REG - Petershill Prtnrs - Q3 2024 Trading Update
19/11/2024 07:00
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RNS Number : 6927M Petershill Partners PLC 19 November 2024
Petershill Partners plc (the "Company" or "Petershill Partners"), today
publishes its Q3 trading update for the quarter ended 30 September 2024
Gross Fee-eligible AuM raise of $9 billion for the quarter and $23 billion
year to date
Highlights
· Aggregate Partner-firm AuM of $328bn and Aggregate Fee-paying
Partner-firm AuM of $233bn, decreasing 1% and 2% during the quarter
respectively, including the impact from the disposal of the stake in LMR
Partners. Aggregate Partner-firm AuM and Aggregate Fee-paying Partner-firm AuM
increased 8% and 18% year-over-year, respectively.
· In the third quarter, Partner Fee Related Earnings (FRE) were $57m, 8%
higher than in Q3 2023 reflecting Net Management and Advisory Fees of $97m, 7%
higher than Q3 2023 and Partner Fee Related Expenses of $40m, 5% higher than
in Q3 2023.
- Management fees during Q3 2024 were $96m, 1% lower than in Q3
2023. Transaction and Advisory Fees were $5m in Q3 2024, compared to zero in
Q3 2023, and Offsets in Q3 2024 were ($4m) compared to ($6m) in Q3 2023.
· Partner Distributable Earnings in the third quarter were $90m, 13%
higher than in Q3 2023 reflecting higher Partner FRE of $57m ($53m, Q3 2023),
Partner Realised Performance Revenues (PRE) of $23m ($14m, Q3 2023) and lower
Partner Realised Investment Income of $10m ($13m, Q3 2023).
· Transaction activity during Q3 2024, included the completion of the
disposal of the stake in LMR Partners for total nominal consideration of up to
$258m, with the accounting fair value of the sale consideration at closing
marginally above the carrying value of the investment in LMR Partners as at 31
December 2023 which was $195m.
· Subsequent to the quarter end:
- On 13 November 2024, the Company completed a partial sale of its
stake in Accel-KKR (AKKR), consisting of the entirety of its balance sheet
investment capital and a small portion of FRE and PRE interests. The total
nominal consideration was $282m, compared to the carrying value of the
interests being sold of $253m as at 30 June 2024;
- Special dividend of 17.5 cents per share, equivalent to $189m to be
paid on 20 December 2024 to shareholders on the register as at close of
business on 22 November 2024, with ex-dividend date of 21 November 2024.
· During 2024, the aggregate nominal consideration due from sales of
stakes in Partner-firms has amounted to $575m relative to a carrying value of
assets disposed of $483m, a premium of approximately 19%.
· During 2024, $449m of total capital return has been announced,
taking the total capital return paid and announced since the beginning of 2022
to $888m. Since the beginning of 2022, our Partner-firms have raised total
gross fee-eligible AuM of $106bn, in a generally slower fund-raising
environment for the industry, with asset-raising meeting or exceeding our
guidance in each of the last 3 years.
· We now expect 2024 organic fee-eligible AuM raise to be at the top
end of the previous 2024 guidance range of $20-25bn and realisations to
slightly exceed the previous guidance range of $5-10bn in fee-paying AuM. We
reiterate the rest of our 2024 guidance as provided at our interim results on
17 September 2024.
Statement from Ali Raissi-Dehkordy and Robert Hamilton Kelly
"During the first nine months of 2024, we are pleased with our Partner-firms'
ability to raise $23 billion of fee eligible assets, despite the slower
fund-raising environment. The robust asset raising and growth in Fee-Paying
AuM has translated into good growth in FRE during the first nine months of
2024. Strategically during the quarter, we made strong progress with the
completion of the disposal of LMR Partners and subsequent to the quarter end
we completed the partial sale of predominately balance sheet investment
capital in AKKR. These disposals are consistent with our strategy of focusing
on high quality management fee centric earnings while also demonstrating our
ability to realise assets at attractive valuations relative to their holding
values. As we look forward, our Partner-firms' robust capital raising and the
Company's dynamic approach to capital allocation underpin our ongoing
confidence about our prospects for shareholders."
