Partners Group, one of Europe’s largest private equity fund managers, is reorganising itself to operate more independently from its founders

March 25, 2014 6:01 pm

Founders hand more independence to Partners Group

By Anne-Sylvaine Chassany in London

Partners Group, one of Europe’s largest private equity fund managers, is reorganising itself to operate more independently from its founders.

Alfred Gantner, one of the three former Goldman Sachs bankers who started the Swiss-based fund manager nearly two decades ago, said the idea that an outsider, and not them, should chair their company, came to him while on holiday in the Alps last summer.

“I just had this moment. After a two-day off-site, I realised how much the firm had grown beyond its founders,” he said, sitting in the fund manager’s London office, on the 40th floor of the Heron Tower.

The Zug-headquartered group, which manages €32bn of private equity assets, announced this month that Peter Wuffli, UBS’s chief executive in the run-up to the financial crisis, was to replace Mr Gantner as chairman, marking the first time since the group was founded in 1996 that the chairmanship had not been held by one of the founders. The company said the decision was the latest stage in its “institutionalisation.” In the world of private equity, where founders tend to keep a firm hand on the decision-making processes and take a big chunk of the profits of their companies even when they reach retirement age, Partners Group stands out.

Mr Gantner rebuffs the idea of any near-term succession however.

“I am 46 and I don’t intend to work less,” he said. “But a true global powerhouse is going to set itself apart through diversity. And three Swiss founders who all had their upbringings at Goldman Sachs, went pretty much to the same schools, worked at the same firm for 20 years . . . that has created a very concise, focused entrepreneurial drive, but that’s not diversity.”

Mr Gantner said it was a normal process to go through to allow the company to operate and invest globally.

We want to make sure that more people not only have a say but also some of the limelight. It’s a slow transition to a governance that is less founder-centric

– Alfred Gantner

“I have no fear that the founders will be heard in the future. We have a lot of money in this firm. But we want to make sure that more people not only have a say but also some of the limelight. It’s a slow transition to a governance that is less founder-centric.”

Like his US peers, Mr Gantner, and his co-founders Marcel Erni and Urs Wietlisbach, who each own 10 per cent of the company, had a good year in 2013, making about SFr20m each in total pay, mostly in dividends.

The group, which went public in 2006, has built a diversified platform that includes medium-sized buyout funds, credit funds and infrastructure funds, and has opened offices in cities such as San Francisco, São Paulo and Tokyo. Its assets under management grew 10.5 per cent last year, after raising €5.1bn in new commitments, it reported on Tuesday.

Recent investments have included the $4.4bn acquisition of Multiplan, a US healthcare IT service provider, with CV Starr, the insurance investment group headed by former AIG boss Maurice “Hank” Greenberg, from buyout houses Silver Lake and BC Partners.

Since going public, Partners Group’s assets have increased more than threefold.

“Very few people thought that going public was a good idea at the time, but we were convinced this business would become more institutionalised. A lot of our peers have followed that route since then,” Mr Gantner said.