Partners Group's Redemption Crisis Sends Stock to Six-Year Low, Yield Swells to 6.4%

The Swiss asset manager has found itself caught between an enviable long-term track record and an acute liquidity shock that has wiped nearly a third off its share price this year. The trigger was a decision in early June to cap redemptions in its flagship Global Value SICAV, a move designed to protect remaining investors but which instead triggered a brutal sell-off.

Redemption requests for the fund had reached 9.8% of its net asset value, far exceeding the quarterly limit of 5%. At a separate US vehicle, the proportion hit around 6%. The firm was forced to block exits, arguing the fund held sufficient cash and that the step was purely protective. The market disagreed. On June 3, the stock plunged 16% in a single session, hitting its lowest level in six years. At a current price of €763.20 (or the equivalent in Swiss francs), the year-to-date loss stands at roughly 30%.

For income hunters, however, the crash has thrown up a rarely seen anomaly. The last dividend of CHF 46 per share now yields a punchy 6.4% – an outlier for a financial services stock. Over the past decade, Partners Group has raised its payout by an average of almost 20% annually. But with the company already distributing more than 90% of its earnings, there is scant room for operational missteps.

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

Analysts are split on whether the sell-off is overdone. Zürcher Kantonalbank called the one-day rout exaggerated, noting that the redemptions in question amount to less than 1% of total assets under management. Others have trimmed their targets: Vontobel cut its price target to CHF 960, while Julius Bär lowered its to CHF 1,200. Still, most maintain buy ratings, citing an operating margin above 60% and a near-total conversion of operating cash flow into free cash flow.

Management is sticking to its full-year guidance of gross new money inflows between $26 billion and $32 billion. But the Evergreen funds are weighing on net growth. The firm expects a slowdown of up to two percentage points in the growth of assets under management starting in the second half of this year, with a similar drag likely to carry into next year.

Investors will get their first hard update on the situation at the end of June, when Partners Group publishes month-end AUM figures. A more comprehensive mid-July update follows, with half-year results due on September 1. The technical picture already reflects extreme pessimism: the relative strength index stands at 25.8, deep in oversold territory. That alone does not signal a recovery, but it does suggest the selling may have run its course for now. Whether the redemption pressure has eased – and whether the dividend can remain on its upward trajectory – will determine if the stock can claw back some of its losses.

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