Please note anyone who wishes to ask a question during the conference may press star and one on their touch tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Webcast viewers may submit their questions or comments in writing by the relevant field. Please hold the line. The conference will begin shortly. Thank you. Please note anyone who wishes to ask a question during the conference may press star and one on their touch tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Webcast viewers may submit their questions or comments in writing via the relevant field. Please hold the line. The conference will begin shortly. Thank you. Please note anyone who wishes to ask a question during the conference may press star and one on their touch tone telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Webcast viewers may submit their questions or comments in writing via the relevant field. Please hold the line. The conference will begin shortly. Thank you. Ladies and gentlemen, welcome to the AUM Announcement H1 2022 conference call and live webcast. I'm Moira, 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. Welcome to Partners Group's business update and outlook call. My name is David Layton. I'm the CEO of the firm, currently joining from the United States. Our CFO, Joris Gröflin, is currently recovering from a minor surgery. He's doing well, but Philip Sauer, our Head of Corporate Development, will be covering AUM developments today from Switzerland. Also joining us on today's call from the UK will be Sarah Brewer, our Global Co-Head of Client Solutions. Let's open up with slide 2. Halfway through 2022, the outlook for the global economy is far from rosy. The cost of living is rising. Higher interest rates will continue to weigh on the macro picture. Capital markets are likely to remain volatile. Corporate default rates are bound to rise, and valuations feel destined to remain lower as the market processes these factors. M&A activity has slowed over the first half of the year, and the credit market is highly selective for new issuance. However, this continues to be a reasonably good time to be in the long-term business of private markets. Corporate cash levels are strong. Profit margins are sustaining at high levels. We have solid levels of dry powder, and as an industry, we have a multi-decade track record of being able to capitalize on dislocation. While the current backdrop may present some challenges, we are convinced that the shift from public markets towards private markets is structural, and it will persist, and we continue to see evidence of that. I'd like to share with you all some high-level observations of what we saw in the first half. On the client side, we saw solid demand across our asset classes during the period. Our clients entrusted us with $13 billion in new capital commitments. The majority of demand continued to come from bespoke client solutions. For the full year 2022, we confirm our guidance of expected fundraising of between $22 billion and $26 billion. On the investment side, we were able to secure $13 billion of quality investment content during the period. Our ability to build businesses into market leaders has in turn resulted in today's portfolio continuing to exhibit strong operational performance, and we continue to get good feedback from many clients on our relative performance and on our results. In H1 2022, portfolio realizations amounted to $6.4 billion. I'll spend some time on this later in the presentation. As one might expect, we've postponed some exits given the volatility in the market. Consequently, we're providing you all with our best insight at this point that H1 performance fees are likely to materialize at around 5%-10% of total revenues. With that overview, let's move to the next slide. We've always been focused on creating long-term value for our clients, picking our spots well, and driving transformational change in our investment companies. Even with this complex macro environment and our competitive industry, the strategies we will continue to employ will be focused on driving portfolio performance. That's what our business is all about. It's about delivering relative outperformance. We believe that it's in periods of time like this that true differentiation can be demonstrated. In decades past, private equity investing was arguably less intensive. People would buy good companies, improve a few things, and generate solid returns. That's not the environment that we're in today. Our industry has matured, and it's evolving from an alternative asset class into a traditional asset class. We're increasingly taking stewardship for wider and wider swaths of the economy. It's competitive, and it's important for us to be able to drive more comprehensive value creation strategies to be differentiated. This evolution has driven our emphasis on thematic investing and on driving entrepreneurship in Partners Group approach with the typical Wall Street approach, which has tended to be more transactional and more leverage driven in nature. You'll see us continue to drive in this direction. Earlier this week, we announced the appointment of Wolf-Henning Scheider as partner and the leader of our private equity business department. This follows the recent hire of Ben Breier, our new head of health and life in the U.S. Both have led multi-billion-dollar, 100,000+ employee conglomerates, and they're reflective of the type of leaders that we're seeking to attract, and it's not just internally. We're working hard to instill entrepreneurial cultures at scale across our assets and businesses. Almost before we do anything else in a portfolio company, we try and put an entrepreneurial board in place. We've actually built out a dedicated team focused on helping us to strengthen entrepreneurial governance across our global portfolio and on finding directors of our portfolio companies that can help drive specific initiatives at companies. Outperformance, that's our mission. Let's move to the next slide. In the first half of 2022, we secured about $13 billion of new investments for clients. In terms of strategy, we invested the majority of capital, 62% or about $8 billion, into direct transactions, while the remaining 38%, or about $5 billion, went into portfolio assets such as secondaries and primaries. Secondaries is obviously very topical at the moment. We invested $1.7 billion in secondaries in the first half of the year. In terms of geography of new investments, the U.S. was our most active region, accounting for 53% of all investment commitments versus 43% in Europe. Many of our secular themes in these markets remain intact, and inflation protection has been obviously very important to us. In H1, investment activity was a little lower in Asia-Pacific, but that's not necessarily indicative of H2 or the mid to long-term outlook. We did see market volatility impose a reduction in transaction activities in H1, particularly in the back half of the period. Valuations have been coming down in many sectors, with some dislocations between buyers and sellers, as to be expected. Prime assets can still be pricey, and so you need to be selective. The debt markets are very selective at the moment, with only the highest quality assets able to attract scale financing solutions. For some of our investment targets, we did debt finance. Other companies, particularly those with transformational business plans, didn't require material debt financing to still provide attractive returns for our clients. Across the industry, I do expect the velocity of transaction activity to be slower in the May to August time period, and then we'll see where the market goes from there. We continue to have robust levels of dry powder and remain confident in our ability to capitalize on dislocation and to invest under a broad array of investment strategies. Let's move to the next slide. Here we highlight some of the investment examples from H1. In private equity, we believe that market positioning and pricing power are key, and those have been