N-Q 1 fp0011443_nq.htm fp0011443_nq.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS
OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-22241

Partners Group Private Equity (Master Fund), LLC
(Exact name of registrant as specified in charter)

1114 Avenue of the Americas, 37th Floor
New York, NY 10036
(Address of principal executive offices) (Zip code)

Robert Collins
1114 Avenue of the Americas, 37th Floor
New York, NY 10036
(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 908-2600

Date of fiscal year end: March 31

Date of reporting period: June 30, 2014

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number.  Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609.  The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507.
 
 
 
 

ITEM 1. SCHEDULE OF INVESTMENTS.

The Schedule(s) of Investments is attached herewith.
 
Partners Group Private Equity (Master Fund), LLC
(a Delaware Limited Liability Company)
Consolidated Schedule of Investments - June 30, 2014 (Unaudited)
 
INVESTMENT OBJECTIVE AS A PERCENTAGE OF TOTAL MEMBERS' EQUITY
Percentages as a percentage of total investments are as follows:
 
 
Private Equity Investments (88.36%)
  
Direct Investments * (47.78%)
  
Direct Equity (25.90%)
Investment Type
Geographic
Region b
  
Fair Value **
  
ACP Viking Co-Investment, LLC a, c
Member interest
North America
   $ 1,754,493  
ACP Viking Co-Investment, LLC a, c
Common equity
North America
     540,845  
Apollo Overseas Co-Investors (MHE), L.P. a, c
Limited partnership interest
North America
     8,738,305  
Astorg Co-Invest Kerneos, FCPI a, c
Common equity
Western Europe
     10,765,121  
ATX Networks Holdings, LLC a, c
Member interest
North America
     82,378  
Aurora Products Group, LLC a
Member interest
North America
     172,585  
CapitalSpring Finance Company a, c
Warrants
North America
     542,462  
Carlyle Retail Turkey Partners, L.P. a, c
Limited partnership interest
South America
     6,883,970  
CCM Pharma Debtco Limited a
Common equity
Western Europe
     1,568,628  
CD&R Univar Co-Investor, L.P. a, c
Limited partnership interest
North America
     2,560,457  
Centauro Co-Investment Fund, L.P. a, c
Limited partnership interest
South America
     8,830,272  
CT Holdings (International) Limited a
Common equity
Asia - Pacific
     2,730,508  
DLJSAP BookCO, LLC a, c
Member interest
South America
     682,841  
EQT Marvin Co-Investment, L.P. a, c
Limited partnership interest
Western Europe
     2,114,621  
Eurodrip Co-Investment Fund I, L.P. a, c
Limited partnership interest
Western Europe
     10,803,008  
Fermo Limited a, c
Common equity
Asia - Pacific
     4,213,098  
Fermo Limited a, c
Preferred equity
Asia - Pacific
     5,327,577  
Gemini Global Holdings Investors, LLC a, c
Member interest
North America
     5,425,790  
Globetrotter Investment & Co S.C.A. a, c
Common equity
Western Europe
     1,365,849  
Globetrotter Investment & Co S.C.A. a
Preferred equity
Western Europe
     9,609,191  
GTS II Cayman Corporation a, c
Common equity
South America
     3,305,778  
Hogan S.ar.l a, c
Common equity
Western Europe
     1  
Hogan S.ar.l a, c
Preferred equity
Western Europe
     1,208,877  
Kahuna Holdco Pty Limited  a
Common equity
Asia - Pacific
     1,041,487  
KKBS Group Holdings, LLC a, c
Member interest
North America
     199,236  
KKBS Holdings, LLC a, c
Member interest
North America
     104,094  
KKR Matterhorn Co-Invest, L.P. a, c
Limited partnership interest
Western Europe
     14,914,486  
KLFS Holdings, L.P. a, c
Limited partnership interest
North America
     2,822,000  
Learning Care Group (US), Inc. a, c
Warrants
North America
     9,705  
Mauritius (Luxembourg) Investments S.ar.l. a, c
Common equity
Western Europe
     2,134,648  
MPH Acquisition Holdco, L.P. a, c
Common equity
North America
     20,000,000  
NDES Holdings, LLC a, c
Member interest
North America
     2,867,094  
NTS Holding Corporation, Inc. a, c
Common equity
North America
     2,672,335  
Peer I S.A. a, c
Common equity
Western Europe
     14,907,557  
Peer I S.A. a
Preferred equity
Western Europe
     2,686,703  
QoL meds Holding Company, LLC a, c
Common equity
North America
     9,564,689  
R&R Co-Invest FCPR a, c
Common equity
Western Europe
     14,227,384  
Sabre Industries, Inc. a, c
Common equity
North America
     795,150  
S-Evergreen Holding Corp. a, c
Common equity
North America
     559,392  
Silver Lake Sumeru Marlin Co-Invest Fund, L.P. a, c
Limited partnership interest
North America
     2,700,001  
Snack Parent Corporation a, c
Preferred equity
North America
     5,108,256  
SPH GRD Acquisition Partners, LLC a, c
Member interest
North America
     11,784,801  
Spring Topco, Ltd. a, c
Common equity
North America
     580,248  
Strategic Partners, Inc. a
Common equity
North America
     4,371,892  
Surgery Center Holdings, Inc. a
Warrants
North America
     41,654  
Swissport II Co-Invest FCPR a, c
Common equity
Western Europe
     7,039,348  
THL Equity Fund VI Investors (BKFS), L.P. a, c
Common equity
North America
     9,750,000  
Valhalla Co-Invest, L.P. a
Limited partnership interest
Western Europe
     8,013,011  
Velocity Holdings L.P. a, c
Common equity
North America
     1,592,600  
Velocity Technologies Solutions, Inc. a, c
Common equity
North America
     9,327,400  
Virtuoso Lux I SarL a, c
Common equity
Western Europe
     4,020,423  
Virtuoso Lux I SarL a, c
Shareholder loan
Western Europe
     16,843,455  
          259,905,704  
 
