Ladies and gentlemen, welcome to the Partners Group update conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions or comments in writing via the relevant field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to the Partners Group management. Please go ahead.
Thank you very much. Welcome to the Partners Group business update and outlook call. I hope you're all well. My name is Dave Layton. I am the CEO of the firm, currently joining from the United States. Also presenting on today's call will be my partner and our CFO, Hans Ploos, who's joining from Switzerland, as well as my partner and the Co-Head of our Global Client Solutions team, Sarah Brewer, who's joining from London. It will be good for you all to get to know her. We will also have Philip Sauer, a senior member of our business development team in Switzerland. He will be on for the Q&A portion of the call. I'd like to start the presentation today on slide two, and this is really just a quick summary of some of the key messages from the first half of this year.
We've been pleased with the strength and stability that the platform has continued to demonstrate this year. We have very good momentum in the business. Our clients entrusted us with $12 billion in new capital commitments in the first half of this year. As an organization, we've created a culture where we put our clients at the center of our business, and we're genuinely motivated, driven, and humbled by the trust that they've continued to demonstrate in our organization. Our total assets under management at the end of June showed a step forward to $119 billion. Looking into the second half of 2021, and frankly, well into the future, we continue to believe that there will be a strong market for our investment solution. We see sustained demand from our investors, with many investors today looking to increase their exposure to private markets.
We have a unique approach of providing bespoke private market solutions in addition to traditional private equity, private infrastructure, private debt, and private real estate investment programs. Given the robustness of client demand in the first half of this year, we've increased our guidance for full-year fundraising. We currently expect to onboard between $19 billion and $22 billion for the full-year 2021. Sarah will elaborate on this a little later in the presentation. Turning to the investment side. As our H1 figures show, we've successfully converted on the robust investment pipeline that we highlighted to you previously. In this period, we secured a number of investment opportunities that had been advanced during 2020. It continues to be a competitive market for new investments, but our thematic sourcing strategy has been a strength for us.
We secured for our clients $13.1 billion of attractive investment content in the first half of this year. We leverage our entrepreneurial ownership approach to transform portfolio companies into market leaders, and we're getting good feedback from many clients on our relative performance and on our results. Our overarching investment strategies remain unchanged, and I'll speak a little bit more about investments and realizations later in the presentation. With this introduction, let me now hand over to Hans, who will walk us through our assets under management development. Hans?
Thanks, Dave. Also, a warm welcome from my side. As already mentioned by Dave, we had a strong start of the year confirming that our growth trajectory continues. Let's move to slide four. We reached $119 billion in assets under management at the end of June versus $109 billion at the end of December last year. We continue to deliver strong, sustainable growth. Our transformational investing approach to deliver superior returns is based on capitalizing on thematic growth trends and transforming attractive businesses into market leaders. In essence, we invest in the sectors where future growth is and buy and build companies to be the leaders in those sectors. Combining winning sectors with building winning companies is what it is all about. The growth confirms that our clients are confident in the strength of our thematic investing approach and in our private market platform. Let us go to slide five.
We received $12 billion in new commitments over the first half of 2021. Fundraising across the four private markets assets classes was largely in line with assets under management. We saw good sentiment for fundraising that was supported by end of demand, strong closing activity of larger flagship funds, and sound investment activity. Starting with private equity, which represents 58% of our total inflows or $7 billion. Fundraising was supported by a solid deployment base and a strong track record of realizations. On the traditional offerings, private equity clients demand came in from our fourth buyout fund, which is approaching its final close. On the bespoke client solutions, we saw both strong growth of mandates and open-ended funds. For example, our open-ended U.S. flagship fund recorded its highest ever inflows during the six-month period. Private debt represented 23% of all new commitments, or $2.8 billion.
Our debt business continues to benefit from a low-yield environment and was driven by two strategies. First, our CLO business. We raised three new CLOs in the first half of the year, which contributed $1.3 billion in new assets raised. Our CLO business represents 6% of total AUM and is expected to grow strongly in the years to come. The second strategy is our direct lending business. It contributed around $1.5 billion in AUM and stemmed mainly from senior loan programs. Private real estate represented 8% of new commitments, or $1 billion. Real estate grew relatively less than the other asset classes as it is in between fundraising cycles. Real estate is in the early stages of marketing its new flagship fund, which targets global real estate opportunities. We expect this program to contribute to fundraising in the next 12 to 18 months.
