Transcription of The Stock Network Interview with Pengana Private Equity Trust (ASX:PE1), Executive Director Adam Myers
Lel Smits: Pengana Private Equity Trust provides investors access to high-quality global private companies through a single listed vehicle on the ASX. The portfolio spans private equity, private credit and opportunistic investments across sectors and geographies. I’m joined today by Adam Myers, Executive Director at Pengana Capital Group to discuss recent portfolio performance, also the impact of major holdings including SpaceX and how the trust continues to unlock value from leading private companies globally.
Adam, welcome back to the Stock Network.
Adam Myers: Thank you, it’s a pleasure to chat to you again.
Lel Smits: Now the Pengana Private Equity Trust recently delivered positive monthly returns with strong contributions from its investment in SpaceX, which is really a very significant holding in the portfolio. Can you outline what the current exposure is to SpaceX within PE1 and also what latest developments are with this company?
Adam Myers: Okay, I’ll start with the second part first. The last I’ve read is that SpaceX intends to raise about 75 billion US dollars, that’s fresh capital through an initial public offering, at a valuation of about 1.75 trillion dollars, that’s US dollars as well. This will be by far the biggest RPO ever and it’s targeting to have all of this done by the end of June.
In our portfolio, SpaceX is currently marketed around 800 billion dollars, that’s for the business as a whole, which is also based on the December share sale value. At that level, it comprises about 14 percent of the Pengana Private Equity Trust portfolio. We know the merger with XAR went through an implied valuation of around a trillion dollars, that’s based on the merger ratio, and if those marks were taken into PE1, it would increase the size of the position to around 17 percent of the portfolio and if the RPO goes through at the 1.75 trillion dollars, it would be in sort of the low 20 percent of the portfolio value.
Lel Smits: Adam, they are certainly very compelling numbers and in the case of companies like SpaceX, can you outline how they really demonstrate the opportunity that’s available through private markets and also the importance of incorporating private markets into investment portfolios?
Adam Myers: That’s a great question. I think the share of economic value that’s being created in private markets is only increasing. The most innovative companies today have plenty of access to private capital.
They don’t have to tap public markets to fund their growth and that means that they can stay private for much longer. Sometimes they never have to list it all. We’ve been talking about SpaceX, people like to talk about it, it’s a very exciting company.
We also have exposure to companies like Anthropic and OpenAI, which at last values, Anthropic was valued at about $350 billion, OpenAI at over $700 billion, I think $730 billion was the last valuation there, and they’ve all indicated plans to go public at some point in 2026. So if we think about the value just between those three companies, we’re talking about close to $3 trillion, that US dollars, that of value that listed equity investors haven’t had an opportunity to participate in. So just for perspective, that is bigger than the market cap of all the listed businesses in Australia combined.
So investors who want to access that dynamic segment of the market really need to do so through private allocations.
Lel Smits: That certainly is some perspective comparing the two and some very well-known names. On the flip side though, when it comes to perhaps lesser known names in your portfolio, you’ve got really a portfolio spanning industrials from financial services and healthcare technology, also exchanges and mobility platforms, many perhaps that we may not have heard of.
What’s one of the lesser known names that you’re most excited by and why?
Adam Myers: I’m probably not going to give you the sort of answer you were hoping for here because I’m really excited about the dozens of businesses across the portfolio that are quietly compounding returns in areas many of us would think of as boring. We have exposure to one of the largest tire distributors in the US and a large wealth and financial advice network and one of the biggest suppliers of garlic and a company that services cranes and payments businesses and boring businesses that are growing and have steady and sustainable cash flows. And the reason that I like these businesses, the reason that these are the businesses that I’m excited about is because they provide that really, really solid base that allows us to selectively target the exceptional growth businesses that we’ve spoken about in a way that isn’t going to overwhelm the risk return profile of the portfolio.
Lel Smits: So against this backdrop of investing, we’ve got the impact of geopolitical uncertainty, which has clearly increased following the recent conflict and also the flow on through impact to energy markets. And while it is still early, Adam, are you seeing any impact on private equity activity?
Adam Myers: It is still early and it’s important to recognise that. But we are continuing to see transactions being done across the spectrum. Just overnight, I saw buyouts announced across consumer, industrials and the services sector. So the market is clearly not drying up. But in tricky environments, the range of outcomes is likely to widen.
And this creates, or not creates, this places greater importance on diversification. And true diversification is actually difficult to achieve in private markets, which is why we really think that a vehicle like PE1, which targets top quartile returns while offering diversification across businesses, regions, sectors, vintages and managers, can be so useful in a portfolio.
Lel Smits: Well, Adam, I really appreciate the update from Pengana Private Equity Trust and certainly many developments to watch in the coming months.
Adam Myers:Thanks a lot. It was a pleasure to chat to you.
Ends