Regal Partners Global Investments Limited (6L20.F) Earnings Call Transcript & Summary

All right. Good morning, everyone. Thanks for joining us. Welcome to the VGI Partners' review of our 2 listed investment companies, our global fund, which is VG1 and our Asian Fund, VG8. It's Rob Luciano here. I'm joined by Tom Davies here in Sydney, Marco Anselmi, and we have Rob Poiner who's on the screen in New York. Rob, can you hear us? We can see you. Great. And we're just here to give you a general update. We'll go through a slide pack, which I believe many of you will have seen before, but we know that there are some new investors on the call, and we know we've had a number of new investors join us over the last 6 months or so. So we'll progressively go through the slides, I'll do that relatively efficiently, we hope. And then we'll move on to Q&A, and that should take us probably an hour or so to get through this, but we're happy to go over. And I should say upfront, we're very happy to take your call or follow-up with individual shareholders or groups afterwards. We have Ingrid, Investor Relations, Gemma and Rachel, who is in Brisbane. The 3 and the team can help you all and myself, Tom, Marco and Rob are also available to talk to our key investors in VG1 and VG8. So in terms of the first slide here, it's just a general snapshot on who we are and our structure. The diagram really gives you a snapshot on how we're structured, unlisted and listed funds. The key point with VGI is you now can access our strategy through 2 listed investment companies. The aim of doing -- of listed investment companies, as a reminder for everybody, was to close our strategies, and we believe that it provides an access point for nonwholesale investors to access our strategy. If you recall, our core global strategy is only accessible in an unlisted structure if you are a wholesale investor; that is, if you had more than $1 million to invest with us and you met certain criteria. We might go on to the next slide. This is the performance of our global funds since inception. This is the unlisted funds that started in early January 2009, and this is the return profile and over the period, it has held, on average, close to 30% cash. So on a risk-adjusted format, you can do the calculations yourself. That's the long-term time series. Again, different to most managers, we are a long/short absolute-return manager, and we have generated that return with 2/3, roughly 2/3 the exposure to the market, just on 70% exposure to the market and beaten the market. And as a consequence, it's a -- we focus on a risk-adjusted return. 2020, you can see the math there, was one of our more disappointing years. The second half of 2020, substantial improvement and the return profile is there for you to see. In terms of what we look for in a business, it hasn't changed, consistent now for more than 12 years. We evolve our -- the way that we analyze companies and our processes continue to evolve, but the core principles remain the same: attractive industry structure, secular growth, sustainable competitive advantage, high-quality management team, a strong balance sheet. It's not essential for it to be net cash. We're happy to have a high quality business with some leverage, many do these days, but it's something that we don't want an excessively geared company. And we're always looking for a margin of safety, we don't want to buy a $1 coin at $1.50. We're typically looking at dollar coins trading at discounts, or dollar coins trading at fair value that we think can keep growing. In terms of philosophy and alignment of interests, the key 3 -- key tenets of our philosophy is there, capital preservation, compound growth and targeted return through the cycle, 10% to 15%, and we're roughly now in the midpoint of that concentration. So we look to allocate capital to our best ideas and the alignment of interests on the slide there, again, a reiteration of how we've always operated. Our unlisted funds, all the cost of operating those have been covered from day 1. We took that same philosophy to the listed investment companies where we cover all the ongoing operating costs. People will recall when we listed our listed investment companies, we covered the setup costs, there weren't any dilutionary options on issue. And we took a very unique and novel approach to establishing our listed investment companies, which in turn, the whole market followed, which we were pleased by. The other difference for the VG1 and VG8, our listed investment companies, is the founders of VGI Partners or the original shareholders, perhaps, which is myself, Rob Poiner in New York, and Douglas Tynan, who's resigned from the firm. We have committed to reinvest any performance fees we receive from both VG1 and VG8 back into shares of VG1 and VG8, while we are the manager. And so that is a very different attribute of our listed investment company. It's in line with what we did over the years with our core funds, our unlisted funds, and it highlights the ongoing alignment and commitment that we have as the manager. And I should say that Tom and Marco have also been ongoing acquirers of the listed investment companies themselves. And VGI Partners itself, the management company, which is majority owned by myself, Rob Poiner and Doug Tynan, that VGI Partners itself has been an ongoing buyer of VG1 and VG8, which is, again, a differentiated aspect of the listed investment companies that we manage. Staff are prohibited from buying or selling securities. So you won't read about me buying securities in a company or doing pre-IPO investments. You won't read about VGI Partners' staff doing that. We invest in the funds. There are -- in our own funds and our own listed investment companies. There are a lot of things that we see that we could do for ourselves. We don't do it for ourselves. We do it for our investors, because we ourselves are only permitted to invest in what we manage for you. Again, a different aspect, you'll see lots of fund managers pop up as investors in certain vehicles and securities, which they do for themselves but don't do for their clients. That's not what we do. In terms of our key initiatives for VG1 and VG8, we're continually focused -- focusing on enhancing our adviser relations and shareholder communication. It's something that we're going to continue to focus on and build our capabilities in. We've increased some disclosure where feasible and where possible, and it doesn't prejudice our interests and capabilities to execute. And we're doing regular webcasts. Rob did one recently, which I think will be shown soon. Tom and Marco have done a few, and we're making ourselves accessible where possible, to speak to investors. In terms of capital management, we announced -- VG1 announced a capacity executed on buyback, August last year. We've made a commitment even when VG1 was at a premium to not raise any more capital after the -- that additional raise that coincided with our IPO. Same with VG8. There's no plans to do anything else that's pending. And again, we have no dilutionary options or instruments outstanding. And dividends, which is important to all of us, particularly all our VGI personnel who are investors in our listed investment companies. So we're very focused on fully franked dividends. We're mindful of how important they are. We're very focused on VG1 paying fully franked dividends on a regular basis. We've just announced -- our Board just announced a fully franked dividend of $0.015 for VG1, and we now have the capability for VG1 to continue to pay fully franked dividends, hopefully, continue to grow those dividends. And that is certainly a part of the strategy for VG8. As we build up franking credits, those fully franked dividends will start to get paid, but as per VG1, we only wanted to commence paying -- we only wanted to commence paying dividends for VG1 when we knew that we could pay a sustainable and growing dividend, and that will be the case for VG8, and we hope to pay a dividend as soon as possible. We have a complete alignment of interest to receive fully franked dividends. I should highlight though for VG1, that fully franked dividend of $0.015, there is a DRP, and the DRP is due close of business 15th of February. Myself and my family and VGI Partners' executives here, the other executives and Board members I've spoken to, will all be reinvesting in the DRP and I'll leave it to you to make your own decision and decide whether you participate, especially given the discount that exists at the moment. Okay. Now moving on to our global strategy, which is -- the ticker is VG1 on the Australian Stock Exchange. These were the drivers of performance last year. We had a very strong second half despite still having a relatively conservative cash balance and still having a short exposure. The return drivers for the year and some of the returns from these positions, some of which are quite large, like Amazon, were very substantial. Pinterest delivered as well, over 100% return. You might recall, we started talking about that position in about July of last year. Stocks nearly tripled from our original purchases. Palantir, very similar situation, very strong performance, and we were able to take advantage of some of the July -- sorry, January moves due to online trader interest and retail interest in the United States. Particularly in Palantir, where that share price moved substantially, we were able to capture considerable -- unlocking considerable gains and FDJ, which we built a position, Marco and Tom and I went to Paris and London end of '18 -- end of '19, I should say, and participated in that IPO. We received the largest non-French institutional allocation, and that's a position that we've allowed to grow and compound, and has now more than doubled from the IPO price, I believe. It's been just another strong contributor this year driven by not just their monopoly long-term license, but the growth in online gaming, on which with a monopoly, you're in a pretty formidable position. And Mastercard have a long-held position that has performed well, and we think is increasingly attractive here. Just going through the portfolio structure. You can see the long and the short structure there, the cash weighting, this is as at 30 -- December 31, it has moved around a little bit. We've found a couple of new opportunities in a certain situation, which we'll talk about at a later date. The short positions has changed as well, with some single stock shorts, but we can talk about that perhaps later. And the rough composition of the portfolio is by -- again I reiterate, by location of exchange. It's slightly a little bit misleading, [ it's hugely globalist pie, right ], just some of the listings are in the U.S., and that is sometimes, I think can be a little bit disrepresentative of the total global exposure, but we can talk about that later as well. This gives you a general sense of the split between sectors and the top 10 holdings. We may not always disclose top 10 if we're looking to build a position. And we don't have a prejudice or interest, particularly in things where we think liquidity is not that substantial. A number of these have substantial liquidity, but not always. Largest position remains Amazon. You may recall that, that was nearly a 20% weight middle of last year. We've reduced it down. The stock's obviously performed very strongly. It's really gone sideways since we have reduced the holding. Mastercard, still second largest holding. Pinterest is growing considerably due to performance. CME, you might recall, we reduced that holding a bit, very happy with the TD. New position, SAP, and a new addition as of last year was Olympus. This top 10 holding has since changed, since December 31, due to a new addition which we won't talk about today. And a couple of other modifications that we've made in the portfolio. But it's similar to this, but we're excited about a new position we've been able to build in January. So look, I might pass this over to Tom. Tom's done a lot of work on luxury and particularly on Richemont. And Tom, I might hand the floor over to you, if that's okay.

