Dear ladies and gentlemen, welcome to Partners Group's semi-annual results presentation. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to André Frei, who will start the meeting today. Please go ahead, sir.
Good morning, everyone, welcome to the presentation of Partners Group's semi-annual results 2018. My name is André Frei, I'm the Co-Chief Executive Officer of Partners Group. I have with me here in the room, Steffen Meister, our Executive Chairman, Christoph Rubeli, Co-CEO , and Philip Sauer, who is the Co-head of our Group Finance and Corporate Development department. We look forward to presenting from different perspectives, the successful start of 2018. Naturally, I will talk about clients, Steffen will take the board perspective, Christoph will talk about investments, and Philip will talk about the financials of Partners Group in the first six months of 2018. Let me start on slide number three and talk about the key private market trends from a client perspective.
Actually, we see a continued trend by institutional investors to invest in private markets, which is no longer an alternative, but a well-understood and established pillar in portfolio construction for institutional investors. I would like to quote or cite a survey here. You see that about 90% of investors are pleased with the returns achieved by this asset class in the past, and about 90% of investors are looking forward to maintain or even increase allocations to private markets going forward. That is a trend that I also see in our client portfolio. Talking to clients, I see a good number of clients who have started maybe in one asset class and are interested in increasing allocation to this asset class. Clients that have started with one asset class and are keen to diversify further and cover several of the asset classes that Partners Group does offer.
In short, this is an attractive trend, and as a company, we believe private market will grow in importance going forward. On slide four, you see that our client demand in 2018 has been driven by both program offerings as well as customized mandate solutions. In 2018, to be specific, we have more than 25 programs and mandates in the markets that are open for inflows. Partners Group's assets under management covers about two-thirds corporate assets on the private equity and the private debt side, and about one-third of our assets under management is comprised of real assets, that is real estate and infrastructure. In the first half of 2018, the corporate assets, private equity and debt, have amounted to about three-quarters of fundraising. Strong interest by clients. Clients look at private equity as a complement to public equity.
They do expect private equity to enhance returns. They look at private equity to really gain equity exposure to the real economy, which is not fully covered by public equities only. Clients look at real assets, for example, with the perspective of a rising inflation. Clients also look at private debt, for example, from the perspective of rising interest rates, because you do know the private debt typically has a floating rate nature, which is in contrast to the fixed income in public fixed income. I'm going to talk about programs and mandates illustrated on the right-hand side in one of the coming slides. If you move to slide five, you see the sustained growth in assets under management of Partners Group in the last decade.
At Partners Group, we're grateful for this growth over the past one to two decades. Of course, we work hard to continue that growth trajectory also going forward. In the first half, we have seen inflows of EUR 6.2 billion, which is in line with the expectations. We had announced or guided for EUR 11 billion to EUR 14 billion asset raising for the full year 2018. That takes us from EUR 62 billion assets under management to EUR 67 billion assets under management as per June 2018. More assets under management naturally requires more professionals and leaders working at Partners Group. We have talked many times about limited operating leverage at Partners Group. This is certainly true on the equity investment side, where we simply need to source additional opportunities.
We need to diligence additional investment opportunities and both investors, we need to create value in these assets for many years to come. That's why on the equity investment side, there's very little operating leverage for us as a company. Of course, as a company, we do strive for efficiency and scalability in every area where this is possible. That can be using technology for a corporate setup to establish scalable procedures and processes towards corporates and clients. To some extent, the private debt, the senior debt platform, that is an element where a certain scalability or operating leverage does exist. Roughly overall, very limited operating leverage for us as a company. To state it positively, we are committed to really invest into the platform. We want to build out our investment platform going forward.
The financial success that we have had in 2018 first half will give us the capital to build out the platform further and hire professionals to build up capacity. Let me move on to slide six, which illustrates the assets under management diversification across regions and types of clients. You see a well-diversified picture, in both dimensions. We are strong in our home market, that's what I refer to for Switzerland and Germany, with about one-third of assets under management. In this market, I see clients really continuing to allocate. Some clients moving from almost over-diversified private market portfolios to direct-oriented, high conviction portfolios with fewer managers. There's a certain consolidation across managers in our home market, like Switzerland and Germany. Very similar tendencies, for example, in the United Kingdom and the rest of Europe.
I'm pleased with the strong growth we're seeing in Asia and Australia, where we have a combination of very large clients like sovereign wealth funds, but where we also have products that cater to the retail markets. North America coming in 14%, that is an area where I like to see more growth, where I'm also confident that we will see growth with our growing positioning and brand in the United States, with our consistent, strong track record. I'm convinced that the United States and North America will contribute more strongly to asset raising in the midterm. On the right-hand side, you see the type of clients. Public pension funds continue to amount up to about 50% of our capital raised. That will remain the case for the future, we think. The 40%-50%, I believe, will come from public and private pension funds also going forward.
Insurance companies and sovereign wealth funds, certainly two growth areas for us as a company. In terms of client diversification, slide seven, you see that our largest clients amount to 3%, and our top 20 clients amount to about a quarter of our assets under management. Actually, when our investment teams look at client concentration, this is typically seen as a risk. A more diversified client base is better in terms of risk profile for a company. At Partners Group, I see client concentration or large clients also as an opportunity. As a matter of fact, these are typically the mandate clients that have longstanding, established, trusted relationships with Partners Group. In that sense, I look forward to more large clients contributing to asset raising and actually assets under management at Partners Group. That is a positive picture also, and not just a risk profile for stakeholders.
On the right-hand side, you see the split in terms of programs, mandates, and structured programs. This 20/40/40 split is a split that I could envision to be the case also for the coming years. We see strong interest by distribution partners at this point in the cycle. There's a lot of asset raising for our semi-liquid programs that are typically oversubscribed. We manage the pipeline for these assets very carefully. These are natural and good programs that allow mid-size pension funds, for example, to allocate to private markets in a similar way like the big public or corporate pension funds would do. A really strong element for our fundraising. Closed-ended programs, these are the natural flagship funds, let's say, just the products, commingled structures, that are simpler in nature, less high touch than the mandate solutions that amount to about 40% of asset raising.
Mandate solutions is actually something I would like to talk about on our next slide. This slide, in a simplified way, illustrates the differences between an investment program and the mandate structure, and how this makes a difference in terms of client interaction for us as a company. Closed-ended structures on the left-hand side have been used by clients for many years to diversify across private market investment managers. You see at the beginning, it's about the commitment decision. Clients need to perform due diligence on the investment manager and the program. They make a commitment decision. The manager is mandated to build up exposure, to create value, and ultimately realize positions. The question the client needs to ask five, seven years later is whether or not to re-up with an investment manager.
