Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Perennial Better Future Trust performance review
Perennial Partners’ sustainable small cap equities fund, the Perennial Better Future Trust, was up 2.4% net of fees in December, beating the S&P/ASX Small Ordinaries Accumulation Index’s return of 1.4%. The trust has been in operation for almost four years, since inception in February 2018, and has grown to exceed $100 million in assets. The trust has delivered a 15.5% a year return net of fees, outperforming the benchmark by 6.1% a year — once again showing that ESG views can pay for investors.
The trust is an actively managed portfolio comprised of mainly smaller and mid-cap listed companies that incorporate sustainable themes such as healthcare, education, renewable energy, low-carbon technology, water management, environmental services, and improving social welfare. The companies selected have an ESG&E (environmental, social, governance and engagement) score.
It avoids companies that receive revenue from the manufacture, distribution or mining of tobacco or alcohol products, weapons or armaments, thermal coal, uranium, oil or gas, gambling, pornography, toxic pesticides, old-growth forest logging or the live export of animals.
According to the company update, the positive contributors this month included Genetic Signatures (+36.1%), Telix Pharmaceuticals (+17.4%) and 3P Learning (+17.4%). Negative contributors this month included Nitro Software (-29.8%), Janison Education (-5.7%) and Imricor (-14.8%).
Perennial has done well with saliva-based Omicron test company, Genetic Signatures (ASX:GSS), which finished the month +36.1%. The share price rose after the Therapeutic Goods Administration (TGA) registered a saliva-based protocol to collect and test patients for COVID-19, using this product. The registration was completed quickly and it is likely that the new methology will be required for all cases of the new variant. The company’s COVID-19 detection kit is able to detect all known variants of the virus.
Another stock which performed well was Telix Pharmaceuticals (+17.4%). Perennial says, “Telix Pharmaceuticals was up strongly during the month after announcing that the US Food and Drug Administration (FDA) had approved Telix’s prostate cancer imaging product, Illucix… Patients will be able to start benefiting from the improved technology in the coming months.”
Also down during the month was Nitro Software which fell by 29. 8 per cent after US comparables DocuSign and Adobe announced disappointing results. This indicates that growth rates in the company’s markets were slowing.
The weighted average Perennial derived ESG&E score was 7.2 per cent, which is 26 per cent higher than the benchmark ESGE score of 5.7 per cent.
