The investment management company, Pendal Group Limited today announced that it will acquire the remaining 50 percent stakes in Regnan Governance Research & Engagement Pty Ltd to take its ownership to 100 percent. The news sent the stock price to edge up by 1.993% to settle the day’s trade at $8.100 on 7 February 2019.
Regnan was co-founded as 50:50 joint venture between the global asset manager Pendal Group Limited (ASX: PDL) and Commonwealth Superannuation Corporation (CSC). It was established to investigate and acknowledge the social, environmental and corporate governance-related sources of risk and value to long-term shareholders. Regnan sells its research to institutional investors as well to the companies to direct them towards the advocacy and engagements with their long term investors.
With this change in shareholding, co-founder Commonwealth will cease to be an owner of Regnan and the entire ownership of the Regnan will be held by Pendal Group. However, the transaction is not material to any change in Pendal financials. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]
Richard Brandweiner, CEO of Pendal Australia, said: “Complete ownership of Regnan will allow Pendal to support its clients on their journey further to fully embed ESG into their frameworks, and also improve its ability to be a more active steward of their capital across all its investment capabilities.”
The company believes that the closer alignment with Regnan will support its objectives to improve investor outcomes through a continued focus on stewardship. Further, it is expected to enhance Regnan’s capability and service proposition by empowering it to leverage the fundamental insights of an investment management organisation, across fixed income, equities, and multi-asset portfolios, said Pendal.
Currently, Pendal manages approximately $2 billion in dedicated sustainable and ethical strategies on behalf of its clients. And Regnan focuses on environmental and social issues with specialization in ESG research, engagement and advisory services.
The report however read that even after the change in ownership, Regnan will continue to offer its independent services under the Regnan brand while strengthening the responsible investment capability of Pendal.
Alison George, Acting CEO of Regnan, said: “This represents an exciting next chapter for Regnan, allowing the research body to develop its research and engagement capabilities further and to have them more deeply embedded in investment processes to enhance outcomes for investors.”
Pendal aims to deliver evidence-based, multi-asset ESG research and stewardship by taking full ownership of Regnan. It is considered as the unique value proposition of the company that supports its goal to deliver sustainable, risk-adjusted out-performance for its clients.
PDL is currently trading at a Price to Earnings multiple of 11.760 x with a market capitalization of $2.55 billion. The stock has witnessed a negative price movement of 24.67% over the past 12 months, despite the surge of 4.42% in last month.
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