Partners : Annual Results 2023

Key

Figures

As our firm continues to grow, we remain committed to driving forward our strategy of delivering sustainable returns through a focus on transformational investing, bespoke client solutions, and positive stakeholder impact.

Given the more challenging market environment, we are especially pleased to report a solid set of financial results for 2023 and robust operational performance across the businesses and assets under our stewardship.

Key Figures

Key performance indicators

Assets under management as of the end of the year (in USD bn) Revenue Margin3,4

Revenues (in CHF m)4

EBIT margin

EBIT (in CHF m)5

Financial result (in CHF m)

Profit (in CHF m)

2023

146.9

1.56%

1'945

61.3%

1'193

16

1'003

2023 Annual Report

2022

135.4

1.51%

1'872

60.5%

1'132

(2)

1'005

4

Corporate

Calendar

Management Fee EBIT (in CHF m)5 Shareholders' equity (in CHF m) Return on shareholders' equity (ROE)5 Equity ratio5

956

2'427

41%

51%

963

2'416

38%

53%

Annual General Meeting of shareholders 2024

Ex-dividend date

22 May 2024

24 May 2024

Share information as of 31 December

Share price (in CHF)

Total shares

Market capitalization (in CHF bn)

Free float6

Diluted shares (weighted average)

Diluted earnings per share (in CHF)

Dividend per share (in CHF)7

Dividend yield per share8

Bloomberg ticker symbol

Reuters ticker symbol

• Based on average AuM of CHF 125.0 billion in 2023 (2022: CHF 124.1 billion), calculated on a daily basis.
  4 Revenues from management services, net, including other operating income.
  5 As defined in the Key definitions and alternative performance metrics section of the Annual Report 2023 (p. 32 & 33). 6 According to the SIX Swiss Exchange definition.
  7 As per proposal to be submitted to the next ordinary Annual General Meeting of shareholders on 22 May 2024. 8 Yield as of 31 December 2023.

2023

1'213

26'700'000

32.4

84.90%

26'027'274

38.55

39.00

3%

PGHN SW

PGHN.S

Dividend record date

Dividend payment date

Announcement of AuM as of 30 June 2024

Publication of Interim Financial Results & Report as of 30 June 2024

27 May 2024

28 May 2024

11 July 2024

3 September 2024

Messagefrom the Chairman and the CEO

Steffen Meister Executive Chairman

David Layton Chief Executive Officer

Dear clients, business partners, shareholders, and colleagues,

2023 was a difficult year for the world, and was one marked by a significant acceleration of change within the economy. Geopolitical tensions and conflicts have escalated in several arenas and inflationary pressures along with the interest rate regime have continued to create significant uncertainty in the financial markets. Our industry has similarly grappled with a more difficult period, with a muted transaction market driven by a disconnect between buyers and sellers, as well as slowed client conversions impacting fundraising across the industry. In this context, we are pleased that the portfolio of businesses and assets under our stewardship continues to perform robustly, and our financial results are solid.

Our thematic sourcing, built on a deep industry sector expertise, has identified a significant pipeline of investment opportunities. Despite the more challenging conditions for transactions globally, we invested USD 13 billion into a diversified set of portfolio and direct assets as well as private credit opportunities. These

investments reflect our highly selective sourcing process focused on sub-sectors of the economy with consistent, above-average, secular growth rates.

While the exit market remained cautious and we elected to postpone several exits of mature businesses, we generated USD 12 billion in portfolio realizations, with several additional exit processes planned for the next 12 to 18 months.

On the client side, our focus on bespoke client solutions allowed us to raise a firm wide record number of mandates in the period, building a solid base for future growth. Our clients entrusted us with USD 18 billion in new capital commitments bringing our total AuM to USD 147 billion as of 31 December 2023, up 8% year-on- year.

Based on the confidence of the Partners Group Board of Directors in the sustainability of the firm's growth and the solidity of the firm's balance sheet, the Board of Partners Group will propose a dividend of CHF 39.00 per share to shareholders at the Annual General Meeting in May 2024. The proposal represents an increase of 5% year-on-year.

2023, in our view, was an inflection point and we expect 2024 to be a transition year as transactions and client conversion periods continue to normalize.