 
 
 
 
Partners Group Private Equity (Master Fund), LLC
(a Delaware Limited Liability Company)
Consolidated Schedule of Investments - June 30, 2014 (Unaudited) (Continued)
 
Private Equity Investments (continued)
            
Direct Investments (continued)
              
Direct Debt (21.88%)
Interest
Maturity
Investment Type
Geographic
Region b
  
Fair Value **
  
Ability Network Inc. a
Libor (1.00% floor) + 5.00%
5/16/2021
Senior
North America
   $ 7,711,250  
Ability Network Inc. a
Libor (1.00% floor) + 8.25%
5/16/2022
Second Lien
North America
     11,500,000  
American Importing Company Inc. and Ann's House of Nuts a
Libor (3.25% floor) + 4.50%
5/23/2018
Senior
North America
     19,305,000  
Attendo Care AB a
Euribor (1.25% floor) + 7.00% +  3.25% PIK
6/30/2019
Mezzanine
Western Europe
     8,895,758  
Attendo Care AB a
Euribor (1.25% floor) + 10.25% PIK
6/30/2019
Senior
Western Europe
     3,146,973  
ATX Networks Corp. a
12.00% + 2.00% PIK
5/12/2016
Mezzanine
North America
     997,541  
Australian Satellite Communications Pty Ltd. a
Libor + 5.25%
9/28/2019
Senior
Asia - Pacific
     4,866,189  
Australian Satellite Communications Pty Ltd. a
Libor + 4.75%
5/31/2018
Senior
Asia - Pacific
     2,737,117  
Beauty Holding Two AG a
Euribor + 1.50% + 10.00% PIK
12/12/2020
Mezzanine
Western Europe
     9,403,256  
Biomnis a
7.00% + 7.00% PIK
9/3/2019
Senior
Western Europe
     3,065,463  
Biomnis a
7.00% PIK
9/3/2019
Senior
Western Europe
     2,676,789  
CapitalSpring Finance Company a
9.00% + 3.75% PIK
9/20/2018
Mezzanine
North America
     7,383,006  
CCM Pharma Debtco Limited a
Libor (1.50% floor) + 6.50% +  4.00% PIK
12/31/2020
Mezzanine
Western Europe
     11,033,656  
Evergreen ACQC01, L.P. a
10.25%
7/11/2022
Mezzanine
North America
     6,487,078  
Global Tel*Link Corporation a
Libor (1.25% floor) + 7.75%
11/23/2020
Second Lien
North America
     10,209,360  
Global Tel*Link Corporation a
Libor (1.25% floor) + 3.75%
12/14/2017
Senior
North America
     4,038,221  
KACC Acquisition, LLC a
12.00% + 1.00% PIK
6/29/2018
Mezzanine
North America
     4,338,811  
Kahuna Bidco Pty Limited a
BBSY + 5.00% + 3.50% PIK
12/31/2016
Mezzanine
Asia - Pacific
     5,286,277  
Kerisper S.A.S a
Euribor + 3.00% + 3.50% PIK
12/31/2017
Second Lien
Western Europe
     7,482,847  
Learning Care Group (US) No. 2, Inc. a
Libor (1.00% floor) + 4.50%
5/5/2021
Senior
North America
