Christina Han Head Investment Research | Patrick Xin Du Private Equity
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
–
P
U
O
R
G
S
R
E
N
T
R
A
P
As of 31 December 2020
Annual Report 2020
Contents
Key figures
Message from the Chairman and the Co-CEOs
2020 at a glance – Partners Group’s business model and review of financial performance
Investments
Clients
Financials
Appendix
Key definitions and alternative performance metrics (APM)
Consolidated financial statements
Financial statements of Partners Group Holding AG
Compensation Report
Corporate Governance Report
Contacts
4
6
9
15
19
26
28
30
102
118
143
174
As in the past, the breadth and clear strategic direction of our
platform has enabled us to successfully navigate through these
challenging times, reflected in a robust set of 2020 financials.
Our transformational approach to investment and our
entrepreneurial approach to governance remain at the core of our
activities, enabling us to generate superior returns and look ahead
with confidence.
This, combined with the dedication of our employees and the
trust of our clients, business partners and shareholders, positions
us well to continue to create lasting, positive impact for all our
stakeholders, irrespective of the economic environment.
Partners Group | 3
ANNUAL REPORT 2020 Key figures
1'533
professionals
CHF
1'412
million
20
USD
109
billion
1.51%
offices around
the world
assets under
management
revenue margin1), 2)
CHF
875
million
CHF
805
million
CHF
27.50
per share
revenues1)
EBIT
profit
proposed dividend
Total AuM3)
(in USD bn)
Number of professionals
109.1
94.1
83.3
74.4
930
840
746
45.5
50.0
57.2
1'464
1'533
1'203
1'036
2014
2015
2016
2017
2018
2019
2020
2014
2015
2016
2017
2018
2019
2020
Profit4)
(in CHF m)
558
396
336
900
805
752
769
Share price development since IPO5)
1'600%
1'400%
1'200%
1'000%
800%
600%
400%
200%
0%
-200%
Partners Group
+1'551%
Bloomberg European Financial Index
-57%
2014
2015
2016
2017
2018
2019
2020
2006
2008
2010
2012
2014
2016
2018
2020
1) Revenues from management services, net, and other operating income. 2) Based on average AuM of CHF 93.8 billion in 2020 (2019: CHF 88.4 billion), calculated on a daily basis.
3) Assets under management exclude discontinued public alternative investment activities and divested affiliated companies. 4) Partners Group adjusted its profit for specific non-cash items
related to the capital-protected product Pearl Holding Limited until 2014; the successful conversion of Pearl in September 2014 has consequently made Partners Group’s adjusted net profit
equal to its IFRS profit from 2015 onwards. 5 ) As of 31 December 2020.
4 | Partners Group
ANNUAL REPORT 2020 Key figures
Key performance indicators
Assets under management as of the end of the year (in USD bn)
Revenue margin1),2)
Revenues (in CHF m)2)
EBIT margin
EBIT (in CHF m)
Financial result (in CHF m)
Profit (in CHF m)
Net cash position at end of year (in CHF m)3)
Shareholders’ equity (in CHF m)
Return on shareholders’ equity (ROE)
Equity ratio
ANNUAL REPORT 2020
2019
94.1
1.82%
1'610
63%
1'008
30
900
1'035
2'288
42%
58%
2020
109.1
1.51%
1'412
62%
875
53
805
1'102
2'275
35%
56%
1) Based on average AuM of CHF 93.8 billion in 2020 (2019: CHF 88.4 billion), calculated on a daily basis. 2) Revenues from management services, net, including other operating income.
3) Comprises cash & cash equivalents and short-term loans for investment programs provided by the firm, net of long-term debt.
Share information as of 31 December 2020
Share price (in CHF)
Total shares
Market capitalization (in CHF bn)
Free float1)
Diluted shares (weighted average)
Diluted earnings per share (in CHF)
Dividend per share (in CHF)2)
Dividend yield per share3)
Bloomberg ticker symbol
Reuters ticker symbol
1'040.0
26'700'000
27.8
84.96%
26'505'234
30.36
27.50
2.6%
PGHN SW
PGHN.S
1) According to the SIX Swiss Exchange definition. 2) As per proposal to be submitted to the next ordinary Annual General Meeting of shareholders on 12 May 2021. 3) Yield as of
31 December 2020.
Corporate calendar
12 May 2021
17 May 2021
18 May 2021
19 May 2021
15 July 2021
Annual General Meeting of shareholders
Ex-dividend date
Dividend record date
Dividend payment date
Assets under management announcement as of 30 June 2021
7 September 2021
Publication of Interim Report as of 30 June 2021
Partners Group | 5
ANNUAL REPORT 2020
Message from the Chairman and the Co-CEOs
André Frei Co-Chief Executive Officer, Steffen Meister Executive Chairman, David Layton Co-Chief Executive Officer
Dear clients, business partners
and fellow shareholders,
We start this letter by acknowledging the unprecedented
events of the past year, precipitated by the outbreak of the
COVID-19 pandemic. Safeguarding the health and safety of
our employees, and those of our portfolio companies, was
our first priority in 2020.
In parallel, we drove forward performance in our investments
for the benefit of our clients. With double-digit EBITDA
growth across our direct private equity portfolio, we are
proud to report strong portfolio performance last year. The
foundations for portfolio stability were laid by our emphasis
on thematic sourcing coupled with our disciplined asset
selection and value creation approach.
Towards the end of the year 2020 markets turned more
active and our investment activity has increased again
considerably. As we transition into 2021, our transformational
approach to investment and our entrepreneurial approach
to governance remain at the core of our activities. This gives
us confidence that with our investment strategy we are well
positioned to continue to grow and provide our clients with
sustainable returns.
Continued strong demand for our private markets
solutions
Despite the challenging environment in 2020, our business
model has proven to be resilient amid the economic
headwinds caused by the pandemic. Clients around the globe
entrusted us with USD 16 billion in new commitments. We
saw strong demand across all asset classes and program
types, from customized mandates and our extensive range
of evergreen fund solutions, to traditional closed-ended
6 | Partners Group
programs. Our total AuM increased to USD 109 billion as
of 31 December 2020. This translated into a strong 11%
underlying AuM growth (16% including foreign exchange
effects).
In the past, our industry has primarily grown via traditional
funds, but we are now increasingly seeing investors in private
markets turn to customized mandate solutions as a means
of optimizing the return potential of their commitments to
the asset class. Many of our clients are looking for specific
risk/return exposures and to combine various asset classes,
match asset/liability needs through cash-flow profiling, and
ramp up quickly through investment level steering. We are
truly differentiated in creating these types of bespoke private
markets solutions, with a 20-year track record of forming
customized mandates. Today, 64% of our AuM is managed
through bespoke private markets solutions. We believe
that this differentiates us and will remain important as our
industry continues to mature and grow.
The transformative trends we identified have been
amplified and accelerated
We are highly satisfied with the resilience our portfolios
showed during the volatility of 2020. Our investments were
reasonably stable in the first half of the year and rapidly
transitioned back to growth in the second half of the year.
We believe that our hands-on approach and our thoughtful
theme selection helped to facilitate this stability. COVID-19
has, in fact, amplified and accelerated most of the trends and
themes on which Partners Group has focused.
Our team of over 500 private markets investment
professionals works year-round to identify transformative
trends across sectors. We find and target companies and
assets with strong potential to benefit from these trends.
Then, together with our over 200 Operating Directors
ANNUAL REPORT 2020 Message from the Chairman and the Co-CEOs
ANNUAL REPORT 2020
and Industry Advisors, our professionals leverage our
entrepreneurial governance approach to transform the
companies and assets in which we have invested into market
leaders. This approach has delivered strong revenue growth
and sustained double-digit EBITDA growth across our direct
private equity portfolio – in turn giving us a strong track
record of investment outperformance in many areas.
In 2020, we continued our steady work on our investment
themes, which are underpinned by long-term secular trends.
This has been our approach across the entire platform, not
only in private equity, but also in private infrastructure and
private real estate, for several years. However, today, this
approach shapes our investment activities more than ever.
In private equity alone, there are hundreds of such themes;
we currently zoom in and develop concrete investment
opportunities in more than 50 of them, grouped into our
four main sectors. Just to name a few of these, we look at
cell and gene therapy related tools and services in Health &
Life, software verticalization in Technology, digitized facility
management in Services, and sustainable alternatives in
industrial food production in Goods & Products, amongst
many others. We have started 2021 with a significant
investment pipeline centered around our main thematic
growth trends.
Translating clients' portfolio performance into
shareholder returns
Turning to our financials, while our fundraising activity in
2020 resulted in AuM growth in USD of 16%, the year-on-
year average AuM growth in CHF was 6% as the Swiss franc
strengthened against all major currencies. Management fees
grew by 1% to CHF 1'146 million and were impacted by
temporarily lower levels of other operating income, mainly
due to lower investment activity during the period.
Total revenues decreased by 12% to CHF 1'412 million,
driven by lower revenues from performance fees. In H2,
more favorable exit markets enabled the firm to realize
several assets and performance fees recovered strongly to
27% of total revenues, up from 9% in H1. In H1, the firm
had to postpone several divestments due to the weak exit
environment caused by COVID-19. As a result, total revenues
from performance fees decreased by 44% to CHF 266 million
representing 19% of total revenues. Our expected mid- to
long-term range of performance fees in relation to total
revenues remains at 20-30%.
While we forged ahead with investing for future growth, our
disciplined approach to cost management resulted in a stable
EBIT margin, which stood at 62% as of year-end. Below EBIT,
the financial result is driven by our investments alongside
clients into our own investment programs. The strong
performance of these programs reflects the success of our
transformational investing strategy. Profit decreased by 11%
year-on-year to CHF 805 million, in line with revenues.
Based on the solid development of the business across asset
classes and regions, the operating result and Partners Group’s
Board of Directors' confidence in the sustainability of this
growth, the Board will propose a dividend of CHF 27.50 per
share to its shareholders at the Annual General Meeting in
May 2021. This represents a dividend increase of 8% and a
payout ratio of 91%.
Formalizing our Stakeholder Benefits program and
advancing our corporate sustainability efforts
At the portfolio level, besides remaining steadfast in our
commitment to responsible investment and ESG integration,
we further advanced the Stakeholder Benefits Program
which we had introduced in last year's letter. The program is
aimed at systematically re-investing in our portfolio assets to
create positive impact for employees and other stakeholders,
ultimately building better, more sustainable businesses to
optimize investment outcomes for our clients. Last year, we
entered into a structured dialogue with some of our largest
clients and other stakeholders to define the scope and format
of the program. This year, we have begun to take action: we
have launched a pilot program at three of our assets. We will
continue to work on defining the final format of the program
in 2021 and look forward to updating you on our efforts.
We also continued to advance our corporate sustainability
efforts in 2020 with a focus on two key topics: diversity
& inclusion and climate change. We remain committed to
achieving our target of substantially increasing the number
of senior female professionals and leaders at our firm
through our employee development programs and targeted
recruitment initiatives. Furthermore, we supported the launch
of two new employee networks, The Black Network and The
LGBT++ Network, which together with our existing Women's
Network aim to make Partners Group a more inclusive
company.
On the climate front, we will soon publish our Climate Change
Strategy that we started developing last year to formalize our
approach to managing climate risks across our investment
portfolio and our firm.
Finally, we have continued to focus on onboarding new talent
and investing in the development of our employees through
PG Academy, our in-house platform that provides employees
with targeted opportunities to grow business and leadership
skills. We launched PG Academy at the start of the year and
swiftly combined physical and virtual classroom trainings with
Partners Group | 7
ANNUAL REPORT 2020 ANNUAL REPORT 2020
Message from the Chairman and the Co-CEOs
eLearning to expand our leadership development programs
and targeted training modules during COVID-19.
composition of our Executive Committee that will take effect
from 1 July 2021.
After eight years in the role, André Frei will step down
from his position as Co-CEO and Executive Committee
member and will assume a new responsibility as Chairman of
Sustainability. The Board of Partners Group is very grateful
for André's significant contributions to the firm as Partner
and Co-CEO. David Layton, who has been a Co-CEO since
2019 and is based in Denver, will become Partners Group's
sole CEO.
In tandem, we announced further appointments to
the Executive Committee that will support the future
development of the firm's transformational investing and
bespoke client solutions strategies. With an ambitious
business development agenda, the Board of Directors is
confident that Partners Group's experienced and global
leadership team will steer the firm to continue to realize its
full potential.
Thanks to the dedication of our employees and the trust
of our clients, business partners and shareholders, we are
convinced that we will emerge from this crisis even stronger
and with a renewed commitment to creating lasting, positive
impact for all our stakeholders.
We thank you for your continued partnership.
Your sincerely,
Steffen Meister
Executive Chairman
André Frei
Co-Chief Executive Officer
David Layton
Co-Chief Executive Officer
More detail on each of these initiatives will be made available
in our 2020 Corporate Sustainability Report.
Going beyond impact: we are in this together
Taking a step back and looking at the extraordinary events
of the past year, there is no denying that the COVID-19
pandemic is the biggest challenge that many of our
portfolio companies have ever faced. Naturally, in the early
days of the pandemic, the attention of our investment
engine shifted entirely to helping our portfolio companies
navigate the evolving pandemic. Our investment teams
are responsible for around 200'000 employees who work
for our largest portfolio companies. During this time, they
worked intensively with our portfolio company management
teams to ensure the health and safety of these employees
as well as maintain business continuity, with each asset
requiring customized advice and solutions to manage the
negative impacts of the crisis. To support the most financially
vulnerable employees at our portfolio companies, we also
rallied to raise a USD 10 million Portfolio Employee Support
Fund. As of December 2020, the fund had supported over
12'000 portfolio company employees with their medical
expenses, increased childcare or remote learning costs,
as well as assisting households whose income levels were
negatively impacted by government-imposed lockdowns,
furloughs or the tragic loss of loved ones.
Our 25th anniversary in 2020 – time to give back
Partners Group celebrated its 25th anniversary in 2020. The
success of our firm to-date could not have been achieved
without the dedication of our employees and the trust and
partnership of our clients, business partners, and other
stakeholders. To mark the occasion, Partners Group launched
the PG Gives Back initiative, gifting employees additional time
off and financial contributions to support the communities in
which they live. Across Partners Group's 20 offices globally,
our more than 1'500 employees planned their own initiatives
or partnered with local charities and organizations to donate
time and capital to important causes such as conservation,
education, healthcare and helping those in need.
Moving towards a single CEO structure as of 1 July
2021
Careful succession planning has always been a key success
factor for Partners Group and periodic adjustments to
our Executive Committee and senior leadership team are
a recurring feature of our corporate development. In line
with this, on 16 March 2021 we announced changes to the
8 | Partners Group
2020 at a glance – Investments
Investments
USD 8.6 billion invested on
behalf of our clients in attractive
and differentiated businesses
and assets.
In the current investment environment, in which elevated
prices persist for attractive assets, substantial value creation
is required to generate outsized returns for investors. At
the end of 2020, Preqin, one of the largest data providers
for the private markets industry, analyzed the performance
of diversified buyout managers since the Global Financial
Crisis (GFC) and ranked Partners Group among the topmost
consistent performers. It is our view that this result was driven
by our thematic investing and transformational business-
building approach.
Performance for the twelve-month period ended
31 December 2020
Our experience during 2020 has reconfirmed that the main
themes underlying our investment approach should not only
withstand the structural changes caused by COVID-19, but
that the crisis may in fact amplify the relevance of most of the
businesses and assets in our investment portfolio.
Investment environment
We are proud to report strong portfolio performance in
2020. We broadly outperformed relevant public markets
benchmarks and delivered superior returns for our clients,
despite the economic uncertainty caused by the COVID-19
pandemic. Our transformational investing strategy provided
support to our portfolio in H1 and facilitated a rapid return
to growth in H2. The foundations for portfolio stability were
laid by our emphasis on thematic sourcing coupled with our
disciplined asset selection and value creation approach.
Thematic investing is our proprietary and systematic
approach to identify great investment and asset development
opportunities in today's fast-changing environment. Our
targeted businesses are those that not only greatly benefit
from structural trends and related growth, but that offer us
the potential to transform them. Transformation is achieved
through our entrepreneurial ownership and business-
building approach, which has a single objective: to turn good
businesses into market leaders.
Average quartile ranking of post-GFC buyout vintages
1st quartile
2nd quartile
3rd quartile
4th quartile
1
r
e
g
a
n
a
M
p
u
o
r
G
s
r
e
n
t
r
a
P
3
r
e
g
a
n
a
M
4
r
e
g
a
n
a
M
5
r
e
g
a
n
a
M
6
r
e
g
a
n
a
M
7
r
e
g
a
n
a
M
8
r
e
g
a
n
a
M
9
r
e
g
a
n
a
M
0
1
r
e
g
a
n
a
M
1
1
r
e
g
a
n
a
M
2
1
r
e
g
a
n
a
M
3
1
r
e
g
a
n
a
M
4
1
r
e
g
a
n
a
M
5
1
r
e
g
a
n
a
M
6
1
r
e
g
a
n
a
M
7
1
r
e
g
a
n
a
M
8
1
r
e
g
a
n
a
M
9
1
r
e
g
a
n
a
M
0
2
r
e
g
a
n
a
M
1
2
r
e
g
a
n
a
M
2
2
r
e
g
a
n
a
M
3
2
r
e
g
a
n
a
M
4
2
r
e
g
a
n
a
M
5
2
r
e
g
a
n
a
M
Source: simplified illustration of the analysis of Preqin, December 2020, ‘Post-GFC Track Records Could Drive 2021 Allocations’.
Partners Group | 9
ANNUAL REPORT 2020
2020 at a glance – Investments
The overall outperformance of our private markets portfolios
during this period was driven by our investment themes,
which are underpinned by long term secular trends. In
private equity alone, there are hundreds of such themes
and we currently zoom in more than 50 of them, grouped
into our four main sectors. Just to name a few, we look at
cell and gene therapy related tools and services in Health &
Life, software verticalization in Technology, digitized facility
management in Services, and sustainable alternatives in
industrial food production in Goods & Products, amongst
many others.
The portfolio net performance overview for the twelve-
month period ending on 31 December 2020 is provided
below.
Private equity (direct)
Private debt (direct)
Private real estate (direct)
Private infrastructure (direct)
YTD as of 31 December 2020
Partners
Group1)
Reference
index2)
17.6%
2.0%
-3.3%
14.4%
15.9%
3.5%
-8.2%
-5.8%
1) Partners Group shows performance as model net returns, which are based on gross
investment performance and standard fee parameters for the twelve-month period
ended on 31 December 2020. All cash flows and valuations are converted to USD
using fixed FX rates as of 31 December 2020. Return figures denote annualized pooled
internal rates of returns (IRR). Reference index returns denote time-weighted returns.
Model net figures do not include the impact of factors such as any taxes incurred by
investors, organizational and administration expenses or ongoing operating expenses
incurred by the investment program (e.g. audit, hedging etc.). The performance
presented reflects model performance an investor may have obtained had they
invested in the manner and the time period shown and does not represent performance
that any investor actually attained.
2) For reference purposes, Partners Group private equity, private debt, private
real estate and private infrastructure performances are compared, respectively, to
the following USD-denominated indices: MSCI World Net Total Return USD Index
(ticker: NDDUWI); a composite of 50% S&P/LSTA Leveraged Loan Index in USD
(ticker: SPBDAL) and 50% S&P European Leveraged Loan Index USD-hedged (ticker:
SPBDELUH); FTSE EPRA NAREIT Developed Total Return Index USD (ticker: RUGL);
and S&P Global Infrastructure Total Return Index USD (ticker: SPGTINTR).
Private equity
2020 was a very successful year for our direct private
equity portfolio: we increased EBITDA by 10% overall,
improved margins by 120 bps and continued to develop our
investments. Our portfolio companies were swift in adjusting
to the new situation under COVID-19 and implemented
appropriate action plans with the help of our operating
directors, industry specialists and investment professionals
who worked intensively alongside them. Throughout the year,
we continued with our proven platform-building strategies
in the transformation of our businesses. This has provided
relative stability in our portfolio, as has our focus on high-
quality, resilient companies in our four sectors: Technology,
Services, Health & Life, and Goods & Products. 2020 has
10 | Partners Group
proven once again that our investment strategy is capable of
delivering consistent outperformance, also in rough macro
environments.
Direct private equity portfolio EBITDA growth
+10%
2019
EBITDA
2020
EBITDA
Total full-year adjusted EBITDA of
Partners Group’s private equity direct portfolio
Private debt
Overall, our debt portfolio has proven to be resilient. On the
direct lending side, we continue to focus on strategies that
lead to the best risk-return outcome for our clients. In order
to achieve this, we focus on fundamental credit due diligence,
negotiating transactions with strong legal protections, strong
origination network and relationships, underwriting stable,
profitable and established businesses as well as active
portfolio management and workout efforts where needed.
In 2020, our private debt strategies slightly underperformed
their benchmark. While Partners Group’s programs provided
significantly more stability and less drawdowns in Q1 2020,
they benefitted to a lesser extent from the very strong
market at the end of the year. We would generally expect our
debt strategies to experience less volatility as a result of the
focus on high quality, non-cyclical businesses.
Our liquid loan business was also resilient in a large part
due to the conservative and defensive approach to build
and manage our syndicated loan portfolios. The syndicated
debt team was able to play it safe and play offensive
simultaneously by purchasing what we believed to be robust
credits at significantly depressed prices in the secondary loan
market.
Private real estate
Our private real estate portfolio has shown only a modest
decline in valuation and substantially outperformed the
benchmark. It has limited exposure to the sectors that
have been most heavily impacted by government-imposed
COVID-19 lockdowns, such as retail, hospitality and student
housing. Our disciplined use of leverage, combined with
strong rent collection levels throughout the period, further
strengthened the liquidity profile at the investment level.
Rent collection across the portfolio stood at a resilient 94%
globally as of December 2020. Moreover, rent collection
ANNUAL REPORT 2020
2020 at a glance – Investments
across our US real estate portfolio exceeded national
averages for all sectors. Additionally, global diversification
within our portfolio has limited its exposure to any one city or
sector.
Private infrastructure
Partners Group's private infrastructure portfolio has
performed very well compared to other private infrastructure
portfolios, mainly due to the fact that it has minimal exposure
to commodity prices, GDP, or traffic volumes. Our portfolio
is characterized by a heavy overweight in long-term take-or-
pay arrangements with creditworthy counterparties, broad
diversification across sub-sectors and a concentration on
essential services, such as renewable power generation, gas
transportation and data transmission. Our infrastructure
portfolio achieved a solid net performance of 14.4% during
2020.
Offense remains the best defense
We believe that great investment opportunities will prevail
with our approach and the COVID-19 crisis has not materially
altered our investment strategy.
Partners Group uses a thematic investing approach centered
around three giga themes that drive its thinking about more
granular transformational themes:
• Digitization and automation: the main driving force for
businesses in technology, services and production
• New living: the forces shaping consumer preferences
We transform assets via proactive operational value creation
and platform expansion to create strong companies with
a leading market position. Last but not least, we apply
entrepreneurial governance by putting in place first-class
management teams capable of achieving our ambitious
targets and building effective boards whose interests are
aligned with the company's success.
With over 500 engaged investment professionals and in
excess of 250 operating directors and trusted advisors in our
close network, we remain confident that this transformational
investing strategy will continue to be key to our success.
More detail on our thematic investing can be found in our
2021 Private Markets Navigator, which can be downloaded
here: https://www.partnersgroup.com/en/news-views/
perspectives/current
Investments in 2020
During 2020, we invested a total of USD 8.6 billion (2019:
USD 14.8 billion) on behalf of our clients across all private
markets asset classes, with the majority of these investments
undertaken in Q1 and Q4. Investment activity slowed
during the year as we prioritized protecting and enhancing
existing portfolio performance over making new investments.
We focused resources accordingly in Q2 and Q3, while
safeguarding the health and safety of portfolio company
employees.
and habits, including areas such as nutrition, healthcare,
leisure and learning
Partners Group's private markets investments
(in USD bn)
• Decarbonization: this will drive the largest ever energy
infrastructure and effectiveness program in history
We then dive deeper into these giga themes to identify
underlying transformative trends that have the potential to
generate sustainable returns for our investors. We look for
trends that will result in above-average, secular growth over
a five- to ten-year period and, in private equity alone, we
typically follow more than 50 thematic ideas at any one time.
These transformative trends drive how we look at investment
opportunities and shape how we transform our assets across
the four private market asset classes.
13.3
11.7
9.7
19.3
14.8
8.6
2015
2016
2017
2018
2019
2020
Note: figures include add-on investments but exclude investments executed for short-term
loans, cash management purposes and syndication partner investments.
Partners Group | 11
ANNUAL REPORT 2020 2020 at a glance – Investments
Out of the total amount invested in 2020, USD 5.7 billion
(67% of total investment volume) was deployed in direct
assets, of which USD 3.7 billion was invested as equity in
individual businesses and real assets, and USD 2.1 billion
was invested in corporate debt. For our equity investments,
our entrepreneurial governance approach, which focuses
on transforming attractive businesses into market leaders,
remains key to generating superior returns.
To complement our direct assets, we invested USD 2.8 billion
(33% of total investment volume) in portfolio assets on behalf
of our clients in 2020. These portfolio assets include USD 1.4
billion of secondary investments (2019: USD 2.7 billion) into
globally diversified private markets portfolios and USD 1.5
billion of select primary commitments (2019: USD 2.0 billion)
to other private markets managers. For secondaries, the
distressed window was short-lived. During Q2 of 2020, many
transactions were put on hold due to wide bid-ask spreads. In
the second half of the year, secondary market prices for many
high-quality assets rebounded to their pre-COVID levels. We
are committed to maintaining pricing discipline and a focus
on inflection assets, where we believe the greatest value
creation potential can be found.
Investment activity remained geographically diversified in
2020, with 53% of capital invested in North America, 40%
in Europe, and 7% in Asia-Pacific and emerging markets,
reflecting our global reach and scope.
Private markets investments by region and asset class
(in USD bn)
Asia-Pacific/
Rest of World
7%
Portfolio
assets
33%
Sec.
16%
North
America
53%
USD
8.6 billion
Europe
40%
Prim.
17%
USD
8.6 billion
Equity
43%
Debt
24%
Direct
assets
67%
Note: figures include add-on investments but exclude investments executed for short-term
loans, cash management purposes and syndication partner investments.
Direct equity investments include all direct private equity, direct infrastructure and direct
real estate investments (including direct secondary transactions where Partners Group has
a controlling interest).
12 | Partners Group
Select private markets investments in 20201
Private equity
In July 2020, we acquired a major stake in Rovensa, which
is among the world's top three providers of bionutrition,
biocontrol and crop protection solutions. The company is
primarily focused on the higher-margin fruit and vegetable
growing industry.
Rovensa
We were attracted by the sector in which Rovensa operates
based on the following three factors. Firstly, over the long
term, the agricultural sector is uncorrelated with GDP due
to its essential nature. Secondly, projected increases in
average daily caloric intake are anticipated to increase food
demand by over 50% in the next 30 years, at a time when
there are restrictions on available arable land. In this context,
farmers must find ways to increase yields by making their
crops more robust and productive. Finally, there is a trend
towards biological crop products vs. chemically derived
ones. Rovensa’s portfolio is ideally positioned for these new
realities and we plan to accelerate the transformation of the
product portfolio to benefit from these trends.
In our first few months of ownership we set up an effective,
action-oriented board and outlined the strategic plan. We
see potential to create value by accelerating the development
of Rovensa's leading and diverse portfolio and expanding its
geographical footprint. We will also support the company’s
research and development culture, with a special focus on
high-growth market niches. Select acquisitions in biologicals
will complement organic growth. Combined, these initiatives
will play a major role in cementing Rovensa’s transformation
into a high-growth, truly international biosolutions provider.
1 All Partners Group investments and divestments mentioned herein were made on behalf
of the firm’s clients, not on behalf of Partners Group Holding AG or any of its affiliates.
ANNUAL REPORT 2020
2020 at a glance – Investments
Private debt
In December 2020, we provided a unitranche solution for
the acquisition of ThinkProject. ThinkProject provides
cross-enterprise collaboration and workflow software to the
engineering and construction industries. The software is
delivered as an SaaS platform, and is currently used by more
than 2'750 customers in 60 countries.
The construction industry historically has been slow to
digitalize. Software adoption is increasing, driven by the
need to improve project management and reduce cost
overruns. ThinkProject's collaboration and workflow software
offerings enable clients to improve project coordination
and communication leading to a reduction in project delays
and cost efficiencies. The company is a market leader in the
DACH region and has exhibited strong historical growth
through market cycles, with its sticky products leading
to >80% of recurring revenues. With this direct debt
investment, we capitalized on two key thematic sourcing
themes: software verticalization and digitalization.
We were instrumental in providing a financing solution as
part of a club to the sponsor, required for the secondary LBO
of the company. Our undrawn credit facilities will support the
company in continuing with its track record of M&A activity.
The financing also contains an ESG-linked ratchet mechanism.
Private real estate
We recently acquired a portfolio of industrial assets
concentrated in several of Partners Group’s high-conviction
US target markets, including Raleigh-Durham, Austin
and Denver, as well as infill locations near major East
Coast population centers. An example of one property
in the portfolio is a 77'000 square foot Class A industrial
warehouse located in Kearny, New Jersey. The property is
well situated to serve as a last-mile distribution facility given
its strategic position in proximity to New York City.
The logistics sector continues to benefit from the structural
growth of e-commerce, a trend that has further accelerated
during 2020. In particular, we have conviction in last-mile
distribution facilities, smaller urban logistics warehouses, and
cold storage units. We seek out locations with good transport
links, in close proximity to larger cities, and with limited land
supply due to their infill location.
The value creation plan involves driving additional net
operating income (NOI) growth through leasing up existing
vacancies and near-term known vacates, marking below-
market rents to market rate and developing a new Class A
industrial development on a build-to-suit basis. Partners
Group was well-positioned to recapitalize this opportunity as
the operator sought to partner with an institution that could
provide a holistic solution for the entire portfolio.
Private infrastructure
We acquired an 80% equity stake in VSB Group, a leading
European developer, owner and operator of renewable
energy assets. VSB operates throughout the entire renewable
energy value chain, from the development of projects,
to asset management and the technical and commercial
management of operational sites, as well as having a broad
offering in energy solutions. VSB has successfully developed
and built over 1.1GW of onshore wind and solar PV
generating assets to-date and manages over 1.4GW of wind
assets.
VSB Group
One of the key transformative trends in which we are
continuing to invest in is decarbonization and the energy
transition. With a portfolio of over 7.7 GWs of renewable
generation capacity worldwide, we have been a longstanding
investor in clean power production. The Company's proven
development track record, strong and engaged management
team, and sizable project pipeline make it an excellent fit
for Partners Group's platform expansion strategy. VSB is
very well-positioned to capitalize on increased demand for
environmentally-friendly sources of energy throughout
Europe.
We will work closely with the management team to realize
this ambition by leveraging our experience of institutionalizing
businesses to accelerate the conversion and development
of VSB's renewable energy pipeline. In the first few months
of our ownership we have already had great success with
obtaining permits for 200MW in Finland and the addition
of 300MW in Poland, which was achieved through organic
growth and strategic platform acquisitions.
Partners Group | 13
ANNUAL REPORT 2020
ANNUAL REPORT 2020
2020 at a glance – Investments
Divestments in 2020
We realized a number of mature private markets assets on
behalf of our clients, leading to a total of USD 11.8 billion in
underlying portfolio distributions in 2020 (2019: USD 11.0
billion). Similar to our investment activities, divestments were
skewed towards Q1 and Q4 2020. Underlying portfolio
realizations in the first half of the year were dominated by
cash distributions from the closings of transactions for which
the respective sales and purchase agreements were signed in
Q4 2019 and early Q1 2020.
Partners Group's underlying portfolio realizations
(in USD bn)
11.8
10.2
13.4
11.0
11.8
7.6
2015
2016
2017
2018
2019
2020
Note: include realizations from Partners Group's direct as well as portfolio assets (primaries
and secondaries).
A good example of how we capitalize on thematic growth
trends and leverage our entrepreneurial governance approach
to transform portfolio companies is our investment in French
fiber-to-the-home broadband platform Covage. Demand for
data is expected to more than double in the next five years,
and, over our holding period, we transformed Covage to
address this anticipated demand.
We grew the size of Covage's network by over 20x: from
less than 50'000 fiber connections in 2016 to 1 million
connections in 2020, with additional near-term buildout to
over 2.4 million homes and 27'500 businesses across France.
This will continue to have a lasting, positive impact on local
communities and we are proud to say that we contributed to
bridging the digital divide in rural France.
This transformation attracted a strategic buyer for Covage
and, in December 2020, we completed the sale of our 50%
equity stake in the company. The transaction gave the
company an equity value of around EUR 1.1 billion.
Another example is our transformation of PCI Pharma
Services, a global provider of outsourced pharmaceutical
supply chain solutions, which produced stellar returns for our
clients following the sale of a majority stake in August 2020.
14 | Partners Group
Through our thematic sourcing approach, we had identified
the strong industry-wide trend of outsourcing diversified
pharmaceutical services in a near-shore setup due to the
pressure on big pharmaceutical companies to control costs
and optimize manufacturing and packaging footprints while
maintaining close collaboration and agility. We built our thesis
of capitalizing on PCI's leading market position in big pharma
to achieve above-market growth rates by transforming the
company into a value-added solutions provider.
We helped PCI in multiple dimensions to foster operational
excellence and strategically reposition the company. From
the start we had set up a collaborative and experienced
Board for PCI, which enabled us to transform its operations
and proactively execute the long-term strategic vision. We
expanded PCI's clinical capabilities and geographical reach
through several add-on acquisitions, building PCI’s presence
in Ireland, Australia, Germany, and Canada. We also led
a talent transformation, appointing a new management
team with a clear vision for the future of the business as a
solutions provider for its clients by differentiating PCI through
technology, talent, and operational excellence. The strategic
plan launched about 20 transformational initiatives with full
Board support.
PCI Pharma Services
When we first invested in PCI in 2016, the company was
perceived as a best in class service provider for commodity
or non-core pharmaceutical products. Today, PCI is a trusted
partner for its customers, providing integrated pharma supply
chain solutions with the shared goal of improving patients'
lives. It is a leader in technology, with a first-of-its-kind
digital platform to provide clients with real-time supply chain
data and analytics. A robust value creation plan, a dynamic
management team and active corporate governance led to
true business transformation for PCI during our ownership,
resulting in a 25% EBITDA compound annual growth rate
(CAGR).
2020 at a glance – Clients
ANNUAL REPORT 2020
Clients
USD 16.0 billion gross client
demand in 2020; AuM stands
at USD 109 billion.
Fundraising environment
AuM grew to USD 109 billion
The industry continued to observe strong demand for private
markets solutions in 20202. The structural growth drivers
continue to be the increase in institutional assets under
management, the rising allocations of institutional investors to
private markets and the outperformance of private markets
against public markets. Moreover, we observe a concentration
of private markets allocations with those managers that have
the capacity and ability to onboard sizeable commitments and
deploy larger amounts of capital as well as providing an all-
encompassing service catalogue. We have started confidently
into 2021 and base our full-year fundraising outlook on the
expectation that the situation around COVID-19 will improve
as the year progresses.
2 Source: Preqin, February 2021, Alternatives in 2021.
Total assets under management
(in USD bn)
In 2020, we saw continued strong client demand across all
private markets asset classes despite COVID-19 and received
USD 16.0 billion in new commitments. This demand for
programs and mandates brings total AuM to USD 109.1 billion
as of 31 December 2020 (31 December 2019: USD 94.1
billion).
The breakdown of total AuM as of 31 December 2020 is as
follows: USD 52 billion private equity, USD 25 billion private
debt, USD 17 billion private real estate, and USD 16 billion
private infrastructure.
AuM by asset class
Private infrastructure
14%
Private
real estate
15%
USD
109 billion
Private equity
48%
109
#1'533
professionals
83
#1'203
Private debt
23%
57
#930
45
#746
37
#625
28
#447
22
#334
2008
2010
2012
2014
2016
2018
2020
Note: assets under management exclude discontinued public alternative investment activities
and divested affiliated companies held up to 2013.
Alongside new commitments received during the period,
tail-down effects from mature private markets investment
programs amounted to USD -6.2 billion and redemptions
from evergreen programs amounted to USD -2.0 billion in
2020 (full-year guidance for tail-downs and redemptions:
USD -7.5 to -9.0 billion).
Partners Group | 15
2020 at a glance – Clients
Our transformational investment strategy provided stability
to our portfolio and facilitated an instant return to growth
in the second half of the year. As a result, performance-
related effects from a select number of investment programs
generated a positive contribution of USD 2.2 billion to AuM.
Foreign exchange effects positively impacted underlying
AuM growth by USD 4.9 billion, in particular due to the
strengthening of the Euro against the US Dollar. Overall, this
resulted in net AuM growth of USD 15.0 billion during the
period and a growth rate of 16% year-on-year. Excluding the
impact of exchange rates, this leaves 11% underlying AuM
growth in 2020.
Total assets under management development
(in USD bn, except where stated otherwise)
+16.0
H2: 7.7
H1: 8.3
-8.1
Tail-downs: -6.2
+7.1
FX: +4.9
Redemptions: -2.0
Others: +2.2
109.1
=EUR 89.2 bn
=CHF 96.4 bn
94.1
New client demand for private infrastructure represented
22% of all new commitments (USD 3.5 billion). Private
infrastructure showed the strongest net AuM growth on a
relative basis. Infrastructure is in the midst of fundraising for
its successor direct offerings, which contributed substantially
throughout the year. This program will continue to make a
relevant contribution to fundraising over the next 12 months.
Net AuM growth by asset class
(in USD bn)
+31%
+10%
+13%
+15%
94.1
12
15
22
45
2019
109.1
16
17
25
52
2020
Private infrastructure
Private real estate
Private debt
Private equity
Client demand by region and by type
We have a broadly diversified and international client base
spanning a range of clients.
AuM by region
Australia
7%
Switzerland
16%
Asia
6%
Middle East
3%
South America
2%
North America
16%
USD
109 billion
Germany & Austria
16%
France & Benelux
6%
UK
21%
Southern Europe
4%
Scandinavia
4%
Note: due to rounding, totals may not correspond with the sum of the separate figures.
In terms of type of clients, the majority of our AuM stems
from institutional clients such as corporate, public and
other pension funds as well as sovereign wealth funds and
insurance companies. These institutional investors often
invest via bespoke solutions or traditional long-term closed-
ended private markets programs.
2019
New money/
commitments
Tail-downs &
redemptions1)
1) Tail-downs & redemptions: tail-downs consist of maturing investment programs
(typically closed-ended structures); redemptions stem from evergreen programs.
2) Others consist of performance and investment program changes from select programs.
Note: due to rounding, some totals may not correspond with the sum of the separate figures.
FX &
others2)
2020
Client demand across all asset classes
Private equity was the largest contributor to assets raised in
2020, representing 40% of all new commitments (USD 6.4
billion). Demand was split across a wide range of different
programs and mandates, with our successor private equity
direct and secondaries programs as well as our evergreen
programs being the main contributors.
Private debt saw strong inflows, which represented 23% of
all new commitments (USD 3.7 billion). Demand was spread
over several different programs and mandates focused on
our collateralized loan obligation (CLO) business, which
contributed about 55% of the assets raised, and our direct
lending activities, which contributed the other 45% of new
commitments. Today, our entire CLO business represents
around 5% of our AuM.
Private real estate new commitments represented 15% of
overall new client demand (USD 2.5 billion), stemming from
a diversified range of investment programs and mandates
focusing on our Global Real Estate Opportunities strategy.
16 | Partners Group
ANNUAL REPORT 2020 2020 at a glance – Clients
Over the last three years, we have seen strong demand from
distribution partners, which typically accounted for between
15-25% of client demand. They represent private individuals
and smaller institutional investors, who increasingly recognize
the benefits of private markets and aim to mirror the
allocations of institutional investors in their own investment
portfolios. Usually, they seek to access private markets
through open-ended programs with limited liquidity features
(evergreen programs).
AuM by type
Distribution partners/
private individuals
18%
Public pension
funds & SWFs
24%
Asset managers,
family offices,
banks & others
19%
USD
109 billion
Insurance
companies
10%
Corporate &
other pension funds
29%
Client demand by product structure
Managing around 300 diverse private markets portfolios in
different stages of their lifecycle and across all private market
asset classes is our strength and a key differentiator for our
firm. These encompass traditional private markets vehicles
such as comingled, closed-ended limited partnerships;
mandates for large institutions, which allow us to steer
investment exposure across multiple private markets asset
classes in line with clients' longer-term investment horizons;
and evergreen programs.
In 2020, 42% (USD 6.8 billion) of overall inflows were raised
via traditional private markets programs, typically limited
partnerships, with a pre-defined contractual life, often
with an initial term of 10-12 years for closed-ended equity
offerings and 5-7 years for closed-ended debt offerings.
Our mandate business focuses on building up private markets
exposure for large institutional clients, often to achieve
long-term target allocations. Capital is committed via long-
term partnerships, which are often not limited to a specific
contractual life and will continue for a perpetual term, unless
new commitments are discontinued. Some 35% (USD 5.5
billion) of our client commitments stemmed from relationships
with clients through mandates.
The remaining 23% (USD 3.7 billion) of new commitments
stemmed from our evergreen programs. We are a global
leader in evergreen programs for investments in private
markets. These open-ended evergreen vehicles cater mostly
to high-net-worth individuals and have no contractual end
but are subject to potential redemptions. As of 31 December
2020, we manage 26% of our AuM (USD 28.2 billion) in
evergreen programs. In 2020, inflows to evergreen programs
have exceeded redemptions by USD 1.7 billion.
Gating provisions are a standard feature of these evergreen
programs in order to protect remaining investors and
performance; net redemptions in these investment programs
are typically limited to 20-25% p.a. of the prevailing net asset
value, depending on the investment strategy and content of
the program. When deemed to be in the best interest of the
investment program, stricter gating rules can be enforced for
select share classes for a period of up to two years.
Following these inflows in 2020, our total AuM by product
structure as of 31 December 2020 stands as follows.
AuM by program structure
Traditional
client programs
36%
M
a
(
3
n
d
8
a
%
t
)
e
s
USD
109 billion
Bespoke
client solutions
64%
Evergreen
programs (26%)
As a pioneer in creating private markets products which
are accessible for the defined contribution (DC) pensions
industry, a highlight for our firm in the first half of 2020 was
the Information Letter issued by the US Department of Labor
(DoL) in response to our initiative to seek guidance for the
US DC industry on investing in private markets. The DoL
clarified that, under federal law, DC pension plan fiduciaries
could prudently incorporate certain private markets strategies
into diversified investment options, such as target-date
funds. Previously, DC plan sponsors had been reluctant to
include private equity in their investment options for fear of
breaching their fiduciary duty under federal law.
Partners Group | 17
ANNUAL REPORT 2020 2020 at a glance – Clients
In its guidance, the DoL also clarified that Partners Group's
dedicated evergreen offering for the US DC market is well-
suited for these investment options. This is important as it
not only enables Partners Group to help modernize the US
DC market and provide participants with potentially improved
retirement outcomes, but it also offers the US DC pension
system vital access to the broader economy by providing the
opportunity to be a substantial future investor in the growing
proportion of businesses that choose not to list publicly.
AuM well-diversified across programs and clients
As of 31 December 2020, our two largest investment
programs, which are both globally diversified, accounted for
12% of our AuM. While the largest program combines private
equity and private debt investments and caters to private
investors in the US, the second largest program combines
private equity and private debt investments and caters to
private investors in Europe.
AuM split by private market programs and mandates
EUR
Around
80 billion
300 programs
& mandates
Client outlook
Based on robust client demand for programs and mandates
and facilitated by the solid increase in our investment
capacity, we confirm our guidance of USD 16-20 billion
expected gross client demand for 2021.
Fundraising is expected to be balanced across all program
types, from customized mandates and the firm's extensive
range of evergreen fund solutions to our traditional closed-
ended programs.
Our full-year estimates for tail-down effects from more
mature investment programs and potential redemptions from
evergreen programs amount to around USD -9.5 billion.
We base our 2021 fundraising outlook on the expectation
that current uncertainties around COVID-19 will improve
as the year progresses. We are positive that our portfolio
is strongly positioned, confirming the strength of our
transformational investment approach. This, combined with
our bespoke client solutions, gives us the confidence that our
growth journey will continue.
AuM, client demand and other effects
(in USD bn)
Full-year 2021 expectations
+15.7
83
74
+16.0
109
+16.5
94
-8.1
+7.1
16-20
Client demand
~ -9.5
+/-
=
Tail-downs &
redemptions1)
FX & others2)
Total AuM
Note: total AuM of USD 109 billion as of 31 December 2020.
-5.6
-1.2
-7.1
+1.4
2018
2019
2020
2021
1) Tail-downs & redemptions: tail-downs consist of maturing investment programs
(typically closed-ended structures); redemptions stem from evergreen programs.
2) Others consist of performance and investment program changes from select programs.
Note: for illustrative purposes only. Due to rounding, some totals may not correspond with
the sum of the separate figures.
18 | Partners Group
ANNUAL REPORT 2020 2020 at a glance – Financials
Our transformational investing strategy provided support to
our portfolio in H1 and facilitated a rapid return to growth
in H2. In H2, more favorable exit markets enabled the firm
to realize several assets and performance fees recovered
strongly to 27% of total revenues, up from 9% in H1. In H1,
the firm had to postpone several divestments due to the
weak exit environment caused by COVID-19.
Total revenues from performance fees therefore fell 44% to
CHF 266 million, leading to total revenues decreasing 12%
to CHF 1'412 million. Total revenues from management fees
increased marginally by only 1% to CHF 1'146 million.
Key financials
AuM as of the end of the period (in USD bn)
AuM as of the end of the period (in CHF bn)
Average AuM as of 31 December (in CHF bn)1)
Revenue margin1),2)
Revenues (in CHF m)2)
Management fees (in CHF m)3)
In proportion of total revenues3)
Performance fees (in CHF m)
In proportion of total revenues
EBIT (in CHF m)
EBIT margin
Profit (in CHF m)
1) Based on average AuM, calculated on a daily basis.
2) Revenues from management services, net, including other operating income.
3) Management fees and other revenues, net, and other operating income.
Financials
Financial stability of business
confirmed; management fees up
1%; EBIT margin at 62%.
Our EBIT margin remained largely flat at 62%, confirming our
disciplined approach to cost management. Profit decreased by
11% to CHF 805m, in line with revenues and driven by lower
performance fees.
The Board proposes a dividend of CHF 27.50 per share
(+8%) based on continued average AuM growth in CHF and a
confident growth outlook across all business lines.
2019
94.1
91.1
88.4
1.82%
1'610
1'138
71%
473
29%
1'008
62.6%
900
2020
109.1
96.4
93.8
1.51%
1'412
1'146
81%
266
19%
875
62.0%
805
Growth
+16%
+6%
+6%
-12%
+1%
-44%
-13%
-11%
Partners Group | 19
ANNUAL REPORT 2020 2020 at a glance – Financials
Management fees stable, impacted by lower other
operating income and the timing of fees levied on
new funds raised
In 2020, our average AuM in CHF grew by 6%. Over the
same period, management fees increased by 1%, amounting
to CHF 1'146 million in 2020 (2019: CHF 1'138 million). The
difference in growth can be explained by two factors. First,
95% of management fees generated in 2020 are recurring
in nature. These recurring management fees increased by
4%, with the difference to average AuM growth in CHF
(+6%) accounted for by the timing of fees levied on some
new commitments, which will only contribute their full
revenue potential from 2021. Second, other revenues from
management services & other operating income decreased by
35% to CHF 61 million in 2020 (2019: CHF 94 million). The
decrease stems predominately from lower other operating
income earned for treasury management and short-term
financing services. This was impacted by the reduced
investment activity during Q2 and Q3 as a result of the
market dislocation caused by COVID-19.
Revenue development
(in CHF m)
+21%
+ 1 4 %
1'326
324
(24%)
84
1'002
(76%)
1'610
473
(29%)
94
1'138
(71%)
-12%
+4%
1'412
266
(19%)
61
1'146
(81%)
Revenues1)
Performance fees
Other revenues from management
services & other operating income
Management fees2)
2018
2019
2020
1) Revenues from management services, net, and other operating income.
2) Management fees and other revenues, net, and other operating income.
Management fees will continue to be the main
source of revenues
Given the anticipated growth in the firm’s AuM, management
fees are expected to make up around 70-80% of total
revenues in a calendar year in the medium to long term, with
the remainder of revenues stemming from performance fees,
assuming a favorable market environment for exits.
Management fees are contractually recurring
~10%
H1: 9%
H2: 27%
20-30%
Performance fees1)
19%
81%
~90%
70-80%
Management fees2)
“contractually recurring”
2006-2015
2020
long term
1) Assuming that the market is favorable to exits, Partners Group expects to continue to
generate significant performance fees from the underlying client portfolios due to the
visibility that it has on the life cycles of its programs.
2) Management fees and other revenues, net, and other operating income.
Management fees represented 81% of total revenues in 2020
(2019: 71%) and will continue to dominate our firm's revenues
in the years to come. Below are some characteristics of the
management fees generated by our different offerings:
• Closed-ended offerings: management fees are recurring
as they are based on long-term client contracts, often
with an initial term of 10-12 years for closed-ended
equity offerings and 5-7 years for closed-ended debt
offerings. Such closed-ended offerings represented 36%
of our total AuM as of the end of December 2020.
• Mandates: management fees from mandates stem from
capital that is committed via long-term partnerships,
which are often not limited to a specific contractual
life and will continue for a perpetual term, unless new
commitments are discontinued. Mandates represented
38% of our AuM as of the end of December 2020.
•
Evergreen programs: management fees stem
predominantly from investment programs with limited
liquidity that have no contractual end and cater
predominantly to high-net-worth individuals and smaller
investors; they represented 26% of AuM as of the end of
December 20203.
