Pengana International Equities Ltd Registered · ASX:PIA
Pengana International Equities Ltd Registered — Pengana International Equities — Investor Presentation (August 2025)
51 slides from Pengana International Equities Ltd Registered's investor presentation, Aug 21, 2025
Slide 1: Proposed Portfolio Enhancements
For personal use only PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) PROPOSED PORTFOLIO ENHANCEMENTS Through an investment in Global Private Credit Targeting a significant increase in dividends AUGUST 2025
Slide 2: Important Information & Disclosures
IMPORTANT INFORMATION & DISCLOSURES This report has been prepared by Pengana Capital Limited (ABN 30 103 800 568, Australian Financial Services Licence No. 226566) (“Pengana”). This report does not contain any investment recommendation or investment advice and has been prepared without taking accoun
Slide 3: Agenda
For personal use only AGENDA 1 SUMMARY OF PROPOSAL 2 WHY IT MAKES SENSE 3 WHY PIA CAN DO IT 4 HOW THE STRUCTURE WORKS 5 APPENDIX PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) | PAGE 3
Slide 4: Executive Summary
EXECUTIVE SUMMARY Proposal to enhance PIA: • Diversify assets by adding exposure to Global Private Credit (GPC), generating regular reliable For personal use only income • GPC exposure is loan funded so no change to size and composition of equity exposure • GPC Target Return of 4.5% p.a. above cost
Slide 5: Reasons for the Proposal
REASONS FOR THE PROPOSAL Diversification and Tax-Efficient Income – Without the Concentration Risk For personal use only • Diversified return sources combine steady income with growth potential, reducing reliance on any one market condition. • Fully-franked yield delivers tax-efficient, reliable cas
Slide 6: Introducing a Proposed Second Income Stream
INTRODUCING A PROPOSED SECOND INCOME STREAM Diversifying with Global Private Credit • New income stream from Global Private Credit For personal use only • Funded via a competitively priced loan • Global private credit behaves differently to equities, offering low correlation and improved diversifica
Slide 7: What Is Global Private Credit?
WHAT IS GLOBAL PRIVATE CREDIT? Individually customised non-bank loans to US and European mid-market companies, with seniority and security, that are held to maturity or refinanced For personal use only Individually …by non-bank …to …and managers or … with … that are held mid-market owners of seniori
Slide 8: Targeted Impact of Proposed Changes
TARGETED IMPACT OF PROPOSED CHANGES Delivering More Without Changing the Core • Increases targeted fully-franked For personal use only PIA Current PIA Proposed dividends by 56% to 8.4c per Dividend 5.4c p.a. 8.4c p.a. share Gross Dividend 7.7c p.a. 11.2c p.a. Frequency Quarterly Monthly • Dividends
Slide 9: Agenda
For personal use only AGENDA 1 SUMMARY OF PROPOSAL 2 WHY IT MAKES SENSE 3 WHY PIA CAN DO IT 4 HOW THE STRUCTURE WORKS 5 APPENDIX PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) | PAGE 9
Slide 10: Why It Makes Sense
WHY IT MAKES SENSE Global equities and global private credit behave differently – and that difference is what makes them work so well together. • Historically superior risk-adjusted returns For personal use only 15.2% Return vs. Volatility combined with low correlations can make private credit an ef
Slide 11: More Return Per Unit of Risk
MORE RETURN PER UNIT OF RISK Adding global private credit improves portfolio efficiency • Global private credit has historically 12% For personal use only enhanced the Sharpe ratio of diversified 10% portfolios 8% Return • It has held up well during equity drawdowns, 6% offering downside protection
Slide 12: An Alternative Source of Franked Dividends
AN ALTERNATIVE SOURCE OF FRANKED DIVIDENDS Offering Australian Investors Diversification Beyond a Narrow Dividend Market • PIA is designed to help Australians diversify ASX Weighted Dividend Yield1 For personal use only away from the highly concentrated local dividend market. Other • Most Australian
Slide 13: Key Risks Considerations
