Pengana international funds re-rated after manager change

Pengana Capital has received two ratings for its international equities funds after seeing redemptions when the funds underwent management changes.

The firm’s international equity manager, Jordan Cvetanovski, and deputy manager, Stephen Glass, left the firm earlier this year and the firm had to undergo a search for a new manager for its International and International Ethical funds.

While the search was underway, the funds’ ratings were put on hold as their departure was classed as a ‘significant event’.

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Speaking to Money Management, Pengana head of distribution, Adam Myers, said a small number of existing clients were unable to make allocations to the fund as it no longer had a rating.

It had since appointed offshore managers Harding Loevner and Axiom as managers of the International and International Ethical funds respectively and conducted an expedited ‘out of cycle’ review to have them re-rated as soon as possible.

“There was a period of uncertainty but most clients trusted us which was very gratifying. But there were some, including super funds, who were unable to invest because of the rating so there were some redemptions,” Myers said.

“Some clients require certain criteria to be met to allocate to a fund for professional indemnity or dealer group rules, for example, and one of these is a minimum rating from a recognised research house so a rating is very important.”

The fund objectives remained the same but the managers had a different style processes; Harding Loevnor had a quality growth focus while Axiom favoured dynamic growth compared to the style-neutral approach of the former managers.

The portfolios were also overhauled with only limited positions retained by the new management so this was another factor considered by the rating houses, as well as the new management style.

The ratings were ‘Recommended’ from Zenith and ‘Superior’ from SQM, but it was awaiting a rating from Lonsec.




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