Private Equity, Repriced: Unlocking Value in an Overheated Market

There’s an old saying: Markets climb a wall of worry

But with persistent geopolitical tensions, rising economic uncertainty, and the World Bank warning that 2025 could see the weakest global growth outside of a recession since 2008, it’s worth asking – where can investors still find value without sacrificing growth potential?

One compelling answer lies in private equity.

Over the long term, private equity has generally outperformed listed markets – in part because investors can access private companies at more attractive valuations. Historically, private equity deals have occurred at entry multiples 20–30% lower than comparable public companies. With listed markets running hot, that valuation gap may be even wider, further enhancing the relative appeal of private equity.

PE1: Private Equity, Repriced

The Pengana Private Equity Trust (ASX: PE1) is Australia’s only globally diversified private equity vehicle listed on the ASX. It offers access to a high-quality, institutional-grade portfolio that would typically be unavailable to individual investors.

• Institutional-quality manager: The portfolio is managed by US-based GCM Grosvenor (US$82bn AUM, est. 1971), one of the world’s most experienced private market investors.
• Diversified, high-quality portfolio: with over 500+ private companies diversified across sectors, geographies, and strategies, and vintages dating back to 2003. The portfolio has consistently delivered strong growth (with the underlying PE portfolio generating a top quartile IRR since inception), underpinned by companies with solid cashflows, pricing power, and resilience to macro volatility.
  Proven performance: Since PE1’s IPO in April 2019, it’s NAV has compounded at 8.9% p.a. The portfolio has returned 9.5% over the 12 months to 30 June.
• Attractive entry point: Units are currently trading at discount, versus a 30 June post-distribution NAV of $1.63.
• The trust pays a 4% p.a. distribution based on NAV: Meaning the current yield at market prices is above the targeted 4%. As the NAV rises, so does the income. Investors are being paid to wait for the discount to close.
• Pengana’s active discount management: When PE1 units trade at more than a 10 % discount to NAV, up to 75 % of available cashflow is directed to on‑market buy‑backs to enhance investor value.

A Clear Path to Value Realisation

PE1 recently completed the sale of six primary fund holdings that were purchased in the secondary market at 98% of NAV. The cash realised from these transactions is now being deployed into a permanent on-market buyback programme, a directly accretive strategy aimed at narrowing the trust’s discount to NAV and enhancing investor outcomes.

Why Now?

PE1 offers a rare combination in today’s market:

• A high-quality, globally diversified private equity portfolio
• A substantial discount to NAV
• Visible, near-term catalysts to unlock value

In a world where listed equities are pricing in perfection, PE1 provides something different – access to real businesses with strong fundamentals, trading at a meaningful discount, and backed by active capital management.