Pengana Capital Group Ltd. · ASX:PCG
Pengana Capital — H1 FY2020 Earnings Presentation
24 slides from Pengana Capital's earnings presentation, Feb 25, 2020
Slide 1: Pengana Capital Group Interim Results
PENGANA CAPITAL GROUP Interim Results For the period to 31 December 2019 Russel Pillemer Katrina Glendinning Chief Executive Officer Chief Financial Officer
Slide 2: Table of Contents
TABLE OF CONTENTS 2 11 Overview 2 3 H1 2020 Results 34 H1 2020 Highlights 4 Focus for FY 2020 6 2
Slide 3: Overview
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Slide 4: Our Philosophy
Our Philosophy We aim to generate superior long term returns with focus on capital preservation • Leading provider of premium products • Benchmark-unaware mandates; we don’t aim to “beat the market” over the short-term • Proven long-term performance over multiple funds • Impose capacity limits acros
Slide 5: Funds Under Management
Funds Under Management 1 Historical Growth in FUM ($m)2 $4,000 Reduction in FUM exacerbated by uncharacteristically Distributions $3,519 high distribution payments of $115m higher than $3,500 historical $3,272 averages $3,127 $3,078 Growth from investment performance at $186m for $2,879 the six mont
Slide 6: Diversified Range of Funds
Diversified Range of Funds 1 Acronym Primary Fund Name Strategy Strategy FUM Management Fee; Performance Fee at 31/12/19 ($m) (Primary Fund) 2 PAEF Pengana Australian Equities Australian Multi-caps 1,012 1.0%; 10% 3 PECF Pengana Emerging Companies Australian Small-caps 813 1.3%; 20% above ASX Small
Slide 7: Funds Under Management
Funds Under Management 1 FUM Strategy Breakdown (31/12/2019) Australian strategies account for 60% of FUM; was 64% at 31/12/18 7% 1% International strategies expected to be the dominant segment within the medium term 4% Significant further capacity in various International 33% Equities strategies, i
Slide 8: Annual Fee Margin FY 2016 to H1 FY 2020
Annual Fee Margin FY 2016 to H1 FY 2020 2.3% 2.19% 3.23% 2.1% 1.9% 1.70% 1.7% 1.56% 1.5% 1.49% 1.32% 1.3% 1.1% 0.9% 1.15% 1.14% 1.15% 1.14% 1.17% 0.7% 0.5% FY 2016 FY 2017 FY 2018 FY 2019 Dec 19 Mgmt fee/avg FUM Perf fee/avg FUM Total fee/avg FUM, 5 year avg Performance fees fluctuate over relativel
Slide 9: H1 2020 Results
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Slide 10: Pengana Capital Group Underlying Profit After Tax
Pengana Capital Group Underlying Profit After Tax1 Dec Dec Pengana Capital Group Operating EBITDA ($’000) 2019 2018 Management fee revenue 19,412 19,361 Performance fee revenue 5,477 3,199 Net fund direct expenses (1,787) (1,762) Operating expenses (8,171) (9,108) Team profit share (8,594) (7,548) E
Slide 11: Pengana Capital Group Statutory Profit After Tax
Pengana Capital Group Statutory Profit After Tax Dec Dec Pengana Capital Group Operating EBITDA ($’000) 2019 2018 Underlying profit before tax1 7,851 5,584 Add: Items excluded from underlying profit Non-cash amortisation and impairment (1,446) (1,593) New product development (277) (588) Acquisitions
Slide 12: Pengana Capital Group Balance Sheet
Pengana Capital Group Balance Sheet1 Dec June Pengana Capital Group Balance Sheet ($’000) 2019 2019 Cash net of AFSL cash requirements 10,960 10,346 Current receivables 9,049 5,188 Current liabilities (10,348) (8,432) Net working capital 9,661 7,102 Investments net of AFSL liquid asset requirements
Slide 13: H1 2020 Highlights
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Slide 14: Period to 31 December 2019 in review
Period to 31 December 2019 in review • Increased profitability with the return of performance fees • Announcement of the proposed Pengana Private Equity Trust (ASX:PE1) Secondary Raising • Further development of our international equity capabilities • Business restructuring to increase sales • Acqui
Slide 15: Acquisition of Stake in Lizard Investors LLC
Acquisition of Stake in Lizard Investors LLC • Chicago-based asset management firm specialising in global small to mid-cap equities with strong long term track record • Builds on a long term relationship with founder Leah Zell, a pioneer in Global small cap investing • Since 2015, Lizard has been su
Slide 16: Focus for FY 2020
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Slide 17: Pengana Private Equity Trust (ASX: PE1)
Pengana Private Equity Trust (ASX: PE1) Secondary Offer Opens 24/2/2020 Seeking to raise up to $473m Aims of the Secondary Offer • Enable unitholders to efficiently increase their investment in PE1 • Increasing the size and liquidity of PE1 • Make sufficient new Units available to selected financial
Slide 18: Pengana Private Equity Trust (ASX: PE1)
Pengana Private Equity Trust (ASX: PE1) Secondary Offer Approval gained to raise 328,556,154 units at $1.37 per unit Benefits to existing investors • Ability to increase their investment in PE1, without having to buy on-market • Increased size of PE1 which could result in increased liquidity for the
Slide 19: Pengana Private Equity Trust (ASX: PE1)
Pengana Private Equity Trust (ASX: PE1) Impact of PE1 on PCG earnings • The Trust has the potential to be a significant contributor to PCG's profitability • Profit contribution from base management fees estimated at 85-90 bps per annum • Potential profit contribution from annual performance fees (no
Slide 20: International Equities Strategy
International Equities Strategy Pengana International Fund performance since inception to 31 December 20191 Return since inception 10.6% 2 vs MSCI ACWI 3 of 10.9% Generated index like returns while underweight the key driver of the market - large cap US tech stocks Attracting increased support from
Slide 21: Focus Going Forward
Focus Going Forward • Substantial growth opportunity for Pengana Private Equity Trust • Focus on growth in FUM for various International Equities strategies • Strong performance in context of aims of strategy • Good environment for these products • Continued focus on advised markets and to a lesser
Slide 22: Evaluating the Components
Evaluating the Components • Australian Equities, including small and multi-cap strategies ~$2bn • Very strong franchises • Limited growth potential due to capacity constraints but high margins and potential for substantial performance fees • International Equities multi-cap strategies ~$0.8bn • Stro
Slide 23: 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 25 February 2020. This presentation is not an offer or invitation for subscription or purchase of securities or a recommendation with resp
Slide 24: For More Information
THANK YOU FOR MORE INFORMATION PENGANA CAPITAL GROUP ABN 43 059 300 426 Level 12, 167 Macquarie Street, Sydney, NSW 2000 T: +61 2 8524 9900 F: +61 2 8524 9901 24 E: clientservice@pengana.com PENGANA.COM
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