VGI Partners Limited (ASX:VGI)  has explored the possibility of merging with or being acquired by a number of rival money managers, including Phil King's Regal Funds Management Pty Limited and Challenger Limited (ASX:CGF). The VGI has engaged Jefferies banker Michael Stock to run the process, The Australian has confirmed. Luciano and other senior VGI figures have already informed some of the fund's staff and have run the proposal by their largest investors.

A VGI spokesman declined to comment, as did King. A Challenger spokeswoman did not respond to a request for comment. Stock, previously at Credit Suisse and UBS, has been a long-time VGI investor.

Challenger was being advised by Macquarie. Those briefed on the discussions - speaking on condition of anonymity - said a move to merge VGI and Regal would leave each as equal partners. It is unclear which other funds are in discussions with VGI, and sources said Regal was the obvious partner.