KEY RISKS CONSIDERATIONS Structural safeguards are in place across multiple dimensions 1. Leverage: Debt facility sized at ~33% of total Global Private Credit Asset Class For personal use only Embedded Risk Controls and Recovery Advantages assets. USD$ Cumulative Default Rate1 2. Return Shortfall Ri
Slide 14: Agenda
For personal use only AGENDA 1 SUMMARY OF PROPOSAL 2 WHY IT MAKES SENSE 3 WHY PIA CAN DO IT 4 HOW THE STRUCTURE WORKS 5 APPENDIX PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) | PAGE 14
Slide 15: Why PIA Can Do This
WHY PIA CAN DO THIS Structure, scale, and alignment that other vehicles can’t match For personal use only Permanent Capital Profit & Franking Enables long-term Reserve allocations to illiquid, high- Smooths distributions and yielding credit without supports consistency liquidity mismatch through mar
Slide 16: Enabled by the LIC Structure
ENABLED BY THE LIC STRUCTURE Uniquely positioned to deliver this dual-income strategy • Managed funds and ETFs must maintain liquidity for redemptions – making it difficult to For personal use only invest in illiquid assets like Global Private Credit • PIA faces no such constraints – allowing the co
Slide 17: Global Private Credit Team
GLOBAL PRIVATE CREDIT TEAM Pengana Credit Pengana Credit Pengana Capital Group Pengana Credit Chief Investment Officer For personal use only Chief Executive Officer Portfolio Manager Nehemiah Richardson Nick Griffiths, CFA Adam Rapeport, CFA >30 years financial services >25 years actuarial and inves
Slide 18: Global Private Credit Team: Mercer
GLOBAL PRIVATE CREDIT TEAM Mercer Experience Access Value Add For personal use only Mercer’s Private Debt team has extensive Mercer uses its size and scale to Investment,operational operational and experience in all major markets & segments access a wide range of Private Debt Investment, and opportu
Slide 19: Global Listed Equities Team: Harding Loevner
GLOBAL LISTED EQUITIES TEAM Harding Loevner Investing in high quality, growing businesses at reasonable prices IDENTIFIED THROUGH FUNDAMENTAL RESEARCH WITH A LONG-TERM, GLOBAL PERSPECTIVE For personal use only leads to long term superior risk adjusted returns • Appointed May 2021 • Owner led firm wi
Slide 20: Global Listed Equities Team: Harding Loevner
GLOBAL LISTED EQUITIES TEAM Harding Loevner Portfolio Guidelines1 Portfolio Holdings2 Portfolio Outcomes For personal use only Harding Loevner Global Equity Model MSCI All Country World Index HL Global MSCI* Guideline Limits More Profitable Equity* Profit Margin Return on Assets Return on Equity Alp
Slide 21: Agenda
For personal use only AGENDA 1 SUMMARY OF PROPOSAL 2 WHY IT MAKES SENSE 3 WHY PIA CAN DO IT 4 HOW THE STRUCTURE WORKS 5 APPENDIX PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) | PAGE 21
Slide 22: PIA Portfolio
PIA PORTFOLIO A dual-income portfolio blending capital growth and consistent yield For personal use only High-Quality Global Equities Managed by US-based Harding Loevner, A US$43Bn1 global equities manager Diversified across 35-75 holdings Capital Growth PIA + Portfolio Fully Franked Income Diversif
Slide 23: Strong Alignment and Structural Discipline
STRONG ALIGNMENT AND STRUCTURAL DISCIPLINE Designed to maximise shareholder value with high Target Returns For personal use only Feature Detail Maximising Shareholder Value Target Return of 4.5% p.a. above cost of debt Risk Sharing with PCG PCG covers cost of debt, receives returns above Target Retu
Slide 24: Agenda
For personal use only AGENDA 1 SUMMARY OF PROPOSAL 2 WHY IT MAKES SENSE 3 WHY PIA CAN DO IT 4 HOW THE STRUCTURE WORKS 5 APPENDIX PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) | PAGE 24
Slide 25: Pengana Credit
For personal use only PENGANA CREDIT PENGANA AUSTRALIAN EQUITIES FUND | PAGE 25
Slide 26: The Case for Borrowers
THE CASE FOR BORROWERS A growing demand Banks are scaling back lending as For personal use only Private lenders now the first “port of call” regulation decreases their appetite for for growing subset of borrowers certain activities Bank Share of US and European Middle Market Global Private Credit –
Slide 27: Historical Returns: Attractive Yield and Potential Return Enhancement
