Pengana Capital Group Ltd. · ASX:PCG
Pengana Capital — H1 FY2024 Earnings Presentation
26 slides from Pengana Capital's earnings presentation, Feb 29, 2024
Slide 1: Pengana Capital Group Shareholder Presentation
PENGANA CAPITAL GROUP SHAREHOLDER PRESENTATION FOR THE HALF YEAR ENDED 31 December 2023 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 Update 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 31/12/2023) Performance Since Inception p.a. 13 FUM Indicative Further Fund Benchmark Relative Primary Fund/Vehicle Name Strategy Team Current ($m) FUM Capacity ($bn) % % % Pengana Emerging Companies1 Australian Small Caps Internal 709 Limited 11
Slide 6: Funds Under Management
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 • FUM flat over the 6 months to 31 December 20233 $4,000 $3,974 • positive performance for the period of $102 million $3,519
Slide 7: Analysis of Management Fees
ANALYSIS OF MANAGEMENT FEES (AS AT 31/12/2023) MANAGEMENT FEE SPLIT IN H1 FY2024 • Funds under management (“FUM”) subject to ($17.5M) management fees of $3.06bn (at 31/12/2023) • Average gross management fee rate of 1.20% (FY23: 1.19%) • Management fees of $17.5 million in H1 FY2024 split: • 39% to
Slide 8: Annual Gross Fee Margin
ANNUAL GROSS FEE MARGIN 3.5% No performance fees were earned in H1. 3.23% Some funds did outperform but did not manage to catch up 3.0% to their high-water-marks 2.5% 2.37% 2.20% 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% 1.18% 0.5% FY 2015 FY
Slide 9: Overview of Performance Fees
OVERVIEW OF PERFORMANCE FEES (AS AT 31/12/2023) • Diversified sources of performance fees FUM SUBJECT TO PERFORMANCE FEES ($2.3BN) (“PFs”) should provide added stability: • Average split of PFs to PCG of 65% (FY23: 65%), including: • 48% split in unit trusts, Market Relative • 100% in listed vehicle
Slide 10: Half Year in Review
SECTION II HALF YEAR IN REVIEW
Slide 11: Key Developments in H1 FY2024
KEY DEVELOPMENTS IN H1 FY2024 • Continued challenging environment for listed equity fund managers o Equity strategies out of favour, particularly those with a quality/growth bias o Flat FUM since FY20221 o H1 FY2024 saw Strong absolute performance Modest net outflows in relation to industry Mo
Slide 12: Financial Performance in Year to 31/12/2023
FINANCIAL PERFORMANCE IN YEAR TO 31/12/2023 • Closing 31 December 2023 FUM of $3.1bn • Average monthly FUM over H1 $2.9bn, current FUM $3.2bn (27 Feb 24) • Significant investment into Credit Business detracted from profitability YoY • Operating EBITA down to $1.8 million from $2.5 million • Underlyi
Slide 13: Underlying Profitability
UNDERLYING PROFITABILITY1 Increase/ Increase/ Dec 2023 Dec 2022 Pengana Capital Group (Decrease) (Decrease) Comment $’000 $’000 $’000 % Management fee revenue 17,420 18,032 (612) (3.4) Slightly lower average FUM Performance fee revenue - - - - No performance fees in period Net fund/other direct expe
Slide 14: Statutory Profit
STATUTORY PROFIT Pengana Capital Group ($’000) Dec 2023 Dec 2022 Underlying profit before tax1 3,163 3,770 Less: Less: Loan share plan interest income (1,189) (687) Less: Amortisation and non-cash items (2,000) (1,688) Less: Profit & Loss tax expense (600) (762) Less: FX in other comprehensive incom
Slide 15: Balance Sheet
BALANCE SHEET1 31 Dec 2023 30 Jun 2023 Pengana Capital Group ($’000) ($’000) Cash net of AFSL cash requirements 7,259 10,740 Receivables 4,648 4,064 Payables (3,196) (4,206) Net working capital 8,711 10,598 Investments net of AFSL liquid asset requirements and associated current liabilities 7,329 6,
Slide 16: Pengana Global Private Credit
SECTION III PENGANA GLOBAL PRIVATE CREDIT PENGANA CAPITAL MARKETS BUSINESS
Slide 17: Overview
OVERVIEW • PCG identified Global Private Credit (“GPC”) as a key opportunity: o Favourable risk-return characteristics with low correlation to other asset classes o Limited opportunities for Australian retail and HNW investors to access GPC • In 2023 PCG established Pengana Private Credit (“PPC”); t
Slide 18: Why Global Private Credit
WHY GLOBAL PRIVATE CREDIT (“GPC”) • GPC is arguably the most sought-after segment in investment markets today o Adds diversification and risk-return characteristics to portfolios o GPC benefits from a number of current structural tailwinds; worldwide size of GCP markets is ~$1.6 trillion, and foreca
Slide 19: Pengana Private Credit
PENGANA PRIVATE CREDIT (“PPC”) • Joint Venture between PCG and Washington H. Soul Pattinson (“Soul Patts”) • PPC employs only a small number of dedicated resources, as it leverages off existing PCG infrastructure • Soul Patts has made available up to $200m of capital to seed a GPC portfolio • PPC’s
Slide 20: Mercer Strategic Relationship
MERCER STRATEGIC RELATIONSHIP • PPC's deep strategic relationship with Mercer is a key strength • PPC has appointed Mercer as Investment Consultant for the master GPC portfolio o One of the world's largest investment consultants with ~US$16 trillion in global assets under advice (as of June 30, 2022
Slide 21: PPC's Range of Investment Offerings
PPC’S RANGE OF INVESTMENT OFFERINGS Through leveraging the master GPC portfolio, PPC will deliver 4 distinct investment offerings, each include purpose-built exposures to the range of underlying investments in different proportions suitable to risk/return targets 1. Wholesale Fund (launched in Octob
Slide 22: PPC's Range of Investment Offerings
PPC’S RANGE OF INVESTMENT OFFERINGS 3. Term Accounts • 12, 24 and 60 months with monthly income payments • Highly compelling floating target returns • Market leading layers of built-in protections for capital stability and income reliability • Fully digital onboarding and account management infrastr
Slide 23: Financial Impact on PCG
FINANCIAL IMPACT ON PCG • As PPC mostly leverages off the PCG existing infrastructure there are minimal requirements for separate additional resources • GPC is generally a high fee margin business for PCG; with different offerings having varying margins • JV economics: o Soul Patts gets paid a retur
Slide 24: 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 • We are confident these new offerings will be a testament to our ability to continue to provide relevant and differentiated investment produ
Slide 25: 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 August 2023. This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with respec
Slide 26: 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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