Profits At NAB Hedge Fund Unit Halved In 2009

Profits At NAB Hedge Fund Unit Halved In 2009

Pengana Capital, a hedge fund group backed by Australian banking major National Australia Bank (NAB) says its profits more than halved during the global financial crisis.

Net profit for the 12 months to June 30 fell from $21.3 million to $8.5 million while revenue declined by 62 per cent to $11.2 million.

In May 2008 NAB emerged as one of the hedge fund group’s largest shareholders when it acquired a 35 per cent stake in the asset manager from then opposition leader Malcolm Turnbull.

The company paid a dividend of $12.6 million in 2009, almost a third lower than the $18 million dividend paid in 2008.

NAB has embarked on a series of acquisitions in wealth management, insurance, mortgage origination and broking since chief executive Cameron Clyne assumed the top job at the lender.

Last year the company acquired Insurance giant Aviva’s Australian business, undertook a joint venture in wealth management with Goldman Sachs JBWere and acquired the mortgage business of Challenger Financial.

Currently NAB is in the midst of a takeover battle valued at $13.3 billion for AXA Asia Pacific Holdings.

Pengana Capital was formed by a former Goldman Sachs employee more than six years ago and is not the only hedge fund group to be negatively impacted by the global financial crisis.

Many asset managers were crippled by redemption requests during the crisis and a large number were forced to wind down.

Russel Pillemer, the firm’s founder and chief executive said that its funds had not suffered from any “significant” redemptions.

Mr. Pillemar however added that its had been more difficult to raise money, which has resulted in further declines in the group’s assets under management.

“The main factors contributing to this decline have been poor economic conditions and the loss of a large mandate,” the fund said.