Half Year 2026 Partners Group Holding AG Earnings Call

September 1, 2026

Speaker #1: Thank you for standing by. Welcome to Partners Group's interim financial results as of 30 June 2026. I would like to hand the conference over to our first speaker today, Dave Leighton.

Operator: Thank you for standing by. Welcome to the Partners Group's interim financial results as of 30 June 2026. I would like to hand the conference over to our first speaker today, David Layton. Please go ahead, sir.

Speaker #1: Please go ahead, sir.

Speaker #2: Thank you very much. Good morning, everyone. Thank you for joining us for the 2026 interim results. I'm Dave, the CEO of Partners Group. Joris, our CFO, and Stefan, our Chairman, will also present during their prepared portion of this call.

David Layton: Thank you very much. Good morning, everyone. Thank you for joining us for the 2026 interim results. I'm Dave, the CEO of Partners Group. Joris, our CFO, and Steffen, our Chairman, will also present during the prepared portion of this call. We're taking this call from our London office, and have invited some select investors list for this call. We also the firm, including our incoming Co-CEOs, and there could not be a more capable, ready set of executives than the two of them, and they'll be available for the Q&A portion, if needed. Let me start here with the headlines and the key business updates. This was a strong H1. Fundraising was solid. $16 billion of new assets. That's up 31% year-on-year. We've been raising private capital now for 30 years, and this was the best H1 that we've ever seen with record client demand.

David Layton: Thank you very much. Good morning, everyone. Thank you for joining us for the 2026 interim results. I'm Dave, the Chief Executive Officer of Partners Group. Joris, our Chief Financial Officer, and Steffen, our Chairman, will also present during the prepared portion of this call. We're taking this call from our London office, and have invited some select investors list for this call. We also the firm, including our incoming Co-Chief Executive Officers, and there could not be a more capable, ready set of executives than the two of them, and they'll be available for the question-and-answer portion, if needed. Let me start here with the headlines and the key business updates.

Speaker #2: I think this call, from our Leighton office, has invited some select investor analysts for this call. We also have the firm, including our incoming Co-CEOs, and there could not be a more capable, ready set of executives than the two of them.

Speaker #2: And they'll be available for the Q&A portion if needed. Let me start here with the headlines and the key business updates. This was a strong first half.

David Layton: This was a strong H1. Fundraising was solid. $16 billion of new assets. That's up 31% year-on-year. We've been raising private capital now for 30 years, and this was the best H1 that we've ever seen with record client demand. On that basis, and on the pipeline we currently see from across our increasingly diversified client segments, we're reconfirming our full year fundraising. Management income came in at CHF 905 million. That's growing 12% in constant currency. Solid, 23%. EBITDA was CHF 706 million. On the portfolio, our more recent vintages in particular, show strong momentum, which is the basis for value creation and years to come. Speaking about a couple of years, notable that we raised $80 billion since 2023, and again, with a record H1 in 2026. Looking at the bigger picture on the left side, we see that the overall industry fundraising is down about 15% since 2023, and we're up roughly 50%, and that's market share that we have gained during a difficult environment. On the right, you can see what drove it.

Speaker #2: Fundraising was solid, $16 billion of new assets—that's up 31% year on year. We've been raising private capital now for 30 years, and this was the strongest we've ever seen, with record client demand.

Speaker #2: And on that basis, and on the pipeline we currently see from across our increasingly diversified client segments, we're reconfirming our full-year fundraising management income came in at 905 million Swiss francs.

David Layton: On that basis, and on the pipeline we currently see from across our increasingly diversified client segments, we're reconfirming our full year fundraising. Management income came in at CHF 905 million. That's growing 12% in constant currency. Solid, 23%. EBITDA was CHF 706 million. On the portfolio, our more recent vintages in particular, show strong momentum, which is the basis for value creation and years to come. Speaking about a couple of years, notable that we raised $80 billion since 2023, and again, with a record H1 in 2026. Looking at the bigger picture on the left side, we see that the overall industry fundraising is down about 15% since 2023, and we're up roughly 50%, and that's market share that we have gained during a difficult environment. On the right, you can see what drove it.

Speaker #2: That's growing 12% in constant currency—a solid 23%. EBITDA was 706 million Swiss francs. And on the portfolio, our more recent vintages, in particular, show strong momentum, which is the basis for value creation in years to come.

Speaker #2: Speaking of years, I think it's notable that we've raised $80 billion since 2023—and again, with a record first half in 2026. Now, looking at the bigger picture: on the left side, we see that the overall industry fundraising is down about 15% since 2023.

Speaker #2: And we're up roughly 50%, and that's market share that we have gained during a difficult environment. On the right, you can see what drove it.

Speaker #2: Those share gains are diversified across asset classes. Private equity has raised $28 billion during this time period, and it is ramping up its next flagship fundraise.

David Layton: Those share gains are diversified across asset classes. Private equity has raised $28 billion during this time period and is ramping up its next flagship fundraise. Credit has been strong. Most recently, we had record closing for our direct infrastructure fund, which closed about 50% higher than its predecessor. Across these more recent fundraisers, we've been particularly pleased with the healthy mix of new and existing clients. Again, this is market share that we've taken during challenging fundraising years for the industry, and these have potential to be some strong vintage years. At least they're off to a very strong start. On the next slide. As we mentioned on our last call, H1 was a highly selective period for us for new investments. However, deployment has accelerated into the H2. We've signed $5 billion of additional investments during July and August. Our core investment strategy remains unchanged.

Speaker #2: Credit has been strong. Most recently, we had a record closing for our direct infrastructure fund, which closed about 50% higher than its predecessor. Across these more recent fundraises, we've been particularly pleased with the healthy mix of new and existing clients.

Speaker #2: Again, this is market share that we've taken during challenging fundraising years for the industry, and these have the potential to be some strong vintage years.

Speaker #2: At least they're off to a very strong start. On the next slide—as we mentioned on our last call—H1 was a highly selective period for us for new investments.

Speaker #2: However, deployment has accelerated into the second half. We've signed $5 billion of additional investments during July and August. Our core investment strategy remains unchanged.

Speaker #2: We deliver value to clients by identifying assets where we have deep thematic conviction and implementing the value creation plan to drive transformation. Last year, our private equity team screened over 2,000 assets and only transacted on about 1%.

David Layton: We deliver value to clients by identifying assets where we have deep thematic convictions and implement the value creation plan to drive transformation. Last year, our private equity team screened over 2,000 assets and only transacted on about 1%. We remain highly selective but are increasingly excited about the opportunities that we're finding. Five asset classes, five distinct strategies, and a dynamic set of investment engines supplying content for our clients. Next slide. This slide highlights some of the reasons why we believe that these more recent investment years, again, where we've been taking share with CHF 80 billion raised and a material amount already invested, they have the potential to be strong years. The operational performance of our direct equity portfolio from 2023 onwards is back to double-digit growth. Recent infrastructure and real estate KPIs are also solid.

Speaker #2: We remain highly selective, but are increasingly excited about the opportunities that we're finding. Five asset classes, five distinct strategies, and a dynamic set of investment engines supplying content for our clients.

Speaker #2: Next slide. This slide highlights some of the reasons why we believe that these more recent investment years—again, where we've been taking share with $80 billion raised and a material amount already invested—have the potential to be strong next year.

Speaker #2: The operational performance of our direct equity portfolio from 2023 onwards is back to double-digit growth. Recent infrastructure and real estate KPIs are also solid.

Speaker #2: This is value creation and operational success, which ultimately lays the foundation for future performance for our clients. Next slide. Among our clients, we're known for delivering consistent returns throughout cycles.

David Layton: This is value creation and operational success, which ultimately lays the foundation for future performance for our clients. Next slide. Among our clients, we're known for delivering consistent returns throughout cycles. We had a handful of idiosyncratic topics in the portfolio this period, coming out of the 2021 and 2022 time period in particular, but we believe that we're on track to achieve a net TVPI of over 2x in five of the last six vintage pools. Returns alone are not the only factor that's important for clients. As an industry, we've been through several periods of limited distributions, and we've received good feedback from clients on our consistency during the last few years. Slide. Similar story for infrastructure, but with even stronger recent vintage performance. Top quartile performance across a number of key vintage years.

Speaker #2: We had a handful of idiosyncratic topics in the portfolio this period, coming out of the 2021 and 2022 time period in particular. But we believe that we're on track to achieve a net TVPI of over 2x in five of the last six vintage pools.

Speaker #2: Now, returns alone are not the only factor that's important for clients. As an industry, we've been through several periods of limited distributions, and we've received good feedback from clients on our consistency during the last few years.

Speaker #2: Similar story for infrastructure, but with even stronger recent vintage performance. Top quartile performance across a number of key vintage years. And again here, our net DPI runs ahead of the market for that 2018 to 2020 vintage pool in particular.

David Layton: Here, our net DPI runs ahead of the market for that 2018 to 2020 vintage pool in particular. These results helped support the recent close of our largest ever direct equity or our direct infrastructure strategy. Next slide. We remain highly confident in our ability to deliver on our full-year fundraising target, which we established at the start of this year. Interestingly, our growth is coming from a much broader base of clients and investment strategies than in the past. Looking at these client segments on the left side, we're more diversified today in our fundraising than we've ever been. We have many different cylinders helping us to drive our client solutions. Zooming in on just a couple of areas here, looking at consultants, for example.

Speaker #2: These results help to support the recent close of our largest-ever direct equity or direct infrastructure strategy. Next slide. We remain highly confident in our ability to deliver on our full-year fundraising target, which we established at the start of this year.

Speaker #2: And interestingly, our growth is coming from a much broader base of clients and investment strategies than in the past. Looking at these client segments on the left side, we're more diversified today in our fundraising than we've ever been.

Speaker #2: We have many different cylinders helping us drive our client solutions engine. Zooming in on just a couple of areas here—looking at consultants, for example.

Speaker #2: We have really invested in that channel and in those relationships, and this has been important to some of our recent successes. If I look at one of our recent flagship fundraisers, for example, we saw an increase of three times in the number of consultants that advise clients to invest with us.

David Layton: We have really invested into that channel, into those relationships, and this has been important to some of our recent successes. If I look at one of our recent flagship fundraisers, for example, we saw an increase of 3x in the number of consultants that advise clients to invest with us, and that helped to drive a very healthy level of demand from new clients into that strategy. Asia and the Middle East, we've seen a pickup in activity here. In the last two periods, we've closed more than five Asian mandates. We're able to construct tailored mandates with a specific geographical allocation for each client. That's a really appreciated feature of our mandates in particular. Interestingly, insurance on the next slide. We've worked to broaden our mandates over the last couple of years and to make customized mandates available.

Speaker #2: And that helped to drive a very healthy level of demand from new clients into that strategy. In Asia and the Middle East, we've seen a pickup in activity here.

Speaker #2: In the last two periods, we've closed more than five Asian oppositions. We're able to construct tailored mandates with a specific geographical allocation for each client.

Speaker #2: And that's a reason that really appreciates the nature of our mandates in particular. And insurance, on the next slide. We've worked to broaden our mandates over the last couple of years.

Speaker #2: And to make customized mandates available to clients. Insurance clients are some of the most regulated in terms of regulation and capital requirements, and traditional fund structures have not been particularly helpful in addressing their needs.

David Layton: Insurance clients are some of the most complex in terms of regulation and capital requirements, and traditional fund structures have not been particularly helpful in addressing their needs. We have seen opportunity across certain segments to provide easy processes and flexibility. We have seen many. We have the ambition to quadruple our insurance AUM to CHF 100 billion. That is an incremental CHF 75 billion by 2033, and that will be an increasingly relevant building block to help us achieve our CHF 450 billion AUM target. With that, let us shift our focus to the financial update. Joris?

Speaker #2: We've seen opportunity across insurance segments to provide easy, seamless entry. And we have the ambition to quadruple our insurance AUM to $100 billion.

Speaker #2: That's an incremental $75 billion by 2033, and that'll be an increasingly relevant building block to help us achieve our $450 billion AUM target. And with that, let's shift our focus to the financial update.

Speaker #2: Yoris.

Speaker #3: Thanks, Dave. Let me now connect the strategic progress you outlined with the financial performance that we delivered in H1 2026. The key message from this slide is that our financial profile remains strong.

Joris Gröflin: Thanks, Dave. Let me now connect the strategic progress you outlined with the financial performance that we delivered in H1 2026. The key message from this slide is that our financial profile remains strong. We showed double-digit management income growth in constant currency. We improved the profitability in our management income. Management income EBITDA grew by 15% year on year in constant currency, with the margin rising to 63%. Our overall EBITDA margin remained in line with our historical average at 63%. Taken together, our half year results show resilient and high-quality earnings profile, continued growth in management income and profitability, and stable overall margins, even with lower contribution from performance income and adverse FX impacts. I will now go through the key drivers in more details, starting with the revenues on the next slide. Management income represented 81% of our revenues in H1 2026.

Speaker #3: We showed double-digit management income growth in constant currency. We improved the profitability in our management income; management income EBITDA grew by 15% year-on-year in constant currency, with the margin rising to 63%.

Speaker #3: Our overall EBITDA margin remained in line with our historical average at 63%. Taken together, our half-year results show a resilient and high-quality earnings profile, continued growth in management income and profitability, and stable overall margins, even with lower contribution from performance income and adverse FX impacts.

Speaker #3: I will now go through the key drivers in more detail, starting with the revenues on the next slide. Now, management income represented 81% of our revenues in half-year one 2026.

Speaker #3: It grew by 12% at constant currency in H1 2026 and 6% as reported, in line with the average AUM growth. Thanks to the successful finance closes of our direct infrastructure program and private equity secondaries program in H1, late management fees—which are part of other operating income—came in very strongly and contributed positively to our management income growth.

Joris Gröflin: It grew by 12% at constant currency in H1 2026, and 6% as reported, in line with the average AUM growth. Thanks to the successful finance closes of our direct infrastructure program and private equity secondaries program in H1, late management fees, which is part of other operating income, came in very strongly and contributed positively to our management income growth. Let me talk about our management income margin on the next slide. We are a diversified platform. Our management income margin has shown resilience over time in changing markets and despite FX conditions, evolving within our historical bandwidth of 1.18% and 1.33% since the IPO. Slight variances between years may be driven by the timing of when fees are activated in an investment program or when we realize transaction fees, and how our mix in product and asset classes is influencing our recurring management fee.