3 Gating provisions are a standard feature of these evergreen programs in order to
protect remaining investors as well as performance; net redemptions in these investment
programs are typically limited to 20-25% p.a. of the prevailing net asset value, depending
on the investment strategy and content of the program. When deemed in the best interest
of the investment program, stricter gating rules can be enforced for select share classes
for a period of up to two years.
20 | Partners Group
ANNUAL REPORT 2020 2020 at a glance – Financials
Performance fees impacted by weak exit
environment in H1 but recovered strongly in H2
As a result of the market volatility and generally weak exit
environment caused by COVID-19, we postponed a number
of divestments that were originally tabled for H1 2020. In H2,
the portfolio swiftly returned to growth and, as we realized
several assets towards the end of the year due to more
favorable exit markets, performance fees recovered strongly
to 27% of total revenues in H2. Due to a low performance
fee contribution in H1, performance fees for the full-year
amounted to CHF 266 million (2019: CHF 473 million) and
represented 19% of total revenues in 2020 (2019: 29%). This
compares to our expected mid- to long-term range of 20-
30% of total revenues, where we assume that exit markets
are more supportive.
Performance fee contribution by investment programs
& mandates in 2020
Rest (>50)
13%
Top 1
29%
Top 11-20
14%
CHF
266
million
Top 6-10
15%
Top 2-5
29%
In total, about 70 investment programs and mandates with
portfolios diversified across many vintage years contributed
to performance fees in 2020. 2020 performance fees were
driven by dozens of underlying direct assets and hundreds
of portfolio assets. The asset that contributed the most
represented 7% of the total performance fees in 2020. The
investment program that contributed the most – a mature
private equity evergreen program – represented 29% of the
total performance fees in 2020.
Performance fee contribution by number of
investment programs and mandates
In private markets, performance fees are designed to
remunerate investment managers for the long-term value
creation they generate for their clients. We follow a
performance fee recognition approach, which sets high
hurdles for reporting such fees and which minimizes the risk
of a claw-back in case of a subsequent negative program
development.
In closed-ended investment programs, performance fees are
typically charged only once investments are realized and a
pre-defined return hurdle has been exceeded. Unrealized
investments are subject to very significant discounts (-50%)
which are applied to stress-test whether the hurdle rate will
still be reached despite these hypothetical mark-downs. The
performance fee recognition methodology is explained in
detail in the appendix on pages 26 and 27.
Strong current portfolio composition re-confirms
mid- to long-term performance fee outlook
Our mid- to long-term performance fee outlook is unchanged
and remains within a range of 20-30% of total revenues,
assuming market conditions and the exit environment remain
broadly supportive. We base our assumption on the strong
performance potential and diversification of our current
portfolio. We therefore expect our performance fee potential
to grow roughly in line with AuM.
In 2020, we managed around 300 diversified investment
programs and mandates at different stages of their lifecycle
and anticipate that performance fees will be earned regularly
from this wide range of investment vehicles going forward,
making them a "quasi-recurring" source of income in the mid-
to long-term.
Performance fee development
83
74
94
473
57
372
294
6-9 years
324
109
266
…translates
into future
performance
fee potential
50
64
Past AuM...
37
43
45
31
13
43
39
34
2011 2012
2013
2014
2015
2016
2017 2018 2019 2020
2025
AuM (in USD bn)
Performance fees (in CHF m)
Note: assuming that the market is favorable to exits, Partners Group expects to continue to
generate significant performance fees from the underlying client portfolios due to the
visibility that it has on the life cycles of its programs.
Partners Group | 21
ANNUAL REPORT 2020
2020 at a glance – Financials
Continued stable revenue margin on management
fees
A substantial part of our revenue base is recurring and based
on long-term contracts with our clients, providing highly
visible cash flows. Our management fee margin has been
stable since our IPO and ranged between 1.18% and 1.33%.
In 2020, the management fee margin decreased marginally,
mainly due to lower other operating income (CHF -33
million compared to previous year) as a result of the weaker
investment environment, amounting to 1.22% (2019: 1.29%).
Total revenue margin decreased due to the overall lower
performance fees in 2020 and amounted to 1.51% (2019:
1.82%).
Revenue margin development1)
1.39%
1.33% 1.39% 1.38%
1.23%
1.89%
1.74%
1.82%
1.71%
1.51%
%
8
1
1
.
%
6
2
1
.
%
3
2
1
.
%
1
3
1
.
%
4
2
1
.
%
2
2
1
.
%
3
3
1
.
%
9
2
1
.
%
9
2
1
.
%
2
2
1
.
%
9
1
%
1
8
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Management fees2)
Performance fees
1) Calculated as revenues divided by average assets under management, calculated on a
daily basis.
2) Management fees and other revenues, net, and other operating income.
Balancing cost discipline with making the right
investments for future growth
Personnel expenses represent the largest costs for the firm.
In 2018 and 2019, we intensified the build-out of our teams
across the entire organization to increase our investment
capacity and to support major business, corporate and
organizational initiatives to drive future growth. The firm
grew its FTEs by 42% from 1'025 FTEs in the beginning of
2018 to 1'452 FTEs at the end of 2019.
Throughout 2020, we prioritized business continuity and
the onboarding of recent joiners over the hiring of new
employees. As a result, hiring efforts temporarily slowed
and resulted in a 5% FTE growth for the twelve-month
period ended 31 December 20204, largely in line with the
development of average AuM in CHF (+6%). While the
slowdown of hiring confirmed our cost discipline, the average
number of FTEs grew by 12% to 1'504 (2019: 1'337 average
FTEs), following the intensified hiring throughout 2019 as a
result of the strong growth trajectory of AuM.
4 As of 31 December 2020, FTEs amounted to 1'519 (31 December 2019: 1'452).
22 | Partners Group
Total personnel expenses – the main driver of costs for the
firm – decreased by 12% during the period. The increase
of regular personnel expenses (management-fee related)
by 8% to CHF 329 million (2019: CHF 306 million) was
more than offset by the decrease in performance-fee
related personnel expenses by 45% to CHF 101 million
(2019: CHF 185 million), which decreased in line with the
development of performance fees (-44%). At Partners Group,
performance-fee related personnel costs adjust in line with
the development of performance fees as we allocate up to
40% of our recognized performance fees to our teams.
Total operating costs developed in line with revenues
(in CHF m)
Revenues
Total operating costs, of
which
Personnel expenses
Personnel expenses (regular)
Personnel expenses
(performance-fee-related)
Other operating expenses
Depreciation & amortization1)
EBIT
EBIT margin
Average FTEs
Year-end FTEs
2019
1‘610
-603
-490
-306
-185
-79
-34
1‘008
62.6%
1‘337
1‘452
-12%
-11%
-12%
+8%
-45%
-13%
+12%
-13%
+12%
+5%
2020
1‘412
-537
-430
-329
-101
-69
-38
875
62.0%
1‘504
1‘519
Note: revenues include management fees and other revenues, net, performance fees,
net, and other operating income. Regular personnel expenses exclude performance fee-
related expenses. Performance-fee-related personnel expenses are calculated on an up
to 40% operating cost-income ratio on revenues stemming from performance fees.
Other operating expenses decreased in line with revenues by
13% and amounted to CHF 69 million (2019: CHF 79 million).
During the period, restricted travel activity due to COVID-19
reduced travel and representation expenses by around CHF
15 million. This saving was offset by a total CHF 10 million
commitment for COVID-19-related expenses, which included
the firm's contribution to a newly created Portfolio Employee
Support Fund and the contribution by the Executive
Committee, the members of the Board of Directors and by
many Partners Group employees, who, in turn, forfeited part
of their compensation in 2020. In 2020, this fund addressed
the specific needs of more than 12'000 portfolio company
employees and their families, in particular for medical
expenses, healthcare, childcare and loss of income as a result
of government-imposed lockdowns.
ANNUAL REPORT 2020
2020 at a glance – Financials
ANNUAL REPORT 2020
Depreciation & amortization increased to CHF 38 million
(2019: CHF 34 million), driven by the depreciation impact
of our newly built Denver campus, technology as well as
amortization for select fundraising-related costs.
Sustained target of 40% cost-income ratio on new
business
In 2020, EBIT decreased by 13% mainly as a result of lower
performance fees, amounting to CHF 875 million (2019: CHF
1'008 million) and the EBIT margin remained largely flat at
62.0% (2019: 62.6%), confirming our disciplined approach to
cost management.
As in the past, we will continue to steer the firm based on
our targeted 40% cost-income ratio on newly generated
management fees (assuming stable foreign exchange rates).
We also allocate up to 40% of revenues stemming from
performance fees to our teams through our long-term
incentive programs and/or bonus payments. The remainder
(~60%) will be allocated to the firm and its shareholders.
Management fees and our operating costs (excluding
performance-fee related expenses) are particularly affected
by such currency movements. At the same time, performance
fee revenues and performance fee-related expenses are
similarly affected by currency movements and are therefore
largely EBIT margin-neutral.
During the period, the depreciation of major currencies
against the CHF impacted management fees on average by
-4.5%. At the same time, these currency movements reduced
costs by only 1%. The total EBIT margin was therefore
negatively affected by currency movements throughout the
period by approximately -2.5%.
Depreciation of major currencies against the CHF
FX rates (average)
1 EUR = CHF
1 USD = CHF
1 GBP = CHF
1 SGD = CHF
2019
1.112
0.994
1.269
0.729
2020
1.070
0.939
1.204
0.680
Delta
-3.8%
-5.5%
-5.1%
-6.6%
EBIT margin development
59%
58%
61%
65%
65%
63%
62%
~60%
target for newly
generated management
fees and all
performance fees
Strong performance in underlying portfolio drove
financial result
The financial result amounted to CHF 53 million (2019: CHF
30 million):
• CHF 52 million (2019: CHF 61 million): we invest into
2014
2015
2016
2017
2018
2019
2020
Note: for 2014, non-cash items related to the capital-protected product Pearl Holding Limited
were excluded from depreciation & amortization.
Diversified FX exposure
As a globally diversified firm, fluctuations in predominantly
the EUR or USD against the CHF affect the absolute amount
of revenues and costs and, therefore, also our total EBIT
margin.
Currency exposure in 2020
Others
6%
GBP
9%
EUR
47%
AuM ≈
Management
fees1)
USD
38%
Others
6%
SGD
11%
EUR
5%
≠
GBP
12%
Costs2)
USD
27%
our own investment programs alongside our clients
(see detailed description of balance sheet investments
below). During the period, our transformational investing
strategy facilitated growth in these investment programs
and resulted in an average return across all stages and
asset classes of 8% (2019: +10%). For further information
see note 5.1. of the notes to the consolidated financial
statements.
• CHF 1 million (2019: CHF -31 million): the small positive
contribution was driven by positive foreign exchange
effects and less hedging and other costs as opposed to
last year. This was mainly driven by the lower amount
of short-term loans outstanding (treasury management
and short-term financing services). Furthermore, the
decreasing interest differential between the USD and the
CHF reduced our hedging costs during the period.
CHF
40%
Corporate taxes amounted to CHF -124 million (2019: CHF
-137 million). The tax rate amounted to 13.3% (2019: 13.2%).
1) Includes management fees and other revenues, net, and other operating income.
2) Includes regular personnel expenses (excluding performance fee-related expenses),
other operating expenses as well as depreciation and amortization.
Partners Group | 23
2020 at a glance – Financials
In summary, the firm's profit decreased by 11% year-on-year
to CHF 805 million (2019: CHF 900 million).
Profit supported by strong portfolio performance
(in CHF m)
EBIT
Total financial result, of which
Portfolio performance
Foreign exchange, hedging & others
Taxes
Tax rate
Profit
2019
1‘008
-13%
30
61
-31
-137
13.2%
2020
875
53
52
1
-124
13.3%
900
-11%
805
Proposed dividend of CHF 27.50 per share (+8%)
Based on the strong development of the business in all
asset classes and regions (driven by year-on-year average
AuM growth in CHF of 6%), the operating result and their
confidence in the sustainability of this growth, Partners
Group’s Board of Directors will propose an increasing
dividend of CHF 27.50 per share (2019: CHF 25.50 per share)
to its shareholders at the Annual General Meeting on 12 May
2021. This represents a dividend increase of 8% and a payout
ratio of 91% (2019: 76%).
Dividend payments
F
H
C
n
i
e
r
a
h
s
/
d
n
e
d
i
v
i
D
30.00
25.00
20.00
15.00
10.00
5.00
0.00
27.501)
25.50
22.00
19.00
15.00
10.50
7.25
8.50
5.50
6.25
2011
2012
2013 2014
2015
2016
2017 2018 2019 2020
120
100
80
60
40
20
0
T
o
t
a
l
i
A
u
M
n
U
S
D
b
n
1) The Board of Directors proposes that a dividend of CHF 27.50 per share be paid for the
financial year 2020, subject to the approval of the Annual General Meeting of shareholders to
be held on 12 May 2021.
Available liquidity of CHF 2 billion
Our balance sheet remains strong. After a dividend payment
of CHF 668 million in May 2020, we have an available
liquidity of CHF 2.0 billion and hold a current net cash
position of about CHF 1.1 billion as of 31 December 2020
(31 December 2019: CHF 1.0 billion). With this we have
sufficient cash available to meet expected operational
expenses, as well as to service short-term financial
24 | Partners Group
obligations. We furthermore always ensure that we meet our
targeted available liquidity level that would also enable us to
sustain the firm's operations in a financial crisis scenario and/
or a depressed economic environment.
The firm maintains a diverse range of unsecured credit
facilities with Swiss and international banks amounting to
a total of CHF 865 million as of 31 December 2020 (31
December 2019: CHF 865 million). These credit facilities
can be used for general corporate purposes and/or to
provide fixed advances, with a primary focus on working
capital financing. The facilities are subject to maximum debt
covenants which were met throughout the current and prior
year. As of 31 December 2020, no credit facility was drawn
(31 December 2019: no credit facility drawn).
Available liquidity of CHF 2 billion on balance sheet
(in CHF m)
Cash & cash equivalents
Short-term loans
Long-term debt
Total net cash
Undrawn credit facilities
Total available liquidity
Assets
1‘228
673
Liabilities
799
1'102
865
1'967
Partners Group has two fixed-rate senior unsecured CHF-
denominated corporate bonds outstanding:
• CHF 300 million, coupon 0.15%, maturity on 7 June
2024 (ISIN CH0361532895), issued in June 2017
• CHF 500 million, coupon 0.40%, maturity on 21 June
2027 (ISIN CH0419041287), issued in June 2019
As of 31 December 2020, our long-term, outstanding debt
amounted to CHF 799 million (31 December 2019: CHF 799
million).
The proceeds of the bonds that we issued in the past further
strengthen the sustainability of our operations in a financial
crisis scenario and enable us to optimize the management
of our liquidity, in particular, for short-term financing needs
arising from our treasury management services offered
to our clients. These services allow for efficient use of
capital within our investment programs by bridging capital
drawdowns and distributions where beneficial for clients (e.g.
netting cash-flows to reduce the number of drawdowns and
distributions).
ANNUAL REPORT 2020
2020 at a glance – Financials
ANNUAL REPORT 2020
As of 31 December 2020, 271 short-term loans (31
December 2019: 278) were outstanding with an average
loan amount of CHF 2.5 million (31 December 2019: CHF
3.2 million). The duration of these loans amounted to 1-3
months. The loans are typically secured against unfunded
commitments and are, in addition, subject to strict loan-to-
value (LTV) rules. In addition, each loan is assigned with a risk
specific capacity, which is measured against an overall risk
capacity budget.
Continued balance-sheet light approach
As of 31 December 2020, we hold our own investments
amounting to a total of CHF 0.7 billion (31 December 2019:
CHF 0.7 billion).
The firm's balance sheet investments consist of its
financial investments/GP commitments, seed investments
and investments in associates. Financial investments/
GP commitments (i.e. our obligation to fund investments
alongside clients) typically represent about 1% of assets
invested in a closed-ended limited partnership structure and
have an aggregated net asset value of CHF 616 million as of
31 December 2020 (31 December 2019: CHF 605 million).
Investments in associates amounted to CHF 25 million as of
31 December 2020 (31 December 2019: CHF 42 million),
which mainly represent a stake in Pearl Holding Limited, a
mature investment program which continues to wind down
via ongoing distributions.
Partners Group also provides seed financing to certain early
stage investment programs managed by the firm. The scope
of these investments is limited due to the firm's strict balance
sheet risk management framework. The underlying assets of
these investment programs are typically private market assets
valued at the (cash-flow-adjusted) net asset value and they
amounted to (net) CHF 51 million as of 30 December 2020
(31 December 2019: CHF 61 million).
In addition to investing into investment programs alongside
clients from our balance sheet, we further align the interests
of clients with those of the firm's employees by offering all
employees preferential terms to invest alongside our private
markets programs via a global employee commitment plan. In
line with standard industry practice, such investments charge
no management fees and no performance fees.
In total, commitments by the firm's Board of Directors and
employees amounted to approximately USD 2.0 billion as of
31 December 2020 (31 December 2019: CHF 1.5 billion), of
which USD 1.6 billion (2019: USD 1.2 billion) are committed
to closed-ended programs and USD 0.4 billion (2019: USD
0.3 billion) to evergreen programs.
Financial outlook
• Management fees: we are moving confidently into
2021 and expect gross client demand of USD 16 to
20 billion, together with around USD -9.5 billion in
tail-down effects from the more mature closed-ended
investment programs and redemptions from evergreen
programs. Fundraising is expected to be balanced across
all program types, from customized mandates and the
firm's extensive range of evergreen fund solutions to
its traditional closed-ended programs. We expect this
demand to translate into additional management fees
and therefore guide that the management fees in CHF
develop broadly in line with the average AuM in CHF.
• Performance fees: we continue to guide that full-year
performance fees remain within our mid- to long-term
guidance of 20-30% as a proportion of total revenues,
assuming the market is favorable to exits.
• Target EBIT margin: we continue to apply a disciplined
approach to cost management and invest in initiatives
that support our growth. We therefore steer the
operating margin towards our target EBIT margin of
~60% for newly generated management fees (assuming
stable foreign exchange rates), as well as for performance
fees.
Investments alongside clients
(in CHF m)
Financial investments / GP commitment1)
Investments in associates2)
Seed investments3)
Total investments alongside clients from balance sheet
616
25
51
692
• Balance sheet: our balance sheet remains strong. With
CHF 2.3 billion in shareholder equity and CHF 2.0 billion
available liquidity or CHF 1.1 billion net cash, we feel
well-equipped to realize the potential of private markets
in different economic environments.
1) NAV excluding CHF 289.7 million of commitments that were not yet called but may
be called over time, typically between one to five years following the subscription of the
commitment.
2) Investments in associates described in detail in note 6 of the 2020 Annual Report.
3) Seed investments presented in the annual report as assets and liabilities held for sale.
Note: as of 31 December 2020.
Partners Group | 25
ANNUAL REPORT 2020
2020 at a glance - Appendix
Performance fee recognition
In private markets, performance fees are designed to remunerate
investment managers for the long-term value creation for
their clients. They are a profit-sharing incentive for investment
managers when their investment programs outperform a pre-
agreed return hurdle, typically defined over the lifetime of such
programs. In closed-ended investment programs, performance
fees are typically only charged once investments are realized and
a pre-defined return hurdle has been exceeded. As the value
creation period lasts several years, performance fees often only
start to be earned six to nine years after an investment program
commences its investment activities, and only if these are
successful. The illustrative example below shows the performance
fee model of a typical limited partnership program. It shows
how distributions in private markets portfolios bring forward
the maturity profile of an investment program and increase the
likelihood that the required return hurdle will be reached.
Illustrative example of a closed-ended private
markets program over its lifetime
This illustrative example assumes an initial client
commitment of 100 into a closed-ended investment
program. It is agreed that the investment manager shall
receive 20% of profits over time and that the return
hurdle shall translate to distributions to the client of 140.
After a few years, the investment manager generates
realizations in the portfolio and starts making
distributions to the client. After 6-9 years, the cumulative
distributions (blue triangle) received by the client exceed
140, i.e. the hurdle rate. In a first step, the investment
manager is entitled to receive subsequent distributions
above the return hurdle as performance fees, until the
investment manager “catches-up” on past performance in
excess of the client investment (“catch-up” on 140-100 =
40, and 40 x 20% performance fees = 8).
In a second step, the investment manager and the client
will share any additional distributions that stem from the
sale of the remaining portfolio over time, according to
the pre-defined performance-sharing mechanism. In our
example the client receives 80% of distributions and the
investment manager receives 20%. The example assumes
that the remaining NAV equals 60 and this entitles the
investment manager to an additional performance fee
of 12 (60 x 20%) should the portfolio be sold at the
indicated value of 60.
Total performance fees received by the manager are 20
(20% of 40 + 20% of 60 = 8 + 12) and clients receive
80% of profits (80% x (200 – 100)).
The timing and amount of performance fee payments
depends on several factors, including the pace of
deployment, performance of investments and pace
of realizations (cash distributions). Partners Group
recognizes performance fees once it is highly probable
that performance fees will be received and retained
permanently, irrespective of the subsequent performance
of that program. This is described through the following
steps:
•
•
Step 1: we consider performance fees which would
be due to realized investments only, considering
the agreed profit-sharing mechanism, including the
agreed hurdle return.
Step 2: we consider performance fees expected
on the aggregate program, i.e. on the combination
of realized and unrealized investments. We
include the value of unrealized investments with a
significant discount (typically 50%, depending on
the investment strategy). This discount is chosen
such that performance fees are highly likely to be
permanent, including in case of subsequent negative
program development, i.e. such that the likelihood of
a potential claw-back situation is minimal.
•
Step 3: performance fees are only recognized on the
lower of either realized investments (Step 1) or the
combination of realized and stress-tested unrealized
investments (Step 2)
The illustrative example below explains the conservative
approach for performance fee recognition described
above.
Performance fee model in a closed-ended
investment program
Capital returns to clients
200
Total current value
(in USD)
140
100
hurdle rate
(8% IRR on invested capital)
initial client commitment
(in USD)
NAV
60
12
(20% of 60 = 12)
8
catch-up
(20% of 40)
Distributions
140
Performance fees
(20% above 100)
Locked-in performance (based on exits)
Performance fee recognition (realized)
6-9 years
8
0
6-9 years
20
(20% of 100)
Note: performance fees of performance fee generating investment programs and
mandates typically range between 5-20% over a hurdle of 4-8% IRR on invested
capital, depending on the program and instruments. Past performance is not indicative
of future results. For illustrative purposes only.
26 | Partners Group
Partners Group | 26
2020 at a glance - Appendix
ANNUAL REPORT 2020
Illustrative example of performance fee
recognition in a closed-ended program
This simplified example assumes that, with initial client
commitments of 450, a fund made only two acquisitions:
investment Y for 100 and investment Z for 350.
Furthermore, it is assumed that the value of investment Y
increases to 200 and the value of investment Z increases
to 800 for Scenarios 1 and 2, and to 500 for Scenario 3.
The performance fee recognition under these three
scenarios would be as follows:
Scenario 1: No realizations (hurdle rate met)
Investment Y increases to
Investment Z increases to
Remaining NAV
200
800
1'000
•
•
•
Step 1: as there were no realized investments,
we would not be entitled to a performance fee.
Performance fees = 0.
Step 2: NAV stress-test: 1'000 x 50% = 500; 500
(stress-tested NAV) – 450 (cost of investments Y and
Z) = 50 (value gain); 50 (value gain) x 20% = 10 in
performance fees.
Step 3: as performance fees can only be recognized
on the lower of realized investments (step 1:
performance fee = 0) vis-à-vis the combination of
realized and stress-tested unrealized investments (step
2: performance fee = 10), we would not recognize any
performance fees.
Scenario 2: Investment Y realized (hurdle rate met)
Investment Y realized for
Investment Z increases to
Remaining NAV
200
800
800
•
•
•
Step 1: as investment Y was realized for 200, we
would be entitled to a performance fee as hurdle rate
at asset level was met. 200 – 100 = 100 (value gain);
100 (value gain) x 20% = 20 performance fees.
Step 2: stress-test on remaining NAV: 800 (unrealized
investment Y) x 50% = 400; 400 (stress-tested NAV) +
200 (realized investment Y) – 450 (cost of investment
Y and Z) = 150 (value gain); 150 (value gain) x 20% =
30 performance fees.
Step 3: as performance fees can only be recognized
on the lower of realized investments (step 1:
performance fee = 20) vis-à-vis the combination of
realized and stress-tested unrealized investments (step
2: performance fee = 30), we would recognize 20
performance fees.
Scenario 3: Investment Y realized (hurdle rate not met)
Investment Y realized for
Investment Z increases to
Remaining NAV
200
500
500
•
•
Step 1: as investment Y was realized for 200, we
would be entitled to a performance fee as hurdle rate
at asset level was met. 200 – 100 = 100 (value gain);
100 (value gain) x 20% = 20 performance fees.
Step 2: stress-test on remaining NAV: 500 (unrealized
investment Y) x 50% = 250; 250 (stress-tested NAV) +
200 (realized investment Y) – 450 (cost of investment
Y and Z) = 0 (value gain); as the stress-test brings the
overall return hurdle of the program below the pre-
agreed threshold in this example, no performance fees
can be recognized.
•
Step 3: as the hurdle rate has not been met, we will
not recognize any performance fees, despite there
being realized investments.
Partners Group | 27
ANNUAL REPORT 2020
Key definitions and alternative performance metrics
(APM)
Key definitions
Assets under management (AuM): Partners Group publishes
information on Assets under Management (“AuM”), Assets
Raised (“AR”), Tail-downs and other related information
(combined “AuM Information”) on a semi-annual basis.
AuM Information provides market participants with
transparency on the status and development of Partners
Group's recurring revenue basis for asset management,
investment management and advisory services ("AuM
Services").
When calculating AuM Information, Partners Group strives
to mirror the recurring fee basis, including reserved amounts
for commitments for the various programs and mandates;
amounts can therefore be based on reasonable estimates
and judgment where necessary, in particular where AuM
Information reflects anticipated investment activities for
the next semester. Where Partners Group renders AuM
Services in a joint effort with similarly split responsibilities
with third parties, AuM and AR are counted at 50%. No AuM
and AR are counted where Partners Group is only providing
administrative, transactional or consultant services.
AuM are increased by Assets Raised which are based
on i) subscriptions, or ii) new fee-paying assets and
amounts planned to be invested, which would become
fee paying assets in the following six months (“Tail-ups”).
Reductions in AuM for maturing programs i) may follow
a fixed schedule, ii) are based on the cost of realizations
of assets or iii) on liquidations of programs (each a “Tail-
down”). AuM are reduced by redemptions on open-ended
programs (“Redemptions”). AuM can further change due to
performance, investment program changes or FX rates (“FX &
others”).
Alternative performance metrics (APM)
Partners Group uses various financial and alternative
performance metrics (APM) to measure its financial
performance as part of its financial reporting. The APMs
used by Partners Group supplement the measures that are
documented and published in accordance with International
Financial Reporting Standards (IFRS). An APM is defined
as a financial measure of historical or future financial
performance, financial position or cash flows not already
defined or specified in the applicable financial reporting
framework.
APMs are predominantly operational management metrics
and undergo regular performance reviews in both internal
and external reporting. The resulting findings are taken into
account as part of a strategy review process. We must point
out that the comparability of APMs within the industry can
be limited due to different calculation methods.
Partners Group uses the following APMs:
Dividend payout ratio is defined as the (proposed) dividend
per share divided by diluted earnings per share.
Earnings before interest and tax (EBIT) stands for the sum
of revenues from management services, net, including other
operating income and expenses before net finance result and
before income taxes. This metric is used by Partners Group
as the financial target in its internal presentations (business
plans) and in its external presentations (to analysts and
investors). EBIT is considered as a useful unit of measurement
for evaluating the operating performance of the group.
28 | Partners Group
Key definitions and alternative performance metrics
(APM)
ANNUAL REPORT 2020
EBIT margin is calculated as earnings before interest and
tax (EBIT) divided by revenues from management services,
net, including other operating income. It is one of the key
operational management metrics as it provides an indication
of the profitability of the business.
In millions of Swiss francs
EBIT
Revenues from management
services, net, including other
operating income
2020
875
1'412
2019
1'008
1'610
Revenue margin is calculated as revenues from management
services, net, including other operating income, divided by
average assets under management (in CHF) calculated on a
daily basis.
In millions of Swiss francs
Revenues from management
services, net, including other
operating income
2020
1'412
2019
1'610
Average assets under management
(in CHF) calculated on a daily basis.
93'778
88'440
EBIT margin
62%
63%
Revenue margin
1.51%
1.82%
Return on average shareholders’ equity (RoE) is calculated as
profit for the period, divided by average equity attributable to
owners of the Company.
In millions of Swiss francs
Profit for the period
Average equity attributable to
owners of the Company
2020
805
2'281
2019
900
2'128
Return on equity
35%
42%
Earnings before interest, tax, depreciation and amortization
(EBITDA) stands for the sum of revenues from management
services, net, including other operating income and expenses
before net finance result, before income taxes and before
depreciation and amortization.
Equity ratio is calculated as equity attributable to owners of
the Company, divided by total liabilities and equity.
Net cash position is calculated as cash and cash equivalents,
including short-term loans to products, minus credit facilities
drawn and long-term debt.
In millions of Swiss francs
Cash and cash equivalents
Short-term loans
Long-term debt
Net cash position
2020
1'228
673
(799)
1'102
2019
933
900
(799)
1'035
Partners Group | 29
1. Report of the auditors on the consolidated financial statements
2. Consolidated financial statements:
– Consolidated income statement for the years ended 31 December 2020 and 2019
– Consolidated statement of comprehensive income for the years ended 31 December 2020 and 2019
– Consolidated balance sheet as of 31 December 2019 and 2018
– Consolidated statement of changes in equity for the years ended 31 December 2020 and 2019
– Consolidated statement of cash flows for the years ended 31 December 2020 and 2019
– Notes to the consolidated financial statements for the years ended 31 December 2020 and 2019
31
36
37
38
40
42
44
30 | Partners Group
Report of the auditors on the consolidated
financial statements
Statutory Auditor's Report
To the General Meeting of Partners Group Holding AG, Baar
Report on the Audit of the Consolidated Financial Statements
Opinion
We have audited the consolidated financial statements of Partners Group Holding AG and its subsidiaries (the
Group), which comprise the consolidated balance sheet as at 31 December 2020 and the consolidated income
statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies.
In our opinion the consolidated financial statements (pages 36 to 101) give a true and fair view of the consolidated
financial position of the Group as at 31 December 2020, and its consolidated financial performance and its
consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRS) and comply with Swiss law.
Basis for Opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss
Auditing Standards. Our responsibilities under those provisions and standards are further described in the
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are
independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession, as well as the International Ethics Standards Board for Accountants’ International Code of Ethics for
Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled
our other ethi-cal responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opin-
ion.
Key Audit Matters
Recognition of revenues from management services (net)
Valuation of financial investments
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of our
audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not pro-
vide a separate opinion on these matters.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
Partners Group | 31
ANNUAL REPORT 2020 ANNUAL REPORT 2020
Report of the auditors on the consolidated
financial statements
Recognition of revenues from management services (net)
Key Audit Matter
Our response
Revenues from management services, which com-
prises management fees, commitment fees, organisa-
tional fees and performance fees, are the result of in-
vestment management services within the Group’s op-
erating segments. Payments to third parties for the in-
troduction of clients as well as rebates paid to clients
are recognised as revenue deductions.
Revenues from management services (net) is an area
of focus due to the size and importance to the Group’s
results.
The calculations of revenues and revenue deductions
are largely automated. There are a number of inherent
risks in calculating certain types of revenue and reve-
nue deductions including the interpretation and manual
input of key contractual terms, which could lead to er-
rors. The bespoke and complex nature of underlying
investment management agreements and other con-
tractual terms involving multiple Group entities re-
quires effective monitoring to ensure all financial terms
and conditions are captured completely and accurately
and are applied appropriately.
Performance fees are inherently more complex in na-
ture. The assessment of the likelihood of a future claw-
back on such fees and the determination whether cri-
teria set in the carried interest arrangements are met
require management’s judgement. The determination
of performance fees is based on the underlying valua-
tion of the investment portfolio and requires manual in-
terventions.
Amongst other procedures, we obtained an understand-
ing of management’s processes and controls around
the calculation of revenues and revenue deductions by
performing walkthrough procedures, testing relevant
key controls and evaluating the governance structure.
We analysed independent third party controls reports on
valuation related processes and controls to determine
whether they were appropriate for our purposes.
On a sample basis, we obtained confirmations from the
external auditor of the underlying investment programs
on the revenues from management services covered in
their audit and reconciled these revenues to the Group’s
general ledger. We also performed inquiries with the ex-
ternal auditor of the underlying investment programs to
confirm that the audits on the sampled investment pro-
grams were completed.
On a sample basis, we agreed revenue deductions to
underlying contracts and performed manual recalcula-
tions.
We obtained an understanding of the Group’s pro-
cesses and controls around the calculation of perfor-
mance fees by evaluating the terms and conditions set
out in the underlying partnership agreements and per-
forming walkthrough procedures. On a sample basis,
we tested performance fees by:
⎯ Performing analytical procedures based on our un-
derstanding of investment realisations and the per-
formance of the investment fund;
⎯ Discussing and evaluating management’s assess-
ment of the likelihood of a future clawback of per-
formance fees by challenging and back-testing the
key assumptions. We further corroborated whether
such fees had been recognised in the appropriate
period;
⎯ Reconciling potential performance fee values used
in the assessment of a future clawback to the ac-
cruals in the financial statement of the underlying
investment programs; and
⎯ Evaluating completeness by assessing whether a
sample of eligible but unearned performance fees
should have been recognised during the 2020 fi-
nancial year.
For further information on the recognition of revenues from management services (net) refer to notes 2, 3 and
19.7 to the consolidated financial statements on pages 44 to 49 and 94 to 95.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
32 | Partners Group
Report of the auditors on the consolidated
financial statements
ANNUAL REPORT 2020
Valuation of financial investments
Key Audit Matter
Our response
As at 31 December 2020, financial investments on the
Group’s balance sheet amounted to CHF 615.6 million
(2019: CHF 605.3 million). In addition, financial invest-
ments presented as assets held for sale amounted to
CHF 305.7 million (2019: CHF 175.4 million).
The financial investment and assets held for sale port-
folio comprises a large number of unquoted securities
for which no prices are available and which have little
or no observable inputs. The Group applies valuation
techniques such as the market approach, the income
approach or the adjusted net asset value method that
are based on international standards.
The fair value assessment requires significant judge-
ment by management, in particular with regard to key
input factors such as earnings multiples, liquidity dis-
counts, discount rates or the selection of valuation
multiples.
Our procedures included obtaining an understanding
of the Group’s processes and key controls around the
valuation of and accounting for unquoted investments
by performing walkthrough procedures, testing rele-
vant key controls and evaluating the valuation govern-
ance structure. We analysed independent third party
controls reports on valuation related processes and
controls to determine whether they were appropriate
for our purposes.
On a sample basis, we obtained confirmations from
the external auditor of the underlying investment pro-
grams on their net asset values or the valuation of
their investments. We also performed inquiries with the
external auditor of the underlying investment programs
to confirm that the audits on the sampled investment
programs were completed. The proportionate holdings
of the Group in such financial investments were recon-
ciled to the Group’s transaction records that are kept
for each investor.
We further assessed if adjustments to the fair values in
the financial statements of the underlying investment
programs are required.
For further information on the valuation of financial investments refer to notes 2, 5.3.2 and 5.3.3 to the
consolidated financial statements on pages 44, 45, 60 and 61.
Other Information in the Annual Report
The Board of Directors is responsible for the other information in the annual report. The other information com-
prises all information included in the annual report, but does not include the consolidated financial statements, the
stand-alone financial statements of the company, the remuneration report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual report and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other infor-
mation in the annual report and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materi-
ally misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibility of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true
and fair view in accordance with Swiss IFRS and the provisions of Swiss law, and for such internal control as the
Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are
free from material misstatement, whether due to fraud or error.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
Partners Group | 33
Report of the auditors on the consolidated
financial statements
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that in-
cludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit con-
ducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstate-
ment when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the ba-
sis of these consolidated financial statements.
As part of an audit in accordance with Swiss law, ISAs and Swiss Auditing Standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material mis-
statement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, for-
gery, intentional omissions, misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Group’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made.
— Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
— Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
disclosures, and whether the consolidated financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
— Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business ac-
tivities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with rel-
evant ethical requirements regarding independence, and communicate with them all relationships and other mat-
ters that may reasonably be thought to bear on our independence, and where applicable, actions taken to elimi-
nate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those mat-
ters that were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a mat-
ter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
34 | Partners Group
ANNUAL REPORT 2020 Report of the auditors on the consolidated
financial statements
Report on Other Legal and Regulatory Requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an inter-
nal control system exists, which has been designed for the preparation of consolidated financial statements ac-
cording to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG AG
Thomas Dorst
Licensed Audit Expert
Auditor in Charge
Zurich, 15 March 2021
Christoph Hochuli
Licensed Audit Expert
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
Partners Group | 35
ANNUAL REPORT 2020 Consolidated income statement for the years ended
31 December 2020 and 2019
In millions of Swiss francs
Note
2020
2019
Management fees and other revenues, net
Performance fees, net
Revenues from management services, net
Other operating income
Personnel expenses
Other operating expenses
EBITDA 1)
Depreciation and amortization
EBIT 1)
Finance income
Finance expense
Profit before tax
Income tax expense
Profit for the period
Profit for the period attributable to owners of the Company
Basic earnings per share (in Swiss francs)
Diluted earnings per share (in Swiss francs)
1) For definitions please refer to p. 28 and p. 29.
1'115.7
266.4
1'382.1
1'074.4
472.5
1'546.9
30.2
63.4
(430.0)
(68.5)
913.8
(38.4)
875.4
65.5
(12.3)
928.6
(123.8)
804.8
(490.4)
(78.5)
1'041.4
(33.8)
1'007.6
64.6
(35.0)
1'037.2
(137.3)
899.9
804.8
899.9
30.63
30.36
33.93
33.66
3.
5.2.
4.1.
10.
11.&12.
5.1.
5.1.
9.1.
15.
15.
36 | Partners Group
ANNUAL REPORT 2020
Consolidated statement of comprehensive income
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Note
2020
2019
Profit for the period
804.8
899.9
Other comprehensive income:
Exchange differences on translating foreign operations
Total other comprehensive income that may be reclassified
to the income statement in subsequent periods
Net actuarial gains/(losses) from defined benefit plans
Tax impact on net actuarial gains/losses from defined benefit plans
Actuarial gains/(losses) from defined benefit plans, net of tax
Total other comprehensive income not being reclassified to the
income statement in subsequent periods, net of tax
4.5.2.
9.2.
(94.2)
(94.2)
0.4
(0.0)
0.4
0.4
(36.1)
(36.1)
(1.3)
0.3
(1.0)
(1.0)
Total other comprehensive income for the period, net of tax
(93.8)
(37.1)
Total comprehensive income for the period, net of tax
711.0
862.8
Total comprehensive income attributable to owners of the Company
711.0
862.8
Partners Group | 37
ANNUAL REPORT 2020 Consolidated balance sheet
as of 31 December 2020 and 2019
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Assets
Cash and cash equivalents
Trade and other receivables
Short-term loans
Assets held for sale
Total current assets
Property, equipment and right-of-use assets
Intangible assets
Investments in associates
Financial investments
Other financial assets
Deferred tax assets
Total non-current assets
Total assets
5.4.1.
5.3.4.
5.3.3.
11.
12.
6.
5.3.2.
5.3.5.
9.2.
1'227.6
468.7
673.5
305.7
933.0
651.9
900.2
175.4
2'675.5
2'660.5
236.2
62.3
25.0
615.6
353.4
64.0
1'356.5
4'032.0
237.2
68.8
42.1
605.3
292.0
43.8
1'289.2
3'949.7
38 | Partners Group
ANNUAL REPORT 2020 Consolidated balance sheet
as of 31 December 2020 and 2019
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Liabilities and equity
Liabilities
Trade and other payables
Income tax liabilities
Provisions
Employee benefit liabilities
Liabilities held for sale
Total current liabilities
Employee benefit liabilities
Provisions
Deferred tax liabilities
Long-term debt
Lease liabilities
Other long-term liabilities
Total non-current liabilities
Total liabilities
Equity
Share capital
Treasury shares
Legal reserves
Other components of equity
Equity attributable to owners of the Company
Total liabilities and equity
7.
4.5.
5.3.3.
4.5.
9.2.
13.
8.
5.4.3
14.
228.7
46.2
2.2
107.4
254.6
639.1
179.2
83.4
3.4
161.7
114.3
542.0
213.6
208.6
6.8
3.4
798.9
56.6
39.0
1'118.3
1'757.4
0.3
(266.2)
0.2
2'540.3
2'274.6
4'032.0
6.7
4.0
798.6
55.2
46.5
1'119.6
1'661.6
0.3
(212.9)
0.2
2'500.5
2'288.1
3'949.7
Partners Group | 39
ANNUAL REPORT 2020
Consolidated statement of changes in equity
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Equity attributable to owners of the Company
2020
Other components of equity
Share
capital
Treasury
shares
Legal
reserves
Translation
reserves
Retained
earnings
Total other
components
of equity
Total
Balance as of 1 January
0.3
(212.9)
0.2
(129.4)
2'629.9
2'500.5
2'288.1
Transactions with owners of the Company,
recorded directly in equity
Contributions by and distributions to owners of
the Company:
Purchase of treasury shares
Disposal of treasury shares
Share-based payment expenses
Tax effect on share-based payment and treasury
share transactions
Dividends paid to owners of the Company
Total contributions by and (distributions to)
owners of the Company
Profit for the period
Total other comprehensive income for the period,
net of tax
Total comprehensive income for the period,
net of tax
(221.2)
167.9
(93.6)
(93.6)
57.3
57.3
(221.2)
74.3
57.3
33.6
33.6
33.6
(668.5)
(668.5)
(668.5)
-
(53.3)
-
-
(671.2)
(671.2)
(724.5)
804.8
804.8
804.8
-
-
-
-
-
-
(94.2)
0.4
(93.8)
(93.8)
(94.2)
805.2
711.0
711.0
Balance as of 31 December
0.3
(266.2)
0.2
(223.6)
2'763.9
2'540.3
2'274.6
40 | Partners Group
ANNUAL REPORT 2020
Consolidated statement of changes in equity
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Equity attributable to owners of the Company
2019
Other components of equity
Share
capital
Treasury
shares
Legal
reserves
Translation
reserves
Retained
earnings
Total other
components
of equity
Total
Balance as of 1 January
0.3
(143.6)
0.2
(93.3)
2'204.3
2'111.0
1'967.9
Transactions with owners of the Company,
recorded directly in equity
Contributions by and distributions to owners of
the Company:
Purchase of treasury shares
Disposal of treasury shares
Reversal of contractual obligation to purchase
treasury shares
Share-based payment expenses
Tax effect on share-based payment and treasury
share transactions
Dividends paid to owners of the Company
Total contributions by and (distributions to)
owners of the Company
Profit for the period
Total other comprehensive income for the period,
net of tax
Total comprehensive income for the period,
net of tax
(457.4)
388.1
(457.4)
(88.5)
(88.5)
299.6
110.0
110.0
110.0
54.5
54.5
54.5
36.1
36.1
36.1
(585.4)
(585.4)
(585.4)
-
(69.3)
-
-
(473.3)
(473.3)
(542.6)
899.9
899.9
899.9
-
-
-
-
-
-
(36.1)
(1.0)
(37.1)
(37.1)
(36.1)
898.9
862.8
862.8
Balance as of 31 December
0.3
(212.9)
0.2
(129.4)
2'629.9
2'500.5
2'288.1
For further information related to the contractual obligation to purchase treasury shares, please refer to note 14.
Partners Group | 41
ANNUAL REPORT 2020 Consolidated statement of cash flows
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Note
2020
2019
Operating activities
Profit for the period
Adjustments:
Net finance (income) and expense
Income tax expense
Depreciation and amortization
Share-based payment expenses
Change in provisions
Change in employee benefit assets/liabilities
Non-cash change in other financial assets
Non-cash change in other long-term liabilities
Operating cash flow before changes in working capital
(Increase)/decrease in trade and other receivables and short-term loans
Increase/(decrease) in trade and other payables
Finance expenses (other than interest) paid
5.1.
9.1.
11.&12.
4.2.
804.8
899.9
(53.2)
123.8
38.4
57.3
(0.5)
(28.6)
(50.7)
(6.8)
884.5
365.5
58.4
(4.1)
(29.6)
137.3
33.8
54.5
6.9
89.4
(100.4)
18.5
1'110.3
(87.3)
48.4
(3.3)
Cash generated from/(used in) operating activities
1'304.3
1'068.1
Income tax paid
Net cash from/(used in) operating activities
Investing activities
Purchase of property and equipment
Purchase of intangible assets
Purchase of financial investments & assets and liabilities held for sale
Proceeds on disposal of financial investments & assets and liabilities held for sale
Proceeds on disposal of investments in associates
Purchase of other financial assets
Proceeds on disposal of other financial assets
Interest received 1)
Net cash from/(used in) investing activities
11.
12.
6.
5.1.
(149.9)
1'154.4
(107.3)
960.8
(18.9)
(12.0)
(59.0)
82.8
17.5
(21.8)
0.9
2.8
(7.7)
(113.7)
(21.9)
(135.1)
104.2
13.7
(28.4)
0.2
3.5
(177.5)
1) Excludes CHF 25.3 million (2019: CHF 60.4 million) compensation from short-term loans (see note 5.2.) that forms part of net cash flow from operating activities.
42 | Partners Group
ANNUAL REPORT 2020 Consolidated statement of cash flows
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Note
2020
2019
Financing activities
Repayments of credit facilities
Drawdowns from credit facilities
Issuance of long-term debts
Payment of principal portion of lease liabilities
Interest paid
Dividends paid to shareholders of the Company
Purchase of treasury shares
Disposal of treasury shares
Net cash from/(used in) financing activities
13.
8.
14.
(375.0)
375.0
-
(12.1)
(8.4)
(668.5)
(221.2)
74.3
(835.9)
(1'015.0)
1'015.0
499.1
(12.1)
(3.6)
(585.4)
(457.4)
299.6
(259.8)
Net increase/(decrease) in cash and cash equivalents
310.8
523.5
Cash and cash equivalents as of 1 January
Exchange differences on cash and cash equivalents
933.0
(16.2)
412.2
(2.7)
Cash and cash equivalents as of 31 December
1'227.6
933.0
In millions of Swiss francs
31 December 2020 31 December 2019
Bank balances
Petty cash
Total cash and cash equivalents
1'227.6
0.0
1'227.6
933.0
0.0
933.0
Partners Group | 43
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
1. Reporting entity
Partners Group Holding AG (“the Company”) is a company domiciled in Switzerland whose shares are publicly traded on the
SIX Swiss Exchange. The address of the Company’s registered office is Zugerstrasse 57, 6341 Baar-Zug, Switzerland. The
consolidated financial statements for the years ended 31 December 2020 and 2019 comprise the Company and its subsidiaries
(together referred to as “the Group”) and the Group’s interest in associates. The consolidated financial statements were
authorized for issue by the Board of Directors (“BoD”) on 15 March 2021 and are subject to approval at the Annual General
Meeting of shareholders on 12 May 2021.
The principal activities of the Group are described in note 3.
The consolidated financial statements present a true and fair view of the Group’s financial position, results of operations and cash
flows in accordance with International Financial Reporting Standards (“IFRS”) and comply with Swiss law.
2. Critical accounting estimates and judgments
Estimates and judgments are based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future and exercises judgment in applying its accounting policies.
The resulting accounting estimates will, by definition, rarely equal the related actual results. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, as well as significant judgments in applying accounting policies, are discussed below.
(a) Accounting for investment programs
The Group assessed its involvement with the investment programs that it manages to determine whether it has control over them
(see note 19.3.). In accordance with IFRS 10, the Group assessed its power over the investment programs, its exposure or rights
to variable returns and its ability to use its power to affect its returns. The assessment determined whether the Group acts as an
agent on behalf of the investors in the investment programs and within delegated decision-making rights or as a principal.
In its assessment, the Group focused on its exposure to the total economic interest in the investment programs. This exposure
consists of a combination of the stake the Group holds in an investment program and the Group’s remuneration for the services it
provides to the investment program. IFRS 10 does not provide clear-cut thresholds for determining whether or not an investment
program is controlled. The Group took all available facts and circumstances into consideration and concluded that it acts as an
agent for all investment programs that it manages, except for investment programs financed with seed capital (see note 19.15.).
For further details on the investment programs and their carrying amounts please refer to note 5.3.2.
(b) Fair value
A significant portion of the Group’s assets and liabilities are carried at fair value. The fair value of some of these assets is based
upon quoted prices in active markets or observable inputs.
In addition, the Group holds financial instruments for which no quoted prices are available and which have little or no observable
inputs. For these financial instruments, the determination of fair value requires subjective assessment with varying degrees of
judgment which consider the liquidity, concentration, pricing assumptions, current economic and competitive environment and
the risks affecting the specific financial instrument. In such circumstances, valuation is determined based on management’s
judgment about the assumptions that market participants would use in pricing assets or liabilities (including assumptions
about risk). These financial instruments mainly include derivatives, private equity, private debt, private real estate and private
infrastructure investments.
For more information regarding fair value measurement, refer to note 5.5.
44 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
(c) Revenue recognition
Instances may arise where the Group has to decide whether revenues should be recognized or not. This mainly relates to
performance fees, which are foreseeable, but have not yet been collected by the Group or are subject to claw-back. A “claw-
back” ensures that investors in an investment program are returned any performance fees paid in excess of the originally agreed
percentage during the life of the investment program. It protects investors from paying performance fees on one investment,
and then having a subsequent investment incur losses resulting in overall performance fees paid in excess of the originally agreed
upon terms. Performance fees are only recognized once the likelihood of a potential future claw-back is no longer considered
meaningful in the assessment of the Group (see note 19.7.).