Private infrastructure represented 10% of new commitments, amounting to $1.2 billion. Infrastructure is in the midst of fundraising of its next-generation direct offering. We're seeing strong demand and expect a relevant contribution to fundraising from infrastructure over the next six months. Fundraising was also broad-based across the different customer offerings. First, we saw strong commitments for traditional closed-end funds, accounting for 36% of client demand. Second, we saw increased demand for our bespoke client solutions, which now account for 64% of fundraising. These include open-ended evergreen funds and tailored mandates to meet client needs for diversification in private markets. Evergreen programs were the fastest-growing category and grew 15% over the first half of 2021. This is driven by the strong performance combined with robust inflows.
It is becoming clearer and clearer that more and more clients, ranging from private individuals to institutional investors, appreciate the flexibility of choice we offer with our range of non-traditional private market offerings. We believe our ability to provide tailored access to private markets by creating and actively manage bespoke client solutions remain unique in the industry. With that, I would like to move to slide six. Now that we discussed the $12 billion gross inflows, let's go through the impact of tail downs, redemptions, exchange rates, and other effects. We have good visibility on tail downs and redemptions. Therefore, we can provide the market with clear guidance on these two factors. Starting with tail downs. They amounted to $2.9 billion. The majority of our programs have a long duration, yet when they mature, AUM decline.
The reduction in AUM typically follows a predefined mathematical formula, hence the impact is known. Redemptions are different. We manage $33 billion in evergreen programs, which provide some form of liquidity. The redemptions were $1 billion in H1 2021. Important to mention that evergreen programs were again a net contributor to growth because the inflows were 3x the level of the redemptions. We do not have visibility on factors such as exchange rates and the other items, and as a result, we do not provide guidance on them. Foreign exchange effects amounted to a negative $1.6 billion. This was mainly driven by 3% lower euro against the US dollar at the end of June 2021 compared to the year-end of 2020. Remember, 46% of our AUM come from euro-denoominated programs.
With regard to the other effects, AUM growth in the first half of the year was helped by continued strong performance across our private market portfolios. This led to a positive contribution of $3.3 billion from our portfolio of evergreen products that link the AUM to the net asset value development. Overall, this resulted in a net assets under management growth of $9.8 billion during the period, or an increase of 9% versus December 2020. Let's move to slide seven. Here, we provide you with a more detailed overview of the AUM breakdown and fundraising by asset class. As you can see, we saw strong client demand across all asset classes and double-digit growth over the last five years. Our largest asset class, private equity, contributed the most in the first half of 2021 in both absolute and relative terms.
Reaffirming the strong global demand for our unique transformational investment approach. Confirms our leading position in the largest segment of private markets. While we expect our growth to continue to be broad-based across all asset classes, we do foresee private equity and private infrastructure to outperform in the near term. Before handing back to Dave, I would like to conclude that we're extremely pleased with our fundraising and our investment efforts. Our investment and client pipeline is robust and gives us the confidence as we enter the second half of the year. Back to you, Dave.
Thank you, Hans. Let's move to slide nine. This slide shows a breakdown of the $13 billion of new investments for the first half of the year. As we've previously discussed, we started 2021 with a robust pipeline of attractive investment opportunities, which were delayed for a variety of reasons in 2020. We had a strong H1 for new investments, admittedly, this was at least partially a result of some catch-up effect from a lighter prior period. The private equity market today is a broad and deep market. Our investments represent only about 1% of the global buyout and growth transactions completed during the period. Considering that private equity itself only represents around 10%-20% of global M&A markets, this tells you how much upside and how much opportunity there is.
We're confident that we can continue to grow our investment activity while remaining selective, and providing attractive relative value at the same time. In this first half of 2021, in terms of strategy, we invested the majority of capital, 59% or about $8 billion in direct transactions, while the remaining 41%, or about $5 billion, went into portfolio assets such as secondaries, primaries, or broadly syndicated loans. For those of you who follow us more closely, you'll note that this is the first time where we're showing broadly syndicated loans as a separate category. These include assets raised for collateralized loan obligations and net inflows into dedicated liquid loan investment vehicles. As this has become a more recurring and substantial part of our private debt business, we've decided to include the inflows, which represents the initial investments made for those vehicles in our investment figures.
We retrospectively adjusted the investment volumes to include liquid loans until 2016. As Hans said, CLOs represent 6% of assets under management, and we've been an active CLO issuer. Over the past five years, we've raised 15 CLOs in Europe and the U.S. In terms of geography of new investment, the U.S. was the most active region for Partners Group's investment business during the first half of this year. It accounted for 55% of all investment commitments, versus 32% in Europe and 13% in Asia Pacific and the rest of the world. Examples of U.S. investments announced during this period include Axia Women's Health, a leading provider of women's healthcare services. It's well-positioned to expand within the growing women's health industry. Idera, a leading provider of software solutions that enable customers to navigate the digital transition.
