Wealth Focus has secured access to a guaranteed allocation to the VGI Partners Global Investments IPO. Investors looking to apply for a broker firm allocation will need to contact us on 1300 559 869 by close of business Tuesday 5th September.
Allocations may still be available after this date but will be allocated on a first come first served basis.
VGI Partners Global Investment fund – Outperformance in global equities
VG Partners have recently announced the launch of a new Listed Investment Company (LIC), VGI Partners Global Investments Ltd. The fund aims to provide investors with superior long-term growth through via a concentrated portfolio of global stocks and a focus on capital preservation.
VGI Partners Global Investments historical outperformance over the MSCI World Index (14.6%pa vs 10.7%pa since inception in 2008) demonstrates the quality of their management.
Source: Independent Research report
What we like
- Strong outperformance – Management have proved their pedigree outperforming the MSCI World and S&P 500 total return indices since inception in 2009
- Long short fund – We have a preference for Active Long/Short managers that can use the volatility to their advantage. A further benefit is that the manager can often leverage their returns by using short positions to fund long positions. ie 50% shorting of the portfolio, allows the manager to invest up to 150% of the portfolio in long positions while maintaining a net market exposure of 100%.
- No bonus options – This issue does not provide the free option that can often dilute NTA performance returns
- Reinvestment of performance fees – VGI intends to re-invest their performance fees into the fund, further aligning their interests
- Listing costs absorbed by the manager – The majority of the associated listing costs are being paid by the manager and not by the new company. The result is that investors will receive $1 NTA for $1 invested
- Manager paying a large proportion of ongoing costs – VGI will also pay a large majority of the operating and administrative costs from their management fee
Things we don’t like
- Performance Fees – We view the fees as high relative to their peers. 1.5%pa plus a performance fee with no equity benchmark is relatively high versus peer comparisons (we note that some of this is offset by VGI paying the majority of ongoing operating costs)
- Concentrated Portfolio – Overall we view this as a positive in light of our conviction in this manager, however, a concentrated portfolio carries greater risk when an investment goes astray
- Long short fund – 150% Long and 50% Short is problematic when there is poor stock selection or an inefficient market. By nature of the inherent leverage, this type of investment can at times carry additional risk
- Low dividends – VGI state that delivering a high dividend is not a primary objective. This may become an issue in a secondary market driven by income focused retirees.
It is our view that VGI are a high quality manager with an excellent track record since launching their unlisted fund in 2009. To date, investment in the unlisted fund has been limited to high net worth investors and family offices (min. $1 Mill investment) and provides an opportunity for retail investors to gain access to this successful strategy.
It is refreshing to see a manager stepping forward to pay the listing costs and many of the ongoing operational fees, avoiding the temptation to dilute investors with a bonus option, and aligning interests by re-investing their performance fee.
Our key concerns are around the relatively high fees and the lack of focus on a regular dividend. Supporters are likely to cite the outperformance (after fees) of their unlisted fund as justification, and that international shares are always a focus on growth over income.
Our view is that investors who want exposure to a growth play via a high quality international manager would do well to consider this issue. The word among brokers is that demand has been exceptionally high and we would not be surprised to see demand in excess of the the $400 Million cap.
Call us on 1300 559 869 to ask us to secure an allocation.
- Broker firm offer – Our allocation through the broker firm offer means investors are guaranteed their desired allocation without risk of scaleback through the general offer (until our allocation is exhausted).
- Limited Offer – The offer is to raise $300 Million (capped at $400 Million), with the ability to raise less. The shares will be traded on the ASX.
- Minimum investment – $20,000 (this is a Wealth Focus minimum)
- Issue Price – $2.00 per share
Find out more
If you would like further information on the VGI Partners Global Investments Offer, please click on the links below:
Please call us on 1300 559 869 to ask us to secure an allocation.
Wealth Focus Pty Ltd
What do we get paid?
Wealth Focus will receive a payment of up to 1.36% plus GST of the amount invested. This commission is paid by the product issuer and is NOT an additional charge to the investor.