     6,200,000  
Panda Temple Power Intermediate Holdings I, LLC a
Libor (0.50% floor) + 13.00% PIK
7/27/2020
Mezzanine
North America
     6,870,598  
Photonis Technologies S.A.S a
Libor (1.00% floor) + 7.50%
9/18/2019
Second Lien
Western Europe
     9,054,500  
Sabre Industries, Inc. a
10.00%
2/22/2019
Mezzanine
North America
     4,011,202  
Securitas Direct Holding AB a
Euribor + 3.75% + 6.75% PIK
9/2/2019
Mezzanine
Western Europe
     7,835,747  
Ship Luxco 3 S.a.r.l. a
Libor (1.25% floor) + 3.50%
11/30/2019
Senior
Western Europe
     20,302,139  
Springer Science+Business Media Deutschland GmbH a
Libor (1.00% floor) + 4.00%
8/14/2020
Senior
Western Europe
     9,915,966  
Sun Products Corporation (The) a
Libor (1.25% floor) + 4.25%
3/23/2020
Senior
North America
     12,917,518  
Surgery Center Holdings, Inc. a
Libor (1.25% floor) + 4.75%
4/11/2019
Senior
North America
     4,887,188  
TrustHouse Services Group a
Libor (1.25% floor) + 4.50%
4/15/2019
Senior
North America
     7,060,446  
              219,619,896  
Total Direct Investments (47.78%)
         $ 479,525,600  
 
Secondary Investments* (34.99%)
Geographic
Region b
  
Fair Value
  
3i Europartners Vb, L.P. a
Western Europe
   $ 1,385,537  
Abingworth Bioventures V Co-Investment Growth Equity Fund, L.P. a, c
Western Europe
     1,133,177  
Abingworth Bioventures V, L.P. a
Western Europe
     889,764  
Advent International GPE VI, L.P. a
Western Europe
     4,799,747  
Apax Europe VI - A, L.P. a
Western Europe
     884,222  
Apax Europe VII - B, L.P. a, c
Western Europe
     784,260  
Apollo Investment Fund IV, L.P. a, c
North America
     6,776  
Apollo Investment Fund VI, L.P. a
North America
     1,466,563  
Apollo Investment Fund VII, L.P. a
North America
     1,036,229  
Apollo Overseas Partners (Delaware) VII, L.P. a
North America
     419,486  
Ares Corporate Opportunities Fund III, L.P. a
North America
     283,339  
Bain Capital Fund X, L.P. a
North America
     33,662,678  
Bain Capital X Co-Investment Fund, L.P. a
North America
     1,195,904  
Baring Asia Private Equity Fund IV, L.P. a
Asia - Pacific
     539,504  
Blackstone Capital Partners V/F, L.P. a
North America
     4,301,319  
Blackstone Capital Partners V-S, L.P. a
North America
     585,282  
Candover 2001 Fund UK No. 2, L.P. a
Western Europe
     33,508  
Candover 2005 Fund, L.P. a, c
Western Europe
     1,254,108  
 
 
 
 
 