Dimension Renewable Energy, which is a community solar and battery storage platform that supports the low-carbon transition. Our thematic investment strategy is all about identifying long-term structural trends, and we try and find sectors and sub-sectors that are well-positioned for transformative growth, and the assets that are best positioned in these markets to be future market leaders. Let's move to slide 11. Across asset classes and across geography, we've had some great case studies. Let's zoom in on Unity Digital Infrastructure. Unity will build and operate telecommunications towers in the Philippines, and there's strong demand for these assets, with unit volume of data traffic in the country forecast to grow at 45% per year until 2025. Unity aims to yield secure long-term contracted cash flows with telecommunications providers, and it will also support the transformative trends around digitization and rising data consumption in the area.
The company is expected to benefit from new government-backed initiatives in the country to improve wireless service levels, including the introduction of industry targets to build at least 50,000 new towers. These value creation initiatives are aimed at building and operating towers, acquiring tower portfolios, and increasing tenancy levels. The investment is expected to have a broad positive stakeholder impact. It's going to increase communications, and improve poor service quality levels across the country. It's in a structurally attractive space, thematically relevant. I think our team did a great job here of getting in front of it, and it's a great example of the type of investment content that we're generating for our clients right now. Now, our portfolio performance has also been strong. As we look on the next page, we've continued to see solid value creation generated by our transformational investing approach.
We communicated in our prior call that we saw promising potential for calendar year 2021 in terms of exits. That has been the case thus far. We generated $10.5 billion of underlying portfolio realizations in the first half. We also have good visibility on exits that were materially progressed or signed in the first half of this year but had closing conditions which pushed them into the second half. These high visibility liquidity events are expected to result in at least another $5 billion in distributions in H2. We've been locking in some solid outcomes for our clients. Needless to say, these strong results have led to particularly upbeat conversations with some clients more recently. Let's now move to slide 12. Here's a couple of concrete examples of those exits.
One strong exit was announced in the first half of this year and closed in H2, is our sale of U.S. digital engineering services company, GlobalLogic. We sold it for an enterprise value of $9.5 billion. Partners Group invested in GlobalLogic in 2018. This is a space and a target company around which we've spent a considerable amount of time developing our thesis. We've applied our entrepreneurial governance approach to drive several transformational value creation initiatives and to accelerate the company's growth trajectory. Initiatives have included launching dedicated sales strategies to address niche customer segments and expand key accounts. During our ownership, we've increased GlobalLogic's employee base by more than 7,000 additional employees, software engineers, and data experts. We've also completed four strategic add-on acquisitions, including three in Europe, which further expanded the business.
Additionally, we've enhanced the company's focus on environmental, social, and governance initiatives, helping the company to establish a dedicated ESG function and a midterm strategy. Our investment in GlobalLogic generated an average gross multiple in excess of 5x for our clients. We've also completed the sale of Cerba HealthCare, which is a leading European player in medical diagnosis. During our ownership, we led Cerba's successful consolidation strategy within France. We also penetrated new international markets, including Italy and Africa, and we launched a strategic initiative to expand Cerba into an adjacent category of veterinary testing services, an area we have a lot of experience in with some of our other portfolio companies. We had already achieved a leadership position in that segment in France by the time of our agreed exit.
Last but not least, we steered the successful repositioning and expansion of Cerba's research business for biotech and pharma companies. During this past year, the company's core processing capacity has been expanded dramatically to keep up with demand for COVID-19 testing, Cerba is uniquely positioned today as a very attractive asset in this sector. We generated a return in excess of 2.5x for our clients and our co-investors. Another good outcome. Another recently announced exit, which is expected to close in the second half, was the sale of a large-scale U.S.-based portfolio of industrial real estate with a combined leasable area of 8.6 million sq ft, This investment generated a 2x return for our clients.
We built this portfolio of quality assets across attractive industrial markets, gaining exposure to key transformative trends such as the rise of e-commerce and the relatively outsized expansion of regional growth cities. We're proud to see the transformational results our team has driven here. With these and other exits, they've given a strong contribution to the distribution profiles of a number of our investment programs, which are at different stages of their life cycle. They also further strengthened and solidified our performance track record. Now with this, I'll hand over to Sarah Brewer, who's a long tenured leader at Partners Group. She's a member of our executive team and the Co-Head of our Global Client Solutions effort. Sarah?
Thank you, Dave. It's a real pleasure to be on this call with you all today. I'll be concluding this presentation by providing some more details on our full-year 2021 fundraising outlook. Please let us move to the next slide. We expect that the secular growth trajectory of the private markets industry in general, and for Partners Group in particular, will continue to be driven by three key trends. Firstly, the growth of institutional assets under management globally. Secondly, the structural trend of rising allocations of institutional investors to private markets. Indeed, a recent study conducted by Preqin indicates that about 90% of investors expect to maintain or actually increase their allocation to private markets over the next five years. That's a trend that we've very much observed firsthand here.