So as Rob said, Richemont is 5% weight in the global fund and also the second largest position in our VG8 global -- in our Asian portfolio. So the key driver for Richemont earnings is the Jewelry division, and the Jewelry division consists almost entirely of Cartier and Van Cleef. Cartier was founded 170 years ago, Van Cleef was found 110 years ago. So both of these brands have got a very rich history. They've got a lot of prestige, and they've got a lot of heritage. The reason that's important is because it gives them pricing power. And a way to assess that -- the way we look at assessing that is to look at the secondary market. So if you look at Sotheby's or Christie's -- look at resale value of jewelry, Cartier and Van Cleef quite often appear in the top 10 lists of highest value transactions. And actually Cartier in May last year, sold a Tutti Frutti bracelet for $1.7 million, which was the highest online sale to that date. Below that in the actual consumer end of the markets, so away from high jewelry into fashion jewelry, where the price points are $1,000 to $10,000, Cartier and Van Cleef are the leading brands on the RealReal, which is the leading luxury resell website, in terms of their ability to hold secondary market prices. So what we take from both of those indicators is that these are brands which hold their prices very well even in the resale market, and that's an indication they have very good pricing power. So we think Cartier and Van Cleef are -- we think they are the best luxury jewelry brands around. In terms of the sector, we think luxury jewelry is the best or the highest growth sector within the luxury sector. And the reasons -- the secular drivers behind that are the shift to branded jewelry. So still today, I mean, 1/3 of the market is actually branded, 2/3 is still High Street jewelers that sell unbranded jewelry. And there's been a secular shift towards the brands over time, but it's still in the very early stages. So we think that's got a long runway to go, as some of the larger groups who can invest more heavily in marketing will see the share shift towards them over time. Also, another driver is increased instances of self-purchasing. So there's been a bit of a shift here in perception. So jewelry, historically, was just -- it was a gifting item, whereas now you see a lot more people purchasing it as more of a fashion item and something that they want to buy themselves and see as an investment for themselves. And then the last driver, and this is more of a luxury sector driver as a whole, is the bifurcation of wealth. This has been a societal phenomenon, it's a global phenomenon we've seen for 10 years now, where the rich are just getting richer. And the target market for these luxury companies is the top 1% and that 1% just continues to get richer. So as the target market gets more wealthy, it's obviously a big tailwind for the likes of Cartier, Van Cleef and Richemont as a whole. Those drivers and the strength of the brands have driven the jewelry division to have 10% revenue growth annually for the last 10 years. And we don't think those drivers changed or we don't think the brands have -- the brands' strengths are only enhanced in our view. So we think they can continue to achieve high single-digit or double-digit growth for the next 10 years. In terms of looking at Richemont, we think that there's still upside to the current Richemont share price, just looking at the Jewelry division. We think that underpins the whole valuation of the business. And we think that you get a lot of other attractive assets essentially for free. The 2 big ones are the e-commerce division. So it's called YOOX NET-A-PORTER. Within that, you have YOOX, NET-A-PORTER, MR PORTER and THE OUTNET. The combination of those websites is -- makes them a leading e-commerce platform, rivaled only by FarFetch, and they've been going through some transitions. So they historically have had separate operating systems in the back end, which have made their logistics growth relatively complex. Over the past 3 years, they've been re-platforming, moving it all down to one singular computer system, which is run by IBM. That's been quite a long process, and this has resulted in -- and they've been investing on the income statement, which has resulted in them reporting operating losses for the past few years. We think we're getting in towards the last innings of that. We think over the next -- with -- currently NET-A-PORTER is being transferred onto the new platform, and we think in the next 12 to 18 months, they'll be through that and it should push the business back towards or into profitability. And we think if you look out there at the peers that are in the sector, probably the closest peer is Mytheresa, which IPO-ed 2 weeks ago. That's 1/5 the size of YOOX NET-A-PORTER and it's got about a USD 3 billion market cap. So we think YOOX NET-A-PORTER is being ascribed no value as part of the Richemont current share price. And one of the largest -- one of the key peers out there has got a $3 billion market cap. So there's a lot of hidden value just in that asset alone. In addition, we think you get a leading watch and accessories brand portfolio for free. So this is a business which generates $3.5 billion in revenue and includes brands like Mont Blanc, Dunhill, Piaget, Jaeger-LeCoultre. So there's some very, very high-quality brands that also have temporary impact. So the Hong Kong protests were a very big headwind. The crackdown on gift-giving in China were a big headwind. And then of course, COVID was a big headwind for this business. We think management are taking a very long-term view in their management of this. So instead of discounting to drive revenue, what they've actually done is spend EUR 500 million in buying back watches, taking them off the market and taking them apart for their spare parts. The reason they've done that is to maintain the brand equity for the long term. We think that's a pretty unique strategy that management have taken, and they are only able to do that because they have a very long-term view of the business. We think that is positioned as well. The brands have maintained their equity. The store footprint has been shrunken down. There's been a shift to online because of COVID, and because they own YOOX NET-A-PORTER, they're also able to transition faster to online, some of the -- for the watch sales. And we think it's very well positioned for the next 2 to 3 years as that sector recovers and these brands are positioned to take advantage of that with, of course, a lot of operating leverage in the retail business, which it has. So summarizing on Richemont, we think the current valuation, there's upside from jewelry alone, which we see as a very high-quality business with a lot of secular growth. And then we think you get one of the leading -- well, the leading e-commerce platform, and a portfolio of very high quality watches and jewelry for free. So there's a lot of upside from the current share price.

