Partners Group restricts hedge fund access to €6bn of troubled portfolio debt
Partners Group is restricting hedge funds and distressed-debt investors from buying loans issued by three struggling portfolio companies as the Swiss private equity firm negotiates the refinancing of around €6bn in debt due in 2028, according to a report by Bloomberg.
Swiss private equity firm Partners Group is limiting hedge funds and distressed-debt investors from purchasing loans from three struggling companies as it works to refinance €6 billion in debt due in 2028, according to Bloomberg. The Zurich-based firm is utilizing approved lender lists to restrict access to debt issued by French property services firm Emeria, Dutch conveyor belt manufacturer Ammega, and Swiss watchmaker Breitling.
These restrictions, known as white lists, aim to prevent opportunistic investors from amassing positions that could influence restructuring negotiations. White lists enable private equity sponsors to control which investors can hold a company's loans, and are being employed more frequently to prevent distressed-debt hedge funds from acquiring discounted debt and potentially demanding creditor-friendly restructurings or business control.
Emeria is currently negotiating with creditors over its €3.6 billion debt burden, which may require Partners Group to inject additional capital to secure refinancing. Ammega's debt investors have also faced limitations on accessing financial information and purchasing loans. These measures could complicate exits for existing lenders as loan prices decline.
Emeria's March 2028 term loan was trading at around 70 cents on the euro, while Ammega's December 2028 loan was quoted at 79 cents and Breitling's October 2028 debt at 82 cents. While restrictions can shield creditors from aggressive restructuring tactics, such as transactions that improve the priority of certain lenders, they also narrow the pool of potential buyers and may reduce liquidity.
Hedge funds can sometimes gain economic exposure to loans through sub-participations arranged by banks, although Partners Group's loan documentation reportedly includes provisions that can restrict or cancel such transactions where the ultimate investor is identified.
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