Thirdly, the outperformance of private markets against public markets driven by the superior governance and active ownership. To implement these target allocations, institutional investors are seeking private market firms that are proven not only in terms of returns, but in terms of service and governance as well. Many clients that we speak to now demand far closer interaction and deeper relationships with their fund managers, as well as the ability to provide bespoke private market solutions that are tailored to the specific and ever-increasing complex requirements. They require increased portfolio transparency, sophistication in reporting, and a commitment, clearly, to all ESG topics. It's our belief that Partners Group is well-positioned to service all of these aspects given the breadth of the platform we have.
In particular, we see ourselves as the market leader in providing investors with tailored access to private markets with a 20-year track record of structuring and managing mandates, as well as private markets evergreen funds with certain liquidity features. With this, let's move to the next slide, where I'll provide you an update on our fundraising outlook for 2021. As you'll recall, in January, we provided guidance of $16 billion-$20 billion gross client demand for the full-year. Based on robust client demand in the first half, we are adjusting our guidance today to an anticipated bandwidth of $19 billion-$22 billion for the full-year. We use scenarios to derive our guidance, so let me give you a little bit more detail on that.
We base this guidance on a bottom-up analysis of our various open offerings, as well as indicated client interest. The lower end of the range assumes more potential market uncertainty and that conditions in transactional markets worsen for the remainder of the year. On the other hand, the upper end of the guidance is based on the assumptions that the situation around COVID-19 continues to further improve and that the benign fundraising and investment market continues. With this guidance provided, there's clearly a skew of our fundraising activities towards the first half of the year. As Hans mentioned, this is mainly driven by some pent-up demand and a strong closing activity of the larger flagship funds, which we don't expect being repeated in the second half to the same extent.
Our bottom-up analysis indicates that fundraising will continue to be diversified across asset classes, with private equity the largest overall contributor to inflows. As mentioned, we're in the final innings of fundraising for Partners Group's fourth private equity buyout program, which is a significant contributor to inflows in the first half of the year and will close for some final investors in the second half. We will separately inform our clients and shareholders about the final close when it takes place. Three client trends I and we observe in the market at the moment are as follows. Number one, increased exposure generally. As mentioned, we see clients globally looking to increase their exposure to all private market asset classes. Our existing clients are looking to increase their allocations, and we also are approached by new clients looking to gain exposure to private market asset classes.
Secondly, clients increasingly want to invest across different asset classes. Historically, clients would often come to us asking for exposure to a specific asset class. Now in the U.K., for instance, we have seen clients ask instead to say a risk-return profile to meet their specific needs, where we often can put forward a multi-asset class portfolio to solve this. Thirdly, transition into mandate strategies. In Germany, for instance, we have had several examples of clients moving from a more traditional LP structures into a mandate structure so they can tailor their specific investment requirements, they can invest continuously through cycles, and they're not necessarily reliant on when the next flagship fund is out. These structures also can make the governance of private markets, in many cases, simpler. Needless to say, traditional LP structures remain an important part of our fundraising, as demonstrated by the H1 results.
With that, I'd like to move on to the final slide of today's presentation. Slide 16 will look familiar to you and highlights the consistency of our private markets platform. After talking about the expectations for new client commitments, let me provide some overview on the negative factors. Our full-year estimates for tail-down effects from the more mature closed-ended investment programs and redemptions from evergreen programs have not changed from previous guidance. Tail-downs and redemptions are estimated to negatively affect AUM by around $9.5 billion, of which around $7.5 billion are estimated to be tail-downs and our expected base case of redemptions from evergreens amounts to around $2 billion. As in previous years, we do not provide guidance on other effects such as FX rates.
Let me conclude today's presentation by saying that while many variables will drive the actual outcomes, we're confident that this will be another solid fundraising year. The structural growth drivers for the private markets in general, and for Partners Group in particular, are very much intact, and conversations that we have with clients continue to be extremely positive. I would like to conclude by saying thank you for listening in. We look forward to speaking to you again soon, and on the 7th of September, we will present our H1 2021 financials. We'd now like to open up for questions.
We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested use only hands if you're asking a question. For viewers, may submit their questions or comments in writing via the relevant field. Anyone with a question may press star and one at this time. The first question comes from Bruce Hamilton, from Morgan Stanley. Please go ahead.
Hi there. Thank you. Good afternoon, guys. Great numbers. Three quick questions. Given the level of exit realization activity, there isn't, I guess, any change at this point to your sort of the performance fee assumptions, though, I guess it would be plausible that you breach the 30% based on current activity levels at least for a half year period, I assume. Any comments you can give around that would be helpful. Secondly, in terms of the pickup in high net worth demand mentioned through the sort of semi-liquid structures, I guess that's clearly positive. I think in the past there, you said, given the complexity of those products, you would try to sort of manage the growth. I mean, that's now 28% of AUM.