HISTORICAL RETURNS: ATTRACTIVE YIELD AND POTENTIAL RETURN ENHANCEMENT Private / illiquid credit For personal use only 16-18% 18%+ 0 0 13-15% Public / liquid credit 12-14% 10-12% Global 8.6% 7.3% US 7.0% 5.9% Europe 4.7% 3.8% 3.2% 2.0% 0 0 10 Year Investment High Yield Bonds Broadly Direct Lending Di
Slide 28: A Broad Opportunity Set
A BROAD OPPORTUNITY SET Defensive, Diversifying, and Income-Generating Bilaterally negotiated loans, primarily to companies earning USD$10-$250 million EBITDA (“Middle Market”) For personal use only Senior Secured – these loans have first right to the cash flows and assets of a company for payment
Slide 29: The Case for Investors
THE CASE FOR INVESTORS Attractive characteristics of Global Private Credit Returns Attractive, stable returns with low volatility as illiquidity premium is captured. Returns driven For personal use only predominantly by yield with capital appreciation available in some strategies Borrowers pay p
Slide 30: Constructing Multi-Manager Portfolios
CONSTRUCTING MULTI-MANAGER PORTFOLIOS Construct diverse and resilient portfolios Build flexibility to manage through the For personal use only across the Private Credit universe cycle • Contractual yield – anchor portfolios with durable yield and a • Dynamic credit allocation – select strategies tha
Slide 31: Global Private Credit Portfolio Composition
GLOBAL PRIVATE CREDIT PORTFOLIO COMPOSITION Constructed to support risk/return and liquidity objectives GPC Target allocations: Master Class Income Balanced Total Return For personal use only • Total Return: 25 – 45% • Balanced: 10 - 30% Income focus, through • Income: 30 - 50% cash coupons Equity-l
Slide 32: Harding Loevner
For personal use only HARDING LOEVNER PENGANA AUSTRALIAN EQUITIES FUND | PAGE 32
Slide 33: Our Secret Sauce: Collaboration Without Consensus
OUR SECRET SAUCE: COLLABORATION WITHOUT CONSENSUS Structure, transparency, debate, and individual accountability lead to better decisions. For personal use only Research Universe (5,500) Research Analysts Portfolio Managers Portfolio Qualified Co-Lead Portfolios Companies (~550) Rated Stocks (~450)
Slide 34: Harding Loevner's Consistent Results
HARDING LOEVNER’S CONSISTENT RESULTS Our decision-making has produced a distinctive pattern of performance For personal use only HL Global Equity* MSCI* 25 5-Year Annualised Rolling Returns (Net, AUD)1 Alpha 0.74% HL Global Equity Returns (net AUD %) 20 Beta 0.90 15 Outperform R-Squared 0.83 10 Stan
Slide 35: Top Positions by Active Weight %
TOP 10 POSITIONS BY ACTIVE WEIGHT % As at June 30, 2025 MSCI ACTIVE ASX:PIA WORLD WEIGHT For personal use only Netflix, Inc. 4.0 0.8 3.2 Schneider Electric SE 3.3 0.2 3.1 Vertex Pharmaceuticals 3.1 0.2 2.9 Incorporated Alphabet Inc. 4.0 1.4 2.6 Tradeweb Markets 2.5 0.0 2.5 Deere & Company 2.7 0.2 2.
Slide 36: Portfolio Exposures
PORTFOLIO EXPOSURES As at June 30, 2025 Sector (ASX:PIA) % MSCI World % Under/Over % Region (ASX:PIA) % MSCI World % Under/Over % For personal use only Communication Services 15.1 8.5 Com munication Ser vices 6.6 Asia 13.7 6.3 7.4 Asia Industrials 17.1 11.4 Ind ustrials 5.7 Mid East - 0.1 -0.1 Mid E
Slide 37: Harding Loevner Global Equity Performance
HARDING LOEVNER GLOBAL EQUITY PERFORMANCE Growth of $100,000 invested since inception1 (net, AUD) to June 30, 2025 For personal use only $2,250,000 $2.08 million $2,000,000 $1,750,000 $1.63 million $1,500,000 $1,250,000 $1,000,000 $750,000 $500,000 $250,000 $0 HL Global Equity Strategy (Partial Simu
Slide 38: Harding Loevner Global Equity Performance
HARDING LOEVNER GLOBAL EQUITY PERFORMANCE Performance (net %, AUD) as at June 30, 2025 For personal use only 1M 3M 6M 1Y 2Y (pa) 3Y (pa) 4Y (pa) 5Y (pa) 7Y (pa) 10Y (pa) SI1 (pa) HL Global Equity Strategy 1.2 4.7 1.3 12.6 14.2 16.1 4.7 8.9 9.5 10.7 8.9 (Partial Simulation)2 MSCI World Total Return 2
Slide 39: Completed Portfolio Transactions
COMPLETED PORTFOLIO TRANSACTIONS Trailing 12 Months as of 30 June 2025 For personal use only Q3-24 Q4-24 Q1-25 Q2-25 Positions Compass Group PLC Alimentation Couche-Tard Inc. AMETEK Inc Johnson & Johnson Established Alfa Laval AB HEICO Corporation DBS Grcoup Holdings Ltd Progressive Corporation Amph
