Pengana Capital Group Ltd. · ASX:PCG
Pengana Capital — H1 FY2023 Earnings Presentation
23 slides from Pengana Capital's earnings presentation, Feb 24, 2023
Slide 1: Shareholder Presentation for the Half Year Ended 31 December 2022
PENGANA CAPITAL GROUP SHAREHOLDER PRESENTATION FOR THE HALF YEAR ENDED 31 DECEMBER 2022 Russel Pillemer Katrina Glendinning Chief Executive Officer Chief Financial Officer
Slide 2: Table of Contents
PENGANA CAPITAL GROUP TABLE OF CONTENTS I Business Overview II Half-Year Review III Strategic Expansion i ii PRIVATE MARKET STRATEGIES PENGANA CAPITAL Private Equity MARKETS Private Credit PENGANA CAPITAL GROUP | PAGE 2
Slide 3: Business Overview
bn SECTION | BUSINESS OVERVIEW
Slide 4: Group Overview
GROUP OVERVIEW Leading Australian provider of premium, value added products Focused on the higher-end retail market: financial Recognised, well-regarded brand built over 20 years • Loyal client base advisors, SMSFs and HNW’s • Product well-rated by research houses; • Serviced by experienced and capa
Slide 5: Compelling Track Records with Capacity to Grow
COMPELLING TRACK RECORDS WITH CAPACITY TO GROW (AS AT 31/12/2022) Performance Since Inception p.a. 13 FUM Indicative Further Fund Benchmark Relative Primary Fund/Vehicle Name Strategy Team Current ($m) FUM Capacity ($bn) % % % Pengana Australian Equities1 Australian Multi Caps Internal 720 Limited 8
Slide 6: Growth in Funds Under Management
GROWTH IN FUNDS UNDER MANAGEMENT (“FUM”)1 HISTORICAL GROWTH IN • Focus over the past few years has been on re-positioning the FUM ($M)2 business for future FUM growth at higher margins • Decrease in FUM over the 6 months to 31 December 20223 $4,000 $3,974 $3,519 • distributions made to investors of
Slide 7: Analysis of Management Fees
ANALYSIS OF MANAGEMENT FEES (AS AT 31/12/2022) MANAGEMENT FEE SPLIT IN H1 FY2023 • Funds under management (“FUM”) subject to ($18.1M) management fees of $3.0bn (at 31/12/2022) • Average gross management fee rate of 1.19% (FY22: 1.19%) • Management fees of $18.1 million in H1 FY2023 split: • 39% to I
Slide 8: Annual Gross Fee Margin
ANNUAL GROSS FEE MARGIN 3.5% 3.23% 3.0% 2.5% 2.20% 2.37% 2.19% 2.0% 1.69% 1.56% 1.5% 1.43% 1.33% 1.0% 1.18% 1.15% 1.12% 1.15% 1.14% 1.18% 1.17% 1.19% 1.18% 0.5% FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 H1 FY 2023 Mgmt fee/avg FUM Perf fee/avg FUM Total fee/avg FUM, 8.5 year av
Slide 9: Analysis of Performance Fees
ANALYSIS OF PERFORMANCE FEES (AS AT 31/12/2022) • Well diversified sources of performance fees (“PFs”) provide FUM SUBJECT TO added stability: PERFORMANCE FEES ($2.4BN) • Absolute hurdles (higher level of certainty and consistency): 53% • Market Relative hurdles – (predominantly) Style Agnostic stra
Slide 10: Half-Year Review
SECTION II HALF-YEAR REVIEW
Slide 11: Key Developments in H1 FY2023
KEY DEVELOPMENTS IN H1 FY2023 • Volatile six months in listed investment markets ○ Mostly positive absolute returns across strategies with mixed results on a relative basis ○ However, no performance fees earned as all funds under their high-water-marks ○ It is important to note that performance fees
Slide 12: Financial Performance in H1 to 31/12/2022
FINANCIAL PERFORMANCE IN H1 TO 31/12/2022 • Closing 31 December 2022 FUM of $2.961bn (31 January 2023: $3.039bn) • Operating EBITA down 89% to $2.5 million • Underlying Profit before tax down 85% to $3.8 million • EPS on Underlying Profit after tax down 85% to 2.41 cents • Net tangible underlying as