Is there a level where you wouldn't want it to push too much higher and so you try and manage the growth, or how should we think about that? Finally, just on sort of returns that you're underwriting in new investments, given your thematic approach, I assume no major change, or is it a bit lower? I think you said LPs are now expecting sort of low to mid-teens from funds rather than sort of high teens to 20. Is that how we should think about it? That's the third one. Thank you.
Yeah. Hans here, I'll start with the first question. I think the distributions and actions have confirmed that this has the potential to be a good year, which is what we said at the start of the year. We will have our call in September to discuss the financial results, and there we'll give an update what the impact will on performance fees. Dave.
On the high net worth demand, we do indeed watch the mix of high net worth capital to ensure that it doesn't exceed certain thresholds. One thing of note actually for those evergreen structures is it's actually these are the pretty material portion that is in those evergreen vehicles. It's institutional money. It's not necessarily the same concern that we have with that institutional money that we have with a high net worth investor that is perceived to have the potential to be a little bit more fickle during periods of market volatility. We do indeed limit the overall amount of evergreen capital as it relates to the total percentage of our assets under management. You can think about 30% as probably being a pretty good level at which we're currently managing that business below in terms of total assets under management.
In terms of returns for new investments, which was your third question, Bruce, this is a market environment where we do think returns have come under pressure. You have leverage levels that are a little bit higher, but largely consistent with historically. You have higher purchase prices. We do think that there's been a couple hundred basis points of pressure on returns overall to our industry versus a couple of years ago. I think the way that we have navigated that with our platform and with our clients is to really add the operating resources that we need to fundamentally impact companies in a more substantial way. Oftentimes the assets that we are investing in today are businesses that we've tracked for years. We've built out an impressive bench of operators and advisors and future board members.
We go into that investment with a very strong thesis of the impact that we can have. While market returns have probably come down, our returns have actually remained pretty consistent. Our underlying underwriting versus the same period in some of our prior years is actually higher today than it was a couple of years ago. It relates to the impact that we anticipate having on those investments, not necessarily on the market situation overall. That's helpful, Bruce.
Great. That's great. Thank you.
The next question comes from Pascal Boll from Stifel. Please go ahead.
Yes. Good evening, everyone. Congrats on these stunning results, first of all. Secondly, I have one question. When I look at your invested assets in H1, I see that 41% are invested in portfolio assets, and this compares to 33% in full-year 2020, when you also invested a lower asset amount. Will this have an impact on the fee margin going forward? What kind of trend do you see going forward? Will you more invest in portfolio assets or will this trend see a reversal?
Thanks, Pascal, for the question. It's a good question. That mix shift relates actually primarily to the inclusion of broadly syndicated loans into the portfolio portion of the equation. In the past, we haven't shown broadly syndicated loans because it's a more public style asset class. You can have $1 billion of broadly syndicated loans, for example, broadly syndicated loans, and you can trade in and out 100 x and have $100 million of investment volume. That's obviously not an accurate indicator of the investment volume. We've started to add the new inflows into our CLOs and broadly syndicated loan investment vehicles into that side of the equation. That's a portfolio style asset. That explains the vast majority of that mix shift change that you're observing.
Maybe I add a couple of comments. Over time, the mix will not change. Also from a management fee stability, you can expect what we always have said and have delivered, that we have stability of management fees.
The next question comes from Gurjit Kambo from JP Morgan. Please go ahead.
Hi. Good afternoon. Yeah, thank you for the update. Just a few questions for me. Firstly, when we think about sort of the investing timeframe, what we're hearing is that perhaps the timeframe or the time for due diligence is becoming tighter. I guess therefore what you need to do, I guess, is more speculative work, which I'm sure Partners does. How much of a competitive advantage is that for Partners, particularly in the mid-market space where, I guess, some of your peers would be a lot smaller? That's the first question. Secondly, just on the realizations that you've seen. Some good realizations. Is there any sort of mix of the buyers who've been helping the realizations? Are SPACs more of a kind of benefit in terms of potential acquirers of your assets rather than competing for your assets. That's the second question.
Just finally, within the U.S., obviously, you've done a lot of investing there. Is there just more opportunities for thematic investing there, or it's just the deals you've been sort of looking at over the last few years happen to have been more in the U.S.? Those are the three questions. Thank you.
Thank you. I'm happy to cover those for you. With regard to the tighter time frames, it is certainly the case. It used to be years ago, if you wanted to buy a company within the private market, you had four, five, six months to do your due diligence from the time that the sale process was initiated until the time that it was concluded. More recently, those time frames have condensed to more like four, five, six weeks. What that means is that you can't come into a sale process expecting to do your work during that formal sale process. You need to come in with your pre-work already done, expecting to do confirmatory work, not to start from scratch.