Speaker #3: Let me talk about our management income margin on the next slide. We are a diversified platform. Our management income margin has shown resilience over time in changing markets and despite challenging conditions, evolving within our historical bandwidth of 1.18% and 1.33% since the IPO.

Speaker #3: Slight variances between years may be driven by the timing of when fees are activated in an investment program, or when we realize transaction fees, and how our mix in product and asset classes is influencing our recurring management fee.

Speaker #3: In H1, we again demonstrated that we are within the bandwidth, with a stable management income margin at 1.24%. Let me briefly speak about the ethics impact on the next page.

Joris Gröflin: In H1, we again demonstrated that we are within the bandwidth with a stable management income margin at 1.24%. Let me briefly speak about the FX impact on the next page. As I told you before, we grew our management income by 12% in H1 2026 on a constant currency basis. Looking back further, this is in line with the growth rate we have achieved over the last five full years, removing the FX effects. This highlights the consistent growth of our platform's recurring revenue base. A double-digit management income growth rate at constant currency has been and will be our continued goal for the mid and long term, even though there may be temporary deviations in periods from time to time. Let me turn to the performance income on the next slide.

Speaker #3: As I told you before, we grew our management income by 12% in half-year one 2026 on a constant currency basis. Now, looking back further, this is in line with the growth rate we have achieved over the last five full years, removing the FX effects.

Speaker #3: This highlights the consistent growth of our platform's recurring revenue base. A double-digit management income growth rate at constant currency has been, and will continue to be, our goal for the mid and long term, even though there may be temporary deviations in certain periods from time to time.

Speaker #3: Now, let me turn to the performance income on the next slide. With the mandatory adoption of the new IFRS 18 standard, performance income is a combination of performance fees—the main driver—and other performance-oriented income on our assets on the balance sheet.

Joris Gröflin: With the mandatory adoption of the new IFRS 18 standard, the performance income is a combination of performance fees, the main driver, and other performance-oriented income on our assets on the balance sheet that are directly attributable to our private markets business. In H1 2026, we generated CHF 233 million in performance fees, highly diversified across asset classes and strategy, leading to a performance income representing 19% of our overall revenues. Private equity, as our largest asset class, continued to contribute the most at 48%, while infrastructure accounted for 40%, reflecting the increasing share of infrastructure AUM of our platform. Across both asset classes, performance fees were mainly driven by direct exits from our pipeline. This clearly demonstrates that our own realizations are above the industry overall. We are currently in the sales process of a number of direct assets, with some being quite sizable investments.

Speaker #3: ...that are directly attributable to our private markets business. In H1 2026, we generated $233 million in performance fees, highly diversified across asset classes and strategy, leading to performance income representing 19% of our overall revenues.

Speaker #3: Private equity, as our largest asset class, continued to contribute the most at 48%, while infrastructure accounted for 40%, reflecting the increasing share of infrastructure AUM on our platform.

Speaker #3: Across both asset classes, performance fees were mainly driven by direct exits from our pipeline. This clearly demonstrates that our own realizations are above the industry overall.

Speaker #3: We are currently in the sales process of a number of direct assets, with some being quite sizable investments, and we expect attractive outcomes for our clients and shareholders.

Joris Gröflin: While we expect attractive outcomes for our clients and shareholders, the actual closing of the realizations may slip into next year for some of them. This brings us to guide towards a range of around 20% to 25% for 2026. Looking at our current exit pipeline of roughly $75 billion that we are actively working on, we are confident to generate performance income of 25% to 40% of our revenue over the next three years and beyond. Let me now move to operating costs on the next slide. One of the points that as the CFO I am most happy about, was the solid growth of our management income, EBITDA and margin. This is a direct result of cost discipline in our management income funded expenses, which are fully in our control.

Joris Gröflin: While we expect attractive outcomes for our clients and shareholders, the actual closing of the realizations may slip into next year for some of them. This brings us to guide towards a range of around 20% to 25% for 2026. Looking at our current exit pipeline of roughly $75 billion that we are actively working on, we are confident to generate performance income of 25% to 40% of our revenue over the next three years and beyond. Let me now move to operating costs on the next slide. One of the points that as the Chief Financial Officer I am most happy about, was the solid growth of our management income, EBITDA and margin. This is a direct result of cost discipline in our management income funded expenses, which are fully in our control.

Speaker #3: The actual closing of the realizations may slip into next year for some of them. This brings us to guide towards a range of around 20% to 25% for 2026.

Speaker #3: Looking at our current exit pipeline of roughly $75 billion US dollars that we are actively working on, we are confident that we can generate performance income of 25% to 40% of our revenue over the next three years and beyond.

Speaker #3: Let me now move to operating costs on the next slide. One of the points that, as the CFO, I am most happy about was the solid growth of our management income EBITDA and margin.

Speaker #3: This is a direct result of cost discipline in our management income–funded expenses, which are fully in our control. Our performance income–related expenses are variable and are a direct reflection of performance fees during the period, with up to 40% of performance fees allocated to employees.

Joris Gröflin: Our performance income related expenses are variable and are a direct reflection of performance fees during the period, with up to 40% of performance fees allocated to employees. This resulted in CHF 706 million of EBITDA for H1 2026 at a margin of 63%, as shown on the next slide. Our profitability remains strong and best in class across the industry. Over the last five years, our EBITDA margin has been always above 60%. This is a range I am also very comfortable with going forward. Let us have a look at our profits and balance sheet on my final slide. In H1 2026, we generated a net profit of CHF 502 million, which was flat year-on-year on a constant currency basis. This translates into a return on equity of 55%.

Speaker #3: This resulted in CHF 706 million of EBITDA for H1 2026 at a margin of 63%, as shown on the next slide. Our profitability remains strong and best-in-class across the industry.

Speaker #3: Over the last five years, our EBITDA margin has always been above 60%. This is a range I am also very comfortable with going forward.

Speaker #3: Let us have a look at our profits and balance sheet on my final slide. In H1 2026, we generated a net profit of CHF 502 million, which was flat year-on-year on a constant currency basis.

Speaker #3: This translates into a return on equity of 55%. As you have seen, we have generated strong operating cash flows in H1 2026, adding to our overall liquidity of CHF 2.9 billion.

Joris Gröflin: As you have seen, we have generated strong operating cash flows in H1 2026, adding to our overall liquidity of CHF 2.9 billion. Given our financial profile, we remain confident in our ability to paying dividends that are stable or growing year by year. This brings me to the end of the financials update. Let me now hand over to Steffen.

Speaker #3: Now, given our financial profile, we remain confident in our ability to pay dividends that are as stable or growing year by year. This brings me to the end of the financials update.

Speaker #3: Let me now hand over to Stephanie.

Speaker #2: Thank you, David. And Joris, good morning everybody, also from my side. So let me finish this presentational part of the session this morning with a couple of high-level perspectives.

Steffen Meister: Thank you, David and Joris. Good morning, everybody, also from my side. Let me finish this presentational part of the session this morning with a couple of high-level perspectives. Let me start maybe with some thoughts on the H1 financials and the short midterm outlook. Maybe moving to next slide, please. I think it is important to recognize that the environment still is not straightforward. We have political uncertainty, geopolitical, macro uncertainty. Big parts of public markets, as you will recognize, are priced imperfection, which is a little bit hard to reconcile with the environment, to be honest. Against that backdrop, I think we can only conclude that the first 6 months financials show that our business has just become extremely resilient over the last few years.

Speaker #2: Let me start, maybe, with some thoughts on the H1 financials and the short- and mid-term outlook. Moving to the next slide, please. I think it's important to recognize that the environment is still not straightforward.

Speaker #2: I mean, we have political uncertainty, geopolitical and macro uncertainty. Big parts of public markets, as you will recognize, are priced to perfection, which is a little bit hard to reconcile with the environment, to be honest.

Speaker #2: And against that backdrop, I think we can only conclude that the first six-month financials show that our business has just become extremely resilient over the last few years.

Speaker #2: But maybe more important, if I look at the four, I would say, key operational dimensions of our business, that gives us a lot of confidence for the mid-term.

Steffen Meister: But maybe more important, if I look at the four, I would say, key operational dimensions of our business, that gives us a lot of confidence for the midterm. These are, one, the operational growth in our portfolio, and Dave talked about that. We see for a very big part of our portfolio, especially the younger vintages, we see extremely good growth rates that will produce very good outcomes for clients in the mid to long term. The second one is the investment pipeline. There was not a shortage of investment pipeline for the last 12, 24 months, you know this. But we were clearly cautious in the last 6 to 9 months, specifically at a time when we had these uncertainties and valuations were high, bid-offer spreads were high. Here we clearly see some normalization, some more realism coming in.

Speaker #2: So these are, one, the operational growth in our portfolio—and Dave talked about that. We see, for a very big part of our portfolio, especially the younger vintages, extremely good growth rates.

Speaker #2: That will produce very good outcomes for clients in the mid to long term. The second one is the investment pipeline. There wasn't a shortage of investment pipeline for the last 12 to 24 months.

Speaker #2: You'll notice, but we were clearly cautious in the last six to nine months, specifically at a time when, you know, we had these uncertainties and valuations were high, bid-offer spreads were high, and here we clearly see some normalization, some more realism coming in.

Speaker #2: We've signed only five—just $5 billion—in the last few weeks. We have a good pipeline for the next few quarters. We're quite hopeful to realize on these investment opportunities.

Steffen Meister: We have signed only $5 billion in the last few weeks. We have a good pipeline for the next few quarters. We are quite hopeful to realize on these investment opportunities. These are great businesses. At reasonable, they are not cheap, they are at reasonable prices, but it is businesses we really want to own. We know exactly how we want to develop these businesses. The third one is the exit side of things. Again, here, there is no shortage of successful business that we can sell, but also here we clearly see an environment which makes it easier to advance in these exit processes, and we should see a number of really nice exits in the next 6 to 12 months. As Jure said, if you sign contracts in September, October, there is a good chance that they slip into next year. We will figure out.

Speaker #2: And these are great businesses. They’re not cheap, but they’re at reasonable prices. But it's businesses we really want to own. We know exactly how we want to develop these businesses.

Speaker #2: The third one is the exit side of things. Again, here, I mean, there's no shortage of successful businesses that we can sell. But also here, we clearly see an environment which makes it easier to advance in these exit processes.

Speaker #2: And we should see a number of really nice exits in the next six to twelve months. As Joris said, if you sign contracts in September or October, there's a good chance that they slip into next year.

Speaker #2: We'll figure it out. But, you know, for us, client results are our first priority. And so we'll optimize these exits in a way that optimizes results for clients.

Steffen Meister: But for us, the client results is our first priority, and so we will optimize these exits in a way to optimize the results for clients, and that will certainly be beneficial for shareholders in the long term. Then maybe as a fourth point, I really want to stress that it is not just about good fundraising or record fundraising, it is about market share that we win in a very deliberate way in segments that we decided in the last 2, 3 years to strengthen. This is our teams in Asia, in India, for instance, in particular. It is in the Middle East, not only in the client side, also in the investment side that we build up there. I would say, broadly speaking, with some wealth fund coverage, it is on the insurance side, and Dave did a little bit of a deep dive there, and on the consultant side.

Speaker #2: And that will certainly be beneficial for shareholders in the long term. And maybe as a fourth point, I really want to stress that it's not just about good fundraising or record fundraising.

Speaker #2: It's about market share that we win in a very deliberate way, in segments that we decided in the last two or three years to strengthen.

Speaker #2: These are our teams in Asia—in India, for instance, in particular. We also have teams in the Middle East, not only on the client side, but also on the investment side that we have built up there.

Speaker #2: I would say, broadly speaking, we've got some well-funded coverage. It's on the insurance side, and they did a little bit of a deep dive there. And on the consultant side, these are the segments that we expect to grow faster than, I would say, the more traditional pension fund sectors in Europe and the US in the next few years.

Steffen Meister: I would say, broadly speaking, with some wealth fund coverage, it is on the insurance side, and Dave did a little bit of a deep dive there, and on the consultant side. These are the segments that we expect to grow faster than, I would say, the more traditional pension fund sectors in Europe and US in the next few years, and this is where we think we are really well-positioned. If I look at the short to midterm outlook overall, it is fair to say that the activity in our industry is far away from the peak levels that we have seen maybe a number of years ago. We are not back there. Everybody in industry has their share of topics to work on, including Partners Group, and we have been very transparent about that in our July update.

Steffen Meister: These are the segments that we expect to grow faster than, I would say, the more traditional pension fund sectors in Europe and US in the next few years, and this is where we think we are really well-positioned. If I look at the short to midterm outlook overall, it is fair to say that the activity in our industry is far away from the peak levels that we have seen maybe a number of years ago. We are not back there. Everybody in industry has their share of topics to work on, including Partners Group, and we have been very transparent about that in our July update.

Speaker #2: And this is where we think we are really well positioned. So, if I look at the short- to mid-term outlook overall, it's fair to say that the activity in our industry is far away from the peak levels that we have seen maybe a number of years ago.

Speaker #2: Okay, we're not back there. And everybody in the industry has their share of topics to work on, including Partners Group, and we have been very transparent about that in our July update.

Speaker #2: But clearly, if I look at the four dimensions here, we have all the confidence that in the mid-term we will actually gain speed and are on track to achieve our 2033 vision, which we laid out to you one or two years ago.

Steffen Meister: But clearly, if I look at the four dimensions here, we have all the confidence that in the midterm, we actually gain speed, and we really are on our track to achieve our 2033 vision that we have laid out to you one or two years ago. Moving a bit from the short to midterm to maybe the mid to long-term outlook. If I can ask you to maybe change the next slide. Let me talk a bit about the investment strategy and give an update here. Why is it important to talk about that investment strategy and that outlook? This is, again, I want to reiterate that very strongly, because our industry will see fundamental changes. We will have a profound transformation ahead of us the next 10 years. There is no doubt about that.

Speaker #2: So, moving a little bit from the short- to mid-term, to maybe the mid- to long-term outlook—if I may, can I ask you to please change to the next slide?

Speaker #2: Let me talk a bit about the investment strategy and give an update here. So, why is it important to talk about that investment strategy and that outlook?

Speaker #2: Once again, I want to reiterate that very strongly, because our industry will see fundamental changes, okay? We have a profound transformation ahead of us in the next 10 years.

Speaker #2: There's no doubt about that, okay? No one knows exactly what the industry and the world will look like in 10 years. I don't think we've ever had that before in history—looking 10 years ahead with such a lack of certainty in the outlook, maybe except for periods of war.

