Transcription of The Stock Network Interview with Pengana Private Equity Trust (ASX:PE1), Investment Specialist William Dougall
Lel Smits: Pengana Private Equity Trust is a diversified portfolio of institutional quality global private equity and private credit opportunities typically reserved for large institutional investors made available to Australian investors through the ASX. Following a positive May return, the diversified portfolio continues to benefit from exposure to high-growth private companies including SpaceX, Pre-IPO, Anthropic, OpenAI and OSEI while expanding into new investments such as Diversify and Laneways. With SpaceX now officially one of the largest IPOs in history and enterprise AI leaders accelerating growth, I’m joined today by William Duggal, Investment Specialist at Pengana Capital Group to discuss how P1 and the newly launched Pengana AI Private Opportunities Trust are positioning investors for the next generation of global innovation.
Will, welcome back to the Stock Network.
William Dougall: Thanks for having me on.
Lel Smits: Now, SpaceX first entered the P1 portfolio back in 2020. It’s your largest holding now, also the biggest public listing in history. How has this milestone validated your investment thesis? Also, what does it mean for the Trust and its investors going forward?
William Dougall: Yeah, great question. So, it really does validate the thesis. So, the whole point of P1 is to really give Australian investors a way to access the kind of private companies that are very difficult to get exposure to. And SpaceX is really essentially the textbook example of that. And it was obviously effectively closed to retail for a number of years.
And P1 first invested back in 2020 at a valuation of around USD$50 billion. And it’s obviously since listed at a valuation of USD$1.77 trillion and has since traded above USD$2.5 trillion overnight. So, it is a meaningful chunk of value that has been created whilst the company was still in private hands.
And the big takeaway for our investors is what this says about the market. And the most valuable companies in the world are being built in private hands and they’re staying private for longer. So, P1’s job is to keep finding the next generation of these companies across our 550-plus portfolio of businesses and whilst, of course, staying disciplined on the diversified middle market private equity exposure that’s been at the core of the strategy since day one.
Lel Smits: So, looking beyond SpaceX, you recently increased your investment in Anthropic as the company’s revenue growth continues to accelerate. What do you think makes Anthropic one of the most private AI investments today? And also, how do you think it’s comparing with the broader AI opportunity that’s led by companies such as OpenAI?
William Dougall: Yeah, great question. And one that we’re getting quite a bit from our clients.
So, Anthropic is one of the most exciting businesses that we’ve seen in years. Around 12 months ago, it had about $4 billion in annual recurring revenue. And as of May this year, it’s much closer, that annual recurring revenue number is much closer to USD$50 billion.
And just recently, the company also raised about USD$65 billion at a post-money valuation of USD$965 billion. And we participated in that round in P1. And what sets Anthropic apart is really its dominance in enterprise AI.
Around 80% of its revenue comes from businesses and not consumers. And its coding product, flawed code, which I’m sure a lot of the marketers has heard of, it’s become one of the most adopted tools in software development. And that’s different from the business model of OpenAI, I suppose, which is definitely more consumer-led through models such as ChatGPT, which I’m sure is a household name by now.
Yeah, so we hold both those in P1. And the broader point is that AI is the largest wave of value creation that we’ve seen in private markets in decades. And the companies that are leading it are still very much private.
And we want our investors to own a piece of that while it’s still happening.
Lel Smits: And finally, Will, Pengana has now launched the Pengana AI Private Opportunities Trust to provide dedicated and more concentrated exposure to leading private AI businesses. AIX is set to list on the ASX on 2 July. Why do you think now is the right time to launch AIX? Also, how does it complement P1 for investors that are perhaps seeking that longer-term exposure to artificial intelligence?
William Dougall: Yeah, great question. So SpaceX showed what can really happen when a great private company finally hits the public markets. And AIX is built to give Australian investors access to the next wave of those businesses whilst they’re still private.
And the problem we’re trying to solve essentially is listed portfolios are under real pressure from AI disruption, but the companies actually driving that disruption sit almost entirely in private markets. And you can get some exposure through the hyperscalers, but it’s diluted across huge conglomerates and only captures a fraction of the value being created. And AIX is designed to close that gap.
And think of it this way. So P1 could serve as the core private equity exposure, diversified across 550 portfolio companies and a range of sectors. And AIX could serve as more of a satellite for investors who want more concentrated exposure to AI specifically.
And it’ll hold about 12 to 20 of the leading private AI names and targeting companies like Anthropic, OpenAI, ByteDance. And it also has an intended seven-year life, which is quite interesting with the management fees dropping to zero after that. So it is purpose-built for this window of opportunity rather than structuring it as a permanent capital vehicle.
Lel Smits: Well, Will, I appreciate the update from Pengana Private Equity Trust and look forward to learning more about Pengana AI Opportunities Trust when it comes on the ASX next month.
William Dougall: All right.
Lel Smits: Thanks, Will.
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