Partners Group's Data-Centre Bet Arrives as Fee Forecast Cuts Cloud the Picture

Partners Group trims performance fee guidance to 20-25% of income after H1 profit fell 13%, while closing a $4B atNorth data-centre deal.

The Swiss private markets firm has spent the past fortnight sending investors a decidedly mixed message. On one hand, it closed a $4 billion acquisition of Nordic data-centre operator atNorth alongside CPP Investments and Equinix, taking a stake of up to 10 percent in the business. On the other, its slashed outlook for performance fees has left the market questioning just how much juice remains in this year's earnings stream.

The atNorth transaction, announced on Wednesday, marks the latest deployment from Partners Group's infrastructure secondaries strategy. Data centres have emerged as one of the more resilient beneficiaries of the cloud and artificial-intelligence buildout, even as the wider private-markets complex wrestles with AI-driven disruption across parts of its loan book. The company offered scant detail on atNorth's specific growth trajectory, but the purchase fits a pattern of selective secondaries buying in infrastructure themes with structural tailwinds.

That strategic logic, however, is doing little to steady the share price. The stock closed at 709.20 euros, leaving it just 3.3 percent above its 52-week low — a measure of how forcefully the recent selling wave has compressed valuations. The leadership reshuffle unveiled last Wednesday, under which David Layton moves to chief investment officer while Roberto Cagnati and Juri Jenkner step up as co-CEOs from the start of 2027, has done little to arrest the drift; the shares have shed 0.8 percent since that announcement.

Fee Income Takes the Strain

The root of investor unease lies in the half-year numbers published last week. Total revenues slipped 7 percent to 1.12 billion francs, with net profit falling 13 percent to 502 million francs. The culprit is unmistakable: performance fees — the carried-interest-style income that swells when underlying funds outperform — collapsed 39 percent to 216 million francs.

Management fees, by contrast, proved their worth as the more dependable leg of the model, advancing 6 percent in franc terms to 905 million francs (or 12 percent before currency effects). That distinction matters because the company has now formally walked back its full-year guidance for performance income. Where management previously pointed to performance fees contributing 25 to 40 percent of total income, it now expects a range of 20 to 25 percent — a revision that Reuters flagged as landing with particular weight among investors, given how directly it bears on earnings quality for the current year.

Group EBITDA still contracted 9 percent to 706 million francs, though the margin held firm at 63 percent. The company reaffirmed its capital-commitments guidance of $26 billion to $32 billion for the full year, alongside the $16 billion in fundraising it clocked during the first half.

A Sector Under Scrutiny

The disappointment is not Partners Group's alone. Peers including KKR, Blackstone and Blue Owl have all felt the chill of investor scepticism, with analysts pointing to artificial intelligence as a disruptive force across swathes of the private-credit market. Estimates suggest 25 to 35 percent of that market — particularly exposures to software companies — is directly or indirectly vulnerable to AI-related risks. For a firm of Partners Group's scale in alternative assets, that is a shadow extending well beyond its own financial statements.

UBS had already signalled its caution back in July, downgrading the stock from "Buy" to "Neutral" and slashing its price target from 1,175 to 705 francs, citing negative earnings momentum and the risk of further gating measures at mature evergreen funds — vehicles without fixed maturity dates where redemption restrictions can bite.

Deal Flow Continues Apace

None of this appears to be slowing the investment machine. August brought the close of an Asia-focused private-credit mandate worth $1 billion with an institutional investor — the latest in a run of more than five such mandates with large Asian investors over the past year, including 800 million euros committed by a regional sovereign wealth fund.

The atNorth acquisition, meanwhile, underscores that secondaries activity remains a core tool for building out positions in high-growth infrastructure themes without the auction-process competition of primary deals. For investors, the calculus is now straightforward: operational continuity and deal execution are demonstrably intact, but the trimmed performance-fee forecast has injected a fresh dose of caution into the near-term earnings debate. The market's verdict on which force wins out will have to wait until the fourth-quarter figures arrive on 16 March 2027.