Steffen Meister: No one knows exactly how the industry and how the world looks like in 10 years. I do not think we ever had that actually in history, that looking 10 years ahead, there is such a lack of certainty in the outlook, maybe except for periods of war. But we have a pretty good hypothesis how we should think about this unfolding of that economy transformation to happen and how we should react to it in different asset classes. I do not want to dwell on that too long. We spoke about that on a corporate day, but just to recall, we see there is three waves here, that will bring this transformation. We are in the middle of the first wave. That is the one which is actually the most irrelevant one. It is about using some of these new technologies to just become more effective.

Speaker #2: But we have a pretty good hypothesis about how we should think about this unfolding of the economic transformation, and how we should react to it in different asset classes.

Speaker #2: So I want to—I don't want to dwell on that too long. We spoke about that on a corporate day. But just to recall, we see there are three waves here.

Speaker #2: You know, that will bring this transformation. We're in the middle of the first wave. That's actually the most irrelevant one.

Speaker #2: It's about using some of these new technologies to just become more effective, okay? The second wave is about to happen for a number of sectors.

Steffen Meister: The second wave is about to happen for a number of sectors. In some sectors, this will probably be out there three, four years from now. This is when we go from support systems to much more autonomous systems and agents. Have a much, much more fundamental impact on the businesses. Then we should not forget that there will be a third wave. There has always been a third wave in business model transformation through economy transformation periods. The third wave is really about these new scientific methods, complete reconfiguration of ecosystems and business models. That is, in most cases, only starting in the 2030s, but that is still within that 10-year period. Think about these three waves a bit like the, I would say, intense period of industrialization to 100 years, but essentially happening in 10 years.

Speaker #2: In some sectors, this will probably be our reality three or four years from now. This is when we go from support systems to much more autonomous systems and agents.

Speaker #2: Have a much, much more fundamental impact on the businesses. And then we shouldn't forget that there will be a third wave. There has always been a third wave in business model transformation through economic transformation periods.

Speaker #2: And the third wave is really about these new scientific methods, a complete reconfiguration of ecosystems and business models. That's, in most cases, only starting in the 2030s, but that's still within that 10-year period.

Speaker #2: So think about these three waves a bit like the, I would say, intense period of industrialization—the 100 years—but essentially happening in 10 years.

Speaker #2: So, we believe that these three waves will give us enormous opportunities, and we have clearly defined key focus areas across the asset classes. I want to give you a little bit of an update on what we're doing here and how we are preparing for that.

Steffen Meister: We believe that these three waves will give us enormous opportunities. We have clearly defined key focus areas across the asset classes. I want to give you a little bit of an update of what we are doing here and how we are preparing for that. We can maybe move to the next slide here. If I say these are the immediate focus areas, it is important to acknowledge that this is not the only thing we are doing in these areas. This may be defining 50%, 60%, 70% of the focus. We are nimble, we are opportunistic, so there will be certainly interesting areas also around them. Clearly, the private equity, the main story is that there will be hardly any business that can succeed without business transformation.

Speaker #2: We can immediately move to the next slide here. So if I say these are the immediate focus areas, it's important to acknowledge that this is not the only thing we're doing in these areas.

Speaker #2: I mean, this is maybe defining 50%, 60%, 70% of the focus. We are nimble, we are opportunistic, so there will certainly be interesting areas also around them.

Speaker #2: So clearly, the main story in private equity is that there will be hardly any business that can succeed without business transformation. It's very different from the private equity industry of the last 20 years, when I would argue that 90% of investors were actually looking to buy businesses and do more of the same—make them slightly more efficient, scale them up, and finance them in an attractive way.

Steffen Meister: It is very different from the private equity industry in the last 20 years when I would argue that 90% of the investors, they were looking actually to buy businesses, do more of the same, slightly more efficient, scale it up, and finance it in an attractive way. This is a very different business going forward. How do we respond to that? We have built, over the last few quarters, a team of about 150 AI experts, internally and externally. We have our existing, about similar sized bench of operators, internally, externally. What the next few years is about is really marrying the digital transformation capabilities with the operational transformation capabilities. The big difference is, going forward, there is not anything like a digital transformation that is separate from operational value creation. This is one and the same across the different verticals and dimensions. This is what we are working towards.

Speaker #2: This is a very different business going forward. How do we respond to that? We have built, over the last few quarters, a team of about 150 AI experts.

Speaker #2: Internally and externally, we have our existing, about similarly sized, bench of operators. Internally and externally, what the next few years is about is really marrying the digital transformation capabilities with the operational transformation capabilities.

Steffen Meister: We have our existing, about similar sized bench of operators, internally, externally. What the next few years is about is really marrying the digital transformation capabilities with the operational transformation capabilities. The big difference is, going forward, there is not anything like a digital transformation that is separate from operational value creation. This is one and the same across the different verticals and dimensions. This is what we are working towards. We have now started to give regular updates on what we do on the portfolio company side, and we will continue to do so to give you a bit of a sense and make this more tangible. I believe that we will create absolutely a leading effort in that space.

Speaker #2: The big difference is, going forward, there isn't anything like a digital transformation that is separate from operational value creation. This is one and the same across the different verticals and dimensions.

Speaker #2: This is what we're working towards. We have now started to give regular updates on what we're doing on the portfolio company side, and we'll continue to do so to give you a bit of a sense and make this more tangible.

Steffen Meister: We have now started to give regular updates on what we do on the portfolio company side, and we will continue to do so to give you a bit of a sense and make this more tangible. I believe that we will create absolutely a leading effort in that space. On the infrastructure side, if, again, we look a little bit at the future, of course, we will still have roads and bridges, and I would say the more traditional kind. But a big part of infrastructure investing is not going to happen in these areas. It is going to happen in, I would say, a very interconnected play between power, data, mobility, logistics. It is this interconnection that is needed because it is the efficiencies that you need to create between those, A. B, it is the advanced technologies that change year by year that to use actually to build the best next-generation utilities.

Speaker #2: I believe that we will create absolutely the leading effort in that space. On the infrastructure side, if again we look a little bit at the future, of course we'll still have roads and bridges, and I would say the more traditional kind.

Steffen Meister: On the infrastructure side, if, again, we look a little bit at the future, of course, we will still have roads and bridges, and I would say the more traditional kind. But a big part of infrastructure investing is not going to happen in these areas. It is going to happen in, I would say, a very interconnected play between power, data, mobility, logistics. It is this interconnection that is needed because it is the efficiencies that you need to create between those, A. B, it is the advanced technologies that change year by year that to use actually to build the best next-generation utilities.

Speaker #2: But the big part of infrastructure investing is not going to happen in these areas. It's going to happen in, I would say, a very interconnected play between power, data, mobility, and logistics.

Speaker #2: And it's this interconnection that is needed, because it's the efficiencies that you need to create between those—A, B. It's the advanced technologies that change year by year that you actually use to build the best next-generation utilities.

Speaker #2: And therefore, the next generation infrastructure is really a combination of, I would say, traditional project finance. It's private equity. It's infra asset management. And it's sort of business development.

Steffen Meister: Therefore, the next-generation infrastructure is really a combination of, I would say, traditional project finance. It is private equity, it is infra asset management, and it is sort of business development. This is exactly the team we have built up. We have built several of these platforms. We are in the process of buying two, three additional platforms just in the next 6 months. We believe that we have built a team here that is second to none in building these next-generation utilities. We talked about private credit at our Capital Markets Day, and actually for quite some time before that. We forecasted for a while that we will see a major transformation in credit. I think one of the key statements we made about three, four years ago, the first time, is large end of the private credit space is actually not going to be real private credit anymore.

Speaker #2: This is exactly the team we have built up. We have built several of these platforms, and we're in the process of buying two to three additional platforms over the next six months.

Speaker #2: We believe that we have built a team here that is second to none in building these next-generation utilities. We talked about private equity and private credit at our Capital Markets Day, and actually for quite some time before that.

Speaker #2: And we forecasted for a while that we will see a major transformation in credit. And I think one of the key statements we made about three or four years ago, for the first time, is the large end of the private credit space is actually not going to be real private credit anymore.

Speaker #2: It's much more of a public market-style activity that might still, you know, happen in a private credit format. You see this with, like, the forecast health.

Steffen Meister: It's much more a public market style activity that might still happen in a private credit format. You see this with like the forecast in data centers and ships next year. That's not traditional private credit. So what we are focusing on in this world of bifurcation that's coming with this transformation to economy is really PE-style, entrepreneurial style of credit underwriting. With us, we have a leading team building it up. We have these adjacent relative value strategies around it. That's our focus, and that's why we're growing quite heavily also in private credits. In real estate, I think we see a similar transformation, as in infrastructure. It's also real asset class. In real estate, historically, I guess we had a kind of a horizontal layering of the value creation between the planning and the engineering and the development and the real estate services.

Speaker #2: In data centers and chips next year, that's not traditional private credit. So, what we are focusing on in this world of bifurcation that's coming with this transformation of the economy is really pre-E style, entrepreneurial-style credit underwriting.

Speaker #2: We already have a leading team building it out. We have these adjacent relative value strategies around it. That's our focus, and that's why we're also growing quite heavily in private credits.

Speaker #2: In real estate, I think we see a similar transformation as in infrastructure. It's also a real asset class. Now, in real estate, historically, I guess we had a kind of horizontal layering of the value creation between the planning and the engineering and the development.

Speaker #2: And the real estate services—the future will be a complete vertical integration between exactly all these aspects. Why is that? A lot has, again, to do with data, with technology, with a very dynamic behavior of tenants and buyers of these assets, where the time when you build something, it is final.

Steffen Meister: The future will be a complete vertical integration between exactly all these aspects. Why is that? A lot has, again, to do with data, with technology, with a very dynamic behavior of tenants and buyers of these assets, where the time when you build something, it is final. These times are completely over. This is where we decided to buy Empira, our first large M&A transaction, which is very successful. It was a modest-sized business, but with an incredible technology platform. This is now really bearing fruit. This is what we're expanding, we're leveraging. That's where the growth is coming from in real estate that we've seen in the last 6, 12 months. We have a similar effort going on in the industrial sector's platform. On the royalties side, we have also mentioned that for a while.

Speaker #2: These times are completely over. And this is where we decided to buy Empira, our first larger M&A transaction, which is very successful. It was a modest-sized business, but with an incredible technology platform.

Speaker #2: This is now really bearing fruit. This is what we're expanding. We're leveraging. That's where the growth is coming from in real estate that we've seen in the last six to twelve months.

Speaker #2: And we have a similar effort going on in the industrial sector's platform. Then, on the royalty side, you know, we have also mentioned that for a while.

Speaker #2: Royalties are a financing tool, first and foremost, similar to private credit. And I think what we see is comparable to private credit 20 years ago.

Steffen Meister: Royalties is a financing tool first and foremost, like private credit. I think what we see is similar to private credit 20 years ago, we see that royalties will expand beyond the more traditional areas of focus, like IP ownership in pharmaceuticals or in exploration and things like that. Like in private credit, we expect royalties to have applications across all private equity sectors, but also across infrastructure and other real asset sectors. We're building up this heavily, and we clearly want to be a leading institution when it comes to royalties financing. So in the mid to long-term, I think the world in private markets, the industry will look very different. Clearly, there's a lot of uncertainty how the world exactly looks like. But I think we have a very clear hypothesis. We have a clear focus area. We know what assets we want to buy.

Speaker #2: We see that royalties will expand beyond the more traditional areas of focus, like IP ownership in pharmaceuticals or in exploration and things like that.

Speaker #2: Like in private credit, we expect royalties to have applications across all private equity sectors, but also across infrastructure and other real asset sectors. We're building up this heavily, and we clearly want to be a leading institution when it comes to royalties financing.

Speaker #2: So in the mid to long term, I think the world in private markets—the industry—will look very different. And clearly, there's a lot of uncertainty about what that world will look like exactly.

Speaker #2: But I think we have a very clear hypothesis. We have a clear focus area. We know what assets we want to buy. We have a very clear conviction about how we want to develop these assets.

Steffen Meister: We have a very clear conviction how we want to develop these assets, and I think we have a real good team to do that. Maybe that team is sort of the keyword and the segue here to talk about the last topic. This is our leadership rotation. Whenever I use that word rotation, I know the reaction sometimes is, rotation is a strange term when it comes to a successful CEO that is sort of stepping down and not continuing that function. Because most companies, if that happens, the CEO would, I don't know, go on retirement or competition or whatever. That's not Partners Group style. We have much more as a tradition or rule than the exception that successful key leaders in the firm, when they step back from their functions, they usually continue in other functions, other key roles actually in the firm.

Steffen Meister: We have a very clear conviction how we want to develop these assets, and I think we have a real good team to do that. Maybe that team is sort of the keyword and the segue here to talk about the last topic. This is our leadership rotation. Whenever I use that word rotation, I know the reaction sometimes is, rotation is a strange term when it comes to a successful Chief Executive Officer that is sort of stepping down and not continuing that function. Because most companies, if that happens, the Chief Executive Officer would, I don't know, go on retirement or competition or whatever. That's not Partners Group style. We have much more as a tradition or rule than the exception that successful key leaders in the firm, when they step back from their functions, they usually continue in other functions, other key roles actually in the firm.

Speaker #2: And I think we have a really, really good team to do that. And maybe that team is sort of the key word, and a segue here to talk about the last topic.

Speaker #2: This is our leadership rotation. Now, whenever I use that word "rotation," I know the reaction sometimes is—I mean, rotation is a strange term.

Speaker #2: When it comes to a successful CEO that is sort of stepping down and, you know, not continuing in that function—because most companies, if that happens, the CEO would, I don't know, go into retirement or competition or whatever.

Speaker #2: That's not the Partners Group style. You know, we have much more as a tradition—more as a rule than the exception—that successful key leaders in a firm, when they step back from their functions, usually continue in other functions, other key roles actually, in the firm.

Speaker #2: I'm very happy to announce this kind of rotation again today. So, Dave Layton, after nearly eight years now as a great CEO—a successful CEO—you built, with your team, that resilience in our business and are going to transition into another role, back into the investment side of things.

