Partners Group and Mediobanca Private Banking, the private wealth division of Italian banking group Mediobanca, have partnered to launch the first private markets royalties evergreen fund for Italian investors.
Mediobanca’s high-net-worth and ultra-high-net-worth professional clients will have access to Partners Group’s cross-sector royalties strategy, which invests in pharmaceuticals, music, broader media and entertainment, and the energy transition.
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The strategy makes use of different investment structures, such as the purchase of existing royalties, the creation of new royalties, and lending against royalties.
Partners Group has made approximately 20 investments in royalties in the past 12 months and said the asset class can offer attractive risk-adjusted returns, long-term predictable cash flows and distributions, low correlation to broader markets, and act as a hedge against inflation.
The global royalties market is estimated to be worth more than $2tn (£1.5tn).
Partners Group, which has more than $174bn in assets under management, currently manages $52bn in assets across its evergreen product suite globally.
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“Our cross-sector royalties strategy is packaged in an evergreen fund which means investors get immediate access to a broad, diversified portfolio from day one,” said Stephen Otter, head of royalties at Partners Group.
“The royalties market is large and our differentiated cross-sector strategy means we can invest where we see the best relative value at any point in time. Royalties provide a returns profile that is positioned between private equity and private credit, thereby acting as a stabiliser and diversifier in portfolios, while generating uncorrelated yield.”
“Our cross-sector royalties strategy offers Italian investors a compelling diversification opportunity in an uncorrelated asset class, which was previously largely reserved for large international institutional investors,” added Raniero Proietti, managing director and chair Italy at Partners Group.
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