(d) Others
Other relevant areas with critical accounting estimates and judgements include goodwill impairment, actuarial assumptions
regarding IAS 19 and uncertain tax positions in respect to the business model. These are, however, considered to be of less
significance for the Group.
(e) Impact of COVID-19
The Group has assessed the consequences of the COVID-19 pandemic on the Consolidated Financial Statements, specifically
considering the impacts on key judgements and significant estimates. The accounting matters assessed included, but were not
limited to, fair values of investments, recoverability of outstanding loans and receivables, the carrying value of goodwill, intangible
assets, and property, equipment and right-of-use assets, and the defined benefit pension plan. Any continued negative impacts
from the pandemic in 2021 may have an impact on these, or other, matters.
The Group experienced strong portfolio performance in 2020 and broadly outperformed relevant public markets, despite the
economic uncertainty caused by the COVID-19 pandemic. This also reflected positively on the Group’s financial investments (see
note 5.3.2.) that are measured at fair value.
The COVID-19 pandemic did not change the Group’s assessment with regard to the credit risk related to outstanding loans and
receivables. The Group has not identified any material expected credit losses (see note 5.4.1.).
Market volatility caused by COVID-19 resulted in a generally weak exit environment and, therefore, lower performance fees in
the first half of 2020. In the second half of the year, valuations recovered and markets were more favorable to exits. The overall
impact on the portfolio led to a shift of accrued performance fees towards long-term assets (see note 5.3.5.).
The impact of the COVID-19 pandemic did not result in impairment issues for goodwill, intangible assets, or property, equipment
and right-of-use assets. No directly attributable significant negative impact was noted on the defined benefit pension plan.
While there was no significant impact from the areas assessed, the Group will continue to monitor these areas of increased
judgements and risk for material changes.
3. Segment information
The BoD has been identified as the chief operating decision-maker. The BoD reviews the Group’s internal reporting in order to
assess performance and allocate resources. Management has identified the following operating segments based on these reports:
• Private equity
• Private debt
• Private real estate
• Private infrastructure
In these operating segments, the Group provides its clientele with investment management services in the private markets
spectrum. These services comprise structuring and investment advisory in relation to direct investments in operating companies
or assets and investments in third party managed investment programs. As part of its management services, the Group offers
diversified as well as more focused investment programs in relation to investment styles, industry and geography of the
investments in private markets.
Partners Group | 45
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Private equity
Private equity refers to investments made in private – i.e. non-publicly traded – companies. On behalf of its clients, the Group
focuses on investing directly into companies that have been identified via its thematic sourcing approach with the objective of
transforming them through driving forward strategic initiatives and operational improvements. In addition, the Group invests in
the private equity secondary market by acquiring portfolios of privately held companies and in the primary market by maintaining
a comprehensive set of investment relationships.
Private debt
Private debt refers to debt financing for private – i.e. non-publicly traded – companies. On behalf of its clients, the Group focuses
on investing opportunities within sectors and industries that are undergoing transformational change, as identified by its thematic
sourcing approach. The Group provides tailored financing solutions to companies looking for non-bank funding across the entire
debt structure, ranging from predominantly senior loans to subordinated financing solutions, as well as across different regions.
Private real estate
Private real estate refers to investments made in private – i.e. non-publicly traded – real estate assets. On behalf of its clients, the
Group focuses on investing in real estate assets benefitting from transformative trends where it can deploy a value creation plan.
The Group invests in either equity or debt instruments, as well as across sectors and regions. In addition, the Group invests in the
private real estate secondary market by acquiring portfolios of privately held assets and in the primary market by maintaining a
comprehensive set of investment relationsips.
Private infrastructure
Private infrastructure refers to investments made in private – i.e. non-publicly traded – infrastructure assets. On behalf of its
clients, the Group focuses on investing in essential infrastructure assets that have clear stakeholder impact which could be
transformed through its entrepreneurial governance. The Group invests across the capital structure in either equity or debt
instruments, as well as across sectors and regions based on its thematic sourcing approach.
The activities in all operating segments consist of:
• Strategic asset allocation and portfolio management
• Investment management, value creation and monitoring
• Risk management
• Reporting and portfolio administration
• Relationship management
The BoD assesses the performance of the operating segments based on gross segment results, determined by the allocation of
directly attributable revenues and expenses for the respective operating segment. Therefore, the gross results per operating
segment do not include the allocation of expenses that are not directly attributable to the operating segment. As the Group
pursues a fully integrated investment approach, many professionals are engaged in assignments across several operating
segments within the private markets asset classes. Thus, only the personnel expenses of professionals entirely dedicated to a
single operating segment have been allocated to the respective operating segments. This has led to the majority of personnel
expenses being unallocated to any of the operating segments. The same applies to other operating expenses. Depreciation and
amortization have also not been allocated to the operating segments. All non-directly attributable elements of profit or loss are
summarized in the column labelled ‘Unallocated’.
Management believes that this is the most relevant way to report the results of its operating segments.
There were no intersegment transactions and, as such, no eliminations are necessary.
46 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Operating segments
Private
equity
Private
debt
Private
real estate
Private
infra-
structure
Total
reportable
segments Unallocated
2020
Total
Management fees and other revenues
722.3
176.5
226.8
171.4
1'297.0
-
1'297.0
Revenue deductions related to management fees
and other revenues
Performance fees
Revenue deductions related to performance fees
(87.0)
229.0
(7.2)
(16.6)
(56.0)
(21.7)
(181.3)
18.9
(0.1)
0.7
(3.0)
28.1
276.7
-
(10.3)
-
-
-
(181.3)
276.7
(10.3)
Revenues from management services, net
857.1
178.7
168.5
177.8
1'382.1
-
1'382.1
Other operating income
10.1
1.9
9.3
5.9
27.2
Revenues and other operating income
867.2
180.6
177.8
183.7
1'409.3
3.0
3.0
30.2
1'412.3
Personnel expenses
Other operating expenses
(66.0)
(43.5)
(21.6)
(28.5)
(159.6)
(270.4)
(430.0)
(2.7)
(1.9)
(1.7)
(1.4)
(7.7)
(60.8)
(68.5)
Gross segment result before depreciation and
amortization
798.5
135.2
154.5
153.8
1'242.0
(328.2)
913.8
Depreciation and amortization
-
-
-
-
-
(38.4)
Gross segment result
798.5
135.2
154.5
153.8
1'242.0
(366.6)
Reconciliation to profit for the period:
Net finance income and expense
Income tax expense
Profit for the period
(38.4)
875.4
53.2
(123.8)
804.8
Partners Group | 47
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
2019
Operating segments
Private
equity
Private
debt
Private
real estate
Private
infra-
structure
Total
reportable
segments
Unallocated
Total
Management fees and other revenues
718.5
166.4
186.3
159.3
1'230.5
2.5
1'233.0
Revenue deductions related to management fees
and other revenues
Performance fees
Revenue deductions related to performance fees
(90.8)
408.1
(29.1)
(15.5)
(33.3)
(19.0)
(158.6)
23.1
(0.1)
20.3
(1.2)
51.5
(0.1)
503.0
(30.5)
-
-
-
(158.6)
503.0
(30.5)
Revenues from management services, net
1'006.7
173.9
172.1
191.7
1'544.4
2.5
1'546.9
Other operating income
17.3
9.1
17.3
15.9
59.6
Revenues and other operating income
1'024.0
183.0
189.4
207.6
1'604.0
3.8
6.3
63.4
1'610.3
Personnel expenses
(99.1)
(35.6)
(29.4)
(34.2)
(198.3)
(292.1)
(490.4)
Other operating expenses
(3.8)
(3.4)
(1.5)
(1.9)
(10.6)
(67.9)
(78.5)
Gross segment result before depreciation and
amortization
921.1
144.0
158.5
171.5
1'395.1
(353.7)
1'041.4
Depreciation and amortization
-
-
-
-
-
(33.8)
(33.8)
Gross segment result
921.1
144.0
158.5
171.5
1'395.1
(387.5)
1'007.6
Reconciliation to profit for the period:
Net finance income and expense
Income tax expense
Profit for the period
29.6
(137.3)
899.9
48 | Partners Group
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Geographical information
The operating segments are managed on a worldwide basis with Switzerland as the headquarters. Local offices ensure access
to clients and investment opportunities. While investment management services are primarily provided out of Switzerland,
local offices such as Guernsey and Luxembourg serve as the Group’s main fund hubs. In presenting information on the basis of
geographical operating segments, respective revenue is based on the geographical location where the revenues are invoiced and
collected. Prior year numbers have been aligned.
In millions of Swiss francs
Switzerland 1)
Guernsey
Luxembourg
US
Others
Total
Revenues from management services,
net
2020
2019
(8.9)
681.3
398.3
200.9
110.5
(8.0)
920.4
311.2
187.1
136.2
1’382.1
1’546.9
1) Revenue deductions related to management fees, performance fees and other revenues are largely reimbursed by Swiss entities.
The respective revenues do not correspond with the profits in these countries as they are subsequently allocated to the Group’s
operating entities based on the Group’s transfer pricing policy which complies with the OECD Transfer Pricing Guidelines.
In 2020 and 2019, no direct counterparty of the Group contributed more than 12% to the Group’s revenues from management
services, net.
4. Remuneration
4.1. Personnel expenses
In millions of Swiss francs
Salaries and cash bonus
Share-based payment expenses
Other long-term benefits (management carry program)
Retirement schemes - defined contribution plans
Retirement schemes - defined benefit plans
Other social security expenses
Other personnel expenses
Total personnel expenses
4.2.
4.5.2.
2020
2019
(258.7)
(56.7)
(55.0)
(16.1)
(3.5)
(20.8)
(19.2)
(251.6)
(53.7)
(117.4)
(13.9)
(3.4)
(28.3)
(22.1)
(430.0)
(490.4)
The average number of employees in 2020 was 1’516 (2019: 1’349), which is equivalent to an average of 1’504 full-time
employees (2019: 1’337).
Partners Group | 49
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
4.2. Share-based payment expenses
The Group recognized the following expenses for grants in 2020, as well as in previous periods:
In millions of Swiss francs
Note
2020
2019
Grants 2014 (options and non-vested shares)
Grants 2015 (options and non-vested shares)
Grants 2016 (options and non-vested shares)
Grants 2017 (options and non-vested shares)
Grants 2018 (options and non-vested shares)
Grants 2019 (options and non-vested shares)
Grants 2020 (options and non-vested shares)
Share grants at start of employment
Total options and non-vested shares
Grants 2017 (MPP)
Grants 2018 (MPP)
Grants 2019 (MPP)
Grants 2020 (MPP)
-
(0.8)
(1.1)
(2.9)
(5.4)
(15.7)
(17.4)
(1.3)
(44.6)
(2.0)
(4.6)
(2.9)
(2.6)
(0.2)
(1.2)
(2.4)
(5.5)
(11.1)
(17.5)
-
(2.7)
(40.6)
(3.0)
(7.1)
(3.0)
-
4.3.1.
4.4.
4.3.2.
Total share-based payment expenses1)
(56.7)
(53.7)
1) Share-based payment expenses for non-executive members of the BoD of CHF 0.6 million (2019: 0.8 million) are disclosed as a part of third party services (see note 10.).
4.3. Options, non-vested shares and Management Performance Plan
The Group has a long history of granting equity incentives to its employees. These are awarded at year-end through options,
shares and the Management Performance Plan (“MPP”).
4.3.1. Non-vested shares and options
The Employee Participation Plan (“EPP”) aims to align employee interests with those of external shareholders. As in previous
years, the 2020 plan was a shares-only plan for the Group’s employees and its allocation to departments, teams and individuals
was dependent on their performance and contribution to the overall achievement of the firm’s goals during the period.
EPPs follow a linear vesting model, with proportionate annual vesting over a three- or five-year period following the awards,
depending on the rank of the employee and contingent upon the employee remaining with the Group during the respective
service period.
Since 2015, the Group awards a management incentive plan (“MIP”) to select individuals in the senior management team who
have significantly contributed to the firm’s success in the past and who have the potential to do so in the future. The vesting of
this long-term option-only plan for senior management follows a five-year (50% of grant) and six-year (50% of grant) cliff-vesting
model.
50 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Number and weighted average exercise price
The number and weighted average exercise price of options and non-vested shares developed as follows:
Outstanding as of 1 January
Forfeited during the period
Exercised during the period
Granted during the period - options
Granted during the period - shares
Outstanding as of 31 December
Weighted average
exercise price
(in CHF)
Number of
instruments
Weighted average
exercise price
(in CHF)
Number of
instruments
2020
2020
2019
2019
662.51
617.24
295.84
1'045.00
-
1'560'494
(45'154)
(199'488)
111'225
57'038
597.86
615.66
145.42
950.33
-
1'484'142
(74'998)
(139'590)
224'140
66'800
716.38
1'484'115
662.51
1'560'494
Exercisable as of 31 December
142'089
123'769
Of the outstanding 1’484’115 options and non-vested shares (31 December 2019: 1’560’494), 142’089 options are exercisable
immediately (31 December 2019: 123’769). All other options and non-vested shares are restricted until at least 26 October 2021.
The outstanding instruments are split by strike price and grant year as follows:
Numbers of instruments outstanding
Grant year
Options granted in 2010 and 1.1.2011
Options granted in 2011
Options granted in 2012
Options granted in 2013 and 8.1.2014
Options granted in 2014
Options granted in 2015
Options granted in 2015
Options granted in 2015
Options granted in 2016
Options granted in 2016
Options granted in 2017
Options granted in 2017
Options granted in 2018
Options granted in 2018
Options granted in 2019
Options granted in 2019
Options granted in 2020
Non-vested shares granted from 2015 to 2019
Total instruments outstanding
Strike price in CHF
31 December 2020
31 December 2019
209.00
195.00
236.00
270.00
324.00
340.00
450.00
446.00
682.00
593.00
805.00
810.00
975.00
800.00
965.00
807.60
1’045.00
-
-
9'468
24'927
35'291
5'358
1'418
59'500
6'127
325'000
10'110
291'000
35'078
191'500
18'489
196'150
20'890
111'225
142'584
14'813
11'918
33'947
53'329
8'344
1'418
165'000
6'127
345'000
10'110
300'200
35'078
198'500
18'489
196'150
20'890
-
141'181
1'484'115
1'560'494
Partners Group | 51
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
The estimated fair value of options granted, and the underlying fair value of services, is based on the Black-Scholes model,
whereas the fair value of the non-vested shares granted is based on the share price at the date of grant.
Fair value of options and shares granted in 2020, and related assumptions:
Date of grant
26.10.20
26.10.20
26.10.20
18.11.20
18.11.20
18.11.20
Non-vested
options1)
Non-vested
options
Non-vested
options2)
Vested
shares
Non-vested
shares
Non-vested
shares
Fair value per option/non-vested share at measure-
ment date (in CHF)
53.05
53.05
922.00
922.00
922.00
Share price (in CHF)
Exercise price (in CHF)
Vesting conditions
Expected volatility
Expected term of execution
Expected dividend ratio 4)
Risk-free interest rate (based on Swap rates)
836.60
836.60
922.00
922.00
922.00
1'045.00
1'045.00
5 years
5 years
6 years
at grant
3 years
5 years
24.70%
24.70%
5 years
5 years
6 years
3.99%
3.99%
(0.73%)
(0.73%)
Total options/shares granted
Total value granted in 2020
(in millions of CHF)
55'575
55'650
809
16'660
39'569
2.9
3.0
3.0
0.7
15.4
36.5
Gross amount recognized in profit or loss
(in millions of CHF)
Forfeitures during 2020 (in millions of CHF)
Net amount recognized in profit or loss
(in millions of CHF)
0.4
0.5
0.4
0.7
5.7
(0.0)
10.7
(0.0)
0.4
0.5
0.4
0.7
5.7
10.7
Total amount recognized in profit or loss
(in millions of CHF)
- recognized in personnel expenses related to the grant 2020
(in millions of CHF)
- recognized in third party services related to the grant 2020
(in millions of CHF)
- recognized in personnel expenses related to the grant 2019 1) (in millions of CHF)
18.4
17.4
0.6
0.4
1) Under the 23 September 2019 MIP, the Group granted equity incentives equaling the fair value of CHF 5.9m. The amount is allocated to the participants in two tranches, the first half in Sep-
tember 2019 and the second half in October 2020. As both parties have a common understanding of the terms and conditions and participants have begun rendering services in respect of both
tranches, the Group recognizes expenses for both tranches beginning in 2019.
2) Under the 26 October 2020 MIP, the Group granted equity incentives equaling the fair value of CHF 6.0m. The amount is allocated to the participants in two tranches, the first half in October
2020 and the second half in autumn 2021. As both parties have a common understanding of the terms and conditions and participants have begun rendering services in respect of both tranches,
the Group recognizes expenses for both tranches beginning in 2020.
3) Linear vesting model, with proportionate annual vesting.
4) Based on historical data.
The applied expected volatility is based on the average of the historic five-year volatility of the Company’s stock and the longest
available future implied volatility for the Company’s shares/options in the market.
52 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
4.3.2. Management Performance Plan
In 2017, the Group revised its dedicated performance fee-related compensation program and introduced the MPP for Executive
Committee members and non-independent Board members. Over the first five-year period of the plan, the 2020 MPP reinforces
an alignment of interests with shareholders as it is dependent on the share price development. The 2020 MPP restricts payouts
to a positive share price development relative to the share price at grant. Five years after the grant, the intrinsic value of the MPP
will be measured as an intermediate step. Thereby, the intrinsic value of the 2020 MPP cannot exceed 7.6x the grant fair value.
Over the period following the fifth year (year 5 to 14), the MPP payout commences. It can deviate from the intermediate intrinsic
value calculated in year five as it is dependent on the achievement of a performance fee target, which ultimately derives from
active value generation and the realization of investment opportunities in underlying client portfolios. Any payout will be in the
form of restricted shares, which have a two-year selling restriction, equal to the value of the respective payout (the share price
at the time of payout is the reference). In 2020, the MPP consumed CHF 5.1 million of performance fee related compensation
(2019: CHF 4.5 million). For further details regarding the MPP, please refer to the Compensation Report (p. 138).
Vesting parameters
The MPP grants vest linearly over a period of five years. The linear vesting is subject to a minimum five-year tenure in the
respective committee. Before that, it has a five-year cliff vesting attached. Any holder of unvested MPP rights leaving the Group
has the obligation to forfeit his or her unvested interest back to the Company.
Valuation
In accordance with the option-like characteristics of the MPP, the grant date fair value is calculated similarly to the valuation of a
combination of call options and put options (based on the Black-Scholes model).
Fair value of MPP granted in 2020, and related assumptions:
Date of grant
Share price (in CHF)
Exercise price/normalized index price (in CHF)
Vesting conditions
Expected volatility
Expected term of execution
Expected dividend ratio
Risk-free interest rate (based on Swap rates)
Total fair value granted in 2020 (in millions of CHF)
Total amount recognized in profit or loss (in millions of CHF)
Call options
Put options
18.11.20
18.11.20
922.00
922.00
922.00
1'422.16
5 years
5 years
22.54%
5 years
3.98%
(0.71%)
22.54%
5 years
3.98%
(0.71%)
8.8
2.6
Partners Group | 53
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
4.4. Entry shares
In 2020, the Group further granted 1’930 (2019: 3’943) shares totaling CHF 1.3 million (2019: CHF 2.7 million) to employees
of the Group that commenced employment with the Group during the year. These shares are subject to a vesting period of one
year. In addition, the shares are subject to a maximum five-year selling restriction, which is terminated if the employee resigns
from the Group before the end of the restriction period.
4.5. Employee benefits
In millions of Swiss francs
Defined benefit plan
Accrued variable compensation (cash bonus)
Management Carry Plan
Other employee benefit liabilities
Total net employee benefit liabilities
Current liabilities
Non-current liabilities
Balance as of 31 December
31 December 2020 31 December 2019
(2.4)
(161.5)
(142.6)
(14.5)
(321.0)
(107.4)
(213.6)
(321.0)
(2.4)
(157.5)
(196.0)
(14.4)
(370.3)
(161.7)
(208.6)
(370.3)
4.5.1. Performance fee related compensation
Each year, the Nomination & Compensation Committee (“NCC”) allocates up to 40% of recognized performance fees to the
Performance Fee Compensation Pool which is then distributed to an eligible group of employees.
The promise represents a constructive obligation towards the eligible group of employees. The pool is allocated to the individual
employees via the MCP (see (a) below) and the MPP (see note 4.3.2.) with the remainder, i.e. the difference between the
Performance Fee Compensation Pool and the MCP/MPP allocations, being allocated via the Performance Fee Bonus Pool (see (b)
below).
In 2020, performance fees recognized in the consolidated income statement amounted to CHF 266.4 million (2019: CHF 472.5
million), of which CHF 58.4 million (2019: CHF 124.9 million) were allocated via the MCP allocation (including social securities)
and CHF 43.1 million (2019: CHF 59.6 million) via the Performance Fee Bonus Pool allocation. Based on performance fees
recognized as of 31 December 2020, the Group expects a cash payout of CHF 56.9 million (2019: CHF 127.9 million) for these
schemes in the first half of 2021.
54 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
(a) Management Carry Plan allocation
A portion of the performance fees recognized from investments made during a relevant investment period is allocated to the
broader management teams. The allocation is based on the MCP that was introduced in 2012 and is discretionarily granted to
employees on an annual basis. The grants are only paid out to the eligible employees once the performance fees are collected by
the Group.
Performance fees depend on the performance attributable to investments made. The Group recognizes expenses related
to the MCP in personnel expenses when the payment of the related performance fees becomes sufficiently visible. This is
in the period in which performance fees are recognized in the consolidated income statement, which is generally before the
effective collection of such performance fees. Until the cash amount is paid to eligible employees, the corresponding liabilities
are recognized as employee benefit liabilities. The part of the liabilities that is not expected to be settled wholly before twelve
months after the end of the reporting period is presented as non-current liabilities.
(b) Performance Fee Bonus Pool allocation
The Performance Fee Bonus Pool, i.e. the difference between the Performance Fee Compensation Pool and the MCP/MPP
allocation, is distributed among the broader management teams based on their contribution to performance. The part of the
Performance Fee Bonus Pool that is not expected to be settled wholly before twelve months after the end of the annual
reporting period in which the employees render the related services is presented as non-current liabilities.
4.5.2. Defined benefit plan
The pension plan for Swiss employees (“the Pension Fund”) is a defined benefit plan. The Pension Fund provides benefits for
retirement, disability and surviving dependents that meet or exceed the minimum benefits required under the Federal Law
on Occupational Retirement, Survivors’ and Disability Insurance (“BVG”), including the legal coordination charge, which is also
insured. The monthly premium to fund the Pension Fund’s benefits is split equally between the employer and the employees.
Contributions, which vary by the age of the employees, range from 6-13% of the covered salary and are credited to the
employees’ individual retirement savings accounts. The Pension Fund is responsible for capital investments and pursues an
investment strategy with a prescribed investment policy. The Group assumes an average retirement age of 62 (female) and 63
(male), respectively. Upon retiring (including early and partial retirement), insured persons are entitled to a lifelong retirement
pension if employees do not choose to withdraw the entire balance, or portion thereof, of their individual retirement savings
accounts in the form of a capital payment.
The Pension Fund is administered by Gemini Sammelstiftung, Zurich/Switzerland, which is legally separate from the Group
and is governed by a foundation board. In addition, there is a pension fund commission comprised of two employee and two
employer representatives. The duties of the foundation board, as well as the pension fund commission, are laid out in the BVG
and the specific pension fund rules. They are required by law to act in the best interest of the participants and are responsible
for setting certain policies (e.g. investment, contribution and indexation policies) for the Pension Fund. At least four times a year,
the foundation board, as well as the pension fund commission, meet to analyze consequences and decide on adjustments in the
investment strategy.
Pursuant to the BVG, additional employer and employee contributions may be imposed whenever a significant funding deficit
arises in accordance with the BVG. In addition to investment risk, the Pension Fund is exposed to actuarial risk, longevity risk,
currency risk and interest rate risk.
In addition to the pension plan for Swiss employees, a defined benefit plan for Swiss management also provides retirement
benefits and risk insurance for death and disability for components of remuneration in excess of the maximum insurable amount
of salary under the plan described above.
Partners Group | 55
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Development of defined benefit asset/(obligation)
In millions of Swiss francs
2020
2019
Present value of benefit obligation as of 1 January
(79.2)
(68.8)
Included in profit or loss:
Current service cost (employer)
Interest expense on benefit obligation
Plan amendment
Included in other comprehensive income:
Actuarial gains/(losses) on benefit obligation arising from:
- change in financial assumptions
- experience gains/(losses)
Other:
Employee contributions
Benefit payments
Present value of benefit obligation as of 31 December
Fair value of plan assets as of 1 January
Included in profit or loss:
Interest income on plan assets
Administration cost
Included in other comprehensive income:
Actuarial gain/(loss) on plan assets
Other:
Employer contributions
Employee contributions
Benefit payments
Fair value of plan assets as of 31 December
Net defined benefit asset/(obligation) as of 31 December
(4.4)
(0.2)
1.0
(2.3)
(1.1)
(3.1)
1.2
(88.1)
(3.4)
(0.5)
-
(5.8)
(2.9)
(2.8)
5.0
(79.2)
76.8
68.4
0.2
(0.1)
3.8
3.1
3.1
(1.2)
85.7
(2.4)
0.5
(0.1)
7.4
2.8
2.8
(5.0)
76.8
(2.4)
The weighted average duration of the net defined benefit obligation is 17.1 years as of 31 December 2020 (2019: 16.9 years).
56 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Asset allocation as of 31 December
Cash
Public debt
Public equity
Private markets
Alternatives/other
Total
2020
2019
4.6%
11.8%
30.2%
51.6%
1.8%
13.2%
6.2%
25.4%
52.9%
2.3%
100.0%
100.0%
Principal actuarial assumptions
The calculation of the net defined benefit asset/(obligation) included the following principal actuarial assumptions:
Principal actuarial assumptions as of 31 December
2020
2019
Discount rate
Interest rate on retirement credits
Average future salary increases
Future pension increases
Mortality tables used
Sensitivity analysis
0.10%
1.00%
1.50%
0.00%
0.25%
1.00%
1.50%
0.00%
BVG 2015 (GT)
BVG 2015 (GT)
Reasonably possible changes as of the reporting date to one of the relevant actuarial assumptions, holding other assumptions
constant, would have affected the defined benefit obligation and current service cost by the amounts presented below:
In millions of Swiss francs
Decrease of discount rate (-0.5%)
Increase of discount rate (+0.5%)
Decrease of salary increase (-0.5%)
Increase of salary increase (+0.5%)
Shorter life expectancy (-1 year)
Longer life expectancy (+1 year)
Impact on defined
benefit obligation
Impact on current
service cost
(employer)
(8.5)
7.2
1.2
(1.3)
0.2
(0.2)
(0.8)
0.6
0.1
(0.2)
0.0
(0.0)
Although the analysis above does not take into account the full distribution of expected cash flows under the defined benefit
plan, it does provide an approximation of the sensitivity of the assumptions presented.
The expected employer contributions in 2021 are estimated to be CHF 3.2 million.
Partners Group | 57
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
5. Financial instruments including related income and expense, risks and
measurement
5.1. Finance income and expense
In millions of Swiss francs
Note
2020
2019
Interest income calculated using the effective interest rate method
Net gains on fair value through profit or loss instruments
Share of results of associates (Pearl)
Net exchange differences
Other finance income
Total finance income
Interest expense calculated using the effective interest rate method
Other finance expense
Net exchange differences
Total finance expense
5.5.
6.
2.8
51.7
0.7
10.3
0.0
65.5
(8.2)
(4.1)
-
(12.3)
3.5
58.2
2.8
-
0.1
64.6
(4.9)
(3.6)
(26.5)
(35.0)
Total net finance income and (expense)
53.2
29.6
5.2. Other operating income
In millions of Swiss francs
Compensation from short-term loans
Share of results of associates (LGT)
Other income
Total other operating income
Note
5.3.4.
6.
2020
2019
25.3
0.0
4.9
30.2
60.4
0.0
3.0
63.4
The decrease in compensation from short-term loans was driven by decreased treasury management and short-term financing
services due to reduced investment activity during the second and third quarter of 2020.
58 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
5.3. Financial instruments
5.3.1. Financial instruments by category
The Group’s financial assets can be classified into the respective categories as follows:
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Financial assets
Financial assets at amortized cost
Cash and cash equivalents
Trade receivables 1)
Short-term loans
Other receivables 1)
Accrued revenues 1)
Other financial assets
Financial assets at fair value through profit or loss
Mandatorily measured at FVTPL
Marketable securities
Financial investments
Assets held for sale
Derivative assets held for risk management 1)
Total financial assets
1) Presented in the line item trade and other receivables in the consolidated balance sheet.
5.4.1.
5.3.4.
5.4.1.
5.4.1.
5.3.5.
5.4.1.
5.3.2.
5.3.3.
5.4.1.
1'227.6
225.4
673.5
18.7
221.3
353.4
933.0
228.5
900.2
7.7
405.3
292.0
2'719.9
2'766.7
0.0
615.6
305.7
3.3
924.6
3'644.5
0.0
605.3
175.4
10.4
791.1
3'557.8
Partners Group | 59
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
The Group’s financial liabilities can be classified into the respective categories as follows:
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Financial liabilities
Financial liabilities at amortized cost
Trade payables 1)
Cash collateral for forward contracts 1)
Accrued revenue deductions
Other payables
Lease liabilities
Long-term debt
Other long-term liabilities
Financial liabilities at fair value through profit or loss
Mandatorily measured at FVTPL
Liabilities held for sale
Derivative liabilities held for risk management 1)
Other long-term liabilities
Total financial liabilities
1) Presented in the line item trade and other payables in the consolidated balance sheet.
7.
7.
7.
7.
8.
13.
5.4.3.
5.3.3.
7.
5.4.3.
53.1
1.8
104.3
29.4
66.9
798.9
38.7
55.9
5.2
63.6
28.3
67.6
798.6
45.7
1'093.1
1'064.9
254.6
114.3
1.6
0.3
256.5
1'349.6
1.5
0.8
116.6
1'181.5
5.3.2. Financial investments
The Group holds investments in various investment programs that it manages. These investments typically account for a stake of
one percent in an investment program. Within the investment programs, the Group typically performs investment management
activities for the benefit of external investors under a predetermined investment policy and receives a predetermined
management fee and, where applicable, a performance fee for its services which are presented as revenues from management
services in the consolidated income statement.
In millions of Swiss francs
2020
2019
Balance as of 1 January
Additions
Distributions/disposals
Change in fair value of investments held at period end
Exchange differences
Balance as of 31 December
60 | Partners Group
605.3
53.8
(65.7)
45.8
(23.6)
615.6
554.0
91.8
(86.8)
58.6
(12.3)
605.3
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
As of the relevant balance sheet date, the Group held investments in investment programs, split into the following operating
segments:
In millions of Swiss francs
31 December 2020 31 December 2019
Private equity
Private debt
Private real estate
Private infrastructure
Total financial investments
286.5
224.9
54.8
49.4
615.6
272.8
217.6
59.4
55.5
605.3
5.3.3. Assets and liabilities held for sale
The Group provides seed financing to certain early stage investment programs managed by the Group. The decision to provide
seed financing to an investment program is made by the responsible bodies defined in the Group’s Rules of the Organization
and of Operations (“ROO”). These investment programs typically call the seed financing to invest in assets that are comparable
to the Group’s investments in investment programs that it manages (see note 5.3.2.). Therefore, the underlying assets of these
investment programs are typically financial assets valued at their adjusted net asset values.
Assets and liabilities of four (2019: four) such investment programs are classified and presented as assets and liabilities held for
sale. The assets and liabilities held for sale as of 31 December 2020 are comprised of private equity and private debt related
assets and liabilities:
In millions of Swiss francs
31 December 2020 31 December 2019
Assets held for sale
Liabilities held for sale
Assets and liabilities held for sale, net
5.3.4. Short-term loans
305.7
(254.6)
51.1
175.4
(114.3)
61.1
Short-term loans of CHF 673.5 million (2019: CHF 900.2 million) typically relate to loans granted to various investment programs
managed by the Group and typically have an expected repayment date within the next twelve months. The Group considers
granting short-term loans as part of its maintenance of investment programs and, hence, as part of its operating activities. As of
31 December 2020, the number of outstanding short-term loans was 271 (31 December 2019: 278) and the average amount per
outstanding loan was CHF 2.5 million (2019: CHF 3.2 million). In 2020, the Group received an at arm’s length compensation of
CHF 25.3 million (2019: CHF 60.4 million) for these activities.
As of 31 December 2020, no significant short-term loans are past due or impaired (31 December 2019: none). There have been
no significant losses in the past and the loans are typically fully collateralized by the underlying investments and any unfunded
capital commitments.
Partners Group | 61
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
5.3.5. Other financial assets
The increase in other financial assets to CHF 353.4 million (2019: CHF 292.0 million) mainly resulted from recognized, but not
yet invoiced, performance fees which are not expected to be settled within twelve months (typically in closed-ended structures).
While the Group recognizes performance fees based on the mechanism described in note 19.7., the timing of invoicing depends
on pre-defined conditions with clients at the time when their initial contract is formed. These conditions must be fulfilled before
performance fees are invoiced. The expected timing of settlements is updated at the end of each reporting period. As of 31
December 2020, long-term accrued revenues increased by CHF 43.1 million as the Group expects the conditions to invoice to be
fulfilled at a later point in time in the current market environment due to COVID-19. This results in a later settlement and, hence,
a shift towards other financial assets (long-term).
In millions of Swiss francs
31 December 2020 31 December 2019
Long-term accrued revenues
Long-term loans
Other
Total other financial assets
5.3.6. Capital commitments
274.0
76.4
3.0
353.4
230.9
58.6
2.5
292.0
As of 31 December 2020, the Group had capital commitment contracts of CHF 747.8 million (2019: CHF 705.8 million), of which
CHF 289.7 million (2019: CHF 250.0 million) were not yet called by the relevant investment managers. Capital commitments are
called over time, typically between one to five years following the subscription of the commitment. Capital commitments are not
considered to be a financial liability as the commitments do not constitute an obligation to pay cash until the capital is called.
5.4. Financial risk management
The Group has exposure to the following risks arising from its holding of financial instruments:
• credit risk;
• market risk (including currency risk, interest rate risk and price risk); and
• liquidity risk.
This note presents information about the Group’s exposure to each of the above listed risks, the Group’s objectives, policies and
processes for measuring and managing these risks, and the Group’s management of capital. Further quantitative disclosures are
included throughout the consolidated financial statements.
The BoD has overall responsibility for the establishment and oversight of the Group’s risk management framework. The BoD has
established the Risk & Audit Committee (“RAC”), which is responsible for developing and monitoring the Group’s risk management
policies. The RAC reports regularly to the BoD on its activities.
The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk
limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and in the Group’s activities. The Group, through its training and management standards and
procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and
obligations.
The RAC oversees how management monitors compliance with the Group’s risk management policies and procedures and
reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The RAC is assisted in its
oversight role by the Chief Risk Officer as well as by Internal Audit. Internal Audit undertakes both regular and ad-hoc reviews of
risk management controls and procedures, and reports the results to the RAC.
62 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
5.4.1. Credit risk
The following sections present the Group’s exposure to credit risk and how it is managed by the Group. Credit risk is the risk
of financial loss to the Group if a customer or counterparty to financial instruments fails to meet its contractual obligations and
typically arises from the Group’s trade and other receivables, loans, and cash and cash equivalents. The carrying amount of
financial assets represents the maximum credit exposure.
(a) Trade and other receivables
In millions of Swiss francs
Marketable securities
Fees receivable
Other receivables
Accrued revenues
Derivative assets held for risk management
Total trade and other receivables - short term
Long-term accrued revenues
Total trade and other receivables
31 December 2020 31 December 2019
0.0
225.4
18.7
221.3
3.3
468.7
274.0
742.7
0.0
228.5
7.7
405.3
10.4
651.9
230.9
882.8
The decrease in trade and other receivables was mainly driven by payments of previously accrued revenues and an expected
later invoicing and settlement of not yet invoiced fees (see note 5.3.5). The timing of performance fee recognition in such
structures depends on several factors, including the pace of deployment, performance of investments and pace of realizations
(cash distributions). Performance fees are only recognized once it is highly probable that they will be realized. This typically occurs
subsequent to clients receiving distributions equivalent to their initial commitment and after hurdle rates have been met. For
further explanations see note 19.7.
The Group reassesses the credit risk for trade and other receivables on a regular basis by calculating the expected credit loss
for such receivables. The Group hereby applies the simplified approach with the provision matrix as permitted by IFRS 9. Under
this approach, the lifetime expected credit loss is calculated based on the subsidiaries’ historical default rates over the expected
life of the receivables, current conditions and adjustments for forward-looking estimates. The lifetime of such receivables is
typically less than a month. The Group has not experienced any significant defaults in prior years. As of the reporting date, no
material receivables were overdue (31 December 2019: none). The Group periodically also reviews its customer exposure and
concentration. As of 31 December 2020, there is no substantial concentration of credit risk (31 December 2019: none). The
forward-looking estimates of expected credit losses are primarily influenced by the characteristics of the Group’s customers. The
majority of such customers are investment programs that are managed by the Group on behalf of its clients. This gives the Group
insights into the financial situation of such customers. Further, trade and other receivables with such customers are collateralized
against unfunded client commitments. These commitments can be drawn upon to repay receivables and are jointly backed by
high-quality clients. In addition, underlying assets in the investment programs serve as an additional layer of security. Other
counterparties of the Group are typically regulated financial institutions or institutional investors with a high credit quality and, to
a lesser extent, portfolio companies. The Group considers the probability of default to be very remote. Based on its assessment
as of 31 December 2020, the Group has not identified any material expected credit losses (31 December 2019: none). The
COVID-19 pandemic did not change the Group’s assessment with regard to the credit risk related to trade and other receivables.
(b) Loans
The Group’s loans (see note 5.3.4.) are typically granted to various investment programs managed by the Group on behalf of
its clients. The loans are typically short-term in nature with an expected repayment date within twelve months. The Group
reassesses the credit risk of its loans (see note 5.3.4. and note 5.3.5.) on a regular basis by calculating the expected credit
loss for its loans. The Group hereby applies the general approach as required by IFRS 9. Under this approach, the 12-month
Partners Group | 63
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
expected credit loss is calculated based on the subsidiaries’ historical default rates, current conditions and adjustments for
forward-looking estimates as long as the credit risk has not increased significantly relative to the credit risk at the date of initial
recognition; otherwise, the Group switches to lifetime expected credit losses. The Group has not experienced any significant
defaults in recent years. As of the reporting date, no material loans were overdue (31 December 2019: none). The fact that the
short-term loans are typically granted to investment programs that are managed by the Group on behalf of its clients gives the
Group insights into the financial situation of such borrowers. In addition, the loans are collateralized against unfunded client
commitments, which can be drawn upon to repay related loans and which are jointly backed by high-quality clients. Underlying
assets in the investment programs serve as an additional layer of security. In order to manage the default risk, the granting of
loans is contingent on the adherence to certain loan-to-value ratios. The Group hereby ensures that the loan to an investment
program is classified according to its risk weight and measured against a risk budget. In addition, the Group has established
a system-based loan approval process to control the credit risk resulting from loans to investment programs. This process is
supported by a risk policy framework and pre-defined approval authorities. During the loan approval process, rigorous qualitative
and quantitative checks are applied to ensure the high quality of the Group’s loan portfolio. Based on its assessment as of 31
December 2020, the Group has not identified any material expected credit losses in relation to its loans (31 December 2019:
none). The COVID-19 pandemic did not change the Group’s assessment with regard to the credit risk related to loans.
(c) Cash and cash equivalents
Cash and cash equivalents predominantly include balances with banks that are cancelable on sight. For these bank balances,
typically, only independently rated parties with a minimum rating of “A-3” or equivalent are accepted (as per Standard & Poor’s
Short-Term Issue Credit Ratings definitions). The Group evaluates each counterparty with a proprietary risk scoring that
includes 20 observable parameters such as credit risk ratings, capital ratio, stock price and return on assets and determines the
expected credit loss of its bank balances. In addition, it assigns a maximum counterparty exposure which acts as a further layer of
protection. The Group reassesses the credit risk for cash and cash equivalents on a regular basis. Based on its assessment as of
31 December 2020, the Group has not identified any material expected credit losses (31 December 2019: none). The COVID-19
pandemic did not change the Group’s assessment with regard to balances with banks.
5.4.2. Market risk
Market risk is the risk that changes in market prices, such as foreign currency exchange rates, interest rates and equity prices,
will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimizing returns. The Group may buy and sell
derivatives in order to manage certain market risks. All such transactions are carried out within the guidelines defined in the Rules
of the Organization and of Operations (“ROO”) as issued by the BoD.
(a) Currency risk
The Group is exposed to transactional currency risk mainly on receivables, payables, cash and cash equivalents as well as loans
that are denominated in a currency other than the functional currency of the respective subsidiaries. The currency risk mainly
results from exposures in Euros (EUR), US dollars (USD), British pounds (GBP) and Singapore dollars (SGD). In general, the Group
economically hedges foreign exchange exposures related to third-party assets and liabilities. As a consequence, the Group’s net
balance sheet currency risk is limited mainly to its intercompany receivables and payables.
(b) Interest rate risk
The Group’s income and operating cash flows are substantially independent from changes in market interest rates. The Group
is mainly exposed to cash flow interest rate risk with respect to its cash and cash equivalents held at banks. Such cash flows
are dependent on changes in short-term market interest rates. Due to this short-term nature and limited sensitivity, the Group
currently does not actively manage its cash flow interest rate risk. At the reporting date, the interest rate profile of the Group’s
interest-bearing financial instruments was:
64 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Variable rate instruments
Financial assets
Financial liabilities
Fixed rate instruments
Financial assets
Financial liabilities
2020
2019
1'227.6
(1.8)
1'225.8
752.9
(865.8)
(112.9)
933.0
(5.2)
927.8
961.3
(866.3)
95.0
Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points in interest rates on the balances at the reporting date would have increased/(decreased) annual profit
or loss before tax by the amounts shown below. This analysis assumes that all other variables, particularly foreign currency rates,
remain constant.
In millions of Swiss francs
Profit or loss
50 bp increase
50 bp decrease
Variable rate instruments
2020
2019
6.1
(6.1)
4.6
(4.6)
Fair value sensitivity analysis for fixed rate instruments
The Group does not designate any fixed rate financial assets or liabilities as at fair value through profit or loss. Therefore, changes
in interest rates would not affect profit or loss.
(c) Market risk of investments in investment programs
The Group is exposed to market risks (other than interest rate and foreign currency risk) because of its investments in investment
programs which are classified at fair value through profit or loss.
The majority of the Group’s investments are entered into under investment management contracts whereby the Group invests
alongside third-party investors in the Group’s investment programs invested in underlying private equity, private debt, private real
estate or private infrastructure investments. These investments qualify in accordance with IAS 32 either as equity investments
or debt investments. Typically, instruments qualifying as debt investments contain embedded derivatives for which fair value is
derived from the adjusted net asset value of the underlying investment programs which in turn is based upon the value of the
underlying assets held within each of the investment programs.
In assessing the market risk associated with the Group’s investments, a volatility ratio was applied to each of its investments
classified as marketable securities, financial investments or assets and liabilities held for sale. The Group used long-term data to
determine the volatilities for each asset class.
Partners Group | 65
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
2020
Volatility
2019
Volatility
Carrying amount/volatility
Marketable securities (equity securities held for trading)
Financial investments:
Private equity
Private debt
Private real estate
Private infrastructure
Assets and liabilities held for sale
Total
0.0
286.5
224.9
54.8
49.4
51.1
666.7
12%
18%
8%
15%
12%
12%
0.0
9%
272.8
217.6
59.4
55.5
61.1
666.4
18%
7%
11%
9%
12%
Based on the applied long-term volatility for the individual asset classes, the Group is exposed to the following equity price risk:
In millions of Swiss francs
Profit or loss
2020
2019
Marketable securities (equity securities held for trading)
0.0
0.0
Financial investments:
Private equity
Private debt
Private real estate
Private infrastructure
Assets and liabilities held for sale
Total
5.4.3. Liquidity risk
51.6
18.0
8.2
5.9
6.3
90.0
49.1
15.2
6.5
5.0
7.3
83.1
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group’s approach
to managing liquidity risk is to ensure that it has sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group’s long-term
contracts with clients mitigate its exposure to liquidity risk.
In order to assess the development of its liquidity, the Group uses a cash flow forecasting tool which is integrated into the
budgeting and reporting process and assists in monitoring cash flow requirements and optimizing its cash return on investments.
Cash flow forecasting is performed at group level. Typically, the Group ensures that it has sufficient cash on demand to meet
expected operational expenses as well as the servicing of financial obligations, excluding the potential impact of extreme
circumstances that cannot reasonably be predicted. Surplus cash held by the Group’s subsidiaries, over and above the balance
required for working capital management, is transferred to the Company to the extent permitted by regulatory and legal
provisions. In addition, the BoD and the Executive Committee (“ExCo”) formally monitor the liquidity available on a semi-annual
basis. The available liquidity targeted should allow the Group to sustain its operations with minimal disruptions in a financial crisis
scenario and/or a depressed economic environment. The Group holds its cash in current accounts or invests it in time deposits,
money market deposits and marketable securities deemed to have appropriate maturities or sufficient liquidity to provide head-
room as determined by the aforementioned forecasts. In addition, the Group maintains the following lines of credit:
66 | Partners Group
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
• The Group has two unsecured credit facilities of CHF 460 million (31 December 2019: CHF 460 million) and CHF 375 million
(31 December 2019: CHF 375 million) with a syndicate of Swiss banks and a syndicate of Swiss and international banks,
respectively. These credit facilities can be used for general corporate purposes with a primary focus on working capital
financing. Interest rates are variable and determined by the relevant short-term interest rate plus a margin. The facilities are
subject to maximum debt covenants which have been met throughout the current and prior year.
• An additional unsecured credit facility of CHF 30 million can be used for current account overdrafts or for fixed advances with
a maturity of up to six months (31 December 2019: CHF 30 million). Interest is set at a fixed interest rate. The facility is subject
to a maximum debt covenant which was met throughout the current and prior year.
The following table discloses the financial liabilities with their contractual maturities:
In millions of Swiss francs
31 December 2020
Note
Carrying
amount
Total
6 months
or less
6 - 12
months
13 - 24
months
25 - 60
months
More than
60 months
7.
7.
7.
7.
7.
8.
7.
7.
7.
7.
7.
8.
Trade payables 1)
Derivative liabilities held for risk management 1)
Accrued revenue deductions 1)
Cash collateral for forward contracts 1)
Other payables 1)
Lease liabilities
Long-term debt
Other long-term liabilities 2)
Unfunded commitments
53.1
53.1
53.1
1.6
1.6
1.6
104.3
104.3
104.3
1.8
29.4
66.9
1.8
1.8
29.4
29.4
72.9
13.
798.9
816.3
6.1
2.5
5.8
10.9
23.2
26.9
2.5
307.1
504.2
39.0
39.0
30.4
8.6
289.7
289.7
289.7
1'384.7
1'408.1
384.2
110.1
43.8
338.9
531.1
1) Presented in the line item trade and other payables in the consolidated balance sheet.
2) This line item includes long-term accrued liabilities related to the investment programs and other third parties.
In millions of Swiss francs
31 December 2019
Note
Carrying
amount
Total
6 months
or less
6 - 12
months
13 - 24
months
25 - 60
months
More than
60 months
Trade payables 1)
Derivative liabilities held for risk management 1)
Accrued revenue deductions 1)
Cash collateral for forward contracts 1)
Other payables 1)
Lease liabilities
Long-term debt
Other long-term liabilities 2)
Unfunded commitments
55.9
55.9
55.9
1.5
1.5
1.5
63.6
63.6
63.6
5.2
28.3
67.6
5.2
28.3
75.8
5.2
28.3
7.0
2.5
6.7
10.1
19.8
32.2
2.5
307.5
506.2
13.
798.6
818.7
46.5
46.5
35.9
10.6
250.0
250.0
250.0
1'317.2
1'345.5
350.4
70.3
48.5
337.9
538.4
1) Presented in the line item trade and other payables in the consolidated balance sheet.
2) This line item includes long-term accrued liabilities related to the investment programs and other third parties.
Partners Group | 67
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
5.5. Fair value measurement
Overview
Fair value is the price that would be received by selling an asset or paid to transfer a liability in an orderly transaction between
knowledgeable market participants at the measurement date in the principal, or in its absence, the most advantageous market to
which the Group has access to at that date. The fair value of a liability reflects its non-performance risk. The Group measures fair
values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs - other than quoted prices included within level 1 - that are observable for assets or liabilities, either directly (that is, as
prices) or indirectly (that is, derived from prices) (level 2).
• Inputs for assets or liabilities that are not based on observable market data (that is, unobservable inputs) (level 3).
The following table shows the fair value hierarchy of the Group’s financial assets and liabilities that are measured at fair value:
In millions of Swiss francs
Level 1
Level 2
Level 3
Total
31 December 2020
Marketable securities 1)
Derivative assets held for risk management 1)
Assets held for sale
Financial investments
Financial assets
Derivative liabilities held for risk management 2)
Liabilities held for sale
Other long-term liabilities
Financial liabilities
1) Presented in the line item trade and other receivables in the consolidated balance sheet.
2) Presented in the line item trade and other payables in the consolidated balance sheet.
In millions of Swiss francs
0.0
0.0
3.3
3.3
1.6
-
1.6
305.7
615.6
921.3
254.6
0.3
254.9
0.0
3.3
305.7
615.6
924.6
1.6
254.6
0.3
256.5
Level 1
Level 2
Level 3
Total
31 December 2019
Marketable securities 1)
Derivative assets held for risk management 1)
Assets held for sale
Financial investments
Financial assets
0.0
10.4
0.0
10.4
Derivative liabilities held for risk management 2)
1.5
Liabilities held for sale
Other long-term liabilities
Financial liabilities
1) Presented in the line item trade and other receivables in the consolidated balance sheet.