AuM Development: Q3 2024
The following table summarises the changes in Aggregate Partner-firm AuM,
Aggregate Fee-paying Partner-firm AuM and Ownership Weighted values for the
quarter ended and the nine-month period ended 30 September 2024. All AuM
figures are based on a one-period (3-month) lag:
Quarter ended 30 September Nine months ended 30 September
(US$bn unless otherwise indicated) AuM Fee-paying Ownership Weighted Aum Ownership Weighted Fee-paying AuM AuM Fee-paying Ownership Weighted Aum Ownership Weighted Fee-paying AuM
AuM AuM
Aggregate AuM Prior Period ($bn) 332 238 40 30 304 221 37 28
Inflows ($bn) 9 10 1 - 25 24 2 2
Realisations ($bn) (3) (3) - - (11) (11) (1) (1)
Investment performance ($bn) 1 (1) - - 7 (1) 1 -
M&A ($bn) (11) (11) (2) (2) 3 - - (1)
Aggregate AuM Current Period ($bn) 328 233 39 28 328 233 39 28
AuM Reconciliation: Aggregate Fee-paying AuM Vs Aggregate Partner-firm AuM
The below table reconciles Aggregate Fee-paying Partner-firm AuM to Aggregate
Partner-firm AuM as at 30 September 2024, based on a one-period (3-month) lag:
Q3
($bn unless otherwise indicated) 2024
Aggregate Fee-paying Partner-firm AuM ($bn) 233
AuM not yet paying fees ($bn) 8
Fee Exempt AuM ($bn) 24
Investment performance ($bn) 63
Aggregate Partner-firm AuM ($bn) 328
The following table reflects the Aggregate Partner-firm AuM, Aggregate
Fee-paying Partner-firm AuM and Ownership Weighted Fee-paying AuM by Asset
Class as of 30 September 2024, based on a one-period (3-month) lag:
Asset Class ($bn unless otherwise indicated) AuM Percentage Fee-paying Percentage Ownership Weighted Fee-paying AuM Percentage
AuM
Private equity ($bn) 213 64% 137 60% 12 43%
Private credit ($bn) 58 18% 50 21% 5 18%
Private real assets ($bn) 42 13% 31 13% 8 29%
Absolute return ($bn) 15 5% 15 6% 3 10%
Total Current Period ($bn) 328 100% 233 100% 28 100%
2024 Guidance
· Organic fee-eligible AuM raise at the top end of the previous
guidance range of $20-25bn. Realisations to slightly exceed the previous
guidance range of $5-10bn in fee-paying AuM.
· $200 - $230 million full year Partner FRE (unchanged).
· PRE of 15% - 30% of total Partner Revenues (unchanged).
· Acquisitions in 2024 expected to be in-line with medium-term
range of $100 - $300 million per annum (unchanged).
· 85-90% Company Adjusted EBIT margin (unchanged).
Contact Information
Please direct any questions to Petershill Partners Investor Relations, via
e-mail, at PHP-Investor-Enquiries@gs.com
(mailto:PHP-Investor-Enquiries@gs.com)
Analyst / Investor
enquiries:
Gurjit Kambo +44 (0) 207 051 2564
Media enquiries:
Brunswick Group phll@brunswickgroup.com (mailto:phll@brunswickgroup.com)
Simone Selzer +44 (0)207 404 5959
Petershill Partners will provide a Q4 2024 AuM update on 17 January 2025
ABOUT PETERSHILL PARTNERS
Petershill Partners plc (the "Company" or "Petershill Partners") and its
Subsidiaries (the "Group") is a diversified, global alternatives investment
group focused on private equity and other private capital strategies. Through
our economic interests in a portfolio of alternative asset management firms
("Partner-firms"), we provide investors with exposure to the growth and
profitability of the alternative asset management industry. The Company
completed its initial acquisition of the portfolio of Partner-firms on 28
September 2021 and was admitted to listing and trading on the London Stock
Exchange on 1 October 2021 (ticker: PHLL). The Company is operated by Goldman
Sachs Asset Management ("Goldman Sachs" or the "Operator") and is governed by
a diverse and fully independent Board of Directors (the "Board").