Partners Group Private Equity (Master Fund), LLC
(a Delaware Limited Liability Company)
Consolidated Schedule of Investments - June 30, 2014 (Unaudited) (Continued)
 
Private Equity Investments (continued)
        
Secondary Investments (continued)
Geographic
Region b
  
Fair Value
  
Carlyle Europe Partners II, L.P. a
Western Europe
   $ 859,018  
Carlyle Europe Partners III, L.P. a
Western Europe
     11,584,585  
Carlyle Japan International Partners II, L.P. a
Asia - Pacific
     5,989,443  
Carlyle Partners IV, L.P. a
North America
     1,825,205  
Carlyle Partners V, L.P. a
North America
     1,280,947  
Carlyle Partners V/B, L.P. a
North America
     5,986,627  
Citigroup Venture Capital International Growth Offshore I, L.P. a
Asia - Pacific
     55,680  
Citigroup Venture Capital International Growth Offshore II, L.P. a
Asia - Pacific
     724,055  
Citigroup Venture International Growth Partnership II, L.P. a
Asia - Pacific
     2,184,201  
Clayton, Dubilier & Rice Fund VII, L.P. a
North America
     7,363,651  
Clayton, Dubilier & Rice Fund VIII, L.P. a
North America
     21,538,807  
CVC Capital Partners Asia Pacific III, L.P. a
Asia - Pacific
     3,693,081  
CVC European Equity Partners Tandem Fund (A), L.P. a
Western Europe
     607,362  
CVC European Equity Partners V, L.P. a
Western Europe
     5,389,731  
daVinci Japan Real Estate Partners IV, L.P. a, c
Asia - Pacific
     9,395  
Duke Street VI US No. 1 Limited Partnership a
Western Europe
     288,628  
Fourth Cinven Fund, L.P. a
Western Europe
     772,183  
Frazier Healthcare VI, L.P. a
North America
     1,315,636  
FS Equity Partners V, L.P. a, c
North America
     4,264,789  
Green Equity Investors Side V, L.P. a
North America
     2,062,065  
Gryphon Partners 3.5, L.P. a
North America
     1,954,692  
Harvest Partners V, L.P. a
North America
     621,755  
Hellman & Friedman Capital Partners VI, L.P. a
North America
     3,667,979  
Hellman & Friedman Capital Partners VII, L.P. a, c
North America
     1,841,228  
H.I.G. Bayside Debt & LBO Fund II, L.P. a
North America
     908,509  
Highstar Capital III Prism Fund, L.P. a
North America
     1,789,445  
Investcorp Private Equity 2007 Fund, L.P. a
North America
     4,800,391  
Investcorp Technology Partners III (Cayman), L.P. a, c
North America
     2,033,757  
Irving Place Capital Investors II, L.P. a
North America
     32,765  
Irving Place Capital Partners III, L.P. a
North America
     1,007,083  
KKR European Fund III, L.P. a
Western Europe
     6,635,570  
Lightyear Fund II, L.P. a, c
North America
     6,629,932  
Madison Dearborn Capital Partners V-A and V-B, L.P. a
North America
     8,811,336  
Madison Dearborn Capital Partners VI-C, L.P. a
North America
     918,839  
MidOcean Partners III, L.P. a
North America
     2,824,787  
Montagu III, L.P. a
Western Europe
     41,522  
Oak Investment Partners XII, L.P. a
North America
     1,795,636  
Palladium Equity Partners III, L.P. a
North America
     818,570  
Pamlico Capital GP I, LLC a, c
North America
     1  
Pamlico Capital GP II, LLC a, c
North America
     110,798  
Pamlico Capital II, L.P. a, c
North America
     4,178,312  
Pamlico Capital Secondary Fund, L.P. a, c
North America
     365,260  
Permira Europe I, L.P. 1B a, c
North America
     54,626  
Permira Europe II, L.P. a, c
Western Europe
     178,410  
Permira Europe III, L.P. a
Western Europe
     2,439,051  
Permira IV Continuing, L.P. 1 a
Western Europe
     20,472,606  
Providence Equity Partners IV, L.P. a
North America
     101,607  
Providence Equity Partners V, L.P. a
North America
     729,881  
Providence Equity Partners VI, L.P. a
North America
     15,332,147  
Providence Equity Partners VII-A, L.P. a
North America
     355,842  
Silver Lake Partners II, L.P. a, c
North America
     759,709  
Silver Lake Partners III, L.P. a
North America
     12,753,767  
Silver Lake Sumeru Fund, L.P. a
North America
     318,534  
Sun Capital Partners V, L.P. a
North America
     25,863,824  
TCV VI, L.P. a, c
North America
     1,099,696  
TCV VII (A), L.P. a, c
North America
     11,165,703  
Terra Firma Capital Partners III, L.P. a, c
Western Europe
     14,500,774  
Thomas H. Lee Parallel (DT) Fund VI, L.P. a
North America
     2,828,083  
Thomas H. Lee Parallel Fund VI, L.P. a
North America
     2,528,774  
TPG Partners V, L.P. a
North America
     8,632,619  
TPG Partners VI, L.P. a
North America
     22,496,742  
Tudor Ventures III, L.P. a, c
North America
     5,471,135  
Warburg Pincus Private Equity IX, L.P. a
North America
     541,842  
Warburg Pincus Private Equity X, L.P. a
North America
     18,308,528  
Total Secondary Investments (34.99%)
     $ 351,178,559  
 
