Melbourne-based small caps team is recognised for a decade of market leading performance
One of Australia’s most successful and enduring small cap managers, the Pengana Emerging Companies Fund, has been awarded the prestigious Lonsec Icon Award at last night’s SuperRatings Fund of the Year Awards Dinner.
The Lonsec Awards provide an opportunity to highlight and recognise excellence within the investment and superannuation industry. The research house uses a mix of qualitative and quantitative measures to identify high achieving fund managers and investment products that have stood out amongst their industry peers.
The Lonsec Icon Award is given to a manager that has been able to sustain Lonsec’s highest rating – Highly Recommended – for a number of years.
Amanda Gillespie, Joint Chief Executive Officer of Lonsec Fiscal, presented the award to Steve Black and Ed Prendergast, the founders and senior fund managers of the Pengana Emerging Companies Fund, as well as Russel Pillemer, the CEO of Pengana Capital.
Ms Gillespie said the Icon Award was a distinct honour given the highly competitive nature of asset management in Australia.
“We are delighted to present this award to the Pengana Emerging Companies Fund team. Lonsec’s research team conducts a rigorous examination of all funds year on year, and this fund has been subject to a great many sets of eyes over the past decade. To maintain a Highly Recommended rating over a long period is a testament to the high regard with which this manager is held across our team” Ms Gillespie said.
Pengana Senior Fund Managers Ed Prendergast and Steve Black said they were thrilled with the industry recognition.
“Small caps continue to deliver some exciting performance for investors, and provide a genuinely diversified source of returns within a broader Australian equity portfolio,” Steve Black said.
“We’ve maintained a conservative investment approach and avoided the higher risk or more speculative sectors that can bring a portfolio undone. Our assessment of the quality of a company’s management is the starting point,” Ed Prendergast added.
Established in 2004, the Pengana Emerging Companies Fund was the first partnership between an independent investment management team (Steve Black and Ed Prendergast) and Pengana Capital. On 1 November 2015 the team will celebrate eleven successful years together running Australia’s best performing small caps fund*.
The partnership illustrates the success of the Pengana model – where Pengana partners with talented investment managers to provide the operational and distribution support for a strategy, allowing the managers to focus on managing the portfolio. The structure also means investors enjoy very clear alignment of interests – as the managers have a 50% ownership stake in the fund, and their own money invested in it.
The Emerging Companies Fund is an active stock picker with an underlying belief that smaller companies are often incorrectly priced due to lack of broker coverage. The team takes a fundamental research approach – visiting more than 300 companies every year.
Pengana has limited the funds under management in the Fund to 0.5% of the Small Ordinaries Index in order to capitalise on the inefficiencies in this sector, which are often most evident in less liquid stocks.
“We focus on keeping the fund size to a manageable level. The fund also offers flexibility with the management team nimble enough to look at the smallest of the small end of the market,” the managers said.
Pengana currently manages around A$1.5 billion in assets across five established equity strategies spanning Australian shares, Australian small caps, global resources, global small caps, and Asian event driven.
*No.1 performing small cap funds since inception – MercerInsight MPA data for the 10 years to 31 August 2015.
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