Damien Cottier

The Perennial Better Future Trust has outperformed its benchmark each financial year since inception, now including five consecutive financial years, laying to rest the claim that sustainable investing compromises investment returns.

At the conclusion of the financial year June 30 2023, the Trust outperformed the S&P/ASX Small Ordinaries Accumulation Index (benchmark); returning 12.7% net of fees, outperforming the benchmark by 4.3%. The Trust has delivered 8% per annum since inception net of fees, outperforming the benchmark by 4.9% per annum.

The Trust’s performance has been largely stock specific including strong performance from Telix Pharmaceutics (ASX:TLX), Alpha HPA (ASX:A4N) and long-term contribution from Calix (ASX:CLX).

Perennial Better Future Trust Portfolio Manager, Damian Cottier says: “In a difficult market environment, the authentic investment process we have built has demonstrated yet again that there is no performance trade off investing in this sustainable way.”

The Trust’s actively managed portfolio seeks to generate strong and consistent returns while only investing in companies that have proven through a proprietary scoring system, that they are positively shaping a better future.

These companies sitting within the portfolio are typically in industries such as healthcare, education, renewable energy, and low carbon technologies.

Cottier says: “These industries are positively geared to benefit from strong global tailwinds, expected to continue into the new financial year and beyond.

There is no doubt it has been a challenging environment for both smaller companies and industrials more generally the past financial year, as such, the outperformance was largely driven by stock selection, with the below highlighting why Telix Pharmaceutics (ASX:TLX), Alpha HPA (A4N) and Calix (ASX:CLX) were amongst the high performers.”

Telix Pharmaceutics (TLX.ASX) had a series of positive news. The global sales of its Illucix product for the imaging of prostate cancer continued to exceed market expectations.

The initial sales outcomes suggest there is significant demand for the product and urologists are seeing patient benefits from the technology.

The company also announced the completion of patient recruitment for the company’s Phase III renal (kidney) cancer imaging study.

The product, which aims to distinguish between benign and malignant renal lesions, had previously received “Breakthrough Designation” from the U.S. Food and Drug Administration (FDA). Current imaging cannot reliably make this distinction, leading to invasive biopsy procedures that are not always necessary as up to 80% are not malignant.

Alpha HPA (ASX:A4N) specialises in low cost, low carbon, high purity alumina. These ingredients have applications mostly across lithium-ion batteries, semiconductors, and LED lights, all critical to decarbonisation.

Earlier in the year Alpha HPA announced it reached an agreement with Austrian based global industrial company Ebner Industrieofenbau Gmbh, to enable Alpha to produce synthetic sapphire glass which is a downstream product of the company’s high-purity alumina (“HPA”) production process.

This agreement will result in the production of value-added product in Australia at the company’s Gladstone, Queensland production facility using Ebner’s low-energy technology and Alpha’s high-purity alumina (“HPA”). Alpha’s production process results in HPA which has around 70% lower total emissions compared to incumbent processes.

Calix (CLX. ASX) has been a key contributor over the last few years. It is an industrial solutions company dedicated to solving global sustainability challenges, including;

• The company’s LEILAC technology assists in CO₂ mitigation in the global lime and cement industry which is responsible for ~9% of global emissions.  Partners include Heidelberg Material, Cemex and Adbri.
• Joint Venture with Pilbara Minerals for more efficient and less carbon intensive processing of lithium ore.
• Adapting the core LEILAC technology for other applications with support from government agencies globally including Zero Emissions Steel, sustainable marine and aviation fuels and zero emissions shipping.

Cottier concluded, “It is pleasing to be able to display through performance that an authentic and differentiated approach to sustainable investing is an achievable strategy for investors, wanting to bridge the gap between sustainability and returns.”

*Past performance is not an indicator of future performance.

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Brendan Lyons

Perennial’s Private to Public Opportunities Fund No.3 (PPP3) has closed its capital raising fully subscribed – attracting $200 million from a wide range of wholesale investors.

PPP3 will employ the same investment strategy as Funds 1 and 2. It will target superior returns from an actively managed portfolio of up to 35 positions in private companies and pre-IPOs, plus investments in direct IPOs and discounted placements, over a five-year period. Perennial now manages over $500m in this private investment strategy.

Head of Perennial Private Investments, Brendan Lyons, said: “We appreciate the strong support from investors for PPP3, with many wealth groups, family offices and individuals following on from our earlier PPP funds. We are very pleased to reach the maximum target fund size of $200 million for our third fund in this exciting and expanding sector of the equity market.”

Mr Lyons said investors had been supportive of the fund’s investment process, which focuses on the Last Private Offer (LPO) undertaken by founder-led companies prior to an IPO or other liquidity event.

“Our systematic filtering process, coupled with a large and growing pipeline of private opportunities, provides a diversified investment exposure which is otherwise difficult to access,” he said.

The growing opportunity set has resulted in two new hires into the PPP team. Karen Chan recently joined as Senior Investment Director based in Sydney, with James McQueen adding his legal and execution skills to the PPP team from Melbourne.

Perennial has already identified several private company and pre-IPO investments for PPP3, with the deployment of capital to commence immediately.

Portfolio Manager Ryan Sohn commented: “We are really excited at the prospects of the companies that PPP3 will be invested in. Two of our initial investments are digitised debt collection business Indebted and music platform Songtradr. Both are founder-led global businesses with large markets, fast revenue growth and unique intellectual property.”

Over the past 18 months, the PPP funds have experienced 14 IPOs plus one takeover within the portfolio of private companies. Some of these names include Booktopia, Aussie Broadband, Lumos Diagnostics and Spire Global.

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The expansion follows the 2018 launch of the eInvest Income Generator Fund (ASX:EIGA) and is a natural part of eInvest’s continued evolution as a complete provider of Active ETFs in Australia.

Camilla Love, Managing Director of eInvest, said: “Partnering with independent investment managers at the local and global level is a natural next step in eInvest’s continued evolution as a complete provider of Active ETF solutions. We have the platform to innovate in areas where active management can truly add value and deliver pioneering solutions in response to the changing needs of clients.

“The expansion will give investors choice, flexibility and transparency of independent professionally managed strategies that would otherwise be available to institutional investors.”

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PIML has formally opened its initial offer for the eInvest Income Generator Fund.

Perennial Investment Management Ltd (PIML) has formally opened its initial offer for the eInvest Income Generator Fund (Managed Fund), ASX code EIGA, an exchange traded managed fund (ETMF).

PIML is seeking to raise funds under an initial  offer to seed the fund prior to the units being admitted to trading status on the ASX, at an Issue Price of $4.00 per Unit .

The closing date of the offer is at 5.00pm on 27th April 2018.

The objective of the fund is to provide investors with an attractive level of tax effective income, paid via monthly distributions. The fund aims to provide a gross income yield, adjusted for franking credits, above that provided by the overall market. The fund is targeting a 7.0% annual gross distribution yield (comprising a 5% cash dividend yield, paid in monthly instalments, plus 2% franking credits).

The fund will aim to achieve this by investing in a diversified portfolio of quality Australian shares which the management team – headed by lead portfolio manager Stephen Bruce – believes has the ability to pay an attractive level of dividend income and to grow in value over the long-term.  The portfolio will typically hold in the range of 30-40 quality Australian companies.

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