This is the view of Adam Myers, Executive Director at Pengana Capital Group, which operates Australia’s only listed global PE vehicle, the Pengana Private Equity Trust (ASX: PE1). He said a functional capital markets environment supports exits and realisations, with impact across the global PE ecosystem. “The re-opening of capital markets, and the number of IPOs we are seeing is one of the strongest signals that confidence and liquidity is returning to PE.

“This allows capital to be recycled into new investments, with benefits at all levels of PE investment.

“For example, in mid-market PE most returns realisations are not driven by IPOs directly, but improving exit conditions should support realisations and allow capital to be redeployed into the next generation of investments.

“It improves distribution flows and it certainly supports confidence and valuations across the spectrum.”

Myers said deal activity was also being spurred by a narrowing of the ‘valuation gap’. “The valuation gap is starting to narrow, which means the difference between the expectations of buyers and sellers is closer than it was previously. This is driving a meaningful increase in deal activity.”

While PE1’s biggest position is in the world’s largest private company, SpaceX, and while it also has exposure to tech companies including OpenAI, Anthropic, and Groq, the majority of the portfolio targets relatively ‘boring’ and resilient mid-market companies, Myers said.

“PE’s middle market has shown performance advantages, with middle market buyout funds historically outperforming large-cap buyout strategies.

“There is less competition from other investors in the mid-market, and they often have lower entry multiples and less leverage. Mid-market companies also provide more exit options and hence more ways to deliver returns to investors – they can acquire another business, be acquired, be sold to a strategic sponsor, or pursue a public offering.

“The foundation of the PE1 portfolio consists of these cashflow generative, economically resilient, mid-market buyout businesses.

“But when there is an opportunity to take a meaningful position in a company like SpaceX we also have that flexibility to take it”, Myers said.

PE1’s annualised NAV return since its inception in 2019 to 31 December 2025 is 8.7%. Unusually for a private equity vehicle, PE1 pays an ongoing distribution yield of 4% p.a. on NAV.

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Adam Myers

Data shows that global private equity (PE) is on the rebound, yet sentiment hasn’t caught up and good discounts are still available, according to Adam Myers, Executive Director at Pengana Capital Group, manager of Australia’s only globally diversified PE vehicle listed on the ASX, the Pengana Private Equity Trust (ASX: PE1).

In the US, the world’s largest and most influential PE market, aggregate announced and estimated deal count and total deal value were up by over 8 and 10% respectively in the first half of 2025 compared to the same period last year, according to data from Pitchbook.

Myers said private equity has historically outperformed listed markets because it often provides access to businesses at more attractive valuations, along with opportunities for operational value creation. “PE investments have typically traded at a 20–30% discount to public comparables, and with listed markets now running hot, that gap may be even wider, especially in the middle market where most PE deal volume is concentrated.

“In addition to strong growth potential, private equity offers meaningful diversification and tends to exhibit lower volatility than listed equities.”

According to Myers, the middle market remains active, particularly in secondaries and co-investments. “Exit risk is lower in this segment, as most realisations occur through trade sales or sponsor-to-sponsor deals rather than IPOs, which is especially valuable in more volatile public markets.”

Myers also said distributions, which are often cited as a key health indicator for private equity portfolios, are also trending upwards. Chicago-based GCM Grosvenor, one of the world’s most experienced private markets investors, and manager of PE1’s portfolio, saw its private equity portfolios deliver aggregate distributions that were more than 50% higher in the first half of 2025 versus the same period in 2024, and 60% higher year-on-year as of 30 June.*

PE1 recently completed the sale of six fund stakes that were purchased in the secondary market at 98% of NAV. The cash realised from these transactions is now being deployed into a permanent on-market buyback programme, a directly accretive strategy aimed at narrowing the trust’s discount to NAV and enhancing investor outcomes. “The buyback programme is already having an impact”, Myers said.

“The discount to NAV has narrowed by approximately 10 percentage points since we commenced in early July. The current discount remains around 20%, which presents ongoing value for investors.

“This is not a one-off. We’re committed to the buyback mechanism for the long term, with clear parameters and full transparency. As the strategy continues, we expect to see the discount compress further.”

PE1’s NAV return for the year to 30 June 2025 was 9.5%, with an annualised return since inception in 2019 of 8.9%. Unusually for a private equity vehicle, PE1 pays an ongoing distribution yield of 4% p.a. on NAV, which equates to approximately 5.2% p.a. at current market prices. As NAV rises, so too does the dollar value of income paid to investors—providing a rare case of being “paid to wait” for the discount to close.

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*Past performance is not necessarily indicative of future results.

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Pengana Capital launches Conscious Capitalism adviser-only conferences, to be held across three cities during June.

In line with the continued growth of investor interest in ESG, ethical and impact investment strategies, fund manager Pengana Capital Group has announced a flagship responsible investing event series, Conscious Capitalism adviser-only conferences, to be held across three cities during June.

