DLA Piper helps craft pioneering listed investment trust

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DLA Piper are the legal experts helping fund manager Pengana Capital Group on what is billed to be a game-changer in the investment trust (LIT) and listed investment company (LIC) market.

The global legal giant is advising Pengana on the ASX IPO of the Pengana Private Equity Trust. It is Australia’s first global private equity LIT.

Australian corporate partners Martin Jamieson and David Ryan are heading the DLA Piper team, with senior associate Elliott Cheung, solicitor Kelvin Lau and tax partner Eddie Ahn.

DLA Piper New Zealand funds partner Tracey Cross is also acting on the deal, as the offer is also being across the Tasman.

“We are delighted to once again partner with our client Pengana on this significant transaction, which will see them offer investors unique exposure to a globally diversified portfolio of private equity through a listed vehicle, which is a first for the Australian market,” Jamieson said.

The trust’s IPO also entails the issue to the LIT of alignment shares in the Pengana Capital Group. The trust will be the first LIT/LIC that will have an initial net tangible assets per unit higher than the IPO subscription price paid by investors. This is achieved by Pengana Capital, the trustee and manager of Pengana Private Equity Trust, by issuing equity in itself to the new LIT equal to the value of 5% of the subscription monies to the offer, DLA Piper said.

The premium is expected to encourage investors to heavily support the IPO rather than waiting to invest in the secondary market, thereby boosting the fund raise from the start.

Pengana Private Equity is also proposed to distribute the equity in Pengana it initially acquires to unitholders within two years. The move is expected to encourage investors to back future Pengana products.

DLA Piper helped acquire various approvals from the ASX, since Pengana is both the trustee and manager of the new LIT and the LIT is acquiring equity in Pengana. It also helped secure approval from the shareholders of Pengana of the issue of the equity to the LIT, as well as the issue of convertible non-voting preference shares in Pengana to LIT.

The DLA Piper team also helped Pengana acquire required ASIC relief that the offer has longest marketing period ever for any LIT IPO.