AFRVGI founder Luciano quits Regal-owned hedge fundJoshua...

AFR

VGI founder Luciano quits Regal-owned hedge fund

Joshua PeachMarkets reporter

Nov 15, 2023 – 5.32pm

4 min

High-profile stock picker Robert Luciano has resigned from VGI Partners, more than 15 years after founding what became one of Australia’s best known hedge funds.

Mr Luciano, 50, had been on a sabbatical since June following VGI’s merger with Phil King’s Regal Funds Management in mid-2022 and his resignation rounds out a string of senior departures from the fund manager.

Rob Luciano, 50, will step down after 15 years at the fund. James Brickwood

VGI portfolio managers Marco Anselmi and Simon Birrell will oversee the existing VGI funds with oversight from Mr King.

“Rob is a talented and thoughtful global investor, and we thank him for the extensive time and commitment he has provided to the company,” Mr King said.

Mr Luciano said he was looking forward to spending time with his family, although he will not quit the sharemarket.

“I am proud of the business we created at VGI and am highly confident in the ability of the Regal Partners team to remain a careful steward of our clients’ capital going forward,” he said.

“Phil, Marco, Simon and the entire Regal team are of exceptional quality, and I look forward to watching them execute on the strategy over the coming years.”

Mr Luciano began his career in equity markets with broker Huntley’s in 1996, after four years at accountant BDO Nelson Parkhill. After a stint working at Caledonia Investments, he co-founded VGI in 2008.

High-conviction picks

VGI garnered a reputation for high-conviction picks and aggressive short positions, including a successful public campaign targeting Slater & Gordon as well as Danish jeweller Pandora. VGI followed with an activist short campaign against Corporate Travel Management in 2018.

On the long-side, the firm extracted high returns from early bets on market operator CME Group and Amazon. VGI took activist long positions in auctioneer Sotheby’s and ASX-listed Echo Entertainment (now known as The Star Group).

The hedge fund raised $550 million for a listed investment company in September 2017, and in June 2019, the manager floated a second listed strategy as an Asia-focused fund.

Before the onset of the COVID-19 pandemic, VGI’s assets under management peaked at $3.5 billion and had accrued annualised returns of around 15 per cent.

However, in the years following the pandemic, returns suffered. The departure of high-profile VGI staff including executive and head of research Doug Tynan in 2020 triggered a sustained decline in both the fund’s performance and share price. Mr Tynan, and another senior VGI portfolio manager, Rob Poiner, have since set up rival funds.

VGI’s two listed funds have themselves come under pressure from activist investors who urged the investment manager to close its double-digit discount to net asset value.

Regal merger

The merger with Regal last year allowed Mr King’s firm to secure a presence on the ASX, creating the merged entity Regal Partners.

Mr Luciano retains large stakes in Regal Partners, VGI and the rebranded Regal Asian Investments fund.

Mr Luciano intends to continue investing in the future. “I love investing and have been analysing and investing in stocks professionally since the mid-90s,” he told The Australian Financial Review.

“At this stage I plan to take a break and spend time with my family and friends. In the new year, I will look to start actively managing a fund for my family.”