Through our Partner-firms, we have exposure to $328 billion of Aggregate
Partner-firm AuM, comprising a diverse set of more than 200 long-term private
equity and other private capital funds where capital is typically locked in
over a multi-year horizon. These underlying funds generate recurring
management fees and the opportunity for meaningful profit participation over
the typical 8+ year lifecycles of such funds. We believe our approach is
aligned with the founders and managers of our Partner-firms and, as a result,
allows the Company to participate in these income streams in a way that
provides high-margin, diversified and stable cash flows for our shareholders.
For more information, visit https://www.petershillpartners.com
(https://www.petershillpartners.com) . Information on the website is not
incorporated by reference into this press release and is provided merely for
convenience.
Key Operating Metrics - Definitions
This document contains certain key operating metrics that are not defined or
recognised under IFRS.
The Operator and the Directors use these key operating metrics to help
evaluate trends, assess the performance of the Partner-firms and the Company,
analyse and test dividends received from the Partner- firms and inform
operating, budgeting and re-investment decisions. The Directors believe that
these metrics, which present certain operating and other information in
respect of the Partner-firms, provide an enhanced understanding of the
underlying portfolios and performance of the Partner-firms and are therefore
essential to assessing the investments and performance of the Company.
The key operating metrics described in this section are derived from financial
and other information reported to the Operator by the Partner-firms. The
Operator, with the assistance of an independent accounting firm, performs due
diligence procedures on the information provided by the Partner-firms. It
should be noted, however, that these due diligence procedures do not
constitute an audit.
In addition, each Partner-firm may account for and define certain financial
and other information differently from one another. For example, each
Partner-firm may calculate its fee-paying AuM differently, the result of which
being that the inputs of the Company's Aggregate Fee-paying AuM are not
consistently calculated.
Whilst the operating metrics described in this section are similar to those
used by other alternative asset managers, there are no generally accepted
principles governing their calculation, and the criteria upon which these
metrics are based can vary from firm to firm. These metrics, by themselves, do
not provide a sufficient basis to compare the Partner-firms' or the Company's
performance with that of other companies.
None of Partner Distributable Earnings, Partner Fee Related Earnings, Partner
Realised Performance Revenues or Partner Realised Investment Income are
measures of or provide any indication of profits available for the purpose of
a distribution by the Company within the meaning of section 830 of the
Companies Act 2006, or of any Partner-firm in accordance with the equivalent
applicable rules.
Aggregate Partner-firm AuM
Aggregate Partner-firm AuM is defined as the sum of (a) the net asset value of
the Partner-firms' underlying funds and investment vehicles, and in most cases
includes co-investment vehicles, GP commitments and other non-fee-paying
investment vehicles and (b) uncalled commitments from these entities, as
reported by the Partner-firms to the Operator from time to time and aggregated
by the Operator without material adjustment. This is an aggregated figure
across all Partner-firms and includes Partner-firm AuM outside of the
Company's ownership interest in the Partner-firms.
The Operator and the Directors consider Aggregate Partner-firm AuM to be a
meaningful measure of the size, scope and composition of the Partner-firms, as
well as of their capital raising activities. The Operator uses Aggregate
Partner-firm AuM to inform operating, budgeting and reinvestment decisions.
Ownership weighted AuM
Ownership weighted AuM represents the sum of the Company's ownership stakes in
each Partner-firm's AuM.
Aggregate Fee-paying AuM
Aggregate Fee-paying AuM is defined as the portion of Aggregate Partner-firm
AuM for which Partner-firms are entitled to receive management fees, as
reported by the Partner-firms to the Operator. The principal difference
between Aggregate Fee-paying AuM and Aggregate Partner-firm AuM is that
Aggregate Fee-paying AuM typically excludes co- investment on which
Partner-firms generally do not charge fees and, to a lesser extent, fund
commitments in Partner-firm funds (i) on which fees are only earned on
investment, rather than from the point of commitment and (ii) where capital
has been raised but fees have not yet been activated. This may also include
legacy assets where fees are no longer being charged.
