Partners : 2023 Annual Results Presentation

Annual Report 2023

2

Table of contents

1. Industry
2. Business
3. Financials

Industry	3

The new 'traditional' asset class: financing the economy

Public and private markets have swapped roles as IPOs have shifted away from the real economy

800	85%
			Transition into new IPO era			Traditional
						The % of IPO-ed businesses
600						with positive earnings has
						shrunk since 19901
400
				The number of IPOs			35%
				globally decreased
200				significantly since 19901
							Opportunistic
	1990	1995	2000	2005	2010	2015	2020

In 2023, IPO volumes remain subdued and now stand just above 10% of

their 2021 levels. IPO'ed firms are still mostly unprofitable.

IPOs as strategic corporate development

• Mature and proven companies from all sectors
• Profitable companies with earnings history

1980s

Private markets are opportunistic, event-driven

• 'Household' consumer and industrial companies
• Usually deriving value from high leverage

Private markets drive the broader economy

• Profitable companies and assets across all sectors
• Long-termorientation with lower leverage

Present

IPOs dominated by "hyped" assets

• Primarily unprofitable focused on speculative growth
• Exit path for venture and growth capital

2023 data confirms our hypothesis that the role public and private markets play in financing the economy is changing

The IPO market remained relatively inactive in 2023, making the last two years among the lowest volume years ever

December 2023

As private investors capture a greater share of

returns prior to going public, public investors may suffer over the long run

July 2023

Toshiba Plans to Go Private in $15 Billion Deal With Japan Investors

VinFast Stock Plunges After EV Maker's Blockbuster Nasdaq Debut

PG to sell CWP, a major Australian renewable energy platform to private investors

1 Earnings per share > 0; Annual data, 9'181 IPOs in total. Dr. Jay Ritter's global dataset of IPOs as of 8 March 2024. Excludes IPOs with an offer price below USD 5 per share, unit offers, ADRs, closed-end funds, partnerships, acquisition companies, REITs, bank and S&L IPO, and stocks not listed on CRSP (CRSP includes Amex, NYSE, and NASDAQ stocks). Note: For illustrative purposes only. There is no assurance that similar investments will be made. Companies have been selected for illustrative purposes. Only Pharmathen and Forterro are Partners Group portfolio companies. Source: Partners Group (2024).

Industry	4

The new 'traditional' asset class: investors' considerations

As private markets overtake public markets, the private markets investor landscape will significantly develop and transform industry DNA

	Private markets capital
1'200	formation has outpaced
global equity issuance
	since 2016 1
1'000
800
600

Private markets at the

start of cycle

Growth from existing institutional investors

Current AUM leans active

Leans active

400

200
0
2010	2015	2020

In 2023, private markets capital formation stood ~ 2.8x higher than equity

issuance, in line with the ~3x gap in 20221

	Growth in allocation from 25		Leans passive
	largest asset managers
	Growth from all other asset managers and			Leans passive
	investors
	Private markets AuM by end of cycle: USD 30 tn		Future AuM leans
		slightly passive

2023 data confirms our hypothesis that private markets are set to grow with new entrants transforming the investment DNA

The ongoing shifts to the broader economy and investing landscape have poised private markets for growth

November 2023

Rowan said firms such as Apollo will squeeze active managers, while the largest players in passive management will continue to grow

December 2023

Vanguard is taking a structured approach to opening private equity access to individual investors

October 2023

1 Projection based on global equity issuance which includes rank eligible, non-convertible IPOs and follow-on equity investments; excludes preferred shares, rights issued, closed-end funds, business development companies, and special purpose acquisition companies. Projection based on global private markets fundraising includes private equity, private real estate, and private infrastructure. SIFMA (2023), Refinitiv (2023), Preqin (2023). Note: For illustrative purposes only. There is no assurance that similar investments will be made. Companies have been selected for illustrative purposes. Source: Partners Group (2024).

course and gone into decline

Over the past 15 years, a consensus has developed that globalization has run its

Industry	5

What truly shapes the private markets investment paradigm in the 'brave new world'?

Recalibration of the macroeconomy?

Geopolitics-drivende-globalization?

US Inflation and Interbank Rates Over Time1

Interbank	What could break under higher-for-
Rate	longer interest rates?

2010

2012

2015

2018

2021

5%

3%

Geopolitical tensions and increasing protectionism are reshaping global investments, threatening to depress growth

As the U.S.- China trade dispute hits another

level, the bigger casualty over the longer term could be the globalization trend

Labor market and demographic dynamics?