Steffen Meister: I'm very happy to announce this kind of rotation again today. David Layton, after nearly 8 years now, as a great Co-CEO, successful Co-CEO, you built with your team that resilience in our business, is going to transition in another role back into the investment side of things and becoming the, well, I guess most senior person on the investment side of things as the CIO and Chair of the Investment Committee. Many of you will know that Dave, before he became Co-CEO in 2019, was actually instrumental in building up our private equity franchise over many years. He led it over many years. That's why I'm very excited actually, the board is very excited to have Dave in that new role from January 2027. Importantly, Stephan Schäli, our CIO today, René Biner, our Chairman of the Investment Committee, again, rotate.

Steffen Meister: I'm very happy to announce this kind of rotation again today. David Layton, after nearly 8 years now, as a great Co-Chief Executive Officer, successful Co-Chief Executive Officer, you built with your team that resilience in our business, is going to transition in another role back into the investment side of things and becoming the, well, I guess most senior person on the investment side of things as the CIO and Chair of the Investment Committee. Many of you will know that Dave, before he became Co-Chief Executive Officer in 2019, was actually instrumental in building up our private equity franchise over many years. He led it over many years. That's why I'm very excited actually, the board is very excited to have Dave in that new role from January 2027. Importantly, Stephan Schäli, our CIO today, René Biner, our Chairman of the Investment Committee, again, rotate.

Speaker #2: And becoming the, well, I guess, most senior person on the investment side of things as the CIO and Chair of the Investment Committee. Now, many of you will know that Dave, before he became Co-CEO in 2019, was actually instrumental in building up our private equity franchise over many years.

Speaker #2: He led it over many years, so that's why I'm very excited—actually, the board is very excited—to have Dave in that new role from January 2027.

Speaker #2: Now, importantly, Stefan Scheerle, our CIO today, and René Bina, our chairman of the investment committee, again rotate. So, they're not leaving the investment committee; they stay in very important key roles on the investment side.

Steffen Meister: They're not leaving the Investment Committee. They stay in very important key roles in the investment side, spend more time also on the portfolio side, on boards, and on sourcing of assets. I'm also very happy to announce that we have great talent to succeed Dave with Juri and Roberto stepping into the role as Co-CEOs. Juri and Roberto, you both joined us more than 2 decades ago. Maybe starting with Juri. Juri, you started in the credit team. You were very quickly identified as a key talent there, and you were actually very instrumental in building that credit team. You eventually led that credit team for a number of years before we asked you to take over the infrastructure business. You built that to a very decent size, very successfully. You headed that for a while.

Steffen Meister: They're not leaving the Investment Committee. They stay in very important key roles in the investment side, spend more time also on the portfolio side, on boards, and on sourcing of assets. I'm also very happy to announce that we have great talent to succeed Dave with Juri and Roberto stepping into the role as Co-Chief Executive Officers. Juri and Roberto, you both joined us more than 2 decades ago. Maybe starting with Juri. Juri, you started in the credit team. You were very quickly identified as a key talent there, and you were actually very instrumental in building that credit team. You eventually led that credit team for a number of years before we asked you to take over the infrastructure business. You built that to a very decent size, very successfully. You headed that for a while.

Speaker #2: Spend more time also on the portfolio side, on boards, and on sourcing of assets. I'm also very happy to announce that we have great talent to succeed Dave, with Yuri and Roberto.

Speaker #2: Stepping into the role as co-CEOs. Yuri, Roberto, you both joined us for more than or two more than two decades ago. Maybe starting with Yuri, Yuri, you started in the credit team.

Speaker #2: You were very quickly identified as a key talent there, and you were actually very instrumental in building that credit team. You eventually led that credit team for a number of years.

Speaker #2: Before we asked you to take over the infrastructure business, you built that to a very decent size, very successfully. You headed that for a while.

Speaker #2: And when Dave started to spend a little bit more time in 2024 on the investment side, on M&A, we asked you to become President of the firm and, you know, become the wingman of Dave and help on the business development side and on some of the corporate operational areas.

Steffen Meister: When Dave started to spend a little more time in 2024 on the investment side, on M&A, we asked you to become President of the firm and become the wingman of Dave and help on business development side on some of the corporate operational areas. Now you're stepping from that President role in a Co-CEO role. Your new wingman is then Roberto. Roberto, you have spent your time at Partners Group, I guess, always a bit at the intersection between portfolios, investments, and clients. You were very instrumental in building up our portfolio solutions efforts, the team. You eventually led that team for a number of years. You are certainly one of the key architects of our mandates and evergreen franchise, structured products franchise, which is probably one of the key distinguishing areas of the firm. Both of you have been very successful leaders.

Steffen Meister: When Dave started to spend a little more time in 2024 on the investment side, on M&A, we asked you to become President of the firm and become the wingman of Dave and help on business development side on some of the corporate operational areas. Now you're stepping from that President role in a Co-Chief Executive Officer role. Your new wingman is then Roberto. Roberto, you have spent your time at Partners Group, I guess, always a bit at the intersection between portfolios, investments, and clients. You were very instrumental in building up our portfolio solutions efforts, the team. You eventually led that team for a number of years. You are certainly one of the key architects of our mandates and evergreen franchise, structured products franchise, which is probably one of the key distinguishing areas of the firm. Both of you have been very successful leaders.

Speaker #2: And now you're stepping from that president role into a co-CEO role. And your new wingman is then Roberto. Roberto, you have spent your time at PG, I guess always a bit at the intersection between portfolios, investments, and clients.

Speaker #2: You were very instrumental in building up our portfolio solutions, efforts, and the team. You eventually led that team for a number of years. So you are certainly one of the key architects of our mandates and evergreen franchise.

Speaker #2: Structured products franchise, which is probably one of the key distinguishing areas of the firm. Both of you have been very successful leaders—you have demonstrated great entrepreneurial leadership.

Steffen Meister: You have demonstrated great entrepreneurial leadership. You carry really the Partners Group DNA. With that, we are super happy, as a board, to have you as partners of ours as Co-CEOs in the years to go. To conclude that presentational part, we feel very good about the resilience of the business, A. B, we feel very good about the midterm outlook. Yes, we have signaled softer growth in this year or next year in July in the update, but we're very, very confident for the midterm outlook and for the 2033 goals. We're very confident about the investment strategy and how we build our teams and the assets we look for and how we build them. We're very confident that with this trio at the helm in this new constellation, we have a great setup in the next years to come.

Steffen Meister: You have demonstrated great entrepreneurial leadership. You carry really the Partners Group DNA. With that, we are super happy, as a board, to have you as partners of ours as Co-Chief Executive Officers in the years to go. To conclude that presentational part, we feel very good about the resilience of the business, A. B, we feel very good about the midterm outlook. Yes, we have signaled softer growth in this year or next year in July in the update, but we're very, very confident for the midterm outlook and for the 2033 goals. We're very confident about the investment strategy and how we build our teams and the assets we look for and how we build them. We're very confident that with this trio at the helm in this new constellation, we have a great setup in the next years to come.

Speaker #2: You really carry the PG DNA. So with that, we are super happy, you know, as a board, to have you as partners, you know, with us as co-CEOs in the years to come.

Speaker #2: So, to conclude that presentational part, we feel very good about the resilience of the business. A) We feel very good about the midterm outlook. Yes, we have signaled softer growth in this year and next year, in July, in the update.

Speaker #2: But we're very, very confident for the midterm outlook and for the 2033 goals. We're very confident about the investment strategy, how we build our teams, the assets we look for, and how we build them.

Speaker #2: And we're very confident that, with this trio at the helm in this new constellation, we have a great setup for the years to come.

Speaker #2: So with that, I conclude this formal part. I guess we'll open it up for some questions.

Steffen Meister: With that, I conclude this formal part, and I guess we will open for some questions.

Speaker #1: And we'll start with the guests that are here in the room with us, in our London office. Should we start with Steve?

David Layton: We will start with the guests that are here in the room with us in our London office. Should we start with you?

Speaker #3: Thanks, Dave. I'll start with a question for you, if that's okay. I guess I'll congratulate you on a good stint, and also congratulate Roberto and Yuri on the new roles.

[Analyst]: Thanks, Dave. I will start with a question for you, if that is okay. Well, congrats on a good stint and also to Roberto and Juri on the new roles. This business has made strong progress strategically in the last years, and that is evidenced by the share gains that you showed. Is there anything that you would have done differently? What do you think Roberto and Juri will benefit from most that is currently, I guess, not visible and that you and the team have laid the groundwork on? That is the first one. Secondly, for Steffen, on capital management. On the AUM call in mid-July, you were very clear that buybacks are being debated. How do you and the board weigh the use of cash for capital return versus M&A to support growth, particularly with, I guess, net debt now being at about CHF 1.2 billion?

Speaker #3: This business has made strong progress strategically in the last years, and that's evidenced by the share gains that you showed. Is there anything you would have done differently, and what do you think Roberto and Yuri will benefit from most that is currently not, I guess, not visible and that you and the team have laid the groundwork on?

Speaker #3: That's the first one. Secondly, for Stefan on capital management: On the AUM call in mid-July, you were very clear that buybacks are being debated.

Speaker #3: How do you and the board weigh the use of cash for capital return versus M&A to support growth, particularly with, I guess, net debt now being at about $1.2 billion?

Speaker #3: And then finally, just a question for Dave and Yoris on margins. You continue to show very strong cost control. I guess, presumably, a low single-digit cost growth rate on fixed costs is below median, some expectations.

[Analyst]: Finally, just a question for Dave and Joris on margins. You continue to show very strong cost control. I guess presumably a low single-digit cost growth rate on fixed costs is below median term expectations. So I guess relatedly, your EBITDA margin has dropped despite clearly very strong late management fees. So excluding those late fees, EBITDA margin seems to be around 61%. Should we be thinking about the EBITDA margin going forward at around that 61% to 62% level going forward, please? Thank you.

Speaker #3: So, I guess relatedly, your EBITDA margin has dropped despite clearly very strong late management fees. So, excluding those late fees, EBITDA margin seems to be around 61%.

Speaker #3: So, should we be thinking about the EBITDA margin going forward at around the 61–62% level? Thank you.

Speaker #1: We'll start. If I look at the last number of years, I think one thing that we have been focused on, and will continue to be focused on—one thing we would have done differently—is probably expand the breadth of our investment engines, if you think about the nature of how investment vehicles are evolving.

David Layton: Well, I'll start. If I look at the last number of years, I think one thing that we have been focused on, we'll continue to be focused on, one thing we would have done differently is probably expand the breadth of our investment engines. If you think about the nature of how investment vehicles are evolving, not just for individual investors, but also for institutional investors, they're moving into formats that are more perpetual in nature. If I look back over that 2021, 2022 time period, we're coming off of years where we had huge levels of realizations during those years that needed to be redeployed. You'll see that again in the future, right? Where you have very large levels of realizations that need to be redeployed.

Speaker #1: Not just for individual investors, but also for institutional investors. They're moving into formats that are more perpetual in nature. And if I look back over that 2021–2022 time period, we're coming off of years where we had huge levels of realizations during those years that needed to be redeployed.

Speaker #1: And you'll see that again in the future, right, where you have very large levels of realizations that need to be redeployed. And we're very focused today on expanding the breadth of our investment engine, adding more strategies that we can pull from to add more diversification into the investment platform.

David Layton: We're very focused today on expanding the breadth of our investment engine, adding more strategies that we can pull from to add more diversification into the investment platform. That's certainly something we would have, in hindsight, we were too concentrated, and certainly are working to build that diversification. I'll continue that work in the new role as Chairman of the Global Investment Committee, as well as work with Roberto and Juri on expanding that. Yeah.

Speaker #1: And that's certainly something we would have in hindsight. We were too concentrated and certainly are working to build that diversification, and I'll continue that work in the new role as Chairman of the Global Investment Committee, as well as work with Roberto and Yuri on expanding that.

Speaker #2: On the capital management side, I don't think there has been any change over the years, now, or in the future. So, number one, we want to pay a stable or growing dividend.

Steffen Meister: On the capital management side, I don't think there has been any change over the years or now or the future. Number one, we want to pay a stable or growing dividend. That's the first priority. That can mean in some years that maybe we go slightly above 100%, we feel absolutely confident to do so. Number two, if there is an M&A transaction that is of interest, I don't think that will by any means impair the dividend policy. That's certainly not our mind. Now maybe one point number three, to clarify this discussion about share buybacks.

Speaker #2: That's the first priority. That can mean in some years that maybe we go slightly above 100%. We feel absolutely confident to do so. Number two, if there is an M&A transaction that is of interest, I don't think that will by any means impair the dividend policy.

Speaker #2: That's certainly not our mind. And now, maybe one point—number three—to clarify this discussion about share buybacks. So this is a discussion that is really centered around the question that in years where we see, and this is upcoming, where we see a lot of carry again, the question is whether maybe the additional carry beyond, I would say, what's sort of like the average levels—whether that is carry we want to use.

Steffen Meister: This is a discussion that is really centered around the question that in years where we see, and this is upcoming, where we see a lot of carry again, the question is whether maybe the additional carry beyond, I would say, what's sort of like the average levels, whether that is carry we want to use if it's not used for business purposes, whether we want to use that carry for share buybacks. That's not a discussion for this year, probably not next year. This is something that is a little bit on our minds. What we are not suggesting, just to be very clear here, we're not suggesting to replace a dividend payment by a share buyback.

Speaker #2: If it's not useful for business purposes, what do you want to use that carry for? Share buybacks? So that's not a discussion for this year.

Speaker #2: Probably not next year, but this is something that is a little bit on our minds. But what we are not suggesting—just to be very clear here—we're not suggesting to replace a dividend payment with a share buyback.

Speaker #4: One more question to Yuris.

David Layton: One more question from Joris.

Operator: One more question from Joris.

Speaker #3: Yes, I think if we look at the way that we run our platform, we continue to run it with the same cost management approach going forward as we scale also the platform.

Joris Gröflin: Yes. I think if we look at the way that we run our platform, we continue to run it with the same cost management approach going forward as we scale also the platform. With the range that we are currently running in, that is also what we see in the short term ahead.

Speaker #3: So with the range that we're currently running in, that's also what we see in the short term ahead.

Speaker #5: Hi, it's Hubert Lam from Bank of America. Firstly, again, I'd like to congratulate Dave and wish him all the best in the future. Three questions.

Hubert Lam: Hi, it is Hubert Lam from Bank of America. Firstly, again, I would like to congratulate Dave and wish him all the best in the future. Three questions. Firstly, on the recurring fee margin, I think it fell to about 109 basis points for the H1. Can you talk about how you think about this margin going forward and what has driven the lower margin that we saw in the H1? Second question is on, I guess the fundraising guidance you have given for the year is CHF 26 billion to CHF 32 billion. You had a strong H1 at CHF 16 billion. Now we are almost halfway through the H2 of the year. How should we think about where you can end up within that range?

