Global private markets investment firm Partners Group has added private markets royalties as a fifth asset class alongside private equity, infrastructure, private credit and real estate to its platform offering.
The firm is building what it describes as the first dedicated, scalable multi-sector royalty offering that invests in both well-established royalty sectors, such as intellectual property assets across the pharmaceuticals and entertainment industries, as well as emerging high-growth royalty sectors like the energy transition, sports and brands.
Partners Group’s royalty business is headed by Stephen Otter, who has recently joined the firm as a Managing Director based in Zug. Otter will lead an royalty investment team with an established seed portfolio. The team will be integrated into the wider Partners Group platform.
Partners Group’s research estimates the total private markets royalty market to be worth more than $1tn today and forecasts further rapid growth, due to attractive risk-adjusted returns, long-term predictable cash flows, low correlation to broader markets and a hedge against inflation. As such, the firm believes royalty assets can be an effective tool for stabilising and diversifying traditional private markets portfolios.
Royalties will be made available to Partners Group’s investors through the firm’s range of bespoke solutions, which includes its mandate solutions for existing and new institutional clients and its structured private wealth products. The firm plans to offer the strategy in an evergreen fund structure that could be eligible for investment by private wealth investors, who currently have limited opportunities to gain exposure to private markets royalties.
