What is Grizzly Research's main claim against Partners Group (PGHN)?

Grizzly Research alleges that Partners Group's evergreen funds — which it estimates generated roughly 45% of the firm's total 2024 revenue — contain materially overstated valuations across multiple equity holdings and the direct-debt portfolio. The report documents what it says are mismatches between reported fair values and underlying company financials, share-count discrepancies in registry filings, rapid post-acquisition markups without disclosed support, and accounting anomalies in the debt book. Grizzly is short PGHN and stands to profit if the share price falls.

What is unusual about the Pharmathen and Climeworks valuations?

Both cases show the Master Fund writing common equity to near-zero while simultaneously marking preferred equity in the same company above cost. At Pharmathen, common equity was written to $1 after the company posted a 16.2% revenue decline, two consecutive net losses, and net debt rising from €673.4 million to €819.7 million — yet the largest preferred tranche was marked up 37.9%. At Climeworks, common equity was written down 94.9% while preferred equity remained marked up 18.1%, even as Swissinfo reported the company cut approximately 22% of its workforce. Grizzly argues the preferred recovery assumptions embedded in these marks are not supported by disclosed information.

Did Partners Group understate its software exposure in private credit?

In February 2026, Partners Group stated it had reduced software exposure to "less than half the industry average." Industry estimates from S&P Global (28.7% of BDC/interval fund fair value in Q3 2025), JPMorgan (approximately 21%), and Octus (approximately 30%) imply Partners Group's exposure would need to be below approximately 10.5%–14% to support that characterization. Partners Group Private Lending, LLC reported 25.2% software exposure as of December 31, 2025. Grizzly argues that reclassifying four holdings — DigiCert, Datix Bidco, RLDatix, and Omega Systems — on a basis consistent with how peers Ares and Crescent Capital categorize the same companies brings PGPL's exposure to 32.0%.

How significant are evergreen funds to Partners Group's business?

Partners Group had approximately $185 billion in AUM at year-end 2025, with roughly $56 billion in evergreen programs. The flagship US evergreen Master Fund had approximately $15.9 billion in NAV. Based on 2024 financials of the Master Fund and a large European evergreen fund, Grizzly estimates evergreen programs generated approximately 45% of Partners Group's total 2024 revenue. The report argues this concentration makes valuation integrity in the evergreen platform a central business risk, not a peripheral disclosure matter.

What catalysts could put further pressure on Partners Group's share price?

Grizzly identifies several: further investor scrutiny of valuation marks across the evergreen platform; acceleration in redemptions and potential triggering of withdrawal limits; upcoming semiannual fund filings that could reveal additional detail on Q4 valuation changes; possible regulatory attention to valuation and control practices in private equity and private credit; rising portfolio company default rates, with Partners Group Chairman Steffen Meister telling the Financial Times there is "a good chance" private credit default rates double from the decade average of 2.6%; and refinancing pressure on heavily leveraged portfolio companies in the current rate environment.

Grizzly Research: Partners Group's Evergreen Funds Contain Valuations That Can't Be Reconciled With Underlying Financials, Registry Records, or the Firm's Own Exit Multiples

The report documents a pattern across the evergreen platform that generated an estimated 45% of Partners Group's 2024 revenue: Green DC LuxCo marked up 176.9% while the underlying Swedish business posted a 17.6% revenue decline and 42% wider operating losses; Forterro marked at 27.7x EV/EBITDA against a 13.2x industry median and Partners Group's own Civica exit at 15.4x; Ciddan marked up 12% in the six months beginning the day Russia seized the underlying asset by presidential decree; and PG Investment Company 88 marked up 383% on common equity within 26 days of acquisition with no disclosed supporting inputs. In the debt book, two positions carried fair values in the millions against reported principal of zero. Redemptions in the flagship US Master Fund more than doubled year over year to $1.3 billion in six months, with the Financial Times reporting net redemptions for the first time and Partners Group warning it may impose withdrawal limits if the trend continues.

Ticker: PGHN (Partners Group Holding AG)
Research Firm: Grizzly Research
Report URL: https://grizzlyreports.com/pghn/?ref=shortreport.fyi
Position Disclosure: Grizzly Research discloses it holds a short position in PGHN and will benefit financially if the share price declines.

