PCG - Pengana Capital Group

[tech/a]

Intermediate top.
With opportunity for a top up?

when should I jump in - now?

Your question maybe answered on the chart soon.

 

[robusta]

Ouch, redemption notice received, 95 mil or about 8% of fum being pulled out.

 

[craft]

Ouch, redemption notice received, 95 mil or about 8% of fum being pulled out.

Have you looked at the MER on their funds? Until they lower them or knock the ball out of the park on returns redemption pressure will remain.

I'm stalking but I think they will have to take a hit and lower the MER before things turn.

 

[McLovin]

Have you looked at the MER on their funds? Until they lower them or knock the ball out of the park on returns redemption pressure will remain.

I'm stalking but I think they will have to take a hit and lower the MER before things turn.

Peter Hall is a great fund manager and probably just going through a period of underperformance, there's nothing wrong with that, IMO. The problem is the level of competition in these boutique funds has increased exponentially since 2008.

There seems to be a new fund popping up every day. There's so many fund managers and they're all selling themselves as hedge funds with hedge fund style fees, the punters putting their money in with them are expecting instant results. Even worse, they take their fees based on pre-tax returns. The way some of them churn the portfolio, the after tax returns might be a third less and then they take their 2/20 fee. How someone completely untested like the Boat Fund can be charging 1.5/20.5 fee arrangement is beyond me.

Sorry, that was my rant for the day.

 

[robusta]

Have you looked at the MER on their funds? Until they lower them or knock the ball out of the park on returns redemption pressure will remain.

I'm stalking but I think they will have to take a hit and lower the MER before things turn.

You are right, it is probably a bit of a chicken or the egg thing with the high MER. As a holder of HHL that high MER generates nice income but if the FUM continues to fall because of the high expenses...

The best result would be for some significant out performance from the funds, this seems unlikely in the short term.

 

[skc]

How someone completely untested like the Boat Fund can be charging 1.5/20.5 fee arrangement is beyond me.

Untested?! How can you say that? They've been posting on facebook for like, errrr, several months and made like, errrr, a few dozen calls with an account size of, errrrr, $100k.

Ok. I see where you are coming from.

 

[McLovin]

Untested?! How can you say that? They've been ramping on facebook for like, errrr, several months and made like, errrr, a few dozen calls with an account size of, errrrr, $100k.

Ok. I see where you are coming from.

Changed for you...

 

[robusta]

Thought it was strange that the share price rose a bit over 10% today but a article like this;

http://www.fool.com.au/2013/07/24/has-hunter-hall-international-lost-its-mojo/

Combined with low liquidity was enough to do the trick.

 

[Ves]

The notes in Peter Hall's annual review of operations that appear in the Chairman's end of year report is always an interesting read.

This year his section "Current State of the Investment Markets" provides food for thought for those who participate in the markets using a fundamental based approach. His comments on how the Australian market sits in the investment landscape is a view point that I have not heard much.

It is a shame that I cannot copy/paste and quote the text, but a link will have to suffice.

http://www.asx.com.au/asxpdf/20130829/pdf/42j08fgykcz460.pdf

Page 5.

For me it is always interesting to get inside the broader strategy of successful investors who share your general approach.

 

[robusta]

Half year report out today and not as bad as I thought.

http://www.asx.com.au/asxpdf/20140226/pdf/42n02cwpw14n63.pdf

NPAT down 31.1%, revenue down 13.6% and operating expenses down 18.7% on the pcp. The outflow of funds seems to be slowing while FUM declined only 5.5% The sad thing to me is. "Positive investment performance of $168m to a great extent offset net outflows of $219m and the buy-back for Hunter Hall Global Value Limited (HHV) shares of $10m."

So once again Mr & Mrs Joe Average have been pulling their money out right when positive returns are on the horizon. I hope they have found a profitable home for their investments.

The VGT, GVL and GDG are now back to record highs after The GFC. I wonder if the CIO will draw a normal salary now.

As for guidance;

"As at Friday 21 February 2014 funds under management were $1.053bn. Assuming that equity markets and
the trend of fund flows stay at current levels we expect that Profit from Investment Management after Tax
for the six month period ending 30 June 2014 will be marginally lower than the result for the six month
period ending 31 December 2013."

One thing I am fairly confident of, equity markets will not stay at current levels and fund flows will be driven to a certain extent by investment performance.

 

[Value Hunter]

"renovations for the two funds were similar in that fund managers were appointed to oversee the portfolio construction of both funds, tighter risk limits were imposed in order to reduce the volatility of performance, and the stock selection process for both funds was improved in order to take greater account of both the risk and the upside of stocks in the portfolio. Furthermore, the benchmark for the AVT was changed from the All Ordinaries Accumulation Index to the Small Ordinaries Accumulation Index."