All right. Thank you, Tom. So just going into the Asian funds. Just a quick snapshot on how it's tracking. You can see the return. That return is generated with nearly half of the funded cash, rightly or wrongly. We've been able to deploy a substantial amount of that cash in Asian market weakness over the third and fourth quarters. There was sell-offs in certain situations, largely technology, e-commerce situations in Japan and elsewhere, where we were able to take advantage of share price weakness, some substantial weakness in some cases. But that's the return we generated with a high cash balance, really picked up in the second half. Key contributors, you can see there, Nintendo, Hong Kong Stock Exchange, Richemont was strong, went through Kikkoman, and then Nuix, which was an IPO that took place last year that VG8 took a substantial position in. Just going through the portfolio. That's -- this is it as at December 31. We've found some additional situations since then, made some changes both buyers and some disposals, and this is roughly -- that's roughly the breakdown. There's also a 0 stock short back on and a couple more ending. We might go through to the next slide, next one. So our biggest positions. Remember here, at cost with a restriction of maximum 8% and then we can let single positions grow up to 15%, I believe. So Nintendo, as at December 31 the largest holding, just kind of terrific result. And that's something that we can go through at a later stage, but we have presented on Nintendo in detail. Richemont, second largest, and Tom has just gone through that. Olympus, we went through in the previous result, which is the leading player in endoscopes for -- and leading player globally, 70% market share. Crown Resorts is a special situation, and Marco will go through that afterwards, and we'll take you through our thesis there. Nuix, we mentioned, has become a bigger weight as a consequence of share price performance over the last month or so. And there's a position there that's managed to find its way into the top 10, which we want to talk about. We're active in it, and there's a couple of other new positions that we've been building. You'll notice we've disposed the Kikkoman position, excellent business, but valuation has now got to a point that we're scratching our head. And there are a couple of other situations that we've looked to sell off. You might recall, we made a couple of other disposals last year, in situations where we think the prices have started to defy gravity. Look, Crown Resorts, special situation. We also have a holding in Star, so combined that's roughly a 10% weight in these 2, I'd call them, special situations in that we think they're attractive businesses. We've got a certain opportunity [ to ] the sell-off, and then there's some attractive interest particularly with Crown, which is why we've made it a bigger holding. Yes, I might be [ over ] -- I'll hand it over to you, Marco.

Yes, great. They're probably -- they're not the typical secular growth compound [ off ] that we're looking for in VG8, but nonetheless, we thought we had the opportunity to grow our position in a high-quality asset at a very attractive price. So I mean, Crown Resorts is a company that many people will be familiar with. It's the largest gaming and entertainment venue operator in Australia. They have the exclusive casino license in Melbourne and Perth. They have a casino in London and then potentially now a second one in -- will have a second casino in Sydney. The casino -- the Australian casinos are businesses that we have followed for quite a long time. In fact, we were shareholders of Echo Entertainment, now known as Star Entertainment, which operates The Star casino. We were shareholders of Echo back in 2012 -- 2012 into 2015 in the global portfolio, and it was an investment that delivered a very strong return for us. So there are assets that we understand and we like because of -- primarily they're monopolies. So they have a very attractive industry structure, but they also have a sticky customer base. The product is addictive while also being resilient. So even in consumer downturns, typically, wagering activity holds up pretty well. They also have long-dated concessions, which provides good visibility into future earnings. And then they're highly cash-generative businesses, particularly Crown over the next few years, which has just completed a number of large CapEx projects, which means it should start to produce some free cash flow. And then last thing we also like is that there is tangible asset backing because the casino's on the property, and that provides another way to potentially unlock upside I'll mention in a second. But the opportunity that sort of was presented from Crown was really during the COVID lockdown. The share price sold off as casino visitation essentially ground to a halt. And so Crown had to rush to reduce the burn rate. We sort of took a long-term view in the sense that I wouldn't think that the asset was structurally impaired and that consumer presentation will eventually resume. And so we used COVID as an opportunity to build a position. And then secondly, we grew the position when there was a further share price sell-off as a result of the New South Wales public inquiry into Crown's governance practices. At the time, we -- our analysis showed that we essentially weren't paying for any upside or future potential earnings from Sydney casino. So as we've been in a position, we essentially were getting Sydney as a free option, which we found very attractive. And now the concerns have spread to Melbourne, given that the Melbourne license is also under investigation. We find the possibility or the probability of the Crown Melbourne license being revoked as being very low for a number of reasons. Crown Melbourne, Crown is one of the largest private employers in Melbourne, firstly. It's also a key contributor to the state government revenues through taxes. So we think it's highly unpalatable from the government to revoke that license. And then we also think there's other avenues that the government is more apt to explore before they take the drastic step of revoking that license. So for instance, they now look to impose stricter controls or better compliance, which we think may add incremental costs, but we also think that Crown, through COVID, has rightsized the cost base and taking the opportunity to implement a significant cost savings, which we think could easily offset any incremental costs from more compliance, which -- we actually think that the business will be better off in the -- looking 2, 3, 4 years' time, if there is a change to the corporate governance and the structure, even potentially the shareholding structure. The other thing that we like about Crown and why we still see upside in here is that there's a number of things that can provide further optionality so as I mentioned before, they just completed a large number of their large CapEx projects, such as building Barangaroo, the Crown Sydney casino. And we think that will lead to a material step-up in free cash flow generation, which could be deployed in shareholder returns. So we could potentially see a large buyback or dividend, but then the other -- what else is also attractive is the fact that there could be value unlocked through, for instance, a sale and leaseback property transaction. So Crown now has a -- Blackstone now owns 10%, over 10% stake in Crown. And they have experience in these casino assets. They've actually executed sale and leaseback transactions in prior -- in other casino groups globally. And so it's -- we see that as a decent probability that they could execute something like that in Australia. And then lastly, we also think that there's a decent probability or -- we think Crown would also be a highly attractive asset as -- for a takeover. And we think that puts some downside protection on the price. We've seen prior attempts by other casino groups to take the business over. We think that the inquiry has potentially provided a catalyst to unlock the shareholding structure that's always been in place at Crown. And so we think it will be a highly attractive asset for either Blackstone or any of the other casino groups, someone who can create, perhaps, a pan-Asian casino or a group with Macau and similar corporations. So overall, we've got the opportunity. We see our investment in Crown as opportunistic. It's not a typical secular growth compounder, but we thought -- we've got the chance to build an attractive margin of safety and still see some upside in the investment.

