Global firm to split $10bn evergreen fund in two

Partners Group plans to split its flagship €6.6 billion ($10.59 billion) Global Value SICAV* evergreen private equity fund into two separate strategies to give investors increased flexibility in how they allocate.

A similar strategy could be applied to the firm’s Australian fund, which feeds into the Global Value Fund, if it can be done without triggering a tax event.

The two Global Value sub funds will comprise a compounding fund, which will focus on long-term value accretion, and a distributing fund, which will offer investors the option of receiving returns when investee businesses are exited. Both sub funds will be managed by the same team.

Switzerland-based Partners Group has investment teams around the world, including in Sydney, and has its largest investments in North America. The Global Value Fund was launched in 2007. Since inception the fund has returned 4.5x invested capital net of fees.

The firm said it was proposing to create the two sub funds under the continuing Global Value Fund umbrella amidst a developing evergreen funds industry as well as broadening investor preferences.

“As the industry matures,” Partners Group said, “institutional and private wealth investors are increasingly seeking greater flexibility to allocate capital more dynamically in private markets.”

The two sub funds are to be formed on different pools of investment vintages. Partners Group will continue to have a meaningful commitment and expects to make additional “material” commitments to the compounding fund from its balance sheet, investing alongside new institutional clients.     

Investors will have the option of retaining their current exposure to the Global Value Fund strategy, convert shares from the distributing fund to the compounding fund or redeem shares in one or both sub portfolios.

As part of the changes, Partners Group said it planned to “right size” the compounding fund to support efficient portfolio management and deployment. New investors will be able to subscribe to the compounding fund.

The move to the umbrella fund structure remains subject to shareholder approval.

Partners Group partner and incoming co-chief executive Roberto Cagnati said: “Our proposal to segment Global Value SICAV into two bespoke portfolio profiles sets up one of the most successful private equity evergreen structures to continue compounding returns into the future. We are simplifying portfolio construction and management, enabling investors to align capital with their liquidity needs and return objectives without compromise. The long-term exposure that the compounding fund provides has already generated interest from new institutional investors.”

* SICAV stands for Société d'Investissement à Capital Variable (French for an open-ended “investment company with variable capital”). In the context of the Partners Group Global Value Fund, it designates a type of open-ended collective investment company, based in Luxembourg, where the amount of capital and number of shares change as investors buy or redeem shares.

Image: Partners Group partner and incoming co-chief executive Roberto Cagnati.