The Fund's investment strategy is based on an underlying belief that smaller companies’ share prices are often incorrectly priced.
The investment process focuses on a very active company visitation program to assess management quality and over time the investment team will visit most of the 800 companies in its universe.
In addition to meeting with management, the team’s qualitative-based approach also focuses on product/service quality, competitive advantage, growth prospects, and financial position.
As the Fund will only invest in companies that can be valued with relative confidence, it will not own resource companies, listed property trusts or loss-making companies.
The Fund invests principally in small and mid-cap listed (or soon to be listed) Australian equities. The Fund may also invest up to 15% of its assets in small and mid-cap listed (or soon-to-be listed) New Zealand equities.
The Fund’s investment objective is to obtain returns greater than the S&P/ASX Small Ordinaries Accumulation Index (‘Index’) over rolling 3-year periods after fees.
For up to date fund statistics please find the latest monthly report here
Investment Approach
The Fund’s Investment Team utilises a robust investment process that combines in-depth fundamental research with disciplined portfolio construction and risk controls. Pengana has a stated capacity target of approximately 0.5% of the Index capitalisation for the Fund and will manage the size of the Fund with a view to achieving this target over the medium term. This may include closing the Fund to new investors or returning capital.
Investment Process
The Investment Team seeks to identify market inefficiencies in the pricing of small/mid-cap securities by focusing on the following factors:
The portfolio construction process aims to develop portfolios that incorporate the best investment ideas from the Investment Team’s research with appropriate levels of diversification with the objective of realising the Fund’s return and risk targets.
Indicative Strategic Asset Allocation
Pengana aims to manage the Fund within the following guidelines:
The Fund can invest in securities that are not part of the Index including companies included in the S&P / ASX MidCap 50 Index provided that the companies do not form part of the S&P/ASX 50 Leaders Index. There may also be limited investment in small and mid cap listed (or soon to be listed) New Zealand equities and in listed (or soon to be listed) trusts. Generally, the maximum/minimum value of any individual security in the Fund relative to the Index, will be the percentage weight of that security in the Index +/- 7%. Pengana will endeavour to work within the above guidelines – however these should be viewed as objectives only and not absolute limits.
The latest Top Holdings can be viewed here
* Please note the holdings are in alphabetical order.
The most up-to-date performance can be found here
Founded in 2003 and headquartered in Sydney, with offices in Melbourne, Brisbane, and Perth, Pengana currently manages over AUD$4 billion across a range of international and Australian strategies.
We hunt for the world’s leading investment teams in order to bring our investors unique, differentiated, and smart investment products.
Our unique business model also delivers centralised support from our corporate team, so our fund managers can focus on what they do best – managing portfolios.
Pengana’s premium investment products employ active strategies with non-benchmark mandates, giving our investment teams the freedom to invest in their best ideas.
With independent investment teams in Chicago, Connecticut, New Jersey, United Kingdom, Israel, Melbourne, and Sydney, our range of independently managed investment strategies provides a well-blended and uncorrelated level of diversification.
Each strategy is run by a separate investment team with unique skills relevant to their investment class. Our focus and track record is to provide investors with long-term returns, adjusted for risk minimisation.
Pengana Capital is a wholly owned subsidiary of Pengana Capital Group.
Ed is the co-manager of the Pengana Emerging Companies Fund and established the Fund in 2004 with Steve Black.
Prior to joining Pengana, Ed was a Director of Citigroup and Head of the Small Companies research team.
In total, Ed spent 10 years researching small companies for stockbrokers – primarily at Citgroup and ABN Amro and was the top-ranked analyst by BRW in 2003 and 2004.
Ed has a Bachelor of Economics from La Trobe University and a Graduate Diploma in Applied Finance (SIA).
Steve is co-manager of the Pengana Emerging Companies Fund and established the Fund in 2004 with Ed Prendergast.
Along with Ed, Steve co-manages the Fund, sharing responsibilities for research, financial modelling, valuation and portfolio construction.
Steve was formerly a partner of Goldman Sachs JBWere and managed the award-winning JBWere Emerging Leaders Fund for almost seven years, a period over which the Fund delivered an average return of close to 20% p.a.
The Fund was voted the number one emerging companies fund in Australia in 2000 and 2001 by Personal Investor magazine before being closed to new investments in November 2001.
Steve holds a Bachelor of Economics/ Commerce from Melbourne University. He is a member of ASIA and CA (Institute of Chartered Accountants).
The latest monthly report is available here
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