Add analyst comments in paragraph 8 and 13, updates share prices

By Oliver Hirt and Harry Robertson

ZURICH/LONDON, June 3 (Reuters) - Partners Group's PGHN.S shares sank 17% on Wednesday after it capped withdrawals from an $8.6 billion private equity fund, prompting falls in other European and U.S. fund groups and adding to wider market concerns over private credit exposures.

The Swiss company, which oversees about $185 billion in assets under management, said there had been industry-wide volatility across open-ended evergreen funds since late 2025, starting in private credit and spilling into private equity.

It said that total net redemption requests had exceeded 5% of the net asset value of the Partners Group Global Value SICAV fund and it was therefore capping redemptions, triggering a record fall in its already weakened share price.

Investors have been trying to withdraw their money from private credit funds in recent months, as worries rise about valuations, lending standards and how software companies that have received large amounts of funds can handle AI challenges.

Some have expressed the same fears about opaque valuations and exposure to AI at private equity funds, which typically invest in shares, and Wednesday's statement by Partners Group further fuelled those concerns.

Of its Global Value Fund's top 10 direct holdings, four are in technology, a March filing showed.

Shares in EQT EQTAB.ST fell more than 6%, while CVC Capital Partners CVC.AS and Bridgepoint Group BPTB.L dropped 6% and 5%, respectively.

"The share price reaction implies that the outflows from the Global Value Fund are merely the beginning and will spill over to other investment vehicles," said Vontobel analyst Andreas Venditti, adding, "Given the current focus on private credit, the market is highly sensitive to negative news".

Shares in U.S. private markets groups also slid in pre-market trading, with Blackstone BX and KKR KKR.N both falling 6% and Ares Management ARES.N down 7%.

'PRIVATE WEALTH CLIENTS ARE THE WEAK LINK'

Partners Group said the underlying fund's liquidity position remains within its target, supported by ongoing distributions from its underlying portfolio and an undrawn credit facility.

The Global Value Fund and the underlying fund continue to invest and remain open for applications, it added.

"Volatility in open-ended evergreen fund flows across the industry has been building since late 2025, beginning in private credit vehicles. These flow dynamics have recently accelerated and extended to the private equity asset class, impacting the underlying fund," Partners Group told investors in a statement.

"Private wealth clients are the weak link," said Aneeka Gupta, director of research at WisdomTree, adding they are usually quicker to withdraw money than institutional investors.

"Evergreen funds were sold to retail investors as a way to get private equity liquidity, but private equity is inherently illiquid," she said. "When enough people test that promise at once, the gates come down."

Wednesday's fall brings the year-to-date drop in Partners Group shares to around 30%.

Bloomberg earlier reported that Partners Group was capping withdrawals from the fund.