I do think that that phenomenon has benefited the larger platforms like Partners Group, and it's come at the expense of maybe some of the smaller monoline funds. If you're a large firm like Partners Group, we've got 1,500 people around the world. We've got 20 offices. We can spend the speculative resources on businesses that aren't going to be for sale for two years, three years, four years, and we do that. If you're a smaller firm with five partners or 10 partners that sit around the table, you need to focus on what's in the market today. It's tough to compete. You can't do the type of work you need to do to write a $500 million check in six weeks. You can't do it.
I do think that that is one of the areas that has allowed us to win more than our fair share of transactions over the last couple of years, is our ability to get out ahead of those situations, do the thematic work and compare to transact. That was the first question. The second question with regards to realizations in the mix of buyers, it's actually reasonably balanced. We've had some exits to large public companies. Some of the higher profile exits that we've announced have been that way. We've sold some to private equity. We've had a couple of dividend recaps leveraging the very supportive financing markets. It's a real range. No concentration in any one area that's of note. SPACs, I think have been overdone, overplayed.
We don't see them as active as maybe the media would paint them to be, at least not with regards to being genuinely competitive for many of the assets that we're selling. Your third question with regards to the U.S. and why are we finding relative value in the U.S.? I don't think there's anything structural there. I think many of the topics that we're focused on identifying really good assets that are well-poised to take advantage of structural tailwinds just happen to have been in the U.S. market. It was less of a relative value decision, us saying the U.S. market is more attractive right now, it was much more of a bottom-up outcome where the assets that we found most attractive in the topics that we were focused on happened to be in the U.S. That's the way I think about that mix.
Great. Thank you very much. Appreciate it.
The next question comes from Arnaud Giblat from Exane BNP. Please go ahead.
Yeah, good evening. I've got three questions for you. Firstly, if I can start with GlobalLogic. When we compute or try and estimate the performances from that deal, it looks like you could be earning a year's worth of performance fees from one deal, but it's an investment vintage 2018. I'm just wondering when we should be thinking about the likelihood of these performance fees coming through in terms of fiscal years. Secondly, on your fundraising, I appreciate the update from Sarah and the messaging there, but the implied fundraising you're guiding for H2 is $7 billion-$10 billion, in an environment that still feels pretty strong. If I compare that $7 billion-$10 billion to what you've achieved previously, it doesn't seem like there's a seasonality in fundraising. I'm just wondering if you're being a bit conservative on the guidance.
Finally, I'm just wondering if you could discuss perhaps the opportunities, the pipeline there you see in terms of deploying capital in the near to short term.
Yeah. Sure. Do you want to start, Hans, and maybe I'll add some color on GlobalLogic?
Yeah. On the performance fees, it is as we expected in March that this is the potential to be a good year, but it was early in the year as well, but it's a potential of a good year. We will, in September, announce our financial results, and we will include an update on the performance fees there. That we will do in September.
Just in general, some of the thinking errors that people have maybe had in the past on performance fees, sometimes they'll take kind of the enterprise value and assume that all of that is equity. We actually have debt on there as well oftentimes. We also have co-investors oftentimes. In addition to that, oftentimes when we acquire a position, that equity will be spread across dozens and dozens of different investment vehicles. All of them are in different stages of their life cycle. Some are in carry mode, won't be in carry mode for some time. There's not a one-to-one direct correlation that you can draw between an exit and performance fees in a particular period. We'll give you more guidance on that in the future.
Yeah. I think to add to that quickly, I think what is important, our range, which we always say on the medium to longer term, is between the 20%-30% would not also overfocus in any given year. It's important. Post-COVID, we are where we are, I think that we really take that mid-long-term view that our performance fees will be within the 20%-30%.
Yeah. It's not an annual guide, it's a long-term guide.
That's, yeah.
Do you want to take the second one with regards to-
Of course.
It's not about seasonality of fundraising, it is though about bottom-up analysis to give the color on that.
Exactly. We really derive that guidance, as I said, from bottom-up analysis, and that is around client demand and the open offerings as well. As mentioned, the first half there was strong closing of larger flagship funds and pent-up demand, and we don't expect that being repeated to the same extent that we've seen in the first half.
The next question comes from Hubert Lam from Bank of America. Please go ahead.
Hi, guys. Good afternoon. I just got a couple of questions. Firstly, can you talk about how competition has changed in fundraising and investments over the last nine months? Has it intensified? If there's been any impact on fee margins and valuations, that'd be great. Second question is, can you give us also an update on your relationship with UBS, which you announced last year, if you started to offer products yet to this channel, and it's contributing yet to fundraising? Thank you.
