Partners Group Holding AG ($PGHN)

The next segment our Capital Markets Day, maybe we'll call it a Capital Markets boarding, a quick couple of hours, but I think some important updates from the Capital Markets Day that we held last year. We'll kind of take stock of where we are today. We laid out for you some long-term medium-term objectives that we wanted to achieve. In last year's Capital Markets Day, and I think it's a timely point in the market to come together and talk about where we stand. I'll give you a brief introduction before handing over to some of my colleagues. I'll start high level. Partners Group is ine of the premier private markets firms in the industry. We have somewhat of a different heritage. We come from Switzerland as opposed to from New York or London, where many of our peers pay. And I think that different heritage shows up in a different type of DNA. We're built differently. And you see that differentiation come through in the way that we build our client portfolio much more custom, much more bespoke. You see that show up in the way that we build companies with a hands-on roll up your sleeves, industrial approach, and you see it show up in the way that we build people. Many of our leadership team that you'll see today, joined us as analysts that have come up through the ranks. We are a client-centered firm. We have long-term approach that we take to take a stewardship across cycles. A little bit more industrial DNA. You'll get a sense for that if you ever visit us in one of our campuses. You get a little bit of a feel for that here in London, but in particular, if you visit us in one of our campuses. We have a one firm, no silo integrated approach. And I'll talk to you in just a minute about why that's so differentiating for our clients. Here, you see the trajectory of our firm from our IPO in 2006, the first major private markets firm to go public until where we stand today. We have had an uninterrupted pattern of asset growth and of building client solutions. We now have 5 asset classes, 75% of our assets under management are in equity strategies. There has been a lot of discussion in recent years about the scaling credit opportunity. We have a very attractive credit business, but it is our asset base as opposed to the majority of what we do. And out of our $185 billion in assets under management, $125 billion of that, our bespoke solutions. And we'll talk about why that's so important. But first, the way we build companies, we have a transformational approach to building businesses. And that comes down to 2 things. Number one is the way that we research spaces, we have teams that we'll spend oftentimes years scoping out a sector meeting all the management teams, understanding the dynamics at play within that particular space before ever making an investment. We call that our thematic approach to industry research. We also have a very large network of industry executives that have been there and done that and that help us to navigate the complexities of each subsegment that we're researching. After we take control of the company, we have an entrepreneurial approach to how we run those businesses. We have a standard way that we onboard those businesses. We go up a mountain together oftentimes in Switzerland, and we hold strategy of sites. It's not uncommon for us to spend the first few board meetings not in the numbers, but in the strategic dynamics that are likely to impact that business over the coming years. And we wrestle over the appropriate value creation strategy to establish with each business that we invest into, and then we hold that in all of our future board meetings as the key topic. You will spend a lot less time in a partner with boardroom in numbers and a lot more time in strategic topics. And as a result of that, we tend to have transformational outcomes for our clients. You see our portfolio show up in 2 main ways. We build platforms. We take a niche space, and we help a platform to grow and to develop and then we take midsize companies and help them to enhance to global leading organizations. That approach has shown up in attractive realized returns for our clients. Within our private equity business, $86 billion of assets today, about 11% CAGR over the last 5 years. We've been able to generate a realized outcome for our clients about 19.8% historically within those businesses. And you start to see many of those platforms emerge from medium-sized companies to really global leaders today. What used to be the mid-market that you found in public markets is now found in our portfolio and then the portfolio of many of our peers. These are businesses, many of which that would have been public companies in a prior era that are now, I think, anchoring the portfolios of many of our clients. Our private credit business is a $40 billion business. We tend to build portfolios in a very bottom-up way. This has not been a stamp it out, scale it up type of an approach to private credit but rather an asset-by-asset approach that has been able to leverage much of the industry expertise that we have built on some of our equity strategies. Within infrastructure, that has been a business that we have grown organically. We launched that a number of years ago, and now it's $36 billion of assets and has been 1 of our fastest-growing segments with a 5-year CAGR at 18%. And we build next-generation utilities and you've seen that play out in a very attractive way. Returns interestingly that have echoed, that of our private equity business because of the development that's taking place within many of those platforms, and we've never had a realized loss in that segment of the business. And so downside protection with a pretty meaningful upside, an attractive value proposition. And you can see why that asset class is growing disproportionate relative to some of our others. Our real estate business $22 billion in assets under management. You do see a shift in real estate demand for clients and it's going from broadly diversified real estate allocations to much more niche and much more specific allocations. And so as a result of that, we're acquiring vertical integration in order to help build out that platform. We made an acquisition in 2025 in a vertically integrated platform called Empira. And that's the first of probably a few vertically integrated acquisitions we've made, and we're quite pleased with the impact that, that has had. In addition to that, our royalties business which has scaled very nicely within Partners Group is now $1 billion of assets under management, and we see a tremendous amount of potential, not only on the client side, where you see clients going from maybe a traditional credit allocation towards niche types of allocations, maybe credit-like allocations, alternative credit is what some clients are calling it. But the ability to buy into a revenue stream as opposed to participate in a capital staff, that opportunity is something that many clients find attractive right now, and we believe that we'll be able to continue to scale and grow that business. In addition to that, looking through our investment committee, topics for royalties, I'm just telling you, it's really interesting stuff. Every single one of those things that we've looked at recently. I said I would invest in that. I would invest in the next one. I would invest in the one after that. It's just interesting, attractive content that our clients tend to agree has a lot of upside. One of the key things that a differentiated partners group, okay, has been our client centricity. The most common approach to growing within private markets is to have a financial product and to go out and to sell that financial product, and try and convince the market why your product is better than their product and better than that other firm's product and people tend to push products within our space, we're different. We sit down with clients, and we try to understand what their objectives are, what solutions they need and we build custom solutions for our clients. And as a result of that, we have been amongst the most innovative firms in our space. And you see here on the screen behind me, the number of firsts that our firm has had. We have been a firm to launch some of the earliest types of structured products, whether that's evergreen solutions in the U.S. And that's now a broad topic. We were one of the first firms to look at that on the private equity space, in particular, to many of the European structures that we've launched in a very creative way. So the impact of that is twofold. Number one is we have a very loyal client base that we've been able to solve problems a long period of time. And the second is we have amongst the most diversified revenues in the private markets landscape with our revenue spread over 350 different solutions, and that is different than a firm that has flagship funds that they're somewhat dependent on, right? And if you have a flagship fund that has some challenges, it might be tough to raise the next one versus if you have solution building capability of much more diversification within the track record side of things as well. If we look at the industry that we operate within, we have largely benefited from significant tailwinds, increasing allocations of institutional investors over the last 30 years. Years ago, you saw institutional investors with a 1%, 2%, 3% allocation to private, and that has steadily increased. We're now in a place where many institutions have a mature allocation to private markets and that has presented fundraising challenges for many firms that have more of a traditional fundraising approach. Now there still is structural growth within the private markets. It's actually very attractive. We believe that this industry has the potential to go from $15 trillion today to about $30 trillion in the future. But that growth is coming from new places. It's coming from institutional investors that are looking for more customization like the insurance space, in particular, they have a very different set of needs than maybe a traditional institutional allocator would have. And it's coming from individual investors and the types of firms that can cater to the needs of individual investors and investors that for customization are different than those were able to meet the needs of institutional investors as those allocations were expanding. And so that's one of the reasons why you see this bifurcation in the industry between the haves and have-nots. And Partners Group is clearly one of the haves in our industry and have been able to grow disproportionate to many of our peers in the recent years. because of how innovative we've been and because of the fact that we have many structures and investment capabilities that cater to the needs of this growing segment of the market, 67% of our assets today in bespoke solutions. And if I think about the must-haves to be able to cater to that segment of the market. You need to have a platform that's global in terms of your reach and in terms of your breadth, you need to have multiple asset class capabilities as opposed to providing an individual fund. You need to be able to provide solutions. You need to have portfolio management capabilities and the ability to navigate complex needs of clients and to be able to provide liquidity as a part of the offering as opposed to structures that just tie [indiscernible] capital. You need to be able to create bespoke mandates. You need to be able to solve private wealth needs and you need to be a platform. And I think partners do check all of those boxes. One of the keys to how we manage is by having a portfolio management team that sits at the center of our business. We have investment content manufacturing on this side, right, of the house. We have our client and structuring teams on this side of the house, and we have a portfolio management team that sits at the center of our organization and helps to serve as the CPU steering traffic across these 2 segments of the business. And so as it relates to our ability to build these private market allocations. We have access to individual single-line transactions, which is highly differentiated. The building [ box ] for many within our space as they think about mandates are limited partnerships. The limited partnerships are structures that are very hard to steer, 15 years in some cases. capital will be locked into a single trajectory versus if you're using single-line allocations, you have the ability to steer portfolios on a much more dynamic basis. We have a client that we recently set up a secondary mandate for. And I remember talking to their CIO, and they said in the past, when we wanted to do add secondary content I would make a decision, right, get that ratified by the Board, we instruct our team. Our team would spend 6 months or 9 months meeting secondary managers. They make a proposal that secondary manager would finish fundraising 9 months later or 12 months later or whatever it was, and that capital will be called down gradually over 4 years. And that position that they made a strategic decision to get built would happen sometimes 4 years, 5 years after the decision by the Board to invest into that topic versus with the Partners Group mandate, we have the ability to ramp clients the next week. They can be on the next allocation sheet the next week. So that access to single-line banding is really, really important. And that gives us the ability to build these custom portfolios in a way that's highly differentiated. We also have a risk management approach that can be overlaid because of having portfolio management at the center in a way that's differentiated. And we see time and time again when you have these topics that creep up within the industry, there is a difference between a disparate set of teams that are out there stamping out investment content on their own versus a partner's group more centralized approach to a centralized risk management, centralized investment committee, we tend to get much less exposed to these hot topics that tend to ramp very quickly, but also have a downside risk. And so you see that with software more recently where we had the opportunity to scale in software in years past, but from a risk management and portfolio management perspective and in consultation with our clients, we chose not to do that. Here's a little bit of an illustration of what this means in practical perspective for us as an organization. Most of our peers are set up around funds. You will have a fund and even though you might look at that organization and say, okay, they've got similar asset classes that they play in. They've got similar geographies that they operate across. The organizations itself look completely different if you're organized around funds versus if you're under organized as a single platform. And so we don't have any of our investment professionals that are tied to a specific fund. Our investment professionals work for our clients collectively. And that gives us the ability to feed through portfolio management, all of these different structures. We have 350 vehicles running right now, as we talked about, we can add 351, 352, 353 without a lot of drama because of the way we're set up, we don't need a new team to manage those because we slice our investment content up and distribute it to our clients' pro rata. And so with that approach, we have the ability to build these custom solutions. We've actually taken our mandate capabilities where you used to have to have a $500 million account with Partners Group in order to have a separate account and we pushed that minimum down to $350 million. And then we push it down to $200 million, and then we push it down to $100 million. And now we're building separate accounts at $50 million and below, and we can do that because of the way that we're set up. Many of our peers would struggle to do that because they need to hire a new team for each new product that they bring online. And our ability to slice and dice investment content is highly differentiated. Now given some of the dynamics that we talked about in terms of the changing landscape, the changing fundraising environment, you had for years and years and years, this dynamic where institutional investors we're constantly increasing their exposure to private markets. And now those allocations are more mature, but you have thousands and thousands and thousands of firms that had emerged to meet the needs of those institutional investors. And so we have entered a phase of structural consolidation within our space, and we talked about that a little bit last year. And we have 2 means of growing in the current environment. One of those is through strategic initiatives and one of those is through developing, let's call it, organic initiatives. Now on the strategic initiative side, we have some topics that we categorize under consolidation and that can be consolidation of clients or that could be consolidation -- physical consolidation of investment content or investment manufacturing. And then we have the opportunity to do de novo launches. I'll focus just a little bit on the consolidation side of things. As we as a leadership team and reflected on where to prioritize resources this last year. We have thought a lot about consolidation of manufacturing content because that is naturally going to happen where you have our market previously serviced by all of these independent investment engines. We have had people knocking on our door constantly over the last year, saying that you guys have differentiated access to this wealth channel that I can't get, let's line forces. And I have some differentiated manufacturing capabilities you have differentiated distribution capabilities, let's put those 2 forces together, and we've thought hard about that. We've also had opportunities to build partnerships all the distribution side of things. We have many partnerships that we form. And in fact, that has been, we think, the most timely area to spend time on this last year is partnerships on the distribution side of things. Why? Because that is -- you only have a set number of distribution partners that you can partner with. And once those partnerships are performed, you're pretty well locked in. And so over this last year as we spent time really on where to focus, we think that the opportunity to consolidate manufacturing is one that's going to exist for a very long period of time. You have thousands and thousands of firms that exist out there. And we have done one acquisition this last year and we think that, that opportunity continues to exist. But the very most strategic and timely topic that we could focus on as leadership team is forming strategic partnerships on the distribution side of things. And indeed, out of the 30 or so partnerships that you have seen announced within our space, we've had, I think, 1/3 of those that we have got been a part of. And I think that speaks to the fact that we have been very, very focused on securing distribution partnerships this past year and that has been a much more pressing topic for us than acquiring manufacturing. And both strategic both very relevant. Both we'll see play out over the next decade. But I think once those distribution partnerships are secured, there's not going to be an opportunity to get into those again many, many years. And so that's where we spent our time. Now as we think about the agenda for today, we're going to talk a little bit about some of these new strategies. We're growing our infrastructure business with the new income strategy, and we're developing our private equity yield strategy. We're launching special opportunity strategy. On the investment side of things, we've been very, very active on some of these de novo launches scaling up new initiatives within the existing platform. And then for our existing strategy, we're talking about how we vertically integrate within real estate, how we roll out our multisector royalties portfolio and how we're advancing structured credit and our secondary strategies. On the client side of things, these strategic relationships are really, really key to how we take Partners Group investment content to a broader segment of the market. And we're going to spend some time helping you guys to understand those partnerships and the impact that they could have on our distribution capabilities over the coming years. We're talking about how we're scaling our mandate offering across our client base, how we're growing in some of the regions where we're currently underrepresented Asia Pacific and the Middle East being two of note and using traditional funds to capture new clients. You actually saw a meaningful increase in North America traditional fundraising force this last year, and that was very deliberate. Because with many of them were underrepresented within North America, and we've been using traditional funds to build new relationships and deform first-time engagements with some clients there. On the private wealth side, we'll talk about some of our strategic JVs for wealth management, DC in particular, and then expanding distribution with our Evergreen platform. So some of -- those are some of the key topics that we want to talk about in today's Capital Markets Day. And with that, I'll hand over to our Executive Chairman, Stefan Mike talk about some of the winning investment strategies for the current environment.

