Key figures
Message from the Chairman and the CEO
Following a prolonged period of uncertainty, many economies are showing strong signs of recovery as global vaccination campaigns progress. As the market has regained confidence, investment activity has picked up signficantly across private markets, with investment volumes near record highs.
However, we are aware that there are still significant clouds on the horizon. The outlook on inflation is uncertain; commodity prices have surged; wage pressure is rising in the low-income segment; and the pandemic is not yet behind us.
While we have a large and attractive investment pipeline, identified through our Thematic Investing approach, scenario testing and selectivity are critical tools in our investment toolbox, especially in the current market environment: rather than relying on a single base case, we test our investment proposals against multiple macroeconomic scenarios to select assets and build portfolios that can withstand different economic impacts.
Message from the Chairman and the CEO
H1 2021 at a glance
Investments
Following a strong rebound of the global economy, H1 2021 has been a very active period in terms of private markets investment and exit volumes. Yet, it continues to be an extremely competitive market for new investments and valuations are still at or near record highs, especially for quality assets. In this competitive environment, we remain true to our belief that "offense is the new defense": we seek opportunities to build resilience instead of buying it by focusing on assets with value creation potential in sub-sectors with above-average, consistent growth rates. As such, we continue to be very selective and source thematically in order to identify these sub-sectors. We further build on these growth dynamics and leverage our entrepreneurial governance approach to create market leaders through business transformation and platform development.
InvestmentsClients
We expect the secular growth trajectory of the private markets industry in general, and for Partners Group in particular, to continue and client demand to remain diversified across regions and product types. Supported by the recovering macro-economic environment, pent-up demand and strong investment activity during the period, the industry continued to observe strong demand for private markets solutions in H1 2021. Furthermore, a recent survey amongst institutional investors reconfirmed that more than 80% of investors expect to commit more or the same amount of capital to private markets over the next twelve months and more than 90% envisage to increase the longer-term allocations, a structural trend we have observed first-hand.
ClientsFinancials
Continued client demand enabled us to generate a 21% increase in management fees in H1 2021. Strong underlying portfolio realizations have translated into significant performance fee growth over the same period. Performance fees increased to CHF 442 million (39% of revenues) in H1 2021 from CHF 56 million (9% of revenues) in H1 2020. In the second half of the year, we plan to continue taking advantage of the favorable market environment for exits. As a result, we anticipate performance fees to represent more than 40% of total revenues for the full-year 2021, making 2021 an exceptionally strong year overall.
Total revenues rose 81% to CHF 1'130 million in H1 2021. Total costs grew in line with revenues and EBIT increased by 80% to CHF 702 million. The EBIT margin remained stable at 62%. Profit increased by 101% year-on-year to CHF 629 million.
Financial Report Financial Statements