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PGG Report Summary

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RRM ascribes a “CONVICTION” rating to the Trust. Partners Group is a solid investment manager that plays to its relative abilities, which translate to income stability and capital preservation, rather than stretching for yield and capital upside by moving up the private debt risk-return spectrum. In this regard, RRM has a high degree of conviction in the manager’s ability to continue to at least achieve the stated income objectives over the foreseeable future. To date, PGG has not missed a annualised monthly amount and, subject to a deterioration in credit assessment leading to a material degree of LGD events (which we view as highly unlikely), we do not expect it to. But as RRM pointed out earlier, that does necessarily mean that there can be gyrations in the mark-to-market NAV, which are further augmented by the Fund’s leverage at a whole of portfolio level. Over and above this, like any close-ended vehicle, investors must also bear in mind the additional risk associated with premium / discounts to NAV. However, subsequent to the peak Covid material (which presented excellent buying opportunities in the ASX-listed debt LIT sector), we have seen the discounts contract materially and we would expect this to persist short of another extreme (black swan) market event.

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