Transformational investing

-

In 2023, all our control investments were originated through the first pillar of our transformational investing approach, thematic investing, to ensure complete alignment of our investment philosophy. The second pillar, entrepreneurial governance, led to a solid average EBITDA growth of 13% with an EBITDA margin of 23% in our direct private equity portfolios.9

In this challenging landscape marked by a consistent acceleration of change, this active transformational investing approach shows its outsized ability to create value, a clear differentiation from more passive investing approaches. This feature will become increasingly important to delivering solid returns for clients.

For example, within private equity, in January 2023, we invested in SureWerx, a leading provider of technical and consumable safety products in North America. We identified the company through our "personal protective equipment" theme, which is built on the increasing regulatory requirements on worker

safety. Amongst other initiatives, we intend to redesign the sales and product development processes and transform the company's e- commerce capabilities to increase market reach over the period of our custody.

Within infrastructure, our thematic work on the decarbonization giga theme highlighted "low carbon fuels", such as biogas, that support stability during the transition to renewable energy as an under-explored investment theme. In June 2023, we invested in a leading biogas and biomethane platform in Germany, and subsequently rebranded the firm as biogeen. Over the course of our ownership, we intend to build out the platform of plants to use other sources of feedstock for production and develop ancillary service lines such as commercializing carbon dioxide as an e-fuel to capture additional demand.

Several realizations in H2 postponed

-

We elected to postpone most exits originally planned for H2 given that the environment for transactions remained more fragile than anticipated earlier in the year. We were nonetheless pleased to have successfully achieved select realizations on behalf of our clients.

Within private equity, we announced the agreement to sell Civica, a UK-based global

leader in developing software specifically for the public sector. Our transformational investing plan focused on moving products towards cloud offerings, expanding and upgrading the quality of Civica's go-to-market and distribution activities, and centralizing operations while also acquiring 24 strategic add-ons to drive additional growth. This allowed us to double EBITDA across our holding period.

In 2023 we also completed the exit of a multi- purpose office space in Tokyo, the Tama Centre. Our value creation focused on creating buildings centered on the tenants' needs and on providing a long-term solution to their office requirements.

Record number of mandates raised

-

We sustained our AuM growth trajectory in 2023 and despite the longer client conversion periods across the industry, we were able to raise a record number of new mandates. Such bespoke solutions, which require an integrated platform to function efficiently, allow us to craft differentiated and long-term private markets solutions for our clients. These mandates also build the foundation for future growth as we find that the average mandate client today has tripled their initial investment size since the start of our relationship. Mandates made up 46% of total assets raised, or USD 8.3 billion.

Another important growth area is evergreens, which are differentiated offerings tailored to cater to private wealth clients. With a 20+ year track record of providing solutions to individual investors across market cycles, we remain a leader within this client segment with USD 44 billion in AuM. Evergreens made up USD 4.8 billion or 26% of total assets raised.

Finally, traditional closed-ended programs remain a key element of our fundraising. We brought several new next-generation flagship funds to market this year. These solutions represented 28% or USD 5.1 billion of total assets raised.

Revenues impacted by FX headwinds

-

In 2023, management fees of CHF 1'575 million (81% of total revenues) were adversely impacted by the strengthening of the CHF against the USD and EUR, which reduced growth by 5%. Our management fee margin, however, remained stable at 1.26%, highlighting the value clients place in the quality of our solutions and offering us the benefit of pricing stability.

Performance fees increased to 19% of total revenues, or CHF 369 million in 2023, as several infrastructure programs reached their performance fee hurdle rates following an active 12-month period of exits for the asset class,

adding to the diversification of the firm's performance fee sources. However, as we postponed several of our asset divestitures in the second half of the year, performance fees were skewed towards the first half of the year. In combination, total revenues increased 4% year- on-year to CHF 1'945 million. Despite the headwind brought about by the strong CHF, our EBIT margin increased to 61.3%.

Sustainability fully embedded in our strategy

-

We intend for all our stakeholders, including employees at Partners Group and at our portfolio companies, our client beneficiaries, society, and the environment to experience a positive and lasting impact when engaging with our firm.

