‘Discount investor’ builds stake in VGI

VGI Partners describes itself as a high conviction global equity manager with offices in Sydney, New York and Tokyo. Picture: Reuters

Deep discount investor 1607 Capital has amassed a stake in VGI Partners’ listed investment company, VGI Partners Global Investments, in what some describe as a move that is highly ironic.

The strategy of the Virginia-based 1607 Capital is to unlock value in discounted closed end funds – a similar strategy to VGI itself.

VGI is headed by activist investor Rob Luciano, and while Doug Tynan was also an executive director, he recently stepped into a non-executive role.

The LIC made its debut on the market in 2017, but after its shares hit almost $2.50 in 2018, they are now trading at about $1.79, taking its market value to about $728.39m.

Apparently, VGI has known about the company being on its register for some time.

A substantial shareholder notice was filed on Friday showing that the American fund had a 5.01 per cent stake.

Run by Fred Tattersall, 1607 Capital Partners describes itself as a company with a focus of investing in closed-end funds and similar vehicles and “other discounted assets”.

For the year to June, VGI Partners Global Investments generated a net return of negative 4.3 per cent after all fees and its post-tax net tangible assets per share stood at $2.27 at June 30.

The company said at the time that the second half of the financial year was “marked by concerns over an unfolding public health crisis and its effect on the global economy”.

Since September 2017, VGI’s LIC has generated a net return of +15.2 per cent after all fees.

Other LICs that 1607 have invested in include Ellerston Asia and QV Equities.

VGI Partners describes itself as a high conviction global equity manager with offices in Sydney, New York and Tokyo.

It manages capital for high net worth individuals, family offices, VGI Partners Global Investments Limited and VGI Partners Asian Investments and says it has a focus on “businesses…where we believe we possess insights not appreciated by the wider investment industry”.

Among the companies that have been a target for VGI are Corporate Travel Management.