VGI Partners Ltd (ASX: VGI) shares went up as much as 100% on their debut on the ASX, doubling the issue price of $5.50 per share.
About VGI Partners
VGI Partners is a high conviction global equity manager. VGI manages capital for high net worth individuals, family offices and consists of a team of 11 investment professionals based in Sydney, New York and Tokyo.
VGI Partners was founded in 2008 and according to its prospectus, it manages funds of more than $2.1 billion, including $1.5 billion for approximately 250 high-net-worth individuals and families.
VGI’s flagship fund, the VGI Master Fund, has returned 14% per annum net of fees. The fund was established in 2009. Another strategy they manage is the ASX listed VGI Partners Global Investments Limited (ASX: VG1).
Is It Time To Buy VGI?
According to the VGI prospectus, in the calendar year 2018 VGI made a profit of just shy of $35 million. At a share price of $10 per share, the market cap of VGI is around $670 million. That puts the shares on a Price-Earnings (P/X) of nearly 19 times. No shares were sold via the IPO, so new shares issued meant cash coming into the business, leaving VGI with no debt and $65 million in cash post the IPO.
It should be noted that in 2018 VGI earned a hefty performance fee of almost $45 million. That helped boost the revenue line. I think they will continue to earn performance fees in the future, but keep in mind that performance fees can be lumpy in nature from one year to the next.
Other ASX-listed fund managers that you may consider buying shares in include the well-known Magellan Financial Group Ltd (ASX: MFG), Platinum Asset Management Ltd
(ASX: PTM) or Pendal Group Ltd (ASX: PDL).
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Disclosure: At the time of writing David owns shares in VGI Partners, VGI Global Investments and Magellan Financial.
