The company’s shares are now at 10% of the initial public offering price when the company went public in June 2019, a painful loss for investors as stock markets have soared during that time. period.
The decline in the share price follows uneven performance of investments in its listed portfolios, pressure from activist investors and senior executive departures which together constitute one of the most difficult periods of a career. from one of Australia’s best-known fund managers.
This week, VGI disclosed a $ 400 million drop in its funds under management to $ 2.8 billion in the September quarter, which the company said was “primarily due to fund performance.”
The assets of VG1, its largest listed portfolio, jumped 18.5% in the fiscal year ended in late June, but have since fallen 9% after tax. The assets of VG8, the listed Asia-focused investment firm launched in 2019, grew 12% in fiscal 2021, but have also fallen 9% since.
Jon Howie, who took over as CEO of VGI Partners earlier this year, said in a statement to The Australian Financial Review that the investment team focused on maximizing returns while preserving capital and emphasized their long-term track record.
“While we cannot eliminate short-term volatility from our returns, we remain confident in our investment process and philosophy, and are optimistic about a range of attractive long-term opportunities that have arisen in this context. period of global volatility, ”Mr. Howie said. noted.
The company also pledged to pay a dividend and executed a share buyback program in VG1 to help reduce the spread between the share price of the listed portfolio and the underlying assets.
The fund manager also turned to MA Moelis, the investment bank, and Arnold Bloch Leibler, the law firm, for advice on how to improve his fortune, the Financial review The Street Talk column was published last week.
The company is also grappling with the loss of two of its oldest executives in the past year. In September, Doug Tynan, the company’s former head of research, stepped down from his seat on the board after stepping down from his investment role last year.
In August, the company announced the departure of Robert Poiner, who joined it in 2009 and headed the company’s New York office. The company has since hired a US-based investment analyst.
The departures fueled criticism from Mr Luciano, including a pair of activist investors who have targeted the discount between the share price and the asset value of the company’s listed portfolios.
David Kingston, a former Rothschild banker, and Malcolm McComas, took stakes in VG1 and urged the company to transform into a structure that allows investors to exit at the value of the underlying assets, such as a traded fund in stock Exchange.
“VGI Partners has taken a number of steps over the past 12 months to improve investor performance in our listed funds,” said Howie.
“This includes implementing a buyout in VG1, working with fund boards on a more progressive dividend policy and improving our communications with investors.”