HUNTER HALL INTERNATIONAL LIMITED ANNUAL REPORT 30 June 2013

To me I interpret that to mean "we have changed the way some of our funds run. To stop scared investors from withdrawing money from our funds we will now diversify ourselves into mediocrity for the sake of reducing volatility. Even though this will hurt our performance in the long run in the short run it will help stem fund outflows. Also we will no longer invest as much in high risk, high reward stocks for the same reasons and also because we need to micromanage our analysts because we don't fully trust them due to poor performance over the last few years".

 

[robusta]

"renovations for the two funds were similar in that fund managers were appointed to oversee the portfolio construction of both funds, tighter risk limits were imposed in order to reduce the volatility of performance, and the stock selection process for both funds was improved in order to take greater account of both the risk and the upside of stocks in the portfolio. Furthermore, the benchmark for the AVT was changed from the All Ordinaries Accumulation Index to the Small Ordinaries Accumulation Index."

HUNTER HALL INTERNATIONAL LIMITED ANNUAL REPORT 30 June 2013

To me I interpret that to mean "we have changed the way some of our funds run. To stop scared investors from withdrawing money from our funds we will now diversify ourselves into mediocrity for the sake of reducing volatility. Even though this will hurt our performance in the long run in the short run it will help stem fund outflows. Also we will no longer invest as much in high risk, high reward stocks for the same reasons and also because we need to micromanage our analysts because we don't fully trust them due to poor performance over the last few years".

The market probably likes some more diversification in these funds.

They have seeded a new fund to be run by Peter Hall with $5 mil

http://www.asx.com.au/asxpdf/20141212/pdf/42vfk3ym5phd2g.pdf

Early Dec FUM for this high conviction fund was $18.5 mil

As a long term holder I'm still a bit excited by total FUM for the group growing by $22.6 mil in the most recent quarter. Hopefully the tide is finally turning.

http://www.asx.com.au/asxpdf/20150107/pdf/42vwdbgp7f1b5k.pdf

 

[robusta]

Held HHL since Nov 2012 through declining FUM, share price and dividends.

http://www.asx.com.au/asxpdf/20150528/pdf/42yvj0171txrsr.pdf

Maybe the worm is turning.

 

[robusta]

Its been a long wait for me but the returns should start to flow.

http://www.finnewsnetwork.com.au/archives/finance_news_network110616.html

Love the 20+ year history of outperformance.

 

[So_Cynical]

SOL - Soul Pattinson buying HHL - Hunter Hall

Didn't see that coming, Peter hall has sold his 20% for $1 per share, and has committed to hand over the remaining 26% as part of the broader take over, im assuming these share will be sold at a more realistic take over price of around $3.50, but have no idea.

http://www.smh.com.au/business/fund...h-sale-to-soul-pattinson-20161230-gtjx06.html

Anyway not a tax issue for me as my holding is currently in the red, would like some SOL shares in preference to all cash.

 

[galumay]

Its bizzare, the implication seems to be that SOL will offer at least $1 for the rest of the company - thats a big gap!

 

[So_Cynical]

Its bizzare, the implication seems to be that SOL will offer at least $1 for the rest of the company - thats a big gap!

Thats the implication, but thats not going to fly ~ i expect at least $3.30 but hope for $3.50/60

Maybe the play is to take Peters 46% at $1 on a we will look after you deal, and then just buy 5% on market, thus gaining effective control, but then thats not a proper take over is it?

 

[Garpal Gumnut]

I must admit I do not understand what is going on with Hunter Hall and SOL.

gg

 

[robusta]

I must admit I do not understand what is going on with Hunter Hall and SOL.

gg

Same here, I got out at $3.06 on Friday, way too much uncertainty.

 

[craft]

Peter Hall is certainly decisive.

He has quit and sold out in one foul swoop .


Personally I would have preferred him to stay; my investment (a touch over 50K shares brought a couple of years ago) was all about backing him. Key personnel risk has eventuated here and I don’t value HHL as high without him.


His actions on leaving seem reasonable to me.

Selling 19.9% to SOL for $1.00 per share has ensured that a major holder with investment credentials (similar to him) will effectively have control of appointing CIO. This is in the best interests of remaining minority holders in my view and I don’t have any issue with his pick. Millners are no Mugs. I think he has potentially taken a hit to his personal wealth to pass an ace to those who he thinks will do the best job for remaining shareholders and fund investors.


The price of the remaining ~24% is now unconditionally on the market with SOL in the box seat due to already obtaining 19.9% @ $1.00


Question is whether bidding even starts let alone goes high enough to see any more than just Peter Hall’s shares change hands. If it doesn’t than HHL effectively stays as it is with SOL/BKI/Contact Asset management (or other higher bidder) replacing Peter Hall with enough shareholding for influence. We remain as minority holders riding coat tails.


Possibly the bidding goes high enough to entice minority holders to depart – especially if they don’t believe the new substantial holder adds the same value as Peter Hall did.


All very interesting. Time will tell all.