Partners Group's Master Fund marked up a Russian pharmaceutical equity investment during the same reporting window in which Vladimir Putin's government seized the asset by decree, according to a new investigation.
The report also flags a Hong Kong holding where the fund's disclosed share count conflicts with local registry filings, and estimates that close to 40% of the fund's evergreen-portfolio investments may be severely mismarked. Grizzly Research, which holds a short position in Partners Group, argues these evergreen funds generate nearly half the company's revenue, meaning any erosion of confidence in their valuations could hit fundraising and the firm's long-term financial health.
Ticker: PGHN.SW (Partners Group Holding AG)
Research Firm: Grizzly Research
Report URL: https://grizzlyreports.com/media-and-third-party-coverage-on-grizzly-researchs-investigation-into-partners-group-holding-ag/?ref=shortreport.fyi
Position Disclosure: "Its associated persons, clients, investors, affiliates, employees, and/or consultants may hold short positions in covered issuers and could benefit if their prices decline, according to the disclaimer."
Thesis
Grizzly Research, which holds a short position in Partners Group, alleges that the company's evergreen fund program, and its $15.9 billion Master Fund in particular, contains widespread valuation mismarks in a business line that underpins nearly half the company's revenue.
- Evergreen Revenue Dependence: Grizzly estimates evergreen programs accounted for 46.7% of Partners Group's $3.1267 billion in 2025 revenue and roughly 45% in 2024, up from an estimated AUM base of $28.2 billion in 2020 to $56.2 billion in 2025.
- Redemption Pressure Building: The Master Fund's PGPE Class I returned 13.6% annualized over five years through March 31, 2025, versus 16.1% for the MSCI World benchmark, while the Financial Times reported the flagship U.S. evergreen fund entered net redemptions for the first time and logged $750 million in third-quarter withdrawal requests, double the prior year.
- Mismarked Direct Equity: Of the Master Fund's $9.445 billion direct-equity book (59.39% of NAV) as of September 30, 2025, Grizzly identifies $2.023 billion, or 21.4%, as carrying questionable marks, rising to 39.2% in Western Europe and 66.9% in Asia-Pacific where it says data were available.
- Vanishing Shares: The Master Fund's September 2025 filing reported owning 26,838,037 shares of Zenith Longitude Limited, a $322 million Hong Kong holding, while Zenith Longitude's 2025 Hong Kong annual return recorded the fund's stake at 76,288,162 shares, a gap of roughly 50 million shares that has persisted in registry filings since 2023.
- Markups Amid Deterioration: Grizzly alleges a Swedish data-center operator was marked up 176.9% as its revenue fell 18% and operating losses widened 42%, a Portuguese biocontrol group's common equity rose 857.8% on 2.9% revenue growth, and a Russian pharmaceutical equity stake was marked up during the same window in which the Russian state seized the asset by Putin's decree.
- Inflated Valuation Multiples: Where it says multiples could be reliably derived, Grizzly alleges Partners Group's implied valuations exceeded industry comparisons and, through what it calls "financial gymnastics," sometimes ran more than double the figures proposed by the company's own independently commissioned valuation experts.
- Erratic Debt Marks: Grizzly says direct-debt principal balances and fair-value metrics across the portfolio moved by hundreds of percent, at times in opposite directions, a pattern it describes as atypical for senior loans.
- Understated Credit Exposure: Partners Group has told investors its private-credit software exposure is "less than half the industry average," but Grizzly estimates actual exposure in its available sample at 32%, above both the industry average and peer Blue Owl Capital.
Catalysts
- Withdrawal limits: Partners Group told the Financial Times it would limit withdrawals from its flagship evergreen fund if redemptions rise sharply; any such move would confirm liquidity strain.
- Redemption trend: Third-quarter withdrawal requests already reached $750 million, double the prior year; the fund's next reporting period will show whether that pace continues.
- Valuation scrutiny: Continued market, investor, or regulatory examination of the Master Fund's holdings (no date specified) could pressure shares if it substantiates Grizzly's mismarking claims.
- Fundraising impact: Any visible pullback in evergreen-fund inflows would directly hit a segment Grizzly estimates drives 46.7% of 2025 revenue.