 
 
 
 
Partners Group Private Equity (Master Fund), LLC
(a Delaware Limited Liability Company)
Consolidated Schedule of Investments - June 30, 2014 (Unaudited) (Continued)
 
Private Equity Investments (continued)
        
Primary Investments* (5.59%)
Geographic
Region b
  
Fair Value
  
Advent International GPE VII-B, L.P. a, c
North America
   $ 6,320,341  
Altra Private Equity Fund II, L.P. a, c
South America
     517,669  
Apollo Investment Fund VIII, L.P. a, c
North America
     392,496  
Ares Corporate Opportunities Fund IV, L.P. a, c
North America
     2,349,497  
Avista Capital Partners II, L.P. a
North America
     1,337,778  
Avista Capital Partners III, L.P. a
North America
     6,351,012  
Baring Asia Private Equity Fund V, L.P. a
Asia - Pacific
     2,264,932  
CapVest Equity Partners III B, L.P. a, c
Western Europe
     902,274  
Clayton Dubilier & Rice Fund IX, L.P. a
North America
     1,998,070  
Crescent Mezzanine Partners VIB, L.P. a
North America
     1,836,589  
CVC Capital Partners VI (A) L.P. a, c
Western Europe
     35,268  
EQT VI (No.1), Limited Partnership a, c
Western Europe
     2,458,947  
Genstar Capital Partners VI, L.P. a
North America
     1,017,020  
Hony Capital Partners V, L.P. a
Asia - Pacific
     2,568,440  
KKR North America Fund XI, L.P. a, c
North America
     5,339,809  
Kohlberg TE Investors VII, L.P. a
North America
     2,052,371  
New Enterprise Associates 14, L.P. a, c
North America
     2,627,486  
Pátria - Brazilian Private Equity Fund IV, L.P. a, c
South America
     1,473,220  
PennantPark Credit Opportunities Fund, L.P. a
North America
     11,004,967  
Silver Lake Partners IV, L.P. a, c
North America
     1,408,367  
Windjammer Senior Equity Fund IV, L.P. a
North America
     1,828,492  
Total Primary Investments (5.59%)
     $ 56,085,045  
           
Total Private Equity Investments (Cost $758,712,976) (88.36%)
     $ 886,789,204  
 
Common Stocks (0.00%) d
            
Consumer Services (0.00%) d
  Shares
Geographic
Region b
    
Fair Value
  
Collins Foods, Ltd.
 13,505
Asia - Pacific
     $ 26,385  
Total Consumer Services (0.00%) d
           26,385  
               
Total Common Stocks (Cost $74,690) (0.00%) d
         $ 26,385  
               
Short-Term Investments (14.45%)
              
U.S. Government Treasury Obligations (14.45%)
  
