Petershill Partners reports solid third-quarter performance

Petershill Partners, a global investor in alternative asset managers, reported a solid third-quarter performance in an update on Tuesday, supported by strong partner fee-related earnings (FRE) and significant capital returns.

The FTSE 250 company said that despite a 1% quarterly decline in aggregate partner-firm assets under management (AuM) to $328bn, the figure still rose 8% year-on-year, while aggregate fee-paying partner-firm AuM increased 18% annually to $233bn, reflecting robust long-term growth.

Partner FRE for the quarter reached $57m - an 8% increase from the same period in 2023, driven by a 7% rise in net management and advisory fees to $97m.

Petershill said partner distributable earnings grew 13% year-on-year to $90m, benefiting from higher FRE and a $9m year-on-year increase in partner-realised performance revenues (PRE) to $23m.

The firm completed the sale of its stake in LMR Partners during the quarter for up to $258m, achieving a slight premium over its carrying value as of December 2023.

Additionally, after the quarter ended, the company sold part of its stake in Accel-KKR (AKKR) for $282m, representing a $29m premium to its June carrying value.

The board said the transactions contributed to total nominal consideration of $575m from sales of partner-firm stakes in 2024, reflecting a 19% premium over carrying values.

It also announced a special dividend of 17.5 cents per share, amounting to $189m, payable on 20 December.

That would bring total capital returns announced during the year to $449m, and cumulative returns since 2022 to $888m.

Partner-firms raised $9bn in gross fee-eligible AuM during the quarter, pushing the year-to-date total to $23bn.

Petershill said it now expected 2024 organic fee-eligible AuM raises to reach the upper end of its $20bn to $25bn guidance range, while realisations were projected to slightly exceed the $5bn to £10bn range.

The company said it remained confident in its guidance for 2024.

“During the first nine months of 2024, we are pleased with our partner-firms' ability to raise $23bn of fee eligible assets, despite the slower fund-raising environment,” said managing directors Ali Raissi-Dehkordy and Robert Hamilton Kelly in a joint statement.

“The robust asset raising and growth in fee-paying assets under management has translated into good growth in FRE during the first nine months of 2024.

Strategically during the quarter, we made strong progress with the completion of the disposal of LMR Partners and subsequent to the quarter end we completed the partial sale of predominantly balance sheet investment capital in AKKR.”

Raissi-Dehkordy and Kelly said the disposals were consistent with the firm’s strategy of focusing on high quality management fee centric earnings, while also demonstrating its ability to realise assets at “attractive valuations” relative to their holding values.

“As we look forward, our partner-firms' robust capital raising and the company's dynamic approach to capital allocation underpin our ongoing confidence about our prospects for shareholders.”

At 0850 GMT, shares in Petershill Partners were up 2.7% at 247.5p.

Reporting by Josh White for Sharecast.com.