Company Response
The report does not indicate that Grizzly Research sought comment from Partners Group directly. It does cite the company's statements to the Financial Times, in which Partners Group said net flows in its flagship U.S. evergreen private-equity fund were broadly similar to late 2025, declined to disclose detailed investment-flow figures, and said it would impose limits on withdrawals if redemptions rose sharply.
Notable Details
- Grizzly identified one position whose common equity allegedly rose 383% in just 26 days.
- The Master Fund's combined management and incentive fees totaled $419.0 million for the nine months ended September 30, 2025, equal to about 13.4% of Partners Group's full-year total revenue.
- Grizzly says it reviewed comparable peer-fund filings in the U.S. and Europe and did not find similar valuation patterns elsewhere.
- Financial media reportedly covered lackluster performance at Partners Group's largest European evergreen fund, though the report does not name the outlet or cite specific figures.
"[J]udging by the figures, there is going to be a scandal with this fund and its portfolio companies worse than the one with Wirecard. Wirecard had a fraud of 4 billion dollars in inflated assets. But here, there could be fraud involving tens of billions in inflated assets of the portfolio companies and the fund itself. Even from just a surface-level look, there is accounting fraud, investment fraud, and fraud involving loans and offshores."
A forensic compliance expert consulted by Grizzly Research, alleging potential fraud after reviewing the firm's analysis.
FAQs
What is PGHN.SW's Master Fund and why is it central to this report?
The Master Fund is Partners Group's flagship U.S. evergreen private-equity vehicle, reporting roughly $15.9 billion in net asset value as of September 30, 2025, with direct equity making up 59.39% of that total. Grizzly Research's investigation centers on this fund because it says the fund's disclosed valuations and holdings show discrepancies with third-party filings and comparable investments.
What has Partners Group Holding AG said about redemption pressure in its evergreen funds?
Per a Financial Times report cited in the investigation, Partners Group said net flows in its flagship U.S. evergreen fund were broadly similar to late 2025 and declined to disclose detailed investment-flow figures. The company also said it would impose limits on withdrawals if redemptions rose sharply, after the fund reportedly logged $750 million in third-quarter withdrawal requests, double the prior year.
What does Grizzly Research allege about Partners Group's valuations?
Grizzly Research alleges that a significant share of the Master Fund's direct-equity and debt holdings carry inflated or unsupported valuation marks, including markups on companies with falling revenue and a Russian asset marked up as the state seized it by decree. Grizzly Research holds a short position in Partners Group and estimates close to 40% of the evergreen funds' investments may be severely mismarked.
What is Zenith Longitude Limited and why does its share count matter?
Zenith Longitude is a Hong Kong company in which the Master Fund holds a direct-equity position valued at $322.0 million as of September 30, 2025, about 67% of the fund's Asia-Pacific direct-equity book. The Master Fund's own filing reported 26,838,037 shares, while Zenith Longitude's Hong Kong Companies Registry annual return recorded the fund's holding at 76,288,162 shares, a discrepancy that has appeared consistently in registry filings since 2023.
How much of Partners Group's revenue comes from evergreen funds?
Grizzly Research estimates evergreen programs contributed 46.7% of Partners Group's $3.1267 billion in 2025 revenue and roughly 45% of 2024 revenue, based on Partners Group's own annual reports and Master Fund fee disclosures. Evergreen-program assets under management grew from $28.2 billion in 2020 to $56.2 billion in 2025, per those same annual reports.
How has the Master Fund performed against its benchmark?
As of March 31, 2025, the Master Fund's PGPE Class I share class returned 13.6% annualized over five years on a NAV basis, compared with 16.1% for the MSCI World Total Return index over the same period. Over one year, PGPE Class I returned 5.8% versus 7.0% for the benchmark, per the Master Fund's own performance disclosure.
What would happen if Partners Group limits fund withdrawals?
Partners Group told the Financial Times it would impose withdrawal limits on its flagship evergreen fund if redemption requests continued rising sharply, after third-quarter requests reached $750 million. Any formal imposition of such limits would confirm the liquidity pressure Grizzly Research ties to broader doubts about the fund's valuations.
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