VGI Partners agrees merger with Regal Funds Management
Global equity fund manager VGI Partners Limited has signed a non-binding merger term sheet with specialist alternative investment manager Regal Funds Management.
In an Australian Securities Exchange (ASX) announcement, VGI said it would acquire 100% of Regal in consideration for the issue of new ordinary shares in VGI to existing Regal shareholders, subject to VGI shareholder approval.
However, the proposed merger remained subject to each business completing confirmatory due diligence, negotiation of terms and final board approvals.
After adjusting for cash, liquid assets and other investments, the merged entity would be made up of 60% current Regal shareholders and 40% VGI shareholders.
VGI’s ticker and name was anticipated to change to reflect the combined business.
VGI granted Regal with a six-week period of exclusivity on customary binding terms which include no shop, no talk, and no due diligence restrictions, and an obligation for VGI to notify Regal if it received a competing proposal.
VGI said the merger would provide the following benefits to shareholders:
- The creation of a market-leading alternative investment manager with over $6 billion in funds under management;
- Combining deep industry experience, networks and the long investment track records of industry leaders Robert Luciano and Phillip King;
- Leveraging complementary client profiles and relationships across the combined group, including existing long-term relationships with high-net-worth individuals and family offices within VGI and Regal, alongside a combined retail investor base of 20,000; and
- Opportunity for the investment team to leverage additional resources from the merged group, including Regal’s extensive investment capability and track record investing in Asian equity markets and private unlisted investments.
AUTHOR
Liam Cormican
Recommended for you
Outflows from an Australian private markets fund manager have caused FUM at Pacific Current to decline by $1 billion in the last quarter.
Former RIAA chief executive Simon O’Connor has joined the ethical advisory panel at U Ethical Investors.
Financial services leaders are “all cashed up with nowhere to grow” when it comes to M&A activity, according to Deloitte, with 90 per cent saying they have strong balance sheets ready for an acquisition.
As fund managers are urged to diversify their product ranges, they are finding a faster way to do this is via an acquisition of existing firms but experts say it is not without potential culture clashes.
