Key insights
- News of Partners Group restricting withdrawals from its private equity fund due to redemption requests has triggered a significant premarket sell-off in major private equity firms like KKR, Blackstone, and Ares Management. This highlights growing investor concerns over liquidity and asset valuations in the private markets, potentially signaling broader risk aversion and impacting investor sentiment towards publicly traded alternative asset managers.
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Shares in KKR, Blackstone and other sector peers tumbled in premarket trading on Wednesday as fears over private market valuations returned to the spotlight after Switzerland’s Partners Group moved to restrict investor withdrawals from one of its funds.
Shares in KKR were sharply lower ahead of the opening bell, and were last seen 4.7% lower. Blackstone was down 3.9%, while Ares Management dropped almost 2.5%.
Blue Owl Capital’s shares slipped 2.7%, as Carlyle Group edged lower to the tune of 3.1%.
Shares in Partners Group — the Swiss asset management giant active in private equity, private credit, infrastructure and real estate markets — plunged 16.6%, reaching a 52-week low on Wednesday.
The Zurich-listed firm has moved to curb investor redemptions in its Global Value SICAV fund, an $8.6 billion so-called ‘evergreen’ private equity vehicle, at 5% of net asset value, after redemption requests hit 9.8%, according to a Bloomberg report.
The fund represents about 4.8% of Partners Group’s total asset base.
David Layton, Partners Group CEO, told Bloomberg that the redemption pressure seen in private credit is now spreading into other asset classes.
The cap chimes with similar measures taken by several U.S. private equity outfits in recent months, where firms have halted or restricted investors from pulling out their money, amid a growing rush for the exits.
Retail investors have sought to redeem their money amid growing concerns over liquidity mismatches and deteriorating asset quality in private fund structures.