Bernard Reilly

Perpetual has announced it has entered into a Letter of Intent with Partners Group to explore innovative product development and investment strategy opportunities combining both public and private assets.

The LOI agreement will see Perpetual’s Asset Management business and the Australian arm of Partners Group, one of the largest firms in the global private markets industry with USD$152 billion^[1] in assets under management, collaborate to identify, evaluate, and pursue strategic opportunities, including the potential launch of investment vehicles or products such as Listed Investment Trusts, co-investment, and/or fund structuring.

Perpetual CEO and Managing Director, Bernard Reilly, said: “Perpetual has been at the forefront of Australian investing for decades and this new relationship with Partners Group aligns with our strategic intent of bringing innovative solutions to our clients and continuing to evolve our product suite to provide contemporary, high quality and in-demand investment solutions for our client base.

“Combining Perpetual’s expertise, knowledge and connections as an Australian equities investor, together with Partners Group’s significant local and global reach in private markets including private equity, infrastructure, real estate, royalties and credit, provides the opportunity to explore products that give investors access to asset classes across both public and private markets within a single product, which is a strategic relationship among the first of its kind in the Australian investment industry.”

The agreement also allows for the sharing of market insights, research and investment perspectives, as well as expanded networking collaboration and cross-border opportunities.

Partners Group Head of Australia Martin Scott said: “Since 1996, our business has invested more than USD$234 billion in a range of private markets opportunities across the globe with the sole intent of building long term value for our clients and stakeholders.

“Partnering with Perpetual, one of the flagship brands in Australian equities investing, to explore new investment strategies that combine public-private assets for Australian investors is an exciting step for our business in the region and one that reflects the increasing role played by private markets in the real economy.”

Perpetual Head of Equities, Vince Pezzullo, said: “This agreement with Partners Group provides the foundations for public-private strategies that will allow us to invest in a company’s full lifecycle through various markets and also for investors to benefit from exposure to different parts of the capital structure in the future.

“Potential solutions could also allow for dynamic re-allocation between the investment sleeves over time and make use of liquidity and market events to add additional value to client portfolios.”

With the signing of the LOI, the parties will now work together on market testing to evaluate the demand for the solutions and any proposed structures.

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Notes:
[1] As at 31 December 2024

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Vince Pezzullo

1H18 profit; delivers increased returns to shareholders

1H18 Highlights:

• Strong operating profit after tax of $20.7m
• A fully-franked interim dividend of 3.0 cents per share, a 36% increase on 1H17
• Investment portfolio performance for the 6 months to 31 December 2017 was 10.4%, outperforming the benchmark by 1.8%[1]
• The Net Tangible Asset backing per share was $1.153 after tax2 as at 31 December 2017

The Perpetual Equity Investment Company Limited (ASX:PIC) has announced a strong result for the six months to 31 December 2017, with operating profit before tax of $28.4 million and operating profit after tax of $20.7 million.

The PIC Board also announced a fully franked interim dividend of 3.0 cents per share, a 36% per cent increase on 1H17, highlighting the strong financial position of the company. The dividend will be paid on 11 April 2018.

PIC Chairman Nancy Fox said: “The Board is pleased to once again announce an increased interim dividend. It is in line with our objective to pay a sustainable income stream for our investors, and importantly, is a result of the way we have prudently managed the company since its listing.

“The Company has a healthy profit reserve which combined with the franking account balance puts it in a good position to continue to meet this objective.”

The fully franked interim dividend will provide shareholders with an annual dividend yield of 5.0% and a gross dividend yield (taking franking credits into account) of 7.2%3.

The dividend reinvestment plan (DRP) is available to shareholders for the interim dividend. The plan will operate at a 2.5% discount. The last election date for the DRP will be 22 March 2018.

PIC performance and recent market volatility

The PIC portfolio performed strongly for the six months to 31 December 2017, returning 10.4%, outperforming the benchmark by 1.8%1. As at 31 December 2017, the portfolio held 66% in Australian listed securities, 19% in global listed securities and 15% in cash.

Commenting on recent market volatility, PIC Portfolio Manager Vince Pezzullo said: “The sudden surge in market volatility has highlighted that many asset prices have been artificially inflated by trillions of dollars in monetary stimulus and ultra-low interest rates as central banks have tried to reignite sluggish economies.