2) Presented in the line item trade and other payables in the consolidated balance sheet.
68 | Partners Group
-
1.5
0.0
10.4
175.4
605.3
791.1
1.5
114.3
0.8
116.6
175.4
605.3
780.7
114.3
0.8
115.1
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
The carrying amount for cash and cash equivalents, trade and other receivables, short-term loans, and trade and other payables
are expected to approximate the fair values given the short-term nature of these financial instruments. The carrying amounts for
other financial assets and the remaining other long-term liabilities are expected to approximate fair values since time values do not
materially differ (level 3 input).
The following tables show the reconciliation of all level 3 financial instruments in 2020 and 2019:
In millions of Swiss francs
Balance as of 1 January
Purchases
Sales
Change in fair value 1)
Exchange differences
Balance as of 31 December
In millions of Swiss francs
Balance as of 1 January
Purchases
Sales
Change in fair value 1)
Exchange differences
Balance as of 31 December
Financial assets
Financial liabilities
2020
780.7
219.8
(83.3)
51.7
(47.6)
921.3
115.1
160.8
(1.0)
(0.0)
(20.0)
254.9
2019
Financial assets
Financial liabilities
645.0
200.4
(105.9)
58.2
(17.0)
780.7
54.9
65.3
(1.7)
(0.0)
(3.4)
115.1
1) Presented in the line items finance income and finance expense in the consolidated income statement.
There were no transfers between levels in 2020 and 2019.
Financial investments and assets and liabilities held for sale
Financial investments (see note 5.3.2.) and assets and liabilities held for sale (see note 5.3.3.), disclosed as level 3 financial
instruments, consist of investments in investment programs that the Group manages. For these investments, the determination
of fair value requires subjective assessment with varying degrees of judgment depending on liquidity, concentration, pricing
assumptions, the current economic and competitive environment and the risks affecting the specific financial instrument. In such
circumstances, valuation is determined based on management’s judgment about the assumptions that market participants would
use in pricing the asset or liability (including assumptions about risk).
The Group applies control processes to ensure that the fair value of the financial instruments reported in the consolidated
financial statements, including those derived from pricing models, are in accordance with IFRS 13 and determined on a reasonable
basis. Such controls include reviews of profit and loss statements at regular intervals, risk monitoring and reviews of price
verification procedures and models, which are used to estimate the fair value of financial instruments by senior management and
personnel with relevant expertise who are independent of the trading and investment functions.
Control processes also include the review and approval of new investments made on behalf of investors. The Group has several
investment committees. The investment selections and recommendations are made by the Specialized Investment Committees
and the Global Investment Committee, supported by the Global Portfolio Committee. These committees decide whether or not
new investments will be advised to the manager of the investment program.
Partners Group | 69
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Valuation techniques used to determine fair value of underlying investments
Financial investments held by the Group consist of underlying assets and liabilities within investment programs. In turn, these
investment programs are invested in direct and indirect equity and debt investments. The following valuation techniques are
applied by the Group to determine fair values of equity and debt investments in line with IFRS 13:
• market approach;
• income approach; and
• adjusted net asset value method.
Securities traded on one or more securities exchanges are typically valued based on their respective market prices as of
measurement date adjusted for potential restrictions on the transfer or sale of such investment.
Financial investments are valued using either of the described valuation techniques below.
Market approach
The market approach comprises valuation techniques such as market comparable companies and multiple techniques. A market
comparable approach uses quoted market prices or dealer quotes for similar instruments to determine the fair value of a
financial asset. A multiple approach can be used in the valuation of less liquid securities. Comparable companies and multiple
techniques assume that the valuation of unquoted direct investments can be assessed by comparing performance measure
multiples of similar quoted assets for which observable market prices are readily available. Comparable public companies based
on industry, size, development stage, strategy, etc. have to be determined. Subsequently, the most appropriate performance
measure for determining the valuation of the relevant direct investment is selected (these include but are not limited to EBITDA,
price/earnings ratios for earnings or price/book ratios for book values). Trading multiples for each comparable company
identified are calculated by dividing the value of the comparable company by the defined performance measure. The relevant
trading multiples might be subject to adjustment for general qualitative differences such as liquidity, growth rate or quality of
customer base between the valued direct investment and the comparable company set. The indicated fair value of the direct
investment is determined by applying the relevant adjusted trading multiple to the identified performance measure of the valued
company.
Income approach
Within the income approach, the Group primarily uses the discounted cash flow method and the capitalization model. Expected
cash flow amounts are discounted to a present value at a rate of expected return that represents the time value of money and
reflects the relative risks of the direct investment. Direct debt investments can be valued by using the instrument’s expected
cash flows while direct equity investments can be valued by using the “cash flow to equity” method, or indirectly, by deriving the
enterprise value using the “cash flow to entity” method and subsequently subtracting the direct investment’s net debt in order to
determine the equity value of the relevant direct investment. Expected future cash flows based upon agreed investment terms
or expected growth rates have to be determined. In addition, and based on the current market environment, an expected return
of the respective direct investment is projected. The future cash flows are discounted to the present date in order to determine
the current fair value.
Adjusted net asset value method
As a combination of the market and the income approach, the adjusted net asset value method is used. Indirect investments
of investment programs managed by the Group are typically valued at the indirect investments’ net asset values last reported
by the indirect investments’ general partners. When the reporting date of such net asset values does not coincide with the
investment programs’ reporting date, the net asset values are adjusted as a result of cash flows to/from an indirect investment
between the date of the most recently available net asset valuation and the end of the reporting period of the investment
program, and further information gathered by the investment advisor during its on-going investment monitoring process. This
monitoring process includes, but is not limited to, binding bid offers, other market participant information on developments of
portfolio companies held by indirect investments or syndicated transactions, which involve such companies.
70 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Unobservable input factors
Where available, valuation techniques use market-observable assumptions and inputs. If such information is not available, inputs
may be derived by reference to similar assets and active markets, from recent prices for comparable transactions or from other
observable market data. When measuring fair value, the Group selects the non-market-observable inputs to be used in its
valuation techniques based on a combination of historical experience, derivation of input levels based upon similar investment
programs with observable price levels and knowledge of current market conditions and valuation approaches.
Within its valuation techniques the Group typically uses different unobservable input factors. Significant unobservable inputs
include: EBITDA multiples (based on budgeted/forward-looking EBITDA or historical EBITDA of the issuer and EBITDA multiples
of comparable listed companies for an equivalent period), discount rates, capitalization rates, price/book as well as price/earnings
ratios and enterprise value/sales multiples. The Group also considers the original transaction prices, recent transactions in the
same or similar instruments and completed third-party transactions in comparable instruments and adjusts the model as deemed
necessary. Further inputs consist of external valuation appraisals and broker quotes. A significant portion of the investment
programs’ direct equity investments are measured using EBITDA multiples. EBITDA multiples used show wide ranges.
The value of level 3 direct equity investments valued by using unobservable input factors are directly affected by a change in
that factor. The change in valuation of level 3 direct equity investments may vary between different direct investments of the
same category as a result of individual levels of debt financing within such an investment.
Sensitivity of fair values
From a Group perspective, the fair value of financial investments and assets and liabilities held for sale is typically dependent
on the adjusted net asset value of the investment programs. A reasonably possible change in the adjusted net asset value would
have the following effects on the fair value of these investments held by the Group with changes to be recognized in profit or
loss:
In millions of Swiss francs
31 December 2020 31 December 2019
Adjusted net asset value (1% increase)
6.7
6.7
Although the Group believes that its estimates of fair values are appropriate, the use of different methodologies and different
unobservable inputs, especially in the underlying investments of investment programs, could lead to different measurements
of fair value of its financial investments, assets and liabilities held for sale. Due to the broad range and number of unobservable
input factors used in the valuation of the investment programs’ direct investments, particularly concerning the EBITDA multiple, a
sensitivity analysis on these underlying unobservable input factors does not result in meaningful outcomes.
Partners Group | 71
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
6. Investments in associates
The Group accounted for investments in associates as of 31 December 2020 as summarized below:
In millions of Swiss francs
Principal
activity
Fair
value
Carrying
value
Ownership
Pearl Holding Limited, Guernsey ("Pearl")
LGT Private Equity Advisers, Liechtenstein ("LGT")
Total investments in associates
Private equity
investments
Asset
management
24.5
0.5
In millions of Swiss francs
Balance as of 1 January
Redemption of shares (Pearl)
Share of results (Pearl)
Share of results (LGT)
Exchange differences
Balance as of 31 December
24.5
0.5
25.0
28%
40%
2020
2019
42.1
(17.5)
0.7
0.0
(0.3)
25.0
55.0
(13.7)
2.8
0.0
(2.0)
42.1
Summary of financial information of the investments in associates - 100%:
In millions of Swiss francs
31 December 2020 31 December 2019 31 December 2020 31 December 2019
Pearl
LGT
Total assets
Total liabilities
Equity
Revenues
Profit/(loss) for the period
89.0
2.2
86.8
7.3
2.7
149.4
1.6
147.8
15.3
10.1
1.5
0.3
1.2
1.4
0.0
1.8
0.6
1.2
2.1
0.0
The financial information is based on unaudited financial information as of the balance sheet date as received from LGT and Pearl.
Pearl Holding Limited
Pearl’s investments are managed on a discretionary basis by Pearl Management Limited, Guernsey, which is advised by Partners
Group AG, Switzerland (“PGAG”), in accordance with an investment advisory agreement. PGAG’s duties are to provide asset
allocation, commercial due diligence reviews, investment and disinvestment proposals and performance monitoring. For the
described services, the Group is entitled to receive administration, management and performance fees.
Share of results of associates
The share of results of associates resulting from Pearl is disclosed in profit or loss as net finance income and expense (see note
5.1.), while the share of results of associates resulting from LGT is disclosed as other operating income (see note 5.2.). The Group
assesses LGT’s results as comparable to management services and as a consequence discloses the results as operating income.
Pearl’s results are mainly driven by distributions and changes in fair value of the underlying investments, comparable to changes
in fair value of financial investments (see note 5.3.2.), which are presented as net finance income and expense in the consolidated
income statement (see note 5.1.).
72 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
7. Trade and other payables
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Trade payables
Goods and services received not yet invoiced
Derivative liabilities held for risk management
Accrued revenue deductions
Cash collateral for forward contracts
Lease liabilities
Other payables
Total trade and other payables
8. Lease liabilities
53.1
28.2
1.6
104.3
1.8
10.3
29.4
228.7
55.9
12.3
1.5
63.6
5.2
12.4
28.3
179.2
8.
In millions of Swiss francs
2020
2019
Lease liabilities as of 1 January
Additions
Removals
Accreted interest
Lease payments
Exchange differences
Lease liabilities as of 31 December
Current liabilities
Non-current liabilities
Lease liabilities as of 31 December
67.6
15.9
(1.1)
1.4
(12.1)
(4.8)
66.9
10.3
56.6
66.9
43.8
36.4
(0.7)
1.2
(12.1)
(1.0)
67.6
12.4
55.2
67.6
Partners Group | 73
ANNUAL REPORT 2020 ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
9. Income tax
9.1. Income tax expense
9.1.1. Recognized in profit or loss
In millions of Swiss francs
Note
2020
2019
Current tax expense:
Current year
Under/(over) provided in prior years
Total current tax expense
Deferred tax expense/(income):
Deferred tax expense/(income), net
relating to the origination and reversal of temporary differences
9.2.
Total deferred tax expense/(income)
136.4
(1.8)
134.6
(10.8)
(10.8)
144.5
(0.9)
143.6
(6.3)
(6.3)
Total income tax expense
123.8
137.3
9.1.2. Weighted average expected tax rate reconciliation
In millions of Swiss francs
Profit before tax
2020
2019
928.6
1'037.2
Weighted average expected Group tax rate 1)
13.91%
13.83%
Expected tax expense
Non-tax-deductible expense and non-taxable income
Applicable tax rates differing from expected rate
Under/(over) provided in prior years
Other impacts
Total income tax expense
129.2
(8.9)
(1.5)
(1.8)
6.8
123.8
143.4
(3.0)
(1.8)
(0.9)
(0.4)
137.3
1) The Group calculated a weighted average tax rate, taking into account statutory tax rates of the Company and its subsidiaries in their specific jurisdictions, and their contribution to total profit
before tax.
74 | Partners Group
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
9.2. Deferred tax assets and liabilities
Development of deferred tax assets and liabilities
Deferred tax assets and liabilities are recognized in respect of temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following table shows the
development of deferred tax assets and deferred tax liabilities.
In millions of Swiss francs
31 December 2020 31 December 2019
Deferred tax assets
Deferred tax liabilities
Deferred tax assets / (liabilities), net
64.0
(3.4)
60.6
43.8
(4.0)
39.8
In millions of Swiss francs
2020
2019
Balance as of 1 January, net
Changes recognized in profit or loss
Changes recognized in equity
Changes recognized in other comprehensive income
Exchange differences
Balance of deferred tax assets / (liabilities) as of 31 December, net
39.8
10.8
14.7
(0.0)
(4.7)
60.6
21.1
6.3
12.8
0.3
(0.7)
39.8
Analysis of deferred tax assets and liabilities
The following table shows the gross amounts of deferred tax assets and liabilities by category. Movements in the significant asset
and liability classes giving rise to temporary differences are analyzed below:
In millions of Swiss francs
Financial
investments
Other non-
current
assets
Defined
benefit plan
Share-based
payment
expenses
Accrued
variable com-
pensation &
MCP
Balance as of 1 January, net
Changes recognized in profit or loss
Changes recognized in equity
Changes recognized in other comprehensive
income
Exchange differences
Balance as of 31 December, net
(0.1)
1.8
-
-
(0.1)
1.6
(3.1)
(1.8)
-
-
0.4
(4.5)
0.3
0.1
-
(0.0)
-
0.4
23.1
3.2
14.7
-
(3.4)
37.6
18.0
7.6
-
-
(1.6)
24.0
2020
Others
Total
1.6
(0.1)
-
-
0.0
1.5
39.8
10.8
14.7
(0.0)
(4.7)
60.6
Partners Group | 75
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Balance as of 1 January, net
Changes recognized in profit or loss
Changes recognized in equity
Changes recognized in other comprehensive
income
Exchange differences
Balance as of 31 December, net
Financial investments
Financial
investments
Other non-
current
assets
Defined
benefit plan
Share-based
payment
expenses
Accrued
variable com-
pensation &
MCP
(0.3)
0.2
-
-
(2.5)
(0.7)
-
-
0.0
0.1
(0.1)
(3.1)
0.1
(0.1)
-
0.3
-
0.3
12.1
(1.5)
12.8
-
(0.3)
23.1
11.3
7.2
-
-
(0.5)
18.0
2019
Others
Total
0.4
1.2
-
-
0.0
1.6
21.1
6.3
12.8
0.3
(0.7)
39.8
Taxable temporary differences arise between the tax bases of financial investments and their carrying amounts (fair values with
regard to the application of IFRS 9) in the consolidated financial statements.
Other non-current assets
Taxable temporary differences arise between the tax bases of property and equipment as well as intangible assets and their
carrying amounts in the consolidated financial statements.
Defined benefit plan
The Group recognizes deferred tax assets or liabilities by applying IAS 19 (for further information see note 4.5.2.).
Share-based payment expenses
Taxable temporary differences arise (in accordance with IAS 12.68A) from the recognition of share-based payment expenses (see
notes 4.2. and 4.3.) in the applicable accounting period in accordance with IFRS 2, but the tax deduction based on these expenses
materializes in a different period; e.g. only when the options and shares are exercised or vested. Typically, the measurement of
the tax deduction is based on the share price at the date of exercise or vesting.
Accrued variable compensation & MCP
Taxable temporary differences arise between the tax bases of remuneration-related accruals and provisions and their carrying
amounts in the consolidated financial statements.
Leases
With the adoption of IFRS 16, it is required that a lessee recognizes a right-of-use asset and a lease liability. In many jurisdictions,
lease payments are tax deductible on a cash basis. As a result, the tax basis of the right-of-use asset and lease liability are zero.
The result is a taxable temporary difference in relation to the right-of-use asset and a deductible temporary difference in relation
to the lease liability, which typically can be netted on entity level.
76 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
10. Other operating expenses
In millions of Swiss francs
Third party services
Property related and maintenance costs
Administrative expenses
Travel and representation expenses
Pandemic-related costs
Total other operating expenses
2020
2019
(18.1)
(4.8)
(28.1)
(7.5)
(10.0)
(68.5)
(24.5)
(5.3)
(26.5)
(22.2)
-
(78.5)
Pandemic-related costs represent a CHF 10.0 million commitment for COVID-19-related expenses, which includes the Group’s
contribution to a newly created Portfolio Employee Support Fund and the contribution by the Executive Committee, by members
of the Board of Directors and by many Partners Group employees, who, in turn, forfeited a part of their compensation in 2020.
11. Property, equipment and right-of-use assets
In millions of Swiss francs
Land
Buildings
Right-of-
use assets
Construc-
tion in
progress
Office
furniture
Interior
fittings
Equipment
and
IT fittings
2020
Total
Cost
Balance as of 1 January
Additions
Transfers
Disposals
Exchange differences
Balance as of 31 December
Accumulated depreciation
Balance as of 1 January
Depreciation
Accumulated depreciation on disposals
Exchange differences
Balance as of 31 December
Carrying amount
As of 1 January
As of 31 December
63.7
-
-
-
(0.6)
63.1
-
-
-
-
-
65.0
3.0
26.2
-
(6.9)
87.3
2.3
1.9
-
(0.2)
4.0
77.7
16.3
-
-
(5.0)
89.0
12.7
13.6
-
(0.9)
25.4
29.4
11.6
(34.6)
-
(0.9)
5.5
-
-
-
-
-
10.0
22.2
16.8
284.8
0.5
2.8
(1.1)
(0.7)
11.5
5.1
1.7
(1.1)
(0.3)
5.4
2.3
5.6
(0.6)
(0.8)
28.7
17.1
1.9
(0.6)
(0.2)
18.2
1.5
35.2
-
-
(4.7)
(0.8)
12.8
10.4
3.3
(4.7)
(0.3)
8.7
(6.4)
(15.7)
297.9
47.6
22.4
(6.4)
(1.9)
61.7
63.7
63.1
62.7
83.3
65.0
63.6
29.4
5.5
4.9
6.1
5.1
10.5
6.4
4.1
237.2
236.2
Impairment losses incurred in 2020
nil
Partners Group | 77
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Cost
Land
Buildings
Right-of-use
assets
Construction
in progress
Office
furniture
Interior
fittings
Equipment
and
IT fittings
2019
Total
Balance as of 1 January
7.1
5.9
-
44.7
6.1
22.2
9.5
95.5
Recognition of right-of-use asset on initial
application of IFRS 16
Adjusted balance as of 1 January
Additions
Transfers
Disposals
Exchange differences
Balance as of 31 December
Accumulated depreciation
Balance as of 1 January
Depreciation
Transfers
Accumulated depreciation on disposals
Exchange differences
Balance as of 31 December
Carrying amount
As of 1 January
As of 31 December
-
7.1
56.7
-
-
(0.1)
63.7
-
-
-
-
-
-
-
5.9
7.0
53.6
-
(1.5)
65.0
1.4
0.9
-
-
-
2.3
42.7
42.7
36.3
-
44.7
42.3
-
(57.2)
(0.1)
(1.2)
77.7
-
13.0
-
-
(0.3)
12.7
-
(0.4)
29.4
-
-
-
-
-
-
-
6.1
4.0
-
-
(0.1)
10.0
3.8
1.3
-
-
-
-
22.2
0.6
0.1
(0.7)
-
22.2
15.7
2.1
-
(0.7)
-
-
42.7
9.5
3.1
4.4
-
(0.2)
16.8
7.0
2.5
0.9
-
-
138.2
150.0
0.9
(0.8)
(3.5)
284.8
27.9
19.8
0.9
(0.7)
(0.3)
47.6
5.1
17.1
10.4
7.1
63.7
4.5
62.7
-
65.0
44.7
29.4
2.3
4.9
6.5
5.1
2.5
6.4
67.6
237.2
Impairment losses incurred in 2019
nil
Construction in progress reflects the costs for the Group’s Americas headquarters in Broomfield, Colorado.
78 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
12. Intangible assets
In millions of Swiss francs
Cost
Balance as of 1 January
Additions
Disposals
Exchange differences
Balance as of 31 December
Accumulated amortization and impairment losses
Balance as of 1 January
Amortization
Accumulated amortization on disposals
Exchange differences
Balance as of 31 December
Carrying amount
As of 1 January
As of 31 December
Impairment losses incurred in 2020
Acquired
client contracts
Goodwill
Software
Contract
costs
Other
intangible
assets
2020
Total
4.8
32.4
-
-
(0.3)
4.5
4.8
-
-
(0.3)
4.5
-
-
(1.6)
30.8
-
-
-
-
-
23.4
6.4
(8.1)
-
21.7
16.9
4.7
(8.1)
-
13.5
52.9
5.6
(0.8)
(2.2)
55.5
25.2
10.4
(0.8)
(1.3)
33.5
-
-
32.4
30.8
6.5
8.2
27.7
22.0
9.1
122.6
-
-
-
12.0
(8.9)
(4.1)
9.1
121.6
6.9
0.9
-
-
7.8
2.2
1.3
53.8
16.0
(8.9)
(1.6)
59.3
68.8
62.3
nil
Partners Group | 79
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Cost
Balance as of 1 January
Additions
Disposals
Exchange differences
Balance as of 31 December
Accumulated amortization and impairment losses
Balance as of 1 January
Amortization
Accumulated amortization on disposals
Exchange differences
Balance as of 31 December
Carrying amount
As of 1 January
As of 31 December
Impairment losses incurred in 2019
Impairment testing for CGU’s containing goodwill
Acquired client
contracts
Goodwill
Software
Contract
costs
Other
intangible
assets
2019
Total
108.5
21.9
(6.9)
(0.9)
7.2
1.9
-
-
9.1
122.6
6.1
0.8
-
-
46.7
14.0
(6.9)
-
6.9
53.8
4.7
32.6
-
-
0.1
4.8
4.7
-
-
0.1
4.8
-
-
(0.2)
32.4
-
-
-
-
-
18.2
5.2
-
-
23.4
12.8
4.1
-
-
16.9
45.8
14.8
(6.9)
(0.8)
52.9
23.1
9.1
(6.9)
(0.1)
25.2
-
-
32.6
32.4
5.4
6.5
22.7
27.7
1.1
2.2
61.8
68.8
nil
The carrying amount of goodwill as of 31 December 2020 (CHF 30.8 million; 2019: CHF 32.4 million) has been allocated to the
following cash generating units (“CGU”), which represent the lowest level within the Group at which the goodwill is monitored for
internal management purposes.
• Goodwill of CHF 15.7 million (2019: CHF 17.2 million) relating to the acquisition of Partners Group Real Estate LLC (“PG RE”)
in 2007, which was merged into Partners Group (USA) Inc. as of 1 January 2012, has been allocated to the private real estate
segment.
• Goodwill of CHF 15.1 million (2019: CHF 15.2 million) relating to the acquisition of Partners Group (Italy) SGR S.p.A. in 2013
(“PG Italy”), which was merged into Partners Group (UK) Limited in 2016 and into Partners Group (Luxembourg) S.A. in 2019,
has been allocated to the private equity segment.
80 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
The recoverable amounts of the private real estate and the private equity segments were based on their value in use. The value
in use was determined by discounting the future cash flows from the continuing use of the CGUs and was based on the following
key assumptions:
• Cash flows were projected based on the actual operating results and a five-year estimate (2021–2025). Cash flows for the
time thereafter were taken into account by calculating a terminal value based on the discount factor applied by the Group. No
growth rate was applied for the terminal value.
• Revenues were projected based on the development of the existing business, taking into account the generation of additional
business in the years 2021 to 2025.
• Growth of other operating expenses was applied at a constant rate of 10% p.a. (2019: 10% p.a.).
• Growth of personnel expenses was applied at a constant rate of 5% p.a. (2019: 5% p.a.) plus additional personnel expenses for
additional business revenues (i.e. 35% of additional revenues are expensed as additional personnel and general expenses (2019:
35%)).
• Pre-tax discount rates of 6.8% (PG RE; 2019: 7.4%) and 6.4% (PG Italy; 2019: 6.3%), respectively, were applied in determining
the recoverable amounts of the CGU’s. The Group applied market interest rates of 0.9% (PG RE; 2019: 1.8%) and 0.6% (PG
Italy; 2019: 1.0%), adjusted by market risk premiums and industry weighted average beta factors.
• The impairment test resulted in a value in use higher than the carrying amount.
Management believes that any reasonably possible change in any of the key assumptions would not cause the carrying value of
goodwill of the CGUs to exceed the recoverable amounts.
13. Long-term debt
In millions of Swiss francs
Balance as of 1 January
Issuance of long-term debts
Accreted interest
Balance as of 31 December
2020
2019
798.6
-
0.3
798.9
299.4
499.1
0.1
798.6
The Group issued the following corporate bonds denominated in Swiss francs and listed on the SIX Swiss Exchange:
ISIN
CH0361532895
CH0419041287
Date of
issue
Face value in
millions of CHF
Coupon
in %
Year of
maturity
Issue price
in %
Redemption
price
in %
7 June 2017
21 June 2019
300.0
500.0
0.150%
0.400%
2024
2027
100.052%
100.000%
100.098%
100.000%
The fair values of the corporate bonds as of 31 December 2020 were CHF 302.3 million and CHF 512.0 million, respectively
(2019: CHF 301.8 million and CHF 515.0 million, respectively), and were determined by the quoted market price (level 1 input).
Partners Group | 81
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
14. Share capital, capital management and reserves
In effective number of shares
2020
2019
Issued as of 1 January
Issued during the period
Issued as of 31 December - fully paid in
26'700'000
26'700'000
-
-
26'700'000
26'700'000
The issued share capital of the Company comprises 26’700’000 registered shares (2019: 26’700’000) at CHF 0.01 nominal value
each. The shareholders are entitled to receive dividends, as declared from time to time, and are entitled to one vote per share at
shareholder meetings of the Company.
Legal reserves
Legal reserves comprise the reserves which are to be maintained due to the legal requirements as indicated in the Swiss Code of
Obligations. The Group’s legal reserves amount to CHF 218’100 as of 31 December 2020 (31 December 2019: CHF 218’100),
consisting of CHF 217’100 (31 December 2019: CHF 217’100) for legal reserves from capital contributions and of CHF 1’000
(31 December 2019: CHF 1’000) for other legal reserves.
Treasury shares
Treasury shares are recognized at cost and presented separately within equity. At the balance sheet date, the Group held 347’655
(2019: 278’645) of the Company’s issued shares. The Group holds treasury shares to provide for existing share and option
programs.
Contractual obligation to purchase treasury shares
In 2018, the Company entered into an agreement to conditionally purchase some of its registered shares. As of 31 December
2018, the total notional amount of CHF 110.0 million was directly recognized in equity. The amount was reversed during 2019
(see note 16.).
Translation reserves
Translation reserves comprise all foreign exchange differences arising from the translation of the financial statements of foreign
operations included in the consolidated financial statements.
Dividends
The Company pays an annual dividend following the approval of the appropriation of available earnings by the owners of the
Company at the annual general meeting, typically held in May. The Company paid a dividend of CHF 25.50 per share on 19 May
2020 (21 May 2019: CHF 22). As the Company’s treasury shares are not eligible for a dividend payment, the dividend distribution
of CHF 680.9 million approved in May 2020 (May 2019: CHF 587.4 million) was not fully distributed, i.e. a total of CHF 668.5
million was paid out (May 2019: 585.4 million). After the balance sheet date, the BoD proposes a dividend distribution of CHF
734.3 million (CHF 27.50 per share) for 2020.
Capital management
The BoD’s objective is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain
the future development of the business. The BoD also monitors the level of dividend distributions to shareholders.
The Group may purchase its own shares on the market within the limits defined by the BoD. The timing of these purchases
depends on the market price and restrictions imposed by applicable laws. Primarily, these purchases are used in conjunction with
the Group’s share and option programs. Furthermore, the Company has authorized conditional capital of CHF 40’050. The BoD
is authorized to increase the share capital by up to 15% at its discretion as a result of exercised options and granting of shares.
There were no changes in the Group’s approach to capital management during the year. The Company and some of its
subsidiaries are subject to minimum capital requirements prescribed by external parties (e.g. banks) and are regulated by relevant
authorities in the corresponding countries. The capital requirements may depend on fixed costs, expenditures, key financial
ratios, net assets and assets under management. All these capital requirements have been met during 2020 and 2019.
82 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Outstanding shares
The computation of the weighted average number of ordinary shares outstanding during the period is based on the following
figures:
In effective number of shares
Balance as of 1 January
Purchase of treasury shares
Disposal of treasury shares
Balance as of 31 December
Weighted average number of shares outstanding
during the period (360 days)
Shareholders above 5% (in % of shares issued)
Dr. Marcel Erni
Alfred Gantner
Urs Wietlisbach
In effective number of shares
Balance as of 1 January
Purchase of treasury shares
Disposal of treasury shares
Balance as of 31 December
Weighted average number of shares outstanding
during the period (360 days)
Shareholders above 5% (in % of shares issued)
Dr. Marcel Erni
Alfred Gantner
Urs Wietlisbach
BlackRock Inc.
Shares
issued
Treasury
shares
2020
Shares
outstanding
26'700'000
278'645
26'421'355
290'828
(290'828)
(221'818)
221'818
26'700'000
347'655
26'352'345
Shares held
1'338'959
1'338'959
1'338'959
Shares
issued
Treasury
shares
26'274'704
in %
5.01%
5.01%
5.01%
2019
Shares
outstanding
26'700'000
207'805
26'492'195
618'861
(618'861)
(548'021)
548'021
26'700'000
278'645
26'421'355
26'520'620
in %
10.01%
10.01%
10.01%
6.14%
Shares held
2'673'659
2'673'659
2'673'659
1'639'380
In 2015, the Group’s founding partners, Dr. Marcel Erni, Alfred Gantner and Urs Wietlisbach, each entered into a derivative
transaction with a third party concerning up to 4.1% of the Group’s total share capital over the next five years. In 2017, each of
the founding partners increased the percentage up to 5%. The transaction involved collars that were due to expire on 17 June
2021, subject to early termination, including optional early termination by the three founding partners. The Group was not part
of this transaction and therefore the transaction was not recognized on the consolidated balance sheet. On 10 September 2020,
each founding partner entered into a separate agreement with Morgan Stanley & Co. International PLC as counterparty to early
terminate the collar transactions of the derivative transaction plan and the extension. As a result of the foregoing, the founding
Partners Group | 83
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
partners no longer have any interest in or option rights with respect to the shares subject to the collar transaction of the
derivative transaction plan nor the extension.
15. Earnings per share
In Swiss francs
Average fair value of one ordinary share during the period
Weighted average exercise price for shares under option
during the period
2020
2019
849.52
756.50
748.50
685.19
Note
Earnings
per share
Profit for
the period
2020
Number of
shares
Profit for the period (in millions of Swiss francs)
804.8
Weighted average number of ordinary shares outstanding
14.
26'274'704
Basic earnings per share (in Swiss francs)
30.63
Weighted average number of shares under option during the
period
Number of shares that would have been issued at fair value 1)
Diluted earnings per share (in Swiss francs)
30.36
1) Calculated on the basis of each individual share option grant.
Note
Earnings
per share
Profit for
the period
1'384'243
(1'153'713)
26'505'234
2019
Number of
shares
Profit for the period (in millions of Swiss francs)
899.9
Weighted average number of ordinary shares outstanding
14.
26'520'620
Basic earnings per share (in Swiss francs)
33.93
Weighted average number of shares under option during the
period
Number of shares that would have been issued at fair value 1)
Diluted earnings per share (in Swiss francs)
33.66
1) Calculated on the basis of each individual share option grant.
1'310'821
(1'092'859)
26'738'582
As of 31 December 2020, the Group had 1’484’115 options and non-vested shares outstanding (2019: 1’560’494) (see note 4.3.).
The treasury shares necessary to cover the granted non-vested shares have already been placed in separate escrow accounts in
the name of the employees. Thus, the number of treasury shares (see note 14.) is already net of non-vested shares outstanding.
84 | Partners Group
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
16. Related party transactions
The Group has related party relationships with its investments in associates (see note 6.), pension funds (see note 4.5.2.), as well
as with its management and significant shareholders and their related parties.
In 2020, associates purchased services from the Group in the amount of CHF 2.9 million (2019: CHF 5.6 million).
As of 31 December 2020, loans to employees of the Group amounted to CHF 8.2 million (2019: CHF 9.2 million) and were
included in other financial assets. The loans to related parties of the Group bear interest at market-related interest rates.
The Group purchased treasury shares at arm’s length from its shareholders employed by the Group as follows:
In effective number of shares
2020
2019
Purchase of treasury shares from shareholders employed by the Group
16‘380
6'641
Average purchase price per share (in Swiss francs)
873.34
739.02
In 2018, the Company entered into an agreement with an executive committee member to purchase some of its registered shares
at arm’s length. The maximum transaction value amounted to CHF 110 million and was recorded in equity. As the arithmetic
average of the daily VWAPs (volume weighted average prices) of PGHN shares traded over the SIX Swiss Exchange during
the period starting on 21 January 2019 and ending on 15 February 2019 was below the agreed threshold of CHF 700, the
transaction did not take place and was reversed through equity.
The Group is managed by the Board of Directors (“BoD”) and the Executive Committee (“ExCo”) of the Company. The total
personnel expenses for the BoD as well as the ExCo of the Company are included in personnel expenses (see note 4.1.) and for
non-executive board members in third-party services (see note 10.) and amount to:
In millions of Swiss francs
2020
2019
BoD:
Short-term employment benefits
Other compensation
Share-based payment expenses
Other long-term benefits (MCP)
Post-employment benefits
Total BoD
ExCo:
Short-term employment benefits
Other compensation
Share-based payment expenses
Other long-term benefits (MCP)
Post-employment benefits
Total ExCo incl. former members
Total BoD and ExCo
1.9
0.2
4.3
2.5
0.2
9.1
7.4
0.5
14.2
3.5
0.8
26.4
35.5
2.3
0.3
4.5
7.5
0.1
14.7
7.0
0.5
12.5
9.7
0.6
30.3
45.0
Partners Group | 85
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
At the relevant balance sheet date, the BoD and the ExCo were holding the following number of options, non-vested shares and
shares:
Options and non-vested shares:
In effective number of options and non-vested shares
31 December 2020 31 December 2019
Board members (vested options)
Members of the ExCo (options and non-vested shares)
Total
Share ownership (unrestricted):
In effective number of shares
Board members
Members of the ExCo
Total
29'469
129'780
159'249
66'355
171'135
237'490
31 December 2020 31 December 2019
4'368'934
8'372'538
125'041
110'607
4'493'975
8'483'145
For further information in accordance with Art. 663c of the Swiss Code of Obligations, refer to note 15. of the entity accounts of
Partners Group Holding AG.
The Group aligns the interests of clients with those of the Group’s employees by offering all employees preferential terms to
invest alongside the Group’s investment programs via a global employee commitment plan. In line with standard industry practice,
investments in closed-ended programs charge no management fees and no performance fees and investments in evergreen
programs come at a reduced management fee and performance fee. In total, commitments by the Group’s BoD and employees
amounted to approximately CHF 2.0 billion as of 31 December 2020 (31 December 2019: CHF 1.5 billion), of which CHF 1.6
billion (2019: CHF 1.2 billion) are committed to closed-ended programs and CHF 0.4 billion (2019: CHF 0.3 billion) to evergreen
programs.
17. Subsidiaries
17.1. Changes in scope of consolidation
Incorporation of new Group entities
Name
Incorporation date
Principal activity
Partners Group Orbit S.à.r.l., Luxembourg
28 October 2020
Serve as manager to investment programs
Planeta Industries S.A Compartment PGGLF Investment
Holdings, Luxembourg
6 April 2020
Support the financing activities for the Group
Partners Group Property AG, Switzerland
4 June 2019
Purchase, sale, construction, reconstruction,
maintenance and management of real estate
Partners Group Management VI (USD) S.à.r.l., Luxembourg
14 January 2019
Serve as manager to investment programs
Partners Group Management V (GBP) S.à.r.l., Luxembourg
14 January 2019
Serve as manager to investment programs
Partners Group Management IV (EUR) S.à.r.l., Luxembourg
14 January 2019
Serve as manager to investment programs
Partners Group US Management III LLC, Delaware (USA)
7 January 2019
Serve as manager to investment programs
86 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
17.2. Involvement with structured entities
Structured entities are entities that have been designed so that voting or similar rights are not the dominant factor in deciding
who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed
by means of contractual arrangements. Such entities often have restricted activities and narrow and well-defined objectives.
Consolidated structured entities
The Group provides seed financing to certain early stage investment programs that the Group manages. The decision to provide
seed financing to an investment program is made by responsible bodies as defined in the Group’s ROOs. For further details see
note 5.3.3.
Unconsolidated structured entities
The fair value of financial investments, as presented in note 5.3.2., represents the Group’s participation in unconsolidated
investment programs.
17.3. Subsidiaries
Details of the Group’s operating subsidiaries as of the reporting date are set out below:
Place of incorporation and operation
Registered office
Country of
incorporation
Share Capital in
thousands
Interest %
Interest %
Name of the subsidiary
31 December 2020
31 December 2020
31 December 2019
Partners Group AG
Baar-Zug
Switzerland
Partners Group Advisors (DIFC) Limited
Partners Group Japan Kabushiki Kaisha
DIFC
Tokyo
UAE
Japan
CHF 200
USD 300
JPY 10'000
Partners Group Private Markets (Australia)
Pty Ltd
Sydney
Australia
AUD 200
Partners Group Prime Services Solutions
(Philippines), Inc.
Taguig City,
Metro Manila
Philippines
PHP 13'734
Partners Group (Brazil) Investimentos Ltda.
São Paulo
Partners Group (Canada) Inc.
Nova Scotia
Brazil
Canada
Partners Group (EU) GmbH 1)
Munich
Germany
BRL 795
CAD 0
EUR 32
Partners Group (Guernsey) Limited
St Peter Port
Guernsey
GBP 31'500
Partners Group (India) Private Limited
Mumbai
India
INR 29'615
Partners Group (Luxembourg) S.A.
Luxembourg
Luxembourg
EUR 1'350
Partners Group (Shanghai) Co., Ltd.
Shanghai
China
CNY 12'363
Partners Group (Singapore) Pte Limited
Singapore
Singapore
SGD 1'250
Partners Group (UK) Limited
Partners Group (USA) Inc.
London
New York
UK
USA
GBP 569
USD 75
1) Effective from 11 February 2020, the legal name changed from Partners Group (Deutschland) GmbH
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Partners Group | 87
ANNUAL REPORT 2020 At the end of the reporting period, the Group had other subsidiaries that typically perform management services and/or typically
hold financial investments (see note 5.3.2.). The principal activities and their place of operation are summarized as follows:
Principal activity
31 December 2020
31 December 2019
Place of incorpora-
tion and operation
Number of subsidiaries
Financing/treasury
Holding of land and property
General partner to investment programs
General partner to investment programs
General partner to investment programs
General partner to investment programs
Manager to investment vehicles
Holding of land and property
Investment services
Manager to investment vehicles
Manager to investment programs
Financing/treasury
Client access management
Financing/treasury
Management services to investment programs 1)
Switzerland
Switzerland
Guernsey
Scotland
Germany
Cayman Islands
USA
USA
USA
UK
Luxembourg
Luxembourg
Guernsey
Guernsey
Guernsey
1
1
18
3
1
4
4
1
1
1
7
1
1
6
2
1
1
18
3
1
4
4
1
1
1
6
-
1
6
3
1) Reduction caused due to merger of two entities that provide management services to investment programs in Guernsey.
18. Subsequent events
No events took place between 31 December 2020 and 15 March 2021 that would require material adjustments to the amounts
recognized in these consolidated financial statements.
88 | Partners Group
Notes to the consolidated financial statements for the years ended 31 December 2020 and 2019ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19. Summary of significant accounting policies
19.1. Basis of preparation
The consolidated financial statements are presented in Swiss francs, rounded to the nearest one hundred thousand. The figures
referred to in text passages are actual figures either rounded to the nearest Swiss franc or presented in millions of Swiss francs
unless otherwise stated. The statements are prepared on a historical cost basis, except for certain assets and liabilities which are
stated at fair value, such as derivative financial instruments, assets and liabilities held for sale and financial instruments at fair
value through profit or loss.
The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, as well as income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making judgments concerning carrying values of assets
and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognized
in the period in which the estimate is revised if the revision affects only that period, or, in the period of the revisions and future
periods if the revision affects both current and future periods.
Judgments made by management in the application of IFRS that have a significant effect on the consolidated financial statements
and estimates with a significant risk of material adjustment in the next year are described in note 2.
The Risk & Audit Committee (“RAC”) performed an assessment of the risks to which the Group is exposed to. The risk assessment
covers, in particular, strategic and business risks, operational risks, financial risks (see note 5.4.) as well as reputational risks. For
its assessment, the RAC has taken into consideration the internal control system designed to monitor and reduce the risks of the
Group.
19.2. Changes in accounting policies
The accounting policies adopted for the year ended 31 December 2020 are consistent with those of the previous financial year,
except where new or revised standards were adopted, as indicated below.
19.2.1. Standards, amendments and interpretations effective for the first time
The accounting policies applied for the period ending 31 December 2020 are consistent with those of the previous financial
year. A number of new standards became effective on 1 January 2020, but they do not have a material effect on the Group’s
consolidated financial statements.
Amendments and interpretations
The following amendments and interpretations have been applied for the first time but have no significant impact on the Group’s
financial statements:
• Amendments to References to Conceptual Framework in IFRS Standards
• Definition of a Business (Amendment to IFRS 3)
• Definition of Material (Amendments to IAS 1 and IAS 8)
• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
• Extension to the Temporary Exemption from Applying IFRS 9 (Amendments to IFRS 4)
• COVID-19-Related Rent Concessions (Amendments to IFRS 16)
Partners Group | 89
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19.2.2. Standards, amendments and interpretations to existing standards that are not yet effective and might be relevant
to the Group, but have not been early adopted
The following new and revised standards, amendments and interpretations have been issued by the date the consolidated
financial statements were authorized for issue, but are not yet effective and are not adopted early in these consolidated financial
statements. Their impacts on the consolidated financial statements of the Group have not yet been systematically analyzed. The
expected impacts as disclosed in the table below reflect a first assessment by the Group’s management.
Standard / Interpretation
New standards or interpretations
IFRS 17, “Insurance Contracts”
Revisions and amendments of standards and interpretations
Interest Rate Benchmark Reform Phase 2 (Amendments
to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16)
Onerous Contracts - Cost of Fulfilling a Contract
(Amendments to IAS 37
Annual Improvements to IFRS Standards 2018-2020
Property, Plant and Equipment: Proceeds
before Intended Use (Amendments to IAS 16)
References to the Conceptual Framework
(Amendments to IFRS 3)
Classification of Liabilities as Current or
Non-current (Amendments to IAS 1)
Amendments to IFRS 17
Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture (Amendments to
IFRS 10 and IAS 28)
* No significant impact is expected on the consolidated financial statements of the Group.
*
*
*
*
*
*
*
*
*
Effective date
Planned adoption
by the Group
1 January 2023
Reporting year 2023
1 January 2021
Reporting year 2021
1 January 2022
Reporting year 2022
1 January 2022
Reporting year 2022
1 January 2022
Reporting year 2022
1 January 2022
Reporting year 2022
1 January 2023
Reporting year 2023
1 January 2023
Reporting year 2023
Available for optional adoption /
effective date deferred indefinitely
90 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19.3. Basis of consolidation
(a) Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured
entities) controlled by the Company (its “subsidiaries”). The Company controls an investee (entity) if and only if the Company has
all of the following:
• power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
• exposure, or rights, to variable returns from its involvement with the investee; and
• ability to use its power over the investee to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one
or more of the three elements of control listed above.
When the Company holds less than a majority of the voting rights of an investee, it has power over the investee when the
voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company
considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are
sufficient to give it power, including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the
relevant activities at the time when decisions need to be made, including voting patterns at previous shareholders meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses
control over the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included
in the consolidated statement of comprehensive income from the date the Company gains control until the date when the
Company ceases to control the subsidiary.
Whenever necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line
with the Group’s accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full upon consolidation.
When the Group loses control over a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary. When assets of the subsidiary
are carried at revalued amounts or fair values and the related cumulative gains or losses have been recognized in other
comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and
accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or
loss or transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under IFRS 9 “Financial Instruments” or, when applicable, the cost on initial recognition of an investment in an associate or a joint
venture.
(b) Associates
An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control over those policies.
The Group accounts for its interest in associates using the equity method.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the
associate.
Partners Group | 91
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in
the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred.
Based on the Group’s assessment of each individual associate, the share of results of associates is disclosed as operating income
if comparable to revenues from management services. If the share of results is mainly driven by distributions and changes in
fair value of the underlying investments, comparable to changes in fair value of financial investments, the share of results is
presented as finance income and expense in the consolidated income statement.
19.4. Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating
segments’ gross segment results are reviewed regularly by the Group’s BoD to assess their performance and to make decisions
about resources to be allocated to the segments for which discrete financial information is available.
19.5. Foreign currency translation
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in Swiss francs.
(b) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign currency exchange rates at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are translated at each balance sheet date to the functional currency at
the foreign currency exchange rate of that date. Foreign exchange differences arising on translation of such foreign denominated
monetary asset and liabilities are recognized in profit or loss. Non-monetary assets and liabilities that are measured in terms of
historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets
and liabilities denominated in foreign currencies that are stated at fair value are translated to the functional currency at the
applicable foreign currency exchange rate of the date the fair value is determined.
(c) Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from consolidation, are
translated to Swiss francs at foreign currency exchange rates applicable at the balance sheet date. The revenues and expenses as
well as cash flows of foreign operations are translated to Swiss francs at the average rate of the period.
Resulting foreign currency translation differences are recognized in other comprehensive income, and presented in translation
reserves in equity. When the disposal or partial disposal of a foreign operation results in losing control or significant influence
over an entity (i.e. the foreign operation) the cumulative amount in translation reserves (related to the specific foreign operation)
is reclassified to profit or loss as part of the gain or loss on disposal.
92 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
(d) Applied foreign currency exchange rates
The Group applied the following currency exchange rates against the Swiss franc:
Year
2020
Year
2019
Currency
Balance sheet rate
Average rate
EUR
USD
GBP
SGD
1.0812
0.8838
1.2076
0.6686
1.0702
0.9388
1.2042
0.6805
Currency
Balance sheet rate
Average rate
EUR
USD
GBP
SGD
1.0872
0.9684
1.2827
0.7202
1.1124
0.9937
1.2692
0.7286
19.6. Financial instruments
Recognition
Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and
financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument.
Financial assets
Classification
Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for
managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period
following the change in the business model.
The Group classifies its financial assets in the following measurement categories:
• those to be measured subsequently at fair value through profit or loss; and
• those to be measured at amortized cost.
The classification depends on the Group’s business model for managing the financial assets and the contractual terms of the cash
flows.
For assets measured at fair value, gains and losses will be recorded in profit or loss. Investments in debt instruments will be
measured at amortized cost if the objective of the business model is to hold and to collect contractual cash flows and contractual
cash flows represent solely payments of principal and interest.
Partners Group | 93
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair value
through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of
financial assets carried at fair value through profit or loss are expensed in profit or loss.
Subsequent measurements of debt instruments depend on the Group’s business model for managing the asset and the cash flow
characteristics of the asset. There are two measurement categories into which the Group classifies its debt instruments:
• Amortized cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments
of principal and interest are measured at amortized cost. A gain or loss on a debt investment that is subsequently measured
at amortized cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or
impaired. Interest income from these financial assets is included in finance income using the effective interest rate method.
• Fair value through profit or loss: Assets that do not meet the criteria for amortized cost are measured at fair value through
profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss and is not
part of a hedging relationship is recognized on a net basis in profit or loss in the period in which it arises.
Financial liabilities
Financial liabilities are classified as measured at amortized cost or fair value through profit or loss.
• A financial liability is classified as at fair value through profit or loss if it is a derivative or it is designated as such on initial
recognition. Financial liabilities at fair value through profit or loss are measured at fair value and net gains and losses, including
any interest expense, are recognized in profit or loss.
• Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit
or loss.
19.7. Revenue recognition
Revenue comprises the fair value for the rendering of services, net of value-added tax and rebates and after eliminating sales
within the Group. No revenue is recognized if there are significant uncertainties regarding the recovery of the consideration due.
The Group is active in different businesses (see note 3.). Within the different businesses, the Group earns income for its various
activities, which are further explained and outlined below:
Management fees and other revenues
The Group earns investment management fees for discretionary investment programs, typically based on long-term contracts.
The fees are often based on the investment exposure of investors in the investment structures and are often payable on a
quarterly basis in advance. The performance obligation of the Group in respect of these fees is to manage the investment
structures on an ongoing basis. Ongoing investment management fees including all non-performance related fees are recognized
over time, based on the specific contracts.
In the process of structuring new products, the Group typically receives a fee for its services in connection with establishing
investment programs and related legal and structuring work. These organizational fees are always one-off fees, which are
typically received when a new investor commits into the structure. The structuring of the relevant investment programs
represents a separate performance obligation of the Group, and therefore revenue is recognized at the point in time when the
investor commits. Occasionally, the Group also receives transaction fee income relating to private market transactions. These
transaction fees are typically one-time occurring. The performance obligation of the Group is satisfied by the execution of the
private market transaction, and therefore revenue is recognized at the point in time when the execution of the transaction is
completed.
