Private Credit Trust’s $82M Raise Faces Liquidity and Valuation Challenges Ahead

Offer Details and Capital Raise

Pengana Global Private Credit Trust (ASX, PCX), a listed private credit investment vehicle, has lodged a comprehensive Product Disclosure Statement dated 1 October 2025, announcing an entitlement offer and shortfall offer to raise up to approximately $82 million. The offer price is set at $2.00 per new unit, with eligible unitholders invited to subscribe for 1 new unit for every 2 existing units held as at the record date of 7, 00pm Sydney time on 10 October 2025.

The offer opens on 15 October 2025 and closes on 29 October 2025 for the entitlement offer, with the shortfall offer closing on 30 October 2025. New units issued under the offer will rank equally with existing units and are expected to commence normal trading on the ASX shortly after issue.

Investment Strategy and Portfolio Composition

The Trust provides Australian investors with access to a diversified portfolio of global private credit funds, primarily focused on middle market companies in the United States and Europe. The portfolio currently holds exposure across 24 underlying funds, encompassing over 3,500 individual loans. The investment strategy is implemented via a Cayman Islands-based feeder fund and master fund structure, with Pengana Credit Pty Ltd acting as the investment manager and Mercer Consulting (Australia) Pty Ltd as the investment consultant.

The Trust targets a stable monthly cash distribution yield of no less than 7% per annum, net of fees and costs. Since its listing on 21 June 2024, the Trust has progressively increased its monthly distributions, achieving an annualised distribution yield of 7.98% as of 31 August 2025. The net asset value (NAV) per unit has also increased moderately to $2.02, slightly above the issue price.

Risk Management and Capital Initiatives

Pengana Credit and Mercer employ a rigorous investment process emphasizing diversification across managers, strategies, geographies, sectors, and credit qualities to mitigate risk and enhance return stability. The Trust employs currency hedging to manage foreign exchange risk and maintains leverage limits, with an overall leverage ratio not intended to exceed 1.75 times NAV.

To support liquidity and reduce the likelihood of units trading at a discount to NAV, the Responsible Entity intends to conduct regular off-market buy-backs of up to 5% of issued capital each calendar quarter, subject to regulatory limits and unitholder approval where required. This mechanism provides investors with an alternative exit option beyond the ASX market.

Fees, Governance, and Regulatory Compliance

The Trust charges a management fee of 1.20% per annum of NAV, a responsible entity fee of 0.05%, estimated indirect costs of 1.74%, and a performance fee of 20% on returns above a hurdle rate of RBA Official Cash Rate plus 6% (with a floor of 7.5%). Transaction costs are estimated at 0.22% per annum. The offer is not underwritten, and the Manager will bear all upfront costs.

Governance is overseen by Pengana Investment Management Limited as Responsible Entity, with a board comprising experienced executives and independent directors. The Trust adheres to ASIC benchmarks and ASX corporate governance principles, with comprehensive risk management, compliance, and continuous disclosure frameworks in place.

Investor Considerations and Risks

Investors should note that while the Trust targets a 7% distribution yield, this is not guaranteed and distributions may be paid from capital if income falls short. The Trust’s investments are illiquid private credit assets, with valuations subject to delays and uncertainties due to quarterly reporting cycles of underlying funds. Currency fluctuations, credit risk, market volatility, and regulatory changes also pose risks. The Trust’s complex structure involves multiple related parties and layers of investment vehicles, requiring ongoing monitoring.

Eligible investors in Australia and New Zealand can participate in the offer, with the Trust’s units tradable on the ASX subject to market liquidity. The Trust’s structure and investment approach aim to provide retail investors with access to an asset class typically reserved for institutional investors, offering diversification, income, and capital stability benefits.