Speaker #5: Firstly, on the

Speaker #1: To recurring fee Margin . I think it failed to . About 109 basis points for the first half . Can you talk about how you think about this margin going forward and what's driven the the lower margin that we saw in the first half , second question is on the fundraising guidance you've given for the year is 26 to 32 billion .

Speaker #1: He had a strong first half of 16 . Now we're almost halfway through the second half of the year . How should we think about where you can end up within that range And lastly , on private credit , Stephane , I was intrigued by what you said about how you think there's Within private credit , I know you're relatively small compared to other peers out there .

Hubert Lam: Lastly, on private credit, Steffen, I was intrigued by what you said about how you think within private credit, I know you are relatively small compared to other peers out there. Do you need to bulk up more in that space? How do you think about going about that? Thank you.

Speaker #1: Do you need to bulk up more in that space? And how do you think about going about that? Thank you.

Speaker #2: So maybe I'll start on the on the recurring margin . We have had a very successful period for fundraising . And you saw us particularly successful in infrastructure and in private credit .

David Layton: Maybe I'll start on the recurring fee margin. We have had a very successful period for fundraising, and you saw us particularly successful in infrastructure and in private credit. Sometimes you'll see a mix shift vary based on what the big fundraising periods were, what the big tail down areas were in a period. We have an upcoming private equity fundraise on the horizon that we're ramping up for. That'll shift the mix back in due course. But it is mix related as opposed to business related, right? Sometimes it can be mix by asset class, sometimes it's mix of product within that asset class, but it's a mix related change. Joris, anything you'd add to that?

Speaker #2: And and sometimes , you know , you'll see a mix shift vary based on what the big fundraising periods were , what the what the big tail down areas were in a period .

Speaker #2: We have an upcoming private equity fund raise on the horizon that we're ramping up for. That'll shift the mix back in, you know, in due course.

Speaker #2: But it is mix related as opposed to business related, right? Sometimes it can be mixed by asset class, sometimes it's a mix within that asset class.

Speaker #2: But it's , it's a mix related change . Yours . Anything you'd add to that

Speaker #3: Yeah , I think that's so we've seen this in half year one . And at the same time , we're still well within our bandwidth of the management income margin of 1.18 to 1.33% .

Joris Gröflin: Yeah, I think that's. We've seen this in H1, and at the same time, we're still well within our bandwidth of the management income margin of 1.18% to 1.33%. We've demonstrated that we continue to run the firm with above 60% of operating leverage. We can, of course, as I mentioned before, we continue with our cost management and scaling approach that we have in protecting also the overall margin of the firm.

Speaker #3: And we we've demonstrated that we continue to run the firm with above 60% of operating leverage . So we we can , of course , as I mentioned before , we continue with our cost management and scaling approach that we that we have in protecting also the overall margin of the firm

Steffen Meister: I think there's 2 more questions by Hubert. Well, maybe I quickly take those. Yes, we are well into the H2. I would also argue that there have been vacation time weeks, actually. Maybe that's true what you're saying, but actually the real business probably starts pretty much now, actually. That's why I would be a bit hesitant to give any further guidance here. Listen, on your question on private credit, it's a very good question. First, I would tell you that, if you look at the large credit players, they will probably have today 90% in investment grade, what they call investment grade private credit in sort of high yield equivalents in large cap credit. It's a very different business here. It's not a bad business. It's just a beta business. It's scaled business like public market credit.

Speaker #4: I think there are two more questions. Well, maybe I'll quickly take those. So, yes, we are well into the second half.

Speaker #4: I would also argue that there have been vacation time weeks actually . So maybe that's that's true what you're saying . But actually the real business probably starts pretty much now actually .

Speaker #4: So that's why I would be a bit hesitant to give any further guidance here . Listen , your question on private credit , it's a very good question .

Speaker #4: First , I would tell you that if you look at the large credit players , I mean , they will probably have today 90% in investment grade , what they call investment grade , private credit in sort of high yield equivalents in large cap credit .

Speaker #4: It's a very I mean , it's a very different business . It's a bad business . It's just a beta business . A scale business like public market credit , the in the middle market credit space .

Steffen Meister: In the middle market credit space, I would say in Europe, we're clearly one of the top 3 parties or so. I think also in the US, we have come up through the ranks here. I don't know that we need actually a much larger team here. I would say with the exception maybe of the newer regions where we had a smaller team, for instance, Asia, we're clearly building up Asia here. That's very interesting to us. We have incredible track record in Asia in credit. I think in the US, to be honest, it's a little bit more becoming more active with clients. We have, I would say many years back, used credit in many instances as additional allocation for mandates, for the more cash flow-oriented mandates, income-oriented, some of the evergreen funds.

Speaker #4: I mean , I would say in Europe , we're clearly one of the top like three parties . So I think in the US , we have come up through the ranks here .

Speaker #4: I don't know that we need actually a much larger team here . I would say with the exception maybe of the new regions where we had a smaller team , for instance , Asia , we're clearly building up Asia here .

Speaker #4: That's very interesting to us . We have incredible track record in Asia . Credit . I think in the US , to be honest , it's a little bit more becoming more active with clients .

Speaker #4: We have , I would say many years back used credit in many instances as a additional allocation for mandates for the more cash flow oriented mandates , income oriented , some of the evergreen funds , I mean , I'm not sure whether in the last few years , we made enough of an effort to really tackle large individual accounts on credit side will not happen overnight , but this is clearly on our plan .

Steffen Meister: I'm not sure whether in the last years we made enough of an effort to really tackle large individual accounts on the credit side. This will not happen overnight, but this is clearly on our plan actually in the next few years, that we become much, much more active to gain market share there.

Speaker #4: Actually, in the next few years, we will become much, much more active to gain market share. There

Speaker #5: Hi there , Ian White Autonomous . Thanks for taking my questions . Two from my side , please . First of all , notice the disclosures for PPE limited with their one h update last week .

Ian White: Hi there. Ian White, Autonomous. Thanks for taking my questions. Two from my side, please. First of all, I noticed the disclosures for Partners Group Private Equity Limited with their H1 update last week, and particularly the portfolio disclosures. So last 12 months, EBITDA growth a bit less than 5%, net debt to EBITDA nearly 7x. Are those metrics representative of the dynamics in the private equity funds more broadly? If so, why has indebtedness risen so significantly in the last couple of years? Again, Partners Group Private Equity, it looks like it's gone from 5x net debt to EBITDA to about 7x in the last two years. Has there been a significant increase in debt moving to payment in kind structures, for example? That's question one.

Speaker #5: And particularly the portfolio disclosures. So, in the last 12 months, there's a growth of a bit less than 5%. Net debt to EBITDA is nearly seven times.

Speaker #5: Are those metrics representative of the dynamics in private equity funds more broadly? If so, why has indebtedness risen so significantly in the last couple of years?

Speaker #5: PGP, it looks like it's gone from five times net debt to EBITDA to about seven in the last two years. Has there been a significant increase in debt moving to payment-in-kind structures, for example?

Speaker #5: That's question one . And secondly , you've talked quite a bit in this presentation about the diversification , maybe a sort of slight shift in strategy from where the business has been previously from wealth management , evergreens towards insurance funding , for example .

Ian White: Secondly, you talked quite a bit in this presentation about the diversification, maybe a slight shift in strategy from where the business has been previously, from wealth management evergreens towards insurance funding, for example. Can you say a bit about how that transition looks internally? I'm thinking about staffing, resourcing. Is there scope for outright cost reduction in areas that maybe now aren't going to be as big as we thought they were going to be a couple of years ago? Or maybe some churn within the business where you need to pivot to other areas, maybe that, like I say, were less prominent a couple of years ago.

Speaker #5: Can you say a bit about sort of how that transition looks internally ? And I'm thinking about sort of staffing , resourcing . Is there scope for outright cost reduction in areas that maybe now aren't going to be as big as as we thought they were going to be a couple of years ago , or maybe some churn within the business where you kind of need to pivot to other areas , maybe that , like I say , were less prominent a couple of years ago

Speaker #3: Maybe I'll take the

Juri Jenkner: Maybe I'll take the Partners Group Private Equity question. Partners Group Private Equity is similar to what we have outlined back in the July AUM announcement, has an elevated exposure to vintages 2020, 2021, 2022, driven by the distributions that have to be reinvested into a vehicle. As such, I would say the broader private equity platform is much more diversified across vintages.

Speaker #6: P question . P-gp is similar to what we have outlined back in the July AUM announcement as an elevated exposure to vintages , 2020 , 2021 , 2022 , driven by the distributions that have to be reinvested in such a vehicle .

Speaker #6: So, as such, I would say the broader private equity platform is much more diversified across vintages.

Speaker #4: On the diversification side, you know, it's funny that you're one of the few people that ask us to be more effective on cost.

Steffen Meister: Well, on diversification side, it's funny that you're one of the few people that ask us to be more effective on cost. I felt actually that the team is doing a pretty good job on the margin side. Well, listen, this is a constant, I would say, topic where we see certain areas of the firm growing faster than others, that we will have people relocating from one to another. That's, of course, happening all the time. But I wouldn't expect now a big additional, I would say, saving or so because of maybe some of these rotations. Assume that the rate, the EBITDA rate at which we run the business is probably also good forecast for the future.

Speaker #4: I felt actually , that the team's doing a pretty good job on the margin side . Well , listen , there is this is a constant , I would say , topic where we see certain areas of the firm growing faster than others that we will have people relocating from one to another .

Speaker #4: So that's of course happening all the time . But I wouldn't expect now like , like a big like additional , I would say saving or soul because of maybe some of these rotations .

Speaker #4: So assume that the rate—the rate at which we run the business—is probably also a good forecast for the future.

Speaker #2: Yeah . And the needs of some of these client segments become more specific . For example , our insurance team , you know , needs specialists that understand the insurance client's needs .

David Layton: Yeah. The needs of some of these client segments become more specific. For example, our insurance team needs specialists that understand the insurance clients' needs, and we've had to build up a team of specialists. So you might have fewer generalists, but you end up with more specialists. I think we've been able to maintain our cost structure, and that continues to be our ambition.

Speaker #2: We've had to build up a team of specialists, so you might have fewer generalists, right? But you end up with more specialists.

Speaker #2: And so I think we've been able to maintain our cost structure, and that continues to be our ambition. Thanks. Yeah.

Ian White: Thanks.

David Layton: Yep.

Speaker #7: Good morning . From BNP Paribas . I've got three questions please . My first question is on the value creation and the topic we're talking about .

Arnaud Giblat: Good morning. It's Arnaud Giblat from BNP Paribas. I've got 3 questions, please. My first question is on the value creation and the topic we were talking about a minute ago. On the slide, you were showing that vintages 2020 to 2021, 2022 were having 5% EBITDA growth, if I remember well, whereas the next vintages are growing EBITDA at more than 15%. Could you expand a bit more on that, sort of give us a bit more flavor in terms of industry exposure? Or what is it that is affecting those earlier vintages? My second question is on the evergreen redemptions. I'm just wondering, given, well, you're probably seeing redemptions at a 5% rate per quarter, how this is impacting performance. I assume if you've got these large redemptions, your incentive is probably to put the marks at the lower end of the potential range.

Speaker #7: Like a minute ago . So on the slides you were showing that vintages 2020 to 20 2122 were having 5% EBITDA growth . If I remember .

Speaker #7: Well, whereas the next vintages are growing EBITDA at more than 15%, could you expand a bit more on that—sort of give us a bit more flavor in terms of industry exposure, or what is it that is affecting those earlier vintages?

Speaker #7: My My second question is on the evergreen redemptions . I'm just wondering , given . Well , you're probably seeing redemptions at a 5% rate per quarter , how this is impacting performance .

Speaker #7: I assume if you've got these large redemptions, then your incentive is probably to put the marker at the low end of the potential range.

Speaker #7: Does that affect performance across other , other , other vehicles ? I assume you have to have the same mark for every asset in every vehicle you're holding And my third question is , what struck me a lot at your Investor Day 18 months ago was I felt a big shift in terms of willingness to do M&A over the last 18 months .

Arnaud Giblat: Does that affect performance across other vehicles? I assume you have to have the same mark for every asset in every vehicle you're holding. My third question is, what struck me a lot at your Investor Day 18 months ago was, I felt, a big shift in terms of willingness to do M&A. Over the last 18 months, I know that there has been a significant pickup in M&A in the environment, and you have not partaken. I'm just wondering why that is. Is it just a case of you being more prudent or not seeing the right opportunities? Do you still have that strong appetite to increase M&A? Thank you.

Speaker #7: I mean, I note that there's been a significant pickup in M&A in the environment, and you have not taken. So I'm just wondering why that is.

Speaker #7: Is it just a case of you being more prudent, or not seeing the right opportunities? Do you still have that strong appetite to increase M&A?

Speaker #7: Thank you

Speaker #2: So I'll take maybe the first one with regards to the the different vintage years and why vintage year has an impact . Part of it has to do with , I think , some evolution .

David Layton: I will take maybe the first one with regards to the different vintage years and why vintage year has an impact. Part of it has to do with, I think, some evolution. We have really invested significantly into our operational capabilities, into our boards, into our transformation experts that have been working with us on this most recent set of portfolio companies in particular. It was also just a less competitive environment. If I look back over the last couple of years, we had the ability to pick and choose as a firm that is able to take market share and raise capital in a difficult environment. We have been able to invest consistently over the last couple of years, whereas other people have taken maybe more of a pause, and we found it less competitive in certain segments.

Speaker #2: We have really invested significantly into our operational capabilities, into our boards, into our transformation experts that have been working with us on this most recent set of portfolio companies in particular.

Speaker #2: But it was also just a less competitive environment . If I look back over the last couple of years , we had the ability to pick and choose as a firm that is able to take market share and raise capital in a difficult environment , we've been able to invest consistently over the last couple of years , whereas other people have taken maybe more of a pause .

Speaker #2: And we found it less competitive in certain segments . So we had a lot of thematic research identifying specific assets , going hard after it , a little bit less competition , broader bench of operators .

David Layton: We had a lot of thematic research, identifying specific assets, going hard after it, a little bit less competition, broader bench of operators. I think all of those things contribute to the strong growth that you are seeing in the most recent vintage in particular. Roberto, do you want to talk a little bit about the evergreen redemption dynamic?

