VGI Partners Limited

A Quick Look at VGI’s IPO: VGI Partners Limited (Proposed ASX Code: VGI) is a wealth manager specialising in global equities with FUM of over $2.1 billion as at 31 March 2019. The Company’s investment philosophy is based on the key principles of capital preservation, aiming for superior long-term compound growth and concentration of capital in its best ideas. It manages capital for high net worth individuals, family offices and VGI Partners Global Investments Limited (ASX: VG1). The company has a team of 14 investment professionals based in Sydney, New York and Tokyo.Recently, the Company released a prospectus to issue 13.6 Million shares at an issue price of $5.50 per share and will raise a total amount of $75.0 Million. It is expected that the shares will be quoted on ASX on 26 June 2019. The objective of the IPO is to (1) increase alignment between VGI Partners and investors in the VGI Funds, (2) provide VGI Partners with an increased capital base, financial flexibility and ability to execute growth strategies and co-invest in funds through improved access to the capital markets, and (3) broaden VGI Partners’ shareholder base and provide a liquid market for the Shares, and (4) recognise and reward investors who have supported the company over the past eleven years.
 
 

Key Offer Statistics (Source: Company Reports)
 
VGI Partners currently manages funds of over $2.1 billion, which includes $1.5 billion for approximately 250 high net worth individuals and families, and a further $0.6 billion for VGI Partners Global Investments Limited. Following the completion of the capital raising, the company is expected to have approximately $66 million in cash. This capital will be available to support and grow the business, whether through investing in funds managed by VGI Partners (including VG1) or to seed and co-invest in new investment strategies with clear adjacencies to VGI Partners existing areas of expertise.
 
The Master Fund is VGI Partners’ largest and longest running AUD fund. VGI Partners considers the performance of the Master Fund to be representative of the historical performance of VGI Partners’ Investment Strategy. Since establishing the Master Fund in January 2009, VGI Partners has accomplished a compound annual return of 14.6% per annum, after fees.
 
The company comprises of several opportunities to increase revenue and cash flow over the period of time. It has a potential longer-term opportunity to expand into other asset classes through selective talent acquisition and build out of new capabilities. Driven by several positive factors, the investors are advised to keep a close watch on the stock performance post IPO.
 
 

Whispir Limited

Channel Partners, Main Revenue Stream: Whispir Limited (Proposed ASX Code: WSP) allows its customers to quickly and reliably automate manual business processes. It creates an automated workflow that is completely customisable to the business of its clients. It is a global software-as-a-service company, founded in 2001 to provide a communication workflow platform.
 
The company is seeking to raise $47.0 million, including $27.0 million of primary capital through the issue of 16.9 million new shares at $1.60 per share,with the remaining $20.0 million allowing Existing Shareholders an opportunity to realise part of their investment in Whispir. The stock is expected to commence trading on 19 June 2019, Wednesday.
 
The company will use the funds raised to support its ongoing product development and domestic and international growth strategy. With the completion of the offer, the new shareholders are expected to hold 28.8% of the shares and existing shareholders, including management, will retain 71.2% of the shares.
 

Key Offer Details (Source: Company Reports)
 
The company generates revenue by selling access to the Whispir platform, charged on a subscription basis to customers, comprising base subscription charge, optional modules, support charges, and interaction charges.The company accelerates revenue growth through the addition of new customers, targeted regional expansion along with the development of new products. The company’s substantial 73% of the total operating expenditure is on employees. In FY18, approximately 72% of the revenue was generated via the Channel Partners including IBM, Telstra, Nexmo, StarHub, etc. Additionally, the company anticipates annualised recurring revenue CAGR of 27.6% from FY18A to FY20E on a stabilising cost base, driven by product development, growth in use by its existing customers and the acquisition of new customers across the globe. Currently, the company has a strong clientele base of over 500 in multiple industries across Australia, New Zealand, Asia and the USA, including Virgin Australia, Disney, AGL, and multiple government departments and institutions.
 
The company’s strength and investment highlights include its technological capacity to solve complex communication problems, attractive financial profile of the company,diverse customer base, proven channel partner strategy, comprehensive growth strategy, strong intellectual property along with a competitive advantage and an experienced management team. The aforementioned factors place the company in a strong position in its space, i.e., Workflow Communications as-a-Service (WCaaS). Henceforth, the stock looks to be an interesting watch.  

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