topics that we've been focused on for a long time. Companies operating at above average growth segments that are benefiting from long-term transformative trends. I would expect to continue to outperform the general economy throughout the cycle. Our recent purchase of a controlling stake in Forefront Dermatology, the U.S.'s largest dermatology platform company, is an example of this. This is a theme that's we've been pursuing for a number of years, and this is a theme that's still very much intact and it remains very relevant. We found the ability to pass on price increases to the end client and the essential service nature of the medical dermatology segment as two compelling components to the company's underlying business. During our holding period, we're gonna try and leverage our extensive experience working with physician partners and multi-site healthcare practices and executive teams to maintain Forefront's quality and outcome-focused culture and to support its differentiated patient and physician-centric approach. For real assets, and that's private infrastructure and private real estate, we're focusing on inflation-linked revenues. For infra, those are platforms that have an explicit link to inflation through regulation, concession agreements or contracts. In real estate, we're trying to target properties where rent can move with or above inflationary levels. In private infrastructure, we're really proud of our recent investment in North Star. We plan to transform North Star into a leading next generation offshore wind infrastructure services company. We'll work on the value creation plan to expand North Star's platform in Europe by growing its offshore wind fleet and broadening its offering. As a global firm, we often try and export a theme that's working really well for us in one geography into other countries. Convenience-driven multifamily with a heavy emphasis on amenities is a trend that we've been working on in the US that we're now exporting to Europe. We purchased a real estate portfolio primarily in Milan and are refurbishing those buildings to target young professionals and graduate students. These apartments will have all the bells and whistles that young people expect today, gym, concierge, high-quality amenities, community areas. With that, we expect the value of these units to remain relatively durable, and we expect to be able to increase rent commensurate with inflationary levels. Private debt is also not a bad place to be at the moment. With higher base rates and higher yields, the tightening we see in the market is leading to spreads widening, and that's further lifting return expectations. We continue to be choosy. These higher returns can quickly be lost to higher default rates in a market like this, but our team has been picking their spots, I think, very carefully. That brings me to the next slide. Let's talk about our portfolio and its performance. The majority of our direct investments are well-positioned to cope with rising input prices. We've been talking about inflation for a while, starting in Q3 2021 and into the first part of this year. We worked really closely with our portfolio companies and our management teams to build pricing strategies and to address inflation risk as much as possible. We've told our investment leaders that we'll hold them accountable to those plans, and we've been sharing best practices on inflation management across our various teams through our committees. Our average company in the portfolio has an EBITDA margin of around 20%. That's a solid margin. In order to command a 20% margin, you need to be a company that's valuable to your respective value chain. Most of our companies have reasonable pricing power. Our inflation pass-through measures have so far not caused any major impact on volumes. With those initiatives, we've been able to protect our margins, which have remained at around 20%. Now, I've heard some people from traditional asset management speculate that with the high prices paid within private equity during 2017, 2018, 2019, 2020, and 2021, that this correction evaluations will result in a wipe out of carried interest or the returns in private equity will fall off a cliff. I'm telling you, if you have a portfolio that looks like this, that's simply not the case. If you can grow earnings at 15%, protect your margins like this, then you may need to compound value for another year or two and some assets to offset the decline in valuation. This is an equation that should continue to result in strong relative investment performance. That's because it's a strategy that's focused on transformation of assets and on platform building. It's not focused on passively going long leveraged equity. Don't forget, we've been pricing in multiple contraction already for a number of years. Let's turn to the next slide. Now, this is a case study of what asset transformation and platform building means in reality. Confluent is an investment that we made in 2019, and that was an environment where prices were quite elevated, as you all are aware. Now, in line with our thematic investing approach, we've been tracking physical therapy for several years, and we set up a team of in-house and external experts to develop our investment thesis. We visited numerous PT platforms and worked closely with our strong industry contacts before finally deciding to target Confluent as our platform of choice in this space. Our plan aims to grow volumes, managing Confluent's brands and margins more effectively. This is achieved through strategic and targeted platform expansion in underserved communities. To date, Confluent has added over 300 locations. We also saw opportunities to modernize and digitize the platform. We work closely with our operating directors, industry experts, and physician owners. We've been working with the company's very capable and dynamic founder and management team to develop a digital front door, a digital service and scheduling capability, virtual therapy. The company's also invested into a digital therapeutics company that uses virtual reality to help patients remotely. Now, what's the result here? Well, despite having to pay a high price for the asset, this company is positioned to deliver strong returns to our clients. We're only a few years in. EBITDA was just around $40 million at our investment in 2019, and it's recently risen to over $100 million. It's investments like this, I think, that are testament to the strength of our investing approach. Let's move to the next slide. This slide gives you an overview of our net direct portfolio performance for Q1. Now, I know that March seems like a long time ago. We're in the process right now of calculating Q2 performance data as we speak. We have seen more significant changes to valuation comparables in Q2 versus Q1. Based on the insight that I have to date, directionally, I expect our direct private equity positions to be down by mid-single digits as per June. In private debt, we may be down a little bit in Q2. Real estate and infrastructure valuations will likely be flattest for Q2. We're not immune to the public market volatility, but clearly we see outperformance to other asset classes driven by strong earnings growth, which helps to cushion, to a certain extent, downside. We're active business builders in our direct portfolio. We're hands-on, and we can pivot our approach during downturns in order to help our assets to successfully weather periods of instability. As we continue into H2, we're assured that the vast majority of our portfolio assets have an investment thesis that is just as compelling today as it was when we made the initial investment. The market is gonna do what the market's gonna do, but we're proud of our current investment portfolio, which has been built through a highly selective investment process. We believe that this portfolio has the potential for continued relative outperformance. Now, let's talk about liquidity. During the period, portfolio realizations amounted to about $6.4 billion. Now, of