A decline in performance fees hits the bottom line of Zug-based Partners Group. Meanwhile, management fees grew as did assets under management.
The private markets firm Partners Group saw its profits contract by 26 percent in the first half of the year to 464 million Swiss francs ($479 million) from 629 million in the comparable period a year ago, the company said in a statement Tuesday.
Overall revenues fell by 22 percent to 881 million francs in the first half from 1.13 billion in the comparable year-ago period, according to the interim report.
With the markets in turmoil since the beginning of the year, performance fees dropped 84 percent in the first half to 72 million francs from 442 million a year ago. Management fees, however, rose to 809 million francs from 688 million during the first six months of last year.
Performance Fees
Two factors were mainly responsible for the decline in performance fees. First, the group brought forward select realizations originally planned for 2022 to 2021 because value creation targets had been met and exit conditions were particularly favorable.
Second, the firm decided to postpone the planned realization of select other mature businesses and assets during the first half given the changing market environment.
AuM Increase
The firm had $131 billion of assets under management as of June 30, 2022, a 3 percent increase over the 127 billion it was managing at the end of December.
Full Year Performance Outlook
Despite the precipitous drop in performance income, they accounted for 8 percent of revenues, which was within the 5 to 10 percent guidance range for the first half. For the full year, Partners Group expects performance fees to be under their mid- to long-term average guidance of 20 to 30 percent.