Thanks. And I would say on Crown, that is a kind of situation that we can take advantage of in the Asian fund, but also the global fund, meets a lot of criteria, maybe not secular growth, but it's a category of investment that we do focus on and occasionally, we can get some substantial opportunities, and we can take advantage of sell-offs in markets where you have investors who are very focused on short-term performance, short-term return profiles, and we can take advantage of that group. Crown is a classic example of where you had an Australian institution selling due to fear of short-term issues or the perception of owning this kind of situation on their portfolios, and we can take advantage of that. So again, it's irregular but it may become more regular in having these kinds of special situations where they're high-quality businesses that have a mispricing, so I'll leave it at that. Shareholder engagement points are up here. Please, if you have not -- if you're a shareholder of VG1 or VG8 and if you haven't contacted us or we don't have your details, perhaps you have a financial planner, perhaps you have an adviser at one of the brokerages. That's fantastic, but if we don't know who you are, we can't communicate with you directly. So please send an e-mail to our Investor Relations address, please telephone. Ingrid is our Head of Investor Relations. Gemma Brosnan is Investor Relations Manager here. Rachel, I think many of you have been acquainted and spoken to, please contact her, provide us with your details, and then we know who you are, and it allows us, in many instances, to organize a call. Or for investment clubs, we can do a Zoom call for an investment club, for financial planning groups. We're very happy to do calls and have hosted many of those where financial planners or advisers at brokerages have got a group of their investors, and we've had Zoom calls. We've even hosted a number of events for investors who have substantial holdings or clients who cumulatively have [ paid for ] holdings in VG1 or VG8. So we're very happy to engage and keep our long-term shareholders informed. All right. So that's the end of the presentation. We're sort of running a little bit over the time, but we'll make as much time as possible for questions. Tom, you're going to read out the questions. Let's see how many we have got. I think we have a few.

Okay. Thanks, Rob. [ They all ] have got quite a few questions come to our lines. So we'll try and get to as many as we can. If we don't come to your question, as Rob said, please reach out to our Investor Relations team, and we'll get back to you to answer your question in due course. So what's the first question here? What does VGI currently think about shorting? Were you affected by the Reddit day traders who've been creating short squeezes in stocks like GameStop?

Okay. Well, when we think about shorting, I think we commented on shorting last year that we were finding it to be extremely hard. That was coming out of the second half of last year. We had some -- we incurred some substantial losses on shorts, generated substantial gains. And hence, our returns in March were positive. Losses -- and had a couple of squeeze [ outs ] in the third quarter, which we learned from. And that learning process has resulted in a variety of changes, so very substantial changes, I should say, in how we go about shorting and the systems we have in place. And as a result, we have some single-stock shorts on now in both portfolios, and neither were affected by what took place because we've adopted and evolved our processes to ensure that, that won't happen. Like I said, we got -- we had a -- we experienced some short squeezes in the third quarter of last year. That won't -- that's unlikely to happen again because of the systems and changes that we've made.

I'd say they're relatively minor compared to... They were relatively inconsequential, but it taught us a very good lesson. It taught us how to evolve and basic things. So certainly, there was a short interest where we would just avoid it, regardless of how attractive it may be. Days to cover, we're watching it. Retail interest, watching it, other general points. And we've adapted and evolved our systems, including -- we've been monitoring social interest, social media and watching these various trends. Our data scientist in New York has been doing great job in allowing us to track these things. And we've avoided these kinds of situations now for a while. We have been worried about single-stock shorting for a while, for a variety of factors. The easy money, 0 rates, gamification of stock trading. I think we talked about it in our VG8 letter, this acceleration of stock -- individual stock trading in Korea. Korea's an example of leaders in many things for a reasonably small population. And you have a look at the Korean stock market. Certain points, about 70% of trading volume in Korea is individual online trading, which is just out of a lot of speculation. And this is now making its way through into all markets. And it's very problematic. Do I think it's a sustained thing? No, I think it's cyclical. It's a bit like this thing on [ lakes and lake ] discounts. I think it's cyclical, and I think it's a byproduct of the environment we're in, and I think it's very tricky. And you saw some of the losses that firms had in January who were exposed to these kinds of short positions, 20%, 30%, some firms, 50% losses. Thankfully, we've modified our systems, and we think that we are in a position whereby we can avoid that kind of situation. It doesn't mean we're not single-stock shorting, we are. I'd like to -- Rob, I might hand it over to you. You're in New York. You've been helping us on the short side now for over a decade. What are your thoughts? And you're there in real-time and we've talked about GameStop and a few of these things and these situations. What's your take?

Yes, I mean -- point you made. Yes, we've made a number of changes in this process over the last years in terms of protecting against some of those indicators. Frankly, that's not something that we are exposed to, and more generally on the short [ positions ]. Looking from year to year [ are high settings ] when we've done that in [ structural shorts ]. And that, I think [ are the markets ] where we have been really focused. As Rob said, we've been starting to put some of those shorts back on because we've seen some opportunities in the market. And then also, look, I'd say, in terms of that structural disintermediation, we've seen an acceleration of that on the back of COVID, right? So we're seeing a number of these trends, whether that be penetration of online marketplaces or electronic payments or even the shift of corporations into the cloud. We've seen these trends really accelerate over the last 12 months. So I think we've been very careful on the shorts side, but conversely, I think we're now at a point where we are starting to see the risk/reward in some of these positions. And more recently, we've been starting to put some of these back on, particularly these long-term structural shorts where we're relatively confident that the business in 5 to 10 years is much smaller, if it exists at all. We've been starting to reengage in some of those positions.