that amount, portfolio assets and credit distributions accounted for over 70%. As you all will remember from our call in January, a year-on-year decrease in volume of direct investment realizations was already somewhat anticipated, as a portion of the exit pipeline originally planned for 2022 was brought forward into 2021. We and our clients are certainly glad that we made that decision and that we locked in those returns. This is a part of what contributed to 2021 being such an exceptional year for exits. In H1, we have further decided to postpone several realizations of more mature businesses and assets in light of the current market environment. Now, we don't usually talk directly about performance fees on these business update calls. We usually save those for our financial updates. Given the fact that we have reasonable transparency into performance fees deviating from our long-term guidance, we wanted to share our most up-to-date perspectives. As all of you know, we don't usually give guidance on performance fees for any specific year. We do, however, give a mid to long-term outlook on performance fees amounting to usually between 20% and 30% of our total revenue in a typical year. In 2020, during COVID, some exits were postponed and performance fees were trending lower, and so we steered you accordingly. In 2021, we had a catch-up year and a pull-forward phenomenon that resulted in an extraordinary year, and we also tried to steer you towards that result. For H1 2022, we expect H1 performance fees to materialize at around 5%-10% of total revenues. Lower than the typical level of performance fees, obviously. That results from a combination of some 2022 exits that were brought forward into 2021, as mentioned, and some other postponed realizations. We had lower valuations in some of our companies, and it also takes into account the method that we use to recognize performance fees. As we conclude these postponed exits in future periods, you will see the related performance fees come. You all saw this dynamic play out with postponed exits from calendar year 2020 that fell into 2021. Now, before I hand over to Philip, I'd like to reaffirm that we're highly confident, that we're well positioned to navigate the challenging macro environment, as I mentioned earlier. We've already started factoring in a lot of these elements into our underwriting 18 months ago. The trust of our clients means a lot to us and is a testimony to the positioning of our underlying business into our strategy. With that, Philip, over to you. Thank you, Dave, and also a warm welcome from my side. As Dave already mentioned, we had a good first half of the year confirming the continuation of our growth trajectory. However, we also acknowledge that the market environment is changing as we move into the second half of the year. Investments and divestments may slow, but underlying operational performance of our portfolio confirms the strength of the businesses we are building. Now, with that, we reached $131 billion in AUM at the end of June, versus $127 billion at the end of December last year. We believe that these commitments received by our clients confirm their confidence in the strength of our investment approach and our private market platform in general. With this, I would like to move to slide 13. This slide gives you a more detailed picture of our fundraising and AUM. Throughout the first half, we saw strong levels of client demand with over $13 billion in new commitments. As of today, we have not seen that demand substantially shift. While we acknowledge that the current environment is uncertain, we do not expect the outlook on 2022 fundraising to materially change. Our clients fully understand that the best way to realize the potential of private market returns is through consistent investments across economic cycles. In H1, we saw client demand for our bespoke client solutions, which accounted for 71% of assets raised, the highest ever recorded proportion. With bespoke client solutions, we subsume mandates and evergreen programs. Mandates accounted for 35% of total assets raised and are the firm's next generation tailored programs. With mandates, we help our clients to achieve their targeted investment level and to maintain it when we reinvest their proceeds. Our portfolio management team designs optimal investment strategies, both in terms of strategy as well as relative value asset allocations. We do this most often across several asset classes. It is often their job to not only manage the risks in such portfolios, but also to manage cash and hedge the FX exposure. At the core of these mandates, there is a dedicated portfolio manager that takes full responsibility for all these aspects. On the other hand, our evergreen programs, which accounted for 36% of assets raised, provide clients with an easy access to private market solutions. Clients in these programs are predominantly private wealth clients coming through our global distribution partner network, as well as smaller institutional clients. This segment, in general, is very under-invested in private markets, with existing allocations typically well below 5%. We believe there's tremendous secular growth opportunity here. It is not a question of if the demand increases in the years to come, but much rather on how the industry handles the right structures to accommodate the demand and meet return expectations of these wealth clients. Evergreen strategies are something we have actually been offering for 20 years, and our know-how in this sector has made us an industry as well as a thought leader. For example, we are proud to have the oldest and largest U.S. Evergreen equity fund, which recently passed $12 billion in AUM. Needless to say, traditional LP structures remain an important part of our fundraising. Their inflows are less consistently spread across the year rather than, for instance, evergreen structures, which are more coming in regularly. They are very meaningful in contributing to our growth. For instance, in February, we closed our third direct infrastructure program with a total commitment of $8.5 billion, of which a minor amount was accounted for the H1 fundraising figures. Looking ahead, we expect to see a steady inflows of commitments into our future flagship offerings. Across the asset classes, fundraising remained broadly in line with prior years, led by private equity at 51% of total assets raised. We closed our largest flagship fund last year, and because of this, the vast majority of fundraising in private equity in the first half of the year stemmed from mandates and evergreen programs. Private debt accounted for 25% of funds raised and remains an important contributor to fundraising, driven by broadly syndicated loans such as CLOs and direct lending solutions. Private debt is where investors go to hedge themselves against interest rate changes. Our private debt offering provides this protection, and we focus on senior debt, which has, in general, a floating base rate. Private infrastructure continued its solid growth trajectory and accounted for 20% of funds raised. Our performance in this asset class is a testimony to the ongoing demand for the resilient and essential platform building opportunities we can offer. However, we do not expect additional fundraising activities in infrastructure as the team needs to get the most recent fund invested. Our most recent investments in Budderfly, the fastest-growing energy-as-a-service provider in the U.S., shows that we are capable to deploy capital in attractive opportunities despite the current complex macroeconomic environment. Last but not least, private real estate. It accounted for 4% of total assets raised. We closed our last real estate fund in late 2020 and have invested over $4 billion in value-added real estate opportunities over the last 18 months, thereby catching up on lower investment volumes in previous years. Our team is now spending a substantial amount of time to properly onboard and position these assets to outperform in