Damian Crowley

Australian funds management group Pengana Capital (Pengana) has reinforced the value of investors diversifying sources of return across their portfolio, highlighting the ability of its Asia Pacific event-driven fund to deliver smooth returns during volatile markets.

The Pengana Absolute Return Asia Pacific Fund (PARAPF), which has a recommended rating from both Lonsec1 and Zenith2, invests across multiple investment strategies and geographies to take advantage of structural changes and growth occurring across the Asia Pacific region.

The fund can exploit structural changes occurring in the region such as China State-Owned Enterprise privatisations, and invests in companies undergoing corporate activity including M&A deals and capital management initiatives.

Singapore-based Portfolio Manager, Vikas Kumra, said PARAPF had built up an enviable track record since its inception despite shaky market conditions, delivering returns of 10% per annum in the last 7.5 years, compared to 2% per annum returns from the Asia Pacific equity markets and the Reserve Bank of Australia’s cash rate of 3% per annum.

“The Asia Pacific region can deliver some exciting opportunities for investors, with this fund delivering absolute returns and offering investors diversification to their portfolios. One such example is that the region is pregnant with M&A activity: we are seeing circa 800 to 1,200 M&A deals coming to the market each year, which the fund can potentially capitalise on.

“With heightened market volatility recently, the investment team has been able to take advantage of indiscriminate selling to add to some of their high conviction positions in company deals coming to completion. As these are stock specific events, they are unrelated to market movements and offer attractive diversification benefits.”

Commenting on the recent global sell-off, Mr Kumra added: “When you look at the recent sell-off in the Asia Pacific markets, with 4% drops per annum in the last three years, funds such as PARAPF provide a great deal of comfort, delivering real returns despite micro uncertainties and extremely volatile conditions. In that same period we are pleased to have delivered 6% per annum returns and preserved our investors’ capital.”

Fund moves to daily pricing
Pengana today announced to clients that PARAPF has now moved to daily pricing, aligning the Fund’s pricing and processing of applications and redemptions with all Pengana Funds.

Pengana Director of Distribution, Damian Crowley, said the move was in response to strong interest from the investment community for daily pricing to be applied to a broader range of funds – and as interest in the PARAPF strategy has grown amongst Australian investors and advisers.

“Today’s investors are seeking daily liquidity and daily investment returns, and we are excited to be able to offer this service for PARAPF investors,” he said.

Pengana manages around AU$1.7 billion in assets across six established equity strategies spanning Australian shares, Australian small caps, global resources, global small caps, global equities and Asian event driven.

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