Fund manager Pengana Capital Group paid zero performance fees in the first half of the financial year, a “highly unusual” position for the firm.
Announcing its results to the Australian Securities Exchange for the six months to 31 December, 2022, the firm said funds under management (FUM) had declined 3% from $3.04 billion to $2.96 billion.
This then translated into management fee revenue decreasing by 18% from $22,026 to $18,081.
The firm said fund performance added $95 million to the FUM during the period but this was overshadowed by $123 million in fund distributions and net outflows of $47 million which had “uncharacteristically exceeded” inflows.
In an unusual move, no performance fees were paid out for the six-month period, compared to $28,598 a year ago.
Chief executive and managing director, Russell Pillemer, said: “Although all our strategies (bar one) delivered positive performance, no performance fees were earned in the period.
“We consider this to be a very unusual outcome due to the high degree of diversification amongst our funds, although we note that six months is a relatively short period and that were several exceptional market factors that impacted relative performance across our funds during these months.”
Looking ahead, Pillemer said the firm’s return to paying out performance fees would be dependent on market factors.
“We do expect these factors to normalize in the future and combined with alpha generation in our various strategies will return Pengana to normalised levels of profitability over the short to medium term,” he said.
Pengana is one of several asset managers to report a downturn in performance fees in the last six months with Magellan reporting fees down from $11.5 million to $0.1 million and Pinnacle announced fees fell from $6.4 million to $950,000.
