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Ex-Pengana stars in new global boutique


Jordan Cvetanovski and Steven Glass, former Pengana Capital equities managers, have resurfaced at the helm of their own venture, Pella Funds Management.

  • Cvetanovski and Glass formulated their offering after leaving Pengana in March. They have now recruited two staff and commenced discussions with prospective investors for the new international equities boutique.

    Cvetanovski will be CIO and portfolio manager, with Glass as deputy portfolio manager. Also joining Pella are Ryan Fisher and Ronald Yu, who worked alongside Cvetanovski and Glass on the Pengana international equities team.

    Pella applies “the same strategy developed by Jordan Cvetanovski in 2004 and successfully used since then by the current team, who delivered 12 per cent a year over more than five years with 0.7 beta,” according to documents seen by this masthead.

    Steven Glass

    Cvetanovski and Glass departed Pengana after a difference of opinion with upper management. Executive director Dean Weinbren was quoted at the time as saying: “On the corporate side of the business, it is important that everyone is going in the same direction. In this case, they had different ideas to us on how they wanted to run the business. If these ideas are too different then it is best to part ways.”

    In a statement reported by the Financial Standard newsletter, Cvetanovski and Glass said they would not disturb Pengana’s existing client relationships of the international equity funds and that they were “confident that with their individual track records of success they will enjoy new opportunities.”

    Their departure prompted some consternation from research house SQM, which put the fund on hold at the time as it investigated further.

    Pella will build a “fortress balance sheet” by avoiding companies with net debt-to-EBITDA ratios of less than four times and targeting companies that are generating free cash flow, have growth targets of more than 5 per cent a year, and are not involved in activities that contravene its ethical guidelines, the managers say.

    According to the document, that leaves Pella with an investment universe of 1,700 to 1,800 stocks.

    The document says that Pella’s team has “skin in the game” – all employees are shareholders and cannot invest in equities outside of the fund – and more than 75 years’ worth of collective investment experience (a metric this journalist has always found curious). Pella’s “core values” include:

    • Earn the trust and confidence of our clients
    • Invest ethically, act with integrity
    • Think long-term with every decision, and
    • Consistency of process and returns.

    Neither Cvetanovski nor Glass could be reached for comment prior to press time.

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