94 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
Performance fees
Typically, performance fees are recognized so that they do not exceed the portion of performance fees from realized investments
and so that there is a sufficiently large cushion for any potential negative development on the remaining portfolio, therefore
resulting in a very low probability that these fees are subject to a reversal in a potential claw-back situation.
Accordingly, the recognition of performance fees of investment programs with a claw-back is assessed based on a three-step
approach once a pre-defined return hurdle has been exceeded: (1) the total proceeds from realized investments are determined
and the corresponding costs of such realized as well as of fully written-off investments are deducted (“Net Proceeds”), (2) the
NAV of unrealized investments is determined. The respective NAV will be written down (in a so-called “Write-Down Test”) to
the extent that the probability of a future claw-back risk becomes minimal. Then, the corresponding costs of such unrealized
investments are deducted, resulting in a “Write-Down NAV”. This Write-Down NAV is added to the Net Proceeds. In the
final third step (3), performance fees to be recognized are calculated by multiplying the lower of (1) and (2) by the applicable
performance fee rate, if the value is positive.
On a quarterly basis, the Write-Down Test is applied to all private markets investment programs with a claw-back. The
discount applied in the Write-Down Test may vary from investment program to investment program and considers specific risk
characteristics, including macroeconomic, (geo-) political and investment program-specific risk factors. The discount applied in
the Write-Down Test is regularly assessed by the Group and reviewed by the Board of Directors. As of 31 December 2020, the
applied discount was 50% (31 December 2019: 50%).
The Group updates its performance fee recognition on a quarterly basis to faithfully represent the circumstances present at
that point in time. When the probability of no reversal of previously recognized performance fees is no longer considered highly
probable, the Group recognizes the necessary reversals.
Revenue deductions
Revenue deductions include the Group’s payments to third parties, such as rebates. Third-party payments may be one-off or
also recurring, depending on individual agreements. Rebates to clients are typically for fees charged which were earned when
investing through a pooling vehicle, in order to avoid the double charging of fees.
19.8. Other operating income
Other operating income comprises income resulting from the ordinary course of business but that is not revenue from
management services, net. Other operating income includes operating income on short-term loans, true-up compensation on
management and organizational fees.
19.9. Leases
Definition of a lease
The Group assesses whether a contract is either a lease or contains a lease based on the new definition of a lease. A contract
is either a lease or contains a lease if the contract conveys a right to control the use of an identified asset for a period of time in
exchange for a consideration.
As a lessee
The Group recognizes a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially
measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value of outstanding lease payments at the commencement date, discounted
by using an incremental borrowing rate. The lease liability is subsequently increased by the interest cost on the lease liability
and is decreased by lease payments made. It is remeasured when there is a change in future lease payments arising from a
change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or,
as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a
termination option is reasonably certain not to be exercised. Any remeasurement is generally adjusted against the right-of-use
asset.
Partners Group | 95
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
The Group, as a lessee, identified leases mainly relating to rental contracts for its offices (including parking).
As a lessor
The sub-lease contracts are classified as operating leases under IFRS 16.
19.10. Third-party services
Third-party services comprise BoD compensation (non-executive) as well as legal, consulting and other fee expenses to third
parties.
19.11. Finance income and expense
Net finance income and expense comprises bank interest income and expense, dividend income, gains and losses on revaluations
of financial instruments and foreign exchange gains/losses.
Dividend income is recognized in profit or loss on the date the entity’s right to receive payments is established, which in the case
of quoted securities is typically the ex-dividend date.
19.12. Income tax expense
Income tax expense for the period comprises current and deferred tax expense. Income tax expense is recognized in profit or loss
except to the extent that it relates to items recognized directly in equity.
Current income tax relates to the expected taxes payable on the taxable income for the period, using tax rates enacted or
substantially enacted at the balance sheet date, and any adjustments to taxes payable in respect of previous periods.
Deferred income tax is recognized, using the balance sheet liability method, on temporary differences between the tax basis
of assets and liabilities and their carrying amounts included in the consolidated financial statements. The following temporary
differences are not considered in accounting for deferred taxes: the initial recognition of goodwill, the initial recognition of assets
or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent
that their reversal is not probable in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that
have been enacted or substantially enacted as of the balance sheet date and are expected to apply when the related deferred
income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized to the extent that it is probable that future taxable profit will be available against
which the temporary differences can be utilized.
19.13. Cash and cash equivalents
Cash and cash equivalents include cash on hand and call deposits held with banks and are measured at amortized cost. Bank
overdrafts are shown in current liabilities of the consolidated balance sheet.
19.14. Trade and other receivables
Trade and other receivables are measured at amortized cost, less impairment losses.
96 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19.15. Assets and liabilities held for sale
The Group may seed invest capital into investment programs that the Group typically manages with the objective of providing
initial scale and facilitating marketing of the investment programs to third-party investors. For these assets and liabilities held for
sale, the Group is actively seeking to reduce its share in seed financed investment programs by recycling capital back into cash or
by diluting.
Those investment programs deemed to be controlled under IFRS 10 are classified as held for sale and are presented in the
separate balance sheet line items assets held for sale and liabilities held for sale. Such assets and liabilities held for sale are
measured at the lower of their carrying amount and fair value less costs to sell.
Investments that are subsequently disposed of or diluted, such that the Group is no longer deemed to have control under IFRS
10, will subsequently be re-classified to investments at fair value through profit or loss and presented as financial investments in
the consolidated balance sheet.
19.16. Property and equipment
Property and equipment is stated at cost less accumulated depreciation and impairment losses. Costs include expenses that are
directly attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it
is probable that future economic benefits associated with the item will flow to the Group and the costs of the item can be
measured reliably. All other repairs and maintenance costs are charged to profit or loss in the financial period in which they are
incurred.
Depreciation of property and equipment is calculated using the straight-line method to allocate the cost of each asset, minus its
residual value, over its estimated useful life, as follows:
• Buildings
• Interior fittings
30–50 years
5–10 years
• Office furniture
5 years
• Equipment and IT fittings
3–5 years
Major renovations are depreciated over the remaining estimated useful life of the related asset or to the date of the next major
renovation, whichever is sooner. Land is not depreciated.
The carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount (see note 19.19.).
Gains and losses on disposals of property and equipment are determined by comparing proceeds with the carrying amount and
are included in profit or loss.
Partners Group | 97
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19.17. Intangible assets
(a) Client contracts
Client contracts, which the Group acquired and which are recognized as intangible assets, have definite useful lives. Such
intangible assets are carried at cost less accumulated amortization and impairment losses.
(b) Goodwill
Goodwill arises upon the acquisition of subsidiaries and is included in intangible assets.
The Group measures goodwill at the acquisition date as the total of:
• the fair value of the total consideration transferred; plus
• the recognized amount of any non-controlling interest in the acquiree; plus - if the business combination is achieved in stages -
the fair value of the existing equity interest in the acquiree; less
• the net recognized amount (typically fair value) of the identifiable assets acquired and liabilities (including contingent liabilities)
assumed.
When the excess is negative, a gain on a bargain purchase is recognized immediately in net finance income and expense in the
consolidated income statement.
Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is not
amortized but tested annually for impairment.
(c) Software
Acquired software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software.
Software recognized as an asset is carried at cost less accumulated amortization and impairment losses.
(d) Contract costs
The Group may make payments in order to secure investment management revenue contracts. These amounts paid are
considered a cost to obtain a contract and are amortized using the straight-line method which is consistent with the transfer to
the customer of the services to which the asset relates. This is typically between three to five years.
(e) Subsequent expenditure
Subsequent expenditure on capitalized intangible assets is capitalized only when it increases future economic benefits embodied
in the intangible asset to which it relates. All other subsequent expenditure is expensed in profit or loss as incurred.
(f) Amortization
Amortization is recognized in profit or loss on a straight-line basis over the estimated useful life of intangible assets unless such
life is indefinite. Goodwill and other intangible assets with an indefinite useful life are tested at least annually for impairment as
of the balance sheet date. Intangible assets with a determinable useful life are amortized from the date that they are available for
use. The estimated useful life of intangible assets is as follows:
• Goodwill
• Software
• Contract costs
• Client contracts
indefinite
3–5 years
2–5 years
3–5 years
• Other intangible assets
3–10 years
98 | Partners Group
ANNUAL REPORT 2020
Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
19.18. Investments
(a) Financial investments
Financial investments (see note 5.3.1.) are measured at fair value through profit or loss. The fair values of quoted investments are
based on current bid prices. If the market for a financial asset (including unlisted securities) is not active, the Group establishes
fair values by using various valuation techniques. These include the use of recent arm’s length transactions, reference to
other instruments that are substantially the same and discounted cash flow analysis refined to reflect the issuer’s specific
circumstances. For further explanations in connection with the determination of fair value please refer to note 5.5.
(b) Loans
Loans are non-derivative financial assets with fixed or determinable payments, which are not quoted in an active market and
in respect of which there is no intention of trading. They are classified as “held to collect” and their contractual payments give
rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. The Group
measures such loans at amortized cost. They are included in current assets (short-term loans, see note 5.3.4.), except for amounts
with maturities greater than 12 months after the balance sheet date, which are classified as non-current assets (other financial
assets, see note 5.3.5.).
19.19. Impairment of assets
(a) Financial assets
The Group assesses the recoverability of its financial assets that are measured at amortized cost on a regular basis. It calculates,
on a forward-looking basis, the expected credit losses associated with its debt instruments carried at amortized cost. For trade
receivables, the Group applies the simplified approach and the practical expedient permitted by IFRS 9 to apply a provision matrix
that is based on its subsidiaries’ historic default rates over the expected life of the short-term receivables. For the remaining
receivables, including loans, the Group applies the general approach and uses the 12-month expected credit losses as basis for
its calculations of the expected credit loss as long as the credit risk has not increased significantly relative to the credit risk at the
date of initial recognition; otherwise, the Group switches to lifetime expected credit losses. Note 5.4.1. details the Group’s credit
risk assessment of the financial assets.
(b) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date
to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is
estimated. For goodwill and intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable
amount is estimated each year at the same time.
The recoverable amount of an asset or cash-generating unit (“CGU”) is the greater of its value in use and its fair value less
costs to sell. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the
purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets
that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of
assets (CGU). For the purpose of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that
the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes.
Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of
the combination.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognized in profit or loss. Impairment losses recognized in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the
unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed.
In respect of other assets, impairment losses recognized in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used
to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does
Partners Group | 99
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had
been recognized.
19.20. Trade and other payables
Trade and other payables are obligations to pay for goods and services that have been rendered in the ordinary course of
business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less. If not, they are
presented as non-current liabilities.
Trade and other payables are recognized initially at fair value and subsequently measured at amortized cost.
19.21. Provisions
Provisions are recognized when: (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is more
likely than not that an outflow of resources will be required to settle the obligation; and (iii) the amount can be reliably estimated.
If the effect is material, provisions are determined by discounting the expected future cash flows at the pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
19.22. Employee benefits
(a) Defined benefit plan
Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or
trustee-administered funds, determined by periodic actuarial calculations. The Group has both defined benefit and defined
contribution plans.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group
has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all benefits
to employees relating to employee services in the current and prior periods. For defined contribution plans, the Group pays
contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The
Group has no further payment obligations once the contributions have been paid. The contributions are recognized as personnel
expenses in the consolidated income statement when due.
A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans specify an amount
of pension benefit that an employee will receive upon retirement, typically dependent on one or more factors such as age, years
of service and compensation. The benefits paid to employees in Switzerland qualify as a defined benefit plan.
The Group’s net obligation/asset in respect of defined benefit plans is calculated by estimating the amount of future benefits that
employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. When the
actuarial calculation results in a benefit to the Group, the recognized asset is limited to the present value of economic benefits
available in the form of any future refunds from the plan or reductions in future contributions to the plan. An economic benefit is
available to the Group if it is realizable during the life of the plan, or on settlement of the plan liabilities.
Remeasurements of the net defined benefit obligation/asset, which comprise actuarial gains and losses, the return on plan assets
(excluding interest) and the effect on the asset ceiling (if any excluding interest) are recognized immediately in the consolidated
statement of comprehensive income.
The Group determines the net interest expense/income on the net defined benefit obligation/asset for the period by applying
the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined
benefit obligation/asset, taking into account any changes in the net defined benefit obligation/asset during the period as a result
of contributions and benefit payments. Net interest expense/income and other expenses related to defined benefit plans are
recognized in profit or loss.
The Group opted for the risk-sharing approach.
100 | Partners Group
ANNUAL REPORT 2020 Notes to the consolidated financial statements
for the years ended 31 December 2020 and 2019
(b) Share-based payment transactions
The fair value at grant date of share-based payment awards granted to employees is recognized as personnel expenses in the
consolidated income statement with a corresponding increase in equity, over the period until the employees unconditionally
become entitled to the awards. The amount recognized as personnel expense is adjusted to reflect the number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognized
as personnel expense is based on the number of awards that do meet the related service and non-market performance conditions
at the vesting date. For share-based payment awards without vesting conditions, the fair value at grant date of the share-based
payment is measured and immediately expensed in profit or loss to reflect such conditions and there is no true-up for differences
between expected and actual outcomes.
(c) Performance-related compensation
The NCC and the BoD allocate each year up to 40% of recognized performance fees via the Performance Fee Compensation
Pool to a group of eligible employees.
A portion of the Performance Fee Compensation Pool is allocated via the MCP Allocation to the broader management team
on the basis of discretionarily awarded grants. The recognition of the performance fee related compensation expenses usually
occurs when the performance fees are sufficiently visible and recognized. The corresponding liability is recognized as employee
benefit liabilities in the consolidated balance sheet (see note 4.5.). The part of the liability that is not expected to be settled
wholly before twelve months after the end of the annual reporting period is considered in non-current liabilities.
The difference between the Performance Fee Compensation Pool and the MCP Allocation is allocated to a “Performance Fee
Bonus Pool” which is distributed among the broader management teams based on their contribution to performance. The part
of the Performance Fee Bonus Pool that is not expected to be settled wholly before twelve months after the end of the annual
reporting period is recorded in non-current liabilities.
19.23. Long-term debt
Long-term debt is initially measured at fair value less any directly attributable transaction costs. Subsequent to initial recognition
these liabilities are measured at amortized cost using the effective interest method, with interest expense recognized in the
consolidated income statement on the effective yield basis.
The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability to the net carrying amount on initial recognition.
19.24. Share capital
(a) Ordinary shares
Ordinary shares are classified as equity since the shares are non-redeemable and any dividends are discretionary.
(b) Issuance of new shares
Incremental costs directly attributable to the issuance of new shares or options are shown in equity as a deduction from the
proceeds, net of tax.
(c) Repurchase of share capital and options
Where any Group company purchases the Company’s issued shares, the consideration paid, including any directly attributable
incremental costs, is deducted from equity attributable to the Company’s equity holders until the shares are cancelled, re-issued
or disposed of. Where such shares are subsequently sold or re-issued, any consideration received, net of any directly attributable
incremental transaction costs, is included in equity attributable to the Company’s equity holders.
(d) Distribution of dividends
The distribution of dividends to the Company’s shareholders is recognized as a liability in the consolidated financial statements
when the dividends are approved by the Company’s shareholders.
Partners Group | 101
ANNUAL REPORT 2020 ANNUAL REPORT 2020
Notes to the consolidated financial statements for the years ended 31 December 2014 and 2013
Index to the financial statements of Partners Group
Holding AG and report of the auditors
1. Report of the auditors on the financial statements of Partners Group Holding AG
2. Financial statements of Partners Group Holding AG:
– Income statement for the years ended 31 December 2020 and 2019
– Balance sheet as of 31 December 2020 and 2019
– Notes to the financial statements for the years ended 31 December 2020 and 2019
103
106
107
108
3. Proposal by the Board of Directors of Partners Group Holding AG for the appropriation of available earnings as of
31 December 2020
117
102 | Partners Group
Report of the auditors on the financial statements of
Partners Group Holding AG
Statutory Auditor's Report
To the General Meeting of Partners Group Holding AG, Baar
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Partners Group Holding AG, which comprise the balance sheet as at
31 December 2020, and the income statement for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion the financial statements (pages 106 to 117) for the year ended 31 December 2020 comply with
Swiss law and the company’s articles of incorporation.
Basis for Opinion
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under
those provisions and standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Statements section of our report. We are independent of the entity in accordance with the provisions of Swiss law
and the requirements of the Swiss audit profession and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. We have determined that there are no key audit matters to
communicate in our report.
Responsibility of the Board of Directors for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the
provisions of Swiss law and the company’s articles of incorporation, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to con-
tinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the Board of Directors either intends to liquidate the entity or to cease operations, or
has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Swiss law and Swiss Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
Partners Group | 103
ANNUAL REPORT 2020 Report of the auditors on the financial statements of
Partners Group Holding AG
As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi-
cient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement
re-sulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery,
inten-tional omissions, misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of in-
ternal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made.
— Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude that a ma-
terial uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or condi-
tions may cause the entity to cease to continue as a going concern.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in inter-
nal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with rel-
evant ethical requirements regarding independence, and communicate with them all relationships and other mat-
ters that may reasonably be thought to bear on our independence, and where applicable, actions taken to elimi-
nate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those mat-
ters that were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report, unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
104 | Partners Group
ANNUAL REPORT 2020 Report of the auditors on the financial statements of
Partners Group Holding AG
Report on Other Legal and Regulatory Requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an inter-
nal control system exists, which has been designed for the preparation of financial statements according to the
instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the com-
pany’s articles of incorporation. We recommend that the financial statements submitted to you be approved.
KPMG AG
Thomas Dorst
Licensed Audit Expert
Auditor in Charge
Zurich, 15 March 2021
Christoph Hochuli
Licensed Audit Expert
KPMG AG, Räffelstrasse 28, PO Box , CH-8036 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
of the KPMG global organization of independent firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
Partners Group | 105
ANNUAL REPORT 2020 Income statement of Partners Group Holding AG
for the years ended 31 December 2020 and 2019
In millions of Swiss francs
Note
2020
2019
Dividend income
Other finance income
Other service income
Total income
Third party services
General and administrative expenses
Travel and representation expenses
Other service expenses
Finance expense
Profit before tax
Direct taxes
Profit for the period
2.
3.
4.
683.0
85.8
0.3
769.1
(2.5)
(1.6)
(0.1)
(2.5)
(139.0)
623.4
-
623.4
1'161.1
61.7
1.1
1'223.9
(3.0)
(1.4)
(0.1)
-
(99.3)
1'120.1
-
1'120.1
106 | Partners Group
ANNUAL REPORT 2020 Balance sheet of Partners Group Holding AG
as of 31 December 2020 and 2019
In millions of Swiss francs
Note
31 December 2020 31 December 2019
Assets
Cash and cash equivalents
Other current receivables
Accrued income
Total current assets
Financial assets
Participations
Total non-current assets
Total assets
Liabilities and equity
Liabilities
Current interest-bearing liabilities to subsidiaries
Other current liabilities
Total current liabilities
Non-current interest-bearing liabilities
Other non-current liabilities
Provisions
Total non-current liabilities
Total liabilities
Equity
Share capital
Legal capital reserves
Legal reserves from capital contributions
Legal retained earnings
Legal reserves
Voluntary retained earnings
Results carried forward
Profit for the period
Treasury shares
Total equity
Total liabilities and equity
5.
2.
6.
7.
8.
9.
10.
11.
881.6
518.5
615.0
633.0
605.3
900.0
2'015.1
2'138.3
64.1
1'927.5
1'991.6
4'006.7
47.5
2'524.8
2'572.3
4'710.6
1'553.8
2'159.4
4.5
4.4
1'558.3
2'163.8
800.0
800.0
0.5
4.0
804.5
2'362.8
0.3
0.2
0.0
1'286.2
623.4
(266.2)
1'643.9
4'006.7
0.6
4.0
804.6
2'968.4
0.3
0.2
0.0
834.5
1'120.1
(212.9)
1'742.2
4'710.6
Partners Group | 107
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
1. Accounting principles
The financial statements have been established in accordance with the accounting, presentation and valuation principles of the
Swiss Code of Obligations.
Partners Group Holding AG (“the Company”) is domiciled in Switzerland. The address of the Company’s registered office is
Zugerstrasse 57, 6341 Baar-Zug, Switzerland.
Receivables and liabilities
Receivables from and liabilities to subsidiaries are denominated in the local currency of the respective subsidiary and are recognized
on a net basis for each counterparty.
Financial assets
Financial assets include long-term loans. Loans granted in foreign currencies are translated to Swiss francs at foreign currency
exchange rates applicable at the balance sheet date.
Participations
The Company applies the group valuation principle for the valuation of all its participations (see note 7.).
Treasury shares
Treasury shares are recognized at acquisition cost, deducted from equity at the time of acquisition and presented separately within
equity. In case of a disposal of treasury shares, the gain or loss is recognized in the income statement as other finance income or
finance expense. The treasury shares are valued at historic price.
2. Dividend income
The Company has elected to recognize CHF 615 million (2019: CHF 900 million) of dividend income related to the 2020 financial
year profit of its subsidiary Partners Group AG in 2020 (the year in which it was earned). As this dividend will not be paid until 2021,
this amount has been recorded as accrued income.
3. Other finance income
In millions of Swiss francs
2020
2019
Interest income
Foreign exchange gains
Gain on treasury shares transactions
Total other finance income
5.7
69.6
10.5
85.8
7.2
44.3
10.2
61.7
108 | Partners Group
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
4. Finance expense
In millions of Swiss francs
2020
2019
Interest expense
Foreign exchange losses
Loss on treasury shares transactions
Other finance expense
Total finance expense
5. Other current receivables
(21.2)
(60.8)
(56.1)
(0.9)
(139.0)
(15.2)
(34.0)
(47.6)
(2.5)
(99.3)
In millions of Swiss francs
31 December 2020
31 December 2019
Third parties
Subsidiaries
Total other current receivables
6. Financial assets
0.2
518.3
518.5
0.3
605.0
605.3
In millions of Swiss francs
31 December 2020
31 December 2019
Loans to subsidiaries
Total financial assets
64.1
64.1
47.5
47.5
Partners Group | 109
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
7. Participations
Partners Group AG
Partners Group Corporate Finance AG in Liquidation
Partners Group Property AG
Partners Group (EU) GmbH1)
Partners Group Management (Deutschland) GmbH
Partners Group (Luxembourg) S.A.
Partners Group Management I S.à r.l.
Partners Group Management II S.à r.l.
Partners Group Management III S.à r.l.
Partners Group Management IV S.à r.l.
Partners Group Management V S.à r.l.
Partners Group Management VI S.à r.l.
Partners Group Orbit S.à r.l.
Partners Group (Brazil) Investimentos Ltda.
Partners Group (USA) Inc.
Partners Group Colorado Propco, LLC
Partners Group (Canada) Inc.
Partners Group (Singapore) Pte. Limited
Partners Group (Shanghai) Co., Limited
Partners Group (India) Private Limited
Partners Group Prime Services Solutions (Philippines), Inc.
Partners Group Japan Kabushiki Kaisha
Partners Group (UK) Limited
Partners Group (UK) Management Limited
Partners Group Advisors (DIFC) Limited
Partners Group Private Markets (Australia) Pty. Ltd.
Partners Group Cayman Management I Limited
Partners Group Cayman Management II Limited
Partners Group Cayman Management III Limited
Partners Group Cayman Management IV Limited
1) Effective from 11 February 2020, the legal name changed from Partners Group (Deutschland) GmbH
110 | Partners Group
Ownership and voting interest
Domicile
31 December 2020 31 December 2019
Switzerland
Switzerland
Switzerland
Germany
Germany
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Luxembourg
Brazil
USA
USA
Canada
Singapore
China
India
Philippines
Japan
UK
UK
UAE
Australia
Cayman Islands
Cayman Islands
Cayman Islands
Cayman Islands
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
Ownership and voting interest
Domicile
31 December 2020 31 December 2019
Pearl Management Limited
Penta Management Limited1)
Princess Management Limited
Partners Group Management Limited
Partners Group Management II Limited
Partners Group Management III Limited
Partners Group Management IV Limited
Partners Group Management V Limited
Partners Group Management VI Limited
Partners Group Management VII Limited
Partners Group Management VIII Limited
Partners Group Management IX Limited
Partners Group Management X Limited
Partners Group Management XI Limited
Partners Group Management XII Limited
Partners Group Management XIII Limited
Partners Group Management XIV Limited
Partners Group Management XV Limited
Partners Group Client Access Management I Limited
Partners Group Access Finance Limited
Partners Group Client Access 10 MP Management Limited
Partners Group Finance ICC Limited
Partners Group Finance CHF IC Limited
Partners Group Finance USD IC Limited
Partners Group Finance EUR IC Limited
Partners Group Finance GBP IC Limited
Partners Group Finance SGD IC Limited
Partners Group Private Equity Performance Holding Limited
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
Guernsey
LGT Private Equity Advisers AG
Liechtenstein
1) The company amalgamated into Partners Group Management Limited effective 30 September 2020
100%
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
40%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
40%
Partners Group | 111
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
8. Other current liabilities
In millions of Swiss francs
31 December 2020
31 December 2019
Accrued audit expenses
Other accrued expenses
Tax liabilities
Other liabilities
Total other current liabilities
0.3
3.4
0.2
0.6
4.5
0.1
3.9
0.0
0.4
4.4
9. Non-current interest-bearing liabilities
The Company issued the following corporate bonds denominated in Swiss francs and listed on the SIX Swiss Exchange:
ISIN
Date of
issue
Face value in
millions of CHF
Coupon
in %
Year of
maturity
Issue price
in %
Redemption
price in %
CH0361532895
CH0419041287
7 June 2017
21 June 2019
300.0
500.0
0.150%
0.400%
2024
2027
100.052%
100.000%
100.098%
100.000%
10. Provisions
In millions of Swiss francs
Provisions for compensation to board members
Option grants
Management carry program
Social security expenses on management carry program
Total provisions
31 December 2020
31 December 2019
3.0
0.9
0.1
4.0
3.0
0.9
0.1
4.0
112 | Partners Group
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
11. Treasury shares
Balance as of 1 January 2019
Purchase of treasury shares
Disposal of treasury shares
Balance as of 31 December 2019
Purchase of treasury shares
Disposal of treasury shares
Balance as of 31 December 2020
Number of
shares
Weighted
average price
Total
value
In Swiss francs
In millions of
Swiss francs
207'805
618'861
(548'021)
278'645
290'828
(221'818)
347'655
690.98
739.03
708.15
763.93
760.72
757.07
765.62
143.6
457.4
(388.1)
212.9
221.2
(167.9)
266.2
The Company has 1’484’115 (31 December 2019: 1’560’494) outstanding employee options and non-vested shares (see also note
4.3. of the consolidated financial statements). The treasury shares necessary to cover the granted non-vested shares have already
been put aside in separate escrow accounts in the name of the employees. Thus, the number of treasury shares is already net of
non-vested shares outstanding.
12. Share and option grants to members of the Board of Directors and
the Executive Committee
In Swiss francs
2020
2019
Number of
instruments
Weighted aver-
age price
Total
value
Number of
instruments
Weighted aver-
age price
Total
value
In Swiss francs
In millions of
Swiss francs
In Swiss francs
In millions of
Swiss francs
Board of Directors
Shares
Options
Executive Committee
Shares
698
-
922.00
-
0.6
-
115
732.00
20'890
38.30
0.1
0.8
10'905
922.00
10.1
13'500
807.60
10.9
Partners Group | 113
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
13. Commitments and contingent liabilities
In millions of Swiss francs
31 December 2020
31 December 2019
Guarantees for third parties
Guarantees for subsidiaries
54.3
865.0
57.7
865.0
The Company and certain subsidiaries maintain the following lines of credit as of 31 December 2020 (see note 5.4.3. of the
consolidated financial statements):
• CHF 460 million
(31 December 2019: CHF 460 million)
• CHF 375 million
(31 December 2019: CHF 375 million)
• CHF 30 million
(31 December 2019: CHF 30 million)
The amounts drawn by subsidiaries are guaranteed by the Company.
As of 31 December 2020 there are no amounts drawn (31 December 2019: CHF 0.0).
14. Shareholders above 5%
As of 31 December 2020, the Company had received notification of three significant shareholders whose voting rights exceed 5%.
31 December 2020
31 December 2019
5.01%
5.01%
5.01%
4.98%
10.01%
10.01%
10.01%
6.14%
Dr. Marcel Erni
Alfred Gantner
Urs Wietlisbach
BlackRock, Inc.
114 | Partners Group
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
15. Share and option holdings by members of the Board of Directors and
the Executive Committee
Number of shares and options
31 December 2020
Share
ownership
Non-vested
shares
Options
Board of Directors
Steffen Meister, Executive Chairman
Dr. Eric Strutz, Vice Chairman
Dr. Marcel Erni
Alfred Gantner
Grace del Rosario-Castaño
Dr. Martin Strobel
Lisa Hook
Urs Wietlisbach
Total Board of Directors
Executive Committee
André Frei, Co-Chief Executive Officer
David Layton, Co-Chief Executive Officer and Head Private Equity
Juri Jenkner, Head Private Infrastructure
Andreas Knecht, Chief Operating Officer and General Counsel
Marlis Morin, Head Client Services
Dr. Michael Studer, Chief Risk Officer and Co-Head Portfolio Solutions
Hans Ploos, Chief Financial Officer
Total Executive Committee
350'675
238
1'338'959
1'338'959
238
770
136
1'338'959
4'368'934
52'359
5'325
9'954
8'313
17'490
30'600
1'000
-
-
-
-
-
-
-
-
-
4'647
5'691
3'733
3'062
1'363
3'353
772
-
12'673
-
-
12'226
4'570
-
-
29'469
17'000
22'500
17'000
33'659
-
17'000
-
125'041
22'621
107'159
Total
4'493'975
22'621
136'628
Partners Group | 115
ANNUAL REPORT 2020 Notes to the financial statements of Partners Group Holding
AG for the years ended 31 December 2020 and 2019
Number of shares and options
31 December 2019
Share
ownership
Non-vested
shares
Options
Board of Directors
Steffen Meister, Executive Chairman
Dr. Eric Strutz, Vice Chairman
Dr. Marcel Erni
Michelle Felman
Alfred Gantner
Grace del Rosario-Castaño
Dr. Martin Strobel
Patrick Ward
Urs Wietlisbach
Total Board of Directors
Executive Committee
André Frei, Co-Chief Executive Officer
David Layton, Co-Chief Executive Officer and Head Private Equity
Juri Jenkner, Head Private Infrastructure
Andreas Knecht, Chief Operating Officer and General Counsel
Marlis Morin, Head Client Services
Dr. Michael Studer, Chief Risk Officer and Head Portfolio Solutions
350'675
102
2'673'659
102
2'673'659
102
580
-
2'673'659
8'372'538
49'383
2'916
7'853
7'061
17'203
26'191
-
-
-
-
-
-
-
-
-
-
3'096
3'746
2'631
2'198
1'035
2'305
-
13'659
-
10'694
-
12'226
4'570
25'206
-
66'355
32'820
24'500
32'404
34'400
-
32'000
Total Executive Committee
110'607
15'011
156'124
Total
8'483'145
15'011
222'479
16. Full-time employees
The Company did not have any employees in the reporting year or in the previous year.
116 | Partners Group
ANNUAL REPORT 2020 Proposal by the Board of Directors of Partners Group
Holding AG for the appropriation of available earnings as of
31 December 2020
In millions of Swiss francs
Profit for the period
Results carried forward
Total voluntary retained earnings available for appropriation
Proposal by the Board of Directors to the Annual General Meeting of shareholders:
To be distributed to shareholders
To be carried forward
31 December 2020
623.36
1'286.16
1'909.52
(734.25)
1'175.27
Partners Group | 117
ANNUAL REPORT 2020 Compensation Report
Grace del Rosario-Castaño member of the Board of Directors and Chairwoman of the Nomination and Compensation Committee
Dear clients, business partners
and fellow shareholders,
We are pleased to present Partners Group’s Compensation
Report for 2020. In this report, the Nomination &
Compensation Committee (NCC) explains how the firm’s
investment and financial performance translated into
compensation for the Executive Committee and executive
members of the Board of Directors. The NCC strives to
continuously improve the transparency and clarity of the
firm’s approach to compensation and, in 2020, reached out
again to key shareholders and proxy advisors to reflect on
industry trends and gather outside perspectives. These
periodic reviews of compensation structure allow the NCC to
continuously enhance the firm’s approach to compensation
and further align the interests of clients, shareholders,
employees and other stakeholders.
2020 in review
The COVID-19 pandemic struck in the early part of 2020
and government-enforced lockdowns quickly followed. At
Partners Group, we made safeguarding the health of our
employees and the employees of our portfolio companies
our immediate priority. As the pandemic took hold, we
were successful in protecting our colleagues from the initial
spread of the virus with minimal disruption to business
continuity. We then focused on protecting and driving
forward performance in our portfolio by creating a COVID-19
action plan for each asset and by allocating leadership,
operational and financial resources. These plans prioritized
business continuity and the preservation of liquidity. The
outbreak of COVID-19 amplified many of the transformative
trends that are integral to our investment strategy and we
can confidently say that the long-term transformational
118 | Partners Group
investment plans behind our portfolio assets are just as
compelling now as in prior years. We believe that the overall
outperformance of our resilient private markets direct
portfolios against the relevant public markets benchmarks is
testimony to this.
Towards the end of 2020, our focus primarily turned to new
investment opportunities as transactional markets recovered.
Our teams invested USD 9 billion on behalf of their clients in
2020 (2019: USD 15 billion), with a significant proportion of
these investments undertaken in Q1 and Q4. The decrease
in investment activity compared to last year resulted in lower
targeted performance fee-weighted investment volumes,
which negatively impacted the overall size of the long-term
incentive (LTI) pool.
“Following the outbreak, we not only
prioritized business continuity and
the preservation of liquidity in our
portfolio, but also successfully drove
forward performance.”
Despite the wider impact of COVID-19, Partners Group’s
2020 overall performance demonstrated stability and
resilience as measured by key indicators such as assets under
management and management fees. We grew our AuM by
16%, net, to USD 109 billion and management fees grew
by 1% to CHF 1’146 million. However, the market volatility
introduced by COVID-19 impacted the exit environment
and caused us to postpone several exit activities originally
tabled for 2020, which led to a corresponding decline
ANNUAL REPORT 2020 Compensation Report
in performance fees. Total revenues, which incorporate
management and performance fees, therefore decreased by
12% to CHF 1’412 million during the period. Nevertheless,
our disciplined approach to cost management resulted in a
stable EBIT margin of 62%. EBIT decreased by 13% to CHF
875 million, in line with revenue development. Based on the
solid development of the business in all asset classes and
regions, the confidence in the sustainability of the firm’s
growth as well as its strong liquidity position, the Board of
Directors proposes to increase the dividend by a 8% to CHF
27.50 per share (2020: CHF 25.50 per share).
We aligned the compensation of independent Board
members with best practice in public markets
In private markets, we expect independent directors
on portfolio company Boards to actively participate in
developing value-enhancing strategies. Therefore, we
typically expect that they invest a meaningful proportion of
their own net worth into the portfolio company alongside
private equity investors in order to participate in both upside
potential and downside risk. In line with this principle, and to
encourage engagement in value creation initiatives, incentive
schemes for independent Board members may allow for
additional upside through options – but only if these Board
members materially share the downside risk.
Until the AGM of shareholders in 2020, we followed a private
markets approach in a public market context and granted
restricted options to independent Board members. This
approach to remunerating independent Board members led
to discussions with some of our largest shareholders and
proxy advisors and, ultimately, a comparably low acceptance
rate of our Compensation Report over the last few years
(2020: 64%, 2019: 69%). We have therefore decided to
replace restricted options with restricted shares when
compensating independent Board members and follow the
best practice of public market board compensation.
the allocation to MPP and vice versa) and the targeted share
price development (the higher the targeted share price the
lower the allocation to MPP and vice versa). We expect that
the MPP allocation for Executive Committee members may
range from around one-third to two-thirds of the entire LTI
allocation. For 2020, the NCC decided to grant the Executive
Committee one-third of their total LTI in MPP and two-thirds
in EPP, as in 2019. Similar to their allocation in 2019, the
executive members of the Board of Directors received 100%
of their LTIs in MPP in 2020.
We continue to reward long-term value creation
We reward long-term value creation for our clients and
shareholders and therefore do not use short-term incentives.
While there is an annual performance assessment of
executives, the outcome can only affect the nominal amount
of LTIs in the respective year under review. This is intended
to ensure that the interests of senior leaders are strongly
aligned with those of clients – via performance fee generation
through long-term investment success – and shareholders –
via a growing management fee EBIT development that can
ultimately support a growing dividend.
“Despite successful strategy
implementation and strong leadership
achievements, the combination of
lower than targeted performance
fee-weighted investment volumes and
management fee EBIT growth resulted
in a 15% lower LTI pool for executives
on average.”
LTI components for the Executive Committee continue to
consist of two instruments
2020 compensation
LTI grants continue to consist of two instruments. One
instrument is the Management Performance Plan (MPP),
which is a share-based incentive plan that aligns the pay
of executives with the share price performance and the
generation of future performance fees. The other instrument
is the Employee Participation Plan (EPP) which is also a share-
based incentive plan that allocates restricted shares.
The split of the LTI allocation is dependent on two factors:
the total performance fee-weighted investment volume
generated during the year (a higher volume may increase
The total base compensation granted to the Executive
Committee was similar to the one in 2019 and continues
to be based on function. At Partners Group, the base
compensation is equally split between a cash base salary
and a fixed deferred cash payment. In contrast, the size of
the LTI pool for the Executive Committee and executive
members of the Board of Directors is linked to qualitative
and quantitative performance targets. Despite successful
strategy implementation and strong leadership achievements,
the combination of lower than targeted performance fee-
weighted investment volumes and management fee EBIT
Partners Group | 119
ANNUAL REPORT 2020 Compensation Report
growth resulted in a 15% lower LTI pool for executives in
2020 on average.
With regards to the quantitative performance assessment,
lower than expected average assets under management
(AuM) growth in CHF due to unfavorable FX developments
impacted management fee EBIT growth negatively (one of
the two quantitative measures determining the LTI pool).
Furthermore, many market participants adopted a more
cautious investment approach due to government-enforced
lockdowns during 2020. This resulted in a lower investment
activity and ultimately generated lower than targeted
performance fee-weighted investment volumes (the other key
quantitative measure determining the LTI pool).
When looking at the performance of the Executive
Committee, executives not only delivered on their strategic
targets as the pandemic took hold but also showed strong
leadership capabilities by managing the firm through one of
the sharpest and fastest economic contractions since the
Great Depression. The leadership performance of executives
exceeded expectations from the NCC and therefore
positively influenced the qualitative performance factors (see
section 4.2.). Executives were focused on driving forward
performance in our investment portfolio. Although the
firm’s private markets portfolio experienced some degree of
volatility in the first half of 2020, we can confidently say that
our transformative investment strategy not only provided
stability but also facilitated a swift return to growth in the
second half of the year.
Despite COVID-19, the Executive Committee also continued
to expand the firm’s ESG/CSR leadership position by
developing a new Climate Change Strategy, which integrates
the impact of climate change in the firm’s investment process
to reduce our contribution and mitigate its impact. It also put
special emphasis on creating an awareness of the importance
of diversity & inclusion in the culture and work practices
of the firm. The increased awareness was created by
unconscious bias trainings and the creation of a Diversity &
Inclusion Committee which reports directly to the Executive
Committee.
With regards to the compensation of executive members
of the Board of Directors, the total base compensation
granted in 2020 was similar to the amount granted in 2019.
Their overall LTI pool decreased by 15% compared to last
year’s LTI pool, in line with the performance assessment of
the Executive Committee. Due to the already significant
shareholding in the firm by executive members of the Board
of Directors, they were granted their LTI entirely in MPP
(similar to 2019).
120 | Partners Group
Independent Board members were compensated in line with
the firm’s compensation framework for independent Board
members. They received half of their Board fee in restricted
shares and the other half in cash. This framework is a module-
based compensation approach and considers individual
business assignments as well as their additional contribution
to the firm’s business beyond their committee responsibilities
(see section 5.4). Below, the NCC provides information on
planned adjustments to the compensation framework of
independent board members, which are expected to become
effective as of 2021, subject to the approval by shareholders
at the AGM in May 2021. The proposed adjustments are
outlined in Exhibit 12.
We continue to strengthen our efforts on equal pay
Partners Group is an equal opportunity employer and
complies with all applicable fair employment practices laws.
In order to provide equal employment and advancement
opportunities to all individuals, Partners Group endeavors to
make all employment decisions based on merit, qualifications,
and abilities. The Human Resources team annually performs
an equal pay analysis, which has shown no pay inequalities in
recent years. The 2020 analysis is being performed by PWC.
In addition to the global equal pay analysis, Partners Group
engaged the Center of Diversity and Inclusion of the
University of St. Gallen to run the Swiss based analysis. In
the course of the 2020 audit, KPMG conducted a formal
examination of the legally required equal pay analysis for
Switzerland. Based on KPMG’s review of the equal pay
analysis, nothing has come to their attention that the analysis
is not in compliance with the requirements of the Gender
Equality Act and Ordinance.
On behalf of Partners Group and the NCC, I would like to
thank you for your continued trust and support.
Yours sincerely,
Grace del Rosario-Castaño
Chairwoman of the Nomination & Compensation Committee
ANNUAL REPORT 2020 Compensation Report
1. Philosophy & principles
culture, for non-material ways of recognizing individual
achievements and for helping the development of the
firm’s human capital.
1.1 Philosophy
Our investment approach favors trusted, long-term
relationships that extend beyond our USD 109 billion AuM
and our more than 1’500 global professionals who operate
a significant number of businesses and/or assets in various
industries and sectors across the globe. Our professionals are
responsible for around 200’000 employees who work for our
largest portfolio companies and are responsible for creating
long-term value for the over 200 million beneficiaries who are
served by our clients. They focus on business and ownership
excellence to realize the full development potential of the
private assets in which we invest.
Our compensation framework honors this responsibility
and promotes a corporate culture that contributes to
the company’s sustained success, while adhering to its
values. In order to best combine the interests of clients
and shareholders with those of the firm’s employees, our
compensation framework includes a significant long-term
incentive component that allows the firm and its employees
to participate in investment success alongside clients.
1.2 Principles
When making compensation decisions, the NCC follows three
guiding principles, which apply to all employees:
• Compensation follows contribution: we have a unique
business model and operate as one global firm, albeit
with differentiated business lines and functions. The
main drivers for the variable compensation elements
in the firm’s compensation framework are relative to
individual and team results, as well as to the firm’s overall
achievements.
•
Equal opportunity and non-discrimination: we are an
equal opportunity employer and do not discriminate
against employees on the basis of age, gender,
nationality, or any other basis that is inconsistent with
our guiding values. The firm is committed to a “pay for
performance” and “fair pay” policy and systematically
conducts equal pay analyses across departments and
regions.
• Compensation is no substitute for talent development:
compensation is an important pillar of governance and
leadership. It is, however, no substitute for a caring
Our compensation philosophy stems
from our firm’s values
Our mission is to deliver our clients superior and
sustainable investment performance on a mid- to long-
term basis, realizing the potential of private markets
through our integrated platform. We strive for attractive
financial returns and a premium valuation to honor
the long-term trust of our shareholders. At the same
time, our charter defines our overriding compensation
philosophy for the most important asset of our firm, our
employees.
Clients
We understand our clients’ needs and build trusted,
long-term relationships. Our aim is to provide tailored
private markets portfolio solutions that enable them to
achieve superior investment performance and benefit
from market-leading client servicing. Our clients honor
their trust through continued commitments to Partners
Group’s investment vehicles.
Shareholders
We strive for attractive financial returns and for a
premium valuation to honor our shareholders’ long-term
confidence in our firm. Partners and employees hold a
significant ownership in Partners Group and are thus
aligned with external shareholders’ interests.
Employees
We attract talented individuals who are committed to
our purpose and values and help them to develop so
that they perform at their best. Together, we create a
demanding and rewarding environment throughout our
firm.
Senior professionals are incentivized to participate in
delivering superior investment performance to clients
through their eligibility for compensation derived from
the future performance fees earned by Partners Group’s
investments.
Partners Group | 121
ANNUAL REPORT 2020 Compensation Report
2. Pay for performance
This chapter explains how the performance of the Executive
Committee and executive member of the Board of Directors
determines their LTI considerations. The nominal LTI pool
granted for the year 2019 serves as a basis to calculate the
LTI pool for the year 2020.
The total base compensation granted to the Executive
Committee is based on function and represents a stable
compensation component. It is equally spilt between a
cash base salary and a fixed deferred cash payment. In
contrast, the allocation of LTIs, which should encourage true
entrepreneurialism and a long-term perspective, is linked to
two equally weighted annual performance assessments:
• Quantitative achievements, which assess the firm’s
financial performance and investment development.
• Qualitative assessments, which emphasize strategy
implementation and leadership achievements.
Based on the assessment of both quantitative and qualitative
achievements, a compensation factor is determined, which
is then multiplied by the previous year’s nominal LTI pool.
The NCC has decided to cap the compensation factor at a
maximum of 2.0x the previous year’s LTI pool on the upper
end, and at a minimum of 0.5x on the lower end, preventing
either excessive upside or downside for LTI participants.
For example, a compensation factor of 1.0x means that the
nominal LTI pool in the year under review remains the same
as in the previous year.
2.1. Assessment of quantitative measures
The financial performance of the firm reflects its operational
strength and is typically a result of successful past decision-
making. As such, the year-on-year development of the firm’s
financial performance is one of two quantitative input factors
used to determine the compensation factor.
• Assessment of financial performance (50% weighting)
We assess financial performance based on the year-on-
year change in management fee EBIT (defined as EBIT,
adjusted for non-management fee-related and non-
ordinary items).1
Successful investments made in the year under review
provide the basis for potential future performance fees. Their
year-on-year development serves as the second quantitative
input factor determining the compensation factor.
1 As of the NCC meeting in November of the year under review.
122 | Partners Group
• Assessment of investment development (50%
weighting)
We assess investment development based on the
year-on-year change in the performance fee-weighted
investment volume (based on standardized model return
targets defined at the investment date, adjusted for non-
ordinary effects).
Exhibit 1: Year-on-year adjustment of quantitative
assessment
Financial performance
2.0x
1.0x
)
r
a
e
y
t
s
a
l
.
s
v
(
under-
performance
targeted
performance
out-
performance
strong
outperformance
Investment development
under-
performance
targeted
performance
out-
performance
strong
outperformance
r
o
t
c
a
f
n
o
i
t
a
s
n
e
p
m
o
C
r
o
t
c
a
f
n
o
i
t
a
s
n
e
p
m
o
C
0.5x
significant
underperformance
2.0x
1.0x
)
r
a
e
y
t
s
a
l
.
s
v
(
0.5x
significant
underperformance
2.2. Assessment of qualitative measures
The NCC also applies a qualitative assessment, which is
equally important and considers performance metrics such as
strategy implementation and leadership achievements.
• Assessment of strategy implementation: we assess the
successful implementation of key strategic initiatives
as well as continued business & operational excellence
across our platform and businesses.
• Assessment of leadership achievements: we assess
the progress made on ensuring the organizational
effectiveness of the firm, an entrepreneurial leadership
culture as well as the development of talented individuals
who are committed to the firm’s purpose.
The final compensation factor is derived from a combination
of the abovementioned qualitative assessment and the
quantitative assessment.
ANNUAL REPORT 2020
Compensation Report
2.3. LTI allocation to individuals
Once the top-down allocation for the Executive Committee
and the Board has been completed and the overall LTI
pool has been determined, the individual assessment of
each executive member commences. Individual goals differ
depending on a member’s function and level of responsibility
and are outlined in Exhibit 2.
At Executive Committee-level, each member has additional
objectives with a greater focus on either investment-, client-,
corporate-, service- or environmental social governance
(ESG) as well as corporate social responsibility (CSR)-related
activities. At Board committee-level, each executive member
of the Board of Directors has additional responsibilities
through his or her membership in the respective sub-
committees.
2.4. Bonus-malus system
Long-term compensation awarded to members of the
Executive Committee as well as to executive members of
the Board of Directors is subject to “malus” and “clawback”
rules. This means that the NCC and the Board may decide
not to pay any vested but unpaid incentive compensation
(malus) or may seek to recover incentive compensation that
has been paid in the past where the payout and/or personal
conduct has been proven to conflict with applicable laws and
regulations respectively. In 2020, neither malus nor clawback
rules were applied.
2.5. Equal pay analysis & audit
Partners Group is an equal opportunity employer and
complies with all applicable fair employment practices laws.
In order to provide equal employment and advancement
opportunities to all individuals, Partners Group endeavors to
make all employment decisions based on merit, qualifications,
and abilities. The Human Resources team annually performs
an equal pay analysis, which has shown no pay inequalities in
recent years. The 2020 analysis is being performed by PWC.
In addition to the global equal pay analysis, Partners Group
engaged the Center of Diversity and Inclusion of the
University of St. Gallen to run the Swiss based analysis
according to the methodology “Logib”, defined by Swiss
government. In the course of the 2020 audit, KPMG
conducted a formal examination of the legally required equal
pay analysis for Switzerland. Based on KPMG’s review of the
equal pay analysis, nothing has come to their attention that
the analysis is not in compliance with the requirements of the
Gender Equality Act and Ordinance. The analysis didn’t show
an equal pay gap between male and female employees. As a
result, Partners Group was awarded with the certificate “We
Pay Fair” from the University St. Gallen.
The analysis from the Center of Diversity and
Inclusion of the University of St. Gallen showed no
equal pay gap between male and female employees.
As a result Partners Group was awarded with the
certificate “We Pay Fair”.
