Partners Group to Split London Investment Trust as Client Withdrawals Rise
Partners Group Responds to Rising Client Withdrawals
FRANKFURT/LONDON, June 18 (Reuters) - Swiss private equity firm Partners Group said on Thursday it will introduce a dual share-class structure for its London-listed investment trust, allowing up to 30% of the fund to be wound down in its latest move to address clients demanding their money back.
Details of the Dual Share-Class Structure
The board of Partners Group Private Equity Limited (PGPE) investment trust, which manages about €800 million ($917 million) in assets, said investors can either remain in the existing strategy or switch up to 30% of their holding into a separate "realisation" fund, with cash returned over time.
Background: Recent Selloff and Withdrawal Caps
The move follows a sharp selloff in shares of parent Partners Group on the Swiss stock exchange on June 3 on news the company was capping withdrawals from an $8.6 billion private equity fund facing redemption pressure.
A day later, sources said Partners Group - which manages about $185 billion in assets - planned to cap withdrawals from a larger U.S. fund.
Investor Concerns and Market Impact
Rising concerns about private credit fund performance and valuations have prompted investors, particularly wealthy retail clients, to pull money from such vehicles. The pressure now appears to be spilling over into private equity, with withdrawals at Partners Group increasing.
The firm said last week it had no plans for new liquidity curbs on its evergreen funds.
Addressing Share Discounts and Investor Demands
PGPE said on Thursday the proposed structure aims to address the persistent discount of its shares to net asset value, as well as investor demand for cash. Chair Peter McKellar said it offered "a pragmatic and deliverable solution within the Board's control".
Concerns About Private Market Exposures
CONCERNS ABOUT PRIVATE MARKET EXPOSURES
Broader industry concerns centre on private credit and equity exposure to software companies facing disruption from AI.
Case Study: Medallia Takeover
A consortium led by Blackstone, Apollo, and FS KKR Capital Corp has taken control of indebted software company Medallia from private equity manager Thoma Bravo, Medallia said on Wednesday, wiping out around $5 billion in equity for Thoma Bravo and its co-investors.
Market Reaction and Additional Information
Shares in Partners Group were down 2.1% at 1125 GMT, near their lowest level since 2020.
($1 = 0.8724 euros)
(Reporting by Ludwig Burger and Tommy Reggiori Wilkes. Editing by Emelia Sithole-Matarise and Mark Potter)
