This article was originally written by dividinde on 4 August 2017 and updated with current data in March 2026.
Partners Group: a profitability benchmark in private equity
While I systematically avoid investing in traditional large banks such as UBS, there are other Swiss financial stocks that deserve close attention. Partners Group (PGHN) is unquestionably one of those remarkable exceptions. This Zug-based firm, specialising in alternative investments, has built a business model diametrically opposed to that of conventional banks — with a profitability that has commanded respect since its founding.
Following a steep stock market correction of -38.6% over the past 12 months, it is time to revisit this analysis and assess whether the stock now represents a genuine opportunity — or whether market concerns are fully warranted.
A strategic positioning in private markets
In an environment where institutional investors — sovereign wealth funds, pension funds, insurance companies — are searching for decent returns, Partners Group holds a leading position among global alternative asset managers. The firm has established itself as the world's fifth-largest private equity manager, with USD 174 billion in assets under management spread across four main asset classes:
- Private equity: 51%
- Private debt: 20.7%
- Private infrastructure: 18%
- Private real estate: 10.2%
This diversification smooths risk while maintaining exposure across the full economic cycle through private markets.
A business model with exceptional margins
Partners Group's business model rests on two complementary pillars: recurring management fees that generate a stable, predictable revenue base, and performance fees that create significant leverage upon successful exits. For the fiscal year ended 31.12.2025, total revenues reached CHF 2,804.40 million, up 18% year-on-year.
The operational profitability is simply outstanding:
| Metric | PGHN (TTM) | Industry (TTM) |
|---|---|---|
| Gross margin | 91.40% | 71.67% |
| Operating margin (EBIT) | 57.66% | 23.71% |
| Net margin | 44.95% | 16.98% |
These ratios are hard to match across any industry. Net profit for the fiscal year ended 31.12.2025 reached CHF 1,260.70 million, up 11.8% year-on-year. This operational efficiency stems from rigorous investment selection and a well-controlled cost structure.
Capital returns and leverage
The TTM ROE stands at 54.8% — an impressive figure, but one that requires careful interpretation. Since 2017, short-term debt has grown significantly, mechanically inflating ROE without the underlying profitability of the business improving to the same extent. The debt-to-equity ratio stands at 1.14, compared with just 0.18 for the sector average. However, interest coverage remains very comfortable at 30.3x, which largely mitigates the financial risk.
A solid dividend policy, but one to watch
Partners Group's dividend policy reflects the strength of its model. The 2024 dividend (paid in 2025) amounts to CHF 42 per share, up 7.7% from the CHF 39 paid the previous year. Even more notably, the dividend has never been cut in nearly 20 years — demonstrating rare stability even through periods of market turbulence.
Over five years, annualised dividend growth reaches 10.49%, more than double the sector average (4.94%). At the current price of CHF 824.60, the yield works out to 5.09% — an attractive level, close to the industry average (5.27%).
It should be noted, however, that the payout ratio stands at 86.61% (TTM), having risen sharply since Covid. This high proportion mechanically limits the scope for future dividend increases and warrants close monitoring should earnings come under pressure.
Stock performance: a major correction since 2021
When dividinde analysed Partners Group in 2017, the stock traded at CHF 610. His forecast of CHF 800–850 within 12 to 24 months not only materialised, but was far surpassed. The stock subsequently delivered an extraordinary run, peaking above CHF 1'500, before being hit by rising interest rates.
Today, Partners Group trades at CHF 824.60 (March 2026). The 52-week performance stands at -38.62%, and -20.02% over 26 weeks. This correction reflects both the normalisation of valuations for alternative asset managers and persistent macroeconomic uncertainty. With a beta of 1.26 and annualised volatility of 31.46%, PGHN remains a clearly high-volatility stock.
Despite these recent declines, the long-term track record remains impressive: since its IPO, the stock has delivered approximately 12% per year in total return — roughly double the MSCI Switzerland index.
Strategic expansion and the BlackRock partnership
Partners Group is not resting on its laurels. In 2024, the firm achieved a strong fundraising year with USD 22 billion in new client commitments (+22% vs 2023), supported in particular by a strategic refocus on the US market, which accounted for 33% of fundraising.
The announcement in September 2024 of a partnership with BlackRock marks a significant turning point. This collaboration aims to create joint investment solutions for private investors, a segment that Partners Group is actively targeting. The tie-up with the world's largest asset manager substantially reinforces PGHN's commercial credibility in the US market.