Partners Group | 123
ANNUAL REPORT 2020
Compensation Report
Exhibit 2: Group- and Executive Committee-level objectives & Board committee responsibilities
Group level
Objectives
Investment platform
• Achieve sustainable growth and scale of investment capacity
• Create long-term value in portfolio assets
Financials
• Focus on sustainable growth through client satisfaction and therefore AuM growth
• Balancing cost growth vs. revenue growth
Strategy implementation
• Successfully implement key strategic initiatives
• Ensure business & ownership excellence across our platform and businesses
Leadership achievements
• Develop organizational effectiveness via an entrepreneurial leadership culture
• Develop talented individuals who are committed to our purpose
ExCo1)-level
Objectives
Investments
• Achieve asset class-specific investment goals
• Meet asset class-specific return targets
• Establish best practices in corporate governance amongst portfolio assets
Clients
Services
Corporate
ESG/CSR
• Extend client coverage (regional and type of investors)
• Best-in-class client coverage (incl. compliance)
• Achieve fundraising goals (mandates, flagship programs and structured programs)
• Maintain excellent investment service levels
• Provide best-in-class client servicing
• Contribute to our PRIMERA2) platform to the benefit of investments, clients & employees
• Provide necessary corporate IT infrastructure landscape to ensure operational excellence
• Maintain excellent compliance track record
• Adherence to financial, operational, regulatory, legal and conduct risk as well as investment
risk3)
• Achieve our 20 by 2020 and 25 by 2025 diversity targets4)
• Ensure at least 90% of employees are trained on ethics-related issues
• Establish a deep-dive ESG engagement with every one of our lead direct investments
Executive Board-level
Objectives
Strategy
Committee
• Drive the firm via the Board on major business, corporate and organizational initiatives
• Guide human capital development, financial planning and use of financial resources
Investment Oversight
Committee
• Ensure quality/consistency of decision making processes and investment performance
•
Implement investment-related quality standards and measurement methods
Client Oversight
Committee
• Drive strategic fundraising initiatives and identify new key product & fundraising themes
• Lead the coverage of the firm’s key client prospects and global consultant network
1) Executive Committee.
2) PRIMERA is our proprietary private markets database.
3) See Corporate Governance report 2020.
4) We have currently achieved 100% of our 20 by 2020 target, which consisted in having female ambassadors at 20 top universities globally in order to attract the next generation of
talented young women. Further to this, by 2025, we wish to substantially increase the number of our female Partners and Managing Directors to at least 25 (see CSR report 2019/2020).
124 | Partners Group
ANNUAL REPORT 2020
Compensation Report
3. Compensation components
The NCC continues to strive for consistency in the firm’s
approach to compensation and has not changed the
methodology used to determine the size of the compensation
pools. While the total base compensation is fixed and based
on function, the LTI compensation has a clear link to strategy
and tangible targets.
Exhibit 3: Compensation components for the
Executive Committee
Type of compensation
Instrument
Total
cash
compen-
sation
Long-
term
incen-
tives
Base salary & benefits
Deferred cash payment1)
Management Performance Plan (MPP)
Employee Participation Plan (EPP)
Cash
Equity
(share-based)
1) Deferred cash compensation is awarded at year end. It is intended to be stable and
predictable and only adjusted downwards in the case of significant underperformance of
the firm or on individual level.
3.1. Total base compensation
At Partners Group, we do not apply the concept of short-
term incentives as we put more emphasis on long-term value
creation for clients and shareholders. Although there is an
annual performance assessment of executives, the outcome
can only affect the actual nominal amounts of long-term
incentives which will then be allocated to individuals in
the respective year under review. As such, the total base
compensation is based on function and represents a stable
compensation component. More specifically, it is based on an
individual’s role and level of responsibility for the upcoming
year and is typically only adjusted with a change of role. The
total base compensation is equally split between a cash base
salary and a fixed deferred cash payment.
Cash base salary & pension benefits: cash base salaries are
paid on a monthly basis and reviewed annually. The primary
purpose of benefits, such as pension and insurance plans,
is to establish a level of security for employees and their
dependents with regard to the major economic risks of
sickness, accident, disability, death and retirement.
The level and scope of pension and insurance benefits
provided is country-specific and influenced by local market
practice and regulations.
Deferred cash payment: the fixed deferred cash payment
is awarded at year-end to the Executive Committee. The
individual deferred cash payment set by our compensation
framework is intended to be stable and predictable. The
NCC has the flexibility to adjust the fixed deferred cash
compensation downwards (not upwards) in the rare case
the firm or an individual committee member severely
underperforms in the year under review. An adjustment could
also be applied in exceptional cases, such as crisis years that
materially affect the quantitative performance factors. Any
such adjustment, and the reason for the adjustment, would
be made transparent to shareholders. Executive Committee
members are typically notified of their deferred cash payment
at year-end and receive the cash the following February.
Exhibit 4: Total cash compensation for Executive
Committee members in 2020
(in thousands)
Function
Cash
base salary
Deferred cash
payment
Total cash
compensation
Co-CEOCH
Co-CEOUSA
Executive
Committee
member
CHF 750
USD 750
CHF 750
USD 750
CHF 1‘500
USD 1‘500
CHF 500
CHF 500
CHF 1‘000
3.2. Long-term incentives (LTIs)
LTIs consist of two payout components, the Management
Performance Plan and the Employee Participation Plan. The
NCC believes that with increasing seniority, a larger part of
an employee’s total compensation should be variable and tied
to long vesting periods and even longer payout mechanisms.
This is intended to ensure that the interests of senior leaders
are strongly aligned with those of clients and shareholders
and involve a focus on both sustainable financial performance
and long-term investment success.
Management Performance Plan (MPP): the MPP reinforces
a strong alignment of interests with clients and shareholders,
as it is dependent on both, the share price development in
the first five years and the achievement of a performance fee
target thereafter, which ultimately derives from active value
generation and the realization of investment opportunities in
underlying client portfolios.
Partners Group | 125
ANNUAL REPORT 2020 Compensation Report
The MPP requires recipients to have a long-term view, as
it often takes up to 14 years until the full performance fee
payouts from a particular investment year are received. Given
the length of this period, we believe the MPP promotes a
focus on sustainable value creation and avoids inappropriate
risk-taking or short-term profit maximization at the expense
of long-term return generation for our clients.
The MPP grants vest linearly over a period of five years.
For members of the Executive Committee and executive
members of the Board of Directors, the linear vesting is
subject to a minimum five-year tenure in the respective
committee.
MPP payouts have two performance conditions: the firm’s
share performance since grant must be positive, and
future performance fee potential must translate into actual
performance fees. Achieving only one condition while not
the other results in no payout. For instance, achieving better
than underlying ex ante defined model return targets in our
investment portfolio can increase the payout, whereas value
creation below targets decreases the MPP payout. In the
worst-case scenario of insufficient value creation, it can be
zero.
Any payout starts five years after grant and will be in a
number of restricted Partners Group shares in the value of
the respective payout of actual performance fees generated.
We provided a sample calculation in the Appendix A.1. for
more detailed information. The shares will have a two-year
selling and exercise restriction.
Employee Participation Plan (EPP): Partners Group has
a long-term history of granting equity incentives to all its
professionals. EPP aims to align all Partners Group employees’
interests with those of external shareholders.
The annual EPP allocation is linked to the annual performance
review. While there is no direct performance condition after
grant, the allocation of restricted shares does indirectly
encourage the Executive Committee to create shareholder
value through a rising share price by ensuring that the firm (i)
continues to raise additional capital to increase its asset base
and therefore management fees, (ii) to generate meaningful
future performance fee potential and (iii) to maintain the
firm’s profitability by protecting its EBIT-margin target.
The EPP grants vest linearly over a period of five years,
contingent on continued employment with the firm. Any
vested EPP to the Executive Committee has a two-year
selling restriction.
Exhibit 6: 2020 EPP vesting parameters (shares) for
Executive Committee members
20%
20%
20%
20%
20%
+2y selling
restrictions
2020
2021
2022
2023
2024
2025
2026
Exhibit 5: Vesting and expected payout of the MPP, one of the firm's LTI payout components
Intrinsic
value of MPP
right
Vesting parameters
Expected payout of intrinsic value
Evaluation of the intrinsic
value of an MPP right1)
20%
20%
20%
20%
Better than
expected
100%
Worse than
expected
Payment based on underlying performance
fees generated on investments in year 02)
Grant year
t=0
20%
1
2
3
4
6
7
8
9
10
11
12
13
14 years
5
1) The intrinsic value of MPP rights is determined after five years of the grant and relates to absolute shareholder return (net of dividends). Thereby, the intrinsic value of the 2019 MPP cannot
exceed 10x the grant fair value. See detailed description in Appendix A.1.
2) The time period following the determination of the intrinsic value of MPP rights focuses entirely on how such value will be paid out in the following years (in the form of restricted Partners
Group shares). Both magnitude and timing are dependent on the actual performance fees generated for the firm. See detailed description in Appendix A.1.
126 | Partners Group
ANNUAL REPORT 2020 Compensation Report
Allocation decisions between MPP and EPP: the NCC makes
the allocation of MPP grants dependent on two factors: total
performance fee-weighted investment volume generated
during the relevant period (more potential performance fees
may lead to a higher MPP allocation) and the pricing of MPP
rights (a higher targeted share price may lead to a lower MPP
allocation).
Thereby, the proportion of MPP relative to the overall LTI
pool can range from around one-third to two-thirds. The
remainder will be granted in EPP. While this provides a
greater flexibility for the NCC, the overall allocation to MPP
as opposed to EPP must stay within the overall LTI budgets.
Despite the increased flexibility for the NCC, the
compensation of the Executive Committee in 2020 has not
changed: two-thirds of the available LTI pool was granted
in EPP (2019: two-thirds) and one-third in MPP (2019:
one-third).
3.3. Further benefits provided disclosed according to
“Ordinance against Excessive Compensation (OaEC)”
The OaEC requires board members of listed companies to
disclose all benefits directly or indirectly provided to the
Executive Committee and the Board of Directors, even if not
related to compensation. As such, in relation to our firm-wide
Employee Commitment Plan (ECP), we disclose any preferred
terms granted to members of the Executive Committee and
the Board for select investments in Partners Group programs.
The firm has a history of investing in its own investment
programs alongside its clients (typically around 1% of the
program’s size) with its balance sheet. This aligns the interests
of clients with those of the firm and its employees. For
select direct investment programs, our institutional clients’
expectations around the size of such investments could
increase beyond the typical 1% of the program’s size.
Given our strong liquidity position, we could also fund
these investments alongside clients from our balance sheet.
However, the Board decided to overweight the firm’s lean
balance sheet approach over a more pronounced usage of the
balance sheet for investment purposes and therefore favored
a strategy that requires more employees to meet additional
investment expectations from clients. The view of our Board
also reflects the opinion of external shareholders who value a
lean balance sheet strategy higher.
Therefore, Partners Group’s Board has introduced the ECP to
increase incentives for employees to provide more substantial
commitments and also align an even greater number of
employees with clients. In line with industry practice,
Partners Group offers its employees (including the Executive
Committee and the Board of Directors) similar preferential
terms & conditions to invest in its private markets programs,
offering such investments at no management fees and no
performance fees. Generally, the firm does not earn any
revenues on its own investments alongside clients as any fees
levied are rebated.
According to the OaEC, these discounted fees are subject to
approval by shareholders. The NCC discloses in this report
all such discounted fees granted to the Executive Committee
and members of the Board of Directors for investments made
alongside investors in the firm’s closed-ended investment
programs (see Exhibit 9 for the Executive Committee or see
Exhibit 13 for the Board of Directors).
3.4. Equity incentive plans have caused no dilution in
the number of shares for shareholders since the IPO
There has been no dilution of Partners Group’s share capital
since the IPO in March 2006, as the firm holds treasury
shares to provide shares for existing equity incentive
programs. Furthermore, the treasury shares necessary to
cover the granted non-vested shares have already been
purchased by the firm. Further information on Partners
Group’s share-based payment plan can be found in section 4
of the notes to the consolidated financial statements included
in the 2020 Annual Report.
As of 31 December 2020, the Group had 1’484’115 options
and non-vested shares outstanding (2019: 1’560’494). The
treasury shares that are necessary to cover the granted
non-vested shares have already been put aside in separate
escrow accounts in the name of the employees. Thus, the
number of treasury shares is already net of non-vested
shares outstanding. As of 31 December 2020, to cover the
outstanding in-the-money options at the year-end share
price of CHF 1’040.00 (2019: CHF 887.40) 319’783 (2019:
291’045) net treasury shares would be necessary (the amount
takes the different strike prices of different option programs
into account). As of 31 December 2020, Partners Group held
347’655 treasury shares, corresponding to 1.30% of the total
share capital.
Partners Group | 127
ANNUAL REPORT 2020
Compensation Report
4. Executive Committee
compensation
4.1. Total base compensation
The total base compensation granted to each member of
the Executive Committee followed the guidance in Exhibit
4 and was therefore similar to the amount granted last year.
The overall amount of the total base compensation, incl.
other compensation, remained largely flat on individual level
but increased slightly on committee level to CHF 8.7 million
(2019: CHF 8.1 million) predominately due to the hiring of our
new CFO who joined the Executive Committee as of 1 July
2020.
With the COVID-19 global health crisis affecting almost
every segment of the economy and temporarily causing
unprecedented dislocation across financial markets, the
Executive Committee, executive as well as independent
members of the Board of Directors and many Partners Group
employees contributed to the firm’s Portfolio Employee
Support Fund. Partners Group matched their contribution.
The fund was designed to support the most financially
vulnerable employees at our portfolio companies during the
crisis by addressing the specific needs of the families and
individuals in these workforces, in particular for medical
expenses, healthcare and childcare. Our Co-CEOs forfeited
6 months of their annual base salary, donating in total
CHF 0.7 million to this fund.
4.2. LTIs
We received USD 16.0 billion in new commitments from our
global client base in the twelve-month period ending on 31
December 2020 (2019: USD 16.5 billion). The firm’s total
AuM increased to USD 109 billion as of 31 December 2020
(31 December 2019: USD 94.1 billion), representing a net
growth of 16% (2019: 13%). However, this double digit AuM
growth in USD did not translate in a similarly strong average
AuM growth in CHF due to an unfavorable FX development.
As such, management fee EBIT growth was lower than
targeted (one of the two quantitative measures determining
the LTI pool).
We also observed that many market participants adopted
a more cautious investment approach due to government-
enforced lockdowns. Our professionals took a similar cautious
approach and focused on driving forward performance in our
portfolio by creating a COVID-19 action plan for each asset
in our portfolio. They – led by our executives – allocated
128 | Partners Group
leadership, operational and financial resources that prioritized
business continuity and the preservation of liquidity. This
shift in focus during 2020 resulted in lower investment
activities amounting to USD 8.8 billion (2019: USD 14.8
billion) and therefore generated lower than expected
performance fee-weighted investment volumes (the other key
quantitative measure determining the LTI pool).
The quantitative achievements in 2020 resulted in an
average quantitative compensation factor of 0.6x (-40%
compared to previous year):
•
•
Formula on financial performance 2020: The
management fee EBIT considered at the time by the
NCC has remained largely flat and underperformed the
2020 Board expectations of around +10%. The financial
performance therefore did not meet expectations and
resulted in a compensation factor of 0.5x.
Formula on investment development 2020: The firm’s
performance fee-weighted investment volume decreased
by ~30% compared to the previous year. The investment
development did not meet expectations and therefore
resulted in a compensation factor of 0.7x.
Exhibit 7: quantitative assessment 2020
2.0x
1.0x
2020
)
r
a
e
y
t
s
a
l
.
s
v
(
Financial performance
2019
0.5x
significant
underperformance
under-
performance
targeted
performance
out-
performance
strong
outperformance
Investment development
2.0x
1.0x
)
r
a
e
y
t
s
a
l
.
s
v
(
2019
2020
0.5x
significant
underperformance
under-
performance
targeted
performance
out-
performance
strong
outperformance
The assessment of the qualitative performance considers
performance metrics such as strategy implementation and
leadership achievements. The qualitative compensation
factor came in at the mid-point of 1.00x and 1.25x due
to the stronger leadership achievements of the Executive
Committee. Key achievements underlining the change in the
assessment are highlighted below.
•
Strategy implementation – expectations were
met (1.00x): On the investment side, the Executive
Committee further developed and implemented the
firm’s cutting edge thematic and transformational
r
o
t
c
a
f
n
o
i
t
a
s
n
e
p
m
o
C
r
o
t
c
a
f
n
o
i
t
a
s
n
e
p
m
o
C
ANNUAL REPORT 2020
Compensation Report
investing strategy, which has been a priority focus area.
In this context, it has also successfully re-designed the
private equity direct investment team by consolidating
the Industry Value Creation team, the ESG team and
the Research Team into one single unit organized by
the following four sectors: Health & Life, Services,
Technology and Goods & Products. Additionally, the
Committee established a clear path for our ESG/CSR
and climate-related activities to address the Board’s
strategy around impact and action-oriented sustainability
engagements in our lead portfolio assets.
On the client side, the Executive Committee took
further action to achieve the firm’s ambitions regarding
the establishment of our global mandate leadership
position. As part of this, it rolled out the firm’s new plans
for the creation of a strategic portfolio management
dialogue with clients. This dialogue is supported by
an unparalleled basis of mandate services, tailored to
specific risk/return profiles through single or multi-asset
class investment pools, and will enable clients to combine
equity and debt exposure, match asset/liability needs
through cash-flow profiling, and ramp up a portfolio
quickly through investment level steering.
On the corporate side, the Executive Committee raised
the financial accountability of various departments at
the firm for achieving business plans. This included the
introduction of management accounting methodology
measures and incremental profit contribution
assessments, which is designed to give departments
better grounds for strategic decision making related to
hiring and business build out.
•
Leadership achievements – slightly outperformed
(1.25x): The leadership performance of the Executive
Committee exceeded expectations from the NCC
and therefore positively influenced the qualitative
performance factors in their annual assessment, mainly
based on the following achievements:
Crisis performance at portfolio level: not only have
executives delivered on their strategic targets but
they also showed strong leadership capabilities
when managing the firm through one of the sharpest
and fastest economic contractions since the Great
Depression. Executives focused on protecting and
driving forward performance in our portfolio by creating
a COVID-19 action plan for each asset and by allocating
leadership, operational and financial resources. We can
confidently say that the long-term transformational
investment theses behind our portfolio assets are even
more compelling today than pre-COVID-19, as measured
by higher EBITDA growth (11% y-o-y growth of August
EBITDA in our lead direct private equity portfolio)
and higher valuations (expressed in higher Money-on-
Invested-Capital multiple increases).
Crisis performance at client level: despite COVID-19,
Partners Group received USD 16 billion in new
commitments across all private markets asset classes and
program types in the twelve-month period ending 31
December 2020. This was around the same amount as
the firm raised in 2019 (pre-COVID-19) and above the
firm’s full-year 2020 guidance of USD 12 to 15 billion
(guidance communicated in July 2020).
Crisis performance at corporate level: as the pandemic
took hold, the Executive Committee was successful in
terms of the timing and implementation of COVID-19
measures. From a technology perspective, the
Committee ensured minimal disruption to business
continuity. From a team perspective, the Committee
enabled the firm’s professionals to work from home
safely and took the necessary measures to protect our
colleagues from the initial spread of the virus.
As a result of the quantitative and qualitative assessment,
the overall LTI pool in 2020 decreased by 15% to 0.85x of
last year’s pool (the nominal LTI pool granted for the year
2019 serves as a basis to calculate the LTI pool for the year
2020). The Executive Committee was granted nominal LTI
amounting to CHF 15.1 million in 2020 (2019: CHF 16.5
million), including the CFO as a new member of the Executive
Committee. Around two thirds of the value was granted in
EPP (2019: two-thirds) and one third in MPP (2019: one-
third). Exhibit 9 outlines the total full-year compensation of
the Executive Committee in detail.
4.3. Co-CEO compensation
The total base compensation across the entire Executive
Committee and the Co-CEOs is outlined in Exhibit 4. In 2020,
the total compensation for the firm’s Co-CEOs are as follows:
David Layton: David Layton receives his total base
compensation in USD. Expressed in CHF, he earned a total
base compensation of CHF 1.41 million (2019: CHF 1.49
million), of which the cash base salary amounted to CHF 0.70
million and the deferred cash payment CHF 0.70 million. The
total base compensation excluded other compensation, such
as pension benefits and social security payments as outlined
in Exhibit 9, amounting to CHF 0.06 million (2019: CHF
0.06 million). David Layton forfeited 6 months of his annual
Partners Group | 129
ANNUAL REPORT 2020
Compensation Report
base salary, donating CHF 0.35 million to the firm’s Portfolio
Employee Support Fund.
David Layton’s LTI grant decreased by 10% to 0.90x the
previous year’s LTI grant and amounted to CHF 3.83 million
in 2020 (2019: CHF 4.25 million). The NCC assessed his
performance based on his achievements of the Executive
Committee-level objectives outlined in Exhibit 2 and
concluded that the lower decrease relative to the overall LTI
pool was mainly due to the achievements on how the firm
protected performance in client portfolios throughout the
pandemic. The firm’s approach to building and developing
businesses re-confirmed its strategic approach to investment.
The overall outperformance of the firm’s resilient private
markets direct portfolios against the relevant public markets
benchmarks is testimony to this. David Layton received two
thirds of the LTI value in EPP (2019: two-thirds) and one third
in MPP (2019: one-third).
André Frei: André Frei earned a total base compensation of
CHF 1.50 million (2019: CHF 1.50 million), of which the cash
base salary amounted to CHF 0.75 million and the deferred
cash payment CHF 0.75 million. The total base compensation
excludes other compensation, such as pension benefits and
social security payments as outlined in Exhibit 9, amounting
to CHF 0.29 million (2019: CHF 0.32 million). André forfeited
6 months of his annual base salary, donating CHF 0.38 million
to the firm’s Portfolio Employee Support Fund.
André Frei’s LTI grant decreased by 20% to 0.80x the
previous year’s LTI grant and amounted to CHF 3.00 million
in 2020 (2019: CHF 3.75 million). The NCC assessed André
Frei’s performance based on his achievements of the
Executive Committee-level objectives outlined in Exhibit
2 and concluded that the slightly larger decrease relative
to the overall LTI pool related to the differences in focus
between André’s role and that of David Layton, who has
been more heavily involved in protecting the performance
of client portfolios throughout the pandemic, as well as
the development of the new Private Equity team set up. In
particular during the pandemic, the NCC decided to reward
the abovementioned accomplishments of David Layton
relatively higher than those of André Frei. André Frei received
two thirds of the LTI value in EPP (2019: two-thirds) and one
third in MPP (2019: one-third).
4.4. Highest paid Executive Committee member
The highest paid Executive Committee member in 2020
was David Layton, Co-CEO. He was awarded a total base
compensation of CHF 1.41 million (2019: CHF 1.49 million)
130 | Partners Group
excluding other compensation, and LTIs to the value of CHF
3.83 million (2019: CHF 4.25 million). The total compensation
amounted to CHF 5.23 million in 2020 (2019: CHF 5.74
million), excluding other compensation, such as pension
benefits and social security payments as outlined in Exhibit 9.
4.5. Compensation caps
Given that the total base compensation is based on function
and represents a stable compensation component, which
includes a cash base salary and a deferred cash payment,
we make a technical adjustment to the compensation caps.
Instead of calculating the compensation caps in relation to the
cash base salaries of an individual member of the Executive
Committee, we will now calculate the compensation cap in
relation to the total base compensation.
As such, there is no longer need for a short-term cap as the
relationship between cash base salary and deferred cash
compensation is 1.0x. The cap on the LTIs, in relation to the
total base salary, will be reduced from 10x to 5x. For 2020,
the ratio between the committee members’ LTIs compared to
their total base compensation ranged from 0.85x to 2.72x in
2020 (cap = new 5x). These ratios exclude any other benefits
(social security and pension contributions) and show the
varying compensation levels among individuals based on their
function, achievements and responsibility.
4.6. Executive Committee loans (audited)
Executive Committee members may apply for loans and fixed
advances, subject to an internal review and approval process.
As of 31 December 2020, no loans were outstanding to
either current or former Executive Committee members or to
a related party of a current or former Executive Committee
member.
4.7. Employee contracts (audited)
Employee contracts have no special provisions such as
severance payments, “golden parachutes”, reduced stock and/
or options and MPP vesting periods etc. in place in case of
the departure of an Executive Committee member. Individual
settlements will always be subject to the review and approval
of the NCC. Partners Group did not make any such payments
to current Executive Committee members in 2019 and 2020.
ANNUAL REPORT 2020 Compensation Report
Exhibit 8: Composition of the Executive Committee 2020 and functions of its members
Name
André Frei
David Layton
Hans Ploos van Amstel1)
Juri Jenkner
Andreas Knecht
Marlis Morin
Joined Partners
Group in
Nationality
Age
Swiss
American
Dutch
German
45
39
55
45
Position
Co-Chief Executive Officer
Co-Chief Executive Officer and Head Private Equity
Chief Financial Officer, Head Group Finance & Corporate Development
Head Private Infrastructure
Swiss
51 Chief Operating Officer, General Counsel and Head Corporate Operations
2000
2005
2020
2004
2009
2003
Swiss/Italian
50
48
Chief Risk Officer and Co-Head Portfolio Solutions
Head Client Services
Dr. Michael Studer
2001
Swiss
1) Member as of 1 July 2020.
Exhibit 9: Executive Committee compensation for the full-year 2020 (audited)
In thousands of Swiss francs
Cash base
salary
Deferred
cash
payment
Other1)
Subtotal
cash
compensation
2020
EPP
MPP2)
Total3), 4)
André Frei, Co-Chief Executive Officer
David Layton, Co-Chief Executive Officer and Head
Private Equity
750
704
750
297
1'797
2’000
1’000
4'798
704
55
1'463
2’550
1’275
5'289
Total Executive Committee
3'704
3'704
1'255
8'663
10’054
5'024
23'741
1) Other compensation includes payments by Partners Group for pension and other benefits such as social security payments.
2) Fair value of Management Performance Plan (MPP) as outlined in Appendix A.1.
3) Figures above exclude discounted fees for investments made alongside investors in Partners Group’s investment programs under the firm’s Employee Commitment Program. Including
these accrued but not yet paid items the total compensation for the entire Executive Committee amounts to CHF 23’796 thousand, including CHF 55 thousand for discounted fees. The total
compensation of André Frei and David Layton amounts to CHF 4’811 thousand (including CHF 13 thousand of discounted fees) and CHF 5’302 thousand (including CHF 14 thousand of
discounted fees), respectively.
4) Total compensation of the Executive Committee (like-for-like), excluding LTIs and social security costs represents CHF 7.2 million and lies within the approved compensation budget of
CHF 7.5 million at the 2019 AGM of shareholders in May. The additional budget required for the new CFO stems from the firm’s “additional budget reserve” for new Executive Committee
members according to art. 37 lit. 6 in our articles of association.
Exhibit 10: Executive Committee compensation for the full-year 2019 (audited) DRAFT
In thousands of Swiss francs
Cash base
salary
Deferred
cash
payment
Other1)
Subtotal
cash
compensation
2019
EPP
MPP2)
Total3), 4)
André Frei, Co-Chief Executive Officer
David Layton, Co-Chief Executive Officer and Head
Private Equity
750
745
750
271
1'771
2'500
1'250
5'521
745
58
1'548
2'751
1'500
5'799
Total Executive Committee
3'495
3'495
1’081
8'071
10’903
5'600
24'574
1) Other compensation includes payments by Partners Group for pension and other benefits such as social security payments.
2) Fair value of Management Performance Plan (MPP) as outlined in Appendix A.1.
3) Figures above exclude discounted fees for investments made alongside investors in Partners Group’s investment programs under the firm’s Employee Commitment Program. Including these
accrued but not yet paid items the total compensation for the entire Executive Committee amounts to CHF 24’584 thousand, including CHF 10 thousand for discounted fees. The total compen-
sation of André Frei and David Layton amounts to CHF 5’526 thousand (including CHF 5 thousand of discounted fees) and CHF 5’799 thousand (including CHF 0 thousand of discounted fees),
respectively.
4) Total compensation of the Executive Committee, excluding LTIs and social security costs represents CHF 7.1 million and lies within the approved compensation budget of CHF 7.5 million at the
2019 AGM of shareholders in May.
Partners Group | 131
ANNUAL REPORT 2020 Compensation Report
5. Board compensation
5.2. Compensation 2020
The compensation of the executive members of the Board
of Directors was set as follows: the cash base salary is
fixed at CHF 0.30 million p.a. For overall LTI allocations, the
assessment of the compensation of executive members of
the Board of Directors is in line with that of the Executive
Committee. The NCC determined the overall LTI pool by
looking at quantitative and qualitative criteria. In line with
the LTI pool for the Executive Committee, the overall LTI
pool for executive members of the Board of Directors
decreased by 15% compared to the amount granted in 2019.
Individual goals differ depending on a member’s function
and level of responsibility and are outlined in Exhibit 2. At
Board committee-level, each executive member of the Board
of Directors has additional responsibilities through his/
her membership in the respective sub-committees. Due to
their already significant shareholding in the firm, executive
members of the Board of Directors were granted their LTI
entirely in MPP rights (similar to last year).
Executive members of the Board of Directors contributed
to the firm’s Portfolio Employee Support Fund. Partners
Group matched their contribution. The fund was designed
to support the most financially vulnerable employees at
our portfolio companies during the crisis by addressing
the specific needs of the families and individuals in these
workforces, in particular for medical expenses, healthcare
and childcare. All four executive members of the Board of
Directors forfeited 9 months of their annual base salary,
donating CHF 0.9 million altogether to this fund.
For the compensation of independent Board members, the
NCC continued to apply the existing detailed module-based
approach as outlined in the compensation framework in
Exhibit 11. The compensation will largely be determined by
the business assignments carried out, the time each member
allocates to Board committee responsibilities and their
additional contribution to the firm’s business beyond their
committee responsibilities.
Independent Board members are each paid 50% in cash and –
newly – 50% in restricted shares delivered in one installment
in the current board period. These restricted shares have a
five-year selling restriction2. Similar to last year, independent
Board members did not receive any LTI and pension benefits.
2 Restricted shares have a five-year selling restriction as long as independent Board mem-
bers serve on the Board of Partners Group Holding AG. Should they not be re-elected the
selling restriction will be reduced to one year.
The Board has the goal to build a sustainable, entrepreneurial
business over the long term for the benefit of its clients,
employees and shareholders. It thereby applies the
same approach to the firm’s governance as it does to the
management of its portfolio companies, valuing a long-
term approach when it comes to individual board- and
management-led value creation projects.
The Board sets the compensation for its members at a level
that reflects individual responsibility and contribution, as
well as time allocated to the Board mandate. Beyond their
statutory duties and supervisory and risk management tasks,
Board members contribute to Partners Group’s growth
and development by supporting the analysis of investment
opportunities, coaching senior leaders of the firm, working
alongside client teams on business development and major
client relationships, and actively contributing to the firm’s
corporate and cultural development.
5.1. Review of payout structure for independent
Board members
Until the AGM of shareholders in 2020, we followed a private
markets approach in a public market context and granted
restricted options to independent Board members: in private
markets, we expect independent directors on portfolio
company Boards to actively participate in developing
value-enhancing strategies. Therefore, we typically expect
that they invest a meaningful proportion of their own net
worth into the portfolio company alongside private equity
investors in order to participate in both upside potential and
downside risk. In line with this principle, and to encourage
engagement in value creation initiatives, incentive schemes
for independent Board members may allow for additional
upside through options – but only if these Board members
materially share the downside risk.
This approach to remunerating independent Board members
led to discussions with some of our largest shareholders
and proxy advisors and, ultimately, to a comparably low
acceptance rate of our Compensation Report over the last
few years (2020: 64%, 2019: 69%). We have therefore
decided to replace restricted options with restricted shares
when compensating independent Board members and follow
the best practice of public market board compensation.
132 | Partners Group
ANNUAL REPORT 2020 Compensation Report
Exhibit 11: Compensation framework: independent
Board members
Board
membership
Chair/member1)
(NCC, IOC, COC)
Member
(RAC, SC)
Chair
(RAC)
Ad-hoc Board
committee work
Description
Regular Board work,
including offsites; client
AGM; and other Board-
related work.
Additional Board
meetings, including the
preparation of meeting
materials; other additional
meetings; regular calls;
and team interaction.
Official RAC meetings
and several other - mainly
internal - meetings, and
traveling.
Value creation and other
PG-related initiatives
via specially created
committees.
Compensation
Compensation:
CHF 0.10 million
Compensation:
CHF +0.05
million (for each
assignment)
Compensation:
CHF +0.10
million
Compensation:
CHF +0.05 to
0.10 million,
dependent on
time allocation
1) The Strategy Committee (SC) and the Client Oversight Committee (COC) are not
expected to be led by Independent Board members.
Consistent with industry standards, Board members may
also invest into Partners Group investment programs on
a no management fee and no performance fee basis. Any
such discounted fees granted to members of the Board of
Directors for investments made alongside investors in the
firm’s closed-ended investment programs will be disclosed in
the Compensation Report (see section 3.3). The respective
revenues not generated due to these fee discounts to
independent Board members amounted to around CHF 10
thousand and represented <0.001% of total revenues of
the firm. Therefore, they are immaterial to influence their
independent judgment.
5.3. Executive Chairman of the Board
The Chairman’s role requires a substantial commitment
concerning time and involvement. Under the leadership of the
Executive Chairman Steffen Meister, the Board determines,
among other things, the strategy of the firm and exercises
ultimate supervision over management. The Chairman has a
focus on strategic projects and drives forward business and
corporate development (through his engagement as chair of
the Strategy Committee). Moreover, he is actively involved in
the development of client-related initiatives (through his seat
on the Client Oversight Committee). He is, together with the
Executive Committee, responsible for the development of
the next generation of leaders and serves as a coach for the
Executive Committee. The Chairman is also a member of the
board of directors of the firm’s portfolio company Hearthside
Food Solutions and takes an active role in representing the
firm vis-à-vis regulators, key shareholders, investors, and
other important external stakeholders.
The Chairman is paid an annual base Board fee of CHF 0.30
million (2019: CHF 0.30 million). Steffen Meister forfeited
9 months of his annual base salary, donating CHF 0.23 million
to the firm’s Portfolio Employee Support Fund. He was
assessed by the NCC and met his Board-level performance
objectives outlined in Exhibit 2. Based on his achievements
in 2020, he received the same compensation factor as the
Executive Committee (0.85x). The Chairman was therefore
granted LTIs amounting to CHF 1.28 million (2019: CHF
1.50 million), entirely granted in MPP. This brings his total
compensation to CHF 1.64 million, including pension benefits
as outlined in Exhibit 13 (2019: CHF 1.86 million).
5.4. Executive members of the Board
There are an additional three executive members of the
Board of Directors, Dr. Marcel Erni, Alfred Gantner and
Urs Wietlisbach, who are significant shareholders of the
firm. Each is a founding partner of the firm and dedicates a
substantial amount of his time to the firm. Each of them also
plays an instrumental role in determining the firm’s business
and corporate strategy (via the Strategy Committee), in
assessing the quality and consistency of decision processes,
the investment performance achieved, the realization
of the projected appreciation on individual investments,
and the investment risks incurred (via the Investment
Oversight Committee), and/or in driving forward major client
relationships (via the Client Oversight Committee). Dr. Marcel
Erni and Alfred Gantner hold various boards seats in Partners
Group’s lead/joint-lead portfolio companies.
The NCC assesses their contribution to each Board-level
committee throughout the year. Dr. Marcel Erni and Messrs.
Alfred Gantner and Urs Wietlisbach were each awarded
an annual base Board fee of CHF 0.30 million (2019: CHF
0.30 million). Each founder forfeited 9 months of his annual
base salary, donating CHF 0.23 million to the firm’s Portfolio
Employee Support Fund. With regards to their LTI allocation,
each member met the expectations of the NCC on all Board
committees and were each awarded an LTI grant of CHF 0.85
million (2019: CHF 1.00 million), entirely granted in MPP.
This brings the total compensation of Dr. Marcel Erni to CHF
1.22 million (2019: CHF 1.36 million), Alfred Gantner to CHF
1.23 million (2019: CHF 1.36 million) and Urs Wietlisbach to
CHF 1.22 million (2019: CHF 1.36 million), including pension
benefits as outlined in Exhibit 13.
Partners Group | 133
ANNUAL REPORT 2020 Compensation Report
5.5. Independent members of the Board
The independent Board members who focused on Board- and
committee-related mandates at Partners Group are Grace del
Rosario-Castaño, Lisa A. Hook, Dr. Martin Strobel and Dr.
Eric Strutz. Independent Board members spend a significant
amount of time contributing to several strategic board-level
initiatives. They have many formal and informal interactions
with management and employees across the firm on an
extensive range of matters and projects (e.g. key strategic
growth projects, key client-related matters, legal, compliance,
audit, promotion considerations, leadership development
etc.). As of 2020, independent Board members are each
paid 50% in cash and 50% in restricted shares. They do not
receive any LTIs or pension benefits. Select independent
Board members hold boards seats in Partners Group’s lead/
joint-lead portfolio companies (see detailed overview in
Partners Group’s Corporate Governance Report 2020).
Lisa A. Hook was paid an annual base Board fee of CHF 0.10
million. She additionally received CHF 0.05 million for being a
member of the Investment Oversight Committee, CHF 0.05
million for her contribution in the Risk & Audit Committee
and CHF 0.05 million for being a member of the NCC. This
brings her total compensation to CHF 0.27 million (including
base fee and other compensation as outlined in Exhibit 13).
Grace del Rosario-Castaño was paid an annual base Board
fee of CHF 0.10 million. She additionally received CHF
0.05 million for chairing the NCC and CHF 0.05 million for
being a member of the Investment Oversight Committee.
Furthermore, she was entitled to CHF 0.05 million for her
special leadership and corporate development assignments
in Asia, in particular in the firm’s main offices in Manila and
Singapore, and her work on the local board of Partners
Group’s Manila entity. This brings her total compensation to
CHF 0.27 million (including base fee and other compensation
as outlined in Exhibit 13).
Dr. Eric Strutz acted as Vice Chairman and Lead Independent
Director and was paid an annual base Board fee of CHF
0.10 million. He additionally received CHF 0.10 million for
chairing the Risk & Audit Committee. He was also entitled
to CHF 0.05 million for his special assignment on the local
board of Partners Group’s UK entity. This brings his total
compensation to CHF 0.27 million (including base fee and
other compensation as outlined in Exhibit 13).
Dr. Martin Strobel was paid an annual base Board fee of CHF
0.10 million. He additionally received CHF 0.05 million for
being a member of the Strategy Committee, CHF 0.05 million
for his contribution in the Risk & Audit Committee and CHF
0.05 million for being a member of the NCC. Furthermore,
he devoted additional time to Partners Group, providing
guidance on operational excellence matters globally. In this
ad-hoc Board committee work, Martin Strobel advises the
Technology Steering Committee and the firm’s “operational
excellence” program, amongst others. He received another
CHF 0.10 million for this special assignment. This brings his
total compensation to CHF 0.37 million (including base fee
and other compensation as outlined in Exhibit 13).
5.6. Loans to the Board (audited)
Members of the Board may apply for loans and fixed
advances, subject to an internal review and approval process.
Loans are made on substantially the same terms as those
granted to other employees. As of 31 December 2020, no
loans were outstanding to either current or former Board
members or to a related party of a current or former Board
member.
5.7. Board contracts (audited)
Contracts with members of the Board have no special
provisions such as severance payments, “golden parachutes”,
reduced stock and/or options and MPP vesting periods etc.
in place in case of the departure of a Board member. Partners
Group did not make any such payments to current members
of the Board in 2019 and 2020.
5.8. AGM 2021: Board compensation approvals
In this section, the NCC proposes changes to the
compensation for its independent Board members as of
2021. These proposals are made based on the firm having
significantly increased in scope and size over the past few
years in its global investment, client and corporate activities.
One of the consequences of the firm’s growth was its
inclusion into the Swiss Market Index (SMI) in September
2020, an index that represents the largest 20 listed
companies in Switzerland.
134 | Partners Group
ANNUAL REPORT 2020 Compensation Report
The NCC reviewed the existing compensation framework
for independent Board members by conducting a benchmark
analysis across 20 publicly listed firms, including US, European
and Swiss alternatives and asset managers, as well as select
members of the SMI. It concluded that certain adjustments
should be made to select functions and responsibilities that
reflect the growing regulatory complexity in our industry
and increasingly global activities of our company (RAC), the
increasing human capital management responsibilities with
an increasing number of professionals (NCC), as well as the
requirement to dedicate more time to other Board sub-
committees (IOC, COC, SC).
The proposed amendments are outlined in Exhibit 12 and
are expected to become effective as of 2021, subject to the
approval by shareholders at the AGM in May 2021. The NCC
decided to not fully close the compensation gap to other large
listed Swiss financials firms, which show a higher remuneration
for independent Board members, and believes that the
proposed adjustment to compensation will provide a more
competitive compensation package for independent Board
members and continue to allow the firm to access best in class
candidates.
Exhibit 12: Amended compensation framework for
independent Board members as of 2021
Board
membership
RAC
NCC
Current framework
New framework
CHF 100’000
CHF 100’000
Chair: CHF 100’000
Member: CHF 50’000
Chair: CHF 150’000
Member: CHF 100’000
Chair: CHF 50’000
Member: CHF 50’000
Chair: CHF 100’000
Member: CHF 50’000
IOC, COC, SC
Chair: CHF 50’000
Member: CHF 50’000
Chair: chaired by
executive member
Member: CHF 100’000
Larger
subsidiary PG
board
Ad-hoc Board
committee
work
Member: CHF 50’000 Member: CHF 50’000
Dependent on time
allocation.
Example: for each
additional ~10%
estimated time
allocation
CHF +100’000
Dependent on time
allocation.
Example: for each
additional ~10%
estimated time
allocation
CHF +100’000
The final proposals will be outlined in the invitation sent to
shareholders for the AGM to be held on 12 May 2021.
Partners Group | 135
ANNUAL REPORT 2020 Compensation Report
Exhibit 13: Board compensation for the full-year 2020 (audited)
In thousands of Swiss francs
Steffen Meister, Executive Chairman
Dr. Eric Strutz, Vice Chairman
Dr. Marcel Erni
Alfred Gantner
Lisa A. Hook
Grace del Rosario-Castaño
Dr. Martin Strobel
Urs Wietlisbach
Total Board of Directors
Michelle Felman5)
Patrick Ward5)
Cash
Other1)
Subtotal
cash
compensation
Shares
MPP3)
Total 4), 6)
2020
300
125
300
300
125
125
175
300
1'750
46
60
64
20
71
75
19
20
23
73
365
7
11
383
364
145
371
375
144
145
198
373
2'115
53
72
2'239
-
125
-
-
125
125
175
-
551
46
46
644
1'275
-
850
850
-
-
-
850
3'825
-
-
1'639
270
1'221
1'225
270
270
373
1'223
6'491
99
118
3'825
6'708
Total Board of Directors incl. former members
1'856
1) Other compensation: other compensation includes payments by Partners Group for pension and other benefits. In particular, the following Board members received pension benefits: Dr.
Marcel Erni, Alfred Gantner, Steffen Meister und Urs Wietlisbach. The remaining payments to the following members of the Board exclusively represent social security costs in relation to
their compensation: Lisa A. Hook, Grace del Rosario-Castano, Dr. Martin Strobel and Dr. Eric Strutz.
2) Restricted shares were allocated on 18 November 2020 at a share price of CHF 922 per share. Restricted shares have a five-year selling restriction as long as independent Board members
serve on the Board of Partners Group Holding AG. Should they not be reelected the selling restriction will be reduced to one year. The number of shares allocated to each Board member is
as follows: Lisa A. Hook (136 shares), Grace del Rosario-Castano (136 shares), Dr. Martin Strobel (190 shares) and Dr. Eric Strutz (136 shares).
3) Fair value of Management Performance Plan (MPP) as outlined in section A.1.
4) Figures above exclude discounted fees for investments made alongside investors in Partners Group’s investment programs under the firm’s Employee Commitment Program. Including
these accrued but not yet paid items the total compensation for the entire Board of Directors amounts to CHF 16’777 thousand, including CHF 10’069 thousand for discounted fees. The
total fee discounts received by the Board of Directors are listed below:
• Steffen Meister received a technical non-financial income stemming from fee discounts amounting to CHF 96 thousand
• Dr. Marcel Erni received a technical non-financial income stemming from fee discounts amounting to CHF 2’393 thousand
• Alfred Gantner received a technical non-financial income stemming from fee discounts amounting to CHF 3’711 thousand
• Grace del Rosario-Castaño received a technical non-financial income stemming from fee discounts amounting to CHF 2 thousand
• Dr. Martin Strobel received a technical non-financial income stemming from fee discounts amounting to CHF 8 thousand
• Urs Wietlisbach received a technical non-financial income stemming from fee discounts amounting to CHF 3’857 thousand
5) Board member until the Annual General Meeting of shareholders on 13 May 2020.
6) Total compensation of the Board, excluding LTIs and social security costs represents CHF 2.7 million and lies within the approved compensation budget of CHF 3.0 million at the 2020
AGM of shareholders in May.
136 | Partners Group
ANNUAL REPORT 2020
Compensation Report
Exhibit 14: Board compensation for the full-year 2019 (audited)
In thousands of Swiss francs
Steffen Meister, Executive Chairman
Dr. Eric Strutz, Vice Chairman
Dr. Marcel Erni
Michelle Felman
Alfred Gantner
Grace del Rosario-Castaño
Dr. Martin Strobel
Patrick Ward
Urs Wietlisbach
Total Board of Directors
Dr. Charles Dallara, former member6)
Dr. Peter Wuffli, former member6)
Total Board of Directors incl. former members
Cash
Other1)
Subtotal
cash
compensation
Shares /
options
2019
MPP3)
Total 5), 7)
300
100
300
125
300
125
175
275
300
2'000
195
75
2'270
55
8
55
10
65
10
14
20
61
298
89
6
393
355
108
355
135
365
135
189
295
361
2'298
284
81
2'663
-
1'500
1004)
-
1254)
-
1'000
-
-
1'000
1254)
1754)
2754)
-
800
842)
-
884
-
-
-
1'000
4'500
-
-
1'855
208
1'355
260
1'365
260
364
570
1'361
7'598
368
81
4'500
8'047
1) Other compensation: other compensation includes payments by Partners Group for pension and other benefits. In particular, the following Board members received pension benefits: Dr.
Marcel Erni, Alfred Gantner, Steffen Meister und Urs Wietlisbach. Patrick Ward received UK national insurance payments amounting to CHF 7’246. The remaining payments to the following
members of the Board exclusively represent social security costs in relation to their compensation: Michelle Felman, Grace del Rosario-Castano, Dr. Martin Strobel, Dr. Eric Strutz and Patrick
Ward.
2) Shares: Dr. Charles Dallara was allocated 115 PGH shares in the value of CHF 732 per share on 15 May 2019.
3) Fair value of Management Performance Plan (MPP) as outlined in section A.1.
4) Options: each option has a strike price of CHF 807.60 and vests immediately. The selling restricting is 5 years. The number of options allocated to each Board member is as follows:
Michelle Felman (3’264 options), Grace del Rosario-Castano (3’264 options), Eric Strutz (2’611 options) Dr. Martin Strobel (4’570 options) and Patrick Ward (7’181 options). For further
information on the fair value of options and shares granted in 2019, please see consolidated financial statement under 4.3.
5) Figures above exclude discounted fees for investments made alongside investors in Partners Group’s investment programs under the firm’s Employee Commitment Program. Including
these accrued but not yet paid items the total compensation for the entire Board of Directors amounts to CHF 13’734 thousand, including CHF 5’687 thousand for discounted fees. The total
fee discounts received by the Board of Directors are listed below:
• Steffen Meister received a technical non-financial income stemming from fee discounts amounting to CHF 34 thousand
• Dr. Marcel Erni received a technical non-financial income stemming from fee discounts amounting to CHF 1’568 thousand
• Alfred Gantner received a technical non-financial income stemming from fee discounts amounting to CHF 2’511 thousand
• Grace del Rosario-Castaño received a technical non-financial income stemming from fee discounts amounting to CHF 0.5 thousand
• Dr. Martin Strobel received a technical non-financial income stemming from fee discounts amounting to CHF 2 thousand
• Urs Wietlisbach received a technical non-financial income stemming from fee discounts amounting to CHF 1’555 thousand
• Dr. Peter Wuffli received a technical non-financial income stemming from fee discounts amounting to CHF 16 thousand
6) Board member until the Annual General Meeting of shareholders on 15 May 2019.
7) Total compensation of the Board, excluding LTIs and social security costs represents CHF 3.0 million and lies within the approved compensation budget of CHF 3.25 million at the 2019
AGM of shareholders in May.
Partners Group | 137
ANNUAL REPORT 2020
Compensation Report
6. Appendix
A.1. LTIs
The MPP
The MPP consists of a performance right (option-like
instrument), which focuses on the firm’s share performance,
and a performance fee component, which focuses on active
value creation in the firm’s underlying investment programs.
Achieving only one component while not the other results
in no payout. Any payout will be in a number of restricted
Partners Group shares in the value of the respective payout.
Share price component (year 1 to 5)
As a public firm, we aim to provide superior and sustainable
total shareholder return and ensure that senior executives
place an emphasis on positive share price development over
the mid- to long-term. We therefore link the share price
component of the MPP to positive development of the share
price of Partners Group Holding AG (i.e. price return on
PGHN). A negative development of the share price results in
no payout.
For the 2020 MPP grant, the intrinsic value of these MPP
rights will be measured five years after the grant date and
cannot exceed 7.6x the grant fair value (2019: 10x the grant
fair value). We believe that measuring performance over an
extended five-year period is consistent with the long-term
orientation of the firm’s business.
Performance fee component (year 5 to 14)
While the share price component focuses on the price return
of the share in order to determine an intrinsic value, the
performance fee component focuses entirely on how the
intrinsic value will be paid out in the following years (in the
form of restricted Partners Group shares). In other words,
the performance fee component can further influence
the magnitude and the timing of the payout as both are
dependent on the actual performance fees generated from
the particular year in which MPP rights were granted.
