Pengana PE Trust Posts $50M Profit and 7.6% NAV Growth in FY25

Strong Financial Performance and Portfolio Validation

Pengana Private Equity Trust (ASX – PE1) has delivered a standout financial year ended 30 June 2025, reporting total investment income of $57.4 million and a net profit of $50 million. The Trust’s audited net asset value (NAV) per unit increased by 7.6% to $1.6630, reflecting solid capital growth amid a complex global investment environment.

Central to this performance was the Trust’s diversified portfolio, which spans over 550 underlying companies across multiple regions and sectors. The portfolio is heavily weighted towards private equity co-investments and direct investments, which accounted for 63% of allocations, supported by equity funds and private credit exposures.

Secondary Market Sale Affirms Valuation Integrity

A highlight of the year was the strategic sale of six primary fund positions on the secondary market at 98% of NAV. This transaction, notable for its tight pricing and relatively small size, serves as a strong validation of both the Trust’s portfolio quality and valuation methodology. Secondary sales often occur at discounts of 10-15% or more, so achieving near-NAV prices underscores the attractiveness and resilience of the underlying assets managed by reputable, cycle-tested managers.

Addressing Market Discount Through Buybacks

Despite the strong fundamentals, PE1 units traded at a significant discount to NAV during the year. In response, the Trust implemented an ongoing buyback program designed to enhance unitholder value by narrowing this discount and delivering NAV accretion. By 30 June 2025, the Trust had repurchased and cancelled approximately 1.24 million units at an average price of $1.17, supported by cash generated from the secondary sale and ongoing distributions.

The buyback program is structured to allocate a portion of available cash flow to repurchases, with the percentage increasing as the discount widens. This disciplined approach aims to capitalize on market inefficiencies while maintaining liquidity and investment flexibility.

Robust Returns and Positive Outlook

For the financial year, the Trust generated a net return of +11.9%, driven primarily by strong performance in equity co-investments, including marquee holdings such as SpaceX and Kroll Bond Rating Agency. While secondary investments modestly detracted from returns, they have historically contributed a disproportionate share of distributions relative to invested capital.

Looking ahead, the Trust is well-positioned to benefit from a rebound in private equity deal activity and exit opportunities, particularly in the US market where deal count and value have increased significantly in the first half of 2025. The Trust’s maturing portfolio and expected rise in distributions over the next 12 to 18 months provide a solid foundation for continued growth.

With a post-distribution NAV of $459.8 million, full commitment to private market investments, and a prudent use of a line of credit at 7% of NAV, PE1 remains focused on tactical deployment into differentiated private equity opportunities. The Trust’s emphasis on middle-market companies with resilient demand and pricing power is expected to support performance across market cycles.

Governance and Transparency

The Trust’s financial statements were audited by Ernst & Young, who issued an unqualified opinion, reinforcing confidence in the reported results and valuation processes. The Responsible Entity and Investment Manager maintain rigorous oversight, with transparent disclosures on fees, related party transactions, and risk management.