Summary of Partners Group Capital Markets Day - March 10, 2026 Company Overview - **Company**: Partners Group (OTCPK: PGPH.F) - **Industry**: Private Markets Investment - **Assets Under Management**: $185 billion, with 75% in equity strategies and 25% in credit strategies [3][4] Key Points and Arguments Company Heritage and Approach - Partners Group originates from Switzerland, differentiating itself from peers based in New York or London, leading to a unique client-centric and bespoke portfolio construction approach [2][3] - The firm emphasizes a hands-on, transformational approach to building companies, focusing on strategic dynamics rather than just financial metrics during board meetings [5][6] Performance Metrics - Private equity business has $86 billion in assets, achieving an 11% CAGR over the last 5 years and a realized outcome of 19.8% historically [7] - Private credit business stands at $40 billion, with a bottom-up portfolio construction approach [8] - Infrastructure assets have grown to $36 billion, with an 18% CAGR over 5 years, and have never recorded a realized loss [8][9] Real Estate and Royalties - Real estate assets total $22 billion, with a shift towards niche allocations and vertical integration, exemplified by the acquisition of Empira [9][10] - The royalties business has reached $1 billion in assets, with significant growth potential as clients seek alternative credit solutions [10][11] Client-Centric Strategy - Partners Group focuses on understanding client objectives and building custom solutions, leading to a loyal client base and diversified revenue streams across 350 different solutions [12][13] - The firm has benefited from increasing allocations of institutional investors to private markets, with expectations for the industry to grow from $15 trillion to $30 trillion [14][16] Market Dynamics and Future Outlook - The firm anticipates a bifurcation in the private markets, with a need for customization and innovative solutions to meet evolving client needs [15][16] - The leadership team is focused on strategic partnerships for distribution and consolidation of manufacturing capabilities, with a strong emphasis on securing distribution partnerships [29][30] Investment Strategies - The firm is developing new strategies in infrastructure, private equity yield, and special opportunities, while also expanding its mandate offerings in underrepresented regions like Asia-Pacific and the Middle East [31][32] - The investment environment is characterized by significant changes, including the rise of AI technology and evolving client demands, which are expected to create new opportunities [34][36] Sector-Specific Insights - **Private Equity**: Emphasis on business transformation and data strategy as key drivers for success [39][42] - **Infrastructure**: Focus on next-generation utilities and the integration of technology for energy production and management [45][47] - **Real Estate**: Shift towards operational intensity and vertically integrated platforms to meet dynamic tenant demands [49][51] - **Credit**: Anticipation of increased default rates and the need for a more selective, alpha-driven approach to credit underwriting [54][57] - **Royalties**: Growth in intangible assets and the use of royalty financing as a flexible funding solution for businesses [62][64] Additional Important Insights - The firm has successfully reduced the minimum investment for separate accounts from $500 million to $50 million, allowing for greater customization and accessibility for clients [24][25] - The leadership team expresses optimism about the future, citing a differentiated setup that positions the firm well for the next decade [36][37]

Group 1 - RBC Capital has set a price target of $137 for KKR & Co. (NYSE: KKR), indicating a potential upside of about 48.61% from its current stock price of $92.19 [1][6] - KKR has made a strategic acquisition of a majority stake in XCL Education Holdings for approximately $1.3 billion, enhancing its portfolio in the education sector [2][6] - The acquisition is expected to strengthen KKR's position in the education sector, with XCL Education managing several K-12 institutions across the region [3] Group 2 - KKR's current stock price is $92.19, reflecting a decrease of $8.99 or approximately -8.89% [4] - The stock has shown significant volatility, with a yearly high of $153.87 and a low of $86.15 [4][6] - KKR's market capitalization is approximately $82.18 billion, with a trading volume of 15.34 million shares, indicating a strong position in the investment industry [5]

Core Viewpoint - RBC Capital initiated coverage on KKR & Co. with a bullish "Outperform" rating despite a recent decline in stock price [1][4] Company Overview - KKR & Co. is a global investment firm managing various alternative asset classes, including private equity, energy, infrastructure, real estate, and credit [1] - The firm competes with other major players such as Blackstone and Warburg Pincus [1] Recent Acquisition - KKR is set to acquire a majority stake in XCL Education Holdings for approximately $1.3 billion, enhancing its portfolio in the education sector [2] - The acquisition involves purchasing the stake from TPG Inc., with KKR successfully outbidding competitors like Warburg Pincus, Blackstone, and EQT AB [2] Impact of Acquisition - XCL Education manages notable campuses, including the XCL World Academy in Singapore and the American School of Bangkok's Sukhumvit campus, which could strengthen KKR's position in the education market [3] - The transaction is pending regulatory approvals, a standard procedure for large deals [3] Stock Performance - KKR's stock price has decreased by $8.99, or approximately -8.89%, to $92.19, with fluctuations between $91.45 and $99.90 [4] - Over the past year, KKR's stock has experienced significant volatility, with a high of $153.87 and a low of $86.15 [4] Market Capitalization - KKR's market capitalization is approximately $82.18 billion, with a trading volume of 15.34 million shares, indicating substantial size and investor interest [5] - The acquisition of XCL Education could potentially influence KKR's future performance and investor sentiment [5]