The Operator and the Directors consider Aggregate Fee-paying AuM to be a
meaningful measure of the Partner-firms' capital base upon which they earn
management fees and use the measure in assessing the management fee related
performance of the Partner-firms and to inform operating, budgeting and
re-investment decisions.
Ownership weighted Fee-paying AuM
Ownership weighted Fee-paying AuM represents the sum of the Company's
ownership stakes in each Partner-firm's Fee-paying AuM.
Aggregate Performance Fee Eligible Partner-firm AuM
The amount of Aggregate Partner-firm AuM that is eligible for performance
fees.
Partner Net Management and Advisory Fees
Partner Net Management and Advisory Fees is defined as the Company's aggregate
proportionate share of the Partner-firms' net management fees (as reported by
the Partner-firms to the Operator), including monitoring and advisory fees and
less any management fee offsets, payable by the Partner-firms' funds to their
respective Partner-firms for the provision of investment management and
advisory services.
Certain Partner-firms provide transaction and advisory services, as well as
services to monitor ongoing operations of portfolio companies. Management fees
paid to the Partner-firms may be subject to fee offsets, which are reductions
to management fees and are based on a percentage of monitoring fees and
transaction and advisory fees paid by portfolio companies to the
Partner-firms.
The Operator and the Directors consider Partner Net Management and Advisory
Fees to be a meaningful measure of the management fee-related performance of
the Partner-firms, and the Operator uses this metric to analyse and test
income received from the Partner-firms and to inform operating, budgeting and
reinvestment decisions.
Partner Fee Related Earnings (FRE)
Partner FRE is defined as Partner Net Management and Advisory Fees, less the
Partner-firms' operating expenses, fixed and bonus compensation, net interest
income/(expense) and taxes (but not performance fee-related expenses)
allocable to the Company's share of Partner Net Management and Advisory Fees,
as reported by the Partner-firms to the Operator, and subject to applicable
contractual margin protections in respect of certain Partner-firms.
The Operator and the Directors consider Partner FRE to be meaningful measures
of the management fee-related earnings of the Partner-firms and key
performance indicators of the Company's income from investments in management
companies derived from management fee income. The Operator uses this metric to
analyse and test dividends received from the Partner-firms, as well as to
inform operating, budgeting and reinvestment decisions.
Partner Realised Performance Revenues (PRE)
Partner Realised Performance Revenues is defined as the Company's aggregate
proportionate share of the Partner-firms' realised carried interest
allocations and incentive fees payable by the Partner-firms' funds to their
respective Partner-firms, less any realised performance fee-related expenses
of the Partner-firms allocable to the Company's share of performance
fee-related revenues, as reported by the Partner-firms to the Operator.
The Company's share of the Partner-firms' performance fee-related earnings
will be lower than its share of the Partner-firms' management fee-related
earnings because the Company's ownership stake in the Partner-firms'
performance fee-related earnings is lower than its ownership stake in the
Partner-firms' management fee-related earnings.
The Operator and the Directors consider Partner Realised Performance Revenues
to be a meaningful measure of the performance fee-related earnings of the
Partner-firms and key performance indicator of the Company's income from
investments in management companies derived from performance fee income. The
Operator uses this metric to analyse and test dividends received from the
Partner-firms, as well as to inform operating, budgeting and reinvestment
decisions.
Partner Realised Investment Income
Partner Realised Investment Income is defined as the Company's aggregate
proportionate share of Partner-firm earnings resulting from the realised gains
and losses, or any distributed income, from the investments held on
Partner-firms' balance sheets, as reported by the Partner-firms to the
Operator. Partner Realised Investment Income is also realised by the Company
through a limited number of direct stakes in certain Partner-firms' funds.
Realised Investment Income includes income that has been realised but not yet
paid, as well as amounts that are realised and either fully or partially
reinvested.
The Company's share of the Partner-firms' investment and balance sheet income
will be lower than its share of the Partner-firms' management fee-related
earnings because the Company's ownership stake in the Partner-firms'
investment and balance sheet income is lower than its ownership stake in the
Partner-firms' management fee-related earnings.
