Perpetual teams up with Partners Group on public-private funds

Perpetual has signed a letter of intent with global private markets giant Partners Group to explore new investment products that combine both public and private assets.

In a statement on 10 June, Perpetual said the collaboration will see its asset management arm team up with Partners Group’s Australian operations to evaluate opportunities, such as listed investment trusts, co-investments and innovative fund structures.

Partners Group, which has US$152 billion ($233 billion) in assets under management, brings deep experience across private equity, infrastructure, real estate, royalties and credit.

Bernard Reilly, CEO of Perpetual, said the partnership reflects Perpetual’s strategic focus on evolving its product range with contemporary and in-demand investment solutions.

“This new relationship with Partners Group aligns with our strategic intent of bringing innovative solutions to our clients and continuing to evolve our product suite to provide contemporary, high quality and in-demand investment solutions for our client base,” he said.

“Combining Perpetual’s expertise, knowledge and connections as an Australian equities investor, together with Partners Group’s significant local and global reach in private markets including private equity, infrastructure, real estate, royalties and credit, provides the opportunity to explore products that give investors access to asset classes across both public and private markets within a single product, which is a strategic relationship among the first of its kind in the Australian investment industry.”

Martin Scott, Partners Group’s head of Australia, highlighted the growing influence of private markets in the economy and described the partnership as a significant step for the firm’s regional strategy.

“Partnering with Perpetual, one of the flagship brands in Australian equities investing, to explore new investment strategies that combine public-private assets for Australian investors is an exciting step for our business in the region and one that reflects the increasing role played by private markets in the real economy,” he said.

Perpetual’s head of equities, Vince Pezzullo, added that the collaboration could enable investors to participate across a company’s life cycle and also for investors to benefit from exposure to different parts of the capital structure.

“Potential solutions could also allow for dynamic reallocation between the investment sleeves over time and make use of liquidity and market events to add additional value to client portfolios,” said Pezzullo.

Both parties will now undertake market testing to gauge investor appetite and refine potential product offerings, marking a move towards more integrated investment approaches in Australia’s evolving market landscape.

The collaboration between Perpetual and Partners Group aligns with the broader trend of increasing retail access to private markets – which has been particularly pertinent in the US where Partners Group in September teamed up with BlackRock to launch a new multi-asset class model portfolio solution.

“This first-of-its-kind solution will provide simplified access to private equity, private credit and real assets through a single managed account. Investors will be able to choose from three risk profiles to determine allocations to different BlackRock and Partners Group funds,” Partners Group said at the time.

Others moving to capitalise on retail investor demand for private market exposure include Blackstone partnering with Vanguard, Apollo teaming up with State Street, and more recently, Capital Group and KKR announcing the creation of a new hybrid public-private investment category. 

Namely, in April, Capital Group and KKR announced the launch of two public-private investment solutions in the US – each packaged as an interval fund with a 60 per cent investment in public fixed income and 40 per cent in private credit – aimed at enabling retail investors access to private markets.

Commenting on the launch at time, Capital Group CEO Mike Gitlin said the firm – which has been present in Australia since 2011 – is working on “the best way” to bring public-private solutions to clients outside the US.
“Expanding access to private markets is much more than two public-private credit solutions. A joint, cross-company project team is already working on public-private equity solutions,” Gitlin said.

“We’re discussing how we can bring public-private model portfolio solutions to our clients. We believe there is a role for private market solutions in retirement, including target date strategies.”