Thesis

Grizzly Research alleges that Partners Group's evergreen fund platform — the engine of the firm's growth story — is propped up by valuations that cannot be reconciled with underlying company financials, public market comparables, or in some cases basic registry records.

Revenue Concentration: Evergreen programs account for roughly $56 billion of Partners Group's approximately $185 billion AUM. By Grizzly's estimate from 2024 financials, these funds generated approximately 45% of total firm revenue — making the integrity of their valuations a core business question, not a peripheral one.
Benchmark Underperformance: The flagship US evergreen Master Fund returned 13.6% annualized over the five years ended March 31, 2025, versus 16.1% for the MSCI World TR over the same period. Citywire reported that Partners Group's largest European evergreen fund has underwhelmed over two decades.
Redemption Pressure: The Financial Times reported that Partners Group's flagship US evergreen fund entered net redemptions for the first time last year, with withdrawal requests hitting $750 million in Q3 — double the prior-year period. Master Fund disclosures show common-unit redemptions exceeded $1.3 billion in the six months ended September 30, 2025, versus just over $600 million in the comparable 2024 period.
Western Europe Equity Marks: After reviewing Luxembourg SPV annual accounts and, by Grizzly's description, thousands of pages of documents, the report alleges that close to 40% of the Western Europe direct equity portfolio — $4.34 billion of a $9.45 billion Direct Equity book — showed disparities between reported fair values and underlying operating-company financials that were "apparently unjustifiable." A forensic compliance expert consulted by Grizzly alleged accounting fraud, investment fraud, and fraud involving loans and offshore structures.
Zenith Longitude Share Mismatch: The Master Fund's September 30, 2025 filing discloses holding 26,838,037 shares of Zenith Longitude Limited at a $322 million fair value. Zenith Longitude's 2025 annual return filed with the Hong Kong Companies Registry records the Master Fund as holding 76,288,162 shares — nearly triple the disclosed figure. Hong Kong lawyers consulted by Grizzly said plausible explanations for such a discrepancy would ordinarily appear in investor disclosures. No corporate action in public filings explains the gap, and Grizzly says it found no evidence that Zenith Longitude made investments in operating companies in China or Hong Kong.
Forterro Valuation: The Master Fund's mark on PG Investment Company 18 (Forterro) implies approximately €1.5 billion in equity value and a 27.7x EV/EBITDA multiple. Per Forterro's 2024 annual report, revenue was €274.6 million and EBITDA €71.3 million, against €515.9 million in debt. Sage Group traded at approximately 17.9x EV/EBITDA on faster growth; Partners Group's own sale of Civica to Blackstone closed at approximately 15.4x. Industry M&A data cited by the report shows a median IT EV/EBITDA of 13.2x. Applying those benchmarks implies Forterro's mark is 36% to 69% overstated.
Unit4 Valuation: The Master Fund's $316.9 million mark on Bock Capital JVCo Nature (Unit4) — up 112.1% from a $149.4 million July 2021 cost — implies approximately €2.1 billion in equity and 22.6x EV/EBITDA. Per Unit4's 2024 annual report, revenue grew 3.6% and EBITDA grew 7.7%, against €993.2 million in borrowings. Grizzly says a 12x–18x range would be more realistic, implying a 29%–58% markdown.
Green DC LuxCo: The Master Fund marked Green DC LuxCo common equity up 176.9% from cost since January 2022. Swedish filings for the underlying business, Green DC AB, show 2024 revenue fell 17.6% to SEK 539.3 million and operating losses widened 42% to SEK 384.2 million.
Ciddan / Nizhpharm: On April 4, 2025, the Russian government transferred JSC Nizhpharm — the key asset indirectly held through Ciddan S.à r.l. — to state-managed Pharmirus LLC by presidential decree. Between March 31 and September 30, 2025, the Master Fund increased its combined Ciddan preferred and common equity position 12%, from $77.1 million to $86.4 million. The Kyiv School of Economics reported that of 30 companies whose assets had been partially or fully seized by Russia, only three recovered any portion, recouping approximately $630 million against roughly $2.7 billion in losses.
Breitling: The Financial Times reported a $4.5 billion valuation for Breitling in Partners Group's 2023 transaction with CVC, with CVC marking its stake to 0.5x invested capital and Partners Group to approximately 0.7x. Breitling's consolidated 2025 annual report shows revenue fell 5.6% to CHF 782.3 million and operating income declined 12.6% to CHF 90.9 million. S&P Global downgraded Breitling to B- from B in July 2025. Applying Swatch Group's approximately 12.4x EV/EBITDA as a comparable implies an equity write-down in the range of 60%.
Common/Preferred Divergence: Pharmathen common equity was written to $1 after three years of deterioration — including a 16.2% revenue decline, two consecutive net losses, and net debt rising from €673.4 million to €819.7 million — while the largest preferred tranche was simultaneously marked up 37.9%. At Climeworks, common equity was written down 94.9% from cost while preferred equity in the same company remained marked up 18.1%, even as Swissinfo reported the company cut approximately 22% of its workforce.
Rapid Post-Acquisition Markups: PG Investment Company 88 was acquired September 4, 2025 for a combined cost of $53.6 million. By September 30, 2025 — 26 days later — the common equity slice was marked up 383.1%, producing a blended 7.4% gain on the overall position. No supporting inputs or transaction data were publicly disclosed. PG Investment Company 67 (Afileon), acquired July 2024, had its common equity marked up 436.3% and preferred equity 22.8% by September 30, 2025.
Direct-Debt Accounting Anomalies: Comparing the Master Fund's March 31, 2025 N-CSR with the September 30, 2025 N-CSRS, Grizzly found seven positions where principal rose 40% to 570% while fair value barely moved, and two positions — Dentive Capital and Sigma Holdco — where principal was reported as zero while fair values remained in the millions. A former Partners Group valuation professional told Grizzly that principal is the amount owed and should not change absent a new investment, and that principal changes without corresponding cost movement are nonstandard.
Software Exposure Understatement: In February 2026, Partners Group stated its software exposure was "less than half the industry average." Third-party estimates from S&P Global (28.7%), JPMorgan (approximately 21%), and Octus (approximately 30%) imply Partners Group's exposure would need to be below approximately 10.5%–14% to support that claim. Partners Group Private Lending, LLC (PGPL) reported 25.2% software exposure as of December 31, 2025. Grizzly argues that reclassifying DigiCert, Datix Bidco, RLDatix, and Omega Systems on a peer-consistent basis brings PGPL's actual software exposure to 32.0%.

