Follow the future fund and invest in private equity: Pengana

As oil and copper experiences falls and equities markets exhibit fear of the new Omicron COVID-19 variant, Pengana Capital is telling investors to consider private equity.

Speaking to Money Management, Russel Pillemer, chief executive of Pengana Capital Group, said investors could take the $200 billion Future Fund’s lead and consider more allocation to private equity.

“Private companies are usually able to react much quicker, as well as take much longer-term views, particularly in the face of Omicron, than their listed counterparts, which are subject to short term investor scrutiny, quarterly reporting pressures, and daily share price fluctuations,” he said.

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Pillemer said private equity also broadened an investor’s available investment universe, as there were more private companies available for investment that there were listed companies.

“Access for retail investors has traditionally been difficult, as private equity is illiquid and offers limited investment opportunity, making it largely the preserve of institutional and ultra-high net worth portfolios,” he said.

Pillemer said private equity is where pre-initial price offering (IPO) “unicorns” were found, such as Rivian Automotive, the Amazon-backed electric vehicle manufacturer which surged to a US$100 billion ($141 billion) valuation on its Nasdaq debut.

He said Pengana’s Private Equity Trust had invested in Rivian and that investors should also watch out for Nubank, Latin America’s largest fintech, which was preparing for its IPO on 7 December, and targeting a valuation of over US$50 billion.

Pillemer also said Instacart, the largest holding in the PE1 portfolio, was also a buy and would be looking to IPO in the first half of 2022.

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