Pengana Capital has confirmed that “loyalty benefit” that will form part of secondary offer for its Pengana Private Equity Trust. Units will be 1 per cent per $100 million raised.
Pengana’s move follows the inclusion of a “loyalty reward” in the launch of a new Magellan trust in August. Loyalty programs of various sorts may be emerging as a new development in the fund management industry.
Pengana is offering 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.
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.
In a statement to the ASX on Monday, Pengana said that if $200 million is raised under the secondary offer, then the percentage of loyalty units will be 2 per cent of the aggregate unitholding of eligible unitholders.
If $350 million is raised the percentage will be 3.5 per cent, and so on.
The loyalty benefit program will be available only to investors who had units as at the closing date of the secondary offer, regardless of whether they participate in the offer. If an eligible investor retains their pre-secondary offer unitholding for four months after the closing date of the offer, the eligible investor will receive additional units that are full paid loyalty units.
The loyalty benefit program will be paid for by Pengaga.
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, when 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 benefits was its decision to proceed with the High Conviction Trust offer without appointing a broker syndicate. Magellan did not pay commissions to broker 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.