Partners Group CEO David Layton Talks Management Reshuffle

**SPEAKER_1** (0:02)
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**Dani Burger** (0:12)
Partners Group is reshuffling at stop management after a slump in first half earnings. It all started earlier this year when a wave of redemption requests hit the firm's evergreen funds. Partners Group is naming two different co-CEOs who will be replacing David Layton, who becomes CIO on January 1st. I'm pleased to say that David Layton joins us now. David, great to see you this morning. And we have to start with the news there on the rotation of CEOs. And I know it is the group's line that you do this sometimes, keeps the firm fresh, having different leadership positions. But the timing is notable considering it comes after these outflows and concerns over your evergreen funds. How much of this is an attempt to calm investors and do something that looks like riding the ship?

**David Layton** (0:59)
Well, it has zero to do with that, Dani. So I've been in my seat for eight years in January. The prior CEO was in his seat for eight years. The CEO before that was in his seat for eight years. And the CEO before that was in their seat for eight years. We have a partnership culture here at Partners Group, where we kind of rotate leadership assignments from time to time, on a somewhat predictable basis.
The two new individuals that are stepping up could not be more ready to lead the organization. I'm looking forward to after eight years and more of a corporate function, getting back to the investing side of things. That's the part of the business that I came up in. I'm very much looking forward to getting back to investing, as a chief investment officer. But this is very much a part of a natural leadership rotation that our firm has been doing for 30 years now.

**Dani Burger** (1:59)
I guess, David, why decide to do it now then? Because I'm sure you're very aware of the optics that doing it at a point when you announce earnings that perhaps aren't the strongest, just considering how the market is reacting, that it looks like it's coming from a place of stress rather than just a normal announcement you would do otherwise.

**David Layton** (2:17)
Well, I think the timing has a lot to do with the fact that the two incoming co-CEOs that we've been working and developing are absolutely ready to step up and to take on the topics that face the business today. We talked about, do we want to postpone a leadership transition because of optics? But that's not really our style. I think we're going to operate the way we feel is best, put people in the seats that we feel like is best to put them in, and we'll leave the optics to other people. We're not as concerned about that day.

**Isabelle Lee** (3:01)
David, you're staying on as Chief Investment Officer. How will that dynamic be?

**David Layton** (3:07)
Well, we have multiple former CEOs still present within the firm. Our first CEO, Freddie Gander, he rotated out after eight years and became the Chairman of our Global Investment Committee. He will also take on Stefan Meister after eight years in his seat, rotated out and took on the chairmanship of our board. Andre Frye, after his eight years, he rotated out and led a number of our ESG initiatives. That's the culture that we have. It's more of a partnership culture, where you have generations of leaders working together, as opposed to a traditional maybe corporate hierarchy.
It's the individuals that sit around the table for years and years and years. We've been together for 20 years. I've been working with the incoming co-CEOs for over 20 years. I've been working with the prior CEOs that still exist within the company for a period of time. It's maybe a little bit more Swiss than American with regards to how we're set up. But it's a culture that very much works for us and allows us to keep a very natural leadership rotation going within the teams.

**Dani Burger** (4:22)
So David, you go back to your roots, again, leading investment strategy. What would you like to change? Is there anything that you will be changing as you take over as CIO?

**David Layton** (4:33)
Well, I'm stepping into that role as CIO, I think at a good time. Number one, our firm has raised a record amount of capital that needs to be invested. We raised $16 billion in the first six months of this year. That's up 31% year over year. And it's coming from an increasingly diversified number of channels. Our infrastructure business, for example, raised $15 billion for its direct strategy. Another $5 billion for its secondary strategy. That's $20 billion of total capital raised for infrastructure investments that have been brought in over this last fundraising cycle. And so indeed, this is an environment that we feel like we can capture really interesting private markets opportunities for our clients. We have been winning market share within the private markets.