Partners Group Global Multi-Asset (ETL0431AU) Report & Performance

In June, the global equity markets showed notable strength due to favorable developments regarding the US debt ceiling and optimistic economic data.

Furthermore, most of the released inflation data indicated signs of easing, which fueled expectations that the peak of the current rate hike cycle has already been reached. Meanwhile, Partners Group Global Multi-Asset Fund recorded a performance return of 0.9% for the month. This was driven by the net positive revaluations within the Portfolio’s private debt and private equity investments, bringing the returns for the last twelve months to 6.3%, from 1.7%.

Over the reporting period, the Underlying Fund provided capital to finance an add-on commitment to direct equity asset, Galderma. Meanwhile, the Portfolio continued to benefit from distribution activity, receiving proceeds from direct equity asset, KinderCare Education.

During the month, Partners Group made an add-on commitment to Galderma, a leading global dermatology company that develops, manufactures, and distributes a range of medical and consumer skin health solutions through three business units: injectable aesthetics, dermatological skincare, and therapeutic dermatology. The Switzerland-headquartered company operates in over 50 locations across 40 countries. Brands under Galderma include Epiduo, Differin, Dysport, Cetaphil and Benzac.

Meanwhile, Partners Group received proceeds from KinderCare Education, the largest for-profit provider of early childhood education and care services in the US. Earlier in June, the company refinanced its debt structure with a new seven-year term loan to extend maturities and increase liquidity.

Uncertainty over a US government default led to an increased volatility in the global equity markets, although an agreement to raise the debt ceiling was reached days before the deadline. Against this backdrop, the net positive revaluations experienced by the Portfolio’s private equity, private debt, private infrastructure investments were offset by its listed investments. As such, Partners Group Global Multi-Asset Fund’s performance remained flat in May, bringing the total performance for the last twelve months to 1.7%.

Over the reporting period, Partners Group provided additional capital to direct equity asset, Dimension Renewable Energy, to fund the construction of new projects, and acquired direct equity investment Project Silver.

During the month, Partners Group invested capital in Dimension Renewable Energy to fund the construction of 23 projects representing 95 MWs across five states, in line with the investment’s underwriting thesis. Dimension Renewable Energy is a leading distributed energy platform in the US, founded in 2018 and focused on the high-growth community solar sector. As of mid2023, the platform’s community solar pipeline has grown to c. 925 MWs probability weighted (gross capacity of c. 2’250 MWs) across over 500 projects in over ten US states.

In addition, Project Silver represents Partners Group’s acquisition of a significant minority stake in Sterling Pharma Solutions from GHO Capital. Sterling is a UK-based leading pharmaceutical development and manufacturing organization that Partners Group considers attractive due to its thematic relevance and well-established position in market segments with high barriers to entry. Following the transaction, Partners Group will continue supporting Sterling’s growth with a focus on further integration across sites, operational excellence, and branding/marketing.

Driven by positive market sentiment in April and a good start into the Q1 earnings season , the Portfolio’s overall performance increased as its private equity, private debt and listed investments experienced net positive revaluations. Reflecting this, Partners Group Global Multi-Asset Fund recorded a 1.2% performance in April, bringing the total performance for the last twelve months to 1.1%.

Over the reporting period, Partners Group provided capital to secondary investment, LS Power Equity Partners III to repay a credit facility. The Portfolio continued to benefit from a healthy level of distribution activity, including distribution proceeds from primary investment, CVC Capital Partners VII.

During the month, LS Power III called capital to repay the credit facility utilized for the offshore joint venture and related development expenses of Rise Light & Power (Rise). Based in the US, Rise is an energy asset manager and developer, and currently owns the 2.1GW Ravenswood Generating Station, the largest power generation facility in New York City, alongside various transmission projects, a district thermal energy project and a largescale battery energy storage project. In December 2022, Rise entered into a joint venture with TotalEnergies Renewables for the development of a 1.4GW offshore wind facility to transform Ravenswood into a clean energy hub with a mature and cost-effective interconnection of renewable offshore wind energy into New York City. The investment partners expect the project to support the transition from fossil fuel to offshore wind power, benefiting over 700’000 New York homes and driving economic investment in the community.

Meanwhile, CVC Capital Partners VII distributed proceeds from the sale of April to private equity firm KKR. Headquartered in France, the company is a global insurance broker that specializes in the provision of loan, health, property and casualty niche insurance, and asset management. CVC acquired April in 2019 and has since supported the company’s growth by transforming its business model to focus on insurance distribution, enhancing its product offerings, strengthening digital capabilities, and expanding into new markets and geographies.

In March, the broader equity markets displayed an increased volatility, with market sentiment weakening in the second half of the month due to pressure on the banking sector in the US and EU. Despite these headwinds in the banking sector, the major central banks continued to raise interest rates. Meanwhile, Partners Group Global Multi-Asset Fund recorded a -0.1% performance in March, bringing the total performance for the last twelve months to -0.6%. Notwithstanding, the Portfolio’s private equity and private infrastructure investments continued to drive the overall performance of the Portfolio, offsetting the muted performance of other asset classes such as private debt.

Over the reporting period, Partners Group provided capital to finance new add-ons for direct equity asset, QNTM Medical, and several closed acquisitions for primary investment, Permira 8. The Portfolio also received distribution proceeds from primary investment, EQT VIII, L.P.

During the month, Partners Group called capital to finance the first add-ons of QNTM Medical, an outpatient diagnostic imaging platform with a nucleus in western Germany. The company continued to make progress on its value creation strategy by building out its management and integration teams, including a CFO. The company continues to have good traction with potential acquisition targets, with several project in the due diligence phase.

