Teaminvest Private Group Limited

Deployment of Proceeds: Teaminvest Private Group Limited (Proposed ASX code: TIP) is a specialist private equity firm that seeks to assist successful business owners to grow their business and enhance their legacy. It also mentors the next generation of Australian business leaders and supports Australian business by providing a missing piece in the funding landscape.The company acquires, manages and ultimately may divest ownership of privately-owned businesses.
 
The company has made an offer of 2,300,000 new shares at an offer price of $1.00 per new share to raise $2.3 million. The minimum application size is of $2,000 worth of new shares. The commencement of trading on ASX is expected to be on 29 April 2019 and the offer got closed on 10 April 2019. The proceeds received from the issue of new shares under the offer will be used for general operating costs, transaction costs related to the offer and future acquisitions.
 

Key Offer Statistics (Source: Company Reports)

On the financial front, the company’s pro forma total comprehensive income (after tax) was $6.030 million for the year ended 30 June 2018 as compared to $0.007 million for the year ended 30 June 2017. On the capital structure front, on listing it will have 109,376,943 shares outstanding, $8.402 million of cash and $4.170 million of debt. The aggregated pro forma net cash of the Group at listing will be $4.232 million.

Future Strategies: The company intends to largely continue TIP’s business model after Listing. The company’s direct investment in portfolio companies provides cash flow via the payment of dividends. Moreover, cash generated from operations of the company will be used to either re-invest in existing portfolio companies, to acquire new portfolio companies or to pay shareholders a dividend. The Board of Directors will make decisions on the allocation of cash on a half yearly basis after taking into account available investment opportunities. Post listing, the company intends to continue making acquisitions that are accretive and deliver long-term value to shareholders. This is however yet to seen in the upcoming period.

Pengana Private Equity Trust 1

Pengana Private Equity Trust 1 (Proposed ASX code: PE1) is into providing access to a diversified portfolio. From the past 18 years, PE assets have witnessed the rise by almost 600% and, presently, there is more than US$3.5 trillion invested globally in the asset class. Pengana Capital Group announced that it has indicatively raised in excess of $200 million for PE1.

The minimum subscription amount for the offer is $100 million, with a $600 million maximum. Theoffer for Pengana Private Equity Trust 1 got closed on 10 April 2019, with the tentative listing date of 30 April 2019 on ASX.  The Issuance of PCG shares to PE1 (‘Alignment Shares’) equating to 5% of the amount raised, i.e. ~ $10 million, issued at a nominal cost of $1.


Access to Top Quartile Performing Funds (Source: Company Reports)

The Trust has the potential to be a significant contributor to PCG's profitability including profit contribution from base management fees estimated at 85-90 bps per annum and potential profit contribution from annual performance fees (not likely to be before year 3), of 20% of excess returns over 8.0%.  

Strategy Ahead: Going forward, the trust will seek to generate attractive returns and capital growth by using a selective and diversified approach to private markets investments, over an investment horizon of at least 10 years.

With several possible positive profitability impacts of PE1 on the PCG group, the listing looks interesting. However, there are risks associated with the private markets investment strategy such as risks associated with the portfolio companies, market risk, currency risk, etc. Hence considering aforesaid facts, the stock looks to be an interesting watch.
 

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