Business

VGI Partners enjoys stellar ASX debut

Sydney-based hedge fund VGI Partners shares are up 80 per cent on their ASX debut, which puts the company chairman's stake at $409 million.

Sydney-based hedge fund VGI Partners has enjoyed a stellar debut on the ASX, with its shares rising as much as 100 per cent.

VGI shares began trading at midday on Friday at $10.51 and reached as high as $11.01 before dropping back to $10 at 1429 AEST, still up 81.8 per cent on their $5.50 issue price.

VGI raised $75 million in a initial public offering advised by Moelis Australia.

Executive chairman Robert Luciano founded the company in 2008, and it now manages funds of more than $2.1 billion, including $1.5 billion for approximately 250 high net worth individuals and families.

The company has made headlines for its aggressive short calls against Slater and Gordon and Corporate Travel Management.

"Once listed, VGI Partners intends to retain its investment philosophy, which is based on the key tenets of capital preservation, aiming for superior long-term compound growth and concentration of the portfolio in our best ideas," Mr Luciano said in the prospectus.

The company says its master fund has delivered an eye-popping average compound return of 14.6 per cent per year, after fees, since its inception in January 2009, with only a "relatively moderate level of risk".

According to its prospectus, Mr Luciano will retain a 61.2 per cent stake in the company - 40.9 million shares now worth a nominal $409 million, although they are under escrow for five years.

The Sydney Morning Herald last month described the 45-year-old as the "most talked about hedge fund manager in Sydney".

Director Douglas Tyman owns another 10.7 million shares and head of US research Robert Poiner 1.8 million.

In 2018, VGI had $64.8 million in revenue and $34.9 million in net profit after tax.

At $10 a share, it has a market cap of $667 million, meaning it is trading for 19 times 2018 earnings.

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