“As a value investor volatility can provide increased opportunities to buy companies at attractive valuations. We have remained disciplined and maintained appropriate cash reserves, which not only provides a buffer to a market downturn, but also gives us the opportunity to move quickly and purchase stocks that meet our quality filters.

“We will continue to focus on finding companies with sound management, conservative debt levels, a strong business and recurring earnings that we believe are undervalued by the market. This patient approach allows us to find both local and global businesses that deliver strong returns for the portfolio,” said Mr Pezzullo.

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• Strong growth in net profit after tax (NPAT) of $31.8 million – up 318% on FY16
• Final dividend of 2.5 cents per share fully franked, bringing total dividends declared for FY17 to 4.7 cents per share fully franked – a 68% increase on FY16
• Investment return of 17.4%, outperforming the benchmark return by 3.6% net of management fees and operating expenses1

Vince Pezzullo

Investors will be rewarded with an increased dividend after the Perpetual Equity Investment Company Limited (ASX:PIC) yesterday announced a $31.8 million net profit for the year ending 30 June 2017, a 318% increase on FY16.

The PIC Board declared a final dividend payment of 2.5 cents per share fully franked, bringing the total dividend payment for FY17 to 4.7 cents per share fully franked. This represents a 68% increase on the total dividend payment for FY16.

PIC Chairman Nancy Fox said: “The Board’s objective is to pay a regular dividend and we remain focused on achieving this for shareholders. The Board is pleased to announce [yesterday’s] dividend which is a reflection of the continued strong performance and increasing maturity of the company.”

Commenting on the 2017 financial year, Ms Fox said: “Market uncertainty appears to be the new normal. In this context it’s important to highlight PIC is backed by one of Australia’s most experienced fund managers, Perpetual Investments, with a track record of delivering consistent performance to investors for more than 50 years.”

The PIC portfolio delivered investors an increased dividend and strong growth, including an investment return after management fees and operating expenses of 17.4%, outperforming the benchmark return by 3.6%[1].

PIC portfolio manager Vince Pezzullo said: “The portfolio has delivered strong investment returns against a backdrop of market uncertainty. PIC’s key differentiator in the market – capacity to invest up to 25% of the portfolio in global equities – has the ability to enhance returns and better manage market risk.

“The Australian equity market provides a concentrated exposure to the Financials and Materials sectors. We believe it’s important to provide investors with genuine diversification outside of this and the opportunity to benefit in global growth sectors such as Healthcare and Information Technology,
which we have done throughout the year.

“Over the year the portfolio had an average global exposure of 18%, which is reflective of the opportunities we’ve identified abroad. Deutsche Boerse AG, ICON Plc and Bank of America Corporation are just three examples of global stocks that have contributed to performance.”

Continued discipline

PIC is managed by Perpetual Investments, with an investment philosophy and process focused on buying high quality companies at prices below what is perceived as true value.

“This process means we do not focus on trying to predict where markets and prices are heading. We make investment decisions based on in-depth research which allows us to understand the fundamental risks and opportunities of each company we own in the portfolio.”
“We remain committed to this approach which has proven beneficial for investors over the long-term.”

PIC is one of the few Listed Investment Companies in Australia to release its Net Tangible Assets (NTA) per share daily, ensuring our shareholders always have a current valuation of the investment portfolio. As at 30 June 2017, the value of the portfolio’s NTA per share was $1.097 after tax [2] .The NTA per share continues to grow and is $1.105 after tax [2] as at 17 August 2017.

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[1] Returns have been calculated on the growth of Net Tangible Assets (NTA) after taking into account all operating expenses (including management fees) and assuming reinvestment of dividends. Any tax paid and provisions for deferred tax on set up costs and on unrealised gains and losses are excluded. Past performance is not indicative of future performance. The benchmark is the S&P/ASX300 Accumulation Index.
[2] All figures are unaudited and approximate.

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Vince Pezzullo

1H17 Highlights

• Strong operating profit after tax of $22.7m
• A fully-franked interim dividend of 2.2 cents per share, a 175% increase on 1H16
• Portfolio performance for the 6 months to 31 December 2016 was 11.2.%, outperforming the benchmark by 0.8%1
• The Net Tangible Asset backing per share was $1.083 after tax2 as at 31 December 2016

Perpetual Equity Investment Company Limited (ASX:PIC) has announced a strong result for the six months to 31 December 2016, with operating profit before tax of $31.5 million and operating profit after tax of $22.7 million. PIC’s operating profit after tax represents a 76% increase on the first six months of FY16.