Thanks, Hubert. Maybe with regards to competition, this is a competitive market environment. I think clearly we see competition on many fronts. For me, it feels a little bit more intense on the investment side than it does on the fundraising side. I really do think that our bespoke client solutions approach provides a healthy level of differentiation for us versus many of our peers that tend to have one big fund that they raise. It isn't to the point where we're seeing decompression on our core flagship programs. It is a competitive market environment. Now, on the investment side, it is a dog fight, Hubert. We are, I think, differentiating ourselves quite well with regards to the amount of pre-work that we're doing and we're winning our fair share of transactions.
You have to pay a market price in any market environment. It is clearly a competitive market today. I think we're holding our own in this market despite the level of competition. Sarah, do you want to touch on the UBS? That's an area that you're close to.
Of course. Yeah, of course. For the full-year 2021 and more in general during a ramp-up phase, like within the first three years, we expect inflows to amount between half a billion to EUR 1.5 billion per annum. Thereafter, subject to successful implementation of the initiative, between EUR 1 billion and EUR 3 billion per annum. Of course, there's volatility within that range. Any guidance we give on growth assets raised will include the expected new flows from this joint venture.
Great. Thank you.
The next question comes from Jens Jernberg from Citi. Please go ahead.
Hi. Thank you guys for the update. Very good numbers indeed. Just a couple of questions from my side. Firstly, sort of on the fundraising guidance you've provided. I appreciate you said, I think real estate is likely to be strong in the next 12 months-18 months, and then infrastructure likely stronger in the next six months. Now, if I look at what you've raised already, clearly private equity has been particularly strong at roughly $7 billion. In the previous half-years, you always had sort of at least, I think, about $3 billion. What's the expectation for the remainder of the year there? Would you expect that, is that pretty much raised now and you don't expect as much as in previous half-years, or is there still more to come on the private equity side as well?
Secondly, I was curious since Sarah touched on sort of the split between bespoke solutions and the closed-end funds and presumably more in a medium to longer term view, would you think there could be any structural change in the sense that people move a little bit away from the traditional closed-end funds and more into sort of tailored solutions like I guess you've seen in Germany already? Just the final question I have is really, when it comes to growth, I mean, clearly the entire sector benefits from a very strong growth backdrop. Just curious, what do you see as real constraint in growth?
Is it really that you say, "Okay, we could do $19 billion-$22 billion based on client demand, or would you say we could potentially do more, but it's really on the capital deployment side that it wouldn't make sense to get any more money through the door? That's it from my side. Thanks.
Okay. Maybe I'll cover the first one. The private equity business has been particularly strong, and we saw a nice uplift in demand and interest. We had a couple of things going on. Number one is there's just real demand coming out of COVID for institutional investors for private equity right now. As we're on calls with prospects and with existing clients, private equity is a topic. I think people are looking to increase their exposures there. They're looking to increase their exposure to various private markets topics in general, but private equity in particular right now is strong. Number two, we've posted some pretty good results, and oftentimes that will spur interest from clients if you have particularly good outcomes and they see strong distributions. Sometimes that'll spark a particular interest.
We have a buyout program that's in fundraising, and we saw some good interest in that this year. I think it's those dynamics that are all hitting at the same time in the first half of this year that drove that spike in terms of mix in the private equity. I don't think infrastructure or real estate are doing anything wrong. I think it's just particular interest in private equity right now. Sarah, do you want to cover the second question on trends?
Yeah, of course. You asked about bespoke mandates and solutions. For us, that's broken down into both evergreen products and solutions and mandates. As I mentioned in one of the examples, we see quite a few of our clients transitioning from a typical traditional limited partnership into a more mandate structure, which we have a lot of experience in doing, and we have a head start with, I guess, in the industry, so that they can customize their mandate to the specific requirements and needs that they have. That certainly has been a trend, and I think we're well set up on that side and on the evergreen side to take advantage of the more bespoke needs that clients have and responding to that.
It does go without saying, however, that the traditional limited partnerships are still a growth area within our business as well, and that was demonstrated from the first half results and the fund that we have out in the market.
That's great. With regards to it is a growing sector, I do think you're seeing a structural shift for many people's public portfolios into the private markets, as indicated by some of those surveys that Sarah showed at the beginning of her section of the presentation. In terms of constraints for growth, I really do think that there's an institutionalization that needs to occur within our asset class to evolve past the historical limited partnership structures towards a more sophisticated set of products that makes the asset class available. That's one of the strategies that we've been pursuing is to be a group that's leading that innovation, providing more bespoke solutions, providing solutions that work for private clients and potentially VC investors in a more thoughtful way. That's the biggest constraint for growth.
