Partners Group: Canary in the Coal Mine?

"Only when the tide goes out do you discover who's been swimming naked."

– Warren Buffett

Private markets.

A key term and asset class that has grown dramatically over the past three decades.

From a niche corner for pension funds into a $13 trillion colossus that now reaches all the way down to your private banker's brochure.

The pitch was seductive: higher returns, lower volatility (or so the mark-to-model claimed), access to companies that never bother to list. For thirty years, the money flowed in one direction: more.

But here's why it should matter to you even if you never buy a single private-markets fund.

There's a bargain at the heart of it that nobody says out loud. Private markets pay you a premium — a few extra percent a year, history suggests — for one thing above all: giving up access to your own money. Lock it away for ten years, the theory goes, and you earn more than you would in liquid, daily-traded investments (chart 1).

That extra reward even has a name. The illiquidity premium.

It is the engine of the entire $13 trillion machine. The pension fund accepts it because it has decades to wait. The endowment accepts it because it never needs the cash. And for thirty years, it worked beautifully — you were paid, handsomely, to be patient.

But a premium for illiquidity is only a gift as long as you never need liquidity.

The moment you do — the moment everyone does, all at once — that elegant bargain flips into a trap. The reward for locking the door becomes the penalty of not being able to open it.

And right now, deep in the Swiss financial establishment, a door has just been bolted shut.

Enter our beloved Swiss private-markets champion.

Partners Group.

Or, PG.

Chart 1: Investment returns generally increase with degree of illiquidty

Partners Group: The Pride of Zug

To understand why this matters, you must understand what PG built.

In 1996, three men — Alfred Gantner, Marcel Erni, and Urs Wietlisbach — left their jobs at Goldman Sachs and set up shop in sleepy Zug. Their bet was almost heretical at the time: that private equity, then the exclusive playground of vast American institutions, could be packaged, structured, and brought to a far broader base of investors.

They were early.

They were Swiss.

And they were right.

All three founders were in their late twenties when they walked away from Goldman Sachs. They built one of the world’s great private-markets houses not from Wall Street or the City of London, but from Zug — a Swiss town of barely 30,000 people, better known for low taxes and cherry cake than for high finance.

I have a soft spot for this story, because I worked just down the road.

For five years I sat at a Zug multi-family office, managing money for the ultra-wealthy — and the biggest lesson wasn't some secret fund or exclusive deal. It was the mindset. The rich don't chase the hot stock or panic at every headline. They think in decades, not quarters, and stay calm while everyone else flinches.

The magic was never the access — not the exclusive fund, not the velvet-rope product. It was the behavior. The patience. The temperament.

So, we built arvy. Not to sell you the next exclusive fund — but to put that same patient, long-term way of investing into everyone's hands. The mindset of the rich, minus the velvet rope — a few taps away.

That's the lens I'm writing this through.

Back to Partners Group. Thirty years on, the alternative asset manager oversees roughly $185 billion and is one of the most successful financial businesses Switzerland has ever produced (chart 2).

How does it make money?

Two ways, and both are beautiful.

First, management fees — a steady annuity of roughly 1.2% on committed capital, year after year, whether markets rise or fall. Second, performance fees — the famous "carried interest," a slice of the profits when investments are sold well.

The first is the bedrock; the second is the kicker.

And the genius is in the lock-up. Traditional PG clients commit their capital for eight to twelve years and cannot leave. That contractual captivity is the moat — it gives PG a recurring, predictable, sticky revenue stream most asset managers can only dream of. For years it made the business look unbreakable.

A look at the valuation?

Your Swiss heart skips a beat.

Over the past decade, PG traded at an average forward P/E around 25. At its recent low it fell below 16 — a roughly 30% discount on its own ten-year average, the cheapest it has been in a decade. After years of steady increases — which will soon earn PG the title of “Swiss Dividend Aristocrat” — the dividend yield has risen to nearly 7%.

A near-7% yield from a wide-respected compounder that has raised its dividend every single year since listing. It looks like the best "Good Story" in Switzerland — a textbook buy-the-dip.

And this one is personal. If you’re Swiss, there’s a good chance you own a piece of PG without even trying — in your pension fund, your bank’s model portfolio, your parents’ securities account. This isn’t some abstract American ticker. It’s ours. Which is exactly why the next part stings.

Such a discount begs the question: is it cheap for a reason?

Is this the reckoning of private markets?

Is the best now behind it?

Let's check.

Chart 2: Partners Group AUM growth and key milestones

Partners Group Importance and Why the Canary Sings

But first — Thierry, come on, what’s the deal with the bird?

