best Practice for Corporate Governance” issued by economiesuisse.Corporate Governance Report
Corporate Sustainability Report 2020
Portfolio-wide ESG impacts
liters of gasoline being consumed
months of waste generated by the city of Denver
million metric tons
passenger vehicles driven for one year
hours of work
peak jobs during asset construction
hours of work
Corporate Sustainability Report
At a time when the world was already facing several important challenges, ranging from addressing an ongoing climate crisis to fighting for racial justice, the outbreak of the global COVID-19 pandemic added an extra level of complexity. The sheer scale of its impacts, including dramatic loss of life and economic uncertainty, has been unprecedented.
In light of this, Partners Group’s key sustainability priority during the year was to support our stakeholders throughout the COVID-19 crisis, guaranteeing health & safety and maintaining business continuity across our firm and investments.
We also remained steadfast in our commitment to responsible investment and sustainability. A key pillar of our purpose as a firm is to create lasting, positive impact. This would not be possible without a leading responsible investment practice and a principled approach to managing our own operations. In 2020, we led several initiatives at the corporate and portfolio level to advance our sustainability agenda and strengthen our business resilience with the ultimate ambition of creating true stakeholder impact.
"The past year has only served to deepen our conviction that the integration of sustainability considerations into our operations and investment processes is key to creating lasting, positive impact."Steffen MeisterExecutive Chairman