Slide 13: Underlying Profitability
UNDERLYING PROFITABILITY1 Increase/ Increase/ Dec 2022 Dec 2021 Pengana Capital Group (Decrease) (Decrease) Comment $’000 $’000 $’000 % Management fee revenue 18,081 22,026 (3,945) (18)% Reduced FUM Performance fee revenue - 19,263 (19,263) (100)% Net fund direct expenses (1,504) (1,620) 116 (7)% In
Slide 14: Statutory Profit
STATUTORY PROFIT Dec 2022 Dec 2021 Pengana Capital Group ($’000) ($’000) Underlying profit before tax1 3,770 25,181 Less: Less: investment gains recorded in other comprehensive income reserve (311) (1,311) Less: Non-cash amortisation and impairment (687) (718) Less: LSP interest income (not on profi
Slide 15: Balance Sheet
BALANCE SHEET1 31 Dec 2022 30 Jun 2022 Pengana Capital Group ($’000) ($’000) Cash net of AFSL cash requirements 9,497 19,965 Receivables 3,099 7,865 Payables (2,999) (12,204) Net working capital 9,597 15,626 Investments net of AFSL liquid asset requirements and associated current liabilities 5,989 5
Slide 16: Strategic Expansion
SECTION III STRATEGIC EXPANSION i ii PRIVATE MARKET STRATEGIES PENGANA CAPITAL Private Equity MARKETS Private Credit
Slide 17: Private Markets
PRIVATE MARKETS • PCG’s stated aim over the last few years has been to grow our private markets businesses • This will provide PCG with strong growth, diversification, stability and higher margins • Demand for private markets exposures is growing at a rapid rate in Australian and offshore global mar
Slide 18: Private Equity ("PE")
PRIVATE EQUITY (“PE”) • Initial vehicle - Pengana Private Equity Trust (ASX: PE1) launched in April 2019 with initial FUM of $205 million: ○ PE1 FUM is now at $434 million, i.e. 112% increase, driven by capital growth and two additional raisings • Strong future growth forecast for PE due to market d
Slide 19: Private Credit ("PC")
PRIVATE CREDIT (“PC”) • Strong demand for PC from Australian retail and HNW investors; expected to continue/increase as investors become more comfortable with the growing asset class • Significant number of offerings already in the market. However, there is a large gap in the market due to: ○ Qualit
Slide 20: Private Capital Markets ("PCM") Business
PRIVATE CAPITAL MARKETS (“PCM”) BUSINESS • PCG has recognised a significant opportunity to build/grow a capital markets business: ○ Capital raisings for discreet opportunities, including individual equities, credit instruments and funds ○ Predominantly in private markets – synergistic with PCG’s pri
Slide 21: Thank You
THANK YOU • We thank you for taking the time to read our shareholder presentation. • The Pengana team is excited to deliver on our plans for the coming period where the opportunities described will come to fruition in the public domain. • We are confident these new offerings will be a testament to o
Slide 22: Disclaimer
DISCLAIMER This presentation has been prepared by Pengana Capital Group Limited (ABN 43 059 300 426) (PCG). The information in this presentation is current as at 24 February 2023. This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with resp
Slide 23: For More Information
PENGANA CAPITAL GROUP FOR MORE PENGANA CAPITAL LIMITED ABN 30 103 800 568 CLIENT SERVICE T: +61 2 8524 9900 INFORMATION AFSL 226566 Suite 1, Level 27, E: clientservice@pengana.com pengana.com Governor Phillip Tower, 1 Farrer Place, Sydney, NSW, 2000 T: +61 2 8524 9900 F: +61 2 8524 9901 PENGANA.COM
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