That is a typical commitment decision or typical program constellation that you would see in private markets. I believe Partners Group is even stronger on the mandate side, as illustrated on the right-hand side. Here it's about strategic allocation decisions that clients make to the private markets asset class. There's a communication, there's a collaboration, and we want to find out what the strategic allocation to private markets in the midterm could look like. We might agree on a 2.5% allocation to private markets managed by Partners Group. You could agree on a CHF 250 million NAV target, let's say, to be achieved, maintained, increased by Partners Group over time. Here, the collaboration between the limited partner, actually not the limited partner, but the client, and then Partners Group has a very different nature.
On the right-hand side, you see that Partners Group as an investment manager diversifies for clients across private markets, asset classes, as opposed to be just one of several managers that is mandated to build up exposure. In short, at Partners Group, it's 40/40 products, 40 mandates, in terms of percentage points. I believe Partners Group on the mandate side is really positioned to perform at our best, and that is an important pillar for our company. I move on to my last slide before I hand over to Philip Sauer, which is about the expected client demand 2018. I'm happy to reconfirm our expected range of new growth client commitment in 2018, EUR 11 billion-EUR 14 billion is the guidance for the full year 2018 in this current market environment that we expect to remain behind also for the coming months.
In 2018, we continue to expect fundraising across a number of programs in mandates, as I referred to the roughly 2,000 offerings that we have currently in the market. As already highlighted, for example, semi-liquid structures is a strong contributor with about 20%. We have a number of offerings in the market, and in 2019, some of our flagship funds will be back in the market. Tail-end effects from mature private market programs and potential redemptions from liquid and semi-liquid programs are expected to amount to EUR 4.5 billion-EUR 5.5 billion. As previously, we don't provide guidance on other effects such as FX rates. Basically, in short, we reconfirm what we had communicated earlier. I'm satisfied with the successful first half of 2018. Rest assured that we will work hard to make the full year 2018 a success.
With this, I'd like to hand over to Philip Sauer for an update on the financials.
Thank you, and good morning from my side. I have the pleasure to present to you and walk you through to our financials in the first half of this year. With this, I would like to start on page 11 with our key figures. I think important to understand Partners Group is a top-line growth story, so assets under management growth is important for us, which drives ultimately management fees and performance fees later in the cycle. We had average assets under management growth of 20%, which translated in revenue growth of 17%. Our cost base grew in line with these revenues, and that means that EBITDA grew also 17%. Profit grew by 10% but already started from a higher base in H1 2017. Let me explain why this is the case.
On the revenue side, on page 12, you see that revenues were supported by both management fees and by performance fees. Both were growing, 16% management fees, 19% performance fees. The EBITDA margin stayed stable or remained stable at 66%. I will elaborate on that later in the presentation. Below EBITDA, there are two factors which drive profit, which is one, the financial results, and the other one is taxes. On the financial results side, it is important to know that Partners Group invests in its own products alongside clients, and this with about 1% of the product size. This is the major contributor to a positive financial result during the year.
This was also positive last year, it was positive this year, but we had an FX effect, which was slightly negative this year, and that is opposed to a slightly positive effect in the financial result of FX in H1 2017. This, combined with a higher tax rate, led to a 10% profit growth in H1. Let me talk about revenues a bit more in detail because I think it's important to understand. Once you understand the top line, you will understand the remaining part of Partners Group's financials will be a bit easier to understand. First, I will talk about management fees and talk about performance fees later. On the management fee side, management fees at Partners Group are contractually recurring. They are recurring based on long-term client agreements, which can last up to 12 years.
They have a certain additional component, which we call on the slide, the late management fees and other income. This little component is not recurring or contractually recurring, but it comes with a slight volatility depending on fundraising and when we open or close products. This little component decreased by 23% in the first half of this year compared to last year, which was quite high. That means that our overall management fee growth was 16% and slightly lower than assets under management growth, which was 20%. I think it's important to give you a bit more insight on slide 14 on these late management fees, because this is always a topic which is not so common in the public market space and more special for private market funds. Typically, late management fees occur in our products, not in our mandates.
They typically occur during the fundraising period of such products. In periods where Partners Group raises a lot of new funds, typically these late management fees tend to be lower. Vice versa, for instance, like last year, 2017, where we closed a number of products which were already longer in the market, the late management fees are higher. What you can see here on this slide, page 14, is that a number of products for Partners Group which we launched this year started to invest, and clients committing into this product along they go. They're still open. They need to pay, or they have the ability to buy into a portfolio which is now building up at cost.
As Partners Group already invests the money of the clients who commit early in the cycle, those clients who come a bit later into these programs need to pay management fees backwards to the point where the product actually started to invest. At the end of the day, all clients joining that product will pay equal fees. For instance, clients joining in 2020 for products which are still open or might be open until then, they will render management services backwards. These are years, for instance, where management or late management fees could be a bit higher. Now, as we raise a lot of new products, they are lower, and we expect them to be lower than 2017 also for the full year 2018. Switching gears to performance fees. Performance fees are also driven by AUM, in theory.
Because an increasing AUM base allows us to deploy more money in the market, and that should increase the potential future performance fees. This not really happened in history, if you look at that chart. There was more a spike in performance fees in 2016, 2017 instead of a gradual increase. The main reason for that was the great financial crisis in 2008, 2009. This crisis postponed a lot of performance fees, which we expected to come in 2012, 2013, 2014, 2015, and they were postponed to 2016, 2017. Most of this catch-up effect, which we have seen in 2016, 2017, is now absorbed. We see now more products producing performance fees stemming after the financial crisis. For instance, in H1 2018, our CHF 175 million performance fees, which we generated, mainly stem from products launched between 2008 and 2012.
Going forward, Partners Group expects to produce or generate meaningful performance fees as well. We give you guidance that these performance fees might be in the magnitude of 20%-30% of overall revenues. What does that mean? That means, on page 16, that means if you generate CHF 1 billion in revenues, performance fees could be in that bandwidth of CHF 200 million-CHF 300 million. There is a volatility of about CHF 100 million in there, where we cannot give you guidance. I think the capital market needs to get more comfortable with that little volatility we have on performance fees. Why that? We have a high visibility on performance fee generation, but not so high that we can forecast them better than this indication. For instance, at Partners Group, a product will pay performance fees after six to nine years.
