The fund aims to enhance and preserve investor wealth over a five-year period.  Kessler said it suited people who wanted to invest with the aim of financial independence, rather than to build assets. “Our first object is to deliver a return.”

He said a fair return was about 9% at present, compared to a risk-free rate of about 4%.

The fund had retreated from equities over the past few months and moved about 30% into cash or cash equivalents as it became increasingly worried about the exuberance of the equity markets.

But Kessler said the fund still strongly backed Ryman Healthcare as an example of a resilient business model with a balance of power over suppliers and customers.

Commentators have said Ryman looks to be over-valued by about 30%, with a market value of $3.25 billion.

Kessler said on a conventional PE basis, it did look expensive. But he said Pengana focused on after-tax cash earnings, which offered a very different  picture.

Because Ryman’s customers fund a lot of its developments through the cost of living in the villages, shareholders had to pay very little.

“Rather than shareholders putting their hands in their pockets, the clients are doing that. The return to shareholders is very attractive.”

He said people looking to invest for income should not be with funds that had a mandate of trying to outperform the market.

Income strategies would generally look less attractive when markets were buoyant, he said, but the fund had kept pace with the rest of the market, with a 25.71% return for the financial year to date.

“You would expect to easily achieve the risk-free rate plus 6% but not to equal the robust market. But we beat the exuberate market, which worried me a bit.