Pengana Capital will offer unitholders in its Pengana Private Equity Trust a “loyalty benefit” as part of an offer of new units in the ASX-listed trust.
Pengana announced last week that it would offer additional units in Pengana Private Equity Trust via an entitlement offer to existing unitholders as well as a placement. The aim of the offer is to provide additional liquidity and attract new investors.
Pengana’s move follows the inclusion of a “loyalty reward” in the launch of a new Magellan trust in August.
The Pengana trust was listed in April, after raising $205 million. To launch the fund, Pengana partnered with US firm Grosvenor Capital Management , which in turn invests with a number of specialist private equity managers.
Pengana says unit holders will be eligible for loyalty units equal to 1 per cent of their pre-capital raising unitholding per $100 million raised from the offer.
For example, if a unitholder has 1000 units and $200 million is raised in the offer, then the unitholder would receive an additional 20 units.
The loyalty units will be paid for by Pengana Capital and provided to eligible unitholders at no cost.
The loyalty units will be available to investors who hold units in Pengana Private Equity Trust at the closing date of the offer, regardless of whether they participate in the offer. If an eligible investor retains their pre-offer unitholding for four months after the closing date of the offer, they will receive the additional units.
Pengana’s loyalty benefits is similar to “partnership benefits” offered by Magellan Financial Group, which has been building an “investor partnership” over the past few years.
In 2017, Magellan listed the Magellan Global Trust, which included a dividend reinvestment plan with a 5 per cent discount. The cost of the discount is paid by Magellan.
In August, Magellan launched an offer for a new listed investment trust, the Magellan High Conviction Trust, which included a “loyalty reward” for investors in some of its other funds. The reward was an allocation of units worth 7.5 per cent of the units allotted to them under the priority offer.
Another of Magellan’s partnership benefit was its decision to proceed with the High Conviction Trust offer without appointing a broker syndicate. Magellan did not pay commissions to brokers or advisers.
Eligible applicants under the wholesale offer and general public offer received additional units worth 2.5 per cent of the value of the units allotted to them.
Magellan says the 2.5 per cent represents the money that Magellan would have paid to brokers and advisers. Magellan paid the cost of these benefits and all the costs of the offer.