Soul Pattison seeds $200m into Pengana private credit JV
By Dan Purves – Citywire – original article
Pengana Capital aims to make global private credit accessible to non-institutional investors in the same way that its flagship listed global private equity vehicle did for similar clients in 2019.
Washington H Soul Pattinson – which trades as Soul Pattinson – has seeded $200m into $3bn Australian diversified fund manager Pengana Capital Group as part of a joint venture to bring global private credit investments to non-institutional investors.
The seed capital is close to being fully allocated, with the ‘highly diversified portfolio’ focused on best-of-breed global private credit investments. Pengana declined to disclose the major holdings of the portfolio, but did say it has been creating capacity and building a platform to access the best managers in North America and Europe.
In the coming months, non-institutional investors will be given the opportunity to invest alongside Soul Pattinson, with the launch of several vehicles, each specifically tailored to different market segments, including advised and direct retail investors, high-net-worth and family offices.
A spokeperson said it would not be immediately available for managed accounts but it was an area Pengana would look at in the future.
Pengana is not putting a ceiling on the size of the portfolio, but it is very bullish on the asset class as, unlike some other asset classes, there are no capacity constraints in private credit.
‘This is a $1.2tn asset class globally that has exploded the past 10 years. It is huge in North America and Europe, with around 80% of corporate credit written by private credit,’ the spokeperson said.
Russel Pillemer (pictured), CEO of Pengana Capital Group, said that while opportunities in global private credit had been growing at a rapid pace since 2008, there was a severe lack of exposure to global private credit investment options in Australia.
‘Many everyday investors aren’t even aware of the size of this opportunity, purely because they have never had this level of access before,’ Pillemer said.
‘Investing in global private credit offers several significant benefits for portfolio construction, including diversification, higher yields and lower volatility. By adding global private credit to portfolios, investors can achieve greater balance and potentially improve their risk-adjusted returns. But in Australia there is an absence of vehicles that are appropriately structured for Australian retail and mass high-net-worth investors.’
Aside from investing the seed funding, Soul Pattinson is a major shareholder of Pengana alongside Pillemer – with it owning about 39% of the company – and has had a shareholding since 2016.
