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  • September 2016
  • Case
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Partners Group: Ain't No Mountain High Enough

By: Nori Gerardo Lietz and Ricardo Andrade
  • Format:Print
  • | Language:English
  • | Pages:25
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Abstract

Partners Group (PG), a Swiss-based PE manager, initiated a series of strategic shifts and evolved from a predominately fund-of-funds manager into a large, multi-asset class PE firm focused on direct investments. PG was the first PE firm to go public in 2006. A number of large U.S.-based private equity firms followed to create a new category of firms: public private equity firms (PPEs). PG’s results were superlative (565% since inception total return and 22% annual compounded growth) versus the U.S.-based PPEs performance over the same time of 76% to 18%. PG’s multiple was 22x versus its PPE peer group of 8x. PG had the lowest value of AUM yet had the second largest market capitalization behind Blackstone. Why? PG had differing management practices: (i) compensation practices, (ii) corporate governance structure, (iii) accounting policies, and (iv) source of revenues. PG historically had a low percentage of its revenues derived from carried interest payments (less than 10%) while the U.S. PPEs had a significantly higher percentage (on average 50%). Should PG do more direct investments and have more of its revenues come from carried interests? This could conceivably jeopardize its trading multiple and its stock price. Should PG risk changing its business model or proceed with confidence?

Keywords

Business Model; Management Practices and Processes; Entrepreneurship

Citation

Lietz, Nori Gerardo, and Ricardo Andrade. "Partners Group: Ain't No Mountain High Enough." Harvard Business School Case 217-035, September 2016.
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About The Author

Nori Gerardo Lietz

Finance
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Related Work

    • May 2017
    • Faculty Research

    Partners Group: Ain't No Mountain High Enough

    By: Nori Gerardo Lietz
Related Work
  • Partners Group: Ain't No Mountain High Enough By: Nori Gerardo Lietz
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