Sure, let’s start by looking back in history on this Friday morning. There’s a reason coal miners used to carry a canary in a cage.

The bird's small lungs reacted to toxic gas long before the miners felt a thing. When the canary stopped singing, you ran — because what killed the bird first would kill you next.

And here enter private-markets firms. They are the canary of the modern economy.

They sit closest to credit, to liquidity, to the raw risk-on sentiment that powers every bull market. When confidence is high, money pours into their funds and the song is loud. When confidence cracks, the redemptions come — and the bird goes quiet.

The canary wasn’t folklore — it was law. British mines used the birds until 1986: a living early-warning system, paid for in feathers.

And the PG bird had already been twitching. In late April, US short-seller Grizzly claimed 40% of PG’s investments were “drastically mismarked” — Wall Street’s way of saying the brochure prices are fiction. PG hit back hard, calling the report “ridiculous, defamatory and highly misleading.” Maybe Grizzly is wrong. But remember the epigraph: you only see who’s swimming naked when the tide goes out — and the tide is going out.

Fast forward to June 3, PG's bird still went very quiet.

The firm was forced to gate its $8.6 billion Global Value evergreen fund — to cap withdrawals — after investors asked to pull nearly 10% of the fund in a single quarter, double the 5% the rules allow. Only about 62% of those requests were honored. The rest had to wait. The stock fell 16% — its worst single day since it went public in 2006.

This is the dark side of the "evergreen" fund: it promises the very thing the illiquidity premium was paid to withhold — liquidity. You can ask for your money quarterly, but the assets underneath take years to sell. When everyone heads for the exit at once, the door is too small. They’re stuck.

And here is the lesson worth tattooing somewhere: liquidity is everything. Never forget this. A business can be solid, profitable, even cheap — and still be punished savagely the moment its investors can't get out.

PG is not alone.

The redemption freeze rippled across the entire industry — Blackstone, KKR, Ares, Blue Owl, Cliffwater, Apollo. One after another, the great names of private markets have been gating funds over the past months (chart 3). And the chart shows the tell: these names turn first — they lead the market, they don't follow it. That’s why it is important to have them on the radar.

And here is what should make you sit up.

The redemptions didn’t start in private equity. They started months earlier in private credit — the riskiest, most leveraged chamber of the mine — and only then spread into private equity. The gas is moving from one chamber to the next. That progression, not any single fund, is the real signal.

The canary is singing a strange new tune.

And the “Good Chart”?

It smells trouble.

Chart 3: Private-markets peers gating redemptions and tumbling stock price — the sector-wide squeeze

Partners Group “Good Chart”: the more the damage, the longer the repair

For once, it isn't pretty (chart 4).

For years, PG climbed the way great compounders do: a patient, rising staircase of higher highs and higher lows. Then came 2026. The stock has carved out a nosedive that broke three things at once — and in technical analysis, breaking three things is rarely a coincidence.

First, it shattered the long-term uptrend, the rising line that had guided the share price for the better part of a decade.

Second, it sliced through major support — the floor that had held on every previous dip — and did so on heavy volume, the footprint of institutions rushing for the door.

Third, and most telling, the whole trend structure has broken. The orderly staircase is now a falling stairwell, momentum points south.

And here is the uncomfortable rule of charts: the more the damage, the longer the repair. A clean uptrend can resume in weeks; a structure this broken needs months, sometimes years, to rebuild a base worth trusting.

So, which is it? The bargain of the decade, or the first crack in something larger?

There is a real case for the bulls.

Insiders have bought roughly CHF 50 million of their own stock this spring — and, tellingly, kept buying after the June crash, not before it. Management swears the business is solid, private credit under 3% of assets, the panic "a massive overreaction." At a 30% discount to its decade-long valuation and a near-7% yield, the upside from here is real. The canary may simply be holding its breath.

But there is also a more sobering possibility: that this small Swiss bird, already under pressure alongside its competitors, is starting to feel the effects of a trend that hasn't yet reached the rest of the market.

Switzerland’s proudest financial export, at its lowest in ten years, a dividend to make any Swiss heart beat faster — and a chart that just broke in three places at once.

Fact: The canary has stopped singing.

And yet the insiders are loading up — buying their own shares with both hands, after years of selling. They say the bird is fine and the alarm is false. Maybe they're right. Maybe they're not.

At arvy the rule stays simple: a «Good Story» needs a «Good Chart» — and this story doesn't have one yet.

So, we don't climb down the shaft to find out.

We wait for the bird to sing again.

Chart 4: Partners Group — the break of uptrend, support, and trend structure