On 21 August, managers of the Pengana International Equities (PIA) listed investment company (LIC) proposed borrowing from a major international bank – secured against its existing global equity portfolio – to invest in a diversified portfolio of global private credit funds managed by top US and European private credit managers.
It explained that for investors frustrated by falling deposit rates and the phasing out of bank hybrids, the private credit pivot would offer a way to diversify income streams away from traditional equity and interest rate pressures, while maintaining the benefits of an ASX-listed vehicle with fully franked dividends.
However, at a shareholder annual general meeting on 21 October, PIA shareholders voted against the plans despite it being backed by the independent expert and independent proxy adviser.
Prior to the meeting, the company had noted that proxy votes already received were indicating dissent with the decision.
Some 59 per cent of shareholders voted against the proposals, according to filings.
Rather than the private credit approach, shareholders opted to elect new directors in Geoff Wilson, Jesse Hamilton, Richard Caldwell and Julian Martin and undertake a strategic review, subsequent to the one already conducted which had resulted in the private credit proposal.
“Despite this broad-based support, the board-supported resolutions were ultimately defeated and changes to the board of directors of PIA were approved by shareholders. PCG respects the decisions made by PIA’s shareholders and welcomes the incoming directors,” PIA said in an ASX statement.
“PCG confirms that it remains the investment manager of PIA under the terms of the existing investment management agreement (IMA), which is in place until March 2029.”
Under the strategic review, this will assess the company’s structure and persistent share price discount to NTA.
“The board of PIA has resolved to undertake a strategic review of the company’s structure and operations with a view to maximising value for all shareholders. The review follows ongoing shareholder feedback and recognises the company’s persistent share price discount to NTA and investment performance. The board considers it appropriate at this time to assess whether the current structure continues to serve the best interests of shareholders.
“The review will consider a range of potential options, including changes to the investment mandate, management arrangements, capital management initiatives, or alternative structures that may deliver improved outcomes for shareholders.”
Submissions from interested parties can be submitted until 14 November.