Yes. And look, I think we've got 3 key markets, the fads, the failures and the frauds. I think the frauds have become very hard. I think in this -- this is Nirvana for fraudsters. What is currently happening and taking place and facilitated by central banks and governments. It is Nirvana for fraudsters. This is an environment where Bernie Madoff would have not been uncovered. This is an environment where a variety of situations, well-known situations would not be uncovered. Wirecard is an outlier, in that it was uncovered due to investigative journalists, largely. And that's -- unfortunately, not enough investigative journalists these days. And we're, therefore, focusing on these structural shorts. And we're starting to put some of those back on. We think there's some interesting opportunities. The problem is, is in this environment and with these kinds of day trading squeezes, we have to be very careful. But we're finding more opportunities. We're watching for catalysts. And we have a list that we're ready to move on, but we just need to be careful.

I might add something in there as well. Just a bit long in the answer, but specifically on this situation...

It's a good question.

And through January, we obviously avoided the impact on the short side, but we also, on the long side, what happened to all our hedge funds, had to sell long positions to get out of their -- to fund their short positions. And so we took advantage of that, and we were able to pick up and build, position in something relatively new as it sold off rapidly on no fundamental news, but just based on flows that were happening in the market. So with our cash balance and the way we sit today, we'll be very opportunistic and take advantage of market volatility like that.

Yes. And we were also able to reduce the weight in one of our positions that really has gone up many times. It had a 50% move in January. We were able to sell a lot of that position down. It's not usually what we do, but to see a business that already had a substantial share price move 50% on really no fundamentals. We want to buy and hold, but we're not going to buy and hold forever if we're given an opportunity like that. It's since come back substantially. And it's a position that we'll be nimble on, but this is a -- it remains, as we said now that this remains a highly speculative environment and we want to be cautious, and we want to be relatively nimble. We should move on.

Yes. This question probably follows on well. So VG1 and VG8 invested more of their cash in 2020. Do you feel like they're now more fully deployed or are you planning to invest more cash if markets fall?

VG1 invested more cash to get up to really where the other -- where we were in our funds, and I probably have been too cautious in investing VG1 since inception. That's my fault, the degree of cautiousness. We were able to purchase more Amazon, Mastercard major positions in the sell-off. So that was maybe -- the increase was to bring it up to where the other accounts were, to get set. In terms of over the last 6 months, we've put some more money to -- we've sold some positions. We've bought some positions. More likely, we're able to take advantage, as we said, in January, and we bought a position in something that came to something else. So VG1, we've got the capacity to execute, and when we see opportunities, we will. Are we fully deployed? Well, we've got the capacity to get far more invested than we are. It's just a function of what opportunities present themselves. VG8, different story. VG8 started really only late in '19. Was 100% cash, was only just listed. We were cautious going into 2020, and that proved to be -- due to trade war and a variety of other factors, and that true -- proved to be a reasonable strategy in the sell-off. And certainly, it happened earlier in Asia in February. March, we were able to build some positions. Again, too cautious, but we were able to accelerate a number of holdings. We bought Crown, Star, a couple of other positions, a number of luxury good groups. We were able to buy, added to Richemont, a variety of other situations. But what we saw really in August, September, October, in parts of Asia was some stocks were selling off that we liked, and we've been able to build those holdings. And also having cash, we were able to make a very large commitment to the IPO of Nuix, which was -- where we bought that position pre-IPO, it was a pre-IPO commitment. And we were able to, by having cash, to make a very substantial commitment for the Asian part. And that bode very well for the Asian portfolio. I think we were able to put substantial weight in at cost. That Nuix share price, just for reference, is up over 100%. It's very high-quality business. It's a business that we think has very good growth prospects and secular growth profile. And when you have cash and the ability to execute and move quickly, you can take advantage of opportunities. So I hope that touches on it.

I might add on that. So a question we kind of often get is, does VG1 now replicate the [ managed fund ] ?

Yes. So that is yes.

Yes.

So that was a while ago.

Yes. As a result, in 2020, we now have been out replicating [ shell ].

So next question here. VG1 and VG8 are both still trading at a discount to NTA, how is VGI Partners planning to increase the share price of these funds?

Well, we can't increase the share price, but we can focus on our performance and our core mission as the manager is to deliver a return. So we want to focus on performance. And as we are all investors in these funds, VG1 and VG8, substantial investors, we want to focus on return. We want to focus on return, compound capital -- growth of our capital. So it's a bit like saying if we're the manager of a property, how do we push the price of the property up? We're not -- that will happen due to us maintaining it, doing a good job, have a good tenant profile. That's the analogy to think of. What we can do is, obviously, continue to focus on marketing and the sale of it, which is what we have an Investor Relations team for. We're looking to get some more people to help us do that. We were very close to making decision end of last year, but we've decided to continue the process. We'd rather take a little bit longer to get the right person. We don't want to rush. And we have a lot of interest. We're just taking our time. We want to get the right people. We have a very capable team here. We're just really focused on getting the right people who can deliver a good outcome over time. So I think the key is continuing to communicate, continue to talk about what we're doing, focus on returns, focus on fully franked dividends, particularly for VG8, try and pay a dividend for VG8 as soon as practically possible. And not just pay a dividend that's one-off, pay dividends that can grow and accelerate over time. That are fully franked, because if you're in Australia or an Australian taxpayer, you don't want unfranked dividends. You want fully franked dividends. And I think the other point is, is again, trying to highlight to people that we have an absolute return strategy. In March, the -- our 2 funds delivered positive returns. NTAs were up. And there are not many firms that delivered positive returns in March of 2020. Now we had a couple of months after that of [ areas around ] May, but the second half for each of those funds has shown substantial improvement. And it's up to people to make a decision on whether this is the kind of strategy that makes sense to them and to be able to -- we've got to try and explain to people that you can buy this portfolio, as you can see the top 10 holdings, you can buy these portfolios now at a meaningful discount to what you buy the shares in the market at. And that's one way that we need to sort of get across to people. You get to buy a portfolio that's got nearly 14%, 15% in Amazon, 10% in Mastercard, 8%, 9% in Pinterest. You got to buy that at, like, a 15%, 16%, 17% discount depending on the day, it was 10% but -- and hopefully, the more people who see that and realize that you've got also a management team that's aligned with you, which is, again, there are some managers like that, but not many. I think that, that we'll get back to -- we can hopefully convince people that we had a premium and that we certainly deserve over time to narrow that discount and perhaps one day put it back to premium again. In which case, anyone who buys the shares today is going to have a similar charge return. I'm probably taking too long to answer that, but let's go over to the next one. Give me something that's a bit easier.

Amazon is your largest holding, what impact does Jeff Bezos stepping down have on your thesis?