the current market environment. While we'll be launching our next real estate fund in 2023, Sarah and her team have already started having active conversation with clients ahead of the launch. On the right side of slide 14, you see our AUM split as of 30th of June. I would like to highlight that our bespoke client solutions continue to make up the majority of our AUM accounting for 67%, which include mandates with 37% and evergreen programs with 30%. Our traditional client programs make up the remaining 33% and confirm that our growth is generally well-balanced. With that, I would like to move to the next slide. Now, as we discussed the $13 billion of gross flows, let's go through the impact of drawdowns, redemptions, exchange rates, and performance-related effects. I'm starting with drawdowns. They came in at $3.6 billion. This is slightly below the midpoint of our 2022 guidance because we expect a tilt towards H2. As a result, we continue to expect tailwinds to meet our targets as communicated for the full year. Redemptions are different. We manage today $39 billion in evergreen programs, which provide some form of liquidity, typically 5% per quarter. Over the first half of 2022, redemptions were $1 billion, or 3% of our AUM. Evergreen programs were again a net contributor to growth as the inflows substantially exceeded the redemption. In view of the current market environment, we felt it important to provide more color on the process of redemptions. Most evergreen programs give clients the ability to subscribe and redeem to the programs on a quarterly basis. Redemptions have a three-month notice period. This means that we have a fairly good visibility where they will be in three months from now. Because of that, I can tell you that as of today, run rates do not indicate any relevant uptick in redemptions for the second half of the year. We believe the reasons for this is that our clients see the consistent return profile of these programs, as well as the conservative portfolio construction across growing sectors of the economy and in multiple asset classes. Especially in these more uncertain times, this plays to our benefit. As of 30th of June, we have dedicated liquidity within these funds and in the case redemptions do increase, yet we do not expect to hit any of the gating limits as we discussed. We do not have visibility on factors such as exchange rates and other performance-related items, and as such, do not guide on them. We don't think it will be a surprise to any of you that exchange rates have been experiencing a rather volatile period. For foreign exchange rates, we're contributing a negative $5.9 billion in AUM. This was mainly driven by the significant appreciation of the US dollar spot rate as of 30th of June, and in particular against the euro, but also against the British pound, Japanese yen, and Australian dollar. With regards to other performance-related effects, there is a positive contribution, as you can see, of $4.6 billion from our portfolio of products that link AUM to their NAV development. In this context, I would like to take up the comment from Dave about portfolio performance. He mentioned that valuations as of thirtieth of June are expected to further decrease across some asset classes in the amount of a couple of percentage points. These valuation adjustments are not yet reflected in our Evergreen programs. Since we report AUM performance data on Evergreen programs, we base our data on end of May numbers for H1 and end of November numbers for the second half of the year. This concretely means that we will only see the impact of June's performance in the second half of the year and its AUM numbers. We expect a small negative adjustment by a couple of percentage points, but this depends highly on the respective portfolio composition. With that, I would like to move to my last slide, which provides a more granular overview of the AUM breakdown by asset class. It shows that AUM development, fundraising and other factors which combines the impact of tailwinds, redemptions, and exchange rates. It clearly shows that we were growing on a half-year basis. We do not have a crystal ball, but we have been through this crisis in 2008 and 2020, and we know how to navigate this environment to continue to deliver sustainable growth. What we do see is our clients remain confident in our platform. Our portfolio performance also remains strong, and with that, we are assured on our growth trajectory as we move into the second half of the year. With that, I would like to conclude and pass on to Sarah. Thanks so much, Philip. I would like to share with you some of the exciting trends we're seeing right now, both directly in my day-to-day conversations with clients, but also demonstrated on the slide 17. Overall, we continue to expect that the long-term secular growth trajectory of broader private markets industry, and specifically of Partners Group, will continue to be driven by three key trends. Firstly, the growth of institutional assets under management. This is very much supported by the structural trends of rising allocations of institutional investors to private markets. Look, the majority of client conversations that I'm having right now often start with a, you know, we're looking to increase our allocation to private equity or to private markets in general. If they just have one or two of the private market asset classes, they're looking to gain exposure to the ones that they are yet to have. In the market, there are also estimates that the largest 25 institutional investors will approximately double their allocations over the next 10 years. To implement these allocations, investors are really seeking firms that are proven not only in terms of historic performance, that that's no longer good enough, but also in terms of service and governance as well. Many of the clients that we speak to today really demand that closer interaction, that deeper relationship, and the ability to provide bespoke private market solutions that are very much tailored to their increasingly complex requirements. I've seen a steady increase, as Philip discussed, in demand for mandates from our institutional investors. Recently, we actually won a mandate for a leading global insurance group based in the U.S., amounting to approximately half a billion dollars. We were competing here against very well-established global competitors, and the client ultimately selected us because of our extensive experience with fully paid-in investments, higher allocations to direct investments, robust performance and liquidity modeling, as well as a willingness for true partnership. This is very much emblematic of the discussions we're having now with clients globally, where they come to us with their specific requirements and look to us as a solution provider. Secondly, there are new pockets of capital, and we continue to see the DC markets increasingly open up. Started in Australia, we see it happening in the U.K., and the U.S. is on the same track. These markets will also get the benefits of private market returns in the future. Based on different research reports, it truly is reasonable to expect target date fund allocations of DC assets to open up over $400 billion to private equity opportunities in the next 10 years. For us, this is clearly a strategic opportunity, and we're ready to provide our proven top quality solutions to this particular market segment. Thirdly, the growth of the private wealth sector. Private markets are a huge untapped opportunity for the private wealth sector. The growth in this segment is an opportunity that Partners Group is particularly well prepared for. We started in 1999. We're already developing our private wealth offerings, and today we continue to be an innovator in response to localized client requirements, for example, with the likes of ELTIFs, and have long-standing relationships with distribution partners across the globe. We remain committed to making private markets more accessible to the private wealth client