Thanks Dave. So good morning, everybody, first of all, also from my side. It's a privilege to have you here in London or call in different regions of the world. It's fantastic to have the second Capital Markets Day here. Actually, talking about that, I know that some of you asked that question. You guys -- I mean, didn't do a Capital Markets Day for like 20 years or so. Now it's a second role is there. And I can just give you my personal opinion here. I think we're currently seeing probably more change in the last 2, 3 years than we saw actually 10, 15 years prior to these last 2 years. And Dave due to some of those, I mean, we see the client environment changing with, I would say, more stagnation in certain pockets, but then there's an amazing opportunity set in new pockets in institutions, insurance companies, D.C., but the whole wealth, retail, which we only started to actually cover, we see some wealth funds that grow very significantly with different kind of relationships. But also on the investment side, we have a very different environment. I mean we had 10, 15 years that we're in a little bit more of the same. And now after COVID, we had inflation coming up, growth questions, rates. Now we have this wave of AI technology-driven change. So that produces a very, very different environment. And also that had, of course, an impact on our industry, and Dave talked about the consolidation industry. So all of these things, I think, mean that the environment ahead of us is very different from the last 10, 15 years. And this is where I think we feel we need to give you a good sense of what we're doing. And sometimes it's about the nuances to understand them. I can say from my side, I mean, you see probably maybe more excited about the next 10 years than ever before in the last 10, 15 years. I think the setup that we have is so differentiated on the client side and on the investment side in a way that it will have a massive positive impact in the next 5 to 10 years. So we talked a bit about the fundraising side, and we'll go a little more into details and Roberta or later on. Last year, we talked about this 2033 strategy. complete on track, maybe even slightly ahead of track here in achieving that. So whatever I do is maybe today is talk a bit about the investment environment and so on. have a little bit of postie here, winning investment strategies in the AI tech-enabled transformation. But there's a lot of talk right about this new environment, people talk a lot about software and other things. And so I want to just take a step back and give you a bit of a sense how we look at that, why we are, again, quite excited about this environment. So the starting point is something that we have told you for years, right? It's not new for us. We talked since years about our hypothesis that there is a very significant transformation of the economy ahead of us. It's driven by 3 waves. And the first wave that is essentially technology enabling these, let's say, support systems that help us on processes. It's not a big deal yet. That's very important to clarify. The second one is probably a few years out, we start to see certain efforts, but probably 3, 5 centimeters out. This is really towards more autonomy in certain business systems. That's a much, much bigger deal because if you change end-to-end processes, you really need to think about transformation. And then maybe 10 years plus, that's typical in economy transformation, you'll probably see certain business models collapse and others opening up with tremendous opportunities, okay? So this is little bit of starting point of our thinking here. So what I want to do is just go a little bit through like, I would say, one main topic per asset class that we see as something that is really, really fundamental that's guiding our investment activities, our thinking and where we see tremendous opportunities. But of course, also in areas where we want to be very, very mindful about because of that significant change that is ahead of us. So let me start with private equity. And I would say, in private equity, the story is quite simple. The story is the following: business transformation wins full-stop. And especially the companies in all the ecosystems, it's not only by technology, not at all actually, right? In all the ecosystems, the companies that are better than others in using AI and technology in a smart way, better than other people. They will outperform. Data strategy is absolutely fundamental, okay, for every business, for every ecosystem. So there's 3 reasons why we have that hypothesis. And I think the 3, I would say, pillars to that. One is the acceleration of pace also something we talked about for a while. I think a very easy way to make that realized is by looking at what happened to the digital backbone for businesses, business services, but also for many factoring for instance. In the last 10 years, if you look at slide here, we have come out, I would say, in a situation where we use the data in a relatively integrated way, there were sometimes be unstructured. But it was a relatively good integration quarter along the lines of the processes and the systems. Today, I would say, in many cases, we have a bit more cleaning up data, will be more structured, needs not to use these pilots. But if you are very honest about it, I don't think that for most businesses, we have seen this fundamental transformation. So the last 10 years, to some extent, we're much more about incremental wins. If you take our hypothesis basis, there has a good chance in the next 5 years, there will be much more need for transformation because you see now the start of these more autonomous systems, end-to-end processes that get replaced in certain instances that you cannot do with incremental changes. It doesn't work. You really have to work on that business. The second point is a little bit connected to this, and we see this already today in numbers. There was actually a Pricewaterhouse study on this, which I found interesting. They measure the impact of transformation work. And so what they look at Sensile, they have these quintiles and they look at how much effort have you done and what's the outcome? And what that chart says in simple terms is if you do a little bit of transformation you get not much upside. You do a little more, it doesn't give you much more upside. If you go all in, if you really think about changing your company in a way that makes it much more effective in the long term, this is where you get the upside. So this is what we call this win it takes a lot dynamics and platform transformation. By the way, that's exactly what we have seen with many of our most successful exits. PCI last year, ISP is exactly key study for that kind of transformation, where you don't grow like 15%, 20%, but you get these extraordinary IRRs. But the third one is also a very relevant one. transformation past was seen a little bit like, okay, I mean I have a turnaround situation, things go reveal so I need to do some transformation or I want to be to go all for the upside. I don't think we have any of that anymore today. It's offense, it's defense. And this is other Pricewaterhouse [indiscernible] I think it's independent actually. It's not the only use price move because they're all delayed here. They have this interesting survey they do for many years actually, right? To add a survey CEOs on a nonpublic basis about how they look at their businesses going forward. Look at this number here, [indiscernible] was shocking. So nearly half of the CEOs, they will probably not tell you publicly the same. Nearly half the CEOs essentially say we really worried about our business essentially being tossed in 10 years from now, we just don't know. Technology disruption, but also the macro environment, the economy disruption as reasons. So there is much, much more of that thinking like, okay, we have to do something either way. There's nothing like defensiveness or resilience just because we have a good business. That's the thing of the past. So how do we invest, I mean, in that period of winning business transformation, I think we do actually employ our normal approach and [indiscernible] talks about that later on. We have done transformation investing for many years. Now honestly, in the last 10, 15 years in a bull market, where the tide is coming in, all the boats are lifted, I think it's actually much less differentiating than what we'll see in the next 10 years. Selectively, growth capital investing. Sometimes we see these ecosystems and informatic approach, we see businesses that are just an ecosystem that is so new. For instance, we have a network simulation systems for utilities, a company called [ Nira, ] very, very successful growth business. We have businesses in other AI applied deals of legal services, for instance, that have more growth capital. This is probably something that could become more relevant. And then on the secondary side, we'll also hear about that. That's very important. I mean we have this value creation based secondary approach. We're not going for the biggest sizes. I mean, we have a pretty good business. I mean the size of the is about $10 billion to $15 billion equivalent program size, but we're not going for the largest transactions. We're really going for those where we have a bottom-up direct style underwriting of the assets that are consistent with our thinking about the themes. Let me talk about infrastructure also here. Infrastructure, you will hear from Esso growing massively, incredible needs, governments don't have the money. So in itself, that's a great start, right? There's a lot of tailwind, which is helpful. But there's one area that will probably be at amazing new opportunity for the next few years. We call this the next-generation utility opportunity. So what this is about is often about platforms we built centered around some form of energy power production. And of course, again, that is a lot related to this economic transformation because of the need of technology and computation power, but the electrification of manufacturing and the nearshoring, which changes how these manufacturing sites work, all of that leads to an amazing demand for reliable, affordable energy. The good news is we have now the technology to actually address the [indiscernible] because the outlook is, I mean, much higher than 2 years ago with renewables. We got a home storage, batteries, transportation, distribution, but also management with energy efficiency, very AI actually based is much, much more efficient. And the question you might ask yourself is, I mean that's all nice, but we have utilities. So why are you so excited about it? I mean, utilities will probably take that part of the meal. Well, the thing is the following. The utilities that we have that's both in Europe and the U.S., also to a good extent in Asia. They are set up in a different way. They're very extensive. They service oriented. They have limited CapEx in most cases, actually. They're very country kind of set up so they don't really integrated. And that's exactly not a set of the work. So the setup of the private markets platform of the PT platform, and we've done a couple of those already in smaller size and we'll grow them now. All these highly integrated platforms, you combine all these technologies for production, for management storage and for distribution in a high effective way. What you do with that is you essentially bring down the cost from $0.08 [indiscernible] on the kilowatt hour. That's how you create efficiencies, okay? And this is exactly what we're doing. And if you look at some of the math that's somewhat simplifying here, and I can tell you that that's quite an arbitrage Actually, you build these platforms for around 10x free cash flow with the nucleus, with some add-ons and you exited something that is much more core or core plus. So super interesting, something that really excites us and is probably from a size perspective, something that can really bring out infrastructure business to a very different size in the next 5 to 10 years. So how do we invest? We create these platforms. They've talked about that. We buy core. Sometimes it's actually ground-up development, but increasingly, especially with -- next to utilities, we will also buy more developed assets where the new CapEx less than 50% of the total size, maybe 30%, 40%. There will be more income-oriented, the grade for insurance businesses for DC for these kind of investors. So that's an initiative we're working on as having tremendous upside. Partnership side, based on multiprivate equity. If we do a secondary, this is really with the direct style underwriting. We avoid these diversified funds where there might be all kinds of things in there that might not work well in new environment. Let's move to real estate. With that transformation that we've seen for a while that is ahead of us, real estate in itself, the industry is undergoing a massive very profound transformation. And the reasons are the following: it's mostly driven by demand. Demand by tenants or by owners have listed, and it goes feedback of like new working styles, which has, of course, a lot to do with digitalization. It has to do with decarbonization, electrification has to do with digital services AI. It has to do with a generation rent, which looks for different setups in Unico I could probably add a couple of others in logistics and so forth. So what they asked in common, that's maybe the more relevant material. It really changes the way you have to think about real estate because the operational intensity of real estate assets, the dynamic demand of what they look for in student housing, in active adults in the young generation renters in the cities. It's super dynamic okay. And the old system where you had a real estate, a long process between someone that created some ideas, we are planning and then there was going to be some engineering coming in and a developer and eventually what taking care of a property asset manager, an overall asset manager, that just doesn't quite work anymore. It's this dynamic change to the operational intensity, which makes it very, very hard. So this next-generation model that we are so, so excited about its vertically integrated by essentially this single platform in-house services, and was very important is you have one data stack. You can only apply technology. There's a lot of technology actually for real estate, but often it's not used it effectively because you don't have that one data stack. You need to have data flowing through from the planning sort of property asset management, then becomes very, very active. So you address all these concerns. And if you think about what that means, how these real estate platforms look like, essential businesses instead of R&D does development of acquisition development and they have one part is manufacturing production. We call this construction project management and service customer support is property and asset management. And this is exactly the reason why we bought MPA as the backbone as the platform to build our living and some of the office activities on it because they have exactly the integrated set up, very strong technology and in data. So what do we offer on the real estate side, and we'll hear about that essentially 2 main verticalized approaches that is to living. So that's residential, that's student homes, that's active adult, is hospitality, but then also industrial platforms. And also on the secondary side, it's way to diversify this portfolio in a more global way. But again, we have a very, very strong focus on these underlying themes rather than buying just [indiscernible] here. So let's talk about credit. Credit pads, clearly, its headlines in the last few weeks, there was no shortage of that. My sense is that some people have not fully understood, I mean, what the whole transformation is about, what it means to credit, the selected credit headlines around software there was a lot of talk talking about that. There was a lot of talk about some of the technical topics like this more payment in kind and things like that. I'm not sure whether they really address the topic. So the real topic in our view is that we are the beginning of an incredible [indiscernible] of private credit outcomes, okay? And that actually for probably the first time since 10, 15 years, a real alpha election-oriented approach really performs and you might be surprised to hear that, but the reality was between '23 and '21 or so, maybe starting off COVID, the loss rates are broad. I mean across the industry was so low frankly, it didn't matter so much, right? I mean, maybe we had with our very loss -- low loss rates are extremely low. Maybe we have an outperformance of 50 basis points, but it's not something that was actually so visible. And we think that will change. So what's happening in credit? I want to give you here quickly 2 or 3 pieces of thinking in the big picture. So the first one is there's something happening at the large end that we just need to be aware of. This is essentially some form of convergence of public and private market style credit transactions, okay? BS and direct lending income together in these very large transactions, and we've seen many, many more of these large transactions than in the past 10, 15 years. So there is a spread difference that is maybe 100 basis points. There's hardly any difference in terms -- and there's a lot of funding actually coming from insurance business, traditional asset management business. So we just have to be aware of that, okay? So that makes that part of the space a bit more committed. I want to be just careful. The second aspect here is probably the one that is really key. This is this transformation that drives credit bifurcation. And this is actually a very simple thing to understand. It's nothing complicated. So what happens if there is rapid economic change. And you've seen that in industrialization in the last 25 years, that's not new. What happens is that the distribution of outcomes think of some forms normalized distribution, okay? Will essentially cut just longer tails, okay? That is what disruption means. It's dispersion of outcomes. More winners, but probably more loss and some winners do extremely well, but some will test the shown quite quickly. which for the equity strategies in itself is not that much of an issue because if you have a portfolio, when you win off it enough with outsized returns, you can probably cope with the fact that maybe on some of the bad ones, you lose your shirt. The problem in credit is if you have a great asset, you're kept in terms of upside at the rate. The worst case, the asset is so good. It gets refinanced after 18 months or 24 months, we call it the negative convexity. So you have actually a lower return and then if it goes the other way around, I mean, you're essentially hanging it there. So that means that credit will probably see different outcomes. That in itself is not yet a pro. It simply means that it's a good chance that the default rates go up. We expect it will probably about double. That's what our team believes. The recoveries might also come down, but arguably, we should also expect the spreads go up somewhat. So the only thing that it does. What's really important is it does really require you to focus again on very hard work, direct style credit underwriting. Because what happens if you buy these beta portfolios, we have seen many, many of these portfolios in the market in the last 10, 15 years. You look at the right-hand side of this chart, in the past 10 years, let's say, an average large portfolio was 300 to 400 bps above the short-term rates. Because there were very, very long before rate loss rates. If you take away about 100 or 200 basis points to cope with the fact that you see that dispersion of at comes, you see that negative convexity, you end up with something that is just not that effective something in the world, but it's just not that attractive to the bps and it was very fundamentals. In the past world, I mean, all these structures were highly levered. But if you end up with something like 200 bps over you want to be careful how you want to leverage that because the leverage will cost you actually as much, if not even more than the spread you have. So we believe, and of course, simply buying here credit is more complicated than 3 slides here. But what we are clearly seeing is that there is a change how you have to go about producer. [indiscernible] credit is not bad at all. We think actually [indiscernible] going up, especially in the wide and middle market we can create very attractive returns. But it is a little bit different investment discipline going forward. It will be a little bit more equity like in terms of how you have to approach credit in this environment. S So we approached this with our direct middle market lending strategy with extreme low loan loss rates. So we think that that's a very good set up for this environment. We will launch a new strategy and [indiscernible] will talk about that or the credit team special opportunities. It's very obvious to lose that in this environment, this version of outcomes, big refinancing wall in the markets ahead of us in the next 3, 4, 5 years. and actually very limited specialty situation capital for these that this is trends opportunity. And then adjacent opportunities when we speak to our clients about more diversified plays. We will commend to do this in different homes with, for instance, structured credits, low tranches where there's more relative value, credit secondaries has more relative value and the same for NAV financing. So as the last asset class, our youngest asset class, the team has done it for 5, 6 years now, very successfully with strongest growth and I believe, personally, this will be the asset class with the strongest growth for many years to come. So let me explain our hypothesis -- what we believe what will happening. We call royalty financing revolution. It's about an unprecedented opportunity because royalties is only an asset class, so important. It's not only an asset class. It's also a financing technology. So let me explain that. So what we see here is 3 things happening. The first one is what we call this rise of the intangible economy. In simple words, just means that if you look at businesses you look at balance sheet, there's just not so many hard assets anymore, okay? The intangible assets, IP is just growing massively, right? I mean if you think, for instance, about pharma services or pharma businesses, it's growing like at 20% or so much, much faster than our assets. And that means that very often, you don't have a traditional hard asset to finance. And in the absence of doing something against the P&L risk, I mean, the only way to get, I mean, reasonable financing is actually by doing essentially a royalty financing, right? So you have someone that is buying your IP effectively, giving it back to operationalize and getting a share of the revenues, right? That's what the structure is about. But think of it -- it's a little bit as maybe what happened in the sale and leaseback market maybe 40 years ago. So I mean this is something that doesn't only apply actually to these typical situations today like pharma, for instance, or natural resources. This is a much broader application. And this brings me to the second point, which is, we see in this environment, a lot of businesses that have much more quickly than ever before, very solid revenues. -- but the P&L visibility is just not good enough. So it will be very for many of them to get traditional bank financing or private credit financing. However, what they can do is they can give the revenues as a collateral, so they can get financing and a share of the revenue. So effectively using that royalty technology I'm not in a traditional IP format, but essentially for other businesses with strong revenue scasibility. And very similarly and as a third category here, these are businesses will come the businesses in some form of transformation and you will see that very over the next 5 to 7 years. In some businesses that need to spend quite significant CapEx to make change to go and achieve that transformation that will make it very difficult for traditional financing because you don't have the visibility of free cash flow. And again here, this is where royalty financing will come is a wonderful tool because you're not actually focused or worried about the net cash flow line, you actually only worried about the revenue visibility that in many, many of these businesses you will have. So that will, in our view, means that there is a tremendous opportunity in the next few years. Dave talked about that. I mean we see amazing transactions and that's just not so much capital in that space. There's some specialized pockets, but there aren't a lot of generalist players that play this relative value across the sectors as we do it. So is the traditional royalties that the existing business or national resources, pharmaceutical IP, things like that, that's growing at like 20% or more. But then increasingly, we use the same technology, as I said before, to create synthetic royalties or have like what we call the royalty-backed demands, right, all the back nodes for us. And then also here, I mean, there's an integrated way of paying it. So if you want to have access to certain niche strategies, if you're going to have more [indiscernible] we use the secondaries. So overall, a lot of change ahead of us. This change in many ways will be total for part the economy. I mean, will not always be easy for business to address that change. We believe that with the right approach, having -- there's an enormous potential, there's an amazing opportunity ahead of us. I'm super excited about these different areas. And we'll hear a little bit from [indiscernible] and the colleagues, I mean, more specifically, how they go about it, but also then talk, of course, about the challenges problems. As I said, it's not easy at all. But let me just leave here at the stage with this one comment I made before. This is a very complex environment. And it would not be the first time that partners would have in a very complex environment has massively outperformed. It was the first time in 2001, and in 2008, '09 through the European currency crisis 2013, and COVID . I think that is an extended period ahead of us where this differentiated approach, I think, will serve us extremely well. Very excited about that. Thank you for being with us. And with that, handing over to Wolf.