Speaker #2: I think all of those things contribute to the strong growth that you're seeing in the most recent vintage in particular. Roberto, do you want to talk a little bit about the evergreen redemption dynamic?

Speaker #6: Well, with regards to evergreen redemptions, we've outlined very transparently last July our expectations there, and there's no change since then.

Steffen Meister: Well, with regards to evergreen redemptions, we have outlined very transparently last July what our expectations there are. There is no change since then. I think very importantly, though, the way how valuations are performed is in accordance with IFRS and is done as an independent process. It has nothing to do with whether what flows on the evergreen side to whether marks on the assets come out. Yes, you are correct, typically, there would be one price for the same assets across the platform. Maybe just to add here that we have mentioned that consistently, and I think it is true also for the last 6 months, that in average, we sold our assets at about 10% above our marks. Of course, in ideal world, you would sell at the marks, but that is very hard to achieve, right?

Speaker #6: I think, very importantly though, the way valuations are performed is in accordance with IFRS and is done as an independent process.

Speaker #6: So it has nothing to do with whether what flows on the Evergreen side to whether marks on the assets come out. And yes, you're correct; typically, that would be one price for the same asset across the platform.

Speaker #6: Maybe just .

Speaker #4: To add here that we have mentioned this consistently, and I think it is also true for the last six months, that on average, we sold our assets at about 10% above our marks.

Speaker #4: And of course , in ideal world , you would sell at the marks , but that's very hard to achieve , right ? I mean , there's still , I mean , a bit of a market element when you sell the assets .

Steffen Meister: There is still a bit of a market element when you sell the assets, but just to mention that. On the M&A side, look, I do not think anything has changed. We absolutely look at opportunities. Have we been less courageous, as you, I guess, imply in your question? Yes, I think that is true. I think we have been less courageous. We see the right price, the right culture, and then, of course, the complementarity in what M&A offers to us as extremely relevant. Just a third point, we have a pretty wide offering in the different asset classes.

Speaker #4: But just to mention that on the M&A side , I mean , look , I don't think anything has changed . We absolutely look at opportunities .

Speaker #4: Have we been less courageous, as you, I guess, implied in your question? Yes, I think that's true. I think we have been less courageous.

Speaker #4: We see , you know , the right price , the right culture . And then of course , the complementarity in what M&A offers to us as extremely relevant .

Speaker #4: And just the third point , I mean , we have a pretty wide offering in the different asset classes . So a number of players out there that have changed hands that , for instance , a pure private equity player that wants to add some credit or a pure private equity player that wants to add some real estate .

Steffen Meister: So a number of players out there that have changed hands, for instance, a pure private equity player that wants to add some credit or a pure private equity player that wants to add some real estate, that is just for us, maybe not necessarily as intriguing because we might already have some of that. So they are probably a little bit more nuanced in the way we think about adding these. Let me just repeat one thing that I said before, and I think it is really key. Yes, there has been activity, but I guess what you always see in consolidation, you see these waves. You see a first wave where some people that are, maybe desperate in quotes is a bit strong, but a little bit more convinced that they need to do something, they do something.

Speaker #4: That's just for us. Maybe not necessarily as intriguing because we might already have some of that. So we're probably a little bit more nuanced in the way we think about adding these.

Speaker #4: But look , let me just repeat one thing that I said before , and I think it's really key . Yes , there has been activity , but I guess what you always see in consolidation , you see these waves , you see a first wave where some people that are I mean , maybe desperate in quotes is a bit strong , but a little bit more convinced that they need to do something .

Speaker #4: They do something that might work out . It might not work out . We'll figure out , but then there's often a period where you see with less activity and then consolidation , the organic consolidation starts to impact the market .

Steffen Meister: That might work out, it might not work out, we will figure out. Then there is often a period where you see less activity, and then consolidation, the organic consolidation starts to impact the market, and that is what you see. We just talked actually a small round today before we started here at coffee about market share gains by listed public market firms, which is phenomenal. This is why you see some GPs will find it much more difficult next 3, 4 years. Our opinion is that maybe the most interesting opportunities, especially when you want to do M&A in a more nuanced way, they are probably just to come.

Speaker #4: And that's what you see now . We just talked actually in small around today before we started here at Cofiroute . You know , Mark , share gains by the list of market firms , which is phenomenal .

Speaker #4: You know, and this is why you see some GPs will find it much more difficult the next three, four years. And so our opinion is that maybe the most interesting opportunities, especially when you want to do M&A in a more nuanced way, are probably just to come.

Speaker #8: Good morning, Sharath Kumar from Deutsche Bank. Good morning, all. Best wishes to Dave, Jury, and Roberto for your new roles—three, please.

Sharath Kumar: Good morning. Sharath Kumar from Deutsche Bank. Good morning, all. Best wishes to Dave, Juri, and Roberto for your new role. Three, please. Firstly, given higher yields have been the flavor of the week or so, it has been the dominant theme. How do you view the refinancing environment? What proportion of portfolio comes from meaningful debt maturities in the next 1 to 2 years? Is this something that we need to be worried about? That is first. Second, I need a bit of help in forecasting the investment income component within your performance fees. It was negative in the H1, so when do you see a turnaround, and similar guidance or any help for forecasting the net financial income would also be helpful. Lastly, sorry if I missed this, just wanted to understand where we are in terms of redemption requests in the Q3 so far.

Speaker #8: Firstly, given higher yields have been the flavor of the V Corps, it's been the dominant theme. So how do you view the refinancing environment?

Speaker #8: What proportion of the portfolio comes from meaningful debt maturities in the next one to two years? Is this something that we need to be worried about? First. Second, I need a bit of help in forecasting the investment income component within your performance fees.

Speaker #8: It was negative in the first half. So, when do you see a turnaround? And similar guidance or any help for forecasting the net financial income would also be helpful.

Speaker #8: And lastly, sorry if I missed this. Just wanted to understand where we are in terms of redemption requests. In the third quarter so far, in mid-July, you had said something around $2 billion as a sort of run rate per quarter would be a reasonable expectation for the next several quarters.

Sharath Kumar: In mid-July, you had said something around USD 2 billion was sort of a run rate per quarter would be reasonable expectation for the next several quarters. Any change to this view? Thank you.

Speaker #8: So, any change to this view? Thank you.

Speaker #2: Yep Maybe on the first . So we do have active capital markets team that is engaged with our portfolio companies . And constantly looking to put the most efficient and , and up to date capital structures on our businesses .

David Layton: Yep. Maybe on the first, we do have an active capital markets team that is engaged with our portfolio companies and constantly looking to put the most efficient and up-to-date capital structures on our businesses. We have probably six or seven companies at the current point in time that are going through some sort of a process to refinance. That is pretty consistent with what we have had over the last couple of years. No significant change in the dynamic there, but a very active capital markets team that is helping us put the right capital structures in place for each of our portfolio companies.

Speaker #2: We have probably six or seven companies at the current point in time that are going through some sort of a process to, to, to refinance us.

Speaker #2: And that's pretty consistent with what we've had over the last couple of years . No significant change in the in the , in the dynamic there .

Speaker #2: But a very active capital markets team that's helping us put the right capital structures in place for each of our portfolio companies and investment income.

Steffen Meister: On investment income, Joris, do you want to address that?

Speaker #2: Yours. Do you want to address that?

Speaker #3: Yes , of course . I think when we look into the second half of the year , our base case assumes a positive income investment income contribution in the second half of the year , which will also have an impact on the performance income .

Joris Gröflin: Yes, of course. I think when we look into the H2 of the year, our base case assumes a positive investment income contribution in the H2 of the years, which will also have an impact on the performance income. Maybe let me also give the second answer to the net financial income. I think in H1, we made the conscious decision to decrease the FX risk on our balance sheet and also on equity. When we look at this approach, we will continue to run this approach also in the full year of 2026. You can assume that there is some impact from the hedging cost, but also from the mark to market, which we will not know till the very end, of course, of the year, which is then impacting it. Overall, I think a slight improvement is possible.

Speaker #3: Now, maybe let me also give the second answer to the net financial income. I think in half year one, we made the conscious decision to decrease the FX risk on our balance sheet and also on equity.

Speaker #3: So when we when we look at this approach , we will continue to run this approach . Also in the full year of 2026 .

Speaker #3: So so you can assume that there is some impact from the hedging cost , but also from the marketing market , which we will not know till the very end , of course , of the year , which is then impacting it .

Speaker #3: But overall, I think a slight improvement is possible.

Speaker #6: Regarding your third question, no change with regards to the redemption dynamics on the mature evergreen strategies with the private equity focus, but also no change with regards to all the good things happening across the broader evergreen platform, which we mentioned last time.

Joris Gröflin: Regarding your third question, no change with regards to the redemption dynamics on the mature Evergreen strategies with the private equity focus, but also no change with regards to all the good things happening across the broader Evergreen platform, which we mentioned last time.

Steffen Meister: Just one additional word on the performance of the balance sheet position is, I guess, also connected to your question around PGPE. In Q2, we had clearly a couple of idiosyncratic situations of portfolio, like I think everybody has in the industry. They were actually also in the public. I think there were also financing questions around that. It is all the same pool of assets. So this was, in our opinion, one-off. I do not think that is a good guidance for H2. So I think H2 should be just more business as normal.

Speaker #4: It's just one additional word on the the performance of the balance sheet positions . I guess , also connected to your , your question around PE .

Speaker #4: You know , we had in the second quarter , we had clearly a couple of idiosyncratic situations . The portfolio , like I think everybody has in the industry , they were actually also in the public .

Speaker #4: I think there were also financing questions around that . So it's all the same pool of assets . So this was , in our opinion , one off .

Speaker #4: So, I don't think that's good guidance for the second half. So, I think the second half should be just more business as normal.

Speaker #9: Good morning, Michael. Saunderson, Barclays here. Just a couple from me, please. First of all, obviously, you're giving second half guidance around performance fees into the second half and into the future as well.

Michael Sanderson: Good morning. Michael Sanderson, Barclays here. Just a couple from me, please. First of all, obviously, you are giving H2 guidance around performance fees and into the future as well. Just interested, the exit environment, the messaging around this is always very hard to read from the outside. When you are talking about pieces being delayed, I understand the long term. But I guess what I am trying to understand is, who are the buyers out there at the moment? Because obviously rates look like they are going up. There are a lot of people stuck with capital that are struggling to deploy, and are they going to get the returns they expect? So interested to know when you are looking at your exit pipeline, where is the real demand coming from that? Second piece, I guess slightly more positively, thinking about the partnership side of things.

Speaker #9: Just interesting . The exit environment , the messaging around this is always very hard to read from the outside . When you're talking about a sort of pieces being delayed , etc.

Speaker #9: I understand the long term, but I guess what I'm trying to understand is, who are the buyers out there at the moment?

Speaker #9: Because, obviously, rates look like they're going up. There are a lot of people stuck with capital that are struggling to deploy, etc.

Speaker #9: And are they going to get the returns they expect? So, interested to know, when you're looking at your exit pipeline, where's the real demand coming from—that second piece?

Speaker #9: I guess slightly more positively , think about the partnership side of things . I mean , obviously you spent a lot of time talking about those in March and I mean , obviously BlackRock , BlackRock tie up and the products there be really interested to get some updates around those .

Michael Sanderson: Obviously, you spent a lot of time talking about those in March, and obviously the BlackRock tie-up and the products there. Be really interested to get some updates around those. Obviously in your reiterated guidance then, you are making clear messages about balance, but yes, some detail around what is going well in those and where you are seeing the most positive piece. I guess a bit of add on, it would not be a results presentation if we did not ask about US and the DC 401(k) sort of opportunity and how that is evolving and speed of evolution.

Speaker #9: I mean , obviously in your reiterated guidance , then you're making clear messages about developments . But yeah , some some detail about what's going well in those and where you're seeing the most positive piece , I guess , sort of a bit of add on .

Speaker #9: It wouldn't be a results presentation if we didn't ask about the US and the DC 401(k) sort of opportunity, and how that is evolving and the speed of evolution.

Speaker #2: So maybe I'll take the the first topic on exits and the environment . And if I look out over the exit paths that we have been successful in completing the last number of years , as well as our ongoing processes , it's unbelievably balanced .

David Layton: Maybe I will take the first topic on exits and the environment. If I look out over the exit paths that we have been successful in completing the last number of years, as well as our ongoing processes, it is unbelievably balanced. We have had some IPOs, some exits to strategics. Some of our biggest exits have been actually exits to strategics, and then we have had some sales to financial buyers. If I look at the current pipeline, we see actually pretty good dynamics across each one of those channels. Sometimes it can be a little bit more complex today and things can get dragged out a little bit. I would not read too much into the delay.

Speaker #2: We've had some IPOs , some exits to Strategics , some of our biggest exits have been actually exits to Strategics . And then we've had some sales to financial buyers .

Speaker #2: And if I look at the current pipeline, we actually see pretty good dynamics across each one of those channels. I wouldn't read much into it.

Speaker #2: Sometimes it can be a little bit more complex today, and things can get dragged out a little bit. I wouldn't read too much into the delay.

Speaker #2: We have . We have a handful One in particular , but but but but a handful of processes that we're just not sure if we'll end up closing and getting the cash this year or if it's going to be pushed to next year .

David Layton: We have a handful, one in particular, but a handful of processes that we're just not sure if we'll end up closing and getting the cash this year or if it's going to be pushed to next year. At this point in the year, if you're not already signed and marching towards exit, there's just uncertainty there. We've just given ourselves a little bit of a hedge on the guidance there, not being able to predict the specific timing of that one exit. I wouldn't read much into that. The exit environment we have found to be quite reasonable, actually. On the partnerships and Joint Ventures, we had about CHF 1 billion of contribution from partnerships last year, and told you in March that we anticipated potentially up to 100% growth in that this year.

Speaker #2: And , you know , at this point in the year , if you're not already signed in marching towards exit , there , just uncertainty there .

Speaker #2: And so we've just given ourselves a little bit of a hedge on the guidance there, not being able to predict the specific timing of that one exit.

Speaker #2: But I wouldn't read much into that . The exit environment we have found to be quite reasonable , actually on the partnerships and JVs , you know , we had about $1 billion of contribution from partnerships last year , and told you in March that we anticipated potentially up to 100% growth in that this year .

