Partners Group closes Pearl Holding Limited above target

01 December 2001

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Fund

Pearl Holding Limited, the Luxemburg Stock Exchange-listed convertible bond managed by Zug-based Partners Group, has reached a final close above its EUR500m target to reach EUR660m. Partners Group, one of the largest private equity managers and advisors in Europe with SFr 4.5bn under management, supplies a range of tailor-made private equity products for institutional clients. Other vehicles include the listed, AAA-rated, $700m 0%-convertible bond, Princess Private Equity, (Deutsche â€¦unquoteâ€, May 2001, page 11) and the SFr 550m Castle Private Equity AG (Deutsche â€¦unquoteâ€, March 2001, page 10), a joint venture with Liechtenstein Global Trust LGT. The Pearl Holding Limited fund was raised in two tranches: the first from DGZ DekaBank, which supplied EUR485m in September 2000, and the second from Merrill Lynch which provided the remaining EUR175m at the end of summer 2001. The bond is rated AAA by S&P with a guaranteed 2% coupon. This has been achieved through full capital and income protection provided by Swiss Re.

Investments

Pearl Holding Limited, a Guernsey-based, closed-end investment company, invests in a diversified range of private equity vehicles. 50% of the bond will be invested in buyout funds, 40% in venture capital vehicles and 10% in special situations, primarily mezzanine funds. The geographical investment distribution will see the vehicle invest 55% in Western Europe, 35% in North America, and 10% in the rest of the world. To attain chronological, as well as geographical diversification, Partners Group will also look to take secondary positions within buyout portfolios, with particular emphasis on pre-1997 vintage funds, although the majority of its venture capital investment will be in late 2000 and 2001 funds, which have established themselves after the bursting of the technology bubble. Erik Kaas of Partners Group indicates that given the current economic climate, there is an increased number of opportunities in the secondaries market.