VGI Partners Limited (ASX:VGI) is a high conviction global equity manager with offices in Sydney, New York and Tokyo. VGI Partners manages capital for high net worth individuals, family offices, VGI Partners Global Investments Limited (ASX:VG1) and VGI Partners Asian Investments Limited (ASX:VG8).
At VGI Partners, we focus on businesses that we understand and where we believe we possess insights not appreciated by the wider investment industry. Long-term business success is achieved through operating where you have a competitive advantage. In the business of investing, competitive advantage is obtained through superior knowledge and analysis.
VGI Partners believes that its long-term investment horizon provides a competitive advantage in an investment world which is increasingly focused on the short term.
VGI Partners invests in a relatively small number of high-quality businesses. VGI Partners believes that diversification preserves wealth, while concentration builds wealth. This is complemented with opportunistic short selling of low-quality businesses that are typically structurally challenged, poorly managed and materially overvalued.
Funds managed by VGI Partners:
We place a great deal of importance on assessing downside risk. We attempt to know as much about our portfolio companies as we can and believe that this will enable us to prevent permanent loss of capital. Risk comes from not properly understanding your investments.
We aim to produce superior long term compound growth over time by seeking out and investing in what we believe to be some of the best businesses in the world. Great businesses purchased with a sufficient ‘margin of safety’ will provide superior long-term returns.
We aim to invest in a relatively small number of high quality stocks. We aim to be concentrated enough in our best ideas so as not to dilute our overall returns but hold enough positions in order to provide an appropriate level of diversification. Concentrating capital in high quality businesses builds wealth.
Buy these for the long term in an effort to defer tax, minimise frictional costs and maximise our long-term returns. If a business performs well, the stock price will eventually follow.
We aim to hold cash when we feel that no ‘margin of safety’ exists. We demonstrated this in 2008 by holding the majority of our capital in cash. By doing this we were able to protect our clients’ capital during one of the worst market collapses since the Great Depression.
We are often contrarian and strive to be fearful when others are greedy and greedy when others are fearful. To have better performance than the crowd, you must do things differently to the crowd.
We aim to selectively short companies that we have identified to be structurally weak and believe are vulnerable to material price declines.
Alignment of interests is a critical aspect of VGI Partners’ business model and culture. This is achieved through the following:
Consistent with our aim of maximising return for our investors over the long term, VGI Partners recognises environmental, social and governance (ESG) factors can have a material impact on the risk, returns and reputation of investments.
As an unconstrained investor, we do not limit our investment universe by explicitly screening for ESG factors. We believe not all screening processes are created equal, not all ESG factors will be relevant to all investments, and companies can improve their management of ESG issues over time.
Download our statement to learn more about how we assess risks and ESG considerations in VGI portfolios.