segment. We were instrumental in developing the market, and today we remain at the forefront of this. In sum, the private markets industry as a whole will experience extensive growth in the coming years, and we remain confident that Partners Group is well-positioned to capture the coming opportunities. With that, let's move on to the final slide of today's presentation. That's slide 18. This slide will look familiar to you and highlights the consistency of our private markets platform fundraising. In January, we provided guidance of $22 billion-$26 billion gross client demand for the full year. Based on robust client demand in H1 and our bottom-up analysis for H2, we are confirming our guidance for the full year. This analysis takes into account our various open offerings, our mandates, as well as demand from our distribution partners. While private markets will not be able to fully escape the heightened volatility that we've been seeing in public markets, history has shown that private markets provide robust diversification benefits and improve the overall risk-return profile of a portfolio due to their structural advantages. Our bottom-up analysis indicates that fundraising will continue to be diversified across asset classes, with private equity the largest overall contributor to inflows in 2022. However, investors are increasingly focusing on other asset classes to protect against inflation and interest rates such as private debt and private infrastructure, which is widely CPI linked. Let me provide some overview on the negative factors. Our full year estimates for drawdown effects from the more mature closed-ended investment programs have not changed from previous guidance. As Philip mentioned, we expect redemptions to remain fairly equal over H1 and H2 with the potential for limited increase in redemptions from evergreen programs. That said, tail downs are estimated to have a negative impact of $8 billion-$9 billion, and redemptions are estimated to have a negative impact of $2 billion-$3 billion. This brings the total number of negative effects to $10 billion-$12 billion. Let me conclude today's presentation by saying that while many variables will drive the actual outcome, we're confident that the structural growth drivers for private markets in general, and for Partners Group in particular, are very much intact. We'd like to conclude by thanking you for listening in on our call today. We look forward to speaking to you again soon. That will be on the thirtieth of August when we will present our H1 2022 interim results here in London. With that, 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 their touch tone telephone. You will hear a tone to confirm that you've entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Webcast viewers may submit their questions or comments in writing via the relevant field. Anyone who has a question or a comment may press star and one at this time. The first question is from Nicholas Herman from Citigroup. Please go ahead. Yes, thank you for taking my questions. Three from me, if I may. First question, just in terms of LP preferences and demand, could you update us please on what your clients are telling you and what they're looking for? I guess that's also in the context and not to take anything away from your well-diversified sources of new money, but there was, I guess, a notable drop-off in traditional money from traditional programs. Secondly, could you please talk about what the pipeline of activity, I guess, in terms of deployment and realizations looks like into the second half? I guess on the realizations side, that's in the context of your guidance for tailwinds of eight to nine and redemptions of two to three versus less than five in the first half. Finally, could you kindly please talk about your current assumptions on default rates on the private debt side and how those might have changed? We saw JPMorgan take, for example, a decent chunk of provisions today, particularly on the leveraged finance side, although I know that you did talk about it's you guys also on the senior debt too. Those are my three questions. Thank you. Yeah, thank you very much for your questions. I'll address your first one, where you asked about LPs and what they're looking at the moment. I think, you know, as I mentioned, you know, there is demand across the board for increased allocations to private markets. At this particular moment in time, it will come no surprise to you that they're concerned about inflation and interest rates. With that, they're a little bit more than usual into real assets. Those are very much the conversations. It relates. The second part of the answer to that question relates also to your second question, which is they actually have more interest in the bespoke solutions with us and mandates, precisely because of the market volatility. In many cases, we're having discussions with clients where they come to us and they want to have a manager that can actually be a bit more nimble to take advantage of the opportunities that we see, and their current setup, often due to governance reasons, doesn't allow them to do that. They can come to us and say, "Look, these are the requirements I have. These are the concerns within my portfolio right now. Can you create a mandate for us that takes that into account?" That's, I think, partly why we have seen this considerable growth in mandates overall. Hopefully, that answers that part. You also then said about, you know, the traditional programs and the importance of those, and they're clearly absolutely important. I think it's more a reflection of timing rather than anything else. If we look across the board, we're about to have the first close for our private equity fund. That will obviously fall into the second half of this year. I think it's not that one area is more important than the other. They all have their place. It's just a timing thing as we see it right now. You asked about the pipeline of activity for the second half of the year related to both new investments as well as realizations. We are still very active on the investment side. We are in our investment committee every week, debating and wrestling with our teams over the right approach for various investment opportunities. We are actively submitting proposals and submitting bids and pursuing targets that we have had in our sights for quite some time. I do expect a little bit of a lull in transaction activity here, as mentioned, from this kinda May to August time period. We have seen a little bit more of a disconnect between buyers and sellers on valuations, and I think that needs a little bit of time to get processed. On the realization side, we do have a number of mature companies that have potential to you know to be exited in the second half of this year. We want I think to sell into a reasonably benign market environment. We're currently waiting to see how a couple of processes that we're watching kind of play out, and then we'll make a decision on whether or not to pull the trigger on some of our more mature exit opportunities. On the private debt side, we do have some liquid debt that gets marked to market. On the private debt side, we are anticipating, as I think I mentioned in the prepared remarks, a little bit of uptick in defaults. Within the private markets, within the middle market where we play primarily, we haven't seen that come through materially. I don't have any specific guidance for you with regards to where we anticipate defaults coming in within middle market lending. I do anticipate it being certainly above where it's been over the last two or three years, where they've been at very low levels. Then if I may take- Sorry. Sorry. Nicholas? Nicholas. Go ahead. No, you're No, no. Well, I was gonna. If I could just paraphrase you or change it slightly. It sounds like, given that you don't want to be exiting in a volatile market, which is obviously understandable. The market environment would have to materially change, I guess, therefore for your performance fee