It is for us today, very difficult to say of a product phase, which we launched today, pays performance fees in 6 to 9 years. What we can say is if we go 6 years down the road and look backwards and look at the performance of the product, we need to turn around and say, "Okay, this is here. The likelihood that this product will pay performance fees is high." We have today over 250 products, which are diversified across vintages, geographies, and most of these products have hundreds of assets embedded. The likelihood that these performance fees are more recurring going forward is very high. Nonetheless, performance fees are charged on realizations.
What this means, if there is a crisis in the market which could shortfall that exit window, then there will be, of course, less cash flows which we can generate because we can exit less, and then performance fees could also be lower than 20%-30%. Important to note is here that 70%-80%, the bulk of our revenues, is still recurring and contractually recurring in nature, and this is our management fees. They have been recurring on page 17 for the last 12 years. You see on page 17, our management fee margin, it has been very stable, on average, around 125 basis points, and we can assume that this margin remains stable going forward. The reason why we have that stability to that market is because Partners Group has increasingly shifted its investment focus towards direct investments.
Direct investments have the advantage that they come at slightly higher fees. However, they have the disadvantage that they are less scalable. You need more investment professionals to deploy the assets in the market. With the CHF 175 million of performance fees, the overall revenue margin adds up to 177 bps. Let me switch to costs on page 18. On page 18, you see that our cost base increased alongside revenues. We have a very easy budgeting principle at Partners Group, saying when we increase our assets under management, the additional management fees we generate, we give ourselves a budget of 40%. With this 40% of these additional management fees, we hire people in order to broaden the platform to allow us to invest more capital in the market. This holds also true for performance fees.
Performance fees which are generated, 40% will be allocated to our long-term incentivation program for employees. In theory, if you go to page 19, our EBITDA margin should be around 60%, but it is not right now. It is, as you can see, at 66%. We expect going forward over the midterm, over the next three to five years, that this margin heads towards the 60% again because we will continue to hire people in order to broaden our platform and increase our investment capacity. There are two factors which impact the EBITDA margin. One is hiring. If you hire more people, costs increase, EBITDA margin goes down. The other one is FX. Part of the high EBITDA margin we have seen in the first half of this year was also due to FX, and that needs an explanation on page 20.
André talked about our AUM from a client perspective. This is now an AUM split from a program perspective. 50% of our assets under management is in EUR-denominated products. That means 50% of our management fees stem from EUR-denominated products. We have hardly any EUR costs against that. Most of the costs are still CHF, but we will diversify over the years to come because we will not grow ultimately only in Switzerland. Our offices around the world are all growing. If you look at the FX development, especially the CHF against the EUR. The CHF depreciated, or the EUR strengthened, by roughly 9% in the first half of this year compared to the first half of last year. If you have a 9% strengthening of the EUR, that means that our EUR-denominated product produced simply more revenues in CHF.
There are no costs against that, or no additional costs against that. That means our EBITDA margin was slightly lifted also because of FX development. With this, I think I want to jump to page 21 and give you a little overview about our balance sheet data. Currently at Partners Group as of the end of H1 2018, we have CHF 1 billion net liquidity. This is after the CHF 500 million dividend payment which we had in May. Roughly CHF 650 million we have exposure to our own products on our balance sheet and have a shareholder equity of about CHF 1.8 billion. With this, I think we are well equipped also to withstand more difficult economic environments. With that, I would like to hand over to Christoph, who will give you an update about the investment plans.
Thank you, Philip. Good morning. It's my pleasure to share with you a snapshot of the investment activities in the first half of 2018. On page 23, you can see that we continue to navigate in a market which is characterized by relatively modest growth, by a tightening of the overall market conditions as far as the central banks is concerned, relatively high prices but still very liquid financial markets. You can see on the right-hand side that we therefore focus on niches in areas which are special, transformative trends, and that the focus really is on added value, on hands-on management of the assets in a very direct fashion. The overall figures on page 24, you can see that we've been quite active in the first half.
We have deployed CHF 7.7 billion across the platform in different asset classes. The activity of direct investments continue to be the backbone of the investment activities. We've been equally active on the distribution side. In total, CHF 7.4 billion came back to our client portfolios. It's been a market that is quite benign on the exit front, and I'm happy to report that all of these have also happened at very decent profitability ratios. If you look at page 25, you see the brief snapshot of the deal flow, which is sort of the lifeblood of our industry. We have to screen many different opportunities to focus on a select few. We continue to be disciplined as in the past, and roughly 3% of the transactions have come to fruition.
You can see again that the direct equity contribution of CHF 2.8 billion was the backbone of the firm in the first half, and we expect a similarly strong result for the second half. The split between the geographies, you can see that the U.S. has been close to 50%. Overall, we felt 40/40/20 is probably a good ratio to have. That always swings a little bit with the closing of the transactions. The second half will see a little bit more European closings with larger deals like Techem, Ammeraal Beltech, Megadyne that we have signed recently, are in the process of closing. This will certainly shift that balance a little bit more towards the European market. You see the split on the right-hand side in terms of styles.
Direct again is 60%, the backbone of the firm over the years, and this is in line with our long-term strategy, where we feel roughly 60/20/20 is a good split to have between fund investments, the secondary markets, and first and foremost, direct. We practice, as you know, this relative value approach. We believe that the significant contribution to returns comes from doing the right thing at the right time. We're spending quite a bit of time with determining, led by under the guise of our Chief Risk Officer, what are the expected returns that we believe the different instruments, the different market areas will yield. We are in the middle focusing on what we call relative value.
In a very granular fashion, we look at every niche, at every industry, at every geography, at every size of the market to determine what are the things, what are the themes that we wish to invest in over the next 18 months. That sort of produces a cookbook for the investment team. What are we going to hunt for? It's a very proactive approach that we apply. You see over time that the themes change in a pretty dramatic way. Certain years, the secondary market prevails, like in 2009, 2010, right after the Lehman crisis, the global financial crisis. We have essentially focused on buying existing things at a discount. That is today no longer possible, as all the prices are quite elevated.
Today, the focus really is on direct investments, select secondaries, and to round that off, a few of the fund investments that we do in parallel. You see on the right-hand side, transformative trends. To find those niches which offer you above-average growth is really the core of this investment activity. What are the themes? You have on page 29, a brief snapshot that shows you with the green bullet points, what are the themes that we actually like better than others? I will visualize that with two examples. On one hand, in emerging markets, we have this growing middle class that has more money to spend. That is certainly one theme that we like to exploit. You see on the right-hand side in financial services, the commercial services which are being implied. Techem is one of the examples that I will use to illustrate this.
