Partners Group: Not Confident In Exit Rates With Cost Of Capital Issues

Valkyrie Trading Society Investing Group Leader Follow Summary Partners Group Holding AG faces stagnating income and persistent cost of capital headwinds, dampening prospects for rapid exits and robust performance income. Despite 31% fundraising growth and infrastructure AUM gains, performance income remains depressed, and we don't expect near-term improvement amid a sluggish exit environment. The exit rates that drive performance fees are influenced by the cost of capital, which affects how frequently private equity transactions clear. Enduring a high cost of capital is a progress risk. Relative valuation is unattractive, as PGPHF trades at a higher EV/AUM multiple (0.1x) than CVC Partners (0.075x), offering little appeal for new investors. Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More » alexsl/iStock via Getty Images Partners Group Holding AG ( PGPHF ) has quite recently put out results. We note that the income is stagnating compared to last year, and while things were looking better in the early half when This article was written by Valkyrie Trading Society 5.61K Followers Follow The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.