Thank you, Steffen. Good morning, ladies and gentlemen. So let me kick off this investment section here with private equity. And actually, 2025 was a year of headwinds. We have the tariffs, we had macroeconomic or geopolitical topics, but our teams, they stayed with a thematic research and stay disciplined. And actually, we invested $11.2 billion in private equity in those areas, direct partnerships almost at the same level. actually even stronger were our realizations or exits last year. And the industry was talking about exits a lot. And you see we had realizations of $13.4 billion. which was actually for private equity, one of the best tiers we had. So if you look at the performance on the right side here, we had 44% uptick in investments and $46 million in realizations to previous year, whereas the industry was more flat. And how do we do that? Our investment strategy consists of these 2 pillars. Thematic Sourcing, they've talked already a little bit about that. Our teams go into 40, 50 sectors very deep 2, 3 years trying to understand every detail creating conviction and finding the right assets. For example, right now, we're going into the future of mono manufacturing. There's so much change in manufacturing going on. And we try to identify the second and the third mine that provides to that future success and invest there. For example, physical and digital security or robotics, but not in robotics will be a huge field of growth, but it's pretty crowded in the first line but look at robotics parts, for example, and how they are connected, those technologies. That is an example of what we do. And then once we own the companies, the second pillar comes into place the Entrepreneurial Ownership. And it starts in the onboarding that we have a strong team. Our Boards with industry experts because we always say, yes, we have studied the sector deep. But however, there are people that have worked in it for 20, 30 years. And those are our Board members that we bring to these businesses, combined with a strong management and our investment team, what we call the triangle and we deploy the partner school business system. What is that? It's kind of a framework how we onboard companies and how we manage value creation in the course of our ownership period. It's just a framework because every business is different, but it's our playbook. We measure the progress with a bespoken software solution that is unique in the industry. it's PG Alpha. PG Alpha doesn't have only financials. It has a strategy on KPIs. So we can monitor its actually for the management and the Board, but also for us, we can monitor the progress of the strategic initiatives. And it all comes together in the transformation and ownership review, where we oversee the whole portfolio monitor and also give hands how to progress. And that led in the course of the last 10 years to an average of 13% increase year-on-year in EBITDA on our portfolio. And that represents an almost 20% IRR in the course of these years. And importantly, it was mainly driven by operational value creation. So how do we transform and technology comes into place. And I said earlier, let's first look at technology in our portfolio. And actually, what you see here on the left side is that we were always underexposed for software. And you see that last year, we even deemphasized software. And it is due to our strong AI know-how that we have internally as Partnes Group that we went that way, and you see on the graph where the industry went. However, AI and technology is for us the main driver right now to transform our companies to take it into the core of their business models, as Steffen said, and transform them with technology. 90% of our companies have deployed AI in their core business models. And the industry standard is more 30%, 35% right now. So how do we do that? We thought 3 years ago, and there was a time when Chat GPT 3 came out. We formed an AI in-house team, expert the cap from the industry. [indiscernible] Partners Group and for our portfolio companies. And then after they kicked it off, we hired an external Board of advisers of 5 people that come from AI that have done that all their life. And as Steffen mentioned, we start with the data there and then how to weave into the vertical, the software. And what we see on the top layer, the user interface, will be totally disrupted by AI. But the differentiator is in the lower levels, and that's how we build that. Now let me show you an example. Our company, International Schools Partnership was built from scratch in the last 12 years. Today, it's 100,000 students, 111 schools in 25 countries, very successful company that you see on the numbers here. Actually, we partially sold it last year and also reinvested because we are so convinced of the business model we have created. The value creation in the last years was basically quality of schooling. We invested into that and that brought the confidence of parents to bring their students to our schools. But in the last 2 years, we invested into an AI platform at tech. Actually, 93% of our teachers already use an AI platform to actually plan the whole curriculum, to plan their next day, their next week based on the curriculum that we actually put in centrally from ISP corporate according to the country. The students have now an individual learning module to every student is by AI trained individually. So in the morning, you are on the school, get the lesson. In the afternoon, you can practice and the AI doesn't give you the answer. It ask your questions, actually, yes. And you can imagine, we gather tons of data of that. Schools love it. And why do we see huge growth for ISP in the future? Think about an individual school, they cannot afford such a system. Only such a company like ISP, can program, an AI engine. So we believe we can collect even progressively more schools to join that ISP network in the years to come. Let's talk about the secondaries market. The partnerships actually was a record year with almost $230 billion invested in the industry. Partners Group invested $4 billion. And we took the same approach as in direct. So we went deep on the businesses. I wanted to understand the value creation plans inside the portfolios that we bought of each company. and went deep actually with our research, $4 billion invested. And you see we screened $208 million, ended due to diligence of $37 billion and we invested into $4 billion, which represents 1.9% of investment grade. So very thorough, deep based on our playbook investing, and that leads to these results on revenue and on the EBITDA, you see an overproportional growth to the Russell 2000 benchmark. And if you look at the middle chart here, it is mainly based on net value creation or performance-driven and only to a very small portion based on discounts, [indiscernible] lucration. And on the right side, you see that are very, very experienced and one of the largest private partnerships teams in the industry outperformed the market in the course of the last years. So overall private equity direct here on the left and secondaries on the right, we have a strong, strong record, and we continue to build on that using thematic research, more technology, more AI into that, as I've shown, as well as very thorough investigations of secondaries with the same methodology. So with that, I would like to hand it over to my colleague, Esther for infrastructure. Esther?

Thank you, [indiscernible] , I'm responsible for Partners Group's infrastructure business. 2025 has been a year that you might call exceptional, yet we call it consistent. So how does it hang together. In infrastructure, what matters not only is the ability to drive outsized returns. What matters at the same is to deliver to clients portfolios a stable and reliably performing portfolio no matter how complex or volatile the market environments are. And we're particularly proud that in 2025, as in prior years, we've been able to fully fulfill those expectations from our clients in our activities. On the investment side, we've invested $7 billion into very interesting very well priced from a buyer's perspective for assets that will continue to drive performance over the next 5 to 7 years. We've also been able to realize around about the same amount of capital, so just about $6 billion on behalf of our clients. Again, looking at both the direct and our portfolio investments, standout outcomes did underpin what is 1 of the strongest track records in the industry. And last but not least, a quick word on the industry. Those results on the deployment are stronger than what the industry has delivered and on the realizations are particularly strong. That matters and it margins today more than potentially over the last 10, 15, 20 years, where infrastructure has always been something clients have added to in their portfolios. Today, they're in a world where they need to make choices. And even an asset class like infrastructure where a lot of portfolios are still magnet growing, our clients are becoming more selective, which manager they trust and which managed they continue to work with intensify their working relationships with. And we want to be one of that small chosen group order right. Looking at the infrastructure market overall, it is a very, very deep market, over $100 trillion of investments to come up. So a lot of space for managers to grow and develop. But I think importantly, selectivity and the ability to identify the right risk return and grow and scale within that market will become absolutely essential to help us fulfill our ambition to be one of the leading players in the market in the years to come and to help underpin the $100 billion plus AUM ambition that you heard us talk about in last year's Capital Markets Day. And as I look bottom up at the transaction activity, the fundraising activity, the conversations we have with key strategic lines on the one hand and our ability to put infrastructure content into dedicated evergreens and make those available to a more diversified client base on the other side. All of those conversations give me great confidence that we're on a wonderful path to reach or hopefully outperform that goal. What helps there is the fact that we're a generalist, very deeply resourced across deployed, not just from a presence, infrastructure after all is a local investment work, but also from a broader thematic perspective, which helps our team really navigate different sectors and subsectors, identify opportunity early, meaning with conviction, but then also pull back and take a more cautious approach when capital starts crowding it. That's helped underpin the results on our direct control strategies and our secondary strategies and that would also underpin our newly launched active income strategy, which should grow quite strongly over the years to come. Let me take you through an example of what that means in practice. Data centers. I couldn't possibly talk about infrastructure without talking about data centers. Now importantly, that is a market that is classified by some thin infrastructure investors in principle like a lot, which are really, really big CapEx plans, and they keep growing. But then on the other hand, I think one of the biggest questions, and we certainly have seen quite a bit of market volatility around that is a question of, will the revenue come that will allow for that CapEx to earn a profitable return, and how fast will they come? And whilst one might think in the first instance, the data center operator is somewhat insulated from that question because they get the benefit of long-term leases from bid creditworthy counterparts. We have learned in the last 2 to 3 decades in infrastructure, the one has to ask a second and third derivative question in addition to make sure that the underlying business models are sustainable, but there is ultimately also credit risk you take on the offtake side. So not any asset will help underpin great performance. You have to find a specific assets to specific platforms that will also in volatile environments, environments where there is more of a risk of overbuild will continue to perform. Our thematic journey on the data center space has been informed by our thinking and has actually been power let. So we were thinking in megawatts, 98% of the industry was thinking in square meters or square footage and that really mattered for us in making some of the very distinct and conviction investments we've made around the globe. In Atnorth in the Nordics, in EdgeCore in the U.S. and more recently in Asia Pacific through in Australia and the Southeast Asian platform. That is a portfolio today that really helps deliver one of the aspects that Dave talked about earlier in his part. And that is assets that are scaled, assets that are profitable, but assets had also enjoy the benefit of a large buyer in us because you need to be able to modify financial investors, strategic investors in order to get the best outcomes for your clients. There's also another aspect by which we can address [indiscernible] interesting returns in the data center space, it's maybe not so obvious to everyone. And it's through our activities on the secondary market because the secondary markets allow us to be very, very selective bottom-up in the type of exposures we want. And when you look at the relative pricing by which you access those opportunities, it tends to be at a discount to the transaction, the direct transaction levels in the market. And that's really been a tool that we've been using very, very selectively. And I really want to underscore that because data centers when a director in secondary is probably the easiest infrastructure asset you can acquire in today's market. And now we have the benefit with all of the relationships and the [indiscernible] that we have that we can really pick and choose out of that very large investment universe and make sure that what we back also directly are the best positioned assets at very, very attractive prices. And I think the final point that is always proof of the pudding. Of course, it's beyond the identification and the thinking that we're putting in during the origination phase and the value we're creating during our ownership. And we didn't also able to monetize on behalf of our clients according and I'd like to cover 1 of our most recent exits atnorth, technically not a 2025 event, but I think we can confidently look forward as that being a good example of what's to come, and that's the Nordic data center [indiscernible] acquired by a consortium of CPPIB and Equinix. So probably one of the largest infrastructure investors globally teaming up with one of the very, very large listed data center operators in the world. Competitive process remain competitive even though it also coincided with big AI and neo-cloud -- so I used to attract the credit default swaps of the core risk of this world on a daily basis. But I think what is important for atnorth really, again, looking back at the underlying business foundation -- fundamentals on the intrinsic value, and that really allowed us to run a competitive process and deliver a great result for our clients despite the surrounding complexity. And it's really around the ability to take a small platform and help us scale very, very fast. We knew the Nordics is going to matter in a global data center world because you've got relatively cheaper power, you've got relatively more power and a fact of many people don't realize so much. It is structurally cooler than in Continental Europe, which means you need less energy. And that means if I'm applying to a data center operator, I can operate much, much more economically in the Nordics. And if I care about the sustainability of the sourcing of my power, I could do get the added advantage a very low carbon power in that region. So for us to is really around identifying the right business, the right team, the right initial set of assets, we did that in atnorth and then we went to scale it very, very quickly. So moving from about $20 million of recurring EBITDA at the time of acquisition to north of $200 million at the time of exit. Quite a capital-intensive growth process. We also tapped the debt capital markets on a regular fashion raising way over $1 billion worth of financing in the interim. And then I think importantly, we also diversified the client base and we've materially lengthened the customer relationships with atnorth was able to attain. And then last but not least, and this is, I think, what CPP and Equinix is hugely excited about. So we're a number of the unsuccessful bidders with a lot of further runway to grow by way of having secured power and land and the ability to allow the incoming consortium to now choose how fast they want to accelerate on the capital deployment to access that $25 billion contract value pipeline. And all of that comes together to ultimately deliver what I think is a standout result for our clients and one that we will look to repeat as we look to monetize some of the other platforms we have in the portfolio, whether the data is in specific or broader energy or infrastructure platforms. Taking a quick step back to the overall portfolio, about 40 investments globally. On the direct control side, well diversified across sectors and geographies. And that does matter on an infrastructure portfolio as well because infrastructure will be exposed to local regulatory changes, policy shifts macroeconomic headwinds. So for us, it's really important to continue a global approach and one that is focused dominated by developed economy sort of investment focus. That again gives the blueprint for the portfolio will continue to build. I think on the control value-add side, it will be around those dose 40 to 50 assets that we're looking to build out, and then we will add through the active income strategy while a lot of additional depth to that portfolio. And very excited, therefore, to grow and develop the team and I think a lockstep with what Bob said on the infrastructure side, we're also quite active users of artificial intelligence, and that can really help drive on the infrastructure side, fantastic incremental margins that will ultimately translate across the portfolio to our clients. Without maybe a quick word just finally on track record. And as I said, track record, it would underpin our ability to grow our business in a much faster and accelerated fashion compared to the market. We do have a top quartile track record across our control and secondary strategies across multiple vintages of funds. We have delivered on the realized side, north of 2x net TVPI and over 20% net returns to our clients. Importantly, it's a very stable distribution, which is skewed towards society wanted to be skewed at towards the right side of outcomes. And then importantly, on the secondary side, we've also been able to maintain that same exceptional track record of performance against our peers, really around both a very attractive 1.6x net multiple and 18% net IRR those figures will help underpin what I believe will be a fantastic decade for infrastructure to build one of the largest infrastructure platforms in the world. Thank you.

