Christoph Rubeli, Partner Co-Chief Executive Officer Partners Group AG

Christoph Rubeli is the co-chief executive officer of Partners Group and splits his time between the firm's offices in Zug, Switzerland, and Singapore. The firm currently has US$ 47 billion in assets under management for investment across private equity, private real estate, private infrastructure and private debt on behalf of its clients. As a member of the firm’s global investment committee and the private equity directs investment committee, Rubeli is well-placed to talk about Partners Group's distinctive and unique "relative value" investment strategy.

Partners Group applies this relative value approach in Asia, having opened its first Asian office in Singapore in 1996. “From the beginning, we tried to map out what the different sub sectors in Asia were delivering, because it is a very fragmented industry we’re in. We work on the basis that about 50 percent of the return derives from top down analysis and the other 50 percent is in choosing the right investments within the framework of that top down framework. So the asset allocation has always been very important,” Rubeli said.

“When we looked at the relative value from 1996-97 to about 2003, the risk-adjusted returns in Asia did not stack up. But 2003 proved to be a turning point for the private equity industry from our point of view. We could see there was more value being created, that the industry was growing, and that the technical skill set within the industry had become much better. At that point, we also felt that several GPs had built enough experience with robust teams that we could back. So that was the right time to start making investments and we have been an active direct, secondary and primary investor in the market ever since.

"Last year, about 25 percent of the capital we invested globally was in Asia Pacific and emerging markets and I could see this increasing towards the 30 percent mark in the coming years,” he added.

The majority of Partners Group’s programs are global or regional in focus and this is unlikely to change given that its clients are not looking to the firm to generate programs that are specific to one single country. Program investment themes are based either on a specific strategy within each asset class, like secondaries or directs, or else offer clients "integrated" exposure to direct, secondary and primary transactions within one asset class. Programs with a high allocation to Asian markets include emerging markets private equity and private real estate vehicles.

“The majority of our clients give us a global mandate, which leaves us to pick the regional asset allocation or to choose the themes and sub sectors in the investment space. We look at the trends and demographic shifts in each growth market. If you look, for example, at the industry potential in healthcare, education, financial services and professional services, these are themes that for the next decade, if not two, are expected to do very well in emerging markets, including in Asia,” Rubeli said.

Rubeli ascertained that the returns generated in Asia have been very favorable since 2006 and  that the region's future return potential warrants Partners Group continuing to invest a significant proportion of its global assets under management in the region on behalf of its clients.

"Our clients are extremely happy with the returns from our Asian investments and I see no reason why that would distort. If you look at asset valuations around the globe, after a period of assetflation, prices in Europe and the US are at very high levels. Relatively speaking, Asia can be more attractive now in terms of pricing than the other two regions," Rubeli said.

"However, as with anywhere, successful investing is dependent on having the relevant level of experience in the region and local expertise on the ground. It also requires a highly selective approach to investment – for example, at Partners Group we decline an average of 97 percent of our deal flow."

Real estate investments in particular have been very attractive. Last year, Partners Group closed over USD 400 million in real estate investments across Asia Pacific, the bulk in Beijing, India and Hong Kong. “Our base strategy is opportunistic or added value – we buy outdated buildings, modernize them and make them appealing, and then sell them again after several years. Essentially, we are manufacturing the core assets that other people would love to own. We’re adding value to create core assets,” Rubeli said.