Pengana’s private equity offshoot

(Simon Hermann, The Australian)

The dust hasn’t even settled after the roadshow of the $300 million private investment vehicle MCP Income Opportunities Trust as the next private equity fund makes a pitch to ASX investors.

The Pengana Private Equity Trust will be a listed investment trust offering ASX investors exposure to global private equity markets as demand continues to soar.

The ASX listing is pencilled in for April 30.

Private equity is money invested in firms that have not made their initial public offering, or IPO. Since the global financial crisis, private equity raisings have increased significantly year on year, although overwhelmingly concentrated in just one region — the US.

Managed by Grosvenor Capital Management, this latest trust seeks to generate capital growth over an investment horizon of at least 10 years.

Grosvenor and its affiliates have more than $US24 billion ($33.6bn) of AUM across its private market platform.

Pengana seeks to raise up to $600m and is aiming to lure investors with an uplift in the net asset value of the Trust through the issuance of convertible preference shares in the well-established Pengana Capital Group (PCG), resulting in a 5 per cent premium to the subscription price.

The Pengana Capital Group is a 15-year-old diversified Australian fund manager with operations across the country and also in Singapore, which manage an overall $3bn in funds under management.

The average private equity fund appreciated on average 8 per cent last year, compared with a 6.2 per cent decline for the benchmark stock index S&P 500.

Private equity has shown resilience during times of stockmarket volatility and investors dream of getting in early with winners such as Appen, which has delivered spectacular returns for early investors.

With political and economic uncertainty elevated in the current market and knowing how these two forces intersect with investor sentiment, the investment case for private equity remains compelling.

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Pengana Capital Group