The VGI Partners share price hit a record high today

VGI Partners Limited (ASX: VGI) is on a roll.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The local market's newest listed asset manger in VGI Partners Limited (ASX: VGI) hit a new record high of $15.50 today after the group lodged its prospectus for its new VGI Partners Asian Investments Fund.

It's seeking to raise $800 million by issuing up to 320 million new shares in the fund at an offer price of $2.50. It's also agreed to meet all costs around the raising (circa $7.3m) from its existing cash reserves.

Commonly some retail investors are put off subscribing to these kinds of IPOs as the offer price opens below the subscription price due to associated costs with the IPO, among other factors. Therefore VGI is trying to underwrite the offer price to ensure it trades in line with the fund's net tangible assets and attracts more investors. 

It's also offering existing investors in VGI or its funds 'alignment' or 'bonus' units on a 1 for 75 basis. Other alignment shares are also offered to different exisiting investors on a 1 for 125 basis.

Alignment shares are offered as an incentive by the manager to juice the raising and because over a number of years the additional funds under management will pay for itself via management fees. 

This kind of 'bonus' offer and meeting all costs approach was pioneered by Australia's most successful pure play funds manager in Magellan Financial Group Ltd (ASX: MFG). 

VGI does not manage much institutional money as far as I'm aware as its hedge fund strategies are less popular with conservative institutional investors, although they're popular with its core client base of high net worth individuals, family offices, and other high roller types. All of whom have been handsomely rewarded since the firm's 2019 initial public offering. 

Motley Fool contributor Tom Richardson owns shares of Magellan Financial Group. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A piggy bank on the cloud in the blue sky symbolising a record high share price.
52-Week Highs

12 ASX 200 shares that smashed historical peak prices today

Twelve ASX 200 shares rose to new multi-year peaks in an otherwise quiet day of trading.

Read more »

A woman's hand draws a stylised 'Top Ten' on a projected surface.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors saw another day of mild gains for the stock market this Thursday.

Read more »

Two boats on the water with crates with the words trade war in the middle.
Share Market News

Trump's tariffs blocked by trade court: Which ASX 200 stocks could benefit the most?

These 3 ASX 200 stocks have heavy tariffs exposure.

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Broker Notes

How this undervalued ASX All Ords share could rocket 80% in a year

A leading fund manager expects a big turnaround for this beaten-down ASX All Ords stock.

Read more »

Man looking happy and excited as he looks at his mobile phone.
Share Gainers

Why Champion Iron, Clarity Pharmaceuticals, St Barbara, and Woodside shares are charging higher today

These shares are having a good session today. But why are investors buying them?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why ALS, Black Cat, Boss Energy, and Soul Patts shares are falling today

These shares are falling on Thursday. Let's find out why.

Read more »

A car dealer stands amid a selection of cars parked in a showroom.
Broker Notes

Up 77% in a year, guess how much more upside Macquarie tips for Eagers Automotive shares

Macquarie released its latest analysis on Eagers Automotive fast rising shares this morning.

Read more »

Boy looks quizzical standing in front of a graph.
Share Market News

Big ASX 200 news! Stock market whipsaws as Trump's tariffs struck down

Markets initially surged on news that Trump's tariffs are out.

Read more »