Pengana LIC equity stake offer to investors

Pengana Capital has revealed it will grant investors in its recently flagged new listed investment company — Pengana Managers — equity in the underlying investment managers for no extra cost to the investor in a prospectus lodged yesterday.

The details, which were presented in a prospectus to theAustralian Securities and Investments Commission(ASIC), include plans to raise up to $100 million to invest through a range of specialist absolute return and hedge fund boutique fund managers.

The offering will also see investors, for no additional payment, receive equity stakes in each of the boutique firms, ranging from 18 to 30 per cent, in a move which allows investors to participate in the capital growth of these underlying managers.

The initial underlying managers include Australian equities long-short manager Cape Leeuwin Capital, international equity long-short resource sector manager Stanley Fund Managers, global macro hedge fund Camelot Managers and managed futures manager Percon Capital.

Pengana will seek to incorporate additional managers over the next six months.

According to co-founder and Pengana Capital chairman Malcolm Turnbull, the new venture represents a new concept in Australian financial services.

“This new structure allows investors not only to benefit from the hedge funds’ performance, but potentially to enjoy enhanced returns as the businesses of the boutique managers grow over time,” Turnbull says.

Meanwhile Pengana Capital head of hedge funds, Damien Hatfield says, “Because the underlying hedge funds’ strategies are not highly correlated with equity or debt markets, Pengana Managers will seek to provide investors with positive returns even during periods when these markets are falling.”

Pengana will also provide infrastructure and resources to allow selected managers focus solely on achieving their investment goals.