Rob Luciano’s VGI Partners cops Zenith downgrade
More bad news for Regal Partners’ listed VGI Partners Global Investments vehicle.
A Zenith report, seen by Street Talk, downgraded the $514 million listed global long/short investment company to “Approved” from “Recommended” on Monday.
Robert Luciano founded VGI Partners in 2008. James Brickwood
VG1’s rating had been in limbo since July, placed “Under Review” by the research house a month after Luciano announced he would be taking a three-month sabbatical. The decision fell a year after the hedge fund completed its merger into Phil King’s Regal Funds Management.
In his absence, the funds have been run by VGI portfolio managers Marco Anselmi and Simon Birrell with oversight from King.
Report author Atharv Seth said it was critical VG1 records a “sustained period of consolidation and stability” following the Regal merger, highlighting a high level of key person risk and deeming Luciano integral to the company’s success.
“Zenith believes that Luciano remains critical to the process, with our assessment of the strategy premised on his continued involvement,” Seth said.
He noted elevated staff turnover before the merger, including the departure of VGI’s New York office head Robert Poiner in early 2022 and head of research Doug Tynan after 12 years.
Seth also called out VG1’s management and performance fees which he branded as “uncompetitive” relative to other global long/short strategies and “poorly constructed” due to the lack of an appropriate benchmark.
The company charges management costs of 1.54 per cent p.a versus a sector average of 1.25 per cent p.a. A performance fee of 15.4 per cent is charged against all positive returns (after management fees), subject to the recoupment of all prior losses.
“Given the portfolio
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