Partners Group outlines 2020 strategy

Partners Group found that the private equity investment environment remains competitive, with valuations near the upper end of historical ranges, especially for assets perceived as stable and non-cyclical.

The organisation's strategy consists of leveraging secular versus macro trends, with a focus on sub-sector trends that generate higher top-line growth, as well as identifying opportunities to create value at the asset level.

Examples of attractive sub-sector trends include growing demand for pet and veterinary services, and increased demand for well-being services such as physical therapy, according to the private markets manager.

The report also reveals that there has been an increasing number of failed auctions for lower quality assets, and assets that are perceived as having exposure to cyclicality or disruption risk. Asset sales from a number of relatively young private equity portfolios have also had an impact on failed auctions.

As for private debt, the demand remains high despite a slowdown in global growth and rising volatility. The organisation's strategy towards private debt consists of placing emphasis on applying "private-equity-style" due diligence to loans, gaining a holistic understanding of an asset's business model and ensuring transaction metrics provide adequate downside protection, the report says.

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