In Monday's weekly NTA announcement, VG1 NTA was 2.44. In my estimation, in the past 2-3 days the performance of Amazon, CFR & Olympus has pushed this to 2.46. I estimate NTA post tax on unrealised capital gains to be 2.39. I use the mid point (2.42) in further calcs here.
If the 2.42 grew at 12% per year before management/performance fees, then after 3 years NTA would be $3.64 AFTER fees.
Note: I believe the high watermark for VG1 is 2.70 so there is no performance fee on the next 28c of growth.
The current discount is 15%. I guess that if VG1's NTA can swell from 2.42 to 3.64 over the next 3 years that investor confidence in the manager's ability will increase, and so that discount might shrink to 10%. That would be a share price of $3.28. Given today's closing price of 2.11, 3.28 in 3 years is a return of 15.8%.
If all the above mentioned parameters remain the same...
If the raw investment return was 8% (instead of 12%) then the 3 yr return to VG1 holders would be 12.5% (instead of 15.8%).
If the raw investment return was 16% (instead of 12%) then the 3 yr return to VG1 holders would be 19.1% (instead of 15.8%).
For VG8, the numbers look even better (although the VG1 portfolio looks far more attractive to me).
In Monday's weekly NTA announcement, VG8 NTA was 2.62. In my estimation, in the past 2-3 days the performance of the portfolio has pulled this down to 2.61. I estimate NTA post tax on unrealised capital gains to also be 2.61.
If the 2.61 grew at 12% per year before management/performance fees, then after 3 years NTA would be $3.90 AFTER fees.
Note: I believe the high watermark for VG8 is 2.81 so there is no performance fee on the next 20c of growth.
The current discount is 20%. I guess that if VG8's NTA can swell from 2.61 to 3.90 over the next 3 years that investor confidence in the manager's ability will increase, and so that discount might shrink to 10%. That would be a share price of $3.51. Given today's closing price of 2.18, 3.51 in 3 years is a return of 17.2%.
If all the above mentioned parameters remain the same...
If the raw investment return was 8% (instead of 12%) then the 3 yr return to VG8 holders would be 13.8% (instead of 17.2%).
If the raw investment return was 16% (instead of 12%) then the 3 yr return to VG8 holders would be 20.6% (instead of 17.2%).
These are just my own calculations based on my own guesses and assumptions. Please do your own research and tell me if I've gone wrong somewhere.
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