Cesar Farfan

A year on from the successful launch of its first private companies fund, the Perennial Private to Public Opportunities Fund (PPP1), Perennial Value Management (Perennial) has announced the launch of a second closed-ended fund for wholesale investors.

The Perennial Private to Public Opportunities Fund No.2 (Fund No.2) will be open on 1 September 2020 and close 2 October 2020, with the goal of raising up to $125 million in new capital.

Mr Cesar Farfan, Perennial’s Head of Retail Distribution, said the launch was in response to strong investor interest following the success of the first Fund, which is now fully invested and has delivered a total return of 31.6%¹ net of fees since inception (including a 5% distribution in July).

“Off the back of the strong performance of our first fund, we have seen high demand from institutions, high net worth investors and family offices for further investment opportunities in this exciting space,” he said.

Fund No.2 will employ the same investment strategy as its predecessor, with the goal of generating superior returns from an actively managed portfolio of 30-45 unlisted, pre-IPO and listed Australian companies over a five-year period.

Expansion of the investment team

The portfolio management team for the Fund comprises Perennial Head of Smaller Companies and Microcaps Andrew Smith, Deputy Portfolio Manager Ryan Sohn, and Brendan Lyons who has recently joined Perennial as a Portfolio Manager dedicated to Private Investments.  Brendan has 26 years’ global experience across equity markets, corporate transactions, financial and industry analysis, and investment management.

Commenting on the appointment, Mr Smith said, “Brendan will have an excellent impact, and we are particularly keen to leverage his commercial skills to provide transaction support and advice to our investee companies to enhance and accelerate returns for our investors.”

An alternative source of return

Perennial’s new offering targets a part of the market that is difficult to access for individual investors – sitting between venture capital and the listed market – a universe of 6000+ growing and diverse companies which offer high growth opportunities and are one to three years away from an ASX listing or other liquidity event.

Businesses which the first Fund invested in include soft tissue regeneration business Aroa Biosurgery, diagnostic testing business Atomo Diagnostics and lung imaging technology firm 4D Medical – all of which have now successfully listed on the ASX.

“A key drawcard for investors is access to these private growth companies at attractive valuations, as well as the low correlation these investments offer to listed equities,” Mr Smith said.

“In recent months, we have seen increased volatility in Australian and global equity markets, which has prompted many investors to seek out alternate sources of return.”

The Perennial Private to Public Opportunities Fund No.2 is seeking to raise at least $50 million from wholesale investors, up to a maximum of $125 million. The minimum investment amount is $100,000.

“We have been delighted with the strong take up of our first fund and are pleased to be able to offer investors a new way to access this under-researched area of the market,” Mr Smith concluded.

Graph 1: Perennial Private to Public Opportunities Fund returns since inception net of fees^* (%)

*Performance of PPP1 shown net of fees. Does not take into account any taxes payable by an investor. Past performance is not a reliable indication of future performance.

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Note: Inception date for PPP1 was 19 August 2019. Return shown is at 21 August 2020 closing valuations, and net of fees. Past performance is not a reliable indicator of future performance.

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