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  • GLOBAL FUND PDS UPDATE - MLC · Peters MacGregor Capital Management Limited (ABN 77 087 181 600 AFSL 225984) P +61 2 9332 213 W petersmacgregor.com E [email protected] Suite
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Peters MacGregor Capital Management Limited (ABN 77 087 181 600 AFSL 225984) P +61 2 9332 213 W petersmacgregor.com E [email protected]m Suite 1801A, Westfield Tower 2, 101 Grafton Street, Sydney NSW 2022, Australia GLOBAL FUND PDS UPDATE Dear Investor, We are writing to notify you of an important change to our Product Disclosure Statement (PDS) with regards to our ability to utilise cash within the portfolio. Our current PDS restricts cash to 0-20% of the portfolio, with the ability for the manager to move beyond that range for risk management purposes or to to fund intended distributions or potential redemptions. In short, we are relaxing this range, bringing back greater flexibility through reverting to 0-100% equities and 0-100% cash. Basically, being able to hold any level of cash when we believe it prudent from a risk management perspective or where we are unable to identify and hold appropriate companies at prices that meet our time-tested, strict value criteria. The amended PDS is available at our website at www.petersmacgregor.com or by clicking here. Long-term investors will recall we historically operated with this very broad mandate but in recent years tightened the cash band to 0-20% to better reflect our recent experience in markets of having ample opportunities in which to invest. The past year has been exceedingly challenging in markets, as you’ll appreciate, with uncertainty and volatility rising. In addition to an increasingly precarious broad macro environment, investors must contend with a disruptive landscape for many businesses, and corporate balance sheets that have ballooned with debt. We’ve recently taken the decision to materially increase cash in the portfolio for risk management purposes. Over time, we expect to be mostly invested, most of the time. But as we have learned in our decades of experience in managing through multiple market cycles, the key to earning respectable returns through the full cycle is protecting and preserving capital during the major downdrafts. In order to manage risk within this present market environment, we have moved outside of our 0% – 20% target cash range. This will provide us with the opportunity to redeploy into great companies with great management at attractive prices before too long. At this time we feel it prudent and appropriate to amend our PDS to provide ultimate flexibility. While this change gives us greater flexibility in terms of cash, we note that there are no changes to the core investment philosophy, strategy or process of seeking to identify and own a diverse portfolio of high-quality businesses with great management teams at attractive prices. The nature of

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Page 1: GLOBAL FUND PDS UPDATE - MLC · Peters MacGregor Capital Management Limited (ABN 77 087 181 600 AFSL 225984) P +61 2 9332 213 W petersmacgregor.com E service@petersmacgregor.com Suite

PetersMacGregorCapitalManagementLimited(ABN77087181600AFSL225984)P+6129332213Wpetersmacgregor.comEservice@petersmacgregor.comSuite1801A,WestfieldTower2,101GraftonStreet,SydneyNSW2022,Australia

GLOBALFUNDPDSUPDATE

DearInvestor,

WearewritingtonotifyyouofanimportantchangetoourProductDisclosureStatement(PDS)with

regardstoourabilitytoutilisecashwithintheportfolio.OurcurrentPDSrestrictscashto0-20%of

theportfolio,withtheabilityforthemanagertomovebeyondthatrangeforriskmanagement

purposesortotofundintendeddistributionsorpotentialredemptions.Inshort,wearerelaxingthis

range,bringingbackgreaterflexibilitythroughrevertingto0-100%equitiesand0-100%

cash.Basically,beingabletoholdanylevelofcashwhenwebelieveitprudentfromarisk

managementperspectiveorwhereweareunabletoidentifyandholdappropriatecompaniesat

pricesthatmeetourtime-tested,strictvaluecriteria.TheamendedPDSisavailableatourwebsite

atwww.petersmacgregor.comorbyclickinghere.

Long-terminvestorswillrecallwehistoricallyoperatedwiththisverybroadmandatebutinrecent

yearstightenedthecashbandto0-20%tobetterreflectourrecentexperienceinmarketsofhaving

ampleopportunitiesinwhichtoinvest.

Thepastyearhasbeenexceedinglychallenginginmarkets,asyou’llappreciate,withuncertaintyand

volatilityrising.Inadditiontoanincreasinglyprecariousbroadmacroenvironment,investorsmust

contendwithadisruptivelandscapeformanybusinesses,andcorporatebalancesheetsthathave

balloonedwithdebt.

We’verecentlytakenthedecisiontomateriallyincreasecashintheportfolioforriskmanagement

purposes.Overtime,weexpecttobemostlyinvested,mostofthetime.Butaswehavelearnedin

ourdecadesofexperienceinmanagingthroughmultiplemarketcycles,thekeytoearning

respectablereturnsthroughthefullcycleisprotectingandpreservingcapitalduringthemajor

downdrafts.

Inordertomanageriskwithinthispresentmarketenvironment,wehavemovedoutsideofour0%–

20%targetcashrange.Thiswillprovideuswiththeopportunitytoredeployintogreatcompanies

withgreatmanagementatattractivepricesbeforetoolong.Atthistimewefeelitprudentand

appropriatetoamendourPDStoprovideultimateflexibility.

Whilethischangegivesusgreaterflexibilityintermsofcash,wenotethattherearenochangesto

thecoreinvestmentphilosophy,strategyorprocessofseekingtoidentifyandownadiverse

portfolioofhigh-qualitybusinesseswithgreatmanagementteamsatattractiveprices.Thenatureof

Page 2: GLOBAL FUND PDS UPDATE - MLC · Peters MacGregor Capital Management Limited (ABN 77 087 181 600 AFSL 225984) P +61 2 9332 213 W petersmacgregor.com E service@petersmacgregor.com Suite

PetersMacGregorCapitalManagementLimited(ABN77087181600AFSL225984)P+6129332213Wpetersmacgregor.comEservice@petersmacgregor.comSuite1801A,WestfieldTower2,101GraftonStreet,SydneyNSW2022,Australia

themarketenvironmentintermsofthecombinationoftheeconomicrisks,agreaterrateofchange

inthefortunesforindividualcompanies,corporatebalancesheetsthatarestretched,andthe

‘starting’valuationsoftoday–inourview–willreallyplaytoastrictvalue-orientedinvestment

philosophyintheyearsahead.Beingabletorotateinandoutofappropriately/inappropriately

pricedcompanies–withoutbeingundulyconcernedaboutholdingexcesscashforperiodsoftimein

between–willlikelybeakeydifferentiatorthathelpsgeneratestrongoutperformanceoverthelong

term.

Pleasecontactuson(02)[email protected]

questionsorconcernsyoumayhave.

Thankyouforyourcontinuedtrustandwewishyouasafeandhappyfestiveseason.

Yourssincerely,

LWaynePetersMichaelHaddad

ChiefInvestmentOfficerPortfolioManager


Leff 69-9332-1-PB

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