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Goldman Sachs downgraded Partners Group Holding AG (PGHN:SW) (OTC:PGPHF), a $32 billion market cap alternative asset manager, from Buy to Neutral on Wednesday, while lowering its price target to CHF1,150.00 from CHF1,250.00. According to InvestingPro data, the stock has declined over 15% in the past six months, with current analysis suggesting the stock is trading near its Fair Value.
The investment bank cited more demanding consensus estimates for Partners Group compared to European Alternative Asset Manager peers, highlighting concerns about further performance fee downgrades and a potentially challenging outlook for management fees.
Goldman Sachs noted that additional downgrades to performance fees could lead to dividend per share reductions, as the current consensus dividend is not covered by the firm’s earnings per share estimate for 2025. The bank considers it unlikely that Partners Group would maintain a payout ratio exceeding 100% this year.
The downgrade also reflects downside risks from softer private wealth inflows, with management acknowledging recent delays in subscriptions. Goldman Sachs pointed to slower progress on the BlackRock (NYSE:BLK) partnership as another concern.
Currency headwinds from a weaker U.S. dollar versus the Swiss franc were identified as an additional risk factor that Goldman Sachs believes is being underestimated in current market expectations for the Swiss-based alternative asset manager.
In other recent news, Citi analysts have downgraded Partners Group Holding AG from a Buy to a Neutral rating. The price target for the company has been lowered from CHF 1,470 to CHF 1,120. This revision is due to concerns over geopolitical volatility that may impact the firm’s fundraising and asset management growth. Analysts noted that while Partners Group has strong portfolio management capabilities and a focus on direct investing, geopolitical tensions could affect fundraising efforts, especially in fiscal year 2025. Additionally, the company faces potential challenges from an increase in evergreen fund redemptions and weaker performance, which could slow the growth of its assets under management. Partners Group’s revenue, heavily tied to the U.S. dollar, also makes it susceptible to currency fluctuations. The firm had previously benefited from merger and acquisition options, but this is now seen as less likely due to the recent devaluation of shares. Citi’s adjusted estimates also consider currency exchange factors and a higher discount rate, reflecting increased risk aversion among investors.
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