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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Mr Redford-Bell’s role will be pivotal in meeting the wealth creation needs of retail clients in Queensland, with a focus on the distribution of Perennial’s investment solutions through intermediary relationships including independent financial advisers, dealer groups and platforms.

Head of Retail Distribution, Cesar Farfan, said Mr Redford-Bell’s appointment is a welcome addition to strengthen Perennial’s relationships with high-quality advice and wealth management firms in Queensland.

“Perennial is highly committed to the Queensland market. Having an experienced sector professional on the ground will enable us to better service the financial planning fraternity in the region,” Mr Farfan said.

Mr Redford-Bell joins Perennial with over 17 years’ experience in financial services, having previously worked in senior distribution and business development roles at QIC, UBS and Blackrock.

Ms Crandall brings over 17 years’ experience as a senior research analyst to her new role at Perennial Value, having previously spent nine years at Perpetual Investments as the Research Relationship Manager.

Ms Crandall will be based in Perennial’s Sydney office and will work closely with the investment teams.

“I look forward to Marjon joining the team at Perennial, her extensive experience will complement the strengthening of our relationships with research houses and asset consultants,” Mr Farfan said.

Both Mr Redford-Bell and Ms Crandall will work across three of Perennial’s specialist investment boutiques – Perennial, Daintree and Fairlight.

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Mr Farfan brings over 20 years’ financial services industry experience, predominantly in funds management and capital markets roles. He has worked with Perennial Value since 2015 as a Senior Investment Specialist. In his new role, Mr Farfan will lead a dedicated retail division in support of advisers and their clients.

Prior to joining Perennial Value, Mr Farfan held senior distribution and product roles at Westpac, MLC, Macquarie Bank and IOOF. He has extensive hand- on experience dealing with investors and advisers in Australia and internationally.

The appointment comes during a period of expansion for the firm, with Perennial Value pushing into the listed market and forming strategic partnerships with complementary asset management brands like Daintree Capital.

John Murray, Perennial Value managing director, welcomed Mr Farfan to the new role.

“Cesar’s appointment comes at a crucial time for our organisation as we expand our investment capabilities across the business, particularly at a time when the industry faces challenges and competition from new entrants and disruptors,” Mr Murray said.

Mr Farfan said: I’m excited to be leading the sales and marketing team at Perennial Value and look forward to expanding the firm’s capacity and its strong reputation.”

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