In 2023, our sustainability journey continued, and we made progress on the goals set out in our Corporate Sustainability Strategy. As a preview to our Corporate Sustainability Report, to be published in April this year, in 2023 we have specifically further integrated ESG within our PG Business Systems approach, performed a Double Materiality Assessment, and introduced a new Sustainability Office to oversee ESG at the firm as well as ensure ownership by the Board of Directors and the Executive Team.

In a testament to our continued leadership in this space, Partners Group has again received several key industry recognitions, such as being included in the S&P Global Sustainability Yearbook and in the Dow Jones Sustainability Indices, while also retaining the UNPRI A+ rating.

Outlook: setting Partners Group up for future growth

-

Our teams have been laying the groundwork for our firm's future growth and are ready to address the opportunity presented as our industry continues to evolve. We enter 2024 excited by the strength of our bespoke offering and several new additions to our product offering.

This year, Partners Group intends to add royalties as a fifth asset class to its investment universe. Royalties can offer attractive risk adjusted returns and diversification benefits that complement the private markets universe already covered by our investment teams. We intend to provide a solution that is differentiated from existing royalties programs, which are specialized and manage concentrated portfolios. Partners Group will be offering the industry's first, dedicated, scalable multi-sector royalties strategy. We will focus on global diversification and access to a variety of sectors that fit well within our thematic investment theses.

Within the private wealth space, Partners Group is pleased to launch six new evergreen programs, expanding our existing product shelf to include additional asset classes and multi- asset solutions.

While we expect 2024 to be a transition year with buyers and sellers slowly finding a new equilibrium and client conversion rates moving back towards a more normal pace, the new products and asset classes we are adding this year will position us to take advantage of the next phase of growth for our industry. The data from 2023 confirms our hypothesis that the role of public and private markets in financing the economy is shifting, with private markets increasingly surpassing public markets. As the pace of change in the economy accelerates further, our industry will continue to grow in importance. However, to capitalize on this growth requires a focus on transformational investing, and successful private market investors, who, like Partners Group, take an active approach to investing, stand to access a massive investment opportunity of around USD 30 trillion in the next 10 years.

As ever, we thank our employees for their dedication to building a leading private markets platform and our clients, business partners, and shareholders for their continued trust in our firm.

Yours sincerely,

Steffen Meister

Executive Chairman

David Layton

Chief Executive Officer

2023

ataglance- Investments

Market environment

-

2023 was a period marked by an acceleration of change: companies across the globe continued to navigate a challenged macro backdrop, including persistent inflationary pressures, a reset interest rate environment, and geopolitical instability. Across the private market industry, the period was characterized by lower overall transaction and exit volumes, which decreased by 54%1 and 55%2 respectively from 2021 peaks. As a result, private equity investors experienced 64%3 lower distributions during the same period. It is in this environment that we see how valuable our operating playbook truly is. It guides how we build conviction in the businesses and sectors in which we invest and helps to navigate more challenging environments with hands-on active value creation. Ultimately our playbook ensures that we continue delivering consistent performance for our clients.

Our approach to building value

-

At Partners Group, we build differently by leveraging our thematic sourcing approach and

our entrepreneurial governance model to drive transformational investing regardless of the market environment.

We invested USD 13 billion into attractive transformative companies and assets

Our thematic sourcing, which involves extensive research to identify high conviction sectors underpinned by secular growth tailwinds, is our foundation. Once we identify the sector, we seek to understand which business models are set to be the winners within these areas. Today more than ever, we follow a strict adherence to our thematic sourcing of investments. In fact, we originated all of our control investments in 2023 through our thematic sourcing efforts. At the sourcing stage, we already begin building a value creation plan which we will further refine with the portfolio company's management post-close.

After we take control of a business, our culture is to run that business with the mindset of a founder and entrepreneur to drive fundamental

value creation as opposed to a purely financial oriented capital provider. This is our entrepreneurial governance model. The portfolio company's management, board, and the Partners Group investment team work collaboratively to implement this model, ensuring alignment of both the strategic and operational priorities of the portfolio company.