US Labor Participation Rate Over Time2

The next generation of technology?

67%

A smaller, older population threatens economic growth

Declining labor participation rate threatens long-term growth

63%

Don't Get Distracted by The Hype Around
Generative AI	36% CAGR

Generative AI Set to Affect 300m Jobs

Across Major Economies

Investors Are Starting To See The Downside

From The Rapid Acceptance Of AI

2000

2005

2010

2015

2020

1 12-month percentage change, Consumer Price Index, All items, monthly, not seasonally adjusted. Historical data ranges from 2010 to 2023. 3-Month or 90-Day Rates and Yields: Interbank Rates. Total for United States, Percent, Monthly, Not

Seasonally Adjusted. Historical data ranges from 2010 to 2023. US Bureau of Labor Statistics (2024), FRED (2024). 2 Labor Force Participation Rate, Percent, Monthly, Seasonally Adjusted. FRED (2024). Note: For illustrative purposes only.

Companies have been selected for illustrative purposes. Source: Partners Group (2024).

Industry	6

Is the recalibration of the macroeconomy a game-changer?

Private markets grow and deliver strong returns across macroeconomic cycles

Private Equity Fundraising, USD tn1

1'000						25.0%
800						20.0%
600						15.0%
400						10.0%
200						5.0%
1990	1995	2000	2005	2010	2015	2020

Funds vintaged in recession years provided strong returns2

Private markets have grown independently of

1. low-rateenvironment3

Inflation has just returned to more normalized historical levels4

Higher financing costs and lower debt availability impact returns…

			Debt level in the capital structure
		30%	35%	40%	45%	50%	55%	60%
Rate	5%	17.1%	17.8%	18.6%	19.6%	20.6%	21.9%	23.5%
7%	16.8%	17.4%	18.1%	18.	19.7%	20.8%	22.1%
Interest	8%	16.6%	17.2%	17.8%		19.2%	20.2%	21.3%
	9%	16.5%	16.9%	17.4%	.0%	18.7%	19.5%	20.5%
	10%	16.3%	16.6%	17.1%	17.5%	18.1%	18.8%	19.6%

…but these impacts are balanced out by lower entry multiples….

				Entry Multiple
		12.5x	12.0x	11.5x	11.0x	10.5x	10.0x	9.5x
Multiple	11.0x	17.9%	19.5%	21.1%	22.8%	24.6%	26.4%	28.3%
10.5x	16.7%	18.3%	20.0%	21.7%	23.4%	25.3%	27.2%
	10.0x	15.4%	17.1%		20.5%	22.2%	24.1%	26.0%
Exit	9.5x	14.1%	15.8%	17.5%	19.2%	21.0%	22.9%	24.8%
9.0x	12.7%	14.4%	16.1%	17.9%	19.7%	21.6%	23.5%

Given the recalibration of entry multiples, the 'Brave New World' represents a very attractive investment context

Partners Group acquired Velvet CARE, one of the leading European manufacturers of branded and private-label hygiene products, for ~ 8.9x TEV / EBITDA Multiple5

Partners Group acquired ROSEN Group, a global technology leader of mission-critical inspection services for energy infrastructure assets, for ~ 12.2x TEV / EBITDA Multiple6

1 Private Equity fundraising inclusive of Venture Capital from 1990 to 2023. Preqin (2024). 2 Benchmark median net IRR returns for all Private Markets Strategies. Preqin (2023). 3 3-Month or 90-Day Rates and Yields on Interbank Rates. Total for United States, Percent, Monthly, Not Seasonally Adjusted. Historical data ranges from 1990 to 2023. FRED (2024). 4 12-month percentage change, Consumer Price Index, all items, monthly, not seasonally adjusted. Historical data ranges from 1990 to

2023. FRED (2024). 5 EBITDA Multiple defined as TEV over LTM EBITDA (pre-IFRS).6 EBITDA Multiple defined as TEV over LTM EBITDA. Note: For illustrative purposes only. There is no assurance that similar returns will be achieved. Source: Partners Group (2024).

Industry	7

Is geopolitics-drivende-globalization a game-changer?

World trade has remained quite resilient as Globalization embarked on a profound transformation

Global Exports of Goods & Services, USD tn1

30				27
25
20	18
	2010	2015	2020 (COVID)	2025

Globalization Isn't Dead. But It's Changing. Multinational companies still want cheap and efficient markets, but they also want safety. That's why they're rerouting the pathways of global trade and finance.