Good morning, everybody. So my name is Chris Bode, and I head up our private credit business in Europe and Asia. And I have the pleasure to talk to you a little bit about what I think is the most exciting business area we have. Yes. So in the last for 3 months or 6 months. It's been rather noisiest period for private credit. Indeed, most days, as I come in on the trade from the world, I see something on the papers or some sort of were such as contagion and insects and bubbles of all sorts of things being used in the same context as private credit. So it's sort of a pleasure in here to talk about what we see through our rights, what is it we think about the market at this point in time. And in short, we believe that all other risks that are described in the market today are oversimplified. And I just want to spend a moment just to describe what we mean by that. Now a lot of the headlines have talked about defaults, defaults. And I think it's fair to say that defaults indeed have risen recently particularly on the July debt side and particularly in some more cyclical sectors. I want to comment first of all that [indiscernible] Partners Group is much, much lower than the market, 10x lower. But again, default, I don't think it's the main topic. There's been a lot of discussion around more sort of KPIs or technical issues, things like pick elections, valuations, protection. Let me spend a moment on each of these. Pick on the sort of nonpay, noncash pay element of loads, taking a lot of the headlines the moment. If you look at some of the BDCs in the U.S., what we see is about 7% of the income in general is now being picked. Just to put that in context, the pick was in 2020 around 10%. So it's not at abnormally high levels, although we acknowledge that it is higher than the long-term average. The pick in our portfolios between 30% and 50% lower than the market average, around about 4% or so points to our strong selectivity, which I'll come to in a moment. I think inconsistent valuation is another fee that has emerged in the media, -- and certainly, we do observe some inconsistent valuations in portfolios. I think our approach to valuation is very important here. We have an independent external valuer who values bottom up all our lines, line by line, and they don't do it quarterly, they do it monthly, very important. And we've done that for our funds for decades and more than a decade or so on open-ended green funds. Loss of protection. I think Steffen mentioned about it before, certainly at the upper end of the market, a large [indiscernible] has been a learning of the lines between the BSL market and the direct lending market. Some of the protections, which you might associate with a low with a debt instrument, have been eroded away. I think what's important here to recognize is that we target predominantly the middle market, the core middle market where the protections are much better. In particular, 90% of all our loans last year in Europe benefited from a leverage banking covenants numbers that 80% in the U.S. still a very strong number. It's much higher than the broader market, by the way. Go back to the slide. Steffen talked about this earlier. I actually nicked the slide from him. So I hope he's still here, he will certainly challenge to be later. But it's a very important slide, right? What we see is that return outcomes in the credit market in the last 10 years have actually been in quite a narrow range. Really, you could go back to 2017, '18, '19 and defaults and losses in the markets. have been rather benign. Interest rates in Europe were around 0 or even negative sometimes in some jurisdictions. But we see that's going to change. We are seeing it live changing. And our view is that default rates are actually going to double in the coming years. And probably even more importantly, but yes, depressed is that recovery rates, the amount of recovery on those default people fall to around 40% compared to an equity important measure. And what that leads to ultimately is you're going to have winners and losers in the credit market. And Steffen described it very well with the bell-shaped curve. And it simply is the case in credit that you're going to see that. All that means is that you're just going to be more selective and you've got to be more careful. There is no upside in invested in private credit. If I get it right, everybody calls me congratulate me. If I get it wrong, I get the call, right? So I need to make sure that it's right. I need to make sure that the credit is all firm. Now let me touch on software and AI. It's a topic that is, of course, touching many parts of the media and broader industries. Our view in the private credit side part group is consistent with what we're doing across the platform. of talked about it and on the equity side and a part we run a very integrated platform. very benefit from some of the thematic thinking, some of the research they do and they decide to ensure that when we think about private products. When we think about investing in inventory low, we're benefiting from that. And that means that we can very thought on about some of the risks and as well as some opportunities as well, but I worry more about the risks in the various sectors and industries that we touch and that we look at. And what does that mean? Well, we look at over 3,000 companies in the last 5 years or so, 600 or so per year. We invested about 10% of those is a 90% decline rate. The majority of what we look like, the last majority we declined. That's very important. And it comes down to what we call internally our private equity style mind set. The view is we're not investing in a debt instrument. I'm not investing in a loan, I'm investing in our company. I'm an investing year management team. I'm an investing business model. And that's ultimately the way we think about investing on the private credit side as well. And that what we believe is very important, particularly going forward. So taking a step back, what we have here at the Partners Group. Well, we have a $40 billion AUM split rather evenly between direct and the liquid side of our business. We also have a very evenly split AUM by region, roughly in North America, Europe, 50-50, a little bit in Asia Pacific. We run a very diversified portfolio. It's our largest flagship brand bonds at a 0.5% average concentration very diversified over hundreds of names there. And that delivers what we lease are very proud of our returns, 6.7% return, and that includes of a loss rate of 0.8%, which is market leading. Now it looks about -- we think about the growth of the business, wherever we confident what we're doing. It's important to recognize that we've grown our credit business organically. At we started a liquid love business 15 years or so. Today, we run that at $22 billion. It's a very fast-growing business line. Last year, we started our credit secondaries business, been a partnership with General. We also have launched a NAS financing or a fund finance initiative, it's also proving to be very successful. And I also want to pass it now finally to my colleague, Joshua, who is now experiencing our latest initiative on the special opportunity side.

Thanks, Cris. So Special opportunities come in lots of things to lots of different people and, obviously, in the press recently, it's getting a lot of attention. So I thought today, I'd just take a few minutes to describe what it's going to mean to us, our Partners Group. So first of all, if you take a step back and we looked at our pipeline over the last several years and the opportunities we're able to really execute on. There was a segment of risk/reward that was really attractive, but we just didn't have the dedicated capital to really take advantage of . So for us, their dedicated capital pool is going to be special opportunities. It's going to be strategically lined capital at its core -- focused on downside protection and really participating in any upside. So what we've talked about here, particularly Chris has talked about sort of not getting it right and not being able to capture any of that upside -- we're going to do the underwriting, you really try to take advantage of that as well. So it's going to be a downside retake the credit. We're going to look to with upside more than credit has beforehand, and it's going to have a deal velocity somewhere in between the 2 strategies. What that's going to do is going to create a narrower return profile with underlying downside protection similar to private credit, but really a return profile that gets closer to prime equity. So why now? Well, we've talked about the increases in the demand for [indiscernible] Capital. The economic transformation that's going on is really going to require bespoke capital to help fund this transition. Talk a little bit about the maturity wall coming. So if you think about the growth of private credit over the last 5 years, down in a very low interest rate environment, that's now coming to maturity wall. And we're going to refinance that at a vastly different technology period. Do you think about what solutions are in market today? But from what we've seen, we think only about $300 billion of opportunistic capital has been raised, and that's far smaller than what the opportunity set is going to be. So we think there's really ideal environment to us to investing do anything about a little bit of white partners grow. Well, we talked about the mid-market platform, and it's a great mid-market platform here at Partners Group with access, great credit risk. But overall, the opportunistic sector, the capital that has been raised as we raise it much higher bulls bracket rate. So we think it's really underserved that we can take advantage of. If we think about the broad platform at Wolfe talked about a real understanding of thematic trends. We're going to take that to and use that to focus on areas where we want to invest. But importantly, we're differentiated through our 350 key relationships with which were a capital that we think is getting much more aligned with our stakeholders. And finally, being able to leverage the valuation playbook and really active stakeholder, that doesn't exist in the mid-market space for special opportunities. So we think that really differentiates us and gives us an edge to win with our stakeholders. So a little bit of how we're going to invest our Partners Group. Well, we have 3 appetites we're going to focus on. We got capital solutions, where it's really great companies with short-term constraints, this can be deleveraging. Well, this could be providing capital for other [indiscernible] So here, I've got just a few examples as you try to really bring that home. So we're working with -- there's examples in our pipeline right now, so. And we're working with a renewable energy asset with long-term contracted cash flows. We're going to help fund the new projects. Our growth solutions and really the work alongside founders and sponsors alike, to help them take that next step and expand their platforms. So right now, we're working with a really fast-growing quick-service restaurant chain to fund the new rollout strategy. And in Asset Solutions, we're really focused on sort of assets, companies or real assets with deep underlying value. And here, we're going to use that due diligence on the underlying value to lenders. But really, what makes this different is our ability -- and different from me and really excited about it. It's our ability to pull the whole platform in. So when I think about capital solutions and what we're looking at, I get to work directly with the infrastructure team. So everybody got a vast understanding of renewables, till we underwrite that asset. In the growth solutions, I can work with PE and really understand their rollout strategy and asset solutions, well, we have a real estate team that helps you really understand the line of sight to construction and the value of the [indiscernible] . In short, what we're going to do is, I think we've got the ability to create a really differentiated product at a time where the market needs it most. So with that, I'll hand it to Mike.

Thank you. I'm Mike Brian, Co-Head of Real Estate. I really want to pick up on the topic that both Steffen and Dave talked about the changing real estate business model, the fact you need vertical integration to manage that changing world. I've been in the real estate industry over 35 years. I think one of the key things that I felt in the last 3 to 5 years is an increase in operational intensity. And I want to sort of talk about what that means. What it means in practice? There's a lot of data to support why real estate is operationally more intense -- leases are shorter. There's more leases, more [indiscernible] tenants. Some more demanding whether it's about, I mean, it's whether a service, whether it's about energy performance. And technology needs to be managed and real estate is not doing a great job, a lot of different systems that don't talk to each other -- to real estate has become operationally more intense. And as you've heard already, we believe very clearly the vertical integration to manage that operational intensity. What does it mean vertical integration? I think you for missing, it's about boots on the ground, local capabilities, strong local relationships and we see real benefits for our clients in terms of investment performance. It means it can go faster because you've got those relationships faster to lease to build to get new permits. It's a lower leakage and we think about interiors boots on the ground, what are they 270 people in the German market focused on the living sector all stages of the real estate life cycle from sourcing to building, to leasing, to selling to managing. So our strategy is very clear. We want to gain that vertical integration and the operational capabilities, both in-house and through M&A. I think we've talked a lot about already how good we're feeling about the Empira acquisition. We know what we bring to the table, those great client relationships, these bespoke solutions. And we know what Empira brings in terms of its track record, its focus and its vertical integration. And thus far, things are going really well. I've been in client meetings. It really resonates when you talk about what Empira can deliver, and I think the trajectory to grow their AUM and more than double in the next 4, 5 years is very, very attainable. So what is the investment content that's getting clients excited? Here's the one of the key strategies, which is German transition to green. It's a very simple thesis 75% of residential stock in Germany needs energy retrofits. These are stranded assets. And what do I mean by that? There's regulation coming that will at some point say that you cannot operate these assets unless you improve them. And they're unloved by the current owners who don't have the capabilities to execute the business plans so they can be bought at very attractive prices. And if you've got the capabilities to execute the business plan that boots on the ground, you can get good rental uplifts on the green CapEx. So this is a market where rents are regulated. But you need boots on the ground and sourcing capabilities and execution capabilities. And going a level deeper on what is the operational value creation. Very simple houses have energy performance certificates. This is an A to F rating. A is good, F is bad. Typically, they're buying assets with a derating through life of ownership, you take it to a B rating, so you improve it. So what are they doing to deliver that? It's about changing the heating systems. It sounds simple. It's complicated it's about CapEx to improve installation of the roof, the facade, the windows. You do it with the tenants, it sits you. And so you need good technology to talk to German government is very supportive of the initiative. So there's a lot of green financing to help you get there. So pulling it all together, I think you've heard it, and I'm going to repeat it because I think it's really relevant the winners of the next real estate cycle will be vertically integrated. It's what matters. It's what matters to deliver, to have those boots on the ground, that sectoral focus, deliver on the value creation. And I think it is a contrast to the past where perhaps managers was more about horizontal diversification. It was about risk spreading. It was about financial engineering in a low interest rate environment and a more static ownership and I think the data in the middle column here really proves it out. I think LPs are already telling us what they want. You can see the vertically integrated managers are getting more growth in their AUM. So LPs know what they want, and they're voting with their feet for the vertically integrated managers. So what does it mean for us? Comes down to the 3 platform offerings that Steffen talked about earlier on, living platforms. We know that there's a structural undersupply of houses globally. Empira obviously, is our key platform for the living. It's not the only platform, but it is our key platform. Industrial platforms, we have a great track record on urban logistics in North America and Europe, and we're building out our vertical depth in those strategies. And it's about secondaries as well. But across all of these offerings, when you look at the -- actually how we're managing the real estate, you will see vertical integration because that's what we think is relevant and important. Thank you. And I'll now hand you over to Steven to talk about royalties.

Hi. Good morning. This time last year, I actually introduced you to the royalty strategy at Partners Group. I'm delighted to say that over the last 12 months, we've had huge success launching royalties as the fifth new asset class of Partners Group. Firstly, we built out a dedicated investment team to royalties and secondly, we've integrated seamlessly into the broader Partners Group platform in 2 ways. One, we've leveraged the expertise of the other asset classes in the sectors that we invest in. And number two, we've adopted the core PT DNA in terms of relative value dynamic asset allocation. And very importantly, for the first time, global investors can now invest into royalties through our dedicated evergreen offerings. So to give you some numbers, this time last year, we were around 15 people in the team. We nearly doubled the team size. We've gone from $ 200 million of AUM to over $1 billion of I can't give you updated numbers, but it's fair to say that the $1 billion is in the rearview mirror of the car. On the investment side, we've made 17 new investments. We deployed over $500 million and similarly, we are very excited about the pipeline that sits before us today. In terms of some notable investments we made in 2025, we invested into the Warner Bros. music from film and TV catalog which is very timely given what is going on with Paramount and Netflix at the moment. We also invested into the weekend and the number of high-quality direct investments. As you can see from the page, our investors come into immediate diversification across the core sectors that we invested, so life sciences, entertainment and energy transition. And just as importantly, they're also diversified across the way that we invest. So diversified across buying royalties, lending against royalties, creating royalties and the royalty fund investments that we have made. Now our strategy is built to be resilient through market volatility and how is that? Well, number one, we're focused on producing derisked assets that we're not coming into development assets. Secondly, we are focused on products which have clear U.S. peaks, high stand-alone in that market. Number three, and this is very important, we underwrite everything on a yield basis. For us, exits are an upside. They are not a requirement to hit our base case returns target. And last but not least, we have a lot of diversification in our portfolio to reduce down idiosyncratic risk. So we look to make 20 to 30 new investments a year into our Evergreen portfolios. In addition, unsurprisingly in royalties, the legal and the IP side of things is a huge concern and risk you have to spend a lot of time we have built dedicated teams of lawyers with IP and royalties experience to really dig down into those key focus areas. And as you can see on the page, it means that our direct and our royalties portfolio are trending above the target return. So we underwrite to a 12% to 14% return, we're actually outperforming those metrics. Now 2025 was very important for us as a strategy because if you think about the thesis of royalties, it is to have low correlation, not be impacted by market volatility, be very consistent, stable and deliver the uncorrelated yield and returns to our investors. Our target return for our global institutional fund is a 10% to 12% net return for 2025, we were very close to that 12% net return. So notwithstanding everything that was going on in the market around Trump and tariffs and market volatility. Our royalties portfolio continues to perform as expected. In addition, we made a number of high-quality investments. I don't know if any of you in the room use the EpiPen or know somebody who uses the Epipen for anaphylactic shock. We bought a royalty on a product with the Weekend which we believe will replace the [indiscernible] every time the Weekend sold, we get 6.5% of the revenue. asset is performing very well today. Secondly, we invested into the Weekend, the #1 artist globally on Spotify to give you some stats. Two reasons, one, because it's a bit of fun. Two, because it actually continues to make my mind goggle less than 0.01% of all sums on Spotify, achieved 1 billion streams, TVs and references, Michael Jackson, Madonna, Elton John, in their entire career. Each of them have less than 5 songs with 1 billion streams. Anybody brave enough to guess how many the Weekend has in terms of number of songs with 1 billion streams and I guess there's no bad guess unless you say 0 because I won't be asking the question, if you say the [indiscernible] So we have 10 -- so the weekend has just under 30. No other artists on the planet has 20 avatar. So he has 29. It's whether you like it's music or not, no 1 can dispute that has built the most diversified high-quality IP in the music space. This is just 1 of 20 investments that went into our portfolio on an LTM basis. Now very timely, and this often gets overlooked as people think it's the boring part of our portfolio. We also invest in energy transition to U.S. natural gas, scarce commodity, very topical at the moment given Russia and Ukraine, the Middle East, what is power in data centers, which is often overlooked. We now own royalties of more than 3,000 producing gas wells in the U.S. It's so diversified. There's very low volatility in the volumes. We hedge out a lot of the gas price exposure. It sits in the portfolio. People see it as being boring, but it just generates a very attractive yield to our investors. If any of you in this room can find a correlation between how much people use of Epi, how much people listen to the weekend and how much people consume Henry Health gas price. I will buy you a drink. There is no correlation between the sectors that we invest in, which is what helps to generate the low volatility that we see at the fund level. Last but not least, Steven has already touched upon it. We're very excited about this strategy because we see this as a $2 trillion market and growing. That is not just the sectors that are expanding and new ones coming in. It's also the structural way that you can invest into royalties. As mentioned before, we view this as a $30 billion-plus AUM target. And each day that goes by and the pipeline that continues to build, we are more and more confident of delivering that scale. So with that, I will hand it over to the next presenter, Juri.