Core Insights - KKR & Co. is preparing for its quarterly earnings release on February 5, 2026, with projected earnings per share (EPS) of $1.21 and revenue of approximately $1.78 billion [1][6] Revenue and Growth - KKR is expected to see a revenue increase driven by a 20.4% rise in management fees and a 16.1% growth in assets under management (AUM) for the fourth quarter of 2025 [2][6] - Despite an anticipated decline in earnings compared to the previous year, KKR has consistently outperformed earnings expectations, exceeding the Zacks Consensus Estimate in the last four quarters [2] Financial Performance - The divestiture of Janney units has allowed KKR to monetize assets and focus on its core alternative investments, with significant growth in AUM and transaction fees in its capital markets business [3] - KKR's earnings surpassed the Zacks Consensus Estimate in the preceding quarter, although rising expenses have presented challenges [3] Valuation Metrics - KKR's financial metrics indicate a price-to-earnings (P/E) ratio of approximately 39.14, a price-to-sales ratio of about 5.50, and an enterprise value to sales ratio of around 7.40 [4][6] - The enterprise value to operating cash flow ratio is approximately 23.51, with an earnings yield of about 2.55% [5] - KKR's debt-to-equity ratio stands at approximately 1.83, and its current ratio is around 4.20, indicating a strong ability to cover short-term liabilities [5]

Financial Data and Key Metrics Changes - Fundraising in Q2 2025 was $1.3 billion, contributing to a total of approximately $4.5 billion for the first half of the year, which is 75% of the original $6 billion target for 2025 [6][14] - Fee-related earnings for Q2 2025 were $46.1 million, reflecting an 8% sequential and 17% year-over-year growth, while fee-earning AUM grew 6% sequentially and 20% year-over-year [6][29] - Total AUM reached $48.7 billion, with organic net inflows of over $600 million in Q2 2025 and $1.3 billion year-to-date [7][10] Business Line Data and Key Metrics Changes - Fee-earning AUM rose to $37.2 billion, marking a 20% year-over-year and 6% sequential increase [10][24] - The company reported a 34% year-over-year reduction in redemptions, indicating improved organic growth capabilities [11] - Infrastructure fundraising in 2025 was approximately three times greater than in all of 2024, driven by strong demand for Infrastructure Fund V [15] Market Data and Key Metrics Changes - Local investors accounted for approximately 55% of fundraising in 2025, indicating a strong preference for local investment opportunities [21] - The company noted a shift in investor interest towards Latin America as a destination for capital allocation, influenced by geopolitical uncertainties in the U.S. [54][20] - The Brazilian REIT acquisitions are expected to add approximately $600 million in fee-earning AUM, enhancing the company's market position [66] Company Strategy and Development Direction - The company aims to achieve a full-year fundraising target of $6.3 billion to $6.6 billion, reflecting a 5% to 10% increase from the original target [6][21] - The strategy includes leveraging acquisitions to enhance growth, as demonstrated by the recent acquisition of seven listed REITs in Brazil [12][66] - The focus on resilient sectors such as agribusiness, food and beverage, and healthcare is expected to drive positive underlying business trends [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 fee-related earnings target of $200 million to $225 million, with a strong start to the three-year plan [21][30] - The company is well-positioned to navigate global macroeconomic uncertainties, with a focus on local consumption markets rather than export markets [17][20] - Management highlighted the importance of organic growth and the ability to generate revenue independent of M&A and investment returns [7][11] Other Important Information - The company reported a net accrued performance fee balance of $394 million, reflecting a 7% increase from the previous quarter [8] - The effective tax rate for Q2 2025 was 8%, with expectations to hover around 10% annually [31] - A quarterly dividend of $0.15 per share was approved for 2025, indicating a commitment to returning value to shareholders [32] Q&A Session Summary Question: Expansion plans in Mexico - Management acknowledged Mexico as an attractive long-term market and discussed potential local partnerships in real estate and credit sectors [36][42] Question: Deployment pipeline in infrastructure - Management indicated a strong pipeline in infrastructure, particularly in Brazil and Colombia, with significant capital available for investment [44][45] Question: Clarification on fundraising guidance - Management clarified that the increased fundraising guidance excludes the recent REIT acquisitions, with interest coming from Asian, Middle Eastern, and local investors [50][52] Question: Timeline for REIT acquisitions consolidation - Management confirmed that the REIT acquisitions are already closed and will start contributing to results in Q3 2025 [66]