Principal
    
Fair Value
  
U.S. Treasury Bill, 0.030%, 07/03/2014 e
   25,000,000     $ 24,999,958  
U.S. Treasury Bill, 0.030%, 08/07/2014 e
   30,000,000       29,999,075  
U.S. Treasury Bill, 0.025%, 08/14/2014 e
   25,000,000       24,999,236  
U.S. Treasury Bill, 0.040%, 08/21/2014 e
   30,000,000       29,998,300  
U.S. Treasury Bill, 0.025%, 09/04/2014 e
   20,000,000       19,999,360  
U.S. Treasury Bill, 0.025%, 09/11/2014 e
   15,000,000       14,999,400  
Total U.S. Government Treasury Obligations (14.45%)
         $ 144,995,329  
               
Total Short-Term Investments (Cost $144,994,916) (14.45%)
         $ 144,995,329  
               
Total Investments (Cost $903,782,582) (102.81%)
           1,031,810,918  
               
Liabilities in Excess of Other Assets (-2.81%)
           (28,186,616 )
               
Members' Equity (100.00%)
         $ 1,003,624,302  
 
*
Direct private equity investments are private investments directly into the equity or debt of selected operating companies, often together with the management of the company.  Primary investments are investments in newly established private equity partnerships where underlying portfolio companies are not known as of the time of investment.  Secondary investments involve acquiring single or portfolios of assets on the secondary market.
**
The Fair Value of any Direct Investment may not necessarily reflect the current or expected future performance of such Direct Investment or the Fair Value of the Master Fund's interest in such Direct Investment.  Furthermore, the Fair Value of any Direct Investment has not been calculated, reviewed, verified or in any way approved by such Direct Investment or its general partner, manager or sponsor (including any of its affiliates).  Please see Note 2.b for further detail regarding the valuation policy of the Master Fund.
a
Private equity investments are generally issued in private placement transactions and as such are generally restricted as to resale. Total cost and fair value of restricted portfolio funds as of June 30, 2014 was $758,712,976 and $886,789,204, respectively.
b
Geographic region is based on where a Private Equity Investment is headquartered and may be different from where such Private Equity Investment invests or operates.
c
Non-income producing.
d
Rounds to less than 0.005%.
e
Each issue shows the rate of the discount at the time of purchase.
 
 
 
 
 
The Partners Group Private Equity (Master Fund), LLC (the “Master Fund”) may enter forward foreign currency exchange contracts as a way of managing foreign exchange rate risk.  The Master Fund may enter into these contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date as a hedge or cross hedge against either specific transactions or portfolio positions.  The objective of the Master Fund’s foreign currency hedging transactions is to reduce the risk that the U.S. Dollar value of the Master Fund’s foreign currency denominated investments will decline in value due to changes in foreign currency exchange rates.  All forward foreign currency exchange contracts are “marked-to-market” daily at the applicable translation rates resulting in unrealized gains or losses.  Realized gains or losses are recorded at the time the forward foreign currency exchange contract is offset by entering into a closing transaction or by the delivery or receipt of the currency.  Risk may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. Dollar.
 
During the period from April 1, 2014 through June 30, 2014, the Master Fund entered into one short forward foreign currency exchange contract.  The Master Fund had $1,178,078 in net realized losses, and a $1,588,173 change in net unrealized appreciation on forward foreign currency exchange contracts.
 
At June 30, 2014, the Master Fund had one outstanding short forward foreign currency exchange contract:
 
   
Contract Amount
      
Settlement Date
Currency
Buy
Sell
Value
Unrealized Appreciation (Depreciation)
Counterparty
July 24, 2014
   Euro (€)
$64,115,130
  €46,500,000
$63,665,428
$449,702
Barclays Capital
 
Investments held by the Master Fund include direct equity and debt investments in operating companies (“Direct Investments”) and primary and secondary investments in private equity funds (“Private Equity Fund Investments”; Direct Investments and Private Equity Fund Investments, collectively, “Private Equity Investments”).
 
