Pengana updates the investment strategies of Hunter Hall funds to deliver better outcomes for investors
Pengana Capital Group Limited (ASX: PCG) today announced updates to the Hunter Hall funds international equities funds. These changes will substantially improve the management of the portfolios, providing significant benefits to investors.
The changes follow on from the shareholder vote at the Hunter Hall International Limited (ASX: HHL) Extraordinary General Meeting last week, which resulted in the businesses being merged to create a substantial funds management business with in excess of $3 billion in funds under management.
PCG has built an enviable reputation on its highly-regarded expertise and experience in the area of both Australian and international equities funds management.
Investment team expertise and investment mandate
The Hunter Hall Global Value Limited (ASX: HHV), Hunter Hall Value Growth Trust (VGT) and the Hunter Hall Global Equities Trust (GET) will be managed by a combined Pengana and Hunter Hall team of six led by Jordan Cvetanovski (CIO and Portfolio Manager) and Steven Glass (Head of Research & Portfolio Manager).
Jordan is a highly regarded international equities fund manager with extensive experience acquired in Europe and Australia. Prior to joining Pengana, Jordan was a Partner at Carmignac Gestion (a Paris based fund manager with in excess of EUR50bn of funds under management) where he managed three international equity funds. Prior to Carmignac, Jordan worked at Robeco (in the Netherlands), Platinum and BT Funds Management. At Pengana, Jordan employs the same approach to stock selection and portfolio construction that he used successfully over many years in Europe.
Steven is a proven international investor with considerable experience in managing international investments from Australia. Steven started his international investment career at Platinum Asset Management and prior to joining Pengana, Steven spent seven years working as a Portfolio Manager at Hunter Hall. At Pengana, Steven is responsible for the investment research process.
The team will also include James McDonald (Portfolio Manager) who was Hunter Hall’s Acting CIO and Ryan Fisher who recently joined Pengana from Goldman Sachs, where he was Managing Director within the Global Investment Research division and a highly-rated sell-side analyst specialising in Financials.
The investment strategy for HHV, VGT and GET will change to replicate the strategy and process of the Pengana International Equities Fund (‘PIEF’). PIEF’s focus is on investing in a well-constructed portfolio of growing businesses at reasonable valuations. It employs a ‘benchmark–unaware’ strategy with freedom to invest across all international equity markets and company sizes.
Jordan Cvetanovski said: “An integral element of our portfolio construction process is the division of stocks into three segments: Core, Cyclical and Opportunistic. Core stocks, which will always represent 60-80% of the Fund, provide stability, while stocks that we classify as Cyclical or Opportunistic provide the opportunity for material upside.”
“The mandate across the funds is to generate long-term consistent returns whilst reducing volatility and the risk of losing capital.”
Hunter Hall has a long history as an ethical manager, and PCG has announced that the current ethical screen is to be retained in its entirety across the HHV, VGT and GET portfolios.
Fee changes
As part of a review of its pricing strategy, PCG will reduce the fees and expenses charged for certain Hunter Hall products. These fee reductions align the Hunter Hall and Pengana products, and importantly, provide a better outcome for investors.
Russel Pillemer said: “As we’ve reviewed our approach for the funds, our compass is always what is best for our investors. We understand the important responsibility that our investors have placed on us to manage their assets.”
“Our investors are at the heart of all we do, we take our commitment to perform our duties to the maximum of our abilities, and in accordance with our mandate, very seriously. Reducing our fees and enhancing the investment team and mandate for these funds is a great outcome for investors.”
A plan for greater shareholder value in the Listed Investment Company
The HHV Board has also announced details of their Plan for HHV, to deliver greater value to investors in the fund.
As well as the investment team and mandate changes, and proposed fee reductions (subject to approval at the Annual General Meeting), the Board has announced a review of their stated dividend objective and adopted a revised objective to deliver “regular and growing” dividends.
Also in the plan is a one-for-one bonus options issuance available to shareholders with an address in Australia or New Zealand, in recognition of their support.
Changes to the HHV Board include the addition of Frank Gooch as an independent non-executive director (NED) effective immediately, with the intention for him to become Chairman after the next HHV Annual General AGM. Mr Gooch brings over 31 years’ experience in the finance and investment industries including as Managing Director of Milton Corporation Limited, a highly regarded Australian Equities listed investment company (LIC) with a market capitalisation of $2.9 billion. Russel Pillemer, CEO of PCG will also join the Board. Additionally, there has been a substantial reduction in compensation levels for Board members.
Russel Pillemer said: “We appreciate the patience and support our investors have demonstrated through this process, and we’re excited about the future of Pengana Capital Group.”
“Our intention is to deliver best-in-class investment strategies with a focus on sustainable wealth creation and stability,” he added. “Over our 15 year history, Pengana’s primary focus has been on an unrelenting quest to generate superior long term returns for our investors. This focus will continue to guide PCG as a listed company.”
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