Partners Group hires ex-IMF director Dallara

Charles Dallara has joined Partners Group in the US – where he thinks the evolution in the banking sector will provide investment opportunities for his new employer.

Partners Group has hired Charles Dallara, former managing director at the Institute of International Finance (IIF), as a partner. Dallara, who will be based in the US, will also become a board member and vice chairman of the firm’s board of directors. 

He joined the Institute of International Finance in 1993, and developed the organisation for nearly 20 years, according to a statement. While at the IIF, Dallara was involved with the voluntary debt restructuring agreement between private creditors and Greece. Dallara had previously held a number of senior positions in the Reagan and Bush Sr. administrations, and also used to be a US alternate executive director at the International Monetary Fund (IMF).

Partners Group aims to benefit from Dallara’s “wealth of experience and extensive network”, the firm said in the statement.

The global banking sector will continue to have its balance sheets constrained in the years ahead by regulations, but also by growing fragmentation and one of the opportunities I see for Partners Group more generally is to continue to [provide] funding

Charles Dallara

The deleveraging process in the banking world, especially in Europe, will continue, Dallara said during a conference call. “The global banking sector will continue to have its balance sheets constrained in the years ahead by regulations, but also by growing fragmentation. And one of the opportunities I see for Partners Group more generally is to continue to [provide] funding,” he said. 

Over time, regulations are going to make it increasingly difficult for banks to [provide capital] on a global basis, he said. “A group like Partners can reach into its institutional investment client base and move those funds [and invest in the best opportunities]. For banks this is increasingly harder to do, as sadly we are retreating to a world of banking regulation that is increasingly nationalistic and not global,” he said. 

Last September, the Zug-headquartered firm raised a €375 million credit fund to meet increased demand for private debt. In addition, Partners Group’s latest secondary fund hit its €2 billion hard-cap last month. In 2011, the firm identified a record of $70 billion-worth of secondary opportunities, Partners Group said at the time – and it suggested that regulatory change was one of the main drivers of growth in this market. 

Dallara, like Partners, continues to have concerns about the global macroeconomic picture – and the US economy in particular.  While the private sector is gathering momentum, the fiscal cliff issue remains a worry, he says. “I wasn’t particularly proud to be in Europe and see that our leaders in Congress and in the White House could not come up with a more convincing and credible solution. They just pushed the ball ahead for a few months. This is no way to run the world’s largest most important economy. And I remain concerned; the best we can look for this year is probably one and a half or two percent growth in the US.”

While accepting that Europe had had a “mighty struggle” in recent years, Dallara was more optimistic about the region. “Despite the uncertainties and the difficulties, [momentum is beginning to gather] in the Eurozone’s overall efforts to get ahead of its sovereign debt problem – and I think there’s little doubt now in the minds of market participants whether Greece will stay in the euro. Although there’s still a lot of work to be done, things are moving in the right direction,” he said.