Perpetual today announced the opening of the initial public offering for the Perpetual Credit Income Trust (proposed ASX Code: PCI). It is intended PCI will hold a diversified and actively managed portfolio of credit and fixed income assets.
• Targeting a total return of the RBA Cash Rate plus 3.25% per annum, with the intention to provide monthly cash distributions to Unitholders
• The responsible entity seeks to raise $150-$400 million with the right to accept oversubscriptions up to a further $40 million
• Offer period open for new Perpetual Credit Income Trust
• Exposure to a portfolio of typically 50–100 credit and fixed income assets diversified by asset type, credit quality, loan maturity, country and issuer
The Offer has received strong initial support, with indicative bids already surpassing its minimum raise of $150 million, and there is expected to be solid ongoing demand. PCI is intended to provide individual investors with access to credit and fixed income assets they can’t typically source themselves. It has an accessible minimum application amount of $2,200.
It is intended PCI’s portfolio will typically contain between 50-100 domestic and global credit and fixed income assets, diversified by asset type, credit quality, loan maturity, country and issuer. Typical investments will include corporate bonds, floating rate notes, securitised assets and private debt. The management cost is expected to be 0.88% per annum of the Net Tangible Assets of PCI.
PCI is a registered managed investment scheme. The responsible entity of PCI will be Perpetual Trust Services Limited , and the investment manager of PCI will be Perpetual Investment Management Limited (Perpetual Investments).
PCI’s portfolio will be managed by Michael Korber, Perpetual Investments’ Head of Credit and Fixed Income. Michael has over 37 years’ experience, having been involved in credit markets since their development in Australia during the 1990s. He will be supported by Anne Moal, who brings 22 years of experience in credit and fixed income markets, along with a specialist credit and fixed income team that manages more than $7.1 billion in funds under management in credit and fixed income (as at 31 December 2018).
Portfolio Manager Michael Korber said: “The new Perpetual Credit Income Trust is coming at a time when Australia’s retirement age population is growing and looking to meet their income needs in ways diversified beyond their traditional sources of investment income like property and term deposits.
“On a global scale, Australians have one of the lowest allocations to fixed income assets in the OECD. Generally, individual investors may find it difficult to create a diversified portfolio of fixed income assets because some of them are typically issued into wholesale or institutional markets,” Mr Korber added.
Perpetual’s Chief Executive Officer and Managing Director, Rob Adams, said: “As a defensive asset class, credit and fixed income should form the bedrock of an investor’s portfolio.” “Perpetual Investments is a trusted investment manager whose specialist credit and fixed income team has been navigating the credit and fixed income markets with great expertise for decades. Perpetual as a group has been helping clients for more than 130 years,” Mr Adams added.
Features of PCI include:
• Australian and New Zealand investors will be able to access credit and fixed income assets which they can’t typically source themselves, due to high minimum investment requirements and other investor limitations.
• Accessible minimum subscription amount of $2,200 under the Offer, making PCI accessible for individual investors.
• Investment in a defensive asset class which typically has a track record of low capital volatility.
• Access to Perpetual Investments’ proven active and risk aware investment process which enables truly active portfolio management with a strong focus on preserving capital.
• Perpetual Investments will fund all establishment costs for PCI and the Offer, meaning the full amount raised will be available for investment.
Investors should review the Product Disclosure Statement (PDS) dated 8 March 2019 in its entirety before making any investment decision about PCI, including section 7 which contains a summary of some of the potential risks relevant to an investment in PCI. The PDS including full offer and application details is available on www.perpetualincome.com.au. The Offer is open to investors with a registered address in Australia or New Zealand.
The Responsible Entity is offering Units at a subscription price of $1.10 per Unit, to raise up to $400 million and has the right to accept oversubscriptions under the Offer to raise up to a further $40 million. The minimum subscription under the Offer is 2,000 Units, or a minimum application amount of $2,200.
PCI is aiming to deliver a total target return of the RBA Cash Rate plus 3.25% per annum, net of fees, and intends to pay monthly cash distributions to Unitholders.
The Responsible Entity has applied for PCI to be listed on the ASX. It is expected units in PCI will commence trading on the ASX on 14 May 2019. PCI has a target first distribution date of 30 June 2019.
Categories: Australian Stocks