A prominent Australian businessman who made his wealth from a telecom venture wants to build an investment house, a report says.

The founder of Australia-based telecoms firm Vocus Communications, James Spenceley, has plans to grow a A$1 billion ($756 million) fund management business, according to the Australian Financial Review.

After his firm's A$3.8 billion merger with M2 Group in February, Spenceley stepped back from his role as chief executive, handing the reins to M2 boss Geoff Horth and taking up a part-time role as executive director, the report said.

Having cashed in $26.6 million of Vocus stock last week, Spenceley, who still holds 1 million shares in Vocus, plans to establish MHOR Asset Management with fund manager Gary Rollo, formerly of Renaissance Asset Management and one of Vocus's earliest institutional investors, the article said. Spenceley founded Vocus in 2007.

MHOR will at first focus on small-cap companies or those close to listing on the Australian Securities Exchange. Eventually, a far wider range of markets are on the table, the news organisation, which interviewed Spenceley, said.