Russel Pillemer
Pengana Capital Group Limited (ASX: PCG), announces the intention of its wholly-owned subsidiary, Pengana Investment Management Limited (“PIML”) which is the Responsible Manager of Pengana Private Equity Trust (ASX: PE1) (“PE1” or “Trust”), to offer additional PE1 units in the first quarter of the 2020 calendar year (“Secondary Offer”). The Secondary Offer will comprise both an entitlement offer for existing unitholders and a placement.
Since its initial listing on 24 April 2019, PE1 has generated significant upside for Unitholders. The net asset value of the Trust has increased by 11.3%[1] and the unit price is 18[2] above the IPO price.
Russel Pillemer, PCG’s Chief Executive Officer, said “PE1 has attracted strong after-market support since its listing, with PE1 units mostly trading at a material premium to its Net Asset Value (“NAV”). PE1 has been a game changer for retail investors who for the first time have had the opportunity to invest in global private equity, an asset class that has the potential to generate substantially higher returns than listed equity markets, with lower volatility and low correlations[3] with both equity and bond markets.”
PIML intends to conduct a Secondary Offer for units in PE1[4] given its strong performance to date and the continued and growing demand for private equity investments in general and PE1 in particular. Russel Pillemer said “We have had many approaches from existing and new investors and advisor groups who are seeking to acquire meaningful exposures to PE1 but are unable to do so because of a lack of liquidity. The offer of additional units should provide additional liquidity as well as enable the Trust to attract new investors and advisor groups.”
Existing PE1 investors would benefit from the Secondary Offer of additional units in three ways:
- An entitlement offer that will enable them to increase their investment , without having to buy on-market;
- Increased size of the vehicle and thereby increased liquidity for their holdings; and
- A Loyalty Benefit Program, entirely paid for by PCG.
PCG is proposing the introduction of a Loyalty Benefit Program to be offered to investors who hold PE1 units as at the closing date of the Secondary Offer. The proposed Loyalty Benefit Program is a unique innovation by PCG, reflecting the high value that we place on the loyalty of our supporters. To our knowledge, this is the first time ever that existing investors in a vehicle will benefit in this manner from an additional capital raising.
It is proposed that the Loyalty Benefit Program will be available to investors who hold PE1 units as at the closing date of the Secondary Offer (“Eligible Investors”), regardless of whether they participate in the Secondary Offer. Under the proposed Loyalty Benefit Program, if an Eligible Investor retains their pre-Secondary Offer unitholding for four months after the closing date of the Secondary Offer, then the Eligible Investor will receive additional PE1 units that are fully paid up by PCG (“Loyalty Units”).
It is proposed that the number of Loyalty Units to be issued pro rata to all Eligible Investors will be 1% of the aggregate unitholding of Eligible Investors per complete $100m raised under the Secondary Offer. For example, if $100m is raised under the Secondary Offer, then the percentage will be 1%; if $250m is raised under the Secondary Offer, then the percentage will be 2.5%, and so on.
Details regarding the offer size, issue price and offer structure of the Secondary Offer and the Loyalty Benefit Program will be announced in due course.
Key points
- PE1 to offer additional units via an entitlement offer to existing unitholders as well as a placement
- Since listing on 24 April 2019, PE1 has generated significant upside for Unitholders
- Offer should provide additional liquidity and attract new investors and advisor groups
- Existing unitholders to receive Loyalty Units, funded by PCG – a unique innovation to provide a benefit to existing investors
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