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| Manager | |
| Fund Name | |
| Strategy | |
| Latest Return Date | |
| Latest Return | |
| Latest 6 Months | |
| Latest 12 Months | |
| Latest 24 Months | |
| Annualised Since Inception | |
| Inception Date | |
| FUM (millions) | |
| Fund Overview | The Fund will usually hold 40 to 80 positions and will be well diversified across the various event strategies. In keeping with the absolute return focus the Manager will eliminate market risk where appropriate by hedging market and foreign currency risks. Since inception the Fund has averaged a net equity market exposure of ~10%. Sizing of an investment position will depend on the expected risk adjusted returns while taking account the liquidity and volatility of the stock. In addition, the maximum potential loss on any one position should be greater than 0.5% of the NAV and the position should not exceed 30% participation of stressed volume assuming a $200m NAV. Other criteria considered are ability to hedge and the availability of pair candidates as well as the average bid-ask size. For M&A strategies average long position is 3 to 5.5% and average short position 2 to 5%. |
| Manager Comments | The M&A sub-strategy rose +0.88%, with a year-to-date contribution of +5.2%. The largest contributor was a scrip merger in Alpine Electronics and Alps Electric in Japan. In Australia, Pengana added a new M&A position in Mantra Group. The French group Accor S.A. has offered to acquire all Mantra shares at A$3.96, via a scheme of arrangement. Pengana have also exited the position in Challenger Limited which contributed +0.15% to overall performance. In Hong Kong, Pengana added Tiangong International, offering an annualised IRR of >20% to the proposed take out price of HK$0.90. Pengana anticipates the share price could trade above the take out price due to the low premium offered. The Relative Value book contributed +0.53% during the month. A positive contributor was Pengana's long position in Qantas Airways vs short in Singapore Airlines contributing +0.14%. In Australia, Pengana's position in the Fairfax separation hedged against REA contributed +0.15%. In Japan, Pengana's HoldCo trade long Keisei Electric vs short Oriental Land contributed +0.12%. Pengana also added a new pair long Mitsui OSK vs short Kawasaki Kisen. The Directional Alpha book contributed +0.85%. Key successes during October included Shangri-La Asia (+7.2), 3sBio (+11.5%) and Softbank (+9.5%), whilst detractors included China Foods (-1%), and IHH Healthcare CB (-0.6%). Pengana note that they have locked in gains in HSBC and Capital Land and added Reliance Industries and Thai Beverage to their Directional Alpha book. For Reliance Industries, Pengana see supply side reforms in chemicals and consolidation in telecom as catalysts for outperformance. |
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