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Pengana Capital Group

PRI reporting framework 2018

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Asset class implementation gateway indicators

OO 10. Active ownership practices for listed assets

10.1. Select the active ownership activities your organisation implemented in the reporting year.

Listed equity – engagement

Listed equity – voting


OO 11. ESG incorporation practices for all assets

11.1. Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year).

Listed equity

Hedge funds

Select the externally managed assets classes in which you and/or your investment consultants address ESG incorporation in your external manager selection, appointment and/or monitoring processes.
Asset class
ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes
Listed equity

Listed equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Hedge funds

Hedge funds - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

11.4. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

Our inclusion of responsible investing considerations depends on the fund mandate.  If the fund has an ESG or ethical mandate we will select a manager with the appropriate ESG strategy to manage that fund.  Please see below for the details of the three externally managed funds and their incorporation of ESG factors:

 

Pengana WHEB Sustainable Impact Fund

The Pengana WHEB Sustainable Impact Fund aims to generate capital growth over the medium to longer term.

Pengana has appointed UK-based WHEB Asset Management LLP (WHEB) to manage the Fund. WHEB is a global leader in sustainable investing with a focus on the opportunities created by the transition to more sustainable, resource efficient and energy efficient economies. 

WHEB have identified critical environmental and social challenges facing the global population over the coming decades. WHEB invests in a diverse portfolio of global companies providing solutions to these sustainability challenges via nine sustainable investment themes – five of these are environmental (cleaner energy, environmental services, resource efficiency, sustainable transport and water management) and four are social (education, health, safety and well-being).

The portfolio is actively managed and stock selection is based on deep research integrating financial factors with environmental, social and governance factors.

Pengana Global Small Companies Fund (does not have an ethical mandate).

The Pengana Global Small Companies Fund is an actively managed portfolio of global small and mid-cap stocks.  The Fund’s investments are managed by specialist US-based manager Lizard Investors LLC, who create and actively manage portfolios not typically owned by large institutions.  The investment manager uses a value-oriented approach to identify and invest in quality businesses that  create significant value but are mispriced, overlooked, or out of favour.

ESG factors are considered as part of the bottom-up analysis undertaken on each stock and form part of the qualitative assessment.  They are seen primarily as a risk management tool, with ESG issues considered for both their short term and long term impact and hence their materiality to a stock.

Companies with poor corporate governance, social or environmental histories are marked down, however under our qualitative analysis and all else being equal, would be required to show considerable more upside than those without a poor history for us to invest in them.

A consideration of corporate governance is critical to every investment decision and a company without a well thought out policy is qualitatively marked down under our process.

Pengana PanAgora Absolute Return Global Equity Fund (does not have an ethical mandate)

The Fund is managed by PanAgora Asset Management which is based in Boston Massachusetts. The Fund’s objective is to seek attractive absolute returns by identifying and exploiting multiple inefficiencies that may exist in global equity markets. The Fund employs a long/short equity strategy which aims to construct a portfolio that is generally neutral to market movements. As such the performance of the investment strategy is largely independent of the market’s performance. The Fund seeks to achieve its objective by using a diversified set of strategies that have low correlation to one another and which are designed to capitalise on long-term, intermediate-term and short-term inefficiencies. 

PanAgora does not take labour standards or environmental, social or ethical considerations into account when making investment decisions for the Fund.

Corporate governance, however, is considered by PanAgora’s models within the long-term portfolio, where the fundamental strengths and weaknesses of a company are reviewed (i.e. accounting practices, market-specific accounting regulations, the impact of such regulatory requirements and board compensation) within applicable markets.


OO 12. Modules and sections required to complete

12.1. Below are all applicable modules or sections you may report on. Those which are mandatory to report (asset classes representing 10% or more of your AUM) are already ticked and read-only. Those which are voluntary to report on can be opted into by ticking the box.

Core modules

RI implementation directly or via service providers

Direct - Listed Equity incorporation

Direct - Listed Equity active ownership

RI implementation via external managers

Indirect - Selection, Appointment and Monitoring of External Managers

Closing module

12.2. Additional information. [Optional]


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