Techem is one of the larger deals we have done this year. It is a EUR 4.6 billion transaction with a German company that really focuses on metering and measuring utility sort of things, everything from water to electricity to gas. It is by far the largest company in that space. It has about 30% market share, so it is a dominating franchise leader in this industry, and we believe it is actually an ideal candidate for the medium to long term because the today quite low-tech business can be digitized, can be transformed into something more modern. We have here two business partners which have followed us in the transaction, CDPQ and Ontario Teachers' Pension Plan from Canada. They have provided about CHF 1 billion of the equity, and we have provided a little bit more than them, so we own 52% of the company. Our business partners especially 48%.
Second example that I want to use for the emerging markets is Vishal. Vishal is a retailer in India, has over the last year shown growth between 30% and 30%, so it is a highly successful company, but it is still a company with a lot of white space ahead of it. We believe there is a long-term growth pattern that we can exploit. We will help them to have better SKU management, to have the products a bit more rearranged, but we are extremely excited about the prospects of this company in the Indian market. Here we have deployed roughly CHF 500 million for a 61% stake in this company. On the real estate side, I am using this project called Cobalt. It is actually 7 assets in 4 different fronts, which are managed by a U.S. firm called Accesso Partners based in Miami. It is existing office parks.
It is a very good example for what we call tail end liquidity events, where you have essentially an asset base that is intact, but an asset base that can still grow and be improved. A investor base that is somewhat fatigued. We provide a liquidity solution for those investors that we can essentially help them to have an exit. Together with the operator, together with the manager, we then give him like a new life and lead it into a next phase and profit from the return potential that is unexploited still. It is great office parks, about 7 assets, which are in different U.S. cities, anywhere from Texas over to Minnesota. Last example I want to provide you with is Dundonnell. It is a renewables project in Australia, very close in the state of Victoria.
We have been very active in renewables right across Asia, starting in Japan after Fukushima, then in Taiwan, but then also more recently in Australia, where major wind parks have been set up. Here is a project that from an investment perspective is particularly interesting because it is to a large degree already de-risked. About 80% of the revenue base is already contracted, and it is already in the middle of the construction process. A very attractive project from a risk-return perspective. Over the years, you see this on page 34, we have deployed more than CHF 100 billion. We are very proud of what we have built in terms of size, in terms of volumes, in terms of business architecture. More importantly, we are very proud of the track record which we have generated in all of those different asset classes.
You see on the right-hand side, the long-term figures with more than 20% in private equity, a bit more than 14% in infrastructure, and 7% private debt, 12% on the real estate side. All of these, if you compare them to the market average, actually have done very well. I want to finish my presentation with a personal note. I think you have seen the announcement of last week where we have announced a transition in the co-CEO office. Already six years ago, when we discussed who is going to be after our CEO, Chairman Steffen Meister, the next CEO, we came to the conclusion the firm is getting bigger, the firm is getting more complex. I was asked together with André Frei to then become co-CEO in 2013. Already then it was clear that I was going to last for some time.
I'm getting older, therefore I want to focus on a continuing basis on investments, but I'm very, very happy that a capable partner is taking over the reins and will from January onwards lead the firm as co-CEO together with André Frei. It was a privilege to serve in that capacity. I want to thank Steffen for having given me this opportunity, and I want to thank André Frei, that has been a great partner alongside. I think it reflects our culture that is somewhat special, that we share things, that there is a consensus, and that we believe in inclusion and transition, which are somewhat smooth. I think that was what happened in the past.
I will, going forward, focus mostly on governance and the continued build-out of the investment platform, where we have this industry value creation team, which is in a hands-on fashion helping companies to grow and also making sure that the boards are led in a capable fashion. With this, I'd like to hand over to our Chairman, Steffen Meister.
Good morning, everyone. From my side also, thank you, Christoph and André and Philip for your presentations. Let me actually add first a word on that change of the co-CEO office. I think that's well-deserved. As Christoph said, when Christoph and André took over in 2013, it was clear that Christoph was excited, but Christoph also mentioned at that time already that he would not see this assignment beyond maybe four or five years. I think that was roughly the period indicated. At the end of this year, it will be actually five and a half years. We're actually extremely grateful for that commitment during that time and very, very happy for all of these achievements. I can understand Christoph's decision. I have to say that on a more personal note. This job comes with crazy hours sometimes, comes with mad traveling, especially on the investment side.
I have sympathy for that change, Christoph. While it's not a farewell today because there's another half year to run actually, my friend. Still, I want to use this audience here the last time, in this audience here to say thank you for all what you've done. I think the success in the last few years, not least, is attributable to what you guys did. Of course, together with the ExCo, all the other colleagues in the firm. I think this was outstanding. Great commitment, and thank you very much for that, Christoph. Big hand for you. Of course, we'll do this more fun way, in a real way, at the end of the year or so.
There are two reasons why you see me still with a bit of a smile on my face, actually talking about this event or despite that event. This is for two reasons. The first one is, as Christoph said, we are again able to retain a deserved partner, a very important partner in our firm, in a very important function beyond that previous assignment. As Christoph said, he will take over an extremely important role. We spend increasingly time, and I will actually talk about in a moment, on the governance topic, on establishing our operating policy at work, the governance of the portfolio companies that are very decisive for us. It's not an easy role to play, to be honest, because you have to be in a level playing field with CEOs, with other board members.
There's actually few people in our organization next to Christoph who can play that role. We're extremely happy about that. I'm personally looking forward to continue to working with you probably quite closely actually, in that role in the coming years. The second reason why I'm still confident about the future and about that CEO office change or co-CEO office change is because of the incoming partner. That is David Layton. David Layton is the head of Private Equity. It's the largest department. He is in the Executive Committee global, Executive Board. He's an Investment Committee, he's a very senior leader in the firm. Dave has joined Partners Group pretty much actually off the business school.
He has been with us for close to 14 years now, and he has literally built up the Private Equity direct practice with his colleagues, his fellows, over the last 15 years. He has, in that period, done a lot of very important transactions for us, investments. He still sits on the board of a number of them, actually, like KinderCare. That's the private, our largest private sector, early childhood education business in the U.S. or Pacific Bells, as you probably know, from maybe trips, select trips to the U.S. That's a fast food restaurant business. The reason why I think the board is so confident about that change is really fourfold. Dave Layton is a PG entrepreneur. He has several times demonstrated with his assignments in Private Equity, in building up the team, in building up the Denver hub for us, that he's an extremely entrepreneurial person.