Valuation: a mixed picture
With a market capitalisation of CHF 21.36 billion and a sharply lower share price, Partners Group's valuation warrants careful analysis. The table below summarises the main ratios against 2017 levels and current sector averages:
| Ratio | PGHN 2026 | Industry 2026 | PGHN 2017 |
|---|---|---|---|
| P/E (TTM) | 16.96 | 23.21 | 28.9 |
| P/S (TTM) | 7.66 | 5.75 | 13.98 |
| P/FCF (TTM) | 14.82 | 15.91 | 28.46 |
| P/B (last quarter) | 9.82 | 1.57 | 10.6 |
The picture is nuanced. On an earnings basis, Partners Group now trades at a discount to its industry average (P/E 16.96 vs 23.21) — an unprecedented situation in my coverage of this stock. The P/FCF (14.82) is now slightly below the sector average (15.91), which also represents a radical shift. These moves are a direct result of the share price correction rather than any deterioration in fundamentals, as the 2025 results are solid. The P/S remains above the industry (7.66 vs 5.75), consistent with significantly superior margins.
The key concern remains the price-to-book ratio (P/B) at 9.82 versus 1.57 for the industry — six times higher. This is, however, a structural characteristic of alternative asset managers: their value lies in their teams, reputation and deal access, not in tangible assets. That said, it does not offset the absence of a margin of safety for a strict value investor.
Finally, a Piotroski F-Score of 5/9 signals adequate — if not outstanding — financial strength, while an Altman Z-Score of 5.46 sits well above the distress threshold, confirming an overall sound financial position.
Frequently asked questions about Partners Group (PGHN)
What is Partners Group's dividend yield in 2026?
At the current price of CHF 824.60 (March 2026), the yield works out to 5.09% based on the annual dividend of CHF 42. This level is close to the sector average (5.27%) and attractive in absolute terms. It should be noted, however, that the payout ratio exceeds 86% (TTM), leaving limited headroom should earnings decline.
Why has Partners Group's P/E fallen below the industry average?
The -38.6% share price correction over 12 months has mechanically compressed valuation ratios. With a TTM P/E of 16.96 versus 23.21 for the industry, Partners Group now trades at a discount on this metric for the first time. This reflects market concerns about fundraising prospects and interest rate sensitivity, rather than any deterioration in operating fundamentals: 2025 results show 18% revenue growth and 11.8% net profit growth.
Is Partners Group's high ROE reliable?
The TTM ROE of 54.8% is impressive, but should be interpreted with caution. Part of the rise since 2017 is mechanical: a significant increase in short-term debt inflates the return on equity without the underlying business profitability improving to the same degree. Interest coverage at 30.3x mitigates the financial risk, but vigilance remains warranted.
Is Partners Group a value or growth stock?
Partners Group has a hybrid profile. On an earnings and free cash flow basis (P/E 17, P/FCF 15), valuation is now reasonable — even attractive relative to the sector. On a book value basis (P/B 9.82), it remains prohibitive for strict value investors. Five-year dividend growth of 10.49% per year and the US market expansion story give it more of a quality growth character than a value one.
What is the main risk for Partners Group shareholders?
The primary risk is interest rate sensitivity: a prolonged rate rise penalises private equity valuations and reduces the relative appeal of this asset class. The high payout ratio (86.6%) is a secondary risk: sustained earnings pressure could force the company to freeze its dividend. The stock's high volatility (31.46% annualised, beta 1.26) should also be factored in for defensively minded investors.
Conclusion
Partners Group remains one of the most profitable financial companies on the Swiss stock exchange, with operating margins of close to 58%, net profit up 11.8% for fiscal year 2025, and a dividend that has grown uninterrupted for nearly 20 years.
The -38.6% share price correction over 12 months has materially transformed the valuation profile. For the first time, PGHN's P/E sits below its industry average (16.96 vs 23.21), and the P/FCF is now slightly below the sector. These are signals that long-term followers of this stock should not ignore.
The P/B of 9.82 nonetheless remains six times the sector average, indicating that the margin of safety is still insufficient for a pure value investor. The high payout ratio (86.6%) and increased financial leverage are additional factors to weigh carefully.
For investors seeking exposure to private markets through a listed, high-quality vehicle, Partners Group offers a rare combination of growth, profitability and rising dividends — at a valuation that is now considerably more reasonable than it has been for years. Value investors will likely remain more cautious.
🔗 Find Partners Group in our Investor Game
Sources and data
- Financial data: FactSet (fiscal year ended 31.12.2025)
- Partners Group – Official press releases
- Partners Group – Annual reports and investor publications
- Wikipedia – Partners Group (general data)
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