Clearly private equity has room to run with regards to the share of global M&A activity that it occupies. I do think that the industry just needs to take a step forward with regards to the types of programs that it makes available to investors to make them a little bit more user-friendly. That's maybe the third question.
Great. Thank you. That was very helpful.
We have a couple of questions actually from the webcast call from Charles Bendit from Redburn. Dave, I think actually the first two are for you, which basically he asked that following a strong period of divestments, whether you could please share some thoughts on the dynamics that you are seeing in the different exit channels at the moment. Likewise, also, since it has been a very strong period for investment activity, whether it has been harder to complete transactions and maintain pricing discipline in a market that appears to be buoyant. The last question will be here for Hans, where he basically asks how our hiring has been during the first half of the year and how it will continue for the remainder of the year. Dave, do you want to start?
Sure. With regards to the trends or the dynamics within the exit channels, I would say that people are being a little bit less prescriptive with regards to the exit processes that they ran. Maybe in the past, people would launch an exit process with a very strong hypothesis on if the best route for an asset was to go public, if it was to sell to a strategic, or if it was to sell to another financial buyer. Today, you see oftentimes people starting and initiating an IPO process, also having conversations with large strategic acquirers and private equity buyers at the same time. That was actually the case on GlobalLogic. We were preparing to go public and had some conversations with a large strategic that ran simultaneous. We're also in discussions with a number of other potential acquirers as well.
That's maybe one trend of note that we're observing in the exit markets. I think it can be challenging for buyers who don't have a clear focus and a clear orientation, because I think you'll see probably win rates come down unless you are just laser focused on the right areas. The question was asked that it's been a strong period for investment activity and how do we maintain our pricing discipline. Our strategy is to pursue a global relative value strategy. We work on these themes for a very long period of time, and then we come together in a global investment committee, and we'll evaluate the risk-return trade-off between opportunities that we're seeing in one sector against opportunities we're seeing in another sector, opportunities in one geography against another geography.
Really finding the opportunities, the investment opportunities for our clients that represent the best global relative value that we're seeing in the market at this point in time. That's the strategy that we've pursued for a long period of time, and it works. We're not a firm that tries to time the market. We find the best opportunities in any given vintage for our clients to construct thoughtful portfolios with those. Then we're laser focused on value creation right now as a means for offsetting some of the pressure that we're seeing on valuation. Hans, do you want to talk about some of the hiring trends?
Yes. Over the first half, our headcount was essentially stable. Now, you need to remember that in 2020, our average headcount was up 12% on the back of very strong hiring in 2019, when the headcount was up 19%. We reduced some of the hiring in the beginning of last year. The outcome of that is that our headcount is essentially stable. Again, it's after two years of very strong hiring. Having said that, we will step up and increase again the hiring, because our strategy continues to be, is to support future growth, and we do that with our margin targets.
We have a question from Matthew Mish from UBS. Please go ahead.
Yes. Good afternoon. Thank you for your presentation. I have two questions, please. Firstly, on investment and holding periods. Some of the examples you mentioned, obviously, were very successful transactions that came after two, three, four years of investment period only. Also broadly, I think in the industry, we've seen basically a compression in the investment cycle as well. I'm just wondering, how do you view this shortening of investment and holding periods or cycle going forward? Is this sustainable? Is this something that could continue or it's unlikely that this can be sustained for an extended period? Secondly, in the first half, you've seen now a bit of an increase in the share of investments in APAC.
Could you perhaps highlight some of the opportunities you see in the region and whether we should be expecting the share of the region to keep rising from here? Thank you.
That's great. I'm happy to take those. With regards to holding period, I think over the long run, you're going to see an extension of duration, not a shortening of duration. Obviously, this is a very active and robust market environment, and there's a number of very active buyers that are prepared to pay what would be attractive prices for sellers of good quality assets. There might have been a shortening of holding periods in this period in particular. Over the long run, number one, investors are much more focused today on compounding value than they are on distributions. It used to be before you could raise your next program, you had to show a certain level of distribution. Today, we're seeing investors that are much more focused on compounding for the long run as opposed to on getting quick distributions.
I think that demand and push from clients will show up in longer holding periods by service providers and asset managers. I think that shortening of the hold period duration that you've observed in this current period will be trumped ultimately by the longer term, more structural change. With regards to share of investments in Asia Pacific, we do have some upside in that region. Asia, in any given period today can be up to what's called 1/3 of global transaction volume. We have some good upside there. I think we have a fantastic team on the ground. A couple of the advanced pipeline opportunities that we had concluded on were in Asia Pacific this period. I would expect gradual growth in that area, nothing dramatic in the near term.
That's helpful. Thank you.
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