He's also a real PG leader. Being an entrepreneur is only effective at one stage if you can really have your troops behind you, following you, and really achieve together with you, your goals. He has been, I think, remarkable in the way he built up the teams in the U.S. in particular. The third one is, he's a real PG investor. He shares the DNA, the mindset of how we go about investments. He is more focused on the actual governance, developing the assets than the transaction side of things. He shares our values, the long-term thinking here, and he has proven this many times, actually, and he's clearly here, a role model for other people in the firm. The last one, and maybe that's the most important one, he's a real PG culture carrier.
Our firm and our success will depend massively going forward on the ability to retain that culture, that long-term culture, that mindset, that team-oriented cooperation that we have in our organization. I think with Dave being at the helm, at the co-helm, together with André, we're extremely confident that we can retain this. There have been two questions frequently asked with that change. The one question is, "Why do you have, again, co-heads? Why does this actually work at Partners Group? Because it doesn't seem to work in literally any other organization." First of all, I think it's a culture question. As I said, I think we have a very strong team focus in how we run businesses. Literally in all the teams, the same in board. I don't think we're big fans of lonely wolves or captains on the deck that essentially call their shots.
That's not how we work. It's essentially where you see a lot of growth or development in the business, where we are convinced, it's our assessment at least, that to have actually two guys or girls at the helm that can influence each other and can bring in directly different perspectives in decision-making, can make the decision-making faster and can be more effective, depending, again, on the team situation, than maybe with a single head function. The other question was, "Do you actually look for these kind of positions outside Partners Group?" We were pretty blunt in answering that, "No. Full stop." It's not realistic in our assessment. One as a Co-CEO of our firm requires such a huge amount of understanding of our strategy division, how we see private markets shaping up, and I will talk about that because they're changing quite massively actually.
It requires an understanding about operations. There's complexity in that platform, despite the fact that we're only about 1,000 people. It's not a big firm, but it does come with a big need for understanding, especially as with that size. Our Co-CEOs, they don't have big staffs. They don't have teams of 20 people who do their work. They do the work themselves. Even in the board. That's just maybe the size of the company we have, maybe a little bit. The DNA, the culture. With all of that, and then last but not least, the cultural aspect that I mentioned before, we don't see it as realistic in hiring through a headhunter, a person out there, and just staffing a CEO office with such a person. We're confident about that change. We'll talk more in our partnership meeting about that change and celebrate this.
Thank you for that change, for all that work that has been done. Of course, you will meet Dave Layton in our, I think, March presentation for the full year of 2018/19. With that, I'd like to move to some perspectives on private markets. As I mentioned, private markets continue to change quite a bit. They grow disproportionately change disproportionately. They take market share from public markets. You hear notions like long-term governance, differences public and private markets. You probably hear about long-term investing propositions in private markets. We are at the forefront of this with a very small number of large private equity firms. Let me shed some light on some of these developments and what they mean to us. To start a little bit with the developments, I think it's important to have the context here.
The private markets industry has changed massively over the last decade. It used to be an industry that worked essentially with leverage, putting leverage on businesses, waiting for some corporate action, and selling again. It's probably more what hedge funds try to do sometimes today, maybe not through the financial leverage, but the media leverage, but maybe a little bit of the same notion. As this arbitrage has gone away in the '80s and '90s, the business has fundamentally changed. In the last 15 years, the industry had to adapt to a very value creation-oriented approach. If you look today at the typical value creation bridge or return bridge, then the big part of the upside is clearly what can you do in terms of growing the cash flow, the free cash flow of these businesses. How you do that? The industry has adapted.
Thinking about our firm, the fastest-growing team in Partners Group, and that continues to be the fastest-growing team, is our industry value creation team. That's a global team that spans from research people that look at sub-sectors, some of the sectors that Christoph has alluded to, think about the sub-sectors or sub-sub-sectors, transformative trends, about companies in these sectors operating successfully, providing this input to people on the investment side who actually will have meetings with management teams, and eventually, after one or two years discussions, try to invest in such businesses. Once you're invested, there's a very close relationship between board and management, and I'll talk about it in a second again. To actually agree on the investment hypothesis and the value creation effort, and make them happen with the IVC team, the external operating partners.
These are the board specialists, the NEDs, project management offices staffed by us, by outsiders, and then ultimately leveraging the whole platform of the firm to actually grow these assets and these businesses. How do you achieve that value creation at board management level? Because that's probably the biggest difference between private markets and public markets. Well, it's about entrepreneurial governance at that board and management level. This is something we have been fairly vocal about in the last 12, 24 months. We have actually even wrote about this in a book that we published in March. There is this increased bifurcation in how public markets, or at least some public market boards operate relative to private markets.
With all what we've seen as baggage in public markets like Enron, WorldCom, and so forth, leading to Sarbanes-Oxley and things like that, there has been a direction taken by public markets, which essentially forces board or let boards believe that they are forced to really think about processes, about controls, about compliance, a lot of administrative check-the-box kind of things, but not significantly spending time on strategic direction and value creation. Again, I'm generalizing. There's fantastic public firms, especially those that have maybe families involved and founders as maybe shareholders, but there could be many public firms that go into that direction. They measure success by short-term accounting earnings, and that's very different from private markets, where the board is tremendously focused on this agenda of typically three, four, five large value creation projects. You measure that process based on KPIs like midterm cash flow.
By the way, if you speak to entrepreneurs, whether that's in Switzerland or elsewhere, I'm not sure how many entrepreneurs base their success on, I don't know, US GAAP or IFRS earnings, right? That comes with all kind of effects. You see that's a difference in thinking. There is a clear difference in the way governance works, how management teams operate, how boards operate, and that has led to a reduction of attractiveness in some instances of public markets. Increasingly see minority owners, they don't want to go back into public markets or sell to corporates, and in exchange, you get corporate stock. We see increasingly management teams that prefer to be actually operating in private markets for 10 years, 15, 20 years. You see that development.
The number of public companies in the U.S. have come down from about 8,000 20 years ago to about 4,000. That's not just consolidation. That's also because IPOs have come down massively actually in the meantime. How does this play into this whole notion of not only the growth that is probably more evident, but also long-term investing in maybe new forms of governance? Let me talk a little bit about that. If you think about our typical approach in direct equity investing, that's in private equity, that's for infra businesses, for real estate platforms. There's really from a, I would say, market structure perspective, 3 types of situations we look for in all these sectors that we find attractive. Platform situations are very fragmented markets that you often find in healthcare, for instance. Cerba is a clinical laboratory business based in France, very fragmented market.
