Australian-listed Pengana Capital Group, the new company formed from the recent merger of Pengana Holdings and listed ethical funds firm Hunter Hall, has entered an agreement with UK-based sustainability fund manager WHEB Asset Management.
WHEB will manage the Hunter Hall Global Deep Green Trust that will be renamed the Pengana WHEB Sustainable Impact Fund.
The move is part of an overhauled strategy for all Hunter Hall funds now part of Pengana.
Speaking to RI, Russel Pillemer, CEO of Pengana, said the old Hunter Hall Global Deep Green Trust, a positive screened international equity offering, had not gained a lot of traction. “Most significantly it didn’t have the right level of resources,” said Pillemer.
He continued: “We believe for an impact investment fund to be successful it has to achieve great positive impact and good investment returns. For the old Hunter Hall Global Deep Green Trust it never got off the ground with its investment objective. And it hadn’t moved as far ahead of the times as it should on the impact side.”
The most recent monthly performance report for the fund shows it was down 1.5% in May underperforming its benchmark, the MSCI World Index, by 4.1%. Since its inception in 2007 it has lost 0.5%, underperforming the benchmark by 5.4%.
Also speaking to RI, Adam Myers, Executive Director of Pengana, said it had entered into an agreement with WHEB where it will manage the strategy of the new Pengana WHEB Sustainable Impact Fund with the same strategy as the FP WHEB Sustainability Fund.
That fund has returned 2.2% as of June 28.
The Deep Green trust had been managed by James McDonald, Hunter Hall’s Interim Chief Investment Officer since the departure of founder Peter Hall.“We did a global search to find the best impact investment specialist in listed equities. WHEB are fantastic on the impact side,” said Pillemer. “They measure their impact and are great on the financial side.”
Myers said he expected the Pengana WHEB Sustainable Impact Fund to become a significant mandate. He added that while some of its clients wanted the dual aspect of a sound investment with sustainable criteria, for those not as concerned about sustainability the fund provided “industries of the future satisfying tomorrow’s problems”.
WHEB’s Managing Partner George Latham said the firm was excited to enter into the partnership with Pengana for the Australian and New Zealand market.
Elsewhere, Pengana has taken management of the other old Hunter Hall funds in-house. The Hunter Hall Global Value Limited, Hunter Hall Value Growth Trust and the Hunter Hall Global Equities Trust will be managed by a combined Pengana and Hunter Hall team of six.
On whether Hunter Hall’s ethical investment philosophy would remain, Pillemer said Pengana would not dictate strategies, but he did add that all three funds would be managed by its equities teams to an existing strategy with an ethical framework like Hunter Hall’s.
Hunter Hall shareholders voted in favour of merging with Pengana earlier this month in a move that formed a funds house with A$3bn (€2bn) under management.
Pengana Capital was co-founded in 2003 by Pillemer and current Australian Prime Minister Malcolm Turnbull, who is no longer connected with the organisation. Prior to founding Pengana, Pillemer worked in the Investment Banking Division of Goldman Sachs in New York where he specialised in providing advice to funds management businesses. Before moving to New York, he was responsible for leading Goldman Sachs’ Australian Financial Institutions Group.