PGPE Limited reported a full-year 2025 net asset value (NAV) of EUR 13 per share, with a total return of -8.7% including dividends, management said on its results call. Investor Relations representative Andreea Mateescu attributed a significant portion of the decline to currency moves, noting that U.S. dollar weakness created an almost 6% headwind for the globally diversified portfolio.
Mateescu said underlying value creation was “modestly positive,” but performance was held back by “idiosyncratic challenges” in a small number of holdings. Even so, the company emphasized strong liquidity generation during the year, supported by multiple exits that translated into significant fourth-quarter proceeds.
Distributions rise as exits pick up
Shareholder returns included almost EUR 52 million in dividends, which the company said aligns with its objective to distribute 5% per year via semiannual payments. In addition, it deployed almost EUR 6 million into share buybacks during 2025 under a EUR 50 million buyback program announced in October and extended to April 2026, bringing total capital returned through dividends and buybacks to nearly EUR 58 million.
In discussing realizations, management said listed holdings contributed roughly EUR 55 million, driven primarily by Vishal, Galderma, and Global Blue. The year’s realization activity was described as anchored by three assets where the company retained some participation for future growth:
- PCI Pharma Services, described as having been transformed during Partners Group’s ownership into a global contract development and manufacturing organization (CDMO) with advanced drug delivery and biologics capabilities.
- International Schools Partnership (ISP), founded in 2013 and scaled to 111 schools across 25 countries, with continued expansion and technology-enabled learning initiatives.
- Techem, a European submetering and energy efficiency business positioned to benefit from global focus on energy efficiency.
Portfolio repositioning and pipeline into 2026
Senior Portfolio Manager Federica Cazzaniga said the pace of realizations in 2025 accelerated portfolio repositioning. The company’s top 10 holdings now account for less than 40% of NAV, and five of the top 10 holdings at the end of 2024 experienced a liquidity event during 2025. Following partial realizations, PCI and ISP were resized to less than 2% of NAV, while assets including DiversiTech, Foundation Risk Partners, and Forterro moved higher in the rankings. USAC and Allied Universal entered the top 10, described as essential infrastructure service providers where Partners Group has longstanding familiarity.
Looking ahead, Cazzaniga said the sale of Clario has been agreed and is expected to close in 2026, and that a material block sale in Vishal Mega Mart has already been executed in 2026. She also noted the company’s weighted average holding period has reduced to 4.6 years at year-end 2025, below 5 years, compared with an industry backdrop of longer holding periods.
Operating performance and three company-specific setbacks
Partners Group Head of Private Equity Wolf-Henning Scheider said the year was challenging due to macro headwinds including tariffs and geopolitical tensions. He reported 7.2% last-twelve-month (LTM) EBITDA growth across the portfolio, with valuation multiples at 16.6x and net debt at 6.1x, which he said the firm considers reasonable for the portfolio.
Scheider attributed the year’s overall performance profile to broad portfolio resilience offset by three idiosyncratic cases:
- KinderCare: A U.S. childcare/schooling company affected by what he described as speculative investor reaction following the administration’s shutdown of the Department of Education, along with declining maternal workforce participation and what he characterized as a weaker management configuration early in the year. Management was changed, with former CEO Tom White returning to the role.
- Ammega: Experienced multiple contraction amid industrial weakness in North America and Europe, leading to slow or no growth. Scheider said the firm strengthened go-to-market strategy and expects growth from 2026.
- Pharmathen: Faced a partial manufacturing shutdown after an FDA inspection highlighted improvement needs before an operational upgrade was fully completed. Scheider said remediation is underway with new, experienced leadership and expects relaunch of mature products in the second half of the year, with cash flow and EBITDA gradually recovering.
Macro view: energy shock risk and private market “tailwinds”
Senior Economist Fiona Gillespie focused on geopolitical developments in the Middle East, describing sustained uncertainty around oil and natural gas prices and noting the importance of flows through the Strait of Hormuz. She said the U.S. is relatively insulated from a growth perspective as a net energy exporter, while Europe is more vulnerable due to LNG reliance and low flexibility in gas supply, particularly during the storage refill season.
On inflation, Gillespie said a 10% rise in oil prices is estimated to lift core CPI by roughly 5 basis points in the following quarter, implying recent moves could add about 25–30 basis points. She suggested the bar is high for oil to materially shift central bank policy, and said Partners Group is less convinced than markets that major central banks will hike, citing the likelihood that growth and labor market concerns—especially in Europe—could take precedence, tilting the ECB outlook toward further easing.
Despite volatility, Gillespie argued private markets are showing improving relative value, stating private equity valuations are at the widest discount to public markets in about 15 years, and that borrowing costs have retreated substantially as spreads came down and private credit capital increased. She said these dynamics have begun to support a rise in distributions since mid-2025.
In the Q&A, Gillespie said PGPE has very limited exposure to the Middle East with no direct private equity investments in the region historically, and estimated operational exposure across portfolio companies at less than 0.5% of AUM. She said only a small impact was identified across eight of 65 direct companies, and none were heavy industry or high energy demand businesses. She cited Rovensa as an example of minimal exposure (about 1% of cost of goods sold) and noted some contractual protections and pricing pass-through mechanisms.
Listed holdings, software exposure, and balance sheet position
On listed exposure, Cazzaniga said PGPE entered 2025 with a “mid-teens” percentage allocation to listed holdings, which declined as positions were monetized. She said the firm fully sold Global Blue earlier in the year and Avis Financier midyear, adding that the multiple realized on Avis was above 5x invested capital. She also pointed to continued monetization in 2026, including a full exit of Galderma and a block sale in Vishal.
Software exposure was another recurring topic. Gillespie characterized recent software market weakness as “sentiment-driven” rather than “fundamental-driven,” and said AI disruption is concentrated in a narrow segment of legacy SaaS. Scheider said Partners Group had deliberately reduced software exposure after identifying AI-driven risk, while emphasizing Forterro as an example of a portfolio company positioned to use AI capabilities in manufacturing settings. Cazzaniga added that software exposure in the portfolio was approximately 13% of NAV at year-end, aligned with Partners Group’s direct private equity platform.
Mateescu also highlighted balance sheet capacity, stating the company ended 2025 with EUR 8 million in cash and cash equivalents and a fully undrawn EUR 150 million credit facility that was renewed on improved terms in the second half of the year.
Princess Private Equity (LON:PEY) reiterated its 5% dividend policy and said that at the current share price it implies a prospective dividend yield above 7%, positioning it as an attractive income proposition within the European listed private equity peer group, according to management.
About Princess Private Equity (LON:PEY)
Princess Private Equity Holding Limited specializes in private equity and debt investments in non-public companies or assets through privately negotiated transactions. The fund invests in primary and secondary fund investments, direct investments, and listed private equity. It makes private equity investments in buyout, venture capital, and special situation and private debt investments in mezzanine, second lien, or senior debt investments. The fund makes investments without limitations as to geographic regions, financing stage, vintage year, and industry.