guidance, to change for the full year. Well, I don't think it's materially changed. What I would say is we wanna have comfort that some sizable exits are happening in the marketplace. We're actually getting our door knocked down still from large buyers with significant amounts of dry powder that are interested in acquiring target companies. For us, it's about transaction certainty. It's not like, you know, there's not interest to put money to work in the market right now. It's just that we've had now a couple of months with lighter transaction volumes, and we wanna make sure that, you know, that there's a reasonably benign market that we're falling into. I do anticipate that, you know, that we're gonna need a couple of months here to be able to give you good guidance on the second half of the year. I think the guidance on the first half of the year is gonna be spot on. I don't have any guidance for you on the second half of the year because it depends on how a couple of these larger exit processes play out. Got it. Thank you very much. The next question is from Bruce Hamilton from Morgan Stanley. Please go ahead. Hi. Yes. Afternoon, and thanks very much for the presentation. So just picking up on the performance fee point, I mean, I think you've been relatively clear. But to understand, I mean, I guess your expectation, even if, say, we go into recession in Q4 into Q1 of next year in Europe, which is what our economists assume, you would still expect that 2023 should be back to a kind of normal performance fee year. I know this is slightly crystal, you know, crystal ball gazing. But if there's a downdraft on performance fees, it's really just this year, you would think? Or is there a scenario where actually the recovery could be pretty gradual through 2023 as well, and so you could, you know, come in below the next year as well? Is that kind of low odds, just to check. Maybe Bruce, if I may, to answer your question, performance fees may fluctuate from year to year. We give a mid- to long-term guidance of 20%-30%. Most importantly, these performance fees, whether they come now in 2022, come in 2023, these are postponed. As Dave said in his presentation earlier, right? When it does not come at the end of this year, it moves into 2023. Then we see situations as you have seen in 2021, where performance fees spike. Then we would definitely also inform you and provide guidance. But what is more important is that there is just a lower amount of volatility in the market, right? It's whether recession or not, it is much more important that the market somewhat stabilizes. What we have seen in the latter of Q2, that wasn't the fact, and that's why we have postponed. Got it. Maybe just on deployment. Clearly the deployment's really impressive in the first half, and I guess obviously, you know, that could slow a little as you indicate. I mean, it feels as though versus perhaps some of your peers, you're better able to finance deals. Is that you think a function of being in the mid-market allows you to get more done than perhaps people in the large cap space? Or is it, you know, a range of factors that have allowed you to keep as active as you have? Yeah. I think the middle market provides more financing options because you can get financing solutions done with private lenders and aren't completely at the whim of syndicated markets. I do think that does play into the equation to a certain extent, Bruce, yeah. Great. Thank you. The next question is from Hubert Lam, from Bank of America. Please go ahead. Hi, good afternoon. I got a few questions. Firstly, on fundraising. You had $13 billion in the first half, and you're still targeting $22 billion-$26 billion. Should we expect it now to be at the top end of the range? Or is there any seasonal effect that may cause a slowdown in second half or just smaller new product pipeline to second half that may make second half a lower number? Second question is, I know we just talked about 2022, but given your optimistic outlook for 2023, should we, in terms of fundraising, increasing asset allocation on the wealth side as well as institutional side towards private assets, expect 2023 to be at least as good as 2022? I know you also mentioned new real estate fund launching in 2023. Just wondering how we should think about beyond this year and how do you consider also increasing competition, possibly a crowding effect as well as a denominator effect affecting fundraising into next year. Lastly, in terms of valuations, I guess you gave one element of it, which is the earnings growth 15%. Can you also give us what multiple contraction you've also assumed in your portfolio for the first half? Thank you. Thanks so much for your question. Yeah, to your first one, look, as I mentioned, we reiterate our guidance of $22 billion-$26 billion. This is supported from our bottom-up analysis that we've done. Now, where we fall within that range will clearly depend on a number of factors. I obviously don't have the crystal ball either. What I can say is, you know, if the market worsens from where it is now, there could be a chance that clients' commitments do roll over into 2023, and that would mean that we end up at the lower end of the range. That sort of to the kind of where we might end up in that if that worsens, that's sort of where we would look at that. If markets don't worsen, then we envisage being in the upper half of that range. I think you also asked about the market and fundraising and the crowding, and then the outlook overall, and what we look to see going forward as well as the 2023 outlook. I think firstly to talk about the crowding of the market. I think from our perspective, and hopefully that's been articulated, I think we have some, you know, key differentiators, that will be helpful for us to take advantage of those structural trends that we have seen overall. That's especially within, say, the private wealth space as we mentioned, as well as other areas and the bespoke solutions. I think that really gives us a differentiator, compared to our peers to take advantage of that. As well as that, you know, we're having multiple discussions with clients really to meet their specific needs, as I mentioned, and I think that's again, a differentiated versus just having flagship offerings out there in the market. I think at this stage it's difficult to, you know, say, okay, what is the trajectory going forward? We will obviously give you guidance of that, as and when we come to that point. I think overall, you know, we feel very, very confident that there are structural factors that will be helpful for both us and the market in general, which will, you know, increase private market allocations overall in clients' portfolios. That's very much what we're supported by the data and what we're hearing with our client interactions as well. On the crowding effect, I mean, it is a very real phenomenon. I don't think maybe outside observers realize how real that dynamic is. It used to be that your average private equity fund had about a four year life to it. More recently, our industry's had about $2 trillion-2.5 trillion of dry powder and about $1 trillion of transaction activity. That means your average fund life has shrunk to about two years. With all of these funds coming back into the market in a concentrated period of time, it's initiated what I think will be a period of natural selection within the private markets industry, where the strong get stronger and the weak become obviously much less relevant. Where we're starting to see market share concentrate is in the larger platforms that can be more comprehensive solution providers and in niche players who do one thing really, really well. That tends to be where the market share is gravitating towards. The monoline funds that are a little bit less differentiated, I think are gonna find it challenging over the next couple of years. You asked about valuations and about multiple contraction. You know, maybe just to helicopter out a little bit. Our industry over the last 