36. Petershill Partners Plc
Capitalising Alternatives
A diversified player in alternative investments, Petershill Partners Plc provides capital to asset managers globally, operating from its London base. Positioned in the financial services industry – specifically as a general partner solutions firm – the company focuses on private equity and other private capital strategies, offering investors exposure to the growth of alternative asset management through minority stakes in high-quality firms.
Petershill Partners generates revenue by investing in alternative asset management firms, earning a share of their fee income and performance revenues. It holds stakes in over 20 partner-firms, which collectively manage more than 250 underlying funds across asset classes like private equity, real assets, absolute return strategies, and private credit. The company earns management fees – typically a percentage of fee-paying assets under management (AUM) – and performance fees when funds outperform benchmarks. In 2024, Petershill reported distributable earnings of $323 million, up 11% year-on-year, with fee-paying AUM growing 8% and gross management fees rising 11% to $395 million. Its partner-firms raised $32 billion in fee-eligible assets, exceeding guidance, though the broader asset-raising environment saw a 21% decline, marking a third consecutive year of challenges.
Strategically, Petershill has been active in acquisitions, deploying $1.2 billion in 2024, including a $330 million stake in Fraser Healthcare Partners to support its growth. The company returned $1.2 billion to shareholders, including a $151 million special dividend, reflecting strong capital management. However, its aggressive acquisition pace – exceeding its $300 million target – raises concerns about overpaying in a volatile market, especially as macro uncertainty in 2025 clouds the realisation environment for exits. Employing a lean team, Petershill is operated by Goldman Sachs Asset Management, which may limit its independence in decision-making. The company’s partner-firms delivered a net IRR of 17%, outperforming benchmarks, but a tougher fundraising climate and potential over-reliance on acquisitions could strain future growth.
Petershill’s diversified portfolio and focus on high-growth alternative managers offer strong potential, but its acquisition-heavy strategy and dependence on external market conditions pose risks in an uncertain economic landscape.
The glory days of asset management businesses was before 2008 and things aren’t getting better. Petershill is fine but fine doesn’t cut it at Wonder Stocks.
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