They essentially take a big part of the market share by just growing through small acquisitions. You have that in many instances in many sub-sectors. You have companies that we call niche companies. These are companies that have typically one very strong product. Civica is a U.K. business service software provider to governance, mostly in U.K., some Anglo-Saxon countries. Now internationalization happens in Australia and other parts of the world. Franchise companies that have a unique, more defensive kind of capabilities. Our approach with that entrepreneurial governance and that value creation is to bring these organizations and directionally lead them to what we call category leaders. Category leaders are companies that in their space, product, or market, or service area start to dominate the market because they have market shares like 30%, 40%, 50%. You mentioned Techem, that has a market share in Germany of about 30%, 40%.
We have Cerba that is growing to 30%, 40%. Companies like Universal Services of America that we have bought many years ago, and through acquisition, have grown to become actually today called Allied Universal, the largest security business in U.S. They dominate that security business market in U.S. Once you have a company that has that kind of category leadership, these companies get very hard to compete with. Think of it as Real Madrid. I'm not sure whether the team is that controversial. Pick your favorite team in Champions League, okay. These are businesses that are very hard to compete with because they're very scalable. They have lower cost because of the size. They're probably better run in most cases, and they can grow more quickly through additional acquisitions that they can digest better than other people, or just maybe organic growth.
In some cases, these businesses operate in sectors that we feel are quite resilient. Meaning that the industry per se is something that we don't expect to massively change in the next 10-15 years. Or if that changes that industry, we believe that these businesses will actually be the ones that lead that disruption and take, if anything, probably even more market share in that kind of change. If that's the case, we want to keep on owning, holding, developing these assets. This is what long-term investing is about in private markets at Partners Group. In other words, if you think about it in a slightly more conceptual way here on page 41, you have, of course, still that traditional buyout space. We call this relative value assets because that's the approach, it's the relative value thinking, five-year plus minus time horizon, and you typically sell.
In the instances when you have developed businesses that have so dominant positions and they happen to be in industries that have that resilience, a special characteristic, we want to own them for longer. These are assets that look a little bit like public market assets in terms of maybe the sizes, maybe not very big assets in public markets, but I would say reasonable size assets in public markets in terms of their positioning, in terms of their risk characteristics. That makes them also attractive for the clients. That's why clients like that proposition because they see it really as achieving private market returns with a risk characteristic which is much more resembling public market portfolios. What does it mean for our organization? We have started to hold on longer to assets, eight years, 10 years, it could be up to 15 years.
We have discussions with clients, and this is where André discussed the mandate aspect, because that's mostly important for the mandate clients that actually change their mandate structure that allow for 10 years, for 15-year holding periods. It will come also in our firm, if anything, with even more of a stringent push to become a partner to industry. We have never been a Wall Street firm. I think if anything, we'll probably even move away more from being a financial firm in the way we operate, in the way the DNA works, how we hire people, towards more of an industrial partner. Internally, we make that reference when we talk about the 1982 General Electric mindset from set up when Welch took over from Jones.
That's probably a little bit how we should think about what Partners Group is going into in the next 5 to 10 years. More of an industrial business, more value creation, more people from the different industry sectors that actually govern and own this business in the future. That will be a slow process. This doesn't change anything today or tomorrow. It will not have any significant impact on our financials in the next one or two years. In the long run, the next 5 to 10 years, I think with that, we get additional market share and AUM relative or at the cost of public markets with this long-term investment strategy, and we'll certainly talk more about this in the next few years to come.
With that outlook to private market industry and Partners Group, I guess we finish the official part of presentation and move to questions.
Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial 01 on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question is answered before it is your turn to speak, you can dial 02 to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. Alternatively, you may type your questions into the Q&A box. For now, I will hand back to the speakers to manage on-site questions first.
Hello, good morning. Thanks for the presentation.
No problem.
This is [Daniel from Bank Vontobel.] I have a couple of questions for me. First, management fees have been surprisingly stable. Even though you have lower late management fees. Could you elaborate a little bit on how underlying margins have developed over H1? Secondly, on performance fees. We have not seen, again, higher performance fees in H1. Shall we now see a more temporary situation for H2 in performance fees? Thirdly, could you maybe give us some kind of guidance on tax rate or distributed tax rate in H1 and how it should improve going forward?
Daniel, thank you for your question. First of all, with the management fees. Management fees are remarkably stable, yes. You have to look a step deeper, which is, for instance, into our different asset classes. We have moved over the years into, as I said earlier in the presentation, into more equity-related investment strategies, which are less scalable, which are coming at higher fees. With this investment shift mix we see at Partners Group, we think we can maintain our margins on the management fee side.
I think from that end, it should be quite stable going forward. From a performance fee perspective, I think you need to stick, unfortunately, to our guidance, which is 20%-30% of overall revenues. If you do your math in terms of whatever you, I think André elaborated on assets under management fee growth for the full year, you pretty much know where our target AUM will be at the year-end. This gives you enough guidance to calculate the management fees. If you then calculate a 20%-30% performance fee on top, I think then you would be in that range. That means also, yes, we expect meaningful performance fees for the second half as well. It should be 20%-30% of overall revenues for the full year. With regards, lastly, sorry, Evan, is the tax rate.
I think Partners Group has become more and more successful in jurisdictions which have a higher tax rate. Therefore, you might see, going forward, that our tax rate slightly increases going forward. You'll see a couple of percentage points probably, which we will see the tax rate increasing over the next two to four years.
Thank you.
Michael Kunz here from Helaba. A question regarding the guidance for the EBITDA margin. To get into the direction of 60%, I can only imagine three things. Collapse of the euro, a short fall in performance fees or a decline in high rates. Otherwise, I don't know how I get to 60. I might get to 53 if I
Yeah, maybe. Right. Yeah, it's the guidance on EBITDA margin, to what extent, what can bring our EBITDA margin towards that long-term target of 60%? Michael Kunz mentioned rightly, saying, I think a collapse of the euro is probably the quickest way to bring the margin down, as you rightly said. Performance fees is more margin neutral. I think they come with a 60% EBITDA margin or 40% cost income ratio. The reason why we give you guidance towards a more three to five-year time horizon is because in order to bring that margin down, we need to hire disproportionately to management fee growth. This is our intention. If you look at our assets under management growth outlook for 2018, it assumes already a double-digit growth on the midpoint.