I'm sure that's easier, but Jeff Bezos stepping down. Well, look, he was the founder of Amazon, he's obviously an exceptional businessman. Warren Buffett's even said that Jeff Bezos is somebody who he thinks is a Six Sigma Event, an extraordinary manager. Bezos is handing over to effectively an original employee of the company, an executive who started the AWS business and is growing that business. And let's be clear, if AWS was separate, this would be one of the biggest businesses on the planet, right? So the new CEO is clearly an exceptional executive. The most trusted lieutenant of Jeff Bezos. Jeff Bezos is not leaving to go and pursue some other interest or do something else, he's remaining Executive Chairman. I would largely speculate that Jeff Bezos has effectively been the Executive Chairman for many years now, with a key group of people effectively running the organization. Because the key for Amazon is to realize that many years ago, it's no longer just an e-commerce business. It's a series of businesses. So he's really effectively running a bit of a conglomerate, a bit like Buffett [ went ] running a conglomerate. Bezos was the Chairman effectively with the conglomerate. He's got his e-commerce business. He's got his web services business. And he actually has now one of the biggest advertising businesses on the planet. If it were separately listed, it would be one of the largest companies of the S&P 500. So I would say, this transition has been going on now for a number of years. It's formalized. I think it's probably why they had an extraordinary, extraordinary fourth quarter result, even exceeded our expectations. While the share price was down overnight, it was really that, the Bezos effect. It shows you how the perception is. But the reality of it is that the business is in extraordinary fine form. It's had a massive accelerant over the last 12 months, massive pull-forward. And it's clearly morphing into 3 key major divisions, e-commerce, web services, gaming -- sorry, advertising. And I'm going to say the fourth point, which is gaming, which is, I'm going to say, the new fourth vertical, which people will probably increasingly start to value over time. So I don't know, we should probably take our next question. I hope that answers it. I don't know if it covers it.

Should VG1 and VG8 consider restructuring to close the discount?

Well, look, the immediate answer to that is no. Look, I can understand the discounts are an issue for an original investor or someone who has bought at less than discount or even at a premium. We're very focused on it. I think I've covered how we want to address that, which is we're going to continue to perform, and we want to continue to -- our program of engaging with shareholders and our Investor Relations team and BDMs selling what we do to investors. And highlighting you can buy 2 very high-quality portfolios, our Global and Asian portfolios at meaningful discounts to the last share price. And if you want to go buy Amazon, well, you can buy Amazon, 15% of portfolio with Amazon in it, at a 15%, 16% discount. And that's something that we need to continue to highlight and articulate with an aligned manager and someone who continues to invest into VG1 and VG8. That's an unusual offering, and we need to continue to market that. So the answer to that is no, though. So next question.

VG8 has a large position in Nuix. Can you tell us a bit more about the investment? Does this mean you're looking at trading IPOs?

Well, I'm going to -- a quick answer to that is no, we're not looking to trade IPOs, but look -- I'm going to hand it over to you, Marco.

Yes, sure. I mean on IPOs, I think we've been very selective, so we're not trading IPOs. We're looking for, again, high-quality businesses, but in this environment, there's a lot of good businesses IPO-ing, but also a lot of elevated valuations. So no, we're not trading IPOs. Look, on Nuix. Look, so Nuix is -- actually a bit of background on the business. It's actually a software business that's involved in investigative and analytics intelligence. So what it's used for is it's extracting data and insights, so manipulating structured and unstructured data. So what does that mean? So it's used by law enforcement agencies or law firms who need to manipulate vast amounts of data, whether that's photos, text, e-mails. And then the core technology that Nuix has is the processing engine that's patented. And clearly, best-in-class. We've conducted a number of channel checks and spoken to customers who all say that Nuix's engine is -- there's no real alternative out there when it comes to the engine. And what's interesting now is that on top of the back-end software, they're also integrating with a front-end software solution so that if you're a lawyer or the FBI, you can not only use the software on the back end to process the data, but also use it to present and interpret the data, which we think is a highly logical combination of the 2 use cases. Really, what we're excited about Nuix is whether they can expand use cases. So today, as we just said, it's used for really the law firms and law enforcement agencies, but there's increased demand for risk, compliance, governance. And so we think they're primed to benefit from their whole shift from corporates adopting more of that software. And in fact, we've seen a number of high-profile customers, for instance like Uber or Tesla, using some of the Nuix technology. And so we think as the Nuix software can expand its use cases in new verticals and get more use directly from the corporates, we think that, that can really underpin the long-term growth. So we're excited by the long-term opportunity. And being a software business, we think the long-term margins can really flex as they scale. So we think that it's an attractive business and attractive investment for us.

Thanks, Marco. For your recent investments, were there any particular regions or sectors where you've found some opportunities?

So it's a pretty broad question. Well, look, we're stock pickers and look, we obviously work on thematics and that's something that I think you probably see in passport portfolios, perhaps. We've had -- and we've talked about it before. We've talked about electronic payments and the shift from cash to cashless. And obviously, there's -- you do a lot of work on that, Tom. Rob has done a little bit of work on that before. So maybe that's an area that we can talk about. It's obviously something Mastercard's -- part of Mastercard [ N. A. ]. There are obviously other ways to play it, we've looked at ways to get exposure to that in Asia, both you and Marco talked of those situations. So I'll maybe talk a little bit about electronic payments or that sort of shift, then maybe Marco, you can talk about -- we've talked about gaming before as a thematic. You talked about Nuex. Nuex is something that we've -- part of the -- having a position in Palantir and another situation that we've been looking at, which is trying to focus on this shift to -- sifting through very highly structured data, analytics, intelligence, AI, that's another part of it, but we've got multiple overlays, but perhaps to get it simple, the big one we've talked about before, which is payments and maybe [ coin ].

Yes. So, as Rob said, we've invested alongside digitalization in payments for a long time. There's been a secular trend as we've shifted from cash transactions to digital transactions. And as we said I think in past references in our calls, that's still 80% of global payments are done through cash transactions. So there's a long runway of growth, even though it feels like in a lot of developed markets where we're getting into the next stages of digitized payment. So there is still this very long runway. [ Picking gents ] maybe also about this year and the impact of COVID, obviously, for the payments companies, the digital payments companies, it's been a bit of a -- it's been big headwind, because consumer spending is down, but what we've actually seen in a lot of markets is an accelerated shift to digital payments. So Mastercard reported this week and actually said that in Asian markets, they've seen an increase in the limit on the value of tap payments. So that's a big boost to tap payments, you can see they increased the limit from, say, $50 to $100, then more and more transactions go over tap. And we've seen in Australia what that does to digitization of payments: when you make more and more transactions on tap, you lower the friction and you see more takeup. So that's a big tailwind. And as a result of that, now what they're seeing is 2/3 of payments outside of the U.S. are actually -- of physical personal payments are actually made via tap payment. So there are these long-term tailwinds that are taking place. And we still think even in the U.S., tap adoption is still at the early stages. The take-up is still low single digits in terms of the volume of payments which are actually transacted through tap, but they're rolling out cards rapidly [ in B sell nickel ] and 300 million cards have actually been deployed which are contactless in the U.S. And I think we're on the fringes of that adoption in the U.S., which we think will drive an incremental acceleration in digital payment volumes, which will be very material for Visa and Mastercard and might add a couple of extra percentage points of growth for those businesses. As Rob said, our exposure in the portfolio. In global, we have -- our second largest position is Mastercard, which is a clear and direct beneficiary. And then in Asia, we have a position which we can build and we haven't disclosed yet, but we found an attractive investment in the payment space, which we have been allocating to and building recently. So we'll continue to look for more opportunities in the space and see this as a long-term secular winner. Want to talk about gaming?