Thank you. So far, we mainly discussed the investment platform investment activities. We're going to shift gears now to the client side of our activities. I see a lot of familiar faces here. So most of you, I think, have visited us last year in Switzerland at our headquarter. So in other words, we're moving from the factory. That was the building on the right side at our capitas, this investment factory we're moving over to the foundry being where the client activities do happen where we create those bespoke solutions. That's why we have forementioned structuring team, client solutions teams, et cetera. So excited to discuss with you our momentum that we see in the fundraising side. In other words, these 300 client solution colleagues, you see behind me the Pharmacies world map to sit in those offices. So the colleges speak the languages and to understand verity understanding of what the clients actually want and need. That's the starting point to listen. And then out of that originates on had light,200 institutional clients. It's typically more on the mandate side of things. You see the pie chart at the upper right. So we're talking here some wealth clients, pension funds, insurance clients. And then there's also very well diversified 65,000 evergreen type of clients. Again, back to the pie chart, those are mainly private wealth distribution type of clients, just to give you the footprint as a starting point here. Now another perspective of -- I wouldn't want to call it the packaging, but sort of the access to the investor content. You see it's about 1/3, 1/3, 1/3. So we're talking 30% evergreens, but let's zoom into the institutional clients as a starting point here. And where we clearly see the highest growth is for mandates, also a mix shift. We see over the last 10 years, we started with 22%, and that has increased to 37% exposure. Now that's good news because those are the most sticky clients, the most sticky cash flows from a shareholder perspective that one can generate. For the traditional funds, again, diversified across 100 traditional farmers 100-plus funds and for traditional funds, in 2000, slides move. In 2025, we have raised $7.5 billion. So there was a strong fundraising year for traditional funds. I would sort of look at it with 2 headlines. One being established strategies. These are long-term track records. This is, for example, the direct infrastructure funded as we mentioned, fund #4, we are expecting the final dose towards the end of Q2. The private equity secondary fund, for example, getting established, proven tested strategy. We enrolment, 25-plus years track record on the infrastructure secondary fund as well. great market opportunities in this market environment, again, 20-plus years track record. So this were the lion's share of the fundraising happens, proven in tested reliable strategies and then putting my business development head on. On the right-hand side, it's about expanding into strategies, like the De Novo strategy of royalties that we heard about. By the way, I'm wholeheartedly convinced that this will be $30 million by 2023. And possibly even earlier than that. We have tremendous traction in a great risk to offering here with our fifth asset class. Then talking about the credit side of the house, expanding that into secondary is. Again, a strong industrial logic. We've done it for 25-plus years for private equity, then the next sort of market cycle happen in infrastructure. When I say cycle, I'm talking probably 2 cycles last 10 years. and now in the credit markets, you sort of capitalize on the current market volatility, but you also have a credit secondary market that will be doubling, tripling over the next 5 to 10 years. So I think here, again, with our joint venture partner, Generali, I think, a compelling offering to further expand the platform with traditional funds. Regarding royalties, I give you some additional color of the $2 billion -- sorry, not royalties real estate of the $2 billion that was raised last year in 2025, the lion's share came to cross-selling of the Empira distinct platform type of strategies, and there's more to come into 2026, again, expanding our footprint and our strategies. With that, I'd like to move on to the most exciting part of the Capital Markets Day. It's the mandate strategy and the mandate growth and give you some additional color why it is such a superior offering and why it's a wide win-win for our clients, but also from a shareholder perspective. So again, last year, a record year, $9.4 billion raised. You see here some context where we come from. So I gave you the percentages. We have the absolute numbers and again, broadly diversified across our asset classes. Now to give you some additional context here, Dave spoke about, let's call it, the friendly competitors that typically use the fund technology. I want to do some compare and contrast here. When you're -- I would say by market standards sort of by industry norm when you're in a typical SMA, that would put you 2, 3, 4 funds, call it, a mandate, but the fact you're in 2, 3, 4 close-end funds. And then you're on road to 10, 15 years, like there is no dynamic allocation whatsoever. It's a mini funder fund. That's what it typically is. What does they do to you? You go J-curve over or J-curve, fund by fund if you keep up with your exposure? With our, what we call line-by-line technology with is open architecture, where the clients come in pro rata and they can get going immediately and implement the strategies. What that does is you have a compounding effect within your mandate to the NAV level steering. And that's not really key because over 5, 10, 15 years, you compound more value than going J curve over J curve, why you can react to those market dynamics. So it's clearly a superior strategy that we've built and technology and operations over 20 years that cannot be copied that easily. Frankly speaking, oftentimes, is not even allowed in those existing LPS, we have build it their way to offer [indiscernible] allocations, just as a starting point, letting alone, the hundreds of resources that alittakes to manage the cash flows to have the FX hedging in place, the risk management deployment, et cetera. So clearly, a superior and much more sticky offering for our clients from a shareholder perspective. If we put the side, the slide to the side, maybe for a second. In other words, if you think about it, it's almost praising as an industry to go back to your clients in a traditional format every 3 years and sort of ask the pitch again? Do you want the RO-free?Or do you want to have a look at the other competitor or the other one. If you would be a mobile phone operator, wouldn't go back every 3 years and go, are you really sure you don't want to maybe change to Vodafone. Maybe they have a low price, maybe there's something else. So that just illustrates you the more sticky nature of the assets. If you have a superior offering we outperform and where you have a very, very, very low single digit, if at all, generate with that stack of capital. Sorry to go a little long, but I felt I want to illustrate that properly and maybe another way to illustrate this to work with mid examples to make it tangible for you what that exactly means by asset class. So let's first start with sort of, let's call it, a part of the Chinese menu. [indiscernible] pick a decline by asset class to build up the desired exposure. Then in the middle of the slide, you might add in some diversification that helps you to diversify, but also to address market cycles, there could be direct. The second, there is some primaries if desired. And then you want to be specific, especially in this market environment, I'm about the geographical exposures, the sector exposures, et cetera. I think Steffen outlined it so well, it's changed market environment, it's transforming. So you want to be as a client dynamic to face those changing market environments. And I'm telling you spending a lot of time in Asia these days. And there are some Asian clients, maybe some Danish clients, maybe some Canadian clients. They have a view of the world where the geographical exposure should be these days and that they have tools to manage towards certain allocations. So that gives you a part of the Chinese menu. Now in the following, let's bring it alive by real world examples. The first one is a private equity example that started in 2008, the pension fund. It's an all-weather private equity strategy, meaning the clients started with 1 billion NAV target, and let's go with direct and secondary, so we can adapt to market environments. What the bar charts show you is that we started in 2008 with a 13% exposure through secondaries, then came the global financial crisis in consultation with our mandate clients. We [indiscernible] up secondary 2009 left at 66% and captured highly discounted secondaries in the market environment. Thereafter, the rates came down, benign environment to capture the value creation for direct exposures. So you'll see the direct exposure has been dialed up for a number of years, capitalizing that environment in the more recent years for the volatility that we have seen, we have increased the secondary allocation again. That's just one way to look at relative value in the mandates with the dynamic steering that only this technology allows for. Another perspective, moving on to an infrastructure line and the insurance client. Here, the target was very clearly. It's a German insurer, isn't sure you've got the next generation coming. They want let want to green. So the ask was, can we define 50% clean energy as part of the portfolio. We want to have the global, maybe 40% U.S., the rest are on the back of our global platform, there was literally it is 0 competition there for tailor-making a very bespoke solution to that insurance company for infrastructure, clean energy with those diversifications and specifications. That was the ask and that's what we delivered. So a very strong competitive edge and bespoke solution here. Moving on to some credit examples, maybe twofold. One the left, it's an example that originated out of a private equity mandate, it's a pension fund. We had a target of 8% to 10% net for the client. We've been outperforming the target. So the discussion went into can we take down the risk profile a little bit? Could we add some credit, some cash yield? I think it was about 70 credits. They wanted to have nicely diversified. And balance out the portfolio to some extent. That's what happened here. On the right side, credit focused mandate, by the way, we have out of the 180 mandates, 30 of them are credit focus, 20 of them are insurance focused on the right side, where you can address capital charge topics, et cetera, for insurance is, again, very bespoke offerings. The right side of the insurance company said, we need to ramp this up within 12 months. So We used our [indiscernible] syndicated on capabilities. The next ask was leverage between 4% to 6%. So no excessive leverage was sort of mid-market exposures, less than 1% per loan. So we, over the years, split up exactly to those specifications a broadly diversified credit portfolio, 80% of power is downside protected, what we're known for low loss rates, bottom map analysis, covenant-heavy portfolio with senior loans. Last example here is the diversification of royalties. I was just wondering why the right side of the slide doesn't show. It doesn't matter, I'll talk you through it. So for royalties, similar to what you've seen with credits, it's a diversification into existing private markets exposures, clearly, low correlation, barely correlated to sort of GDP or inflation type of swings and/or royalty-only mandates, there we have it, magic -- thank you, or a focus on income, sort of an alternative income yield, which especially in this market environment, rents well, is typically a cash yield of 6% to 8% to the royalty stream with an equity upside in very long-term cash flows, so also works well for some of those insurance type of clients. So with that, I hope we brought it a bit light real examples, the different perspectives and why it is so differentiated, why it is so bespoke, why it is built so differently and what it leads into is a sixfold growth rate over the last 10 years. It's growth that in my book will further be fueled by accessing additional madate clients. What does that mean? So far, until about 12, 18 months ago, we have been targeting mandate clients from $100 million to few billion upwards. Let's not forget it takes a lot of technology, a lot of operations, a lot of resources. So we had to cut it at a reasonable level where it makes sense for the clients, what makes sense for us. Now we have increased our technological capabilities, our operational capabilities. So over the last 12 months, we have started to access clients between 50 in $100 million as well. You can imagine the pyramid goes a bit like this. So there is a whole new field where we have got over 10 clients $100 million over the last 12 months, and that's the digital client segment that we will go for. So with that, we covered the institutional side of our activities, the mandates, the traditional funds and I'll hand over to Robert to dive into the evergreens. Thank you.

