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VGI Partners confirms merger speculation

•5-Merger

This week fund manager VGI Partners (ASX:VGI) has ended media rumours by confirming it is looking to merge with a fellow fund manager.

While speculation has been rife, and the company says there are several parties under consideration, it seems that Regal Funds Management and Challenger are the two names being touted by financial media.

The company released a statement yesterday confirming “yesterday’s media speculation regarding a potential merger with Regal Funds Management or another investment fund manager. VGI confirms that it is having preliminary discussions with a number of parties, including Regal, in relation to a range of potential transactions. VGI is aware of its continuous disclosure obligations to the market and will keep the market informed consistent with those obligations.”

VGI is in talks with Regal and one or more other parties for a takeover deal. And looking at the fund manager’s half-year report, the business is attractive. As at 30 June 2021, funds under management (FUM) stood at $3.2 billion, up 10 per cent on $2.9 billion of FUM at the end of the prior corresponding period (pcp). Statutory net profit after tax (NPAT) for 1H21 was $43.0 million, boosted by performance fees earned during the half as a result of strong investment performance.

Net management fees were $22.2 million for the 1H21 period and broadly steady on 1H20. 1H21 performance fees were $50.4 million, reflecting strong portfolio performance during the year.

VGI manages two unlisted funds and listed funds – VGI Partners Global Investments (VG1) and VGI Partners Asian Investments (VG8). It also offers individually managed accounts.

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