• Magnitude: the magnitude depends on the actual
performance fees that the firm is able to generate from
its 2019 investment vintage throughout the next 15
years. For that purpose, the firm defines a target that
is based on ex ante model returns. This target is set at
100% and needs to be achieved over a time period of
15 years (“1” in Exhibit 14). For example, if the intrinsic
value of MPP rights is 100 and 100% of the targeted
performance fees are actually paid to the firm, the plan
138 | Partners Group
participant receives Partners Group shares in the value
of 100. The total payout can be higher than the originally
targeted nominal amount in the case of consistent
investment performance above underlying assumptions
(“2” in Exhibit 15), or lower than the originally anticipated
nominal amount in the case of lower investment
performance (“3” in Exhibit 15). In the worst-case
scenario, the amount can be zero, irrespective of the
intrinsic value determined through the share price
component.
Exhibit 15: Illustration of actual MPP payout based on
underlying investment performance
Underlying
investment
performance
100%
2
1
3
Intrinsic value
of MPP rights
(example)
Actual MPP
payout
• Timing: the MPP payout occurs as the performance
fees of the underlying investment vintage materialize,
as illustrated in Exhibit 16. After each year, we compare
the actual proportion of performance fees generated
against the defined target. We then pay out the same
proportion of the intrinsic value of the MPP grant in the
form of restricted shares. For example, should the 2020
investment year pay out 15% of its anticipated total
payout (100%) in 2025, we would pay out 15% of the
intrinsic value of MPP rights, determined via the share
price component, to plan participants in the form of
restricted Partners Group shares in 2025.
ANNUAL REPORT 2020
Compensation Report
Exhibit 16: Actual MPP payout occurs as the
performance fees of the underlying investment vintage
materialize (illustration)
Expected payout of intrinsic value = 100%
1
2
3
Better than
expected
100%
Worse than
expected
Payment based on underlying
performance fees generated
5
6
7
8
9
10
11
12
13
14 years
Illustrative example: performance fee payout structure
for the 2020 investment year
Future potential performance fees will depend on
investments made between Q4 2019 and Q3 2020
(“2020 investment year”). Once profitable investments
have been realized, cash is first distributed to the
investors in our investment programs.
Only once the hurdle rate that was agreed with the
firm’s clients has been cleared (i.e. the client has
already achieved a certain predefined minimum return,
typically 8% p.a.) will a part of the investment profits be
distributed to the firm (in the form of performance fees).
Depending on the investment outcomes and timing of
the investment realizations, it often takes up to 14 years
until the full payout of performance fees is received, as
illustrated in Exhibit 17.
Exhibit 17: Possible payout pattern of performance
fees under MPP
100%
Cumulative performance
fee payout
Performance fee
payout p.a.
0%
t=0
Investment year
5
6
7
8
9
10 11 12 13 14
Vesting parameters
The MPP grants vest linearly over a period of five years.
For members of the Executive Committee and executive
members of the Board of Directors, the linear vesting is
subject to a minimum five-year tenure in the respective
committee. Before that, it has a five-year cliff vesting
attached.
Vesting rules in case of retirement
Given that the firm aims to foster a performance-oriented
work environment, senior employees of the firm receive
the majority of their compensation in LTIs with long vesting
periods. This is also the case for employees nearing their
retirement. This can result in senior employees entering their
retirement with a meaningful portion of unvested LTIs.
In order to ensure that senior employees continue to
contribute to the firm’s success until their retirement,
the NCC has established special vesting rules for senior
employees heading towards their retirement.
At the time of retirement, all LTIs for Executive Committee
members and executive members of the Board of
Directors shall be deemed to have fully vested and become
unrestricted, provided that the employee has reached the
age of 55 and has served the firm for ten years or more as a
Managing Director/Partner.
The vesting relief is subject to the following conditions: the
employee is considered a good leaver, agrees to sign a two-
year non-compete agreement and will have no new principal
employment in the private markets industry.
The NCC may use its discretion to make further adjustments
to the rules outlined above on a case-by-case basis in order
to achieve the best result for both the business and the
employee coming up to retirement.
Partners Group | 139
ANNUAL REPORT 2020
Compensation Report
A.2. Compensation governance
Committee members
Legal framework
The Swiss Code of Obligations as well as the Corporate
Governance Guidelines of the SIX Swiss Exchange require
listed companies to disclose information about the
compensation of members of the Board and Executive
Committee, their equity participation in the firm and
any loans made to them. This Annual Report fulfills that
requirement. In addition, this Annual Report is in line
with the principles of the Swiss Code of Best Practice for
Corporate Governance of the Swiss Business Federation
(economiesuisse).
Compensation decision-making authorities
Compensation allocation is an important and challenging
governance and leadership task. As such, Partners Group’s
Board assigns the NCC with the task of carrying out a
systematic process on an annual basis. The Committee
has combined responsibilities for “nomination” and
“compensation” proposals, as both are an integral and a
closely linked part of a typical compensation.
The nomination process ensures the assessment and
nomination of individuals is based on their contribution to
the firm’s success and on their potential for development,
while the compensation process ensures the respective
adjustments to compensation based on functions,
responsibilities and performance. Giving one committee
responsibility for both the nomination and compensation
processes should ensure a seamless transition between a
professional’s development and compensation.
The NCC fulfills the duties set out for it in the firm’s articles
of association. In particular, the committee oversees the
firm’s compensation structure to ensure adherence to
Partners Group’s strategy and culture and to recognized best
practices:
•
•
•
It reviews compensation proposals by the Executive
Committee to ensure they comply with determined
principles and performance criteria and evaluates the
proposals’ consistency with the firm’s values, such as
“fair pay” and “pay for performance.”
It advises and supports the Board and the Executive
Committee with regard to firm-wide promotions,
leadership development measures and succession
planning.
It submits nomination and compensation motions and
recommendations to the Board and is also responsible
for the preparation of this Compensation Report.
140 | Partners Group
As of 31 December 2020, the members of the NCC were
Grace del Rosario-Castaño (Chair), Lisa A. Hook and Dr.
Martin Strobel. According to the independence criteria
outlined in our Corporate Governance Report (section 3),
Grace del Rosario-Castaño, Lisa A. Hook and Dr. Martin
Strobel are independent Board members. The members
were elected by shareholders for a one-year term with the
possibility of re-election.
Committee meetings & decisions taken
Throughout the year, members of the NCC interact with
the Chairman, the Co-CEOs and other members of the
Executive Committee on a regular basis. Throughout 2020,
formal and informal meetings were held with a large group
of the firm’s senior leaders to discuss compensation budgets,
department bonus allocation plans, promotion criteria and
other compensation-related topics.
Typically, the NCC interacts via several informal meetings
throughout the year and holds two decision meetings in the
second half of the year:
•
•
In its first decision meeting (Q3), the NCC confirms the
budget allocations for short term cash payments and
LTIs (MPP and EPP). During the meeting, the committee
defines guidelines for the allocation of the various
compensation pools.
In its second decision meeting (Q4), the NCC approves
the compensation proposal for the Executive Committee
and Global Executive Board members and proposes the
compensation for the Co-CEOs and Board members.
Compensation authorities are outlined in Exhibit 18.
Partner- and Managing Director-level promotions and
compensation are ratified individually.
A.3. Review: binding budgets 2014-2018 vs. actual
payouts
With the introduction of the Ordinance against Excessive
Compensation in listed joint stock companies (“OaEC”) of the
Swiss Federal council, shareholders can express a binding
vote on the compensation of the Board of Directors and
Executive Committee as of the financial year 2014 onwards.
As of 31 December 2020, the actual payout to current
and former Executive Committee member or to executive
members of the Board of Directors has never exceeded the
approved budgets between 2014 and 2018.
ANNUAL REPORT 2020
Compensation Report
Exhibit 18: Approval authorities
Compensation pools
Budget/proposal
Approval
Board of Directors,
Executive Committee
Group-level
budget
Department-level
budget
NCC
NCC
Chairman & Co-CEOs
Q4
Q3
Q3
Shareholders’ AGM
May
Board of Directors ratifies
NCC approves
Q4
Q4
Individual compensation
Budget/proposal
Approval
Chairman of the
Board of Directors
Members of the
Board of Directors
Co-CEOs
Executive Committee,
Global Executive Board
Senior Members of
Management
Members of Management
and Professionals
Chair of the NCC
NCC
Chairman & Co-CEOs
Q4
Board of Directors approve
Q4
Executive Committee
Q4
NCC approves,
Board of Directors ratifies
Q4
Business Department Heads
Note: in the case of approving the Chairman’s compensation and the additional fees for the Nomination & Compensation Committee (NCC) members, the Board member concerned does
not participate in the recommendation involving his or her own compensation.
Partners Group | 141
ANNUAL REPORT 2020
Compensation Report
Statutory Auditor’s Report
To the General Meeting of Partners Group Holding AG, Baar
Report on the Audit of the Compensation Report
We have audited the accompanying compensation report of Partners Group Holding AG for the year
ended 31 December 2020. The audit was limited to the information according to articles 14-16 of the
Ordinance against Excessive compensation in Stock Exchange Listed Companies contained in
sections 4.6 to 4.7 and exhibits 9 to 10 on pages 130 and 131 as well as sections 5.6 to 5.7 and
exhibits 13 and 14 on pages 134, 136 and 137 of the compensation report.
Responsibility of the Board of Directors
The Board of Directors is responsible for the preparation and overall fair presentation of the
compensation report in accordance with Swiss law and the Ordinance against Excessive
compensation in Stock Exchange Listed Companies (Ordinance). The Board of Directors is also
responsible for designing the compensation system and defining individual compensation packages.
Auditor's Responsibility
Our responsibility is to express an opinion on the accompanying compensation report. We conducted
our audit in accordance with Swiss Auditing Standards. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
the compensation report complies with Swiss law and articles 14 – 16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the
compensation report with regard to compensation, loans and credits in accordance with articles
14 – 16 of the Ordinance. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatements in the compensation report, whether due to fraud or
error. This audit also includes evaluating the reasonableness of the methods applied to value
components of compensation, as well as assessing the overall presentation of the compensation
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Opinion
In our opinion, the compensation report for the year ended 31 December 2020 of Partners Group
Holding AG complies with Swiss law and articles 14 – 16 of the Ordinance.
KPMG AG
Thomas Dorst
Licensed Audit Expert
Auditor in Charge
Zurich, 15 March 2021
Christoph Hochuli
Licensed Audit Expert
KPMG AG, Räffelstrasse 28, PO Box, CH-8045 Zurich
© 2021 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member
firm of the KPMG global organization of independent member firms affiliated with KPMG International
Limited, a private English company limited by guarantee. All rights reserved.
142 | Partners Group
ANNUAL REPORT 2020 Partners Group has entities in various jurisdictions regulated
by, including but not limited to, the Swiss Financial Market
Supervisory Authority (FINMA), the U.S. Securities and
Exchange Commission (SEC), the United Kingdom Financial
Conduct Authority (FCA), the Monetary Authority of
Singapore (MAS), the Commission de Surveillance du
Secteur Financier (CSSF) and the Bundesanstalt für
Finanzdienstleistungsaufsicht (BaFin), which uphold the
requirements that these regulations imply. Partners Group
is committed to meeting high standards of corporate
governance, with the aim of guiding the firm to further
success. Partners Group prepares its Corporate Governance
Report according to the “Directive on Information relating to
Corporate Governance (including its annex)” issued by the SIX
Exchange Regulation and also takes into account the “Swiss
Code of Best Practice for Corporate Governance” issued by
economiesuisse.
The corporate governance section contains information on
the following:
1. Group structure and shareholders
2. Capital structure
3. Board of Directors
4. Executive Committee
5. Global Executive Board
6. Compensation, shareholdings and loans
7. Shareholders’ participation rights
8. Changes of control and defense measures
9. Auditors
10. Information policy
11. Non-applicability/negative disclosure
In this Corporate Governance Report, references to “Partners
Group”, the “firm”, the “company”, the “entity”, “we”, “us”
and “our” are to Partners Group Holding AG together with
its consolidated subsidiaries, unless the context requires
otherwise. Furthermore, the board of directors of Partners
Group Holding AG shall be referred to as “Board” or “Board of
Directors”.
1) Formed for the purpose of purchasing, construction, maintenance or management of land and property (non-investment related).
As of 31 December 2020 (Partners Group). The purpose of the chart above is to provide an overview of the group structure of Partners Group Holding AG and its subsidiaries/affiliates.
The ownership percentages reflected in the chart are meant for illustrative purposes and are rounded.
Partners Group | 143
ANNUAL REPORT 2020Corporate Governance Report 1. Group structure and
shareholders
1.1. Group structure
1.1.1. Description
Partners Group operates through majority or wholly
owned direct or indirect subsidiaries in Switzerland, the
United States, Luxembourg, Germany, the United Kingdom,
Guernsey, Singapore and other jurisdictions. The chart on the
previous page provides an overview of the group structure as
of 31 December 2020.
1.1.2. Listed companies belonging to the Group
Partners Group Holding AG is a stock corporation
incorporated under Swiss law with its registered office and
headquarters at Zugerstrasse 57, 6341 Baar-Zug. The shares
of Partners Group are listed pursuant to the International
Reporting Standard on the SIX Swiss Exchange AG under
the Valor number 2460882 and ISIN CH0024608827. The
market capitalization of the company as of 31 December
2020 was CHF 27.8 billion. All other group companies are
privately held.
1.1.3. Non-listed companies belonging to the Group
For more detailed information on the non-listed subsidiaries
of the group, including names, domiciles, share capital and
ownership interests, please see section 6 of the notes to
the financial statements of Partners Group Holding AG in
the Annual Report. For more detailed information on the
non-listed operating subsidiaries of the group, including
principal activity, place of incorporation, registered office and
ownership interests, please see section 17 of the notes to the
consolidated financial statements in the Annual Report 2020.
1.2. Significant shareholders
Partners Group has the following significant shareholders
holding over 3% of the shares and voting rights of Partners
Group Holding AG as of 3 March 2021.
The founding partners and largest shareholders of Partners
Group Holding AG, Dr. Marcel Erni and Messrs. Alfred
Gantner and Urs Wietlisbach (the “Founding Partners”),
each hold 1’338’959 shares in Partners Group Holding AG,
corresponding to 5.01% each of the total share capital of
Partners Group Holding AG.
On 3 December 2015, Dr. Marcel Erni and Messrs. Alfred
Gantner and Urs Wietlisbach entered into a five-year
144 | Partners Group
derivative transaction plan with Morgan Stanley & Co.
International plc, each for up to 4.12% of Partners Group
Holding AG’s total share capital (the “Derivative Transaction
Plan”). The Derivative Transaction Plan involves collars,
which include the purchasing of put and the writing of call
options (each a “Derivative Transaction”). Each Derivative
Transaction was due to expire on 17 June 2021, subject to
early termination, including optional early termination by the
Founding Partners. In order to coordinate the exercise of
their Derivative Transactions, the Founding Partners have
formed a group for their total derivative transaction positions
of 12.37% (4.12% each) of the total share capital.
On 20 February 2017, the Founding Partners each extended
the Derivative Transaction Plan by another 0.87% of Partners
Group Holding AG’s total share capital (each an “Extension”).
Each Extension involves another collar that was also due
to expire on 17 June 2021, subject to early termination,
including optional early termination by the three Founding
Partners.
On 10 September 2020, each Founding Partner decided
to terminate and settle the Derivative Transaction Plan
and the Extension early, which lead to a decrease in their
shareholding in Partners Group Holding AG of 5.01% each.
In addition, on 18 March 2020, a group controlled by
BlackRock, Inc., 55 East 52nd Street, New York, NY 10055,
USA, disclosed an acquisition of shares resulting in a
shareholding of 1’328’551 shares, corresponding to 4.98% of
the total share capital.
On 10 July 2020, a group controlled by Allianz SE, 80802
Munich, Germany, disclosed shareholdings of 900’683 shares,
corresponding to 3.37% of the total share capital.
As of 31 December 2020, Partners Group held 347’655
treasury shares, corresponding to 1.30% of the total share
capital.
All disclosures according to art. 120 of the Financial Market
Infrastructure Act (FMIA), including further details on the
lock-up group and organized group referred to above as
well as on option plans, can be found on the SIX Exchange
Regulation homepage: www.six-exchange-regulation.com/en/
home/publications/significant-shareholders.html.
1.3. Cross-shareholdings
Partners Group has no cross-shareholdings of 5% or more
with another company or group of companies.
ANNUAL REPORT 2020Corporate Governance Report 2. Capital structure
2.1. Capital
The issued nominal share capital of Partners Group amounts
to CHF 267’000, divided into 26’700’000 fully paid-in
registered shares with a nominal value of CHF 0.01 each.
2.2. Authorized and conditional share capital
As of 31 December 2020, Partners Group has no authorized
share capital.
As of 31 December 2020, the following conditional share
capital is available to Partners Group’s Board of Directors: a
maximum amount of CHF 40’050 through the issuance of
no more than 4’005’000 registered shares, with restricted
transferability, that are to be fully paid-in and that have a
nominal value of CHF 0.01 each.
The right to subscribe to new shares as part of the
conditional share capital increase is granted to members of
the Board of Directors and employees of Partners Group
through the exercise of option rights (the “Beneficiaries”).
Subscription and pre-emptive rights of shareholders are
excluded for this conditional capital increase in favor of
the Beneficiaries. The Board of Directors will determine all
details of the terms of issue, such as the amount of issue,
date of dividend entitlement and kind of contribution, and will
establish the related equity investment plan. The acquisition
of the registered shares by exercising the option rights and
the further transfer of the shares are subject to the transfer
restrictions set forth in section 2.6 below.
2.3. Changes in capital
No changes in share capital have occurred during the last
three years.
2.4. Shares and participation certificates
Partners Group has issued 26’700’000 fully paid-in
registered shares with a nominal value of CHF 0.01 each
in accordance with our articles of association (available at
http://www.partnersgroup.com/articlesofassociation). The
shares have been issued in the form of book-entry securities.
Shareholders do not have the right to ask for printing,
emission or delivery of share certificates. Shareholders may,
however, request at any time that Partners Group issues an
attestation of their stock holding.
All shares have equal rights. Each share carries one vote at
shareholders’ meetings. Voting rights and certain other non-
economic rights attached to the shares, including the right to
call and to attend shareholders’ meetings, may be exercised
only after a shareholder has been registered in the share
register of Partners Group as a shareholder with voting rights.
All shares are entitled to full dividend payments.
Partners Group has not issued (non-voting) participation
certificates (Partizipationsscheine).
2.5. Dividend-right certificates
Partners Group has not issued any dividend-right certificates
(Genussscheine).
Partners Group | 145
ANNUAL REPORT 2020Corporate Governance Report
2.7. Convertible bonds and options
Partners Group currently has no convertible bonds
outstanding.
On 7 June 2017, Partners Group issued its first corporate
bond, raising CHF 300 million through a fixed-rate senior
unsecured CHF-denominated issue (ISIN: CH0361532895).
The bond was issued with a seven-year term and a coupon
of 0.15% and matures on 7 June 2024. On 21 June 2019,
Partners Group issued its second corporate bond, raising
CHF 500 million through a fixed-rate senior unsecured CHF-
denominated issue (ISIN: CH0419041287). The bond was
issued with an eight-year term and a coupon of 0.40% and
matures on 21 June 2027. Please see section 13 of the notes
to the consolidated financial statements in the Annual Report
2020 for comprehensive information on the bonds issued by
the firm.
Since 30 June 2000, Partners Group has established
regular share and option programs that entitle management
personnel and a large number of employees to purchase and/
or hold shares in the entity. The options can be settled either
by the issuance of shares out of conditional share capital or
by the delivery of existing shares (treasury shares). Please
see section 4 of the notes to the consolidated financial
statements in the Annual Report 2020 for comprehensive
information on the share and option program of the firm.
Partners Group has not issued any further options or
warrants.
2.6. Transfer of shares, restrictions on transferability
and nominee registration
Share transfers, as well as the establishing of a usufruct (each
hereafter the “Share Transfer”), require the approval of the
Board of Directors of Partners Group Holding AG. A Share
Transfer may only be refused if the Share Transfer would
cause the shareholder to reach a shareholding exceeding 10%
of the total nominal share capital of Partners Group Holding
AG or if the shareholder does not expressly declare the
acquisition in their own name. Approval for Share Transfers
due to inheritance or matrimonial property law may not be
refused.
The Board of Directors may grant exceptions to this rule in
relation to the trading of shares, for example the recording
of persons holding shares in the name of third parties.
Nominees may be entered in the share register with voting
rights for a maximum of 5% of the total nominal share capital
and may be allowed to exceed this limit if they disclose the
names, addresses and shareholdings of the persons for
account of whom they are holding the shares. The Board
of Directors concludes agreements with such Nominees in
relation to disclosure requirements, representation of shares
and exercise of voting rights.
Share Transfers approved based on false representations of
the transferee may be revoked and the shareholder deleted
from the share register. A Share Transfer is deemed to have
been approved if it has not been declined within 20 days.
Amendments to the applicable transfer restrictions regime
requires shareholder approval with a quorum of at least two-
thirds of the represented votes and the absolute majority of
the represented nominal share capital.
During the financial year 2020, no exceptions to the
limitations on transferability and nominee registration were
granted.
For more details, please see articles 5 and 6 of our articles
of association (available at http://www.partnersgroup.com/
articlesofassociation).
146 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report
3. Board of Directors
The Board of Directors of Partners Group is entrusted with the overall strategy and direction of the company and with the
supervision of its management. As of 31 December 2020, the Board of Directors consists of eight members. All members were
elected at the annual general meeting of shareholders (“Annual General Meeting”) 2020 for a one-year tenure with the possibility
of re-election.
The table below shows the current composition of the Board of Directors and Committee membership (for further details and
allocation of tasks see section 3.5 below):
Name
Independent
Director
Strategy
Committee
Investment
Oversight
Committee
Client Oversight
Committee
Risk & Audit
Committee
Nomination &
Compensation
Committee
Steffen Meister, Chairman
Dr. Eric Strutz, Vice Chairman1)
Dr. Marcel Erni
Alfred Gantner
Lisa A. Hook
Grace del Rosario-Castaño
Dr. Martin Strobel
Urs Wietlisbach
Member
Chair
Lead Independent Director
Note: next to the committees mentioned above, the Crisis Committee has the following members: Steffen Meister (Chairman), Dr. Eric Strutz and Alfred Gantner.
1) Dr. Eric Strutz will retire from the Board of Directors as of 12 May 2021 after ten years as an independent member of the Board.
Partners Group | 147
ANNUAL REPORT 2020Corporate Governance Report
All Board members exhibit:
•
Strong alignment with shareholders
• High integrity
• Deeply active engagement with focus on value
creation
•
Strong board leadership skills in shaping and
directing strategy
• Bias towards trusted, long-term relationships
• Knowledge of corporate governance requirements
• A commitment to the long-term success of Partners
and practices
Group
• A proven record of success
• A commitment to sustainability and corporate
responsibility extending beyond our direct
stakeholders
Our Board members exhibit an effective and broad mix of skills, experience and diversity
25%
≤2 years
11%
>60 years
11%
≤50 years
37.5%1)
>10 years
Average
Board tenure
12.4
years
1) Including the Founding Partners.
37.5%
6-10 years
Gender
diversity
25%
women
Average
age
55.6
years
78%
51-60 years
4
different
nationalities2)
56%
Swiss
22%
German
11%
Filipina
11%
US American
Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
2) Graph takes into account board members with double nationalities.
8
Private markets industry know-how1)
5
Risk management experience3)
8
Broad international exposure5)
1) Have had at least 5 years of experience in the private markets industry
2) Have had at least 5 years of C-level experience
3) Have had at least 5 years of involvement in risk management activities
7
C-level experience2)
6
Operational experience4)
7
Investment experience6)
4) Have had at least 5 years of operational experience (through line or general management roles that included profit and loss responsibility)
5) Have had at least 10 years of international business exposure
6) Have had at least 10 years of investment management experience
148 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report 3.1. Members of the Board of Directors
Independent members of the Board may not:
All members of the Board of Directors of Partners Group
Holding AG are also members of the Board of Directors
of Partners Group AG, a 100% privately held subsidiary of
Partners Group Holding AG. Individual members of the Board
of Directors of Partners Group Holding AG are also members
of the Board of Directors of other operating entities of the
group, such as group entities in the UK and the Philippines.
The following provides information on the independence
criteria for members of the Board of Directors and on the
professional history and education of each such member,
including other significant activities in governing and
supervisory bodies of important financial organizations,
institutions and foundations under private and public law,
permanent management and consultancy functions for
important Swiss and foreign interest groups, official functions
and political posts.
Independence statement for members of the Board
Best practice in corporate governance calls for the
independence of selected Board members as an important
element of its quality and integrity. However, codes of best
practice, regulators and proxy advisors tend to use different
criteria and no globally accepted standard has yet emerged.
Having reviewed a series of possible criteria from different
sources, ranging from financial market authorities, other
stock exchanges and codes of best practice to foundations
and independent asset managers with a focus on sustainable
corporate development, Partners Group recognizes
differences in the definition of Board member independence.
Partners Group follows the general corporate governance
principle of “comply or explain” and therefore applies the
following criteria to evaluate the independence of its Board
members.
First and foremost, when searching for an external
independent member of the Board, Partners Group looks
for accomplished, distinctive and competent personalities
who are respected based on their achievements. Moreover,
they are selected based on their ability to contribute relevant
professional skills, commit substantial capacity and add to the
diversity of the Board in terms of background and unbiased
perspectives. In our view, these selection criteria represent
the essence of true independence.
In addition, Partners Group applies several formal criteria for
Board member independence.
•
•
have a line management function (i.e. positions with
substantial decision-making authority) for Partners
Group, or any of its affiliates, currently or in the three
years prior to their appointment;
be employed or otherwise affiliated with our statutory
auditors, currently or in the three years prior to their
appointment;
•
have an overall tenure of more than ten years.
Partners Group also applies the following additional criteria to
independent Board members, whereby the materiality of such
criteria is evaluated on a case-by-case basis:
•
•
limited financial dependence on Partners Group in terms
of employment, income and shareholding relative to their
individual overall situation; and
no material direct or indirect business relationship with
Partners Group or any of its affiliates (except as an
investor in Partners Group products).
As a result of this evaluation process (which is reviewed
annually) we consider the following current Board members
as independent: Dr. Eric Strutz (Lead Independent Director),
Lisa A. Hook, Grace del Rosario-Castaño and Dr. Martin
Strobel.
Neither of the independent Board members, nor any of
their close family members, have ever been members of
the senior executive management of Partners Group, nor
any of its subsidiaries, nor do they have any significant
business connections with either Partners Group or one of
its subsidiaries. None of the independent Board members
exercise any official functions or hold a political post, nor do
they have any permanent management/consultancy functions
for significant domestic and foreign interest groups.
Lead Independent Director
Dr. Eric Strutz is the firm’s Lead Independent Director. The
Lead Independent Director is an independent Board member
with the main mandate to coordinate and align the views
of independent Board members in case of fundamental
disagreements and conflicts with non-independent, executive
Board members. The Lead Independent Director is elected
by the Board for a term of office of typically one year. Re-
election is possible.
Partners Group | 149
ANNUAL REPORT 2020Corporate Governance Report History and education of each member of the Board of Directors, including their responsibilities and other activities and
functions
Steffen Meister
Steffen Meister is a Partner of the firm and Executive Chairman
of the Board of Directors of Partners Group Holding AG, based in
Baar-Zug. Steffen Meister has been with Partners Group since 2000
and served as Delegate of the Board from 2013 to 2018 and as
Chief Executive Officer from 2005 to 2013. Prior to joining Partners
Group, he worked at Credit Suisse Financial Products and had part-
time assignments at Swiss Reinsurance Co. and the Department of
Mathematics of the Swiss Federal Institute of Technology (ETH)
in Zurich. He has 25 years of industry experience and holds a
master’s degree in mathematics from the Swiss Federal Institute of
Technology (ETH), Switzerland.
Director since: 2013
Age: 50
Nationality: Swiss
Board Committees:
Strategy Committee
(Chairman), Client Oversight
Committee
Other board mandates:
Crossiety AG (Co-Founder and
Chairman), FAIRTIQ AG
Board mandates at Partners
Group’s portfolio companies*:
Hearthside Food Solutions
Key qualifications and skills
Private markets industry
know-how
C-level experience
Risk management experience
Operational experience
Broad international exposure
Investment experience
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
Dr. Eric Strutz
Dr. Eric Strutz is the Vice Chairman and Lead Independent Director
of the Board of Directors of Partners Group Holding AG. Dr. Eric
Strutz was Chief Financial Officer and a member of the Board of
Managing Directors of Commerzbank AG until March 2012. Prior
to joining Commerzbank AG, Dr. Eric Strutz was employed by the
Boston Consulting Group from 1993, where he was Vice President,
Director and Partner as from 2000. He studied at the Universities of
Erlangen-Nürnberg, Germany, and St. Gallen (HSG), Switzerland, and
holds an MBA from the University of Chicago, Illinois, USA, as well
as a Doctorate summa cum laude in business administration from the
University of St. Gallen (HSG), Switzerland.
Director since: 2011
Age: 56
Nationality: German
Board Committees:
Risk & Audit Committee
(Chairman)
Other board mandates:
HSBC Bank plc., HSBC
Trinkaus & Burkhardt AG
Board mandates at Partners
Group’s portfolio companies*:
Global Blue, Techem
Key qualifications and skills
Private markets industry
know-how
C-level experience
Risk management experience
Operational experience
Broad international exposure
Investment experience
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
150 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report Dr. Marcel Erni
Dr. Marcel Erni co-founded Partners Group in 1996. He is a Partner
of the firm and an executive member of Partners Group Holding
AG’s Board of Directors, based in Baar-Zug. Previously, he served
as the Chief Investment Officer of Partners Group until June
2017. Prior to founding Partners Group, he worked at Goldman
Sachs & Co. and McKinsey & Co. He has over 30 years of industry
experience and holds an MBA from the University of Chicago Booth
School of Business, Illinois and a PhD in finance and banking from
the University of St. Gallen (HSG), Switzerland.
Director since: 1997
Age: 55
Nationality: Swiss
Board Committees:
Investment Oversight
Committee
Board mandates at Partners
Group’s portfolio companies*:
AMMEGA, Global Blue,
GlobalLogic
Key qualifications and skills
Private markets industry
know-how
Investment experience
C-level experience
Broad international exposure
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
Alfred Gantner
Alfred Gantner co-founded Partners Group in 1996. He is a Partner
of the firm and an executive member of Partners Group Holding AG’s
Board of Directors, based in Baar-Zug. Previously, Alfred Gantner
served as Chief Executive Officer of Partners Group from 1996 to
2005 and subsequently as Executive Chairman from 2005 to 2014.
He serves on the firm’s Global investment Committee which he also
chaired from 2011 until 2017. Furthermore he served as a board
member at various Partners Group portfolio companies such as
Careismatic Brands, Universal Security, VAT, USIC and PCI Pharma
Services. Prior to founding Partners Group, he worked at Goldman
Sachs & Co. He has over 30 years of industry experience and holds
an MBA from the Brigham Young University Marriott School of
Management in Utah, USA.
Director since: 1997
Age: 52
Nationality: Swiss
Board Committees:
Strategy Committee,
Investment Oversight
Committee
Other board mandates:
PG Impact Investments
Foundation (Board of Trustees)
Board mandates at Partners
Group’s portfolio companies*:
Fermaca, Confluent Health
Key qualifications and skills
Private markets industry
know-how
C-level experience
Risk management experience
Operational experience
Broad international exposure
Investment experience
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
Partners Group | 151
ANNUAL REPORT 2020Corporate Governance Report Lisa A. Hook
Lisa A. Hook is an independent member of the Board of Directors
of Partners Group Holding AG. She served as President and Chief
Executive Officer of Neustar, Inc. (NYSE: NSR) from October 2010
until July 2018 and as President and Chief Operating Officer from
January 2008 until 2010. She joined the Neustar board in 2010 and
continued to serve in that capacity until July 2019. Previously, Ms.
Hook served as President and Chief Executive Officer of Sunrocket,
Inc.; held several executive-level posts at America Online, Inc.; was
a partner at Brera Capital Partners, a private equity firm focused on
investing in media and telecommunications; managing director of
Alpine Capital Group, LLC, an investment banking firm; held several
executive and director positions at Time Warner, Inc.; and was a
senior attorney at Viacom International, Inc. She currently serves
on the National Security Telecommunications Advisory Committee
(NSTAC) to which she was appointed in 2012 by President Obama.
In this role, she co-led the NSTAC Report to the President on Big
Data Analytics. In recognition of her personal and professional
achievements, The Dickinson School of Law and Penn State
University honored Ms. Hook as a 2012 Penn State Alumni Fellow.
Director since: 2020
Age: 62
Nationality: US American
Board Committees:
Investment Oversight
Committee, Risk & Audit
Committee, Nomination &
Compensation Committee
Other board mandates:
Fidelity National Information
Services Inc. (NYSE: FIS), Philip
Morris International (NYSE:
PM), Unisys Corporation
(NYSE: UIS), and Ping Identity
Holding Corp. (NYSE: PING),
CubeIQ, Tritantic Capital
Partners (Advisory Board
member)
Key qualifications and skills
Private markets industry
know-how
C-level experience
Risk management experience
Operational experience
Broad international exposure
Investment experience
152 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report Grace del Rosario-Castaño
Grace del Rosario-Castaño is an independent member of the Board
of Directors of Partners Group Holding AG. She spent 22 years at
Johnson & Johnson, joining in 1990 as Brand Manager and ending
her tenure as Company Group Chairwoman, Asia-Pacific, in July
2014. In that role, Grace del Rosario-Castaño was responsible for
all markets in the Asia-Pacific region. In her early years at Johnson
& Johnson, she worked for the Consumer Products Worldwide
division in the United States. Prior to joining Johnson and Johnson,
Grace del Rosario-Castaño spent the formative years of her career
with Unilever. She graduated magna cum laude with a degree in
Bachelor of Science in Business Administration from the University
of the Philippines. She has also completed the Senior Management
Programs at the Asian Institute of Management, Smith-Tuck Global
Leadership For Women, at the Tuck School of Business in Hanover,
New Hampshire and the Advanced Management Program at the
University of California in Berkeley, USA.
Director since: 2015
Age: 57
Nationality: Filipina
Board Committees:
Investment Oversight
Committee, Nomination &
Compensation Committee
(Chairwoman),
Board mandates at Partners
Group’s portfolio companies*:
BCR Group
Key qualifications and skills
Private markets industry
know-how
Broad international exposure
C-level experience
Operational experience
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
Dr. Martin Strobel
Dr. Martin Strobel is an independent member of the Board of
Directors of Partners Group Holding AG. Dr. Martin Strobel’s
background is in technology and he gained a PhD in business
computer science while beginning his career as a consultant at The
Boston Consulting Group. He subsequently joined the Swiss insurer
Baloise Group to oversee technology, before ultimately spending
seven years of his 17-year tenure there as Group CEO. After
leaving Baloise Group in April 2016, Dr. Martin Strobel spent almost
three years as an operating partner at private equity firm Advent
International.
Director since: 2019
Age: 54
Nationality: German/Swiss
Board Committees:
Strategy Committee, Risk &
Audit Committee, Nomination
& Compensation Committee
Other board mandates:
RSA Insurance Group plc.
Key qualifications and skills
Private markets industry
know-how
C-level experience
Risk management experience
Operational experience
Broad international exposure
Investment experience
Partners Group | 153
ANNUAL REPORT 2020Corporate Governance Report Urs Wietlisbach
Urs Wietlisbach co-founded Partners Group in 1996. He is a Partner
of the firm and an executive member of Partners Group Holding AG’s
Board of Directors, based in Baar-Zug. Prior to founding Partners
Group, he worked at Goldman Sachs & Co. and Credit Suisse. He has
over 30 years of industry experience and holds a master’s degree
in business administration from the University of St. Gallen (HSG),
Switzerland.
Director since: 1997
Age: 59
Nationality: Swiss
Board Committees:
Client Oversight Committee
(Chairman)
Other board mandates:
Entrepreneur Partners AG,
PG Impact Investments AG
(President of the Board),
Swiss Startup Factory AG
(Advisory Board member)
Board mandates at Partners
Group’s portfolio companies*:
KR Group (Board observer)
Key qualifications and skills
Private markets industry
know-how
Broad international exposure
Investment experience
*Partners Group representatives are a member of the board of a portfolio company or a special purpose vehicle (SPV) established in connection with the respective investment.
154 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report Organizational changes to the Board of Directors
On 3 March 2021, the Board has nominated Joseph P. Landy
for election as a new independent member of the Board. Mr.
Landy, the former Co-Chief Executive Officer of Warburg
Pincus, has been involved in the private equity industry since
1985. During his 20-year tenure as Co-CEO at Warburg
Pincus, Mr. Landy was jointly responsible for the management
of the firm, including the formulation of strategy, oversight
of investment policy and decisions, leadership of the firm’s
Executive Management Group and the coordination of
limited partner communications. Mr. Landy’s principal areas
of investment focus were information technology, internet
applications and infrastructure, communications applications
and structured investments.
Separately, Dr. Eric Strutz, currently Vice Chairman,
Lead Independent Director and Chairman of the Risk &
Audit Committee, will retire from the Board as of 12 May
2021, after reaching Partners Group’s maximum term for
Independent Board Members of ten years. Following his
retirement from Partners Group’s Board, Dr. Strutz will
remain a member of the firm’s Operating Director network
and will continue his Board assignments at Partners Group’s
portfolio companies Global Blue and Techem.
Following Dr. Strutz’s departure, the Board proposes to
appoint Independent Board Member Dr. Martin Strobel as
Vice Chairman of the Board, Lead Independent Director of
the Board and Chairman of the Risk & Audit Committee.
Dr. Strobel will remain a member of the Nomination &
Compensation and Strategy Committees, subject to his re-
election at the AGM.
3.2. Other activities and vested interests
Please see note 3.1. above.
3.3. Ordinance against excessive compensation in
listed joint stock companies – Number of mandates
pursuant to the OaEC
In accordance with art. 12 para. 1 of the OaEC and art.
25 of the articles of association, each Board member may
hold a maximum of four additional mandates1 in listed
corporations and a maximum of five additional mandates
in other legal entities. The following mandates are exempt
from this limitation: mandates in legal entities controlled by
Partners Group Holding AG or controlling Partners Group
Holding AG; mandates that are carried out on behalf of, or as
directed by, the company or any of its controlled companies
in legal entities that are not part of the group, whereby
each Board member may hold a maximum of ten such
mandates; mandates in associations, non-profit organizations,
foundations, trusts, and employee pension foundations,
whereby each Board member may hold a maximum of ten
such mandates; and mandates in legal entities serving the sole
purpose of managing their own private assets, whereby each
member Board member may hold a maximum of ten such
mandates.
The term “mandate” as used in the articles of association
includes activities within other superior governing or
administrative bodies of legal entities which must be
registered in the Swiss commercial register or a corresponding
foreign registry. Mandates in several legal entities that
are under joint control or joint beneficial ownership, are
considered one mandate.
3.4. Elections and terms of office
The Board of Directors must consist of at least three
members. All members, including the Chairman of the
Board of Directors, are to be elected individually at the
shareholders’ meeting, for a term of one year in accordance
with the OaEC. Re-election is possible. There are no rules in
the articles of association that differ from the statutory legal
provisions with regard to the appointment of the chairman,
the members of the compensation committee and the
independent proxy. The year that each Board member was
first appointed is listed in the table at the beginning of this
section.
3.5. Internal organizational structure
The Board of Directors has adopted written internal
organizational regulations for the management of the
company and of its subsidiaries pursuant to art. 716b of the
Swiss Code of Obligations, the rules of the SIX Exchange
Regulation, the company’s articles of association and the
Swiss Federal Act on Collective Investment Schemes.
The Board of Directors has ultimate responsibility for the
management of Partners Group. Please see the table at the
beginning of this section as well as section 3.1 for information
on the allocation of tasks within the Board of Directors.
1 At the Annual General Meeting to be held on 12 May 2021, the Board will propose to re-
vise the articles of association of the company. The revised version will foresee that each
Board member may hold a maximum of three additional mandates in listed corporations
and a maximum of five additional mandates in other legal entities.
Once a year, during the first Board meeting following
the Annual General Meeting of shareholders, the Board
of Directors appoints its secretary, who does not need
Partners Group | 155
ANNUAL REPORT 2020Corporate Governance Report to be a member of the Board of Directors. The Board
of Directors meets as often as business requires, but no
less than four times a year as set forth in the company’s
Rules of the Organization and of Operations (the “ROO”;
Organisationsreglement); in 2020, four formal meetings, which
lasted between three and eight hours each, were held. The
majority of all Board members was present at all meetings.
The meetings of the Board of Directors were also attended
by relevant non-members of the Board of Directors who
hold key functions or responsibilities within the company.
The formal meetings were complemented by regular and
considerable informal interactions with management and
employees across the firm.
The Board of Directors can deliberate if the majority of its
members are present. Resolutions are adopted with the
majority of the votes of the members present. In the event
of a tie, the Chairman casts the deciding vote. Resolutions by
circular letter require the absolute majority of all members of
the Board of Directors unless higher quorums are provided
by applicable provisions.
The Board of Directors has established further committees
to promulgate and monitor related directives and policies: the
Risk & Audit Committee, the Nomination & Compensation
Committee, the Strategy Committee, the Client Oversight
Committee, the Investment Oversight Committee and the
Crisis Committee. Each committee advises the Board of
Directors on the matters specified below, often with the
assistance of the Executive Committee and others involved
in the management of Partners Group. The members and
Chairs of these committees are determined by the Board
of Directors, apart from the members of the Nomination &
Compensation Committee who are elected individually at the
Annual General Meeting for a term of one year in accordance
with the OaEC. Please see the table at the beginning of this
section for the composition of these committees.
Meetings can be called by each committee member or by the
Chairperson. In order for resolutions or motions to be validly
taken or made, the majority of the committee members
must attend the meeting (in person or, if need be, via phone/
video conference). All resolutions or motions must be passed
unanimously, otherwise the business activities will be re-
assigned to the Board. Quorums and motions may also be
passed by circular resolutions.
Risk & Audit Committee (“RAC”)
The RAC is in charge of ensuring the diligent performance
of internal and external auditing as well as financial
controlling in addition to performing other tasks related to
risk management. In particular, the RAC (i) approves internal
156 | Partners Group
audit’s organization and tasks, (ii) orders the performance of
specific audits, (iii) supervises internal audit’s activities, (iv)
ensures the execution of the external audit, (v) monitors the
financial review processes and (vi) ensures the review of the
management and internal control processes. Furthermore, the
RAC oversees the company’s information security strategy. At
least once a year, the RAC is informed by senior management
on information security and cyber security topics within and
outside the firm. The role of the RAC is primarily supervisory
and its decision-making authority is limited to those areas
which are ancillary to its supervisory role (see also section
3.7.1.2). Subject to limitations provided under the law and the
articles of association, the RAC is presided over by, and only
consists of, independent Board members. Until 13 May 2020,
the members of the RAC were Dr. Eric Strutz (Chair), Michelle
Felman and Dr. Martin Strobel. As of 13 May 2020, the
members of the RAC are Dr. Eric Strutz (Chair), Lisa A. Hook
and Dr. Martin Strobel. The RAC held five formal meetings
in 2020 (2019: four), including one ad-hoc meeting, each
which lasted approximately two to four hours. In addition,
the external auditors attended four meetings (except the
one ad-hoc meeting) of the RAC in 2020. All committee
members were present at all meetings. The meetings of the
RAC were also attended by other non-voting members of the
Board of Directors and relevant non-members of the Board
of Directors who hold key functions or responsibilities within
the firm. The formal meetings were complemented by regular
and considerable informal interactions with management and
employees across the firm on legal, compliance and audit-
related matters or projects.
Nomination & Compensation Committee (“NCC”)
The NCC advises and supports the Board of Directors
in particular with regard to the determination of the
compensation system and principles, as well as with regard
to the nomination of members of the Board of Directors
and the promotion of executive officers of the company
or its controlled companies, as applicable. It assesses the
compensation proposals for the company or its controlled
companies with regard to compliance with the determined
principles. It also prepares the Compensation Report and
the motions on the Board of Directors’ and executive
management’s compensation to be submitted to the
shareholders’ meeting. The Board of Directors may assign
further tasks, responsibilities and powers in compensation
and nomination matters to the NCC. Subject to limitations
provided under the law and the articles of association, the
NCC is presided over by, and only consists of, independent
Board members. Until 13 May 2020, the members of the
NCC were Grace del Rosario-Castaño (Chair), Michelle
ANNUAL REPORT 2020Corporate Governance Report Felman and Dr. Martin Strobel. As of 13 May 2020, the
members of the NCC are Grace del Rosario-Castaño (Chair),
Lisa A. Hook and Dr. Martin Strobel. The NCC held two
formal meetings in 2020 (2019: two), each which lasted
approximately two to three hours, to discuss the annual
compensation for the Board of Directors and the Executive
Committee as well as to confirm the overall compensation
policy. All committee members were present at all meetings.
The meetings of the NCC were also attended by other non-
voting members of the Board of Directors and relevant non-
members of the Board of Directors who hold key functions
or responsibilities within the firm. The formal meetings
were complemented by regular and considerable informal
interactions with management and employees across the firm
on promotion considerations and leadership development
projects.
Strategy Committee (“SC”)
The SC directs the firm’s major strategic initiatives and
advises the Board of Directors on, in particular, major
business, corporate and organizational initiatives. It further
oversees fundamental initiatives in terms of the firm’s human
capital development, financial planning and use of financial
resources. As of the 31 December 2020, the members of
the SC are Steffen Meister (Chair), Alfred Gantner and Dr.
Martin Strobel. The SC held nine formal meetings in 2020
(2019: six), including two ad-hoc meetings, each which
lasted approximately four to six hours. All meetings were
attended by all SC members. The meetings of the SC were
also attended by other non-voting members of the Board
of Directors and relevant non-members of the Board of
Directors who hold key functions or responsibilities within
the firm. The formal SC meetings were complemented
by regular and considerable informal interactions with
management and employees across the firm to implement key
strategic growth projects.
Client Oversight Committee (“COC”)
The COC coordinates global marketing and (key) client
activities, drives strategic fundraising initiatives and identifies
new key product and fundraising themes. In addition, it
oversees the coverage of the firm’s key client prospects, the
global consultant network, the firm’s global public relations
strategy as well as its advisory network. Until 13 May 2020,
the members of the COC were Urs Wietlisbach (Chair),
Steffen Meister and Patrick Ward. As of 13 May 2020, the
members of the COC are Urs Wietlisbach (Chair) and Steffen
Meister. The COC held seven formal meetings in 2020
(2019: four) which lasted approximately two hours each. The
majority of the meetings were attended by all members. The
meetings of the COC were also attended by other non-voting
members of the Board of Directors and relevant non-
members of the Board of Directors who hold key functions
or responsibilities within the firm. The formal meetings
were complemented by regular and considerable informal
interactions with management and employees across the firm
on key client-related matters or projects.
Investment Oversight Committee (“IOC”)
The IOC provides advice and support to the Board of
Directors, the management and the Investment Committees
on the assessment of quality and consistency of decision
processes, the investment performance achieved, the
realization of the projected appreciation on individual
investments, and the investment risks incurred. It defines
quality standards and measurement methods and proposes
any measures that may be required. The Board retains the
right to discuss any investment proposal in the IOC and
therefore it designated Dr. Marcel Erni and Alfred Gantner
as voting members in the Global Investment Committee
(GIC) as of 1 January 2018. The two IOC voting members
have the right to cast a total of one vote on a particular
transaction. In case of absences of standing members, each
IOC voting member may cast one vote in the GIC. For any
transaction approved by the GIC, each IOC voting member
furthermore has the right to request a discussion in the IOC
about whether or not to approve the respective transaction,
whereby any transaction declined by the IOC shall no
longer be pursued. Until 13 May 2020, the members of the
IOC were Michelle Felman (Chair), Dr. Marcel Erni, Alfred
Gantner and Grace del Rosario-Castaño. As of 13 May 2020,
the members of the IOC are Alfred Gantner (Chair), Dr.
Marcel Erni, Lisa A. Hook and Grace del Rosario-Castaño.
Furthermore, Stephan Schäli, Partners Group’s CIO, is a non-
voting member of the committee. The IOC held four meetings
in 2020 (2019: two), which lasted approximately three hours
each. The majority of the meetings were attended by all
members. The meetings of the IOC were also attended by
other non-voting members of the Board of Directors and
relevant non-members of the Board of Directors who hold
key functions or responsibilities within the firm. The formal
meetings were complemented by regular and considerable
informal interactions with management and employees across
the firm on key investment-related matters or projects.
As a response to the outbreak of the COVID-19 pandemic,
the RAC, COC, IOC and SC convened at a higher frequency
than normal (as outlined above) to discuss any financial-,
client-, investment- and strategy-related risks and implement
action plans to drive forward performance across our
Partners Group | 157
ANNUAL REPORT 2020Corporate Governance Report Formal meeting attendance
BoD
RAC
NCC
SC
COC
IOC
4
9
0
1
5
4
0
0
2
3
0
0
9
3
0
0
7
2
0
1
4
4
1
0
95% 100% 100% 100% 90%
95%
Meetings held in
2020
Number of
members who
missed no
meetings
Number of
members who
missed one
meeting
Number of
members who
missed two or
more meetings
Meeting
attendance
BoD: Board of Directors, RAC: Risk & Audit Committee, NCC: Nomination & Compensation
Committee, SC: Strategy Committee, COC: Client Oversight Committee, IOC: Investment
Oversight Committee
Note: the formal meetings attendance table takes into account the changes to the Board
composition and its various committees, as described in greater detail on the previous pages.