Yes, I could mention gaming very quickly. And I think we've talked about it before. Gaming has obviously been accelerated by COVID, but it's really been a trend that's been growing for a number of years now. Just -- it's capturing an increasing amount of the attention and time so we think interactive entertainment, which gaming is a key component of interactive entertainment, is going to become a key -- this is the leading format of media consumption, really. It's a much more engaging than just looking at TV. And that's really where the attention market share is coming from. It's shifting from whether looking at TV or streaming -- a lot of these gaming companies talk about their key competitor being Netflix, because it's really about competition for attention. And so we think that it is going to continue to capture more time, but it's also -- they're going to monetize -- they've proven -- the monetization model has really changed over the last few years, where it's becoming more market transactions that are recurring. So we think it's becoming a very attractive and interesting business model. Just -- all we have to look at, for example, is a company called Roblox, which is IPO-ing in the U.S. It's a -- had been recently valued at $30 billion, and it's user-generated gaming content. So it's not just a single game, that's a flash in the pan. It's thousands of games and young people in the U.S. are spending 2 to 3 hours a day on Roblox, which is -- it's a massive shift to -- in the area. And so we think gaming is a very attractive segment to be exposed to, however we reflected that in the portfolio. In Asia, in VG8, Nintendo is our biggest position. We think they're very well placed, some of the best IP in gaming and very early in the transition to digital. In Global, we have -- as Rob mentioned, we've got Amazon, which has got -- which has a big gaming business, the leading video game streaming provider in Twitch, which I think has a very long runway, but also, we've got a smaller position, a decent size, but not in the top 10, in another gaming business that we haven't disclosed. So we are -- and we are actively looking at some of the other businesses in the gaming sector, and some of the recent selloffs, we're paying close attention to them. Also Gambol working again. I mean, I guess they're 2 thematics.

Yes, we've gone past an hour. We're happy to keep going. There's a bunch of questions still, we know, and we can't answer all of them, but we'll keep going through them. This is probably related to [ my fit here day ]. Do you still see upside in Amazon and Mastercard from here?

Well, we don't want to talk about upside, talking about share prices and targets and things like that, I don't -- I think we want to avoid those kinds of conversations, but if we continue to own something in a large way, we, by definition, think that it's going to be a good long-term investment and we're going get a good return on our capital. And what does that mean? Well, we think we can generate an internal rate of return out of those positions that meets our compound criteria. So by inference you could say, well, yes, we think that there's upside. If we hold something, we think there's upside. We're not holding it because we think there's downside. That's what we have a short on for. So I don't have to look up, Rob, I don't know if you can patch in a quick chat on Amazon and then do a quick dip [ on cloud ].

Yes. I mean, just quickly on Amazon. Yes. It's obviously a very large company, but I think the core thing to remember on Amazon is that the markets that they've penetrated. So if you look at online retail, and let's take U.S. online retail because that's where they're the highest penetrated, they are still a single-digit share of that retail market. So yes, it's a large business, but we're still [ weak in ] -- relatively early on in terms of penetration. And actually, we were going through the result they reported yesterday, and 1 thing we were talking about yesterday was quite interesting was, when we first initiated the Amazon position was back in 2014, and looking at the holiday sales, the fourth quarter sales that year, it was around $15 billion in North America in terms of retail sales. And the growth was actually slowing at the time. It slowed to roughly mid-single digits. And at the time, there was a lot of concern that Amazon was penetrated in the U.S. and that they were close to their limit in terms of retail sales in the U.S. Fast forward that to the result yesterday, and they did $75 billion in the U.S. in retail in the quarter, which is a 5x increase and growing at about 40%. So it's easy, I think, to look at these large numbers and question how much further can it grow, but I think the more important question is, well, what is the size of the addressable market that they're going after? And that point is equally, if not more, relevant on the AWS side. So we think that cloud computing market, that infrastructure market is probably a $1 trillion market longer term. And so with that in mind, AWS is low, maybe mid-single digits penetrated. So yes, it's a large business, yes, these are large revenue pools, but the markets that they are going after are just enormous.

Money.

I'll be very quick on Mastercard. Obviously, we just discussed the secular growth that we think is still there in Mastercard. And our view is that in core payments, that will result in double-digit revenue growth, and then as that drops through because the operating leverage and some of the buybacks they're doing that's -- it could be low teens to mid-teens EPS growth. So it's an attractive compounder. And then in addition, something that's probably been accelerated because of COVID is the monetization of different payments flows. And so B2B payments is the biggest part of that. And this additional flow, particularly in the U.S., they have 4x the addressable market of personal consumption expenditures. So this is something that Mastercard is -- it's very early days, Mastercard is getting into it. It's not in -- you can't see it in the earnings today, but Mastercard is very well positioned, particularly in real-time payments, where they are the clear leader. So we think that it's -- the core business is very high-quality and attractive compound growth, but there's also these additional option value, which is varied within the business as well.

Rob, let's now take a couple more and look to wrap it up.

Yes, this is for your ETA.

So Hong Kong Exchange's share price is up a lot. What's driven that? And have you sold any?