Thank you so much, Juri. Good morning also from my side. Seems I'm one of the last major milestones to pass between us and lunch. So I'll try to keep it concise. Now over to the private wealth side of things, we've been one of the early movers, as you know, in private well amend a market that has been consistently growing, delivering us more than 20% of growth in the last 10 years. And more recently, we've seen a lot of new entrants coming into the industry, leading to an acceleration of the overall growth. A lot of that growth was driven by private credit. As a matter of fact, 70%. The U.S. private wealth assets under management are private credit driven. While Partners Group, and I say this with the highest respect for [indiscernible] one and the credit business, we're an equity investor at hard, but it's private equity infrastructure royalties, but also within private credit, we underwrite with our private equity mindset. So for us, 85% is actually in equity-related strategies, to be clear, there's no private equity only that covers private markets, proven royalties as well. Now the, obviously, we've been benefiting from that positive market dynamic. We've concluded 2025 with a record year in fundraising. And I think the notable point around this is that today, we've broadened the platform achieving this success to more than 30 different evergreen vehicles. And most importantly, those newer evergreen vehicles, the broader agri platform has actually been responsible for almost 60% of the fundraising in 2025. The other element was mentioned before, the industry is 80% U.S. and 20% non-U.S. Partners Group, and in many cases, you would have in the space, people having 1, 2, maybe 3 very big funds and mainly focusing on the U.S. are scope is much more than that. We're global. We're going into so numerous countries across the globe to familiarize ourselves with the regulation, how you tap the market. We have client teams on the ground structuring teams that help creating evergreen at work in specific markets. And it's us to have about 40% in the U.S., while 60% of our private wealth business actually outside the U.S. And Hubert had a question before for the 2025 fundraising that spread is rather similar. 35% was in the U.S. and 65% was non-U.S. Now the key to build the Evergreen business and to grow it consistently is building a long-term track record. And by track record, we really focus a lot about consistency. And what you see here is the track record of our U.S. Evergreen fund that's 11% per annum since inception in 2009 and notably without a single down year, so all positive years. And that compounding feature is something that our clients value a lot and leads to tremendous multiples. So here we are at the 5.5 multiple that the initial investor who came into the fund in 2009 will have experienced. And the real difference also if you think about all the new entrants, 81% of this track record is realized. So that's not about valuations in private markets. It's actually based on what we have invested, held, made better and then realized again in the space, we're very unique in that sense because that needs time to build track record. If you look at the industry, it's actually the other way around only 23% is realized and the majority is based on unrealized business valuations. So what can you really tell about the track record after 2, 3 years? You can't tell a lot. You have a good start, you have a ticket for around 2 to continue, but you can't really charge the performance over time yet after such a short time. And what's the key element in building Evergreen portfolios, is that you always create a balanced mix across vintages. So you need to have some assets that are in the mid of value creation driving your performance just because partners go buy the business and owns it doesn't mean it magically starts growing faster. There's actually, hopefully, this morning, my colleagues on the investment side were able to illustrate to you how you actually need to do things to make companies grow better. So it's after a couple of years that you drive performance. So the new investments you make are typically driving performance in the future. The ones you made a couple of years ago are driving performance in the now and the more mature investments create upside through exits but also liquidity, so you can reinvest in and keep a balance portfolio over time. And then as I mentioned, you have to be very careful about when you run private equity in private markets, private infrastructure offerings, it's less relevant for the e-com for the private debt space. Now that's the point where I want to quickly comment on redemptions. Dave made some remarks before. The first statement I want to make is that we have seen an improvement in the fourth quarter on redemptions. The dynamics that we've seen in the private equity space or very different ones from the private credit space. Dave has outlined in the past couple of updates that we gave that there was a rebalancing. There were new entrants last summer that came into the market. They took some market share, so we have that rebalancing, having a peak in our redemptions, somewhere around September since we have seen a drop in the fourth quarter and a further drop in the first quarter of this year. That's very, very different from the dynamic that you observed in the private credit space. It happens to be somewhat an overlapping times, but it's a very different dynamic. When you look at private credit and private wealth, Partners Group, simply spoken, it's a nonevent, only 10% of our Evergreen AUM are in private credits, reprivate credit funds and of those 3 funds, 90% are institutional investors. So you're literally talking about 1% of our private wealth AUM that are in credit evergreens. And by the way, those funds all have positive flows, inflows vastly outsizing outflows, and that has been the case for every single quarter last year. So it's simply something that doesn't affect us. Now let's move to the new funds. The new funds that we've been talking about a couple of times in the last few updates, have you to confirm they continue to start with a very strong performance on a single out infrastructure one, which specifically has been leading the pack in its segment and also had quite some commercial success. But I think maybe that's the point where we should take a step back and have a deeper look at private market evergreen performance. Yes, we see those fantastic numbers, but what is really the potential? What is really the long-term return? How do we think about Evergreen returns through the cycles. And for that, I start from the closed end of the world, traditional funds, as you know them, white space, 15% to 20% IRR or numbers were familiar with. Oftentimes, that ends up at a multiple after 10 years for investors [Audio Gap] Those are single lines, very much like the managed technology that U described before, but in an ever bring context to deliver to a client with the additional repo with evergreen funds around it, allowing to have the comfort and is to subscribe and redeem and make adjustments in their portfolios. The second approach is a building block approach. Here you use Partners Group Evergreen, but you might also use content of funds from your strategic partner, providing in-house content and therefore, teaming up providing a successful mix covering private and sometimes even semiprivate or public asset classes. Here, the portfolio is structured by an umbrella and clients have their way to individually subscribe portfolio of funds. And let me make a couple of examples. Some of those you have heard about already in the various updates before, but the BlackRock one is obviously, one that is very interesting, a first of its kind. Here you take the fund selection job the leading to deal with picking individual funds of the adviser of the client by offering different mixes of underlying evergreens from growth to balance to income and doing that all with one subscription cement. So that's what you're used to from the public side. You wouldn't want to pick managers with a lot of idiosyncratic risk, but you want to get good exposure to the asset class with high-quality managers. And you've heard our announcement throughout the first quarter. This 1 has been starting in the -- in this quarter after a good preparation time last year around. Moving on to Europe, Deutsche Bank. We created a one-stop solution across private markets that's also a first of its kind because it uses health structures which make a fluent client eligible for investing this. Partners Group is not only being appointed here to measure a good part of the investments, but also to be the overall portfolio liquidity and risk manager of the construct, then that includes third-party Evergreens that we're managing here because of our leading track record, especially in managing evergreen structures with semi liquid features. This one went live last year. We announced that the first commercial success was more than $500 million in funds raised in 2025. This allows us to put access a client potential of 20 million clients across Europe. So it's something we're very excited about. The partnership with Prudential with PGM is, I would say, is a bit different kind in so far that you have 2 managers with asset management capabilities that are very comprehensive partners go on the private equity and private infra side, mainly Prudential on the various parts of the credit spectrum on the other side than the liquid strategies so that allows us to offer an integrated portfolio of one sub solution here again in the form of an interval fund to access broader potential client bases, then the more restricted qualified purchaser targeted funds. That's something we're very excited and we believe will deliver a good multi-asset risk-adjusted return. Not every strategic partnership, though, is about creating bespoke portfolio mixes. In some instances, it's launching dedicated funds, launching dedicated programs with partners that can help us on certain client channels by the insurance channel, for example, here with income, all on certain regions and segments with end markets like Mediobanca in Italy at reacts the client segment that before we didn't have a way to get into. Now summarizing the strategic joint ventures. We've got 7 in 2025. That raised about $1 billion. We've announced that before. We expect this to grow considerably. We expect more than $2 billion of contribution from those JVs in 2026. Needless to say, the number of those JVs is also going to grow. If you think about the white space, it's quite enormous. -- there's 5 asset classes. There's 3, 4 different client segments per country. That's not a thing that focuses on the U.S. and Europe only. Think about Asia, a very heterogeneous market. very different market microstructure in Australia and Japan, the Middle East and the like. And all of those really have the potential for being a good contributor to the next stage of growth in our private growth strategy. With that, I'm coming to the end of my section, 2026 and onwards. A lot of excitement in the private wealth space and a lot of things to do handing back to Dave to wrap it up for today

Thanks, Roberto. So in summary, we have what we believe is a conservatively constructive platform that is somewhat apart from the current headlines that see so much attention on today, you should have gotten quite a sense from our credit activities that we have a very different platform that many that are out there. And with regards to technology, I think, our thematic approach and the fact that our clients have largely been steering and dictating to us the exposures that they want has kept us out of some of the software risk that exists out there. Second, as markets remain complex, people tend to move from traditional types of solutions into solutions that are more custom built for them. That's one of the reasons why I think we've been able to outperform the industry in 2025. And I think we see that continuing into 2026. And then number three, as we think about strategic initiatives, you'll probably see us continue to focus in the near term more on distribution than on manufacturing. We think that, that is the key priority right now and the opportunity to consolidate manufacturing will be a long-term opportunity without a lot of time pressure but there is indeed time pressure to secure these partnerships that Roberto spoke to. And so with that, we'll conclude the prepared sections, and we'll move to Q&A. Steffen, why don't you join me on stage actually and the Partners Group colleagues that presented, why don't we actually just have them sit just to hang out his [indiscernible] poster, why do we have them sit on the couches here? The various presenters and then all quarter back and take it's questions to the different colleagues. And with that, we'll open up the floor for questions. it, do you want to circulate the microphone.

It's Hubert Lam from Bank of America. I've got 3 questions. Firstly, I know you talked about the focus near term is on distribution rather than acquisitions on the manufacturing side. We've recently seen quite a few deals in the space. Just wondering what your thoughts are on the market environment or potential for opportunities, I guess, in the near term. Second question is on BlackRock. I know you just, I guess, starting the partnership. Just wondering what the current -- what the feedback has been so far a traction, what response you're getting from clients initially? And I guess last question, I think there's been some recent press around how some factors are giving more fees to the distributors even on the performance side. Just wondering what your thoughts are around that and whether or not something you would do as well.

Why don't I take the first one and then Roberto, why don't I toss it to you and talk about the BlackRock partnership and then the fees to distributors. So first of all, on the M&A side of things, there is no shortage of conversations to be had right now. We have people that approach us on a very regular basis. We've had our own outreaches to managers that we think particularly capable and complementary to the investment capabilities that we build. Our industry for a long period of time was governed by the amount of investment capacity that a firm could generate. And you saw a tremendous amount of investment into investment resources and organizations building up large investment teams and constantly investing into it. For the last number of years, we've operated with excess capacity. If you look at our collective investment engines as an industry versus capital formation side of things, which has been the governor for growth more recently. And so we do think that this is going to be a market that is poised to consolidate and you will see leading investment talents operating underneath consolidated platforms. We do believe that. But again, I'll just reiterate that our priority is, we think about how to allocate our time right now in 2026. It's more on the distribution side of things than it is on the manufacturing side of things. there's no shortage of conversations to be had there.

Maybe if I quickly answer that. I mean, the challenge of these things is that people kind of try to generalize, right? I mean like is M&A good as bad or whatever? I mean just take a step back, think about financial or in the last 40 years. By the way, this was an average not too successful, as we all know. The problem is at the end of the day, I mean, you have to ask yourself a very simple question, does this particular opportunity make you better with clients? And there could be some reasons why it could do so. It could be that there are very strong relationships. It could be that there's so amazing content that we don't have in our platform. It could be that it adds in a way that we need to combine, we show better portfolios, all of that. And that's exactly the work we do. I think there's a little bit of a sense in the capital areas. I hope there's one thing wrong way here that it's looked a little bit mechanical, right? I mean, like, okay, there was M&A. And so now they have 2 companies, they have more AUM now in total. That is not the approach we have. I mean, of course, I mean, it's nice to be bigger, but it is nice to be bigger if you are actually more successful with 11 is 3 or more than that. And that is something where, honestly, we had on discussions and we kind of didn't to that conclusion. I mean, there was a question on price, some of it was a question of that we felt we will do all the work essentially with these distribution partners and pans and all of that. And so that's why I think we saw a little bit slower. And as Dave said, I mean, the rates at the moment. We just have to be clear about that. The race is on raising side. It's not just only on the wealth management side, where a number of these institutions, like in the first step, they want to have to staff on their shelves. And so we had our product there and other people came in, but not as second generation, right? I mean that investors or institutions they want to have their product this is where we want to get it more very early because they will not have 5 products. They want pun, maybe 2 coducts. But even with some of the large insurance, some well thoughts they're cutting back the lines. They want to have some people that -- I mean, provide solutions in a much more comprehensive way. So this is where we spend more time maybe not enough time on some of the other stuff, but I don't think -- I mean you said like there's thousands of these firms. So I do think these opportunities on the engine side, they will not completely go away and maybe let me add a last point here. We talked about all the change in investment violent. So it's not too bad to maybe observe a little bit of what's the outcomes of these portfolios and how will they weather actually the next 12 to 18 months to have a good sense, what are the engines that are future-proofing this environment? Roberto?

Maybe with regards to fees first. Look, I think there's a couple of things. I think, first of all, the trend is clearly going towards fee models where the distributors fee is charged on top for a mandate, for example, rather than in the form of retrocession, depends large in jurisdiction, but certainly something that we clearly observe as a trend. I think one thing that we always look at whenever we set those type of relationships is what is the total fee load on all levels, and investor making sure that what results on the bottom line is something that we believe is an attractive risk return. There was a black question, but here. Yes, maybe just quickly on the backlog relationship. It reminds me a little bit of what we have seen in 2009. 2009, 28, we started with this project fund in the U.S. wirehouse industry and people essentially said, this is amazing, but it took quite a bit of time. And my sense, maybe Robert, you can talk to it more completely. But my sense is we actually experienced a little bit of that kind of situation. This is a very new way of approaching vessels with pro markets, which allows us also to go much lower than I would say, the traditional ultra high net worth and I would say brokerage kind of channels into much, much more retail-oriented allocations. But this idea of essentially taken to some extent, away the decision to make the locations is something totally new for wealth management in par markets. And so I think it will take some time. The feedback is very good that we get. I mean, they have -- I mean, every day, they have the mid-time meetings between Black of Long Stanley platform. But I think the typical SME discussion, a bit like, by the way, on the institutional side is something that is a much longer discussion than a typical fund investment where we acquire being 1 hour to make decision. So I think it will take some time. But from what we see at the moment, I think the feedback is very positive. I think there's a very good chance we see a real paradigm shift for these SMA allocations in retail.

Does that have the potential to be our largest Partnership, right, of all the things that we went through, yes, it probably does have that potential. But there'll be a ramp associated with it. Anything you want to add, Roberto? Next question.

[indiscernible] from Goldman Sachs. 3 questions from my side. First, I know we've touched upon it at various points in the presentation, but could you just address the topic of the pickup and redemption that we've seen in the traded BDC space in the U.S. And really, it sounds like you're seeing kind of very little kind of direct recourse really cross to your business. I think Robert, you actually talked to a step down in redemptions you're seeing for Q1. But can you just maybe big picture, how is it shaping? How your distribution partners think about the wealth space at all? That's the first question. The second question, specifically on private credit. I think in Chris's presentation, he talked about over the next decade, a doubling of the ports and a falling of the recovery rates, really kind of 2 parts. Number one, what what's driving those assumptions? It would be helpful to get some color there. And then really, are you seeing what kind of level of pickup of that are you seeing in the here and now at the moment? If you could talk to kind of the current backdrop as we move into those new assumptions, yes, so 3 questions there.

Maybe for the first one with regards to redemptions, you have a couple of things that are happening at once. Number one is you did see in the middle of last year, almost all of the larger incumbent funds as we were dealing with more competition, new products coming online, we all had a quite similar level of redemption activity, and that came from having more options on the shelf, a competitive dynamic that was evolving and changing. And you saw whether it was an equity fund or a credit fund, everybody dealing with a similar dynamic and everybody dealing with a similar level of redemption activity. We have seen that change with the more recent quarters. And it does look like the private credit funds have seen a pickup in redemptions and we have had a decline in redemption activity from that Q3 time period headed into Q4, and we're projecting a further decline into Q1. And so I do think that some of the things that were I think, facing or that competitive dynamic are similar, but then there are some specific topics related to private credit that is not impacting people's allocation. Usually, when somebody makes an allocation to a multi-asset strategy or to a private equity allocation, they think about that as a long-term allocation to private markets in a way that you might not think about in some other asset types.

I think that's the key. And I think also if you have seen how fast some of those credit funds have been growing, that points to people having shifted allocation quite dramatically. We've been building our large private equity evergreens literally over 15, 20 years. So there's a lot of people that have been long-term investors. And I haven't never heard that someone would tactically park money in a private equity-focused evergreen to then move it elsewhere afterwards. So I think there is much less tactical, much less speculation in spaces like royalties, infrastructure, private equity, I think because people understand the underlying is a long-term investment you need to make.

Chris, do you want to speak to some of the assumptions that you went through?

So I think the question number one was around assumptions regarding the default rates looking forward. And then I think second of all, regarding what are we seeing today live in the market concretely. I think about default rates, I think we do take a sort of a longer-term perspective. So we have data going back 10, 15, 20 years or so when we can see also by industry what the default rates. And today, we are running at around 2% to 4% at the range. So it is increasing in the market we observed, but it is within what we say a normalized level today. We do think that will increase going back. We looked at previous sort of liquidity crisis, '08, '09, we have seen the time we modeled that out what we think will happen. I think the recovery rate is actually pointed before is also very important recovery rate book that on a default, how much actually will be recovered. We think recovery to be lower today, in particular because we think that some of those assets that will default probably in the industries more impacted by AI and the like, we'll see more disruption or a higher level of disruption and a lower recovery rate as a result. So more binary outcomes for sure. I think the second topic is what we're seeing today. If we look at our watch list as a data point, we do observe that, that has remained static actually in the last few quarters, last recent quarters. We don't see an uptick in our watch list. We do think -- we haven't seen any sort of core data that points to -- or correlates much with the noise is around software and AI. Our view is actually more simply that the AI and the technology will actually impact other aspects of the real economy more than say, the software. We've not seen it in our software portfolio.

Maybe just to add quickly on that first point. I mean, the reality is, I mean, there's always some assumptions behind that. There will be a lot of other external factors that will have an impact on is now, is it doubling? Is it 250%, 150%? I'm not sure where that matters so much. I think what's important is that we understand that credit is just much more directly impacted by a wider dispersion of outcomes. I think that's the key thing. That means spreads have to go up and you have to be much more selective. And it's probably the first time that it really takes off to have these super low loss rates that we have in our portfolio. And it's just a little bit of different environment. I think we'll be nearly a little bit different investment discipline in the next 10 years or so. One other -- just follow quickly on the wealth management side on the credit side. I mean, one reason why I was asked actually in the interview this morning, I mean, why haven't you focused more on the wealth side of your credit business? And I guess the answer was at that time, when we looked at our credit portfolios and the way we run credit portfolios a little more conservative with less leverage, if any leverage actually, so it's really a little more addressing, I would say, conservative insurance portfolios, high single-digit returns. That's very different from what you find in the wealth space. So often these wealth products, I mean, they have more junior in there. They are quite leveraged. They try to achieve something like more like 9%, 10%, 11%, 12% net-net with all the fees, that's probably more like 12%, 13% asset level. And I think that's where also there's a debate. I mean, in this environment, I mean, until at least 3 weeks ago or so people thought that rates will come down even further. So there was a question mark, right, can you actually achieve these? Because I don't know that wealth management clients will invest in a private credit product that gives you on a net basis, 6% or 7%. I don't think that's a big sale. So that's why I think also equity might be a little more insulated from some of these dynamics.