In addition, Permira 8 called capital to finance several recently closed acquisitions, including Mimecast, an email and collaboration security software provider. The take-private acquisition valued the company’s equity at approximately USD 5.8 billion. Founded in 2003 and joint-headquartered in London and Boston, Mimecast serves more than 16 million users across its 40’000 customers, and has a strong footprint in the US, UK and South Africa. Permira finds the investment attractive given the significant opportunity ahead in cybersecurity as more individuals have transitioned to a remote workplace. Moving forward, the investment partner will work with the management team to accelerate the company’s product roadmap and expand the go-to-market organization in order to drive further growth.

On the other hand, EQT VIII distributed proceeds largely stemming from the full sale of SHL Medical to a consortium of investors including EQT Future. SHL Medical is a manufacturer of advanced drug delivery systems such as autoinjectors and serves as a partner to global pharmaceutical and biotech companies. Since EQT’s acquisition in 2020, the company has significantly outperformed its business case through several value creation initiatives, including strengthening its manufacturing and commercial capabilities while accelerating digitalization.

February NAV per share decreased 0.3%

Global equity markets were broadly flat in February as several higher-thanexpected inflation numbers drove interest rate expectations and moderated investor’s sentiment during the month. Reflecting this, Partners Group Global Multi-Asset Fund recorded a -0.3% performance in February, bringing the total performance for the last twelve months to 0.5%. The slight drop in monthly performance was attributable to the Portfolio’s listed investments, which was slightly offset by the positive revaluation of private equity and private debt investments as well as healthy distribution activity within the Portfolio.

Over the reporting period, Partners Group closed two add-on investments in direct equity assets Confluent Health and Rovensa. In addition, the Portfolio received distribution proceeds from direct infrastructure asset Grassroots Renewable Energy Platform.

During the month, Confluent Health, a US-based healthcare company focused on physical and occupational therapy, completed its acquisition of MOTION PT Group, a physical therapy platform in the US. With this acquisition, Confluent will add density into its existing geographic footprint in the northeast region, where the physical therapy landscape remains highly fragmented with attractive tuck-in opportunities. With a track record of excellence in promoting access and quality in physical therapy, MOTION also offers a unique business model with diversified revenue streams, positioning the company as a strong fit with Confluent’s growth strategy of becoming a diversified musculoskeletal platform.

In addition, Rovensa, a leading provider of specialty crop nutrition, biocontrol and crop protection products, completed its add-on acquisition of Cosmocel, a developer, manufacturer and distributor of specialty biostimulant solutions. The addition of Cosmocel is in line with Rovensa’s goal of enabling sustainable agriculture. Cosmocel has a strong presence in the US, and is the market-leading bionutrition player in Mexico. Besides, Cosmocel’s geographic footprint and product portfolio are highly complementary to Rovensa. This acquisition is anticipated to generate cross-selling synergies and establish Rovensa as the leading independent biosolutions company globally.

Meanwhile, Partners Group distributed proceeds from the sale of CWP Renewables, a large-scale renewable energy platform in Australia. CWP was sold to Squadron Energy, an Australian energy company dedicated to accelerating decarbonization. During the holding period, Partners Group implemented value creation initiatives including platform expansion, installation of best-in-class teams, arranging long-term power purchase agreements and asset de-risking. Since its investment in 2016, the platform grew to over 1.1GW from a single 270 MW wind farm, with established portfolio consisting of Sapphire Wind Farm (270MW generating capacity), Crudine Ridge Wind Farm (142MW) and Bango Wind Farm (244MW). CWP Renewables was built from ground up, transforming it into one of the largest renewable energy platforms in Australia. The platform has created enough energy to power 200’000 homes, employ more than 1’000 Australians, and avoids 2.1 million tons of emissions through its renewable power generation.

January 2023 showed signs of easing inflation in several major regions and hopes that central banks will slow the interest rate-hike pace supported investor sentiment. Meanwhile, Partners Group Global Multi-Asset Fund recorded a 3.5% performance in January, driven by its listed and direct equity investments, bringing the total performance for the last twelve months to -0.2%, up from -4.6%.

Over the reporting period, investment activity within the Portfolio remained stable, which included add-on investments for direct assets atNorth and Confluent Health. In addition, the Portfolio continued to benefit from a healthy level of distribution activity, including proceeds from real estate secondary fund Brookfield Strategic Real Estate Partners II.

During the month, Partners Group completed an add-on investment in atNorth, the largest data center operator in Iceland. The platform comprises two data centers in Iceland with a total committed power capacity of approximately 83MW. Furthermore, the company has launched its first data center in Stockholm, Sweden with the first data hall in operation as of March 2022 and the remaining to be completed by the end of the year. At full build-out, the data center will have more than 11MW of capacity. More recently, the company has announced the acquisition of two data center facilities in Finland, which is expected to boost atNorth”s expansion in the Nordic region as it plans to build its third site in the country.

In addition, Confluent Health, a US-based healthcare company focused on physical and occupational therapy, completed its acquisition of MOTION PT Group, a physical therapy platform in the US. With this acquisition, Confluent will add density into its existing geographic footprint in the northeast region, where the physical therapy landscape remains highly fragmented with attractive tuck-in opportunities. With a track record of excellence in promoting access and quality in physical therapy, MOTION also offers a unique business model with diversified revenue streams, positioning the company as a strong fit with Confluent”s growth strategy of becoming a diversified musculoskeletal platform.