1. The Responsible Entity will make an off-market buy-back offer each calendar quarter to buy-back up to 5% of the PCX issued capital each calendar quarter. The Responsible Entity will only be able to continue to buy-back 5% of the capital each calendar quarter where it would exceed the 10/12 Limit (10% of the smallest number of units that are on issue at any time during the previous 12 months) if the Responsible Entity has obtained approval by ordinary resolution of unitholders prior to effecting the buy-back. It is the Responsible Entity’s intention to seek unitholder approval when required so that it can continue to buy-back 5% of the issued capital each quarter. If the Responsible Entity receives acceptances for more units than 5% of the issued capital of PCX for any quarterly buy-back offer, the number of each acceptor’s units will be subject to a proportional scale-back.
2. The NAV is unaudited. The NAV is net of distributions paid since inception on 21 June 2024 to the date of this announcement.
3. Portfolio breakdowns show the Trust’s percentage ownership in the investments based on the latest available data provided by the underlying funds. Allocations adjusted to reflect investments that have been called but not settled. ‘Cash’ refers to the Trust’s direct and indirect investment exposure to cash and other liquid assets. The Master Classes’ investment exposures under ‘Fund Allocation’ exclude the investment exposure of the Trust to any ‘Cash’ that is held via these Master Classes. The Master Classes are explained in the latest PDS for the Trust.
The Responsible Entity intends to continue to make an off-market equal access buy-back offer to all investors in the Trust on a calendar quarterly basis for 5% of the issued capital of the Trust at the Buy-Back Price. The Buy-Back Price is equal to the sum of: (i) the NAV per unit as at the Buy-Back Pricing Date; and (ii) the amounts of distributions that the unitholder would have been entitled to if the unit was not cancelled from the Buy-Back Cancellation of Units Date up to the Buy-Back Payment Date. The Responsible Entity intends that each round of quarterly buy-back will have at least one calendar quarter between the date required for a Unitholder to elect to participate in the buy-back and its Buy-Back Pricing Date and Buy-Back Payment Date, with specific dates to be made available in future Buy-Back Booklets (subject to the acceptance of the buy-back timetable by the ASX). Please refer to the latest PDS for an explanation of capitalised defined terms and a detailed description of the mechanism.
*Lonsec ratings issued 06/11/2025 are published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2020 Lonsec. All rights reserved.
**SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. Information contained in this document attributable to SQM Research must not be used to make an investment decision. The SQM Research rating is valid at the time the report was issued, however it may change at any time. While the information contained in the rating is believed to be reliable, its completeness and accuracy is not guaranteed. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme.
For all important information regarding BondAdviser Product Assessments please see the final page of the BondAdviser Fund Report or visit the BondAdviser website.
Pengana Investment Management Limited (ACN 063 081 612, AFSL 219462) (“Pengana”) is the issuer of this document and units in PCX (ARSN 673 024 489).
There are no guarantees that an active trading market with sufficient liquidity will develop or that such a secondary market will sustain a price representative of the NAV per unit. In circumstances where units are suspended from the ASX, unitholders may not be able to sell their units via the ASX until trading recommences.
The information provided in this document is of a general nature only and has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision in respect of PCX you should access whether PCX is appropriate give your objective, financial situation or needs. None of Pengana, Mercer Consulting (Australia) Pty Ltd, nor any of their related entities, directors, partners or officers guarantees the performance of, or the repayment of capital, or income invested in PCX. An investment in PCX is subject to investment risk including a possible loss of income and principal invested. Past performance is not a reliable indicator of future performance, the value of investments can go up and down.
Authorised by: Paula Ferrao, Company Secretary
COMMENTARY
Market Context
September was again dominated by the interest rate outlook rather than by credit news. The Federal Reserve raised its target range by 0.25% to 3.75–4.00% on 16 September, the first increase since 2023, and the updated projections point to at least one more hike before year-end. The rise puts further pressure on borrowers carrying too much debt, which is why higher-quality borrowers continue to finance at close to their tightest levels in years while weaker, more exposed borrowers trade at stress-level spreads.
Credit markets stayed broadly firm through September, with dispersion between stronger and weaker credits continuing to widen, and more concentrated portfolios underperforming more diversified ones. The spread environment remains attractive but rewards selectivity, which in turn highlights why manager selection and oversight is critical.
Concentration remains a critical consideration
Private credit plays an important role in a diversified portfolio, particularly as a source of income, with return drivers that have a low correlation to traditional equity and fixed income markets. That thesis hasn’t changed.
What the past month has done is bring the risks of concentration and governance into plain view. ASIC estimates the Australian private credit market at around $200 billion, with roughly half concentrated in real estate finance, and has made clear it expects stronger valuation governance and liquidity management across the sector. That concentration isn’t a problem in itself, but it is a reminder that owning multiple loans doesn’t make you diversified if they share the same geography, sector or borrower type. A portfolio built that way carries three exposures at once: one economy, one strategy and, in many cases, one manager. When conditions in that economy and that sector turn together, there is very little inside the portfolio to offset it.
It’s also why we invest the way we do. The US and European private credit markets are significantly larger, deeper, and more mature, and private credit there is a core part of financing the real economy – manufacturers, healthcare providers, commercial services businesses, equipment and receivables, consumer staples – across industries with genuinely different drivers. Real estate is a small part of it. That breadth is what allows a portfolio to be built with limited concentration and correlation, while keeping the flexibility to move capital towards attractive relative value opportunities through the cycle.
For an inherently illiquid asset class, we continue to believe three things matter most:
Credit isn’t a game of perfection. It’s a game of strong process and true diversification to mitigate the risk of capital loss, built in advance rather than assembled once conditions have turned.
The recent headlines shouldn’t be ignored. They reinforce the importance of understanding what you own and how a portfolio has been constructed. Diversify broadly, focus on quality managers, prioritise seniority and security, and understand where the return is coming from. The case for private credit hasn’t changed – how you access it has become even more critical in volatile markets.
The opportunity set
Conditions for new lending remain strong. Spreads on new deals are wider than a year ago, and terms continue to move in lenders’ favour, as some of the funds that benefitted from capital crowding into the market in recent years are now managing redemption requests rather than competing for deals. Borrowers are also being financed at lower entry valuations, with less senior leverage and materially better interest coverage than the 2023 and 2024 vintages. A large wall of 2028 and 2029 maturities is building across the US and Europe, much of it written at 2021-era multiples, and should keep generating opportunities for lenders with capital ready to deploy.
Portfolio Update
Business as usual.
The September cum-distribution NAV per unit was stable at $1.98. Underlying returns were broadly in line with target. The Trust declared a 1.3c distribution for September, exceeding the target minimum and in line with the recent distribution trend.
Throughout the year, we have highlighted the key factors that can influence movements in the Fund’s NAV. The table below summarises these drivers, outlines their potential impact on returns, and indicates whether any were material contributors to NAV performance during the month.
At 30 September, the Trust maintained its target allocation mix, with capital diversified across fund types and managers as follows:
The portfolio remains within stated limits across geography, seniority and investment strategy. Diversification by vintage, style and manager continues to underpin downside protection and liquidity planning.
The Trust’s underlying sector exposure remains well diversified and focused on defensive, non-cyclical industries such as Financials, Industrials, Information Technology and Health Care. These 4 sectors account for 64% of the total Trust exposure.