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SQM Research Rating Advisory - View this email in your browser

 

 
SQM Research Ratings Advisory - Thursday, 25 March 2021
Our Research Service provides Ratings, Sector Reviews, Fund Research & Quantitative Analysis for over 10,000 funds.

SQM Research places two Pengana funds on hold following the departure of senior investment staff
 
Key points:
SQM Research has today made changes to the ratings of two funds managed by Pengana Capital Ltd (the “Manager”) as detailed in the table below.
 

This rating action follows the departure of two senior investment staff - Jordan Cvetanovski (CIO & Portfolio Manager) and Steven Glass (Deputy Portfolio Manager & Analyst).
 
SQM Research has been informed by the Manager of this and other developments which have been considered in taking this action.
 
The details of those developments are described below in an extract from an announcement by the Board of Pengana Capital Group Limited earlier today.
 
“The Board of Pengana Capital Group Limited (ASX: PCG) wishes to advise that it has appointed James McDonald as the interim Chief Investment Officer (‘CIO’), leading the investment team for the following portfolios:
 
• Pengana International Fund
• Pengana International Ethical Fund
• Pengana International Fund – Ethical Opportunity
• Pengana International Equities Limited (ASX: PIA)
 
Jordan Cvetanovski and Steven Glass will leave the business immediately.
 
James has extensive global equities experience having joined Hunter Hall/PCG in 2003. He previously managed the International Fund – Ethical Opportunity and Pengana International Equities Limited and served as the Deputy CIO of Hunter Hall from 2011 until the merger with Pengana in 2017.
 
Since the merger, James has been an integral part of the International Equities Team as well as the Portfolio Manager of the Pengana High Conviction Equities Fund, a highly successful ethically managed fund which has generated 18.4% p.a. returns for investors since the merger with Pengana. The continuity of experience will ensure that there will be no change to the way the portfolios are managed.
 
The Board expects to shortly announce the details for permanent arrangements for each of the portfolios. Arrangements will include James and his team, in addition to a highly credentialed external investment management team. All portfolios will continue to be managed in accordance with their mandates, retaining the focus on ethical and responsible investment management, the generation of consistent long-term returns and downside risk mitigation. “
 
SQM Research views the departure of Mr Cvetanovski and Mr Glass as a significant event which requires further investigation.
 
As a result of these developments, SQM Research has changed the rating for each of these funds to Hold. with immediate effect. The standard guidance used to describe this rating is shown below.
 
Hold - Rating is suspended until SQM Research receives further information.
 
The Hold rating is an initial phase that will remain in place while SQM Research undertakes an assessment of the new permanent arrangements established by the Manager, including the appointment of an external investment management team.
 
Material changes to this situation will be advised to subscriber clients of SQM Research.
 
Important Note
SQM Research emphasises that a rating report does not take into account the objectives, financial situation or needs of individual investors. Since the impact of this change will vary depending on each investor’s personal circumstances, SQM Research strongly counsels investors to speak to their financial adviser or accountant to obtain independent, personalised advice.
 
For further information:
Louis Christopher
Managing Director - SQM Research
Tel: (02) 9220 4666
Email: louis@sqmresearch.com.au
Rob da Silva
Head of Research - SQM Research
Tel: (02) 9220 4606
Email: rob@sqmresearch.com.au
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