The buy back makes sense. They had to do something, as discounts over 20% are outrageous.
You can't call something trading over 20% below NTA a discount. It's pretty much an illiquid stock.
I just feel as though most measures undertaken - such an on market buy back - benefit new investors substantially more than foundational investors.
The concept of off market buy backs at NAV has been raised numerous times with various closed fund managers. They are all scared of the precedent set of funds were to initiate periodic buy backs.
I tend to think if closed funds did it more frequently it would drastically reduce to the huge discounts we currently see. The prospect of making an instant profit in the event you buy into a fund - and then obtain a cash out would draw in substantially more people.
I don't know what to make of VGI recently. Whenever there is an exit of a high profile manager - questions start to be raised.
Regardless, their fee structure is amongst the highest of hedge funds... if they don't start performing the discount will only go one way.
VG1 Price at posting:
$1.92 Sentiment: None Disclosure: Held
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