15 years has gone from buying companies at about 8x on average to today, buying companies at about 12x on average across the board. Now, the largest players, the most successful firms are buying some of the best assets and have been buying in the teens. But if you just look at the industry overall, transactions have been getting done at about 12x. Now, the industry used to be a lot smaller, and there was a lot of inefficiency that was found 15 years ago that is not found today. Part of the uplift in valuations has come from just the maturation and the growth of the sector, and that is here to stay. On average, I do think, though, that you're gonna see, you know, companies that were trading at 12x, trading at 11x, trading at 10.5x. I don't anticipate a scenario in which we're back to the 8x valuation multiples, you know, that we saw 15 years ago as maybe some would suggest, because a lot of the increase in valuation is structural. Our industry is gonna, I think, price much closer to where public markets have been pricing, which is around 12.5x over the long run, 12x-12.5x in the long run, as opposed to where it priced 15 years ago. Within each of our individual underwriting cases that we bring to our investment committee, our teams will look at the long trends. They'll look at how elevated is that particular subsector trading versus what the long-term trends have been. I've seen as high as two in a half turns of multiple contraction recently, two turns, you know, one half turns. It just depends on the individual sector. We do try and be thoughtful about it. Great. Thank you. The next question is from Arnaud Giblat, from BNP Paribas. Please go ahead. Oh, yeah. Good evening. I've got three questions, please. Firstly, I was wondering about the evergreen flows. There is some retail or kind of money in there which can, I mean, in some sectors face certainly asset management in the three B be affected by volatility. Is this an expectation that we have for you? Is that something you'd expect to see as well? I mean, you did say that some redemptions haven't picked up, but I'm just wondering about what it's looking like on the gross flows side. Secondly, on secondaries, CalPERS just announced the sale of a big tranche of their private equity portfolio. I'm just wondering if you're seeing a lot more activity in the secondaries market and what pricing is looking like. Is it attractive? Is there a big opportunity to deploy capital there? What's the expectations in secondaries? Finally, could we just go back perhaps. I'd like to follow up on Hubert's question in terms of how the mid-single digit drop in valuations in Q2 that you talk about, how that breaks out between growth in potential portfolio companies, multiple contraction, and any other moving parts out there maybe. Thank you. With regard to the first question on evergreen flow, there's, you know, retail and then there's retail retail. These are high net worth clients by and large. These are RIA advisors. We have found these vehicles to actually be much more stable than even we would have predicted. If you look at how you know, again, we've been doing these for 20 years now. If you look at how they performed over the financial crisis, how they performed over COVID, how they performed over the last period of time, it's clear that investors view private markets as a place to gravitate towards during periods of volatility, not a place to run away from during periods of volatility. These high net worth clients that we're targeting have, I think, showed a lot of stability in the way that they have behaved through not just this last six-month period of time, but through every market blip that we have observed over recent history. With regards to secondaries, I do think that this is going to be a big opportunity. Now a lot of people talk about the denominator effect and how that impacts the secondary market. We've been hearing a lot of talk about that, but not a lot of transaction activity. I do expect a resurgence in traditional secondary activity. Over the last couple of years, you've seen most of the growth in that segment of the market come from GP-led portfolio restructurings and extension assets. I do think we're gonna see a resurgence in traditional secondaries as people look to balance out the public and private elements of their portfolio following the most recent correction. I think the CalPERS move could be, you know, one in that direction, but there's others that we've been having conversations with, but you're yet to see a lot of that transaction volume come through. Even in the GP-led segment of the market, you know, we've had several examples of transactions that we've passed on, I guess other people passed on as well, and we're starting to see those come back at lower valuations. I do think you could see at some lower valuation levels, you know, some of those transactions that have maybe been pursued but not announced, start to come back to the table and you might see some traction there as well. This has the potential, if this market environment, you know, sustains in this way to be a very, very good market for secondaries. Our team is primed. They're ready to go. Many of our clients are actually asking for us to add flexibility within their mandates to add more secondary content right now because there is a sense that this is gonna be one of the key themes over this next period of time. Now with regards to mid-single digit, we don't have a huge growth element to our portfolio. We have a pretty boring, frankly, middle market portfolio that we're really trying to transform strategically. We have, you know, some growth assets, but not you won't find a ton of the big techy type of exposures or the you know non earnings generating technology investments, et cetera. That drop is spread across sectors. Our health portfolio is pretty stable. Our services portfolio is pretty stable. The technology exposure we do have will be at the larger end. We have what's called our goods and products portfolio that will experience probably the most significant correction of that group. We don't have a lot of growth-y stuff that you need to sweat or worry about. If I may add, Dave, you talked about a 15% quarter-on-quarter EBITDA growth. If we look at the last 12 months from Q1 this year, the EBITDA growth is north of 20%. That mitigates a substantial part of the valuation decrease we will experience in our portfolio despite the public market decrease and also despite we use public peers as a reference for valuing these portfolios. Now we have in our portfolios, and I think that is what Sarah talked about, quite a diversified approach. You not necessarily have, and that is the asset classes Dave talked about is pretty much direct lending. Our portfolios are most often multi-asset class, multi-strategies, and therefore, the diversification mitigates the impact of a direct revaluation. While Dave said we could be in the mid-teens of a direct portfolio in private equity, this depends heavily on the different sectors, right? That is mitigated by diversification factors in the portfolio. All right. Very clear. Thank you. The next question is from Daniel Regli from Credit Suisse. Please go ahead. Hello, good evening, and thanks for taking my questions. I mean, it's largely a bit of a follow-up question. One on the performance fee and exit environment, and maybe can you just put the guidance, obviously of 5%-10%, into context with the H1 2020, where you achieved, when I remember it right, 9% performance fees. Do you see this as a similar environment or even a more difficult environment, just looking at this percentage performance fee contribution numbers? Maybe also regarding this, can you maybe talk a bit about I mean, you talked already about that this preponing and postponing of deals has contributed to this. Is this the full story or was it also that you achieved lower valuations than expected when you're exiting your assets? Can you maybe quantify a bit how much contributed these two factors to the current