Speaker #2: I'm not sure if we'll get quite to 100% growth . You know , in in In some of those some of those JVs , they're built up of in some cases , building blocks of some of these mature evergreens and some of the slowness that's impacted that has , has caused for maybe some reformulation or Complicated the story in certain cases .

David Layton: I'm not sure if we'll get quite to 100% growth in some of those Joint Ventures. They're built up of, in some cases, building blocks of some of these mature Evergreens and some of the slowness that's impacted that has caused for maybe some reformulation or complicated the story in certain cases. You might see a little bit more slowness there, but you'll certainly see good growth in that. Whether that's 100% or not, it doesn't look likely at this point in time that we'll see quite a 2x in that business, but it'll be, I think, a strong showing nonetheless. Those are going really well for the most part. Maybe Steffen, do you want to talk about DC?

Speaker #2: So , so you might see a little bit more slowness there , but you'll certainly see good growth in that , right . Whether that's 100% or not .

Speaker #2: It doesn't look likely at this point in time that we'll see quite a 2x in that business, but I think it'll be a strong showing nonetheless.

Speaker #2: Those are going really , really well for the most part Maybe . Stefan , do you want to talk about DC ? Yeah , a lot of time on that .

Joris Gröflin: Yeah, sure.

Steffen Meister: Yeah, sure.

David Layton: You spent a lot of time on that.

Speaker #2: Yeah .

Steffen Meister: Yeah. Look, the reality is there have been big announcements coming out of US. In detail, a little bit more tricky. There is very different ideas between different, I would say, parties here at the table, how that is implemented. The reality is, I don't think we have, as of today, we have like a-

Speaker #4: Look, I mean, the reality is there have been big announcements coming out of the US in detail. It's a little bit more tricky.

Speaker #4: There's very different ideas between different I would say parties here at the table . How you know that is implemented and the reality is I don't think we have as of today , we have like a , a clear framework that would allow us to essentially grow massively .

Steffen Meister: A clear framework that would allow us to essentially grow massively these 401(k) plans or private market allocations for these plans. It is a little bit, as you can probably relate to, it is a little bit hard sometimes to predict exactly what is the course of political action, including in the US, and that is why I would be a little bit careful with my forecast. I would though tell you that the long-term trend, that there is a clear conviction by literally all the parties in the meantime, that defined contribution investors should have the same rights as DB plan investors. I think that is pretty much undisputed. I think it is a bit more a question of time, and I don't think it is a question of if that happens.

Speaker #4: These four one K plans or private market allocations to these plans . It's a little bit , as you can probably relate to .

Speaker #4: It's a little bit hard sometimes to predict exactly what the course of political action will be, including in the US. That's why I would be a little bit careful with my forecasts.

Speaker #4: I would tell you that the long term trend that , you know , there is a clear conviction by literally all the parties .

Speaker #4: In the meantime, that defined contribution investors should have the same rights as DB plan investors—I think that's pretty much undisputed. So, I think it's a bit more a question of time.

Speaker #4: And I don't think it's a question of if that happens. Thank you. And

Nicolas Payen: Thank you. Nicolas Payen from Kepler Cheuvreux. Three questions, please. The first one, we discussed quite a lot insurance-related AUM. You want to credible them by 2033. Just wanted to know if we can expect any margin evolution from that, especially seeing that insurance AUM are quite non-that year. That is the first question. The second one is coming back just on the hedging cost quickly. Could we expect maybe less FX headwinds going forward because of your hedging strategy, which has been ramped up, potentially? The third one, I think you discussed AI-driven productivity gains within your portfolio companies. Just curious about your own tech stack and how actually AI is potentially helping you within your investment process, and whether or not that has impact on your cost base. Thank you.

Speaker #10: Three questions please . The first one we discussed quite a lot insurance related AUM , you want to cripple them by 2033 . Just wanted to know if we can expect any margin relation from that , especially that seem that insurance .

Speaker #10: I'm quite mandate geared that the first question the second one is coming back just on the aging cost quickly . Could we expect maybe less FX headwinds going forward because of your hedging strategy , which has been ramp up potentially .

Speaker #10: And the third one, I think you discussed AI-driven productivity gains within your portfolio companies. Just curious about your own tech stack and how AI is potentially helping you within your investment process, and whether or not that has an impact on your cost base.

Speaker #10: Thank you

Speaker #2: So with regards to the insurance opportunity, one of the reasons why we, in that slide, showed you that we have crafted solutions across the different asset classes for insurance partners is because we think that we can, I think, be a more comprehensive partner with a reasonably balanced margin profile within this insurance segment.

David Layton: So with regards to the insurance opportunity, one of the reasons why we, in that slide, showed you that we have crafted solutions across the different asset classes for our insurance partners is because we think that we can, I think, be a more comprehensive partner with a reasonably balanced margin profile within this insurance segment. But it is probably naturally weighted more towards credit and infrastructure, as we indicate, than some of the other asset classes. The fee base will follow the appropriate mix that comes from that segment. But we have created. We have shied away from doing the pure play credit mandates oftentimes, and we will oftentimes blend together multiple asset classes in order to keep a reasonable margin there.

Speaker #2: But it is probably naturally weighted more towards credit and infrastructure as we indicate , than than some of the other asset classes . And so the , you know , the , the fee base will follow , you know , the appropriate mix that that comes from that that segment .

Speaker #2: But , but we have created , we've shied away from doing the pure play credit mandates oftentimes . And we'll oftentimes blend together multiple asset classes in order to keep a reasonable margin there .

Speaker #4: I would probably also add here that this is overall, at least as of today. And if that changes, we'll tell you. As of today, I don't think there's a bias towards a change.

Steffen Meister: I would probably also add here that there is overall, at least as of today, and if that changes, we will tell you. As of today, I do not think there is a bias towards a change. I would agree with Dave that on the insurance side, probably that is more infra credit, and we certainly try to do a lot of infra there. I would say with the larger business with some wealth funds, it is probably more equity-related. We hardly do any credit business with some wealth funds. There is usually not that much appetite there anyway for that type of business. With the JV partners, especially when we do joint products, Dave talked about a very small category of clients where maybe we have one or the other, or just evergreen building blocks.

Speaker #4: So I would agree with David on the insurance side—probably that's more infra credit. I mean, I certainly try to do a lot of infra there.

Speaker #4: I would say with the larger business , with some wealth funds , it's probably more equity related . We do hardly do any credit business with some wealth funds .

Speaker #4: There's usually not that much appetite, anyway, for that type of business, with the JV partners, especially when we do joint products.

Speaker #4: So they've talked about a very small category of clients where maybe we have one or the other, or just evergreen building blocks.

Speaker #4: I guess very often the product JVs are essentially new products, where we bring together the expertise of our JV partners and of our firm.

Steffen Meister: I guess very often the product Joint Ventures are essentially new products where we bring together the expertise of our JV partners and of our firm. We announced a few of those in the past, like for instance, PGIM. This is where often we bring much more the equity side of things than fixed income. I would say overall, as of today, I do not see a bias here. If we see suddenly such a phenomenal growth on credit, that is good news anyway then, but that could lead. If you see very disproportionate growth there in infrastructure and credit, that could lead actually to a more permanent change. We will certainly update you if that is happening.

Speaker #4: We announced a few of those in the past , like , like with , for instance , p g , I'm and this is where often we bring much more .

Speaker #4: The equity side of things, then fixed income. So, I would say overall, as of today, I don't see a bias here.

Speaker #4: If we see suddenly such a phenomenal growth on credit , that's good news . Anyway , then , but that could lead . I mean , if you see very disproportionate growth there in infrastructure in credit , that could lead actually to a more permanent change .

Speaker #4: So we'll certainly update you if that's happening.

Speaker #2: Edging .

David Layton: Hedging cost, Jürg?

Speaker #6: Yeah .

Joris Gröflin: Well, maybe to give you the background there, I think we are now more prudent in how we run the expected volatility on our equity, and we are protecting the equity much more by doing these hedging efforts.

Speaker #3: Maybe to give you the background think we've now more prudent in how we how we run the expected volatility of on our on our equity and we're protecting the equity much more by , by doing these , these hedging efforts , I'm .

Steffen Meister: I'm not sure whether I should clarify this. There was a question of whether we see more robustness on the FX side. I guess what we are talking about is hedging balance sheet positions.

Speaker #4: I'm not sure whether I should clarify this. I mean, there was a question of whether we see more robustness on the FX side.

Speaker #4: I mean , so I guess what we are talking about is hedging balance sheet positions . Yes . Okay . We're not talking about hedging revenues .

Steffen Meister: Yes.

Steffen Meister: Okay? We're not talking about hedging revenues. Just if you try to make a picture of this, if we want to hedge the, for instance, the US dollar exposure, euro exposure on the revenue side, and we talk about billions of dollars on 5, 10, 15 years contracts, okay? You wouldn't like that, I'm sure. We will always have this situation that as long as we show CHF as our main currency, and there's no plan to change that, we will have inherently, like other Swiss-based firms, or at least firms reporting CHF, that kind of bias. That's why I think with actually a lot of your inputs, I guess, in the last 2, 3 years, we make it more of a habit to always show the constant currency next to it, just that you get a little bit more an apples to apples.

Speaker #4: I mean , just if you try to cut off , you know , make a picture of this . If we want to hedge the , for instance , the US dollar exposure , your exposure on the revenue side , and we talk about billions of dollars , you know , on like five , ten , 15 years contracts , okay .

Speaker #4: I mean , you wouldn't like that . I'm sure . So I mean , we will always have this situation that as long as we show Swiss franc as our main currency and there's no plan to change that .

Speaker #4: You know , we will have inherently , like other Swiss based firms , or at least firms reporting Swiss francs , that kind of bias .

Speaker #4: That's why I think we've actually had a lot of your inputs. I guess in the last two or three years, we make it more of a habit to always show the constant currency next to it, just so you get a little bit more of an apples-to-apples comparison.

Speaker #4: But this is not something we can easily change, as long as we report in Swiss francs.

Steffen Meister: But this is not something we can easily change as long as we report in CHF.

Joris Gröflin: With regard to AI transformation, we do have a dedicated effort between business and technology. Probably more to come from our side. I think it will help us to make us better investors, service our clients better, and Partners Group, with its vast array of private markets data, documentation, I think we're uniquely positioned and at a fantastic starting point to benefit from it.

Speaker #6: To I transformation , we do have a dedicated effort between business and technology . It's probably more to come from our side . I think you will help us to make us better investors , service our clients better and Partners Group with its vast array of private markets , data , documentation , I think we're uniquely positioned and at a fantastic starting point to benefit from it .

Speaker #4: Let me just quickly adding to that . I mean , so if you think about what AI will do to the investment process , there's one element where I think you have a level playing field because everybody will do about the same , which is essentially , let's say , using an agent to go to a data room to do .

Steffen Meister: Maybe just quickly adding to that. If you think about what AI will do to the investment process, there is one element where I think you have a level playing field because everybody will do about the same, which is essentially, let's say, using an agent to go to a data room, to do financial due diligence, operational due diligence, all of that. You can do this today. We do this today, right? That is not a big deal, actually. It is just helping. That in itself, I think is saving time, but I am not sure whether it is actually super creative. What we are in the process of doing is we should be pretty close to final product by the end of this year. We build what we call the PGAI Fab. We will use the data.

Speaker #4: Financial due diligence , operational due diligence , all of that . You can't do this today . We do this today , right ?

Speaker #4: That's not a big deal . Actually . It's just helping you . That in itself , I think is saving time , but I'm not sure why that's actually super creative .

Speaker #4: So, what we are in the process of doing is, we should be pretty close to a final product by the end of this year.

Speaker #4: We built what we call the PG AI fab . So we will use the data . We do secondary business , primary business , co-investments next to our direct control franchise .

Steffen Meister: We do secondary business, primary business, co-investment next to our direct control franchise now for 25 years. We have all this data. Now we have millions of documents and probably arguably more extensive investment documents. I am not sure whether it is ever seen a PIR, a so-called preliminary investment recommendation Partners Group, right? We talk about 200 pages. There is about 20 pages of Q&A there. This is in our view, super valuable. Not only valuable to build the context for the agent approach to actually have the right context to go into these data rooms, to look at new transactions, to look at peers and all of that.

Steffen Meister: We do secondary business, primary business, co-investment next to our direct control franchise now for 25 years. We have all this data. Now we have millions of documents and probably arguably more extensive investment documents. I am not sure whether it is ever seen a PIR, a so-called preliminary investment recommendation Partners Group, right? We talk about 200 pages. There is about 20 pages of question-and-answer there. This is in our view, super valuable. Not only valuable to build the context for the agent approach to actually have the right context to go into these data rooms, to look at new transactions, to look at peers and all of that.

Speaker #4: Now for 25 years , we this data . Now we have millions of documents and probably arguably more extensive investment documents . I'm not sure whether you've ever seen a , a P I or a so-called preliminary investment recommendation .

Speaker #4: Partners Group . Right . We talk about like 200 pages . There's about 20 pages of Q&A in there . And this is , in our view , super valuable , not only valuable to build the context for the agent approach to actually have the right context to go into these data rooms , to look at new transactions , to look at peers and all of that .

Speaker #4: But very importantly , and that's maybe the key differentiator . And I talked about this relevance of transformation . It's for the transformation to understand how historically , what worked on the transformation side , what doesn't work so well , how we should look at different subsectors , all these different dynamics .

Steffen Meister: But very importantly, and that is maybe the key differentiator, and I will talk about this relevance of transformation, it is for the transformation to understand how historically what worked on the transformation side, what does not work so well, how we should look at different sub-sectors, all these different dynamics. This is literally impossible to do this by hand. You cannot try to use in a smart way 30 million documents and I do not know how many million numbers and try to conclude on a value creation plan. This is where the models are really good at. This is where I think we have a real unique advantage actually with the data we have collected over time.

Speaker #4: And this is literally impossible to do this by hand , you know , you cannot I mean , try to use in a smart way 30 million documents .

Speaker #4: And I don't know how many million numbers, and try to conclude on a value creation plan. This is where the models are really good at.

Speaker #4: This is where I think we have a really unique advantage . Actually , with the data we have collected over time . So I think there's probably time next March or so , maybe in the annual numbers , when we have a little more time , maybe we should give a little bit of an update .

Steffen Meister: I think there is probably time next March or so maybe in the annual numbers when we have a little more time, maybe you should give you a little bit of an update what we are doing there. I think it is pretty exciting.