The Conscious Capitalism events will be held in partnership with two leading international investment houses: UK-based WHEB Asset Management, which was last year awarded ‘European ESG Manager of the Year’ in the Funds Europe Awards 2021, as well as ‘Impact Manager of the Year 2021’ at the LAPF investment awards; and US-based Axiom Investors, which has invested ethically on behalf of institutional investors for nearly 25 years. Both Fund managers have partnered with Pengana to provide ethical and sustainable impact investment strategies for Australian investors.

Dean Weinbren, Executive Director of Pengana Capital Group, says investors’ expectations on financial advisers when it comes to responsible investment strategies are growing. “As investors begin to become more conscious of the implications of where they allocate their investments, there is a growing expectation on advisers to be able to understand, interpret and accommodate their clients moral and ethical standpoints when it comes to where and how they invest their hard-earned money.

“Conscious capitalism is about understanding that even one seemingly small decision to invest away from harmful industries has the potential to make a positive impact on our future, while also providing robust investment returns.

“Investors are increasingly interested in the impact their investments have on broader social and economic outcomes.”

Mr Weinbren said the Conscious Capitalism events will explore the latest trends and innovations in responsible investing. “This is a very exciting space, and we are pleased to be able to partner with such quality managers such as WHEB and Axiom to bring these events to the financial advice industry.”

Pengana Capital Group’s Executive Director and Responsible Investing Specialist, Adam Myers, will kick off the events with a deep dive into the latest trends and innovations in responsible investing. Axiom will explore how active and ongoing improvements in a company’s ESG alignment can improve relative share price performance. And WHEB will look into how periods of instability can result in the reordering of societies and priorities, which in turn provides opportunities for investors to benefit from finding companies with strong competitive advantages in niches which address these challenges.

Register for the Sydney, Melbourne or Brisbane events.

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US-based USD84 billion manager Harding Loevner was appointed to manage the Pengana Harding Loevner International Fund, which invests in high quality, growing companies with a long-term global perspective, and the Pengana International Equities Limited (ASX: PIA), the largest international ethical LIC on the ASX.

Axiom Investors, a Connecticut-based global equity fund manager with over USD19 billion in assets under management, was appointed to the Pengana Axiom International Ethical Funds, which are available both hedged and unhedged.

All funds have been awarded ‘Recommended’ ratings by Lonsec and Zenith following a round of out-of-cycle assessments after the previous management teams were replaced. Additionally, SQM rated the unlisted funds “Superior”, whilst PIA received a recommended rating from IIR.

Adam Myers, Head of Distribution at Pengana Capital, said these ratings strongly endorse Pengana’s ability to source and appoint high quality investment managers for its Funds. “We have never had better ratings for our international strategies across the board.

“These upgrades show confidence in Harding Loevner and Axiom, two best-of-breed and differentiated managers, which echoes the confidence we have seen from investors.

“Both investment strategies have very long-term track records going back 31 and 23 years respectively, which demonstrate their ability to deliver superior performance across market cycles.”

Mr Myers said current volatility in global markets would create investment opportunities. “We’re seeing some volatility and some murmurs about a correction, but from a longer-term view this provides opportunity to buy quality companies at good prices.”

The ratings mean Pengana’s entire rated international fund suite, which also includes the Pengana Global Small Companies Fund and The Pengana WHEB Sustainable Impact Fund, have at least a “Recommended” rating in place from both Lonsec and Zenith.

“We’re incredibly proud to bring these quality and unique international managers and investment opportunities to Australian investors”, Mr Myers said.

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This role will be responsible for managing relationships with WA and SA advisers. Notably, this is the first time Pengana has appointed a dedicated manager for these states.

Adam Myers, Executive Director at Pengana, said: “We’re very pleased to welcome such an experienced professional to the team.  Lachlan has a great track record, strong relationships, and is a key hire in driving our growth strategy in the South and West Australia.”

Mr Hay-Hendry joins Pengana from Blue Sky Alternative Investments, where he was Key Account Manager, NSW/SA/WA. Prior to that he was an Investment Specialist at NAB Asset Management, and Business Development Manager at MLC.

Mr Hay-Hendry holds a Master of Applied Finance, a Bachelor of Commerce and a Diploma of Financial Services.

He will be based in Pengana’s newly established WA office.

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This role will be responsible for managing relationships with Victorian and Tasmanian advisers.

Adam Myers, Executive Director at Pengana, said: “We’re very pleased to have Karyn join the team. She has a demonstrated track record of managing long-term relationships and supporting quality advisory businesses. This hire within our team is key in driving our growth strategy and building on our adviser relationships in the region.”

Karyn joins Pengana from Perpetual, where she was Business Development Manager for VIC/NT. Prior to that Karyn was with Macquarie Bank from 1987 until 2002.

Karyn holds a Diploma of Financial Services from Deakin and the Claritas Investment Certificate and will be based in Pengana’s Melbourne office.

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