The PIC Board also announced an interim fully franked dividend of 2.2 cents per share, in line with the board’s objective to pay a regular and growing dividend to shareholders, fully franked wherever possible. This represents a 175% increase on the first six months of FY16. The interim dividend will be paid on 17 March 2017 and PIC will trade ex-dividend on 28 February 2017.

The dividend reinvestment plan (DRP) is available to shareholders for the interim dividend. The plan will operate at a 2.5% discount. The last election date for the DRP will be 2 March 2017.

The PIC portfolio delivered investors regular income and strong growth in the face of volatile market conditions. Portfolio performance for the six months to 31 December 2016 was 11.2%, outperforming the benchmark by 0.8%1.

Vince Pezzullo, PIC’s Portfolio Manager, said the strong performance against a backdrop of global volatility highlighted the benefits of a disciplined investment approach.

“Market volatility provides an opportunity to buy quality companies at attractive prices. We will remain patient and maintain our focus on identifying quality companies that can deliver strong returns for the portfolio, with the objective of providing shareholders with a growing income stream and long term capital growth.”

As at 31 December 2016, the portfolio held 67% in Australian securities, 14% in global securities and 19% in cash.

New investor website

The PIC board is pleased to announce the launch of our new website. The new site was designed to ensure shareholders have access to a flexible and easy to navigate platform that provides better access to key News & Insights content, videos and fund information. The daily NTA will continue to be published on the new website.

PIC is the only Listed Investment Company in Australia to release the Net Tangible Assets (NTA) per share daily ensuring our shareholders always have a current valuation of the investment portfolio. As at 31 December 2016, the value of the portfolio’s NTA per share was $1.083 after tax2. The NTA per share continues to grow and is $1.099 after tax2 as at 16 February 2017.

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Vince Pezzullo

FY16 Highlights:

• Net profit after tax of $7.6m.
• An increased fully-franked final dividend of 2.0 cents per share bringing the total dividends declared for 2016 financial year to 2.8 cents per share.
• Portfolio performance for the 12 months to 30 June 2016 was 3.1%, outperforming the benchmark by 2.2%[1]
• The Net Tangible Asset backing per ordinary security was $1.014 as at 30 June 2016[2]

Perpetual Equity Investment Company Limited (ASX:PIC) has announced a strong result for the year ending 30 June 2016, with net profit after tax of $7.6 million. This represents a 106% increase compared to net profit after tax declared for the period ending 30 June 2015.

The PIC Board declared a fully-franked final dividend payment of 2.0 cents per share for the year ended 30 June 2016, which brings the year’s total dividend payment to 2.8 cents per share − a 2.3 cents per share increase in the dividend when compared with the 2015 financial year.

The PIC portfolio delivered investors an increase in dividends and strong growth in the face of low interest rates and increased market volatility. Portfolio performance for the 2016 financial year was 3.1%, outperforming the benchmark by 2.2%1.

Vince Pezzullo, PIC’s Portfolio Manager, said the strong performance against a backdrop of global volatility highlighted the benefits of a disciplined investment approach.

“Equity markets globally have been volatile over the past 12 months, and there are a number of macroeconomic factors that will continue to impact markets moving forward.

“Volatility can be uncomfortable in the short-term for many investors, but it also provides opportunities to purchase assets at prices below their true value. We maintain our disciplined focus on buying high quality companies at attractive prices, given company fundamentals and the prevailing market conditions,” Mr Pezzullo said.
Fully invested portfolio3

As at the end of FY16 the portfolio held 55% in Australian securities, 23% in global securities and 22% in cash.

“The second half of this financial year represents the first full six months where the portfolio was fully invested and this has improved capacity to deliver an increased dividend.”

PIC’s capital deployment has been guided by its investment philosophy which targets quality companies that must exhibit four characteristics: quality business, conservative debt levels, sound management and recurring earnings.

“We have a strong focus on identifying quality companies that can deliver strong absolute returns for the portfolio, with the objective of providing shareholders with a growing income stream and long term capital growth,” added Mr Pezzullo.

PIC is the only Listed Investment Company in Australia to release the Net Tangible Assets (NTA) per ordinary security daily, making it the most transparent NTA price in the market. This ensures shareholders always have a current valuation of the investment portfolio. As at 30 June 2016, the value of the portfolio’s NTA was $1.014 after tax. The NTA continues to grow and is $1.061 after tax, as at 17 August 2016.