January 2023

Re-Globalization: A smaller part of the global economy is shifted towards other	Near-Globalization: A modest portion of the global economy is re-shored to
countries in the same regions to de-risk production at lower costs	improve the independence of critical supply chains and retain tech advances

World trade data begin to show early signs of Re-Globalization. Vietnam, Mexico, India are among gainers

May 2023

87% of Pharma companies surveyed are considering moving volumes to Western manufacturing sites

May 2022

Re-Globalization and Near-Globalization represent very significant opportunities for private markets investments

Form, a global manufacturer of highly-engineered metal components, is launching manufacturing facilities in Vietnam to ease supply chain constraints and geopolitical risks

Sterling, a leading European CDMO, is picking up incremental volumes as large pharma companies move manufacturing away from Asia and into Europe and North America

1 Exports of goods and services (constant 2015 USD). World Bank national accounts data, and OECD national accounts data files (2023). Note: For illustrative purposes only. Companies have been selected for illustrative purposes. Source: Partners Group (2024).

Industry	8

Are labor and demographic dynamics a game-changer?

Productivity has become the key driver of global growth

Employment Contribution (USD tn)1			Over the past two decades, productivity growth	Trend is expected to
Productivity Contribution (USD tn)1
		has become a more than a 2x contributor to GDP	accelerate in the next
US Labor Participation Rate (%)2				growth	decade
				62%
60%					26
			12	15
		7
1	3
7	6	6
6	6	5
1972-1982	1982-1992	1992-2002	2002-2012	2012-2022	2022-2032P

Boosting US productivity represents a $10 trillion opportunity […]	Digitalization of business models, shifting supply chains and de-carbonization
equivalent to $15,000 per household	are driving this "American Productivity Renaissance"
February 2023	April 2023

Private markets will serve as a conduit to finance the investments needed to usher this new era of productivity-driven growth

Version 1, a leading provider of digital transformation services, increases productivity by modernizing legacy IT systems,

performing cloud migrations, and developing custom software to improve automation

Ammega, a leading provider of industrial power transmission and

conveyor belting, helps businesses counter labor constraints by enabling the automation of industrial processes

1 Global GDP growth, CAGR %. Source: McKinsey Global Institute Analysis, Partners Group Analysis (2023). 2 US Labor Force Participation Rate, Percent, Monthly, Seasonally Adjusted. FRED (2023).

Note: For illustrative purposes only. Source: Partners Group (2024).

Industry	9

Is the next generation of technology a game-changer?

There are an unusually broad range of perspectives on the potential impact of the new generation of technology

AI pioneer says its threat to world may be 'more urgent' than climate change

Don't be deluded by the exaggerated claims made for AI

Many top business leaders are seriously worried that artificial intelligence could pose an existential threat to humanity in the not-too-distant future. Forty-two percent of CEOs surveyed say AI has the potential to destroy humanity five to ten

years from now

September 2023

How A.I. can help create jobs for humans, not just automate them

AI is Going to Eliminate Way More Jobs Than Anyone Realizes

As we cut through the noise, it becomes clear that the next generation of technology will be THE game changer

1	Technology will lead the next	2	Technology will drive a	3	Technology will redistribute	4	These developments are
transformation of the economy	reconfiguration of winning	profit pools across the	expected to unfold within a
			business models		economy		mere 10 to 15 years

Note: For illustrative purposes only. Source: Partners Group (2024).

Industry	10

The only constant is the ACCELERATION of change!

While it seems widely accepted that the only constant in the economy is change…

Constant Transformation Is the

New Normal

Software Principle #11: The Only Constant is Change

Embracing Change as a Constant In today's digitized and interconnected world, the only thing you can count on is change.

December 2020

Embracing The One Constant In

Business: Change

'Change Is a Constant': Tech Law Firms Steady on Pursuing Innovation

…it misses the key point: the only constant is the ACCELERATION of change

Each successive global economic transformation

has been twice as fast as the previous one1

Adoption of new technology waves has also been twice as fast with each platform shift2

Speed for AI models to reach human level accuracy has also decreased exponentially3

Industrialization		~100 Years

Service Economy ~50 Years

Digitization 1.0 ~25 Years

Digitization 2.0

~10-15 Years ?

PCs 20 Years

Internet 12 Years

Mobile 6 Years

Broader AI	3 Years ?
Adoption

Speech Recognition

Image Recognition

Code Generation

Reading Comprehension

20 Years

10 Years

6 Years

3 Years

1 Partners Group Analysis (2023). 2 Morgan Stanley (2023). 3 Contextual.ai (2023), PapersWithCode (2023). Note: For illustrative purposes only. Source: Partners Group (2024).