Chaos prevails in the private funds market, with Swiss-based Partners Group Holding AG—one of Europe’s largest listed alternative investment managers—imposing restrictions on capital withdrawals from one of its major evergreen private equity funds. The growing pressure from redemption requests indicates that investor anxiety, which initially hit private credit funds, is now expanding to other categories of private investments. According to a letter to investors obtained by Bloomberg, the $8.6 billion Global Value SICAV fund will limit share redemptions to 5% of net asset value per quarter, as investor withdrawal requests surged to 9.8% during the second quarter of the year.
Pressures from private investors increase
A spokesperson for Partners Group stated that there is a noticeable increase in redemption requests from private wealth clients across the group's entire portfolio of evergreen funds. These investors are traditionally considered more sensitive to market volatility compared to institutional investors. They represent approximately 20% of the company's assets under management and constitute a particularly significant portion of the Global Value SICAV’s investor base. The news exerted strong pressure on the stock of Partners Group, which manages approximately $185 billion in private equity, private credit, real estate, infrastructure, and royalties. The stock recorded an intraday decline of up to 18.2% on the Zurich Stock Exchange, marking the largest daily drop in its history. Year-to-date losses are approaching 30%.
The pioneers of evergreen funds
Partners Group is considered one of the companies that pioneered the development of so-called evergreen funds, namely open-ended investment vehicles that allow investors to withdraw part of their capital on a quarterly basis instead of being locked in for a specific duration. Today, it manages more than 30 such investment schemes across five different asset classes, with total assets under management exceeding $56 billion. The negative sentiment also affected other large managers operating in the same space, with shares of EQT AB and CVC Capital Partners Plc also falling by more than 5%.
The crisis expands from private credit to private equity
The company notes that turbulence in private markets, caused by macroeconomic shifts and the geopolitical conflicts of recent years, has begun to shift from private credit funds to private equity portfolios. "These specific trends in capital flows have accelerated recently and are now affecting this fund as well," the letter to investors states. The company's CEO, David Layton, told Bloomberg Television that there are specific factors affecting this particular fund, but he admitted that the trend is broader. "After several quarters of pressure on private credit funds, we are now seeing investors moving to redeem from other categories of private investments," he explained, noting that most of the redemption requests come from investors in Asia and Australia.
Fears over debt quality and artificial intelligence
Private credit funds have been at the center of market concerns for months. Investors are expressing fears about the quality of loan portfolios, as well as the excessive exposure of many funds to software companies, which may face significant disruptions from the rapid development of artificial intelligence. The growing anxiety has led to massive outflows of billions of dollars from the sector, with top managers such as Apollo Global Management, KKR, BlackRock, and Blue Owl Capital also having imposed restrictions on capital redemptions from time to time.
"Restrictions necessary to protect investors"
Partners Group maintains that redemption restrictions are a fundamental characteristic of private markets, as they protect long-term investors in an asset class characterized by limited liquidity. "Protecting all investors in an evergreen fund requires a balance between those seeking immediate liquidity and those who wish to remain invested to take advantage of future investment opportunities," the letter points out.
Warnings for the entire industry
Pierre-Yves Gauthier, CEO of AlphaValue, warned that the phenomenon is not limited to a single company. "The disease is spreading across all private market asset classes," he stated characteristically. As he added, the reduction in assets under management may lead analysts to revise earnings forecasts for the entire sector.
Significant liquidity still available
Despite the restrictions, the company emphasizes that the Global Value SICAV has liquidity equal to approximately 15% of its net asset value. Furthermore, it has an unused credit line that also corresponds to 15% of the fund's size. The investment vehicle, which has been operating for 19 years, had imposed similar restrictions only during the pandemic. The company assures that the fund remains open to new capital allocations, while total distributions to investors are expected to reach 15% for 2026, compared to 16% in 2025.
In the background, the attack by Grizzly Research
The case comes a few weeks after a report by Grizzly Research, which announced that it holds a negative position (short) on Partners Group stock, arguing that there are inconsistencies in the valuations of evergreen funds. Grizzly estimated that up to 40% of investments may be significantly overvalued, citing discrepancies between reported valuations and the actual performance of investments. Partners Group categorically rejected the claims, maintaining that valuations are audited by independent third parties and characterizing Grizzly's accusations as "baseless, defamatory, and deeply misleading." David Layton acknowledged that the Grizzly report did not help the situation, without, however, considering it the main reason for the increased redemptions. "It certainly doesn't help, but it's hard to estimate its exact impact. We don't believe it is the deciding factor, although it is one of the reasons increasing the pressure on this fund," he stated.
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