Partners Group Shares Drop After Missing Market Expectations in First-Half Results
Partners Group (SIX:) experienced a 7.7% drop in shares following the release of its first-half results, which fell short of market expectations. The Swiss private-equity firm reported a nearly 8% decline in net profit to CHF 508 million, with revenue also decreasing by 7% to CHF 977 million. This was attributed to a 39% decrease in performance fees, despite a 4% increase in management fees.
Chief executive, David Layton, noted that while fundamentals improved in the first half of the year, transaction markets were recovering more slowly than anticipated. Earnings before interest and taxes (EBIT) also fell by 6.1% year-on-year to CHF 605 million.
Analysts at UBS highlighted that other financial results, mainly from PGHN's GP commitments, were 26% below consensus. Costs decreased by 9% to 371 million Swiss francs, driven by lower variable performance fee-related personnel expenses.
Looking ahead, Partners Group reaffirmed its guidance of USD 20 to 25 billion in total client demand for the full year 2024. This is based on an expected stabilization in the investment climate, continued interest in its offerings, and an uptick in investment activity.
Analysis:
Partners Group's disappointing first-half results led to a drop in share prices, highlighting the challenges faced by the company in the current market environment. The decline in net profit and revenue, coupled with slower-than-expected recovery in transaction markets, point to potential difficulties ahead. Investors should monitor Partners Group's performance closely and consider the impact of these results on their investment decisions.