We need to hire in excess of that in order to bring that margin, or head that margin towards 60%. That will not happen overnight, and that's why this reversion to the long-term target will happen rather slowly.
One question on the debt business, which has been obviously a very boom phase, I would say, also for you, not just in the market, but also for you, one of the big growth drivers. I'd be interested in how you see it going forward, this market, especially also on the CLO side, how your expectations are.
Thanks for that question. Indeed, the debt business is one of the more rapidly growing businesses at Partners Group. We have many years ago, started to extend our equity capabilities into more mezzanine-type structures. Over the last couple of years, we have also, in parallel to this mezzanine business, second lien business, subordinated sort of debt offerings, focused on the broadest syndicated loan market. We have launched a series of CLOs here in Europe first, then in the United States, and have in parallel also added quite a bit of capabilities to our team that we can actually digest that and that we can responsibly manage and in a disciplined fashion, manage this debt business. I do expect it to grow continuously over the next two, three years as the clients are still looking for this regular and really sort of inflow.
Clients also like it because it's essentially on a LIBOR basis, should there be more inflation, and we all expect that inflation will probably edge up and the interest rates will rise, you have a natural hedge with those debt programs. I think they continue to see quite healthy demand on the client side, and we can see ample investment opportunities in the market. Cynically speaking, whenever a deal gets too expensive for the equity guys, typically the debt team would then finance. There is also a lot of synergies within the platform that help each other to actually stabilize the work that has been done on a particular given asset.
Okay. Two questions for you, a bit broader. How do you see actually the current environment of, especially what we see right now, I mean, this fear of global trade war, emerging market weakness, how do you see that impacting your investments as of rising, and how this could potentially impact performance fees? The second question is much narrower. Could you give us some guidance on the net finance income for the remainder of the year and then going forward? It's been clear in the first half. Do you think that the current level or should it pick up a bit going forward? Thank you.
On the overall macro environment, anybody's guess is good. Crystal ball nobody has. With all the relative value that we practice, very hard to predict the future.
The level of uncertainty that we have at the moment is probably as high as it's ever been. We have certainly seen a big rise of political risk, and you alluded to the trade wars. We've seen actually very little change currently in the portfolio and on the deal-doing side. Prices have remained quite high, have remained quite elevated. Expectations on the vendor side remain quite ambitious and high. We have seen abundance in the debt markets. That continues, as we discussed before. On that front, there is little change. What we do on our side is we just want to be very disciplined by really choosing things which, as Steffen earlier pointed out, are resilient here for the long term, here to stay, which are well managed, and which have growth potential beyond the next phase. With that, I guess even if there's a hiccup, you can sustain.
The second thing you want to be careful about is the use of leverage. We've seen in 2006 and 2007, if you have great companies, but they're over-levered, it doesn't take too much for that equity to be wiped out. That is certainly something that we're very mindful of, that you have covenant-light structures and things which have very little refinancing risk. That's really what we can do on the investment side to counterbalance this uncertainty.
From a client perspective, I would say that Partners Group is known as a company that focuses both on portfolio construction and asset allocation, also asset selection. Clients do know that Partners Group does not take either of the two elements lightly. Actually, we're focused on portfolio construction, which will help should there be a recession, should there be market dislocation, should there be that crisis. Asset allocation is an important element on top of what Christoph just mentioned. I guess from a client perspective, clients are convinced that private markets, as Steffen alluded to, is an asset class where it's about hands-on value creation. It's about stabilizing assets in a downturn. It's about creating growth in an upside environment.
In that sense, private equity, private real estate, and infrastructure is an asset class that, from a client perspective, should not do worse, actually better than public equity or public markets in negative market environments.
From a financial perspective, I think I need to follow up on Christoph's word. I think in the short term, we don't see a big impact on performance fees on trade war and on our portfolio, because at this point in time, prices remain quite high. You asked a second question on the financial results. We assume until year-end that our portfolio still runs well and will perform. If this is the case, probably the run rate is a good way to assume for the rest of the year of what you have seen in the first half.
The question is about how the platform growth will manifest itself. Is it employee driven? Also, what are the investment opportunities? Maybe I'll start on the employee side. Partners Group has grown organically in the past. We want to grow organically going forward. Platform growth will entail substantial hiring on a global basis, primarily both in the U.S. and in the markets where investment opportunities exist. That is not going to be focused on Zug. Hiring going forward is going to take place on an international level. It's going to be a combination of lateral hiring, also of financial analysts and associates or more junior employees joining our platform. We have a strong brand. Lateral hiring works good for Partners Group, of course, you need to convince these talents to join the platform.
I'm also proud of the financial analyst and associate program that Partners Group offers. About 100 employees will be hired over the next 12 to 18 months to join our platform straight from university to learn about private markets, learn about Partners Group, and then they will be full professionals within a number of years. There will be strong growth, not only on the lateral side, but also from a university level and inside.
From the investment perspective, I think page 29 really sums up the themes. If you look at those verticals and the green dots, that's where we focus the energy on. The biggest change, I guess, is that if you want to be successful, you have to be proactive. You cannot wait for a bank to approach you and say, "Hey, there's a potential transaction coming." You have to many months and sometimes even years before the transaction process starts. You have to be ready. You have to get to know the vendors. You have to get to know the management teams. You have to do your homework because by the time the process unfolds, you do not have this time to essentially start from zero. You really have to essentially, on a very proactive basis, develop a transaction idea, a special angle, way ahead of anything starting.
That ensures you a rate of success better than others. That's also honestly what has helped us greatly in the first half of this year to really deploy as much volume as we have deployed. Year to date, in fact, the figure stands at a slightly higher figure than even for the full of last year. Extremely happy about the results, which are really based on this proactive approach, proactive following of transactions that will continue over the next years. The third question that was asked is about the loss of big clients and how we want to prevent a loss of big clients. I believe it's simply a combination of track record and service excellence. We need to perform as an asset class. We need to perform as a company.
It's about the track record, the performance, and the outperformance of private markets over the public comparables. Secondly, service excellence. I'm really proud of the corporate and services teams at Partners Group that make private markets feel public, that allow institutional investors to invest in private markets in a way that is efficient for the client. Ultimately, I believe the most important element is to treat clients like clients rather than limited partners. Actually, we like, especially the large clients, to feel like unlimited partners to Partners Group. It's about close dialogue, it's about service excellence, it's about track record, and that's how we want to grow our client base.
Sorry, one more question. I wanted more clarification if it is true that if you say as you want to expand your investment platform, it means mainly to hire more employees.