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Vince Pezzullo

More than half of advisers surveyed at a recent Perpetual Equity Investment Company Limited (ASX: PIC) roadshow cited the growth of the SMSF market (57%) as one of the main drivers behind the resurgence of listed investment companies (LICs). Other drivers included the capacity to buy directly and trade on the ASX (57%) and an overall greater understanding of the benefits of LICs (37%).

The increased appetite for LICs by advisers has also been demonstrated through the inclusion of PIC on the major wrap platforms and leading dealer group approved product lists (APLs).

Perpetual Investments Portfolio Manager, Vince Pezzullo, said despite recent falls in the market, it is clear there is still interest in LICs as an investment vehicle among advisers and SMSFs.

“There is increasing demand for LICs because they are transparent and liquid investments and these are features which investors, particularly SMSFs, are seeking,” Mr Pezzullo said.

PIC provides an unprecedented level of transparency – it will be the first LIC in the market to release the net tangible asset backing of its shares (NTA) as at the end of each business day within two business days. PIC will also provide monthly disclosures on top portfolio holdings, and bi-annual shareholder updates and briefings.

Mr Pezzullo added: “As well as providing a regular income stream, PIC’s performance can be easily tracked through daily NTA reporting, and shares bought and traded on the ASX.”

Advisers who responded to the survey viewed a regular and growing income stream (67%), long term capital growth (43%) and exposure to international markets (30%) as being among the top three benefits of PIC. An overwhelming majority (90%) also said global equities were an attractive component of a LIC.

“The Perpetual LIC is attractive because you are getting Institutional capability in a listed accessible structure for all investors,” Matthew Christensen, Director, Hill Capital, said.

PIC offers a diversified portfolio through investment in predominantly Australian listed securities with typically a mid-cap focus, as well as up to 25% of the portfolio’s net asset value in opportunistic allocation to global listed securities.

“These adviser insights cement the importance of having diversification in portfolios, as well as having investments which provide regular income and long term growth. With PIC providing carefully managed dividends and franking credits, exposure to global equities and flexibility and control, we believe PIC is a compelling investment opportunity,” Mr Pezzullo said.

PIC recently achieved a ‘Recommended’ rating from research houses Lonsec and Zenith with both research houses commending Perpetual’s tried and tested investment processes and experienced team.

Perpetual Investments ran five roadshows with advisers across the major cities from 21-30 October 2014, coinciding with the launch of its first listed investment company (PIC).

The offer will remain open until 28 November 2014 with a minimum raising target of $150 million. The offer has been arranged through CBA Equities and Taylor Collison and is being jointly managed by Macquarie Capital, Morgan Stanley Australia and ANZ Securities. The co-lead managers are Baillieu Holst and Lonsec.

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Vince Pezzullo

As it officially opens to investors, Perpetual Investments’ first listed investment company – the Perpetual Equity Investment Company Limited (ASX: PIC) – has received a ‘Recommended’ rating from research house Lonsec and ‘Recommended’ rating from Zenith.

Lonsec identified Perpetual’s “long-standing investment philosophy and process” as “one of the key strengths of this offering.” Similarly, Zenith stated that it “has a high level of confidence in Perpetual’s investment process and believes that PIC will generate excess returns for its investors over the medium to long-term.”

The Zenith report also commented that it “sees PIC as a LIC with solid potential as part of a diversified equities portfolio.”

PIC offers its own diversified portfolio through investment in Australian listed securities with typically a mid-cap focus, as well as up to 25% of the portfolio’s net asset value in opportunistic allocation to global listed securities. Its structure also offers the flexibility to manage potential equity market risk by moving up to 25% of the portfolio’s net asset value into cash and deposit products.

Lonsec highlighted that it, “considers the ability… to alter the asset allocation to global equities and cash to enhance the risk management practices of PIC.”

Designed to deliver regular income and long-term capital growth, Perpetual Investments Portfolio Manager, Vince Pezzullo, said these benefits would be attractive to the growing SMSF market.

“Diversification is important in SMSF portfolios, as is flexibility and liquidity. Through PIC we have the ability to increase or decrease our allocation to Australian equities, global equities and cash, based on market conditions,” Mr Pezzullo said.

