Partners Group Navigates Short Seller Storm While Overhauling Financial Reporting

The Swiss private equity heavyweight is juggling multiple challenges as it heads into its annual general meeting next month. A scathing report from US short seller Grizzly Reports has put the firm's valuation practices under the microscope, while management simultaneously rolls out a new accounting standard that will reshape how investors read its financial statements.

Defending the Portfolio

Grizzly Reports launched a blistering attack on Partners Group's business model, zeroing in on how it values its portfolio holdings. The firm has dismissed the report as defamatory and is exploring legal action for market manipulation. One of the key points of contention: the short seller claimed open-ended evergreen funds account for nearly half of the company's revenue. Partners Group counters that the real figure is 34 percent. The firm also disputes Grizzly's assessment of its software exposure, which it says is roughly ten percent of the portfolio, not the higher number alleged.

The stock initially wobbled on the news but has since steadied. Shares changed hands at around 964 euros on Wednesday, sitting precisely on their 50-day moving average. Despite the stabilization, the stock has shed roughly twelve percent since the start of the year and trades nearly ten percent below its 200-day line of 1,070 euros.

Deal Flow Slows as Caution Prevails

Operationally, the Zug-based firm is tapping the brakes. New investments in the first quarter totaled just 2.8 billion US dollars, reflecting the uncertain market environment. At the same time, Partners Group returned 5.7 billion US dollars to clients, mostly from successful exits in private equity and infrastructure projects.

Should investors sell immediately? Or is it worth buying Partners Group?

Fundraising activity tells a different story. The company secured 8.3 billion US dollars in capital commitments during the first quarter, and management has reaffirmed its full-year target for gross new money inflows of between 26 and 32 billion US dollars. That target builds on a strong 2024, when the group posted a net profit of 1.26 billion Swiss francs. The longer-term ambition remains intact: Partners Group aims to grow assets under management to 450 billion US dollars by 2033.

A New Way of Reporting

Starting this year, Partners Group is adopting IFRS 18, a revised accounting standard that will change how performance fees appear in the books. Under the new rules, performance fees will be bundled together with investment income under a single line item called "Performance Income." Management expects this category to eventually account for up to 40 percent of total revenue.

For shareholders, the shift complicates year-over-year comparisons. Quarterly results will no longer align neatly with historical data. For 2025, the company anticipates Performance Income at the lower end of its target range, as some lucrative transactions were pulled forward into the prior year.

Partners Group at a turning point? This analysis reveals what investors need to know now.

Dividend Vote on the Horizon

All eyes now turn to May 20, when Partners Group holds its annual general meeting. The board has proposed a dividend of 46.00 Swiss francs per share for the past financial year, representing a roughly ten percent increase from the prior year. Shareholders must approve the payout, which would then go ex-dividend on May 22, with funds landing in investor accounts on May 27.

Before that, the company closes its share register on May 8, determining who is eligible to vote at the AGM.

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