The Operator and the Directors consider Partner Realised Investment Income to
be a meaningful measure of the investment performance of certain assets held
by the Partner-firms and key performance indicator of the Company's income
from investments in management companies derived from investment income. The
Operator uses this metric to analyse and test dividends received from the
Partner-firms, as well as to inform operating, budgeting and reinvestment
decisions.
Partner Distributable Earnings
Partner Distributable Earnings is defined as the sum of Partner FRE, Partner
Realised Performance Revenues and Partner Realised Investment Income.
The Operator and the Directors consider Partner Distributable Earnings to be
meaningful measures of the overall performance of the Partner-firms and key
performance indicators of the Company's total income from investments in
management companies. The Operator uses this metric to analyse and test
dividends received from the Partner-firms, as well as to inform operating,
budgeting and re-investment decisions. These measures reflect any contractual
margin protections or revenue share interests that the Company may have with
the Partner-firms, which means that the Partner Distributable Earnings Margin
may differ from the margins achieved by other shareholders or partners of the
Partner-firms.
Partner Revenues
Partner Revenues is defined as the sum of Partner Net Management and Advisory
Fees, Partner Realised Performance Revenues and Partner Realised Investment
Income.
The Operator and the Directors consider Partner Revenues to be a meaningful
measure of the overall performance of the Partner-firms. The Operator uses
this metric to inform operating, budgeting and re- investment decisions.
AuM and Associated Data
The data presented in this document for the following key operating metrics
reflects AuM data reported to the Operator on a three-month lag. This
three-month data lag is due to the timing of the financial information
received by the Operator from the Partner-firms, which generally require at
least 90 days following each period end to present final financial information
to the Operator. The key operating metrics reflected on a three-month lag
are:
• Aggregate Partner-firm AuM
• Aggregate Fee-paying Partner-firm AuM
• Average Aggregate Fee-paying Partner-firm AuM
• Aggregate Performance Fee Eligible Partner-firm AuM
• Average Aggregate Performance Fee Eligible Partner-firm AuM
This announcement has been prepared solely to provide additional information
to shareholders and meets the relevant requirements of the Disclosure Guidance
and Transparency Rules of the Financial Conduct Authority. The announcement
should not be relied on by any other party or for any other purpose.
These written materials are not an offer of securities for sale in the United
States. Securities may not be offered or sold in the United States absent
registration under the US Securities Act of 1933, as amended, or an exemption
therefrom. The issuer has not and does not intend to register any securities
under the US Securities Act of 1933, as amended, and does not intend to offer
any securities to the public in the United States. Any securities of
Petershill Partners plc referred to herein have not been and will not be
registered under the US Investment Company Act of 1940, as amended, and may
not be offered or sold in the United States or to "U.S. persons" (as defined
in Regulation S under the US Securities Act of 1933, as amended) other than to
"qualified purchasers" as defined in the US Investment Company Act of 1940, as
amended. No money, securities or other consideration from any person inside
the United States is being solicited and, if sent in response to the
information contained in these written materials, will not be accepted.
FORWARD-LOOKING STATEMENTS
This press release may contain forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by the
use of forward-looking terminology such as "may," "will," "should," "expect,"
"anticipate," "project," "target," "estimate," "intend," "continue," or
"believe" or the negatives thereof or other variations thereon or comparable
terminology. You should read statements that contain these words carefully
because they discuss our plans, strategies, prospects and expectations
concerning the business, operating results, financial condition and other
similar matters. These statements represent the Company's belief regarding
future events that, by their nature, are uncertain and outside of the
Company's control. There are likely to be events in the future, however, that
we are not able to predict accurately or control. Any forward-looking
statement made by us in this press release is based upon information known to
the Company on the date of this press release and speaks only as of such date.
Accordingly, no assurance can be given that any particular expectation will be
met, and readers are cautioned not to place undue reliance on forward looking
statements. Additionally, forward looking statements regarding past trends or
activities should not be taken as a representation that such trends or
activities will continue in the future. Other than in accordance with its
legal or regulatory obligations (including under the UK Listing Rules and the
Disclosure Guidance and Transparency Rules of the Financial Conduct
Authority), the Company undertakes no obligation to publicly update or revise
any forward-looking statement, whether as a result of new information, future
events or otherwise.
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