Self-assessment
The Board of Directors conducts an annual self-evaluation
across several dimensions. This goes beyond assessing
the efficiency and effectiveness of its statutory duties
and supervisory tasks. The assessment also takes into
consideration the Board’s contribution to Partners Group’s
growth by evaluating its impact on investment activities,
strategic projects, human capital management, business and
corporate development initiatives, as well as the development
of client-related initiatives.
Thereby, the firm’s open, transparent and critical Board
culture – characterized by an entrepreneurial spirit and
preparedness to challenge, where appropriate – focuses on
areas in which the Board or Executive Committee believe that
the Board or any of its Committees could further improve.
The self-assessment is in the form of an informal group
meeting where Board members assess skills and experience,
preparation, attendance, accountability, communication, and
contribution to strategic planning.
Overall, the process is comprehensive and provides each
Board member with the ability to receive and provide
feedback on the workings of the Board and to define take-
aways to be incorporated in the goals for the upcoming year.
portfolio. Furthermore, from March to June 2020, the
Chairman was in regular exchange with the Group Finance
department in order to ensure that the RAC and the SC were
updated on the firm’s most recent liquidity and balance sheet
outlook, including potential risk assessments.
Crisis Committee (“CC”)
The CC shall ensure appropriate organization, communication
and decision-making during a crisis. It consists of the
Chairperson, the chair of the RAC and another member of
the Board, as determined by the Board (typically for a term
of office of one year, whereby re-election is possible). Upon
the request of the Chairperson and the chair of the RAC,
additional persons can be nominated as ad-hoc members
(solely Board members) and/or as non-voting advisors
to the CC. During a crisis, the CC may, on behalf of the
Board, act in accordance with the ROO and the articles of
association, insofar as prompt decision-making is advisable,
subject to the applicable instructions. “Crisis” shall mean
an emerging or suddenly occurring extraordinary event
within Partners Group (including its portfolio companies)
that entails significant legal, operational, financial and/or
reputational risks with the realistic probability of substantial
damage to Partners Group, which calls for prompt decision-
making. The CC convenes only on an ad-hoc basis in case
of a Crisis. The CC held no formal meetings in 2020. While
there was no formal CC meeting during 2020, to address the
unprecedented dislocations caused by the COVID-19 global
health crisis, the Chairman established in collaboration with
the Executive Committee a Crisis Response Team (“CRT”)
under the lead of the company’s Chief Technology Officer
that focused on business continuity and assessed operational
risk on an ongoing basis. The CRT held regular meetings,
typically several times a week. The Executive Committee
representatives in these meetings were the Chief Operating
Officer and the Chief Risk Officer. At Partners Group, we
made safeguarding the health of our employees and our
portfolio company employees our immediate priority. As the
pandemic took hold, we were successful in protecting our
colleagues with minimal disruption to business processes,
ensuring flawless business continuity. Over 98% of all
employees successfully worked from home during March and
April 2020.
Formal meeting attendance
The members of the Board are encouraged to attend all
meetings of the Board and the committees on which they
serve. The formal meetings were complemented by regular
and considerable informal interactions with management and
employees across the firm.
158 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report 3.6. Definition of areas of responsibility
The Board of Directors has delegated the day-to-day
management of Partners Group to the Executive Committee
unless provided otherwise by law, the articles of association
or as described below. The Board of Directors has the
right to issue specific rules for this purpose and to form
the respective committees to determine the principles of
the business policy, the risk policy of the various business
sectors and the authority and responsibilities of each of the
company’s bodies. The positions of Chairman of the Board
of Directors and of the Co-Chief Executive Officers are held
by separate people, thus ensuring a system of internal checks
and balances and an independence of the Board of Directors
from the day-to-day management of the company.
Apart from the non-transferable functions mentioned in the
law and in the articles of association, the Board of Directors
has a number of additional duties and powers, including
(among others) resolutions regarding essential features of the
group’s organization, all transactions in connection with real
estate (outside of investment activities), the establishment
of employment conditions, all activities pertaining to the
shareholder register, acceptance and handling of audit
reports and budgets, and the periodic review of the internal
organization. Responsibilities delegated to the Executive
Committee of Partners Group are set forth in the company’s
ROO. The delegated responsibilities are the following:
1. Direct management as well as continual monitoring of
business activities within the scope of, and in line with,
the regulations, guidelines, competencies, individual
resolutions and restrictions imposed by the Board;
2. Conclusion of transactions provided these lie within the
limits as determined by the ROO and particularly by the
determined authorities and responsibilities set forth in
the ROO or by the regulations, guidelines, competencies,
individual resolutions and restrictions imposed by the
Board of Directors;
3. Establishing subsidiaries and founding new group
companies (branches);
4. Developing and issuing directives, policies and job
descriptions for employees to the extent that such tasks
are not reserved for the Board of Directors;
5. Employment and termination of employees within the
authorities and responsibilities set forth in the ROO;
6.
Initiating legal actions and concluding settlements
according to the authorities and responsibilities set forth
in the ROO;
7. Organization, management and implementation of
accounting, financial planning and reporting, including
preparation of the company’s management report and
annual financial statements for the attention of the
Board of Directors;
8. Preparation of the financial plan (budget) for approval by
the Board;
9. Execution of the Board of Directors’ resolutions;
10. Organizing, assisting and coordinating the employment
benefit plans;
11. Organizing insurance management;
12. Organizing risk management as well as implementing and
monitoring the internal control system and compliance;
13. Informing the senior management of relevant resolutions
made by the Board of Directors and the Executive
Committee;
14. Proposals for all transactions that have to be submitted
to the Board of Directors according to the ROO and the
authorities and responsibilities set forth in the ROO;
15. Exercising the company’s shareholder rights as a
shareholder within group companies, including the
entitlement to vote on the composition of the members
of management, accepting the annual financial
statements and matters related to this.
3.7. Information and control instruments vis-à-vis the
senior management
The Board of Directors is kept informed of the activities of
the Executive Committee through a number of information
and control instruments. The Co-Chief Executive Officers,
Chief Financial Officer, Chief Operating Officer/General
Counsel and respective operating officers with line
management functions are in a regular dialogue with the
Chairman of the Board of Directors regarding the general
course of business, the financial situation of the company and
any developments or events of importance to the company
and its business. In the event of extraordinary incidents
or developments, the Executive Committee notifies the
Chairman of the Board without delay.
The Executive Committee submits decisions beyond the
scope of ordinary management or decisions that carry major
implications to the relevant Board Committee or Board of
Directors, including (but not limited to) decisions specifically
reserved for the relevant Board Committee or Board of
Directors.
Partners Group | 159
ANNUAL REPORT 2020Corporate Governance Report Partners Group's risk governance structure
Board of Directors
Risk control & audit
Risk & Audit Committee
Investment risk control
Investment Oversight Committee
Financial Risk Oversight
Operational Risk Oversight
Regulatory, Legal and
Conduct Risk Oversight
Investment Risk Oversight
Internal and External Audit
Executive Committee
Co-CEOs & CFO
Business Department Heads
& Specialists1)
Co-CEOs, CFO &
General Counsel
Investment Committees, Investment
Business Department Heads &
Investment Specialists2)
Financial Risk Management
Operational Risk Management
Regulatory, Legal and
Conduct Risk Management
Investment Risk Management
1) Specialists include Chief Technology Officer, Chief Information Security Officer etc. 2) Investment Specialists include Chief Investment Officer, Chairman Global Investment Committee etc.
Risk assessment and risk reporting by the Chief Risk Officer
3.7.1. Risk governance
3.7.1.4. Executive Committee
Partners Group identifies, assesses, manages and monitors
risks on an aggregate basis for relevant business activities
across the organization. Partners Group has put in place a risk
governance structure comprising the following elements and
related responsibilities:
The ongoing financial, operational, regulatory, legal and
conduct risk as well as investment risk management of
Partners Group’s activities is delegated to the Executive
Committee of PGH (“Executive Committee”), as further
defined in the ROOs.
3.7.1.1. Board
The Board of Directors of Partner Group Holding AG is
responsible for stipulating risk management and governance
principles in line with its obligations under applicable laws and
as further defined in the ROOs.
3.7.1.2. Risk & Audit Committee
The RAC advises and supports the Board in the area of
audit and risk control, as further defined in the ROOs and
described in further detail in chapter 3.5 above. The RAC has
the responsibility to review the risk profile of Partners Group
and ensure appropriate processes regarding ongoing risk
management and audit are in place. It advises and evaluates
the effectiveness of group-wide financial reporting, group-
wide internal control systems and general risk monitoring. It
ensures continuous communication with external auditors.
3.7.1.3. Investment Oversight Committee)
The IOC advises and supports the Board on investment
risk management and the oversight of investment and value
creation processes (including efforts to prevent severe
setbacks to Partners Group’s track record and reputation).
The IOC’s responsibilities are further defined in the ROOs
and described in further detail in chapter 3.5 above.
160 | Partners Group
The Executive Committee reports periodically on the
effectiveness of Partners Group’s risk management to the
Board.
3.7.1.5. Investment Committees
The ongoing risk management of Partners Group’s investment
activities is delegated by the Executive Committee to the
Investment Committees as further defined in the Investment
Policy Private Markets.
3.7.1.6. Chief Risk Officer
To support the risk governance bodies set out above, the
Executive Committee appoints the Chief Risk Officer (“CRO”).
The CRO’s responsibilities are as follows:
• Collecting, consolidating and assessing risk information
from within the organization to enable the RAC to review
Partners Group’s risk profile.
• Overseeing and steering the execution of Partners
Group’s risk management process by monitoring
Partners Group’s risk profile, defining and procuring the
implementation of adequate systems and methods for
risk supervision, and adjusting such systems and methods
to new business lines and products.
ANNUAL REPORT 2020Corporate Governance Report •
Supervising and reporting on the adequacy and
effectiveness of Partners Group’s risk management
setup.
The CRO regularly reports to the Executive Committee
and the RAC. The CRO has a direct reporting line to the
Co-CEOs. The CRO has unrestricted access to information,
locations and documents within the scope of its function.
3.8. Risk culture
Partners Group has a strong risk culture in line with the
purpose and values of the firm as articulated in the Partners
Group Charter. At the core of Partners Group’s risk culture
are the following elements:
• Good judgement: Partners Group encourages staff to
think about the wider implications and impact when
making decisions (“connect the dots”).
• Compliance culture: Partners Group fosters a culture
of compliance to protect its reputation as a responsible
investment manager.
•
Speaking up: Partners Group fosters a culture where
all staff feel comfortable to pro-actively speak up about
concerns, even if they relate to own mistakes, and
highlighting things that are believed to be wrong, as
further set out in the Speak-up Directive.
• Ownership & accountability: Partners Group expects
its staff to take on ownership (“own your business”) of
their business and related risks. Individual ownership and
accountability are reinforced through the Three Lines of
Defense model.
• Anticipations: Partners Group expects all staff to keep
abreast of all possible changes and emerging risks in their
respective areas of ownership and evolve processes and
controls accordingly.
Partners Group's risk governance framework
3.9 Risk management process
Partners Group’s risk management approach consists of three
key elements: A robust risk governance framework, a strong
and broadly embedded risk culture, and a comprehensive risk
management process based on a risk taxonomy tailored to
Partners Group’s business and risk profile.
3.9.1. Enterprise Risk Taxonomy
In order to ensure adequate coverage of relevant risks,
Partners Group operates an Enterprise Risk Taxonomy (“ERT”)
which represents a hierarchical categorization of relevant
risks.
The ERT is organized along the four following Risk Themes:
•
Finance risks: risks related to our balance sheet and
income statement (e.g. profitability and liquidity)
• Operational risks: risks related to internal processes
and operations (e.g. currency hedging, models, service
providers, international marketing and technology)
• Regulatory, legal and compliance risks: risks related to
non-adherence to regulations, laws or internal policies
(e.g. market abuse, data privacy and money laundering)
•
Investment risks: risks related to our investment process
and platform (e.g. investment due diligence, ESG,
portfolio management and semi-liquid products)
In the ERT, overarching Risk Themes are decomposed into
more specific Risk Categories and Risk Areas which facilitate
risk management at a more granular level. The lowest level
of the ERT relates to risks and related controls as covered by
Partners Groups Operational and Financial Internal Control
System, which is described in the Operational Internal Control
System Directive.
Board of Directors
Risk Themes
Risk Categories
Risk Areas
Risk / Controls
Identification &
Assignment
Measurement &
Assessment
Reporting
Enterprise
Risk
Taxonomy
Culture
Partners Group | 161
ANNUAL REPORT 2020Corporate Governance Report Enterprise Risk Taxonomy
3.9.2 Roles and responsibilities
Risk Category Owners are typically Executive Committee
members or Focus Group members, as further defined in the
ROOs. Responsibilities include:
• Ensuring that Partners Group operates within the set
Risk Claim for the assigned Risk Category
• Determining the Risk Areas and setting Risk Claims
• Assigning Risk Area Owners
• Assessing reports provided by these Risk Area Owners
and implementing corrective measures where required
Risk Category Owners periodically report on the
effectiveness of risk management and controls to the
Executive Committee and the Board as part of the annual
risk report by the CRO. Furthermore, Risk Category Owners
provide ad-hoc reporting in case of material breaches of Risk
Claims and irregularities in line with the Quality Assurance
Directive.
Risk Area Owners are typically Business Unit Heads or Cell
Leaders. Responsibilities include:
• Ensuring that Partners Group operates within the set
Risk Claim for the assigned Risk Area
•
Identifying risks and determining risk descriptions and
Key Risk Indicators
• Designing, documenting, implementing and assigning
processes and controls to mitigate these risks following
Operational Excellence principles
• Taking corrective measures in case Risk Claims are (at risk
of) being breached
•
Staying abreast of internal and external changes and
other factors based on horizon scanning
Risk Area Owners periodically report on the effectiveness of
risk management and controls to the Risk Category Owner as
defined between Risk Area Owner and Risk Category Owner.
Furthermore, Risk Area Owners provide ad-hoc reporting in
case of material breaches of Risk Claims and irregularities to
the Risk Category Owner for further discussion on the course
of action.
Risk/Control Owners are typically part of the operating/
business teams and are responsible for the day-to-day
management of risks and corresponding controls.
Risk
Themes
Risk Categories
Risk Claims
Risk Areas
Risk Claims
Risks and Controls
Operational/Financial Internal Control System
(Risks, KRIs, Controls)
Partners Group’s ERT ensures alignment between the
Board, the RAC, the Executive Committee and individual
Risk Category, Risk Area and Risk/Control Owners, clear
assignment of risk ownership and validation functions as well
as consistency in risk categorization across the firm.
Under the lead of the CRO, the ERT is reviewed annually to
ensure that it remains up to date.
A key aspect of the ERT is the definition of Risk Claims
articulating the level and type of risks Partners Group is
willing to take in order to achieve its strategic objectives. Risk
Claims shape the requisite controls and dictate risk behaviors.
A second key aspect of the ERT is the clear definition of
individual ownership and accountability.
• Each Risk Category, Risk Area and individual risk is
assigned to an individual owner who is assigned a pre-
defined set of duties and responsibilities (see chapter
3.9.2.)
•
In addition to risk ownership, the ERT also sets
out validation ownership. Risks are assessed for
their materiality (low, medium, high) by considering
their likelihood and potential impact across various
dimensions. Typically, risks with high materiality
are assigned a validation function by the Executive
Committee and/or the Board which is assigned a pre-
defined set of duties and responsibilities (see chapter
3.9.2)
Partners Group reinforces individual ownership and
accountability through the Three Lines of Defense model to
support effective risk management. The model defines a clear
segregation of duties (and related roles and responsibilities
as further defined in this Directive) between risk ownership
(“line 1”), risk oversight and validation (“line 1b” and “line 2”),
and independent assurance (“line 3”). The model further
requests the different “lines” to collaborate and communicate
effectively on an ongoing basis.
162 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report Responsibilities include, as further outlined in the Operational
Internal Control System Directive:
• Operating defined processes and controls following
Operational Excellence principles to ensure identified
risks are effectively managed
• Making suggestions on how to increase effectiveness of
controls
• Alerting Risk Area Owner of issues, (risk of) breaches and
other irregularities
• Reporting on effectiveness of risk management and
controls to Risk Area Owners
Validation Owners are typically employees in Risk
Management, Compliance, Corporate Legal and other
specialized functions. In select cases Validation Owners are
part of operating business teams with a different reporting line
(“line 1b”). They ensure the effectiveness of risk management
and controls as operated by Risk Owners. Their responsibilities
include:
• Testing if risk management processes and controls are
operated in accordance with the ERT and Partners
Group’s Operational and Financial Internal Control
System (operational effectiveness testing) and testing the
effectiveness of operated processes and controls (design
effectiveness testing), following a risk-based approach
using measures such as spot checks or periodic reviews
• Assessing quality of corrective measures taken in case of
3.9.4 Risk measurement and management
Risk measurement and management is the ongoing process
involving both the respective Risk Owner and Validation
Owner, where available, to ensure risks are monitored against
defined Key Risk Indicators and managed in accordance with
defined Risk Claims.
Where necessary, corrective measures (and escalation) are
proactively taken in a timely manner under the lead of the
respective Risk Owner.
3.9.5 Stress testing
To help assess business resilience, financial or other
consequential impact and the adequacy of the risk
management practice, stress testing is periodically conducted.
Key tools include:
•
•
Scenario analysis: Risk Owners assess if defined Risk
Claims withstand external shocks, such as a global
economic downturn, or internal events, such as a system
failure
Fire drills: Test of the effectiveness of decision making,
operations and controls across various Risk Areas in the
context of a specific mock threat
The CRO is responsible for coordinating stress testing. The
Executive Committee reviews the result and mandates
corrective measures as and where appropriate. The RAC is
informed on the conclusions of stress testing activities and
corrective measures taken.
breach of Risk Claims
3.9.6 Risk reporting
• Reviewing if identified gaps and/or areas for improvement
are implemented
Validation Owners typically validate reporting issued by Risk
Owners. In addition, Validation Owners issue ad-hoc alerts in
case they become aware of material breaches of Risk Claims
and irregularities where these are not reported and addressed
by the respective Risk Owner.
3.9.3 Identification and designation
The identification of risks and the assessment of their impact
is an ongoing process to ensure all material risks are known,
well understood, clearly assigned and pro-actively managed
based on defined standards. The identification of risks is
assigned to the respective Risk Category Owner and Risk Area
Owner, respectively, as further discussed above.
Upon the identification of a risk, the respective Risk Category
Owner assigns ownership and approves the related Risk Claim.
Risk reporting enables the Risk Owners, the Executive
Committee, the RAC and the Board to make informed
decisions, as appropriate, by providing insightful analysis on
the effectiveness of risk management and related controls
based on accurate and timely data.
Risk data aggregation and reporting is defined, mandated
and overseen by the CRO with the support of the respective
Risk Owners. In areas where validation functions have been
defined, these are expected to review the accuracy of the
respective reporting, as appropriate.
On an annual basis, the CRO provides the Executive
Committee and the Board with an annual risk report
discussing – inter alia – the key risk management activities of
the respective calendar year, a risk assessment based on the
ERT (specifically indicating where defined Risk Claims were
not adhered to and corrective measures taken/planned to be
taken), the result of stress testing and an outlook on emerging
risks and related activities (horizon scanning).
Partners Group | 163
ANNUAL REPORT 2020Corporate Governance Report 4. Executive Committee
The table below shows the current composition of the Executive Committee:
Name
André Frei
David Layton
Hans Ploos van Amstel1)
Juri Jenkner
Andreas Knecht
Marlis Morin
Joined Partners
Group in
Nationality
Age
2000
Swiss
2005 US American
Dutch
German
2020
2004
2009
2003
Swiss/Italian
Position
Co-Chief Executive Officer
Co-Chief Executive Officer and Head Private Equity
Chief Financial Officer, Head Group Finance & Corporate Development
Head Private Infrastructure
45
39
55
45
Swiss
51 Chief Operating Officer, General Counsel and Head Corporate Operations
50
48
Chief Risk Officer and Co-Head Portfolio Solutions
Head Client Services
Dr. Michael Studer
2001
Swiss
1) Member as of 1 July 2020.
4.1. Members of the Executive Committee
As also outlined in section 3.6 above, the Board of Directors
has delegated the operational management of the company
to the extent as permissible by law and the articles of
association to the Executive Committee.
The Executive Committee manages day-to-day investment
and client activities as well as the firm-wide and cross-
departmental aspects, such as human resources, compliance
with legal and regulatory requirements, and salary steering.
History and education of each member of the Executive
Committee, including other activities and functions
André Frei
is the Co-Chief Executive Officer of
Partners Group. He is based in Baar-
Zug. Together with David Layton, he
leads the Executive Committee and the
Global Executive Board. As part of his
mandate, André oversees corporate
and investment-related environmental,
social and governance topics at Executive Committee level.
He has been with Partners Group since 2000 and has 21
years of industry experience. Previously, he served as the
Chief Risk Officer of Partners Group between 2008 and
2013 and he was the Head of the Client Services business
department. He is a member of the board of the Swiss-
American Chamber of Commerce. André is also Chairman of
the Board of Restor Eco AG, a company that provides data
and monitoring tools for the global ecosystem and offers
services for the implementation of climate mitigation projects.
164 | Partners Group
He holds a master’s degree in mathematics from the Swiss
Federal Institute of Technology (ETH) in Zurich, Switzerland.
He is also a CFA charterholder.
David Layton
is the Co-Chief Executive Officer of
Partners Group, based in the firm’s
Americas headquarters in Colorado.
Together with André Frei, he leads
the Executive Committee and the
Global Executive Board. He is also
the Head of the Private Equity
business department and member of the Global Investment
Committee. Previously, he was the Head of Partners Group’s
Private Equity business in the Americas and has represented
Partners Group on the Board of Directors of several of the
firm’s portfolio companies, including Universal Services
of America, Nobel Learning Communities, MicroPoise
Measurement Systems, Cabot Credit Management, Pacific
Bells, and Strategic Partners. David has been with Partners
Group since 2005 and has 18 years of industry experience.
He holds a bachelor’s degree in finance from Brigham Young
University’s Marriott School of Management.
Hans Ploos van Amstel
is the Chief Financial Officer of
Partners Group, based in Baar-Zug.
He is Head of the Group Finance &
Corporate Development business
department and a member of the
Executive Committee and Global
Executive Board, with 31 years of
ANNUAL REPORT 2020Corporate Governance Report relevant experience. Prior to joining Partners Group, Hans
was CFO of Adecco Group, Switzerland, from 2015 to 2020.
He started his career in Finance at Procter & Gamble (P&G)
in the Netherlands in 1989. Between 1992 and 2003, he
held positions of increasing responsibility in P&G across
Saudi Arabia, Germany, Belgium and Switzerland. In 2003,
he joined Levi Strauss & Co. in Belgium, as Vice President
Finance & Operation Europe, and moved to the USA as
global Chief Financial Officer in 2005. He was CFO of
COFRA Group from 2009 to 2013, before acting as co-CEO
of C&A Europe for a transition period until 2015. He holds
a Bachelor of Arts from the Economische Hogeschool of
Eindhoven, and an MBA in Marketing & Finance from the
University of Brabant, both in the Netherlands.
Juri Jenkner
is Head of the Private Infrastructure
business department. He is based
in Baar-Zug. He is a member of the
Executive Committee and the Global
Executive Board. He is a member of
the Global Investment Committee and
the Private Infrastructure Investment
Committee. Previously, he was the Co-Head of the Private
Debt business department and Head of the European
Private Debt business unit. He has been with Partners
Group since 2004 and has 21 years of industry experience.
Prior to joining Partners Group, he worked at Privatbankiers
Merck Finck & Co. He holds a master’s degree in finance
from the Lorange Institute of Business Zurich, Switzerland.
He is also a Certified European Financial Analyst.
Andreas Knecht
is the Chief Operating Officer and
General Counsel of Partners Group.
He is based in Baar-Zug. He is the
Head of the Corporate Operations
business department and member
of the Executive Committee and the
Global Executive Board. He has been
with Partners Group since 2009 and has 25 years of industry
experience. Prior to joining Partners Group, he worked at
a number of different law firms, including Niederer Kraft &
Frey, and at Man Group. He holds a master’s degree in law
from the University of Zurich, Switzerland and an LLM from
New York University. He is admitted to the Swiss bar.
Marlis Morin
is Head of the Client Services business
department. She is based in Singapore.
She is a member of the Executive
Committee and the Global Executive
Board. She has been with Partners
Group since 2003 and has 27 years of
industry experience, having previously
built and headed the firm’s Group Internal Audit function. She
also opened Partners Group’s services and operations hub in
Manila. Prior to joining Partners Group, she worked at Credit
Suisse Asset Management Funds, Raiffeisen Landesbank
Südtirol and Raiffeisenkasse Eisacktal. She holds a master’s
degree in international economics and business studies
from the University of Innsbruck, Austria and Marquette
University, Wisconsin.
Dr. Michael Studer
is the Chief Risk Officer of Partners
Group and Co-Head of the Portfolio
Solutions business department. He
is based in Baar-Zug. He is a member
of the Executive Committee, the
Global Executive Board and the Global
Investment Committee. He has been
with Partners Group since 2001 and has 25 years of industry
experience. He holds a PhD in mathematics from the Swiss
Federal Institute of Technology (ETH) in Zurich, Switzerland.
Organizational changes to senior management
Partners Group reviews its organizational structure on
an ongoing basis and implements adjustments whenever
necessary to support and enable the continued successful
growth of its investment platform for the benefit of the
firm’s clients and shareholders, while ensuring continuity and
stability in its core leadership team.
Continuing with this approach, the firm has announced on
16 March 2021 changes to the composition of its Executive
Committee that will take effect from 1 July 2021.
After eight years in his current position, André Frei will step
back from his roles as Co-CEO and Executive Committee
member. André will assume a new responsibility as Chairman
of Sustainability, overseeing Partners Group’s ESG and
stakeholder impact initiatives. He will remain a Partner of the
firm. David Layton, who has been a Co-CEO since 2019, will
become Partners Group’s sole CEO.
Partners Group | 165
ANNUAL REPORT 2020Corporate Governance Report Dr. Michael Studer, currently Chief Risk Officer and Co-
Head of Portfolio Solutions, will also leave the Executive
Committee. He will remain Chief Risk Officer and will
devote more time to relationships with key clients, as well
as to continuing his duties on the firm’s Global Investment
Committee and Global Portfolio Committee. Roberto
Cagnati, currently Co-Head Portfolio Solutions, will become
the sole head of Portfolio Solutions and will join the
Executive Committee.
On the client side, Sarah Brewer and Dr. Guido Koch, today
Co-Heads of Client Solutions Europe, will be appointed Co-
Heads of the Client Solutions business department globally.
Stefan Näf, current Head of Client Solutions, is stepping
back to devote more time to relationships with key clients
as Chairman of Clients and will serve as Secretary to the
Client Oversight Committee, a sub-committee of the Board
of Directors. Sarah Brewer will represent the Client Solutions
business department in the Executive Committee.
Also joining the Executive Committee will be Kirsta
Anderson, current Head of Human Resources, in the newly
created role of Chief People Officer. Partners Group is
an employer of choice with a global headcount of more
than 1,500 diverse professionals and Kirsta’s appointment
reflects the importance the firm places on the personal and
professional development of its employees.
4.2. Other activities and vested interests
Other activities outside of Partners Group, if any, of members
of the Executive Committee are listed in section 4.1 for each
respective member. None of the members of the Executive
Committee hold permanent management or consultancy
functions for important Swiss or foreign interest groups, and
none of the members have official functions or hold political
posts. None of the members of the Executive Committee
have carried out tasks for Partners Group prior to joining the
firm.
4.3. Number of mandates pursuant to the OaEC
In accordance with art. 12 para. 1 of the OaEC and art. 29of
the articles of association, each member of the executive
management may hold a maximum of one additional mandate
in listed corporations and a maximum of four additional
mandates in other legal entities. For mandates exempt from
this limitation, see section 3.3 above.
4.4. Management contracts
Partners Group has not entered into any management
contracts with companies or individuals not belonging to the
group.
166 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report 5. Global Executive Board
In addition to the Executive Committee members, the Global Executive Board includes the following members:
Name
Kirsta Anderson1)
Bill Berry
René Biner2)
Mike Bryant
Roberto Cagnati
Robert Collins
Fredrik Henzler
Dr. Kevin Lu
Stefan Näf
Amelia Räss-Fernandez3)
Dr. Stephan Schäli
Dr. Yves Schneller
Dr. Raymond Schnidrig
Martin Scott
Anthony Shontz
Christian Unger4)
Marc Weiss
1) Member as of 10 August 2020.
2) Member until 31 December 2020.
3) Member until 31 October 2020.
4) Member as of 1 January 2021.
Joined Partners
Group in
Nationality
Age
2020 US American
2016 US American
1999
2016
2004
Swiss
British
Italian
2005 US American
2012
2014
2000
2016
1999
2008
2010
2008
Swedish
Chinese
Swiss
Swiss
Swiss
Swiss
Swiss
Australian
2007 US American
41
53
50
53
42
44
49
47
47
54
52
43
52
47
42
Position
Global Head Human Resources
Head Private Debt
Chairman Global Investment Committee
Co-Head Private Real Estate
Co-Head Portfolio Solutions
Head New York Office
Co-Head Private Equity Goods and Products
Chairman Asia
Head Client Solutions
Head Human Resources
Chief Investment Officer
Head Investment Services
Chief Technology Officer, Head Technology
Head Client Solutions Australia
Co-Head Private Equity Integrated Investments Americas
2013
German
53 Head Operating Directors and Entrepreneurial Governance
2007 US American
55
Co-Head Private Real Estate
The Global Executive Board is a diverse global leadership
team at group level, charged with driving forward the global
business and corporate development of the firm. Members
include Partners and Managing Directors from different
business lines across the firm’s offices in Denver, New York,
London, Singapore and Sydney, as well as its headquarters in
Baar-Zug, Switzerland. The team works closely with the firm’s
Executive Committee. Executive Committee members are
also members of the extended Global Executive Board (see
also section 4.1).
On 1 January 2021, René Biner has left the Global Executive
Board, but he will continue to be Chairman of the Global
Investment Committee at Partners Group. On the same
day, Christian Unger, Head Operating Directors and
Entrepreneurial Governance has joined the Global Executive
Board.
Members of the Global Executive Board
Kirsta Anderson
Kirsta Anderson is Global Head of the
Human Resources business unit, based
in Zug and London. She is a member of
the Global Executive Board and is also
the Co-Chair of the firm’s Diversity &
Inclusion Committee. She has 19 year
of relevant experience. Prior to joining
Partners Group, she was a Senior Partner at Korn Ferry,
where she built and led their global Culture Transformation
practice. Before that she led global client relationships in
the telecoms and financial services sectors and advanced
the firm’s talent management practice. She holds a master’s
degree in philosophy of science from Stanford University,
California, USA and a bachelor’s degree in philosophy and
sociology from New York University, USA.
Partners Group | 167
ANNUAL REPORT 2020Corporate Governance Report
Bill Berry
is Head of the Private Debt business
department, based in Denver. He has
25 years of industry experience. Prior
to joining Partners Group, he was
Co-President of Capula Investment
Management and worked at Bank of
America/Merrill Lynch in a variety
of senior roles including Global Co-Head of Counterparty
Portfolio Management (CPM) and Head of EMEA Structured
Credit and Securitization and Solutions. He holds a bachelor’s
degree in economics from Princeton University, New Jersey
and an MBA from the Wharton School of the University of
Pennsylvania, USA.
Mike Bryant
Mike Bryant is Co-Head of Partners
Group’s London office, Co-Head
of the Private Real Estate business
department and Head of the
European Private Real Estate business
unit. He has 32 years of industry
experience. Prior to joining Partners
Group, Mike worked at GE Capital Real Estate, HVB Real
Estate Capital, Erste Bank, Coopers and Lybrand, and
Cushman and Wakefield. At GE Capital Real Estate he held
a broad variety of leadership roles, including leading the
European asset management and risk functions. He holds
a master’s degree from Cambridge University, UK, and is a
qualified chartered surveyor.
Roberto Cagnati
is Co-Head of the Portfolio Solutions
business department and Co-Head of
the Portfolio Management business
unit, based in Baar-Zug. He has been
with Partners Group since 2004 and
has 17 years of industry experience.
Prior to joining Partners Group,
Roberto worked at Deutsche Bank Asset Management and
Credit Suisse Private Banking in the alternative investment
space. He holds a master’s degree in economics with a
specialization in statistics and financial markets from the
University of Konstanz, Germany.
168 | Partners Group
Robert Collins
is Head of Partners Group’s New York
Office. He leads Partners Group’s US
distribution practice and is President,
Portfolio Manager and Member of the
Board of Managers of Partners Group
Private Equity (Master Fund), LLC
and Partners Group Private Income
Opportunities, LLC. He also chairs Partners Group (USA)
Inc.’s Investment Committee. Robert joined the firm in 2005
as a member of the Private Equity investment team and has
22 years of industry experience. Prior to joining Partners
Group, he worked at UBS Warburg and Salomon Smith
Barney. Robert holds an MBA from the Johnson School at
Cornell University, New York, USA where he was a Roy H.
Park Leadership Fellow, and a BA from Tulane University,
Louisiana, USA, where he majored in economics and history.
He is a CFA charterholder.
Fredrik Henzler
is Co-Head of the Private Equity
Goods and Products business unit,
based in Baar-Zug. He is a member
of the board of directors of the firm’s
portfolio companies Form Technologies
and United States Infrastructure
Corporation. He has been with
Partners Group since 2012 and has 26 years of industry
experience. Prior to joining Partners Group, he worked
at BrainNet Supply Management Group AG where he led
more than 50 operational efficiency projects for portfolio
companies of private equity sponsors including APAX,
Bridgepoint, Cinven, KKR and Permira. He holds a master’s
degree in finance and accounting from the University of St.
Gallen (HSG), Switzerland.
Dr. Kevin Lu
is Partners Group’s Chairman of
Asia and Head of Partners Group’s
Singapore office. He has been with
Partners Group since 2014 and has
23 years of industry experience. Prior
to joining Partners Group, he was a
member of the senior management
team at the World Bank Group’s Multilateral Investment
Guarantee Agency, as its CFO and Asia-Pacific Regional
Director. He holds a PhD in international finance and public
policy from New York University, USA. He is a Distinguished
Fellow at INSEAD, Singapore.
ANNUAL REPORT 2020Corporate Governance Report Stefan Näf
Martin Scott
is Head of the Client Solutions business
department, based in Baar-Zug.
Previously, he was part of the Private
Equity Directs and Primaries business
unit and subsequently founded the
firm’s London office. He has been with
Partners Group since 2000 and has 25
years of industry experience. Prior to joining Partners Group,
he worked at the European Institute for Risk Management
(EIRM). He holds a master’s degree in banking and finance
from the University of St. Gallen (HSG), Switzerland.
is Head of Partners Group’s Sydney
office and Head of the Australian Client
Solutions business unit and Director of
Partners Group Australia. He has been
with Partners Group since 2008 and has
28 years of industry experience. Prior
to joining Partners Group, he worked
at Zurich Investments, Tyndall Investment Management and
Citigroup. He holds a marketing diploma from the Macquarie
Graduate School of Management, Australia and studied business
at the University of Technology Sydney, Australia.
Dr. Stephan Schäli
Anthony Shontz
is the Chief Investment Officer
of Partners Group. He is based in
Baar-Zug. He has been with Partners
Group since 1999 and has 24 years of
industry experience. Prior to joining
Partners Group, he worked at UBS
and Goldman Sachs & Co. He holds
an MBA from the University of Chicago, Booth School of
Business, Illinois and a PhD in business administration from
the University of St. Gallen (HSG), Switzerland.
Dr. Yves Schneller
is Head of the Investment Services
business department, based in Baar-
Zug. He has been with Partners Group
since 2008, previously heading the
Transaction Services team, and has
16 years of industry experience. Prior
to joining Partners Group, he worked
at Baer & Karrer. He holds a PhD in business law from the
University of St. Gallen (HSG), Switzerland and he is also
admitted to the Swiss bar.
Dr. Raymond Schnidrig
is the Chief Technology Officer of
Partners Group and Head of the
Technology business unit. He is
based in Baar-Zug. He has been with
Partners Group since 2010. He has
28 years of industry experience. Prior
to joining Partners Group, he worked
at Goldman Sachs and Finance Online GmbH. He holds a
PhD in computer science from the Swiss Federal Institute of
Technology (ETH) in Zurich, Switzerland.
is Head of Partners Group’s Denver office
and Co-Head Private Equity Integrated
Investments Americas. He has been with
Partners Group since 2007 and has 19
years of industry experience. Prior to
joining Partners Group, he worked at
Pacific Private Capital and Prudential
Capital Group. He holds an MBA from the Northwestern
University Kellogg School of Management in Illinois, USA.
Christian Unger
is Head of the Operating Directors and
Entrepreneurial Governance business
unit, based in Zug. He has been with
Partners Group since 2013, bringing 26
years of industry experience in the media
and digital space. Prior to joining Partners
Group, he was global CEO of Ringier AG,
Switzerland’s largest media company. He holds a master’s degree
in economics from the European Business School, Germany.
Marc Weiss
is Co-Head of the Private Real Estate
business department and Co-Head of the
Private Real Estate Americas business
unit, based in New York. He has been
with Partners Group since 2007 and has
34 years of industry experience. Prior
to joining Partners Group, he worked at
Commonfund, Kenneth Leventhal & Company, Ernst & Young,
LLP, UBS Asset Management and Pension Consulting Alliance,
Inc., whose discretionary asset management business was
integrated into Partners Group. He holds an MBA from the
Cornell University Samuel Curtis Johnson Graduate School of
Management in New York, USA. He was also a certified public
accountant.
Partners Group | 169
ANNUAL REPORT 2020Corporate Governance Report 6. Compensation, shareholdings
and loans
7. Shareholders’ participation
7.1. Voting rights & representation measures
Each share entitles to one vote. The shareholders who are
entitled to attend shareholders’ meetings and to exercise
voting rights are those recorded with voting rights in the
shareholder register as of a qualifying date prior to the
shareholders’ meeting set by the Board of Directors.
Registration in the shareholder register with the attached
voting rights is restricted by the limits on transferability and
nominee registration as set forth in section 2.6. All registered
shareholders are invited to attend shareholders’ meetings. If
they do not wish to attend, shareholders may be represented
at the shareholders’ meeting either by a legal representative
who needs not be a shareholder or an independent proxy.
The Board of Directors issues further rules in relation to
attendance and representation at shareholders’ meetings,
including the electronic issuance of proxies and instructions
to the independent proxy.
7.2. Quorums
• The following resolutions of the shareholders’ meeting
require at least two-thirds of the represented votes and
the absolute majority of the represented nominal share
value:
•
•
the cases listed in art. 704 para. 1 of the Swiss Code of
Obligations, and
the reversal or amendment of the transfer restrictions
(see section 2.6 for details in relation to such
restrictions).
6.1. Principles, content and method of determining
the compensation
Pursuant to art. 14 and 15 of the OaEC, all compensation
paid in 2020 to the members of the Board of Directors and
the Executive Committee, and the outstanding loans, if
any, granted to the members of the Board of Directors and
the Executive Committee, are disclosed in sections 4 and
5 in the Compensation Report 2020. In the Compensation
Report 2020, the firm outlines its compensation principles,
components and method. The Compensation Report can be
found in the Annual Report 2020 or on the firm’s website.
6.2. Loans
Members of the Board of Directors and Executive Committee
may apply for loans and fixed advances, subject to an
internal review and approval process. Such loans are made
on substantially the same terms as those granted to other
employees, including interest rates and collateral. There were
no loans outstanding as of 31 December 2020 for the Board
of Directors and the Executive Committee (refer to sections
4.6 and 5.6 in the Compensation Report).
Pursuant to art. 12 para. 2 section 1 of the OaEC, the
maximum amount of loans and credits for members of the
Board of Directors and the executive management must
be fixed in the articles of association in order to allow the
company to grant such loans and credits to members of the
Board of Directors and the Executive Committee. Art. 27
and Art. 31 of Partners Group’s articles of association state
that the members of the Board of Directors and Executive
Committee may be granted loans, credits and provided
collateral up to certain limits at arm’s length conditions. All
loans listed in the Compensation Report 2020 were granted
before the entering into force of the OaEC.
170 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report 7.3. Convocation of the general meeting of
shareholders
The Annual General Meeting of shareholders takes place
within six months after the close of the financial year. All
registered shareholders receive a written invitation to the
Annual General Meeting including detailed descriptions of
the items to be discussed and the motions of the Board of
Directors no later than 20 days before the date of the Annual
General Meeting. In 2021, the Annual General Meeting of
shareholders is scheduled for 12 May.
Shareholders representing at least one-tenth of the share
capital may at any time request that a shareholders’ meeting
be called. The request must be submitted in writing at
least 45 days ahead of the meeting by stating the items
on the agenda and the motions to be introduced by the
shareholders.
7.4. Inclusion of items on the agenda
Shareholders representing at least one-tenth of the share
capital may submit proposals to be placed on the agenda at
a shareholders’ meeting, provided these items are received
by the Board of Directors no later than 45 days prior to the
meeting by stating the items on the agenda and the motions
to be introduced by the shareholders.
7.5. Entries in the share register
The general rules for registration as a shareholder apply as
described in sections 2.4 and 2.6. The qualifying date for the
registration of shares is defined by the Board of Directors for
every shareholder meeting.
8. Changes of control and defense
measures
8.1. Opting-out
Partners Group has elected to opt out of the rule that an
investor acquiring 33 1/3 % of all voting rights has to submit
a public offer for all outstanding shares.
8.2. Clauses on change of control
The contracts with the members of the Board of Directors
and the Executive Committee do not contain any change of
control clauses.
In particular, no protection measures, such as
•
•
•
•
•
•
severance payments in the event of a takeover (“golden
parachutes”);
special provisions on the cancellation of contractual
arrangements;
agreements concerning special notice periods or longer-
term contracts where they exceed 12 months (in line
with OaEC);
the waiver of lock-up periods (e.g. no options that can be
exercised with immediate effect);
shorter vesting periods/accelerated vesting; and/or
additional contributions to pension funds
exist that protect the above-mentioned persons by certain
contractual conditions against the consequences of
takeovers.
Partners Group | 171
ANNUAL REPORT 2020Corporate Governance Report
9. Auditors
9.1. Duration of mandate and term of office
The consolidated financial statements and the statutory
accounts of Partners Group Holding AG are audited by
KPMG AG. The statutory and group auditors are elected
for one-year periods at the Annual General Meeting of
shareholders and were re-elected at the Annual General
Meeting 2020.
KPMG AG was first elected statutory and group auditor on
21 November 2001. The lead auditor, Thomas Dorst, has
been in charge of the mandate since 10 May 2017 and is
subject to a seven-year rotation interval.
9.2. Auditing fees
In the financial year 2020, KPMG AG and other KPMG
companies received a total of CHF 1.8 million
(2019: CHF 1.8 million) for audit services.
9.3. Additional fees
In addition, KPMG AG and other KPMG companies received
CHF 0.1 million (2019: CHF 0.1 million) in fees for non-audit
related services such as consulting services (tax, regulatory
and IFRS) rendered to Partners Group and its subsidiaries in
the financial year 2020.
9.4. Supervision and control vis-à-vis the external
auditors
The Board of Directors is responsible for the acceptance
and processing of the reports from the statutory and group
auditors. In this, the Board of Directors is supported by the
Risk & Audit Committee, which periodically interacts with and
monitors the qualification, independence and performance of
the external auditors.
Based on the constant dialogue with KPMG AG and its
annual presentation to the Board of Directors evaluating
all audit findings, the Risk & Audit Committee conducts
its assessment. This assessment further includes oral and
written statements made by KPMG AG throughout the year
concerning individual aspects or factual issues in connection
with the accounting and audit. During the 2020 financial year,
the external auditors participated in four meetings (except the
one ad-hoc meeting) of the Risk & Audit Committee in order
to discuss audit processes as well as regulatory guidelines and
monitoring. Among others, the external auditors were also
involved in evaluating findings on risk factors and processes.
Key factors in assigning the external audit mandate to KPMG
AG were:
• Detailed audit budget proposal containing expected
hours and the relevant hourly rate;
• Comprehensive debriefing after completion of audit,
during which suggestions for improvement are discussed
from both sides;
• Quality of service provided;
•
•
•
International expertise in regard to audit and accounting;
Independence and reputation of the audit firm;
Industry knowledge and qualifications;
• Competitive fees.
The Risk & Audit Committee reviews and assesses the
auditor’s performance on an annual basis. In this context
and in the spirit of upholding good corporate governance,
Partners Group periodically conducts appraisals of the audit
mandate, in which budget issues, in particular, are reviewed
to ensure audit fees are kept at a competitive level in the best
interests of shareholders.
Please also refer to section 3.5 concerning the Risk & Audit
Committee.
172 | Partners Group
ANNUAL REPORT 2020Corporate Governance Report
10. Information policy
11. Non-applicability/negative
disclosure
As a company with its shares listed on the SIX Swiss
Exchange AG, Partners Group is committed to pursuing an
open, transparent and consistent communication strategy vis-
à-vis its shareholders as well as the financial community.
Key dates for 2021 are as follows
Event
Annual General Meeting
of shareholders
Ex-dividend date
Dividend record date
Date
12 May 2021
17 May 2021
18 May 2021
Dividend payment date
19 May 2021
AuM announcement
as of 30 June 2021
15 July 2021
Publication of Interim Report
as of 30 June 2021
7 September 2021
Partners Group’s Interim and Annual Reports are available
for download on the website at www.partnersgroup.com/
financialreports.
Partners Group also distributes all current news via regular
press releases. All published press releases are available on
the website at www.partnersgroup.com/pressreleases.
To receive all information automatically upon publication
via email, shareholders and other interested parties may
subscribe to press releases at www.partnersgroup.com/
subscriptionform.
Partners Group’s Compensation Report outlining the 2020
compensation recommendations for the Board of Directors
and Executive Committee can be found on the Partners
Group website at www.partnersgroup.com/compensation-
report or in the 2020 Annual Report.
For all investor enquiries Philip Sauer can be reached as
follows:
Philip Sauer
Zugerstrasse 57
6341 Baar-Zug
Switzerland
Phone: +41 41 784 66 60
Email: shareholders@partnersgroup.com
It is expressly noted that any information not contained or
mentioned herein is non-applicable or its omission is to be
construed as a negative declaration (as provided for in the SIX
Exchange Regulation Corporate Governance Directive and
the Commentary thereto).
Partners Group | 173
ANNUAL REPORT 2020Corporate Governance Report
ANNUAL REPORT 2020
Contacts
Shareholder relations contact
shareholders@partnersgroup.com
Media relations contact
media@partnersgroup.com
partnersgroup@partnersgroup.com
www.partnersgroup.com
Follow us on LinkedIn
Follow us on Twitter
Follow us on YouTube
Zug
Zugerstrasse 57
6341 Baar-Zug
Switzerland
T +41 41 784 60 00
Denver
1200 Entrepreneurial Drive
Broomfield, CO 80021
USA
T +1 303 606 3600
Houston
Williams Tower
2800 Post Oak Blvd., Suite 5880
Houston, TX 77056
USA
T +1 346 701 3900
Toronto
Exchange Tower
130 King Street West, Suite 1843
Toronto, ON M5X 1E3
Canada
T +1 416 865 2033
New York
The Grace Building
1114 Avenue of the Americas, 37th Floor
New York, NY 10036
USA
T +1 212 908 2600
São Paulo
Rua Joaquim Floriano 1120, 11° andar
CEP 04534-004, São Paulo - SP
Brazil
T +55 11 3528 6500
London
110 Bishopsgate, 14th Floor
London EC2N 4AY
United Kingdom
T +44 20 7575 2500
174 | Partners Group
Guernsey
P.O. Box 477
Tudor House, Le Bordage
St Peter Port, Guernsey
Channel Islands, GY1 6BD
T +44 1481 711 690
Paris
29-31 rue Saint Augustin
75002 Paris
France
T + 33 1 70 99 30 00
Luxembourg
35D, avenue J.F. Kennedy
L-1855 Luxembourg
B.P. 2178
L-1021 Luxembourg
T +352 27 48 28 1
Milan
Via della Moscova 3
20121 Milan
Italy
T +39 02 888 369 1
Munich
Skygarden im Arnulfpark
Erika-Mann-Str. 7
80636 Munich
Germany
T +49 89 38 38 92 0
Dubai
Office 601, Level 6
Index Tower, DIFC
POBOX 507253
Dubai UAE
T +971 4 316 9555
Mumbai
Suite 3103, Four Seasons Hotel
Plot No. 1/136, Dr. E Moses Road, Worli
Mumbai 400 018
India
T +91 22 4289 4200
Singapore
8 Marina View
Asia Square Tower 1 #37-01
Singapore 018960
T +65 6671 3500
Manila
18/F Seven/NEO Building
5th Avenue Corner 26th Street
Bonifacio Global City, Taguig
Metro Manila 1634
Philippines
T +63 2804 7100
Shanghai
Unit 1904-1906A, Level 19
Tower I, Jing An Kerry Center
No. 1515 West Nanjing Road
Jing An District, Shanghai 200040
China
T +86 21 2221 8666
Seoul
25th Fl. (Gangnam Finance Center,
Yeoksam-Dong) 152 Teheranro
Gangnam-Gu, Seoul 06236
South Korea
T +82 2 6190 7000
Tokyo
Marunouchi Park Bldg. 6F
2-6-1 Marunouchi, Chiyoda-ku
Tokyo 100-6906
Japan
T +81 3 5219 3700
Sydney
L32, Deutsche Bank Place
126 Phillip Street
Sydney, NSW 2000
Australia
T +61 2 8216 1900
0
2
0
2
T
R
O
P
E
R
L
A
U
N
N
A
–
P
U
O
R
G
S
R
E
N
T
R
A
P
www.partnersgroup.com