In conformity with U.S. generally accepted accounting principles (“U.S. GAAP”), investments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Estimated values may differ from the values that would have been used if a ready market existed or if the investments were liquidated at the valuation date.  A three-tier hierarchy is used to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Master Fund’s investments. The inputs are summarized in the three broad levels listed below:
 
 
 
 
 
·   Level 1 – Quoted prices are available in active markets for identical investments as of the measurement date.  The type of investments included in Level 1 include marketable securities that are primarily traded on a securities exchange or over-the-counter.  The fair value is determined to be the last sale price on the determination date, or, if no sales occurred on any such day, the mean between the closing bid and ask prices on such day.  The Master Fund does not apply a blockage discount to the quoted price for these investments, even in situations where the Master Fund holds a large position and a sale could reasonably impact the quoted price.
 
·   Level 2 – Pricing inputs are other than quoted prices in active markets (i.e. Level 1 pricing) and fair value is determined through the use of models or other valuation methodologies through direct or indirect corroboration with observable market data.  Investments which are generally included in this category include corporate notes, convertible notes, warrants and restricted equity securities.  The fair value of legally restricted equity securities may be discounted depending on the likely impact of the restrictions on liquidity and adviser’s estimates.
 
·   Level 3 – Pricing inputs are unobservable for the investment and include situations where there is little, if any, market activity for the investment.  The inputs into the determination of fair value require significant management judgment and/or estimation.  Investments that are included in this category generally include equity investments that are privately owned, as well as convertible notes and warrants that are not actively traded.  The fair value for investments using Level 3 pricing inputs are based on the adviser’s estimates that consider a combination of various performance measurements including the timing of the transaction, the market in which the company operates, comparable market transactions, company performance and projections and various performance multiples as applied to earnings before interest, taxes, depreciation and amortization or a similar measure of earnings for the latest reporting period and forward earnings, as well as discounted cash flow analysis. The following table presents the Master Fund’s investments at June 30, 2014 measured at fair value.  Due to the inherent uncertainty of valuations, estimated values may materially differ from the values that would have been used had a ready market for the securities existed.
 
Investments
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Direct Investments:
                        
     Direct Equity Investments
   $ -     $ -     $ 259,905,704     $ 259,905,704  
     Direct Debt Investments
     -       -       219,619,896       219,619,896  
Total Direct Investments*
   $ -     $ -     $ 479,525,600     $ 479,525,600  
Secondary Investments*
     -       -       351,178,559       351,178,559  
Primary Investments*
     -       -       56,085,045       56,085,045  
Common Stocks
     26,385       -       -       26,385  
Short-Term Investments
     144,995,329       -       -       144,995,329  
Total
   $ 145,021,714     $ -     $ 886,789,204     $ 1,031,810,918  
 
 
 
 
 
The following is a reconciliation of those investments in which significant unobservable inputs (Level 3) were used in determining value:

   
Balance as of April 1, 2014
    
Realized gain/(loss)
    
Net change in unrealized appreciation/ (depreciation)
    
Gross purchases
    
Gross sales
    
Net transfers in or out of Level 3**
    
Balance as of June 30, 2014
  
Direct Investments:
                                          
  Direct Equity Investments
   $ 242,078,103     $ -     $ 15,252,631     $ 2,574,970     $ -     $ -     $ 259,905,704  
  Direct Debt Investments
     210,660,647       390,992       209,394       31,013,454       (22,654,591 )     -       219,619,896  
  Total Direct Investments*
   $ 452,738,750     $ 390,992     $ 15,462,025     $ 33,588,424     $ (22,654,591 )   $ -     $ 479,525,600  
  Secondary Investments*
     360,274,889       118,276       (6,679,050 )     11,479,312       (14,014,868 )     -       351,178,559  
  Primary Investments*
     52,073,161       -       (317,114 )     5,552,576       (1,223,578 )     -       56,085,045  
Total
   $ 865,086,800     $ 509,268     $ 8,465,861     $ 50,620,312     $ (37,893,037 )   $ -     $ 886,789,204  

The amount of the net change in unrealized appreciation for the period ended June 30, 2014 relating to investments in Level 3 assets still held at June 30, 2014 is $9,031,942, which is included as a component of net change in unrealized appreciation on investments in Private Equity Investments.