Notable Details

The share count discrepancy in Zenith Longitude is not a rounding error. The Master Fund discloses 26,838,037 shares; the Hong Kong Companies Registry shows 76,288,162 — a gap of nearly 50 million shares on a position that makes up approximately 67% of the fund's entire Asia-Pacific direct equity book. Registry records show the figure has been stable at 76,288,162 since 2023, with no corporate action in public filings to explain why Partners Group would report a different number.
Partners Group marked Ciddan up 12% in the six months that began the day the Russian government seized the underlying asset. The April 4, 2025 presidential decree transferring JSC Nizhpharm to Pharmirus LLC falls almost exactly at the start of the window covered by the September 30, 2025 filing. Reuters reported Russian state confiscations were approaching $50 billion by summer 2025.
The implied valuation on Forterro sits above Partners Group's own exit multiple. The firm sold Civica to Blackstone at approximately 15.4x EV/EBITDA. It is currently marking Forterro — which has slower revenue growth and heavier debt — at 27.7x.
Green DC AB, the Swedish data-center company underlying Green DC LuxCo, posted a 17.6% revenue decline and a 42% widening in operating losses in 2024. The Master Fund marked the common equity up 176.9% from cost over the same holding period.
In the direct-debt book, two positions carried fair values in the millions of dollars against a reported principal balance of zero — a presentation that a former Partners Group valuation professional told Grizzly should not exist under standard debt accounting.

"Opacity about the investments combined with the ability to charge fees based on internal models in perpetuity is in our opinion a toxic mix."