Sorry I thought there was some for me. Nicholas Herman from Citi. Thank you for the update. A lot to dig into for sure. Three questions as well, please. It seems to be quite typical. So maybe just take one at a time and then...

We won't take the floor from you until we're...

So the first one, just coming back to the Blackrock offering. So I appreciate that the portfolio solution offering is super unique, very differentiated. It looks very attractive in theory. I mean -- but I guess you also need the performance you need I guess, the demand as well. Can you talk about the initial feedback since as of like, I guess, a month since the launch? But a part of that, are there other advisers who have shown reservations to commit capital based on current returns or if a component fund within the solution becomes gated or what have you? I guess I'd be interested in anything you can say on that, please.

Yes. I would say, again, when someone makes an allocation to a multi-asset strategy, they're making a long-term commitment. Actually, if I look at the Blackrock fund that was recently gated, I mean, they've had positive flows, $800-plus million of inflows in that same period that they did receive a pickup in outflows. We've done work on that fund. We think it's a very attractive fund. You have 92% of investors that are staying with that fund. I per se don't have a problem allocating out of the broad multi-asset strategy to that credit fund. And I don't think that private clients will either if they're looking at the allocation appropriately, we'll test that out. I mean it's obviously a brand-new topic, but we have not received any feedback from investors in the short time since that news has come out, they would think differently than how we're thinking about it.

I think there's sort of, I think, a positive perspective on there, but certainly also a bit of a negative. I mean I do think that -- I mean, just broadly speaking, the more we see headlines on that space open-ended credit or not, I mean, it will clearly lead to longer discussions with some of these advisers, with the end clients and the conversion will take more time. I don't think it changes the end game of it, but I do think it can take more time. I do see though also a positive element here. And we've been voicing that concern for a while that you have to know how to run these open-ended funds and how to construct these portfolios. And I think with what's happening, I think it's the first time at San that we can have that discussion and say, look, we do this since now 25 years for the first one, Roberto, our first open-end product in Switzerland, I guess, back in 2001. Well, the institutional product was 2001. And I think we learned quite a bit. I mean, how we do this. I mean it's not completely trivial how to manage liquidity and foreign exchange and all of that. And so in that sense, I think it might be one of these periods where you take a bit more time. It is a bit of a more comprehensive discussion. In the bull market that will just buy something, okay? I don't think that's happening now. I think people are reflective on these things. But I really believe that is for the long term, this is the time to differentiate to explain why they should probably go with those managers that have done it for a while that have like Blackrock certainly has incredible operations to run this because it's pretty tricky actually on the technical side. So I see this in the mid- to long term as a positive actually.

The second one on the strategic partnerships and Evergreen outlook. So just could you confirm how the blended fee rate from the strategic partnerships in '25 compared to the group blended average and the expectation for those going forward? And I guess just more broadly, it seems like you are highly constructive on the Evergreen growth given the growth runway with the strategic partnerships. So are we still talking at least 15% Evergreen annual growth from the Evergreen business going forward?

Roberto?

Yes. The strategic partnerships are one element of it that wouldn't alter the overall growth rate that we project. I think with regards to pricing levels, this is very much like the relationships we have before. I wouldn't make a difference there on our content on our part, this will be like-for-like.

And you've seen that mix shift take place gradually over time, right? You've seen a mix shift towards mandates and a mix shift towards evergreen solutions without an impact on -- broad impact on management fee margin. And I think that's expected to continue.

And the follow-up question I had, I don't know if this is for you guys or for Will. But so on the private equity portfolio, the EBITDA growth on that portfolio has averaged about 10% over the last 10 years -- sorry, 13% over the last 10 years, I think it's about 10% over the last 4 years. But its current levels looks to be around 6-ish. I mean, how do you see the outlook for the EBITDA growth for the private equity portfolio, I guess, particularly in the context of a more challenging macro outlook? And how does that play into your expectations for returns that you can deliver to your clients in the coming years?

Well, 2025 certainly had some elements where multiples in some sectors came a bit down. Also the headwinds from some markets that gave kind of a new base. So for 2026, we are looking in the companies very intensively right now with the budgets, and we see that we have a good opportunity for a rebound.

Daniel?

Daniel Regli from ZKB. One question I had is on the fundraising for 2026. You're guiding for DKK 26 billion to DKK 32 billion. I just wondered whether you could give me some color what do you expect to come from evergreens and what kind of moving impacts you're having or seeing '26 versus '25, for example, if I already asked this once, I think, kind of recovery a bit from the traditional channel, but maybe also the Blackrock partnership coming on top and everything. And then also maybe putting the fundraising guidance in relation to assets under management compared to the long-term history, it still looks rather conservative. So maybe could you kind of discuss a bit what are the challenges in this year for the fundraising?

I guess the answer that I'm going to have on this is actually quite boring. But it's because we went through and did our business plan. So it's actually across the 3 segments. It's across private wealth where we see growth, where we believe that strategic partnerships will play a bigger role. It's for the mandates where we see an increasing momentum and increasing need for clients to build out their private markets allocation after a few years where many clients were overinvested because the distributions weren't there. So there is a pickup there as well. And then last but not least, on the more traditional side, we do have the infrastructure fund, which heads into its final close, which is having great momentum, and we're also launching our private equity VI strategy, which will contribute so that we will also expect a pickup. Maybe the one nuance I can give is that similarly to the second half of last year, probably private credit will be a slightly smaller part of the mix, which certainly has benefited over the last 2 years in an outsized way.

And if you drill down not just in category, but also in geography, there's some interesting dynamics at play. So in Europe, for example, this was a very strong year for us from a private wealth perspective. We saw a very meaningful pickup in activity for wealth within Europe in particular. Within the U.S., that's a market where we're not as penetrated as some of our peers from a client perspective. And so we use traditional funds in order to start new relationships. It's easier for them to make a commitment to one of our limited partnerships than it is to have a comprehensive mandate. And so we had quite a pickup leveraging the strong track records that we have in secondaries and infrastructure, in particular, to start new relationships with institutions in the U.S. and you had quite a meaningful pickup in traditional funds in North America and then in Asia, where the geopolitical dynamic has really shifted people's perspective on where they want to invest from a geographical perspective. We had about a 3x increase in mandates in Asia this last year. And so it's not just each category grows in a straight line. But every year, we have the ability to cater to the needs of individual segments of the market, leveraging the different tools that we have. So even though it seems like, okay, every year, it's just the same thing, kind of a greater mix shift of mandates, it's actually very dynamic.

Maybe just on the growth. I mean, the times when we had -- when we kind of the IPO had these growth rates of 30%, 40% a year, of course, over, okay? That's just not the way the industry grows, and it's just the industry is too large and too mature for that. I think this target that we announced last year, we said we want to have about 10% -- more than 10% organic growth, and there might be some M&A will pick up here and there. I think that's very realistic in the long term. Let's just not forget that last year, this year so far, looking at the industry, it was pretty bad actually, right? I mean the industry is massively below 21 where it was. We are above '21. I think also this year, we're looking at a goal that will be quite a bit above '21, which was the absolute record fundraising in the industry. My sense is the industry again will be massively below '21 fundraising. So I think there was a market share gain in '23 or so might be 60% or something. I think we'll continue on that trajectory. But I do think that low double digit in average over the period and hopefully, there will be some bar years again. I think that's a realistic assumption.

And you saw that medium-term objective that we've outlined, we -- we achieved more than the expected amount in 2025. So as opposed to that 10%, 11% organic growth with some acquisition activity on top of it, we outperformed the kind of straight-line assumption for 2025 with the results that we just presented.

Maybe just quickly follow up. Can you give me a little bit what kind of needs to happen to kind of you just reaching the lower end of this guidance and what needs to happen for you to reach the upper end of the guidance? Or what are kind of the headwinds you're still seeing, which could you make only '26?

Well, I think it's a bit a question of momentum and environment. I mean, look, at the end of the day, I mean, we are not insulated from like the sentiment of pension fund managers or insurance company managers and some of these headlines. So on the assumption that we have a somewhat benign environment, we don't expect like an incredible gold market, not at all. But I would say with a somewhat benign environment, we should easily achieve the goal that we have given ourselves for 2023. If you continue to see, I mean, 10 years ahead of us, like in the last 2, 3, 4 weeks, I mean, I think there's a good risk that we don't achieve that. I mean I hope that's not the case. I mean, but there's very clearly a momentum. I'm -- so I give you a little bit of an answer that's more connected to the market. Why do I do this? I really believe that purely from a content perspective and from the solutions that we offer I'm not so worried. I'm absolutely convinced. I mean, we have the differentiation. We have the right strategies for private equity. We have the right strategies in credit where I mean the low loss rates now actually play a real role in the next 10 years. I mean royalties is an incredible instrument in this environment with low correlation. You want to have these infrastructure investments and also these new real estate platforms. So I think that content is perfect for the next 10 years. I think the solutions are perfect. But at the end of the day, I mean, this will be lifted more firmly or not so firmly based on your low sentiment environment for sure.

Arnaud?

Arnaud Giblat, BNP Paribas. Two questions, please. Firstly, can I ask about mandates. Over the last 5, 10 years, we've seen a lot of your large peers go multi-assets, consolidate a lot, and they've woken up to the opportunity in private wealth and went in big and have had some success in the U.S. I'm just wondering, are you worried about them thinking the same thing about mandates as a big opportunity set and then going there? And what are the moats around that?

So the mandate opportunity, if you think about the entire private markets landscape is single-digit market share opportunity. And it would require many of our peers to completely reengineer their business models, their setups, their incentive systems, the way that they run carry plans. It is not as simple as just waking up to the opportunity. In order to go from allocating investment content from originator to fund to originator to portfolio management to a distributed set of products is a major transformation. And I think our setup is quite unique to us because of the heritage that we have coming from an organization that's always been innovative in terms of structures. It had more of a portfolio building heritage than a deal doing heritage. Again, they might look similar from the types of asset classes that they cover or the types of geographies that they invest into. But from a business model perspective, they are quite different. The private wealth opportunity is a huge segment of the market. That's going to become, over time, a major segment of the market. It is today a major segment of growth. And so firms are willing to reengineer how they do things to address that segment of the market. For a more niche segment of the market, the work, the transformation that would have to take place at those organizations in order for them to go after that, we just haven't seen it. Instead, what they're doing is they're taking their products, their limited partnerships, they're assembling them together under a common investment access vehicle. They're throwing in some free co-investment and they're saying, here's our mandate, right, and we compete with them. And so we do have competition certainly from peers that have mandates that are attractive more or less to different clients, but they are not the same as a line-by-line dynamically steered mandate towards clients and NAV portfolios. We have not seen pressure from competitors moving into that space.

If you think about our business, there's really kind of 2 businesses in PG. I mean there is the typical GP business, which is our investment engine and our sales force, okay? That's in terms of staff, that's a little bit less than half of the overall global workforce, so a little bit less than 1,000 people. But there's another part of the business that is pretty unique. I mean you don't have that in most other setups that is really this operational backbone. It's more than 1,000 people. It's a much smaller part actually of the cost. It costs us probably around a little more than 10 basis points of our revenues, but that's an engine. That is essentially comprising the platform side, the portfolio solutions, the structuring. There's a lot of technology around it and operations. Dave in your slide, the structure overview that shows how we actually invest, which is by direct investments in single assets. That's very unique in the industry, right? It's a huge operational engine behind it to essentially take these small pieces in individual underlying investments and allocate them to about 300 funds or whatever. So this is something that wasn't built overnight. I mean this was essentially built since about 25 years when we started with these mandates with insurance companies, they suddenly said, well, you need to have IFRS IAS 39 valuation. At that time, no one in private equity had an idea what that was. So we started to build up that valuation team. And it's just continued in a way that we build up more and more for these open-end funds for these mandates, technology. We had insurance companies, they were looking for ratings of individual loan tranches, and we built up that team. And so in a way, this is always a bit of a hassle for us, right, to be able to actually address all these topics. In hindsight, it was a blessing because we build up operations, and I think it means very effective from a cost perspective that really carry all these activities. So I don't think that it is something we'll be exclusive on. I mean other world say they will mandate some of the investors in funds, -- some might invest in single asset when it comes to credit. But I do think that there is still a bit of differentiation for a while to come. By the way, there was one large firm that had a big effort internally to build up the operations to run something similar. And we know that some of the senior leadership team of that team actually left about 6 weeks ago because the company finally decided it was just too complicated.

My second question was on M&A. Clearly, your priority right now is on partnerships and maybe down the line I mean from the M&A you've done and from the M&A we've generally seen in the industry, a lot of the upside has come from distribution. So I'm just wondering, rather than go and acquire a private equity manager, leave what they do, is it invisible to have a distribution deal rather than just outright M&A?

Well, one of the things that is interesting is given the heritage that we have, the clients that we serve, the more European-centric client base that we have, if we look at many of the more traditional funds, we actually don't have a lot of overlap with regards to clients versus some of the other firms that are out there. So there is a significant distribution cross-sell opportunity even with more traditional firms that are out there. And a lot of the distribution deals that you're talking about or distribution opportunities, you don't need to mingle equity in order to achieve. That's one of the reasons why you see so many joint ventures. You can have complementary organizations with complementary distribution and complementary investment engines that have a common joint venture that they establish in order to address a market segment that can be very attractive for both parties that can be incremental for both parties, but you don't have the complexity and noise that comes from trying to merge 2 organizations together. And I think that's primarily where you'll see us focus on the distribution side of things is on those type of ventures where we don't have to mingle equity, but we can link arms and address the market opportunity. Sharath?

Sharath from Deutsche Bank. I have 3 questions. Firstly, thank you for the detail on the software exposures. But can I have an idea of the diversification for the other 86% of your private equity portfolio in terms of the sectors? Or what more can you say about...

So the areas that we've invested in. So if you look across, it's pretty broad across services, industrial, health care, it's a very broadly diversified set of portfolios. Wolf, anything of note that you want to share with regards to the rest of the portfolio outside of software?

For example, very strong asset is Rosen, an inspection company for pipelines that's kind of industrial and services or we have sometimes simple businesses like hygiene papers, you could also say toilet papers and the transformational story is there that we just grow this company that has an excellent operations engine. They are just outperforming their competitors in being better in cost, and we just scale them across Europe. So in health and life, we have quite a fascinating CRO company that is doing drug discovery. And actually, they have invented a new opportunity, also AI-based to reduce drug discovery from -- hopefully, we are not yet fully there, but that's the ambition from 10 years to 3 years. And that is then sold to big pharma actually. So those are newer investments. Another one in our goods and products area, it's cat food and luxury cat food. And that company is tremendously growing this year, also outperforming. So you see it is a very, very broad portfolio across these 4 sectors, health and life, goods and products. Goods and products is very vast, goes from industry to bridling watches, then technology and services. So you see we cover in these 4 areas, 40 themes actually that the teams are working on. So diverse portfolio.

There's no concentration that I would note, though, across that. It's pretty diverse.

Second one is on royalties. You previously set out a target of reaching $30 billion AUM by 2033. We are currently at $1 billion. So how should we think about the phasing of this growth? What sort of growth expectations are baked in near term? And also if you could comment on margins for the strategy?

Yes. So in terms of the ramp curve, Stephen, do you want to comment on that?