*
Direct private equity investments are private investments directly into the equity or debt of selected operating companies, often together with the management of the company. Secondary investments involve acquiring single or portfolios of assets on the secondary market. Primary investments are investments in newly established private equity partnerships where underlying portfolio companies are not known as of the time of investment.

The Master Fund's valuation procedures (the “Valuation Procedures”) have been approved by the Master Fund's Board of Managers (the “Board”).  The Valuation Procedures are implemented by Partners Group (USA) Inc. (the “Adviser”) and the Master Fund's third party administrator, both of which report to the Board.  For third-party information, the Master Fund's administrator monitors and reviews the methodologies of the various pricing services employed by the Master Fund.  The Adviser employs valuation techniques for Private Equity Investments held by the Master Fund, which include discounted cash flow methods and market comparables.  The Adviser has established a committee (the “Valuation Committee”) to oversee the valuation of the Master Fund’s investments pursuant to the Valuation Procedures.  The Adviser and one or more of its affiliates may act as investment advisers to clients other than the Master Fund that hold Private Equity Investments held by the Master Fund.  In such cases, the Valuation Committee may value such Private Equity Investments in consultation with its affiliates.   Valuation determinations by the Adviser and its affiliates for a Private Equity Investment held by other clients may result in different values than those ascribed to the same Private Equity Investment held by the Master Fund.  This situation can arise in particular when reconciling fair valuation differences between U.S. GAAP and accounting standards applicable to such other clients.

 
 
 
 
The following is a summary of quantitative information about significant unobservable valuation inputs approved by the Adviser's Valuation Committee for Level 3 Fair Value Measurements for investments held as of June 30, 2014:

Type of Security
Fair Value
at
06/30/2014
  
Valuation Technique(s)
Unobservable Input
Range
(weighted average)
Direct Investments:
          
    Direct Equity Investments
$ 250,530,485
  
Market comparable companies
Enterprise Value to EBITDA multiple
4.20 x - 17.26 x (9.64 x)
 
3,402,248
  
Discounted cash flow
Discount factor
15.00% - 20.00% (15.85%)
 
542,462
  
Replacement Cost
Recent transaction price
n/a
 
2,730,508
  
Price/Earnings multiple
Price/Earnings multiple
2.00 x – 2.00 x (2.00 x)
 
2,700,001
  
Market comparable companies
Enterprise Value to Sales multiple
2.62 x - 2.62 x (2.62 x)
    Direct Debt Investments
40,591,153
  
Market comparable companies
Enterprise Value to EBITDA multiple
7.50 x - 13.85 x (11.66 x)
 
81,432,155
  
Discounted cash flow
Discount factor
7.09% - 14.97% (11.91%)
 
97,596,588
  
Broker quotes
Bid quotes for an inactive market
n/a
 
Level 3 Direct Equity Investments valued by using an observable input factor are directly affected by a change in that factor.  For Level 3 Direct Debt Investments, the Master Fund arrives at a fair value through the use of an earnings and multiples analysis and a discounted cash flows analysis which consider credit risk and interest risk of the particular investment.  Significant increases or decreases in these inputs in isolation would result in a significantly lower or higher fair value measurement.
 
 
 
 

ITEM 2. CONTROLS AND PROCEDURES.

(a)      The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)      There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR  270.30a-3(d)) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), for the Principal Executive Officer and Principal Financial Officer, are attached hereto.
 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Partners Group Private Equity (Master Fund), LLC

By (Signature and Title)*
 /s/ Scott Higbee  
   
Scott Higbee, President & Chief Executive Officer
  
   
(Principal Executive Officer)
  
       
Date
August 29, 2014
    

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*
 /s/ Scott Higbee  
   
Scott Higbee, President & Chief Executive Officer
  
   
(Principal Executive Officer)
  
       
Date
August 29, 2014
    
       
By (Signature and Title)*
 /s/ Robert Collins  
   
Robert Collins, Chief Financial Officer
  
   
(Principal Financial Officer)
  
       
Date
August 29, 2014
    

* Print the name and title of each signing officer under his or her signature.