We're not going to comment on buying selling situations, but it's still a top 10 holding in VG8, I think we have a 5% holding. It's performed very strongly. What's driving it? Well, let's go back to what the business is, Hong Kong Exchange, we're also in Japan Exchange, which has been a decent performer as well. The Hong Kong Exchange, as the name would suggest, is the monopoly operator of the cash equity exchange and derivatives exchange of Hong Kong. There is no competition, there's no alternative platform. And therefore, it is a highly, highly profitable, highly lucrative business. It's run by an exceptional management team who have done a terrific job since they debuted digitalization of the Exchange well over a decade, they've gone more than 15 years now. We were able to buy a position in end of '19 and then bought more as it sold off in '20. And the driver of it has been -- as is the driver of, I guess, most processing engines, and this is -- an exchange is a processing engine and while as they moved away from a floor environment to a screen environment, completely digital processing engine and made a lot of sense. A Mastercard or a Visa, is a processing engine. It's driven by volume. And the trading volumes, in particular for cash equities, have been extraordinary in the Asian region. And it's accelerated particularly in Hong Kong due to a variety of factors. It's driven by foreign flow that is going into Hong Kong and through the structure that exists now between Hong Kong and the Mainland. People who wish to buy Mainland securities -- Chinese Mainland securities, Hong Kong is China, but Chinese Mainland securities, go through the Hong Kong Exchange, and there is a facilitation through its northbound structure. And then Chinese individuals who wish to then purchase Hong Kong securities can go through its southbound structure. And those volumes, to try to put it in context, last year, grew about 100%, and they're continuing to grow now in January, and maybe this is what the question is here, what's happened recently? Well, the volumes are generally growing at 100% and not just on last year, but like on December, and they continue to grow. And it's clearly very positive for the business. It's an extraordinary growth rate. It's all drop-through. So it's a bit like the Chicago Mercantile Exchange, where you haven't got [ all volit ] Every incremental unit is, largely drops to pure profit because of the incremental cost, the frictional cost of the processing is close to 0 because it's a digital engine. And then to turbocharge that, you've got this U.S.-China trade war and then there's restrictions put on Chinese companies, and this delisting phenomenon where Chinese corporates are delisting from America. And where are they choosing to relist? Hong Kong Stock Exchange. And so you put all that together, and as Charlie Munger said, you get a Lollapalooza Effect. You get this very powerful effect in what is already an extraordinary business. And there you go, that's it. So it's -- that answered the question?

The decision to hedge the currency in mid-2020 has worked so far, how are you thinking about the currency now?

So was it worth it?

Yes.

We would have preferred to have hedged it in March, we did a little, not enough. So -- which is part of the hedging [ act ]. Yes, we hedged and I think average price was $0.68 or $0.69. We've been very negative on the Aussie dollar for a number of years, really for parity. It's been a turbo charger to the fund returns, certain global fund return. For the Asian fund, we were long U.S. dollars and yen, I should say. We're -- both funds, to be clear now, are fully hedged to ADB. It's much harder to be -- to be hanging on the Australian dollar at the moment. We've got this position on for the time being. You're seeing central bankers now try to outcompete each other on effectively driving the short-term cash rate to 0, with the real rate largely being negative, because inflation is there at, at least 1% or 2% or whatever percent you may think it is. And therefore, with the cash rate at 0, you've got negative real rates. And in terms of Australia, it certainly looks like the central bank settings for Australia are likely to be positive for the Australian dollar. Being a commodity exporter at the moment is [ COVID ] positive. The trade war and the ongoing effects of the trade war are the negatives and the elephant in the room, but we watch it very closely. It's based on fundamental analysis. Interest rate differentials really went out the window about 9 months ago. And it's largely now about directional GDP growth, recovery of economies, but in a beggar thy neighbor central banking environment, it's very hard to be -- to have strong views on the Australian dollar for the time being. We are now very mindful that the Australian dollar is a risk-on currency. And if there were to be any major market frictions or selloffs, you would see the Australian dollar sharply, sharply come off, and that is something to be very mindful of. So for the time being, we're staying in our current position, but that could change -- as the facts change, we will change our mind. So I could say that we will keep investors informed, but at this stage, we remain fully hedged. I think we might just take another question or two. One [ of us heads today but ] [ Some of this haze in place ]

Maybe on dividends. When is VG8 likely to pay a dividend, since they have a strong corporate reserve?

I've touched on this before. We -- as soon as possible is the answer, as soon as possible. As soon as we have fully franked -- the capacity to pay fully franked dividends and pay a dividend that is sustainable, we will start. My family is one of the biggest shareholders of VG8. I want to fully frank dividends as soon as possible, but I'd like it to be -- I'd like it to be something that -- as a shareholder, something that I can receive and I can count on going forward and will grow. So exactly what we did with VG1. So as soon as possible.

VGI Partners was buying VG1 and VG8 shares in December and January. I think that ceased over the last couple of weeks. Did VGI Partners hit a limit or can they buy more?

Look, we -- the management company has substantial cash on its balance sheet. The management company started buying the [ big bond ] VGI shares on an ongoing basis and has had a restriction. VG1, there was a restriction. I think if you have a look at the exchange lodgements this morning, you'll see that VGI Partners commenced buying VG1 shares. And there's the 2 portfolios of high quality [ issuers ], we've disclosed the top 10. They're trading at meaningful discounts. It's an attractive purchase. And it's something that the Board of VGI Partners will continue to review and assess. But at this stage, VGI partners has allocated some of its substantial cash reserves to buy what we think is an attractive dollar coin at a substantial discount. And as the largest shareholder of VGI Partners, I think that's an attractive [ issue ]. I hope that helps answer the question. I think we should wrap it up.

Okay. So yes. Look, there's still a lot of questions here. So if you haven't had your question answered, any details there, our Investor Relations team will get back to you. Otherwise, please e-mail the question through or give them a call, and we'll get back to you in due course with the answer to those questions. Rob, do you have any ...

No, not really. Look, it went a little bit over. Again, we're happy to answer your questions. We can't answer all of them on this kind of forum. We know that there's a number we didn't get. I think Tom was venturing -- tried to get an assortment. If you've got a question you'd like answered, we want to answer your question. Please contact Gemma, Ingrid or Rachel. If they can't answer your question, either myself, Tom, Marco or Rob Poiner will get back to you. We want you to feel informed and we want to answer your questions. But again, this kind of forum only allows so much. DRP election is 15th of February, close of business, 15th of February. Please seek your own advice, make your own decision. Again, I just reiterate for my shareholding and certainly for the VGI Partners shareholding, I believe, Tom, Marco, Rob, we've all spoken and a number of the directors have spoken. We will be putting to the DRP as well. Please fill that form out. And then the final point, if we don't -- if you haven't given us your contact details, if you're a shareholder of VG1 and VG8 and if you haven't given us your contact details, we don't know who you are. And if we don't know who you are, we can't add you to a list, we can't do any direct communication with you. And if we don't know who you are, and we don't know what your shareholding is, it's one of those circumstances where we just can't get connectivity with you. And please contact us. Let us know your details. And in due course, we're going to be -- once we can, again, start organizing certain events and meetings, and we know who you are and we know where we're going to be, in either Brisbane or Adelaide or Perth, wherever, in Sydney, Melbourne, we can send out an invitation to you and say that please join us at this event. So anyway, thank you very much for your support. We're very grateful to have you as shareholders of both VG1 and VG8. And have a good day, and we look forward to connecting with you soon. Thank you.