situation? My third and last question would be, can you talk a bit about how you measure returns? I think in the beginning of your presentation you talked about your clients being happy with returns. How often are traditional private equity portfolios revalued and valuations reported to your clients? Thank you. Maybe, thank you, Daniel. I start with maybe the first and last. We do have for our semi-liquid exposure a monthly reporting rhythm, right? For our LP clients, close-ended structures mandates, we run a quarterly reporting rhythm, right? Based on valuations we also actually see in in our evergreen structures. From that end, we are given these semi-liquid structures actually quite close to the market. Now that said, you mentioned about the 9%, which we actually reported during COVID. Is it similar? Yes. COVID is not similar to what we experience today, but what we see is that there is just a falling short of liquidity events. You need, in our industry, especially at Partners Group, realizations to show performance fees. If you are just putting yourself back into the March 2020 situation, there is no reason to actually pursue a liquidity event. We have seen in Q2 now a similar, not event, but a tendency that liquidity is just it just makes no sense exiting companies at this stage. No exiting companies means also no cash flows. No cash flows in turn means also low performance fee. That's why we actually provide that guidance. It's somehow similar, also not similar. Okay, I see. I see. You referenced, you know, the guidance that we gave in 2020 being less than 5% performance fees, and we ended up coming in at 9% in the, you know, first half of last year. That was as a result of a lot of distributions that came from the portfolio side of our business, as well as the debt side of our business. That was just more significant than we had anticipated when we gave that guidance in 2020. You'll also see from the presentation, the vast majority of liquidity that was generated in the first half of this year also came from similar places. You know, the lower expectation in terms of performance fees this year has almost nothing to do with selling our companies at less than we had anticipated. That's almost zero factor. It has 100% to do with postponing the direct investments to make sure that we're selling into a decent market. Okay, thank you. Very clear. Just may I follow up on the first thing Philip has said? Just, can you quickly confirm that on the majority of your assets, these revaluations do not have any impact on management fees charged, right? If I may. The valuation changes are typically not relevant for performance fee calculations. Nonetheless, if, for instance, for evergreen products which link their fees or management fees to NAV development, yes, that might have an impact on management fees. Given that they were, as you see, flat in the first half of the year, there is also, in that sense, a flat management fee development for evergreens, at least to be expected. Okay. Very clear. Thanks a lot. The next question is from Gurjit Kambo from JPMorgan. Please go ahead. Hi, good afternoon. Just a couple of questions. Firstly, in terms of you know, clients, given you know, public markets have dropped quite significantly and public equities have come down probably 20, 30, 40%. Allocations, I guess the allocations you know, for private markets have sort of mathematically gone up. You know, are you seeing some clients sort of pushing back on you know, allocations given they're already probably increased their weighting because of that shift? That's the first question. Secondly, just in terms of asset raising in the first half, you know, was it more skewed towards existing clients than it would be perhaps in a more normalized environment? Thirdly, just on the fee margin, I think I know the answer, but can you just confirm that the margins, the management fee margins on the bespoke mandates are broadly similar to the margins on the traditional client programs? Thanks. Thanks for the questions. Yeah. You referred to the denominator effect. Look, for some of the more technical allocators, and that's very much like insurance companies, that can play a bigger role because they actually have to technically allocate, and therefore it can change pretty quickly. That's about 10% of our client base. In general, what we're seeing with most of our clients is that their target allocations or their long-term target allocations are still well above their current exposures in most cases. You totally refer to something which is happening and is correct, and I think will have an impact. In general, what we're seeing is that their target allocations are still. They still have room within that. I think that's answering your first question. Sure. You referred to the split between new and existing. It's actually been about 50/50. So the only nuance was during COVID times, it was a little bit more skewed to existing clients. But this year we see it split pretty equally. Thanks. In terms of margin, they come in with the same margin. Thank you. Thanks for that. Thanks. Any further questions, please press star and one on your telephone. The next question is from Angeliki Bairaktari from Autonomous Research. Please go ahead. Good afternoon. Thanks for taking my question. Just one for me with regards to the institutional investor allocations that you touched upon earlier. Anecdotally, we do hear some insurers saying that they are considering pausing or even reducing their allocations, and that's not so much shorter term because their public markets allocations have declined due to the drop, but also because the traditional fixed income asset class, which has a much lower capital consumption for insurance businesses, in particular in Europe, is becoming now more attractive. Is that something that you're hearing from your insurance LPs as well? Could that be a concern longer term? Thank you very much. Sure. As Sarah mentioned, I think the trends that we've been observing over the past two decades of private markets continuing to take share from public markets, we think is a structural trend. For every anecdote that you have to the contrary, I can that support that case. I met with one of our large sovereign clients a little while ago, and they were just emphatic they're gonna be taking their private allocation from, I think it was 17%-25%, to take advantage of kind of the dislocations that they're seeing and in support of this. In the insurance world, as mentioned, they do tend to be tactical allocators in some cases. You could have some people that are gonna be more high yield focused in the near term. I think the private markets and I think the private debt solutions that we provide within private markets versus even what you can find in public markets I think do provide compelling value over the balance. We don't see any large-scale anecdotal or large-scale data that would suggest that we're gonna come off of that trend towards structural growth within private markets at the expense of public markets. Thank you very much. With that, we have actually one last question to Sarah, via the web. Perfect. Someone has asked about DC offerings in the U.K., and this is absolutely something we've thought of. They've asked if we've thought of it and considered it. We have a DC offering. We were one of the pioneers within the space. That DC U.K. offering is about $1 billion now. It's a really interesting marketplace right now. You mentioned, you know, the government is further supporting this initiative right now with performance fees coming out of the charge cap. I think this is a very interesting time for growth within this area. We are already there and in the space. Thank you. Thank you, Sarah. With that, I think there are no further questions. Okay. With that, we'd like to thank all of you for your interest in our company and your participation on today's call, and we really look forward to chatting with you on our next update. Thank you very much. Thank you. All the best.