So in terms of where we are today, how open can I be in terms of numbers?

Very transparent.

So we have been open, I think numbers anyway. So we're already over $1.5 billion. So we've seen a lot of growth in the last couple of months. I think by this time next year, we would aim to be somewhere between $2.5 billion to $3 billion. We think we can then ramp to about $4 billion to $5 billion of fundraising and towards the end of the decade, be raising somewhere between $8 billion to $10 billion. So we actually think we'll get to the $30 billion target before 2033.

And my last question is on operating leverage. I just want to square your comment. You said that you have excess capacity in your investment teams and versus maintaining flat guidance or maybe even as a downgrade now that IFRS 18 is implemented and the portfolio would be in the numerator. So I just wanted your clarification on that aspect.

On leverage within the team?

Yes, you're having excess capacity in your investment teams, but not getting reflected in your guidance for EBITDA margins.

Well, we have indeed operated at higher levels of investment volume in the past. If we go back to peak investment levels, we have run our engine deploying $30 billion in the past are not yet back to those levels. And so that's what I mean by excess capacity. In addition to that, from peak levels, we've added meaningful resources. If I look at the operating resources and the investment talent that we've added to the platform from where we were 5, 6, 7 years ago, we do think that we have a meaningful opportunity. But what I was talking about before was excess capacity for the industry, right? Our entire industry, not just Partners Group. But if you think about all the platforms out there that we're investing aggressively into investment talent, all of which are running somewhere below peak levels to varying degrees, we have an industry that has quite a bit of slack in it from a capacity perspective and ability to generate investment volume. And on the topic of the performance fee, that's been in [indiscernible] models now for however long, in projecting that transition was going to take place. So for us, it's not a change. It's just you're moving it from this spot to that spot. But as we think about the 20% to 40% guidance over the long run as we thought about the need to update that guidance, that was one of the factors that informed us in our change.

We wouldn't give that guidance if you would think of it as being 25% for 3 years. So 25% to 40% means 25% to 40%, and that range is given for reason. Let me just make one comment here. This is actually complement paying to the DX team. DX team is always completely underpromising on cost. If you think about the foreign exchange development of Swiss franc in the last few years, I mean we are today about 63% roughly today on EBITDA margin with a constant FX over the last 10, 15 years, we'll probably be at like 70% or something. And I do think our investment team is actually well staffed. Maybe on royalties, I guess there's a couple of people are looking for. But I would say, by and large, I mean we can do much more. We will need much more because there are more fundraising. I think on the operations side, you guys are really effective and save cost every year. So when you -- I think you said today that we'll run it at another 60%. Well, I think we haven't run at 60%. We probably run it at 65% or whatever against the FX that changed in the last time. So I think the company is actually keeping efficiencies quite well also going forward.

Mate?

This is Mate from UBS. I have 2 questions, please. The first one would be on distributor fees. Anecdotally, distributors are clearly pushing for higher distributor fees. And I think it's fair to say that some sector peers are also willing to offer that. Could you talk a little bit about to what extent that can be a limiting factor for growth through those channels? And also to what extent that might pose a risk to recurring fee margins at some point? That's the first question. And the second question is a fairly short one, I'll squeeze it in, if you don't mind. And that's on real estate. I think it's very clear the direction of travel is vertical real estate, made clear. Is there any regional focus in M&A efforts in real estate? And here is a good example for Germany, which other geographies are of interest?

So first of all, on distributor fees, I'll hand it over to you. I do think that given the fact that we have been in that space, and had existing relationships with distributors for decades now and are not the new kid on the block does mean that there's a slightly different dynamic with the Partners Group versus if you're coming new into the private wealth space, and they already have 200 products on the shelf, and you want to be product #201, there's a slightly different dynamic for the new kid on the block. But Roberto, do you want to speak to.

No, no. I agree, obviously, we weren't the ones who needed to buy a seat at the table because we had it much longer. I do think personally, we have experienced those new entrants. In my personal view, this is a couple of years back, but that probably peaked, I think since it has been subsiding. And a bit along the lines what I mentioned before, I also think what we've been seeing more recently is that any incentives start a new fund or the like is shifting more to the benefit of underlying investors as opposed to the distributors. And especially in the U.S., there seems to be an increasing standardization, a bit like what you've seen on the long-only side, how those -- how the market works and better pricing of those funds and their respective incentives are. So I think it's been probably subsiding in the last year or so, but we acknowledge recent coverage.

Yes. And it's -- some of those fees are kind of out in the media now and create a little bit of a buzz, but some of that is not a new dynamic, right? Some of that's a 5-year-old topic that's just now getting some tension because of the private wealth space gaining more prominence. And with regards to additional potential acquisition activity on the real estate side as we look to build further integration, I mean, the U.S. is an obvious spot for us, and we do have a couple of interesting things that we're looking at. But probably more than geographical focus is the focus on the vertical in which they operate. And you're going to see probably some additional focus for us on multifamily and on industrial. Those are 2 spaces that we're zooming in on right now.

My name is Carmela from PEI. Just 2 things from me. One is on the Middle East. I know you've put out a press release on it recently. And I appreciate, Dave, you've talked about how we live in a complex world where this is a new world right now of more geopolitical risk. We're hearing from advisers at least for the near term, that Middle East investors are more or less taking a pause on commitments to some of their managers. Wondering to what extent you're hearing or seeing that as well? And maybe if you could talk about the implications of the conflict near term and long term across exposure to private markets for at least your Middle East clients.

So first of all, just to create a little bit of a context, that region represents only about 3% of our client mix today and has more upside than downside for us as we think about the activity there. We have invested significantly in the region. Stefan, how can you go in there every 6 weeks? Every 6 weeks, much more active there than we have been in the past. And we just had an e-mail bouncing around. We had a new mandate got signed this morning, right, out of that region. And so it's not been our experience that people have paused or stopped activity. I can't speak more broadly what's happening. All I can say is our own experience is that the trains are still moving.

I think what's happening -- so people might mix up 2 things here. So one is a broader topic amongst the largest investors in the region for maybe 2 or 3 years, they're really trying to redefine how to go about private market investing. And so some of them actually, for instance, deposits sent us this morning actually signatures on a large mandate. They have, for instance, decided to cut back from about 45 counterparties to 15 counterparties. And this is the view that they want to have a fewer a smaller group of players that will be much closer in the relationship. They want to work together on transactions. So it's much more like a partnership also. So I think that's why also the mandates, I think, play a very fundamental role in that region going forward. And so I think sometimes you might hear people saying this is pausing. I'm not sure it's pausing. I think it's a little bit of a reconfiguration of the investment approach, and there will be a number of managers that will maybe not get the same kind of capital from the region. The region itself is growing. And for sure, the current dynamics now, I mean, this one party, I mean, clearly came to the office in a very normal way and signed documents, but I'm sure there's others that maybe pause a little bit for a week or 2 or 3 weeks. No one knows how exactly that situation will develop. But my sense is that overall, the region, I mean, will be a very, very large investor. It will grow massively. The allocations will go faster, higher. They will have an interest in becoming more of a partner with GPs. They will also have an interest because often the sovereigns are quite closely related to the leadership in these regions. So they want to have also a partnership where they feel that they bring something back to the region. We have, for instance, a number of portfolio companies that are very active there like the school partnership. So I think it's just the relationships, I think, with many of the some wealth funds, it's not only the Middle East. I think they will -- again, they become much more tailored partnership like. And I think there will be a smaller number of GPs that I personally believe will benefit from that. I think we're part of that. And there will be maybe more traditional GPs that have in the past just gone there every 3 years for the fundraising that might find a little bit tougher going forward.

Go for that. So I've got one more, if that's all right. For steel royalties, please. I appreciate you've talked about the guidance there in terms of how much you expect to raise in the next few years. If you could talk me through -- over here very short. The pipeline of opportunities there in terms of maybe sectors because I know you've done pharma, natural gas and then entertainment. Maybe that's one part of the question. The second one would be the types of LPs who are actually coming to you and are attracted to the strategy, that would be very helpful.

So I'm going to start with the second question first. I mean we've obviously been fundraising this for 2-plus years now. And what becomes apparent is that 99% of global investors currently have a 0 allocation to royalties. And that's across all types of investors. So that's from the largest sovereign wealth funds, pension funds, insurance clients. That's all the way down to private wealth clients. So by the end of this year, we'll have 4, maybe 5 evergreens into the market. We are seeing demand across the board. It's actually quite consistent across the different types of investors. The question people really ask is where do they put in their portfolio. Everybody sees the merits and the rationale of including royalties, particularly because the sectors we invest in are very countercyclical, resilient yielding investments, pretty long dated, but we front-end load the cash flow as well. So there's a yield element, which is very attractive to people. And so we actually see the fundraising as being relatively consistent across the different types of investors. On the first question, we actually invest in close to 10 sectors in the underlying funds. So we have life sciences, obviously, then we invest in entertainment. Everybody assumes that it's just music. It's much more than just music. It's film and TV. It's music from film and TV, it's book royalties, its IP, YouTube royalties, sports royalties, brands royalties. And then we also invest in energy transition, so U.S. natural gas, green metals, carbon, water, and we also own royalties on lobster to give you a very different example, right? So it's a very big space, which people just aren't aware of how large it is. I mean this isn't just about raise as much capital as you can. This is about maintaining the investment quality for our clients and our future clients. And so a lot of work is going on to ensure we understand the size of the market. We actually view this as an asset class, not today, not in 2 years' time, but maybe early 2030s, where we can be deploying $10 billion a year into royalties and still be taking less than 10% to 15% of market share. And that's if markets don't grow from where they are today. And that's not just buying royalties. That's also doing what we did with the weekend, which is taking a product out to IP owners actually lending against the IP and providing them a different alternative than simply selling their work. It's what Steffen was mentioning earlier around going to companies and creating royalties over their assets. which gets accounted for as non-debt and is nondilutive. So very interesting to people. That area in health care alone is expected to grow 10x over the next 5 years. So we see huge growth potential, and we actually think we're just scratching how big an opportunity set royalties is for Partners Group.

Questions one on the secondary. Unlike the other peers in your industry, you don't have an asset class per se in the secondaries. It's split in the different strategies. So I wanted to know how much it accounts in terms of the different strategies and how do you see growth going forward on that one? That's the first question. And the second one is in terms of trends, we see a lot of your peers going which is quite a very trendy topic these days. So I wanted to have your views.

So first, with regards to secondaries, the secondary market has emerged from $100 billion opportunity years ago to over a $200 billion opportunity today. We deployed $5 billion into secondaries last year across topics, about $4 billion in private equity and then the other $1 billion across infrastructure and some of the other strategies that we have. And that was up close to 20% from where it was the year before. So indeed, we have been active. We have been growing within the secondary market. But we don't have it broken out into a separate area because we see the benefits of having a secondary team that can leverage the insights and know-how of our vertical research. And so when someone is pricing a secondary, it's not uncommon for them to walk over to get insight from the vertical team about how they see this particular space or this particular asset. We're going to talk about some of the risks associated with this business to compare and contrast that with what we're seeing in the direct side of the business. And we really like to be able to leverage the insights from a sector perspective from across vertical teams and to have that bleed over into the secondary modeling and secondary pricing. And so that's the reason why we have kept our secondary strategies embedded within our overall asset classes. And it's a different approach. It's probably an approach that's less focused on scale, and it's a little bit more focused on track record, and we do have one of the strongest track records in the space. Second question, [ all ] maybe defense.

So actually, defense in the last 18 months due to the happenings, we got more and more interest from our clients, our mandate clients in this sector and specifically when it's defense and offense. Now you might say the space is already a little bit crowded. I mean you have seen public markets rising. So what we actually are doing is one of our themes that we go very deep right now. And what we look is at the second and third line of opportunities that kind of are serving that space. So the first line, the defense industry is probably overhyped. But who are the suppliers, who are technologies in the background, services in the background. That's what we are looking at with a good team.

And that, by the way, is not an uncommon for us -- a way for us to invest. And so if you think about like the broader AI trend, we do have some very targeted data center investments that we've made, but we also have a number of areas where derivative strategies. We have 4 different platforms that we've invested in, in the heating, ventilation and air conditioning space that kind of tie into the broader topic of cooling and energy efficiency and things like that, not as a direct exposure to the space, but as a, let's call it, derivative exposure.

Miguel [indiscernible] from Lighthouse. Just one question on the infra space. The returns that you have achieved are very, very impressive. But if we look at the makeup of the infra universe, there is quite a large chunk in which you are subject to regulation and regulated returns. Do you think it's sustainable to maintain that very impressive IRR?

Esther, do you want to speak to the return profile?

Thank you. A couple of comments there. I think infrastructure, as you look at the evolution of the asset class, it's moved from traditionally 20, 25 years ago being regulated assets and then a private financing model coming in to take over a public duty to build, enhance and operate the asset to today's world, which is much more complex and more diversified when you look at the income streams you generate off an infrastructure asset and also has a number of, I guess, broader risks on the one hand and an opportunities to earn a return on the other hand. And if you really pare back to sort of infrastructure market from a risk profile, then traditionally, the most risk-averse part of the market has sought to maximize its exposure to regulated cash flow stream. So when you hear people talk about core infrastructure investments, you will typically see them back in directly regulated returns. The way we've looked at that space, also a bit the base of the research and the thinking we're doing, we actually saw comparatively more risk in that part of the overall investment universe than the market consensus or to suggest because ultimately, regulation will need to always balance between a ride of an asset owner to make a profit and the ability of the society to pay for it. And that's why historically, our portfolio was relatively low on directly regulated exposures. And where we have taken them, one good example is a distributed heating platform we have in the Baltics and the Nordics that we've expanded into U.K. That has a regulated asset base as a primary sort of foundational aspect. But then we've used the cash flows from the regulated base to enhance and diversify that business into industrial offtake as well. So basically long-term contracts with industrial counterparties to expand into new geographies and to tag on existing additional regulated assets in quite an efficient manner. And that way, you can move from a regulated return that caps your overall return on the assets, say, 7% or 8% and then through an appropriate capital structure, you uplift that to maybe a low double-digit equity return through adding all these additional components onto the infrastructure asset, you can generate sort of a profitability return on the capital you're employing that's more commensurate in the sort of 14%, 15%, 16%, 17% return range. And then you look at the types of buyers that would like to own these assets going forward. And they're willing to pay an additional premium for the right to continue to tapping into these interesting unit economics, the diversified asset base and the diversified business model. And that helps drive an extra premium on top of those returns. And I do think that thinking going forward will remain essential for the infrastructure universe, not just part of the overall industry as well because the world where you can make money on the back of outperforming significantly to a regulated allowable return without delivering industrial bottom-up value to the assets themselves, I think those are well over. And we saw that, for example, here in the U.K. with the water industry, right, where there's actually been a consecutive number of trades between different equity holders and increasing premium to the regulated asset base, but the operations are somewhat challenged. I mean there will be a point where the regulator steps in and needs to take, I think, corrective measures. So those are the types of exposures that I think going forward to be well advised to avoid. So in short, we're striving to continue to perform in that way whilst also maintaining an appropriate social license to operate.

I must admit you're very patient. You must be hungry. This is amazing. Should we have a last question or should we....

I don't want to stop. I thought...

Anyone not hungry enough and still wanting more information on PG? And I think we can close it here and welcome everyone for lunch upstairs.

Okay. We'd like to thank you for your attention and time. This is indeed a very interesting market opportunity, one that does have its volatility, right, but one that also presents significant opportunities. And hopefully, we've been able to frame how we're looking at those opportunities for you today. We'll wrap up the Q&A portion, and then we'll move upstairs for lunch. Thank you very much.

Thank you for the time.

Thank you for this.