Slide 40: Style Returns
STYLE RETURNS MSCI ACWI Index Total Returns by Quality, Growth, and Value Rank Quality Rank Quintiles Growth Rank Quintiles Value Rank Quintiles 12 12 12 For personal use only 9 9 9 Return (%) 6 6 6 2Q24 3 3 3 0 0 0 -3 -3 -3 Highest Lowest Fastest Slowest Least Most Exp. Exp. Quality Rank Quintiles
Slide 41: In-Depth Research
IN-DEPTH RESEARCH Analysts assess business quality using our standardized framework. Company Example: Thermo Fisher Scientific (Life sciences tools and services) For personal use only Quality Assessment Framework Analyze Porter forces and relative advantages Competitive Advantage 8 (Industry, strate
Slide 42: HL Global Exposure to China
HL GLOBAL EXPOSURE TO CHINA HL Global by Revenues HL Global Model: 10 Holdings with Highest China Revenue Exposure (Pie = Revenue Mix, Plot = Quality & Growth Rank) For personal use only 8% 1.00 Broadcom 92% = China Revenue = Rest of World Tencent WuXi AppTec NVIDIA Atlas Copco Spirax-Sarco Growth R
Slide 43: Industrials: Strengthening Secular Growth
INDUSTRIALS: STRENGTHENING SECULAR GROWTH For personal use only New geopolitical realities Industrial policy Advances in industrial digital technologies Energy transition Source: IFR, March 2023. Portfolio holdings should not be considered recommendations to buy or sell any security. It should not b
Slide 44: Current Market Environment
CURRENT MARKET ENVIRONMENT Inflation and interest rate declines support market rise, but valuations are discounting little risk. US Inflation and Federal Reserve Rate VIX Index For personal use only What’s On 10 90 80 8 70 Our Minds 6 60 5.1 50 Inflation Abating Price ($) 4 US Fed and ECB Cut (%
Slide 45: Info Tech: Beyond Chips & Equipment
INFO TECH: BEYOND CHIPS & EQUIPMENT AI Tsunami moving from chips to platforms to software & services PIA Global Active Weights For personal use only Sector PIA % Under / Over Communication 8 15.1 Services Com munication Ser vices Industrials 17.1 6 Ind ustrials Health Care 14.9 Health Car e AI Tsuna
Slide 46: Health Care: Beyond Big Pharma
HEALTH CARE: BEYOND BIG PHARMA Bioprocessing and Diagnostics: A Return to Robust Growth PIA Global Active Weights For personal use only Sector PIA % Under / Over 12 Communication 15.1 Services Com munication Ser vices Industrials 17.1 Ind ustrials 10 Bioprocessing & Diagnostics Holdings Life Science
Slide 47: Distinct Portfolio
DISTINCT PORTFOLIO Significant active weights in high-quality, durable growth businesses For personal use only Quality Assessment Framework Competitive Advantage Company Description Company Description Threat of new entrants Global leader in energy management equipment and services The dominan
Slide 48: Distinct Portfolio
DISTINCT PORTFOLIO Significant active weights in high-quality, durable growth businesses For personal use only Quality Assessment Framework Competitive Advantage Company Description Company Description Threat of new entrants Biopharmaceutical company with dominant share in the Leading subscrip
Slide 49: Rising Quality Stance at Lower Valuations
RISING QUALITY STANCE AT LOWER VALUATIONS We have maintained our quality and growth premium while lowering relative valuation For personal use only Quality + Growth Rank Profile Relative Valuation Equal-weighted Composite of Relative P/E, P/B, and P/CF 1.8 2.0 1.6 1.9 1.4 1.8 1.7 1.2 1.6 1.0 1.5 0.8
Slide 50: The Harding Loevner Investment Team
THE HARDING LOEVNER INVESTMENT TEAM Diverse perspectives, deep industry knowledge, and broad global coverage. Global Sector and Regional Analysts Portfolio Team For personal use only 31 Analysts 23 Jingyi Li Richard Sean Moon Avg. years Schmidt, Contant, CFA Surana, CFA experience CFA Co-Lead Co-Lea
Slide 51: For More Information
For personal use only PENGANA INTERNATIONAL EQUITIES LIMITED (ASX: PIA) PENGANA INVESTMENT FOR MORE MANAGEMENT ABN 69 ABN 30 063 LIMITED PENGANA CAPITAL 103 081 LIMITED 800 612 568 CLIENT SERVICE T: +61 2 8524 9900 INFORMATION AFSL 219462 226566 E: [email protected] Suite 1, Level 27, pengan
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