Finally, with our portfolio management capabilities, we are able to offer a truly diversified portfolio with vintage-year diversification in any given macro backdrop and to deliver long-term sustainable returns for our clients.

Investments 20234

-

In the challenging environment of 2023, we secured USD 13.2 billion (2022: USD

26.0 million) of attractive investment opportunities into private businesses, assets, and portfolios. The firm deployed USD 7.9 billion (60% of total investment volume) into direct assets, of which USD 5.4 billion was committed as equity and USD 2.5 billion was committed to corporate direct lending.

Edgecore

Partners Group's private markets investments5 (in USD bn)

31.7

26.0

21.7

17.0

13.2

10.3

To complement our direct investments, we invested USD 5.4 billion (40% of total investment volume) into portfolio assets. These portfolio assets include USD 2.4 billion of secondary investments, USD 1.2 billion of select primary commitments to other third-party private markets strategies, and USD 1.8 billion into broadly syndicated loans.

USD 13 billion private markets investments in 2023, shown by investment strategy6

Secondaries 18%

Direct equity

Primaries41% 8%

BSL 14%

Direct credit 19%

Europe was the most active region for our investment business, accounting for 58% of all 2023 investment commitments versus 42% in North America. Against 2023's macroeconomic backdrop, we saw greater relative value in Europe due to better competitive dynamics, which allowed us to purchase high-quality assets at lower multiples. After an active 2022 for Asia-Pacific & Rest of World, our teams in those regions are focused on the onboarding of new assets and are working on building out our current thematic investment pipeline.

Portfolio performance

-

Despite macro headwinds, our transformational investing strategy resulted in another year of strong average EBITDA growth across our direct private equity portfolios (13%)7 and our direct infrastructure portfolios (15%).8 Direct NAV development of lead transactions net of fees for the 12-month and 10-year period ending on 31 December 2023 is provided in the following table.

Net returns of direct portfolio performance9,10

our direct lead portfolio remained strong at 23%.11

We invested USD 5 billion in private equity

In private equity, we invested USD 5.2 billion into attractive well-positioned businesses and assets. Throughout the year, our teams were actively researching over 100 themes to map out entire ecosystems and search for the best derivatives of certain mega trends driving change and growth in the real economy. While

provider that safeguards the pipeline infrastructure in 120 countries around the world. In a time where 38% of pipelines in use today are more than 50 years old, ROSEN Group has a clear value proposition.

At entry, ROSEN Group was already a segment leader with a winning business model. The company has a sustainable technology leadership, a strong data advantage, and a future-proofed technology pipeline.

We will leverage our operational expertise to drive data transformation by changing the legacy software system currently in use to a

ROSEN Group

In January 2023 we invested in SureWerx, a leading provider of technical and consumable safety products which offers a "one-stop-shop"

Private equity Private credit Infrastructure Real estate

1-year

4.4%

8.5%

12.6%

(13.3%)

10-year

17.4%

6.2%

14.0%

4.9%

the changing investment environment has created challenges, it has also produced opportunities.

One example is our investment in ROSEN Group, a leading technology and inspection service provider for critical energy

modern cloud technology with machine learning and AI. In addition, we will add customer centricity to the current engineering focused culture, and enter new end markets including hydrogen pipelines and CO2, which are key to achieving carbon capture targets.

for their customer's safety needs. SureWerx has over 4'500 customers who purchase on average 6 product categories or more. We identified SureWerx through our "personal protective equipment ('PPE')" theme within our safety thematic. PPE is characterized by cycle resilience and growth prospects due to

Private equity

-

Our direct private equity portfolio continued to exhibit strong underlying operational performance and healthy levels of growth, largely resulting from organic value creation. In 2023, the average adjusted EBITDA margin of

infrastructure, in November 202312 at an EV of EUR 2.7 billion. We identified ROSEN Group several years ago, within our theme of "testing, inspection, and certification". Headquartered in Switzerland, ROSEN Group provides technology empowered inspection services for pipeline infrastructure. It is an essential service

increasing regulations on worker safety. There is a growing focus on established brands due to the high cost of product failure. Our value creation plan includes enhancing data and analytics capabilities, building out an enhanced digital ordering platform for customers, and revamping the current supply chain.