“The allocation to global equities in particular offers investors access to the growth opportunities available through investing overseas.”

Zenith’s assessment also praised Perpetual’s “conceptually sound, rigorous and repeatable” investment process and its experienced investment team and stated: “PIC should suit investors seeking an Australian focussed equities exposure while Perpetual’s strong value bias should provide resilience in falling markets along with a steady dividend income.”

“PIC marries the best ideas from Perpetual’s time proven Australian and global equities strategies. Our internal investment team is a deep research engine, expert in bottom-up stock picking which avoids the biases of the ASX300,” Mr Pezzullo.

In its ratings report, Lonsec stated its “high regard for Perpetual’s quality-focused and valuation-driven research process.” It also shared its “favourable view of the investment skill and growing portfolio management track record of Vince Pezzullo as well as the depth and experience of the wider equities investment team.”

Further reinforcing the Perpetual Investment team’s capability and solid track record, last week the Wealth Focus Perpetual Industrial Share Fund, which is co-managed by Mr Pezzullo and Portfolio Manager, Nathan Parkin, won the Super Ratings Fund of the Year Awards for the Australian Shares category based on five-year returns.

PIC’s offer period is now open until 28 November 2014 with a minimum raising target of $150 million. The offer has been arranged through CBA Equities and Taylor Collison and is being jointly managed by Macquarie Capital, Morgan Stanley Australia and ANZ Securities. The co-lead managers are Baillieu Holst and Lonsec.

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Vince Pezzullo

Perpetual Equity Investment Company Limited aims to deliver regular income, long-term capital growth through domestic and global opportunities

Perpetual Investment Management Limited (Perpetual Investments) has unveiled its first listed investment company – Perpetual Equity Investment Company Limited (ASX: PIC) – providing investors and their advisers with direct access to Perpetual Investments’ expert investment team and proven investment philosophy and process.

The company is designed to deliver regular income and long-term capital growth through investment in Australian listed securities with typically a mid-cap focus, as well as up to 25% of the portfolio’s net asset value in opportunistic allocation to global listed securities. Its structure also offers the flexibility to manage potential equity market risk by moving up to 25% of the portfolio’s net asset value into cash, deposit products and senior debt.

Led by Perpetual Investments Portfolio Manager, Vince Pezzullo, PIC will be actively managed.

“PIC marries the best ideas from Perpetual’s time-proven Australian and global equity strategies,” Mr Pezzullo said.

“The portfolio will be actively managed and focus on delivering regular income and long-term capital growth. While Australian listed securities will be the core of the portfolio, it has been structured to provide flexibility in how returns are delivered to investors, while effectively managing risk.”

PIC generally expects to release to the ASX the net tangible asset backing of its shares (NTA) as at the end of each business day within two business days – providing enhanced transparency for investors.  PIC will be the first LIC in the market to do this.

“We believe it’s important for investors to understand the value of what they own so PIC expects to calculate and release its daily NTA to the ASX,” Mr Pezzullo said.

According to Mr Pezzullo, PIC’s coverage of predominantly Australian listed securities with a mid-cap focus and access to global opportunities also offers much needed diversification, particularly to SMSFs, whose portfolios have been typically concentrated in local banks and resources.

“We see PIC as being an ideal addition to the portfolios of many Australian investors, in particular, SMSFs,” he said.   

PIC gives a broader range of investors access to Perpetual Investments

The launch of PIC is the latest growth initiative from Perpetual Investments and follows the announcement of the Perpetual Global Share Fund in August 2014.

Michael Gordon, Group Executive Perpetual Investments, said PIC will give a broader range of investors access to Perpetual Investments’ proven investment philosophy and process through a new channel.

“This is about recognising the changing behaviours of Australian investors and responding to their needs,” Mr Gordon said.

“Investors are seeking transparent, liquid investments as part of a diversified portfolio and this is what we are delivering through PIC. Perpetual Investments’ consistent track record of investing excellence is underpinned by its proven investment process that focuses on value and quality. With an experienced investment team behind it, we believe PIC is an attractive proposition for investors.”

PIC’s offer period is expected to open on 21 October and will close on 28 November 2014 with a minimum raising target of $150 million. The offer has been arranged through CBA Equities and Taylor Collison and is being jointly managed by Macquarie Capital, Morgan Stanley Australia and ANZ Securities. The co-lead managers are Baillieu Holst and Lonsec.

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