— Grizzly Research, from the report's conclusion, summarizing its central objection to Partners Group's evergreen fund structure.

FAQs

What is the Zenith Longitude share discrepancy, and why does it matter?

The Master Fund's September 30, 2025 filing reports holding 26,838,037 shares of Zenith Longitude Limited, a Hong Kong entity valued at $322 million. Zenith Longitude's 2025 annual return filed with the Hong Kong Companies Registry records the Master Fund as holding 76,288,162 shares — nearly three times the disclosed amount. The position represents approximately 67% of the fund's Asia-Pacific direct equity book. Grizzly says no corporate action in public filings explains the gap, and Hong Kong lawyers it consulted said plausible explanations would ordinarily appear in investor disclosures. Grizzly also says it could not find evidence that Zenith Longitude made investments in operating companies in China or Hong Kong.

How did Partners Group mark its Ciddan position after Russia seized Nizhpharm?

On April 4, 2025, the Russian government transferred JSC Nizhpharm — indirectly held through Ciddan S.à r.l. — to the state-managed Pharmirus LLC by presidential decree. Between March 31 and September 30, 2025, the Master Fund increased its combined Ciddan preferred and common equity position by 12%, from $77.1 million to $86.4 million. The Kyiv School of Economics reported that of 30 companies whose assets had been partially or fully seized by Russia, only three recovered any portion of their investment, recouping approximately $630 million while absorbing approximately $2.7 billion in losses.

What is the Forterro valuation controversy?

The Master Fund marks its stake in PG Investment Company 18 — the Luxembourg vehicle holding Forterro, an enterprise software company — at $265.5 million, implying approximately €1.5 billion in equity value and a 27.7x EV/EBITDA multiple. Per Forterro's 2024 annual report, the company had €274.6 million in revenue, €71.3 million EBITDA, and €515.9 million in debt. Grizzly compares the mark to Sage Group at approximately 17.9x, to Partners Group's own sale of Civica to Blackstone at approximately 15.4x, and to a third-party report showing a 13.2x median IT EV/EBITDA — implying the current mark could be 36% to 69% overstated.

What happened with the Green DC LuxCo valuation?

The Master Fund marked its Green DC LuxCo common equity up 176.9% from its cost of $95.9 million to $265.4 million as of September 30, 2025. Swedish filings for the underlying business, Green DC AB, show that 2024 revenue fell 17.6% to SEK 539.3 million and operating losses widened 42% to SEK 384.2 million. Grizzly presents the sharp valuation increase alongside deteriorating financials as an example of marks that cannot be reconciled with underlying performance.

What is the PG Investment Company 88 markup controversy?

PG Investment Company 88 was acquired on September 4, 2025 for a combined cost of $53.6 million. By the September 30, 2025 reporting date — 26 days later — the common equity slice had been marked up 383.1%, producing a blended 7.4% gain across the overall position. Grizzly says Partners Group did not publicly disclose any supporting inputs or transaction data to explain the move, and it could not obtain filed accounts for the underlying entity.

What accounting anomalies did Grizzly find in the direct-debt portfolio?

Comparing the Master Fund's March 31, 2025 and September 30, 2025 SEC filings, Grizzly identified seven positions where reported principal balances rose 40% to 570% while fair values barely changed. Two positions — Dentive Capital and Sigma Holdco — showed principal balances reported as zero while still carrying fair values in the millions of dollars. A former Partners Group valuation professional told Grizzly that principal represents the amount owed by the issuer, should not change absent a new investment or paydown, and that principal changes without corresponding cost movement are nonstandard under ASC 820.

What redemption trends is the Masters Fund experiencing?

Common-unit redemptions in the Master Fund exceeded $1.3 billion in the six months ended September 30, 2025, versus just over $600 million in the same period a year earlier. The Financial Times reported that Partners Group's flagship US evergreen fund entered net redemptions for the first time last year, with Q3 withdrawal requests reaching $750 million — double the prior-year period. The Financial Times also reported that Partners Group warned it would impose limits on investor withdrawals if redemptions rose sharply. Partners Group's April 2026 update reported $0.8 billion in net evergreen subscriptions for Q1 2026 but did not disclose Q4 details.

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