Pengana LIC raising crosses finish line

Pengana Capital fell over the line today after reaching the $30 million cut-off limit for its listed investment company - Pengana Managers — and will now look to list by the end of the month.

Capital raising for the offering, which grants investors equity in the underlying investment managers for no extra cost, had been hampered by a collapse in the initial public offering (IPO) market according to Pengana head of hedge funds, Damien Hatfield.

“What really dogged us was the IPO market collapsed as we hit the streets, but I always knew we had a fairly wide group of high-net-worth investors coming in and that was always going to be the base of the offering,” Hatfield says.

“I never thought we would raise $100 million with the attitude of the market as it was but always thought we would reach between $30 million and $50 million, which is all we really needed.”

Hatfield says despite the lower raising the management expense ratio (MER) will remain at 1 per cent, however some of the fixed costs associated with the offering will come from manager returns.

“The directors’ fees, listing fees and audit fees are all fixed costs so that pushes up the costs, but these aren’t mega fees and are not included in the MER but instead are debited out of the returns from the managers,” he says.

Pengana Managers will invest through a range of specialist absolute return and hedge fund boutique fund managers, and will see investors receiving equity stakes in each of the underlying firms and allowing them to participate in the capital growth of these managers.

The initial underlying managers include Australian equities long-short manager Cape Leeuwin Capital, international equity long-short resource sector manager Stanley Fund Managers, global macro hedge fund Camelot Managers and managed futures manager Percon Capital.

Pengana will seek to incorporate additional managers after the vehicle lists.