The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), AKA WHSP, share price is under the spotlight after committing to a global private credit offering with Pengana Capital Group Ltd (ASX: PCG).
Global private credit joint venture
Investment house WHSP and fund manager Pengana announced that they have executed a shareholders agreement to jointly own and operate Pengana Credit Pty Limited, to offer Australian investors access to institutional-grade global private credit investments.
WHSP noted that it’s a major Pengana shareholder and is a “significant investment house with investments in a diverse portfolio of assets across a range of industries.”
WHSP has provided Pengana Credit with $200 million of seed funding to establish a highly diversified portfolio of institutional-grade global private credit investments.
Pengana has been “building the portfolio over the past year, with seed capital close to fully allocated”.
Pengana said that in the coming months Pengana expects to announce details of global private credit vehicles to be managed by Pengana Credit for offer to Australian investors.
The fund manager said that its global credit offering builds on, and expands, Pengana’s range of international and Australian strategies, which include unlisted and listed vehicles investing in public and private markets.
What to make of this for Pengana shares and WHSP
For Pengana it’s very promising. A fund manager generates management fees and earnings from the funds under management (FUM) that it’s managing, so growth of the FUM is good news.
WHSP seems to always be on the lookout for investments that can diversify its earnings. The much-higher interest rates now mean that cash and bonds/debt pay a much more attractive return, so I can understand why the investment house is building up its debt portfolio.
I think it’s a good move by both of them. The global credit market is a large addressable market to hunt for opportunities.
