The VGI Partners Limited (ASX: VGI) share price is up another 7.6% to $11.29 today despite the Sydney-based hedge fund not releasing any specific news to the market. Even more remarkably the stock has now doubled from its June 20, 2019 initial public offer price of $5.50 per share that was available to subscribers that largely had some sort of previous business interest or investment in VGI.
This listing is of the actual group VGI that runs a number of funds including its flagship VGI Partners Master Fund, which has returned 14.6% per annum net of fees since it was established in 2009. The overall group though is perhaps most famous publicly anyway for its short bets against ASX-listed companies including tort lawyers Slater & Gordon Limited (ASX: SGH) and corporate travel company Corporate Travel Management Ltd (ASX: CTD).
It’s worth noting that to an extent it’s dependent on generating performance fees for additional revenues outside those as a basic percentage of fixed funds under management.
For example its prospectus discloses that in 2018 performance fees made up a total of $44.9 million out of $64.8 million in total revenue. In other words if the company’s funds underperform their benchmarks because its short bet against Corporate Travel ends up with egg on its face then revenues could fall.
However, that has not stopped investors bidding up the stock ever since it hit the ASX boards.
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Tom Richardson owns share in Corporate Travel. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited. 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.