Well, the focus, I guess-
Investing in maybe IT or
We will see growth across the platform. Clearly, the investment cycles need to grow in line with assets under management. I think Philip Sauer already alluded to the fact that our business is not overly scalable, only certain parts. Preference on our side certainly is on organic growth. We hire a lot of financial analysts and associates that we integrate and train and rotate through the firm, that they also learn this DNA and the culture that Steffen Meister has alluded to. Clearly, as the platform grows, there will also be selective lateral hires, as André already pointed out. The growth will be right across the platform, from IT to the service side, to the treasury, the corporate sort of activities, as well as the investment side.
The biggest growth at the moment is probably going to be in this industry value creation team, that we can really, from a hands-on industrial perspective, add value tangibly to the assets that we own.
I'm sorry if I just may add perspective here to clarify this a little bit, because there's two questions that have a little bit the same kind of answer. What makes us successful? How can we retain the big clients? Why do we grow so much? It goes back to the same point. It's about achieving better returns than the public markets, than the average invest in private markets. To do that, you need size. Also in our industry, we do see more of that "winner takes all" kind of phenomenon that you've seen in other industries, of course, very heavily in technology-based businesses, but it happens also in our industry. It reminds me sometimes a little bit of what we have seen in investment banking between the early '80s and the end of '90s. If I make that comparison, don't get me wrong.
Our DNA is very different from investment banking. What you have seen is you had a relatively fragmented market early '80s with a number of players that were more reactive in the way they actually reacted to opportunities. In these 20 years, the market has changed fundamentally. It has become extremely professional, extremely proactive, where you would entertain a dialogue with CEOs of corporates, for instance, for M&A purposes, just all the time, ahead of any transaction. This is exactly what's happening in our industry. You need massive resources to do that because you literally talk to hundreds of companies all the time. It's not just one guy talking to them. You need to have the industry people. You need to have operating partners to actually get some investment hypotheses upfront. There will only be a number of organizations who will have that scale.
Like in investment banking today, literally there are four or five firms that actually dominate that space. I could well see that maybe also in our space in 10 years from now, there's five to 10 organizations that have a very big market share, at least when it comes to larger assets, maybe except for maybe some small cap businesses that are more regional in nature. All of that plays together in a great opportunity, but certainly from a board perspective, it's also a challenge, right? We need to be there. We need to have that market share. We need to have that proximity to these businesses, the understanding, the proactiveness to actually get that market share. Only then will the firm be able to grow as much as we want to in the next five to 10 years and deliver the returns.
That's the most important thing for our clients to be successful. This comes all together in this, I would say, development that we foresee in the market and how we actually want to respond to it.
Maybe some questions from the telephone conference.
Yes, of course. The first question we received on the telephone line is from Tom Mills of Credit Suisse. Your line is now open. Please go ahead.
Good morning. Thanks for taking my question. Well, actually I had three, if that's okay, but the first one is could you give us an idea what the proportion of catch-up effect performance fees, so that you generate in the [route to crisis] that have taken longer to realize are embedded within the CHF 175 million number that you generate in the first half. What are we down to at this point so we can have a better idea of what a more normalized number might be going forwards, obviously taking account of what you've said earlier in terms of the 20%-30%? Secondly, on Slide 38, please could you give us an idea how the IRR has evolved over those different phases of industry development?
What sort of premium growth relative to private markets do you think is required in order to see allocations towards private markets continue to shift at the kind of attractive rates that we have been seeing? Finally, could you give us an idea what your average cash on cash return on the CHF 7.4 billion of exit, or EUR rather, of exits that you did in H1 2018 were, please? Just to get an idea how your performance is tracking. Thanks very much.
Maybe let me start with the performance fees first. From the H1 2018, a very small part, is almost negligible, is still part of this catch-up effect I alluded to. I said most of the performance fees, a significant part already stems from vintages from 2008 onwards until probably 2012. That is why this is the post-great financial crisis area which starts now.
Thank you.
In terms of returns expected by clients and how returns of the asset classes have developed over the past 10, 20 years. Well, actually today, clients still look at private markets and expect an outperformance of, let's say, 3%-5%. 3%-5% is a classical figure looked at in order to warrant the effort, the inefficiency of the asset class, and also to justify the illiquidity of the asset class. I believe outperformance expectations have not changed that dramatically over the past 10 or 20 years. It's still 3%-5%. What does have changed in our opinion is like the general outlook and what, let's say, public equities can do. Public equities over a very long-term horizon have been close to 10%, let's say, 8%-10%.
At this point in time, we believe as a company that public equity returns over the next seven years, let's say, are going to be much lower than that. We clearly see the single-digit returns are realistic for public equities, but that doesn't take anything away from the 3%-5% outperformance. At this point in time, I think clients do expect private equity or the corporate assets, private equity, to clearly be double-digit. Mid-double-digit from an IRR perspective, and they do expect also real assets like real estate and infrastructure to be double-digits, but a healthy notch below what would be expected for private equity. In terms of IRRs achieved on exits, this is a very good environment also to exit and realize investments.
The IRRs achieved on the exits in 2018 are clearly above the levels I've indicated since these investments have been held, created value, and exited during a very beneficial market environment.
That's clear. Thanks very much.
The next question is from Gurjit Kambo of JPMorgan. Your line is now open. Please go ahead.
Hi. Good morning. Thank you for taking my question. Really one question. You talked about the consolidation in the industry and how clients are looking to use less managers. Clearly that helps you in your home markets. Are you finding it difficult for yourselves to maybe enter into markets where you're not as large and given other players may be seeing the benefits of consolidation?
It is fair to say that mandate relationships that cover several asset classes or that are very substantial in size, be it in dollar terms or percentage terms of overall assets under management. Sizable mandate relationships take a while to really happen and to materialize, to cement, and ultimately grow. I don't believe that Partners will be differently positioned outside our home market. It's true that the size of mandate relationships in a region like the U.S. or Asia might take a bit longer. Having said that, we do have mandate relationships all across the globe. An overweight, let's say, to Europe, but we do have very large, very long-standing mandate relationships of size also in the U.S., in Asia, for instance, and Australia.
Okay. That's great. Thank you.
We haven't received any further questions via the telephone lines.
Is there a question in the room, maybe? Okay, there does not appear to be further questions. I would like to thank you for your time today. We overran, but I hope it was worth the effort. It was great talking to you. Let's continue the dialogue and I wish everyone a successful week ahead of us. Enjoy.