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Pengana international equities funds awarded ‘Recommended’ by Zenith, Value Growth Trust rated number 1 in Global Ethical/Sustainable style category
Friday, 8 December 2017: Pengana Capital Group Limited (ASX: PCG) today announced the results of the recent research review with Zenith Investment Partners (‘Zenith’).
Having completed the review in November 2017, the Pengana International Equities Fund (PIEF, the Fund) received a ‘Recommended’ rating on first review by Zenith in the Fund’s two year history.
The Value Growth Trust, formerly part of Hunter Hall International and now managed by Pengana Capital following the merger in June, has been assigned a ‘Recommended’ rating, and achieved the number 1 ranking in the Global - Sustainable/Ethical style category as part of the overall Zenith International Shares Sector review completed in November 2017.
Both funds follow the same investment philosophy: aiming to provide exposure to a diversified portfolio of highly cash-generative and growing global companies purchased at compelling valuations, and are characterised with a unique investment process. The investment team develops an understanding of the opportunities using detailed research covering financial statements, company meetings and external research. Companies that meet the investment criteria are divided into three segments:
• Core (60-80%): are stable and growing businesses that generate consistent returns.
• Cyclical (0-30%): businesses operating in cyclical industries that are poised for a cyclical upturn, which is not recognised in the share price.
• Opportunistic (0-20%): are unique, company specific situations that offer attractive potential upside.
The portfolio is created from the 30-50 stock ideas that work best together, rather than just the 30-50 best ideas.
The VGT is differentiated from PIEF in that it employs formal negative ethical screens to exclude industries that, in the investment team’s opinion, can cause harm to people, animals or the environment. Integration of ESG factors into the research process directs investments to well-managed, responsible and progressive companies.
Russel Pillemer, Chief Executive Officer of Pengana Capital Group said: “The integration of the Hunter Hall Funds into the Pengana model and the alignment of portfolios has gone very smoothly”.
“Our guiding principal for the Value Growth Trust (VGT) has been retaining the negative ethical screen that has a long history of loyalty and support from investors and advisers in the Fund”.
Damian Crowley, Director of Distribution at Pengana Capital Group added: “We’ve been working hard to restore ratings and accessibility for the Hunter Hall Funds, as well as maintain and improve ratings across our range of investments”.
“The result of this review with Zenith is particularly pleasing, as the ethical/sustainable characteristics of the VGT are very important to our investors, advisers and shareholders”.
Investment team experience
Both the PIEF and the VGT are managed by Pengana’s highly experienced international equities team of six, including investment professionals from both Pengana and Hunter Hall, with over 90 years of combined industry experience. This team is led by Jordan Cvetanovski (Chief Investment Officer & Portfolio Manager) and Steven Glass (Head of Research & Portfolio Manager). The investment process and philosophy for the international equities funds that Jordan and Steve manage is an evolution of the process employed in the funds managed by Cvetanovski during his time at Carmignac Gestion in Paris. During his time at Carmignac, the firm grew from €3bn to €55bn, with FUM in European and emerging market funds growing from €50m to over €2bn.
Focus on ethical and sustainable investing
Pengana offers a range of products that allow investors to align their portfolios with their principles without compromising their investment returns. Pengana are committed to best practice in ethical and sustainable impact investing and are a member of the Responsible Investment Association Australasia (RIAA), a signatory to the UN’s Principles for Responsible Investment (PRI), source ESG company research from a specialist provider, and undertake an annual review by an independent research house focused on ESG analysis.
The investment offering includes negatively screened Funds, excluding companies that cause harm to people, animals or the environment from their investment universe. These include sectors such as weapons manufacturing, tobacco, gambling, uranium mining and fossil fuel exploration and production.
They also offer a Sustainable Impact Fund, managed by WHEB Asset Management (‘WHEB’) out of the UK. WHEB are a highly experienced and respected sustainable investment manager, and this Fund only invests in companies that create a positive social or environmental impact or produce goods and services that address the challenges of sustainability. WHEB were recently awarded both ‘Best Sustainable Investment Fund Management Group’ at Investment Week’s 2017 Sustainable Investment Awards and ‘Best Natural Resources and Sustainability Fund’ at Investment Week’s 2017 Specialist Investment Awards. According to the judges, WHEB ‘highlighted both knowledge and dedication, as well an excellent team not afraid to show the courage of their convictions on sustainable issues.’
Russel Pillemer said ‘we have made excellent progress in the last 6 months in delivering an expanded offering to our clients, with ethical and sustainable investing considerations front of mind’. He adds ‘PCG is on a strong growth trajectory, and we will continue to use our clients’ best interests as our compass’.
Zenith Investment Partners
The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (assigned November 2017) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners. com.au/RegulatoryGuidelines.