Speaker #4: What we're doing there, I think, is pretty exciting.

Speaker #2: Any other questions

David Layton: Any other questions?

Speaker #11: And now we're going to take the first question on the audio line. Just give us a moment. And the question comes from the line of Martin from UBS.

Operator: Now we are going to take the first question on audio line. Just give us a moment. The question comes line of Martin Nemec from UBS. Your line is open, please ask your question.

Speaker #11: Your line is open. Please ask a question.

Speaker #12: Yes . Good morning and thanks for taking my I have three of them . Please . The first one would be a follow up on , on on the margin discussion .

Martin Nemec: Yes, good morning, and thanks for taking my questions. I have three of them, please. The first one would be a follow-up on the margin discussion. We have clearly seen a bit of a recurring management fee margin erosion. I think, Dave, you clearly said that this is dependent on the mix. I was just wondering with the ongoing shift from seasoned evergreen products towards the next gen, perhaps somewhat smaller products, what is the expected margin impact here? Where does that recurring fee margin stabilize, in your view, in the next couple of years? Are there any other forces in play apart from that evergreen transition? That is the first one. The second one would be on financing conditions. I was just wondering, with clearly some upward pressure on rates, how do you see financing conditions affecting transaction activity in the H2 of the year?

Speaker #12: I mean , we've clearly seen a bit of a recurring management fee margin erosion . I think , Dave , you clearly said that this is this is dependent on on the mix .

Speaker #12: I was just wondering with the ongoing shift from seasoned evergreen products towards the next gen , perhaps somewhat smaller products , what is the expected margin impact here with that recurring fee margin stabilize , in your view , in the next couple of years ?

Speaker #12: And are there any other forces in play apart from from that evergreen transition ? That's the first one . The second one would be on on financing conditions .

Speaker #12: I was just wondering , with clearly some upward pressure on rates , how do you see financing , financing conditions affecting transaction activity in the second half of the year to what extent is that a concern ?

Martin Nemec: To what extent is that a concern? Could we see perhaps a bit of a rerun of what we saw in 2022, 2023? The last one would be on performance fees. I was wondering what needs to happen in the H2 of the year for performance fees to hit the low end of the 20% to 25% contribution range. Is it really about just an additional small number of exits materializing, or do we need to see a more meaningful pickup in exits? Thank you.

Speaker #12: Could we perhaps see a bit of a rerun of what we saw in ’22, ’23, and the last one would be on performance fees?

Speaker #12: I was wondering what needs to happen in the second half of the year for performance fees due to hit the low end of the 20% to 25% contribution range.

Speaker #12: Is it really about just an additional small number of exits materializing, or do we need to see a more meaningful pickup in exits?

Speaker #12: Thank you

Speaker #2: Good . So on the on the margin the , you know , transition of kind of mature evergreens , transition , younger evergreens , that is one of a dozen factors that play into kind of where the , the fee margin comes out at any particular point in time .

David Layton: Good. On the margin discussion, the transition of kind of mature evergreens transitioning to younger evergreen, that is one of a dozen factors that play into kind of where the management fee margin comes out at any particular point in time. Again, in H1 of this year, we were particularly successful raising capital within infrastructure and within private credit, right? And those bring their own contributions. In the past, I've tried to give you guys guidance on where the management fee is going and even told you we foresee it going down by a basis point or two in this period, and it actually ended up being up at the end of that period. It's very hard to foresee where it comes out because there are a dozen factors that come into play here, but the most significant is mix.

Speaker #2: Again , in the first half of this year , we were particularly successful raising capital with an infrastructure . And within private credit .

Speaker #2: Right . And those bring their their own contributions . In the past , I've tried to give you guys guidance on , you know , where the management fee is going and even told you , we foresee it going down by a basis point or two in this period .

Speaker #2: It actually ended up being up at the end of that period. It's very hard to foresee where it comes out because there are a dozen factors that come into play here.

Speaker #2: But the most significant is mix , and that's the one that we watch most closely trying to to , you know , project where management fees margin is coming out with regards to financing conditions .

David Layton: That's the one that we watch most closely, trying to project where management fee margin is coming out. With regards to financing conditions, yeah, it's always a reality that whenever the financing environment changes, you see transaction activity change for a period of time as the market digests those new rates, and because there is pricing implications that get factored into kind of a new rate environment. At the same time, the transformation case is as important as the financing case today. What you can actually do with the business once you get your hands on it. We don't tend to put as much leverage on our transactions as some of our peers. At least we try and stay a notch below the market with regards to how we finance our businesses oftentimes and put extra emphasis on the transformation case that we bring to the table.

Speaker #2: Yeah , it's , it's always A reality that whenever the financing environment changes , you see transaction activity change for a period of time as the market digests those new rates and because there is pricing implications that that get factored into kind of a new rate environment , at the same time , the transformation case is as important as the financing case today .

Speaker #2: What you can actually do with the business once you get your hands on it . And so , you know , we , we , we don't tend to put as much leverage on our transactions as , as , some of our peers .

Speaker #2: At least we try and stay a notch below the market with regards to how we finance our businesses, oftentimes, and put extra emphasis on the transformation case that we bring to the table.

Speaker #2: So yes , it could impact things , but , you know , hopefully we're less impacted than , than , than others and can still close on our pipeline .

David Layton: Yes, it could impact things, but hopefully we're less impacted than others and can still close on our pipeline. Then performance fees, Joris, do you want to cover that?

Speaker #2: And then performance fees, yours. Do you want to cover that?

Speaker #3: Yes. We've given you a range of around 20% to 25%, and that range is really driven by the slices of revenues that we will see as soon as we realize the exits.

Joris Gröflin: Yes. We've given you a range of around 20% to 25%, and that range is really driven by the slices of revenues that we will see as soon as we realize the exits. That's again, whether they will be closed in

Speaker #3: And that's , again , whether they will be closed in 2026 or shifting into into Q1 . So there are slices , elements of these several exits that we currently have in the pipeline , which will make the difference in the range .

Joris Gröflin: 2026 or shifting into Q1. There are slices, elements of these several exits that we currently have in the pipeline, which will make the difference in the range.

David Layton: Mm-hmm. But the biggest is actually one exit, where we are close to coming to an agreement on, but we just are a little bit uncertain with regards to when that particular transaction closes. So it is more concentrated and less broad.

Speaker #2: But , you know , the biggest is actually one exit where we're close to kind of coming to an agreement on , but we just are a little bit uncertain with regards to when that particular transaction closes .

Speaker #2: So, it's more concentrated and less broad.

Speaker #11: Thank you. And now we're going to take our next question. The next question comes from Daniel Wrigley from Dukat Kantonalbank.

Operator: Thank you. Now we are going to take our next question. The next question comes from the line of Daniel Regli from Zürcher Kantonalbank. Your line is open. Please ask the question.

Speaker #11: Your line is open. Please ask your question.

Speaker #3: Yes .

Daniel Regli: Yes. Good morning from my side. Thanks a lot for taking my questions. I have mainly two follow-up questions, and one is just on what we just discussed. So just your performance fee guidance in my view, has kind of been reduced by about 5 percentage points for 2026, and this is mainly due to this uncertainty about the exit timeline you just mentioned. But can I stand the conclusion correct that we can expect that the expectations for performance fees in 2027 have basically increased by about the same amount, which now the expectations for 2026 have been lowered? Then the second question is again, on the kind of dynamics in the Evergreen platform in Q3.

Speaker #13: Good morning . From my side . Thanks a lot for taking my questions . I have mainly two kind of follow up question , and the one is just on what we just discussed .

Speaker #13: So just, you know, kind of your performance fee guidance, in my view, has kind of been reduced by about five percentage points for 2026.

Speaker #13: And this is mainly due to this uncertainty about the exit timeline you just mentioned, but can I extend the conclusion, correct, that we can expect that the expectations for performance fees in 2027 have basically increased by about the same amount?

Speaker #13: Which now, the expectations for 2026 have been lowered. And then the second question is, again, on the kind of dynamics in the evergreen platform in Q3.

Speaker #13: And I know you kind of said there weren't many changes, but can you just give us maybe a little bit more color on what is going on on both sides?

Daniel Regli: I know you said there weren't many changes, but can you just give us maybe a little bit more color on what is going on both sides, the demand side and the redemptions side? What is your status on the gatings with your more mature Evergreen strategies? How many funds have now been gated by now? What is your expectation for how long these gates will remain in place? Thanks.

Speaker #13: Could you comment on the demand side and the redemptions side, and what is the status on the gating with your more mature evergreen strategies?

Speaker #13: How many funds have now been gated by now , and what is kind of your expectations for how long these gates will remain in place ?

Speaker #13: Thanks

Speaker #3: Let me give you the first answer . On the on the performances . Yes , you're absolutely right . I think if we have a timing shift , those will then of course be realized in the course of half year , one , 2027 , as soon as they close .

Joris Gröflin: Let me give you the first answer on the performances. Yes, you're absolutely right. I think if we have a timing shift, those will then of course be realized in the course of H1 2027, as soon as they close. Looking into 2027 and 2028, I think we gave you the overall topic that we are looking at $75 billion of realizations that we are working on, and how then they will of course translate into the full year 2027 or 2028. I think that's a topic as we go into next year, we will also have more clarity on, I think. But the positive message clearly is, yes, it's feeding into 2027 of what we see shifted from this period.

Speaker #3: Now looking into 2027 and 2028 , I think we gave you the overall topic that we are looking at 75 billion of realizations that we're working on , and how then they will , of course , translate into the full year 2027 or 2028 .

Speaker #3: I think that's that's a topic as we go into next year . We will also have more clarity on , I think . But the positive message clearly is , yes , it's feeding into 2027 of what we see shifted from this period .

Speaker #13: Okay, thanks. Very clear.

Daniel Regli: Okay, thanks. Very clear.

Speaker #6: I think when it comes to evergreens , I mentioned before , there's no change to what we have said back in in July , the mature Evergreens is a dynamic that we will deal with over the next 12 to 18 months .

Juri Jenkner: I think when it comes to Evergreens, I mentioned before, there's no change to what we have said back in July. Mature Evergreens is a dynamic that we will deal with over the next 12 to 18 months. On the other hand, we've also outlined that we expect Evergreen growth with $20 billion to $30 billion expected from the broader platform and the JVs as David has been mentioning before in the presentation.

Speaker #6: But on the other hand, we've also outlined that we expect evergreen growth, with $20 to $30 billion expected from the broader platform and the JVs.

Speaker #6: David has been mentioned before in the presentation.

Speaker #13: Okay, maybe so. But what exactly is the status? How many funds of your mature evergreen strategies have had gates applied now?

Daniel Regli: Okay. Yeah, but what is exactly the status? How many funds of your mature Evergreen strategies have been gates applied now, and what is kind of your expectations for further funds of these mature Evergreens, which will have to apply gates?

Speaker #13: And what is kind of your expectation for further funds of these mature evergreens, which will have to apply gates?

Speaker #6: And we don't comment on specific funds. I can only point to the guidance we gave last time.

Juri Jenkner: We don't comment on specific funds. I can only point to the guidance we have given last time.

Speaker #13: Okay . Thanks .

Daniel Regli: Okay. Thanks.

Speaker #4: Just on your question , on , on on the You know , liquidity limitations that are enacted by our , I guess , the three mature strategies .

Steffen Meister: Just on your question on the liquidity limitations that are enacted by our, I guess the three mature strategies, that are enacted by many, many other large funds in the industry, by many people, especially on the credit side. I think what's just important to notice here that we often talk about the sizes a little bit being a challenge here. There have been a lot of investors that made a lot of money in these funds, okay? The early investors, they made five times. So that's not like a normal fund where you are happy to make two, 2.5 times. They made five times. And clearly at the time, when there's questions around the outlook, some people maybe like to buy some of the sort of a little more fancy public stocks. Some people might diversify into more thematic investments.

Speaker #4: That are enacted by many, many other large funds in the industry, by many people, especially on the credit side. I think what's just important to note here is that we often talk about the sizes being a little bit of a challenge here.

Speaker #4: Now, there have been a lot of investors that made a lot of money in these funds. Okay? The early investors have made five times.

Speaker #4: So that's not like a normal fund where you are happy to make two, two and a half times. They made five times.

Speaker #4: And clearly at the time, you know, when there's questions around the outlook, some people maybe like to buy some of the sort of a little more fancy public stocks.

Speaker #4: Some people might have a little more thematic investment . So there's all kind of reasons , you know , why people try to harvest some of their returns and given the sizes of these funds and the fact that we have a little bit more quiet environment , you know , otherwise on the evergreen side , I mean , you will see , you know , these limitations on liquidity being enacted for a few quarters , as we pointed out in July .

Joris Gröflin: So there's all kind of reasons why people try to harvest some of their returns. Given the sizes of these funds and the fact that we have a little bit more quiet environment otherwise on the Evergreen side, you will see these limitations on liquidity being enacted for a few quarters, as we pointed out in July. So there's no update on the numbers. We've given pretty precise numbers here and figures, but it's just important to see a little bit that context. That's why it's not an issue here on the smaller funds because this is where people have maybe invested three years ago, four years ago. They're compounding, they're ramping up, right. But that is really for the mature funds. This is a little bit a topic because we have been so early.

Speaker #4: So that's not no update on the numbers we've given pretty precise numbers here and figures , but it's just important to see a little bit that context , you know , and that's why it's not an issue here on the smaller funds , because , you know , this is where people have maybe invested three years ago , four years ago , their compounding , they're ramping up .

Speaker #4: Right ? But that is really for the mature funds . This is a little bit , you know , a topic because we have been so early , you know , many of these funds , they're like , out there for 15 , 20 years .

Joris Gröflin: Many of these funds, they're out there for 15, 20 years, and with all that compounded upside, there's clearly much more inclination than elsewhere in the industry to harvest some of these returns.

Speaker #4: And with all that compounded upside, there's clearly much more of an inclination than elsewhere in the industry, you know, to harvest some of these returns.

Speaker #13: Okay. Thanks a lot for this additional color.

Daniel Regli: Okay. Thanks a lot for this additional color.

Speaker #2: Thank you . And with that , I think we'll we'll wrap up this call . Thank you guys for your continued interest in the company .

David Layton: Thank you. With that, I think we'll wrap up this call. Thank you guys for your continued interest in the company. With that, we'll end the call. Thank you very much.

Speaker #2: And with that, we'll end the call. Thank you very much.

Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

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