Pengana High Conviction Property Securities Fund
Australia's only high conviction A-REIT fund with an ESG focus. A Property Fund focussed on capital security, income yield, and sustainable growth that seeks to exploit market inefficiencies by employing an active, value based investment style.
The Pengana High Conviction Property Securities Fund believes each security has an underlying or intrinsic value and that securities become mispriced at times relative to their value and each other, and seeks to exploit such market inefficiencies by employing an active, value-based investment style to capture the underlying cashflows generated from real estate assets and/or real estate businesses.
We believe that responsible investing is important to generate long-term sustainable returns. Incorporating ESG factors alongside financial measures provides a complete view of the risk/return characteristics of our property investments.
All positions are high conviction and assessed on a risk-reward basis, resulting in a concentrated portfolio of 10-20 securities.
The Fund invests principally in listed (or soon to be listed) Australian property securities. The Fund may also invest up to 10% of its assets in listed (or soon-to-be listed) International property securities.
The Fund is focused on:
Capital Security
Transparent NTA valuations are easily verified.
Income Yield
A-REITs have reliable income derived from assets with long term leases.
Sustainable Growth
Rental growth indexed to CPI. A concentrated portfolio enables investment in best-positioned assets and sectors at any point in time.
Liquidity
Daily priced A-REITs with market capitalisation > $50m.
It may also invest in the shares of property developers and other companies associated with the property sector.
The Fund’s investment objective is to obtain returns greater than the S&P/ASX 300 A-REIT (AUD) TR Index (‘Index’) over rolling 3-year periods after fees.
Investment Approach
The investment process identifies mispriced securities through a high conviction and Environment, Social and Governance (‘ESG’) focused approach. The concentrated portfolio enables investment in the best-positioned assets and sectors at any point in time.
Investment Process
The Pengana High Conviction Property Securities Fund believes each security has an underlying or intrinsic value and that securities become mispriced at times relative to their value and to each other Such mispricing is due to irrational market behaviour driven by investor sentiment towards certain types of securities or sub-sectors of the property market
The Fund seeks to exploit such market inefficiencies by employing an active, value-based investment style to capture the underlying cashflows generated from real estate assets and/or real estate businesses. As a result, we adopt a bottom-up investment approach with thematic overlays to benefit from cyclical and structural changes whilst focusing on analysing the quality and potential cash flow for each security.
The team believes that responsible investing is important to generate long-term sustainable returns. Incorporating ESG factors alongside financial measures provides a complete view of the risk/return characteristics of our property investments. ESG issues vary amongst asset type, life cycle phase, corporate structure and other company-specific characteristics. Our approach is qualitative in that we engage with each company to understand the relevant issues and rank them in terms of E, S and G.
ESG factors are integrated into our fundamental research process and are designed to manage risk. This means our valuation process and ranking model takes into account both financial and ESG factors.
Incorporating ESG factors does not significantly reduce the investable universe as most Australian real estate companies rank well across the ESG matrix with high NABERS (National Australian Built Environment Rating System) ratings and good corporate governance relative to global peers.
Indicative Strategic Asset Allocation
Pengana aims to manage the Fund within the following guidelines:
- 70%-100% of Australian listed property securities
- 0%-10% International listed property securities
- 0%-20% cash and cash equivalents
- Maximum position size in Index securities 20%
- Maximum position size in non-index securities 5%
- Maximum number of securities 20
- Minimum market capitalisation A$50 million
The investment team will endeavour to work within the above guidelines – however, these should be viewed as objectives only and not absolute limits.
Latest Fund performance can be viewed 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.
Amy has over 20 years of property funds management experience.
Prior to joining Pengana she worked at Charter Hall/Folkestone for 6 years, managing a high conviction AREIT strategy. This team won several industry awards including Financial Standards Property Fund Manager of the Year 2019, Money Management/Lonsec Australian Property Securities Fund Manager of the Year 2018, and Financial Standards Property Fund Manager of the Year 2017.
Amy has held several senior positions including head of property securities at IAG and portfolio manager at Deutsche Asset Management and Perpetual Funds Management. She began her career as a quantitative analyst at Legal & General in 1994.
Amy holds a bachelor and honours degree in Economics from the University of New England and University of California Davis.
Jade has over 17 years property funds management and corporate finance.
Prior to joining Pengana, Jade was a senior member of Macquarie Bank’s real estate corporate advisory team in London and Sydney.
She has also acted as assistant portfolio manager of IAG’s property securities fund, working alongside portfolio manager Amy Pham.
Sam has over 5 years of property and finance experience and has passed Levels 1 & 2 of the Chartered Financial Analyst program.
Prior to joining Pengana, Sam worked in the Research team at Charter Hall and was responsible for cross-sector quantitative and thematic research, transaction and funds management support, as well as performance reporting for the fund manager’s largest investors.
Sam holds undergraduate degrees in Finance & Law from the University of Adelaide.
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