Regal Investment Fund · ASX:RF1
Regal Investment Fund — Investor Presentation (September 2021)
36 slides from Regal Investment Fund's investor presentation, Sep 23, 2021
Slide 1: September 23, 2021
September 23, 2021 This presentation deck accompanies an audio recording at 11:30am AEST on September 23, 2021. To view the full webcast please click on the link here and register for the webinar. To access the replay of this recording, please reach out to investorrelations@regalfm.com. For any ques
Slide 2: Regal Investment Fund (ASX.RF1)
Equity Trustees Limited ACN 004 031 298 AFSL 240975 Regal Investment Fund (ASX.RF1) ARSN 632 283 384 September 2021
Slide 3: Disclaimer
Disclaimer Equity Trustees Limited (Equity Trustees) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Regal Investment Fund (ARSN 632 283 384) (ASX: RF1). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Sec
Slide 4: Agenda
RF1 Review Market Update Observations RF1 Outlook Q&A Agenda 1 Regal Investment Fund (RF1) — Review 4 2 Market Update 8 3 Market Observations 3a Mining Super Cycle 11 3b Electric vehicles and batteries 15 3c Merger and acquisitions boom 19 3d Opportunity in small caps 23 3e Asian health care 26 3f S
Slide 5: Investment Team — Speakers
RF1 Review Market Update Observations RF1 Outlook Q&A Investment Team — Speakers Brendan Campbell Phil King O’Connor Craig Collie Chambers Chief Investment Chief Executive Portfolio Manager Portfolio Manger Officer Officer Head of Healthcare Head of Aus. Trading 3
Slide 6: Regal Funds Management
RF1 Review Market Update Observations RF1 Outlook Q&A Regal Funds Management Strong heritage built on long / short investing, pioneering alternatives in Australia since 2004 PERFORMANCE SCALE ALIGNMENT FOCUS • Multi-award winning • Managing FUM of • Owned by founders • Dedicated and performance trac
Slide 7: The Regal Investment Fund (RF1)
RF1 Review Market Update Observations RF1 Outlook Q&A The Regal Investment Fund (RF1) Regal Investment Fund (RF1.ASX) 20% Market 5% Long Short 12% Global 24% Small 9% Long Short 30% Emerging NAV1 Neutral NAV1 Equity NAV1 Alpha NAV1 Companies NAV1 Healthcare NAV1 Companies Fundamental, Fundamental, a
Slide 8: RF1 Investment Performance
RF1 Review Market Update Observations RF1 Outlook Q&A RF1 Investment Performance RF1 Performance Since Inception Since Total Return Fund performance 3 Month4 6 Month5 1 Year 6 2 Year pa.7 Inception pa.8 Since Inception8 Regal Investment Fund1,2 +8.5% +21.5% +48.4% 38.7% +40.9% +116.2% S&P/ASX 300 To
Slide 9: RF1 Investment Highlights
RF1 Review Market Update Observations RF1 Outlook Q&A RF1 Investment Highlights RF1 Overview Performance since listing – Net Asset Value • Performance – Since inception in June 2019, RF1 has A$/share generated total unitholder return of 116%, including cash 4.0 Regal Investment Fund (RF1)1 distribut
Slide 10: Equities Set New All Time Highs
RF1 Review Market Update Observations RF1 Outlook Q&A Equities Set New All Time Highs Australia has significantly underperformed the US stock market Australia, US and Global stock market indices last 10 years — rebased to 100 10 yr. CAGR 700 S&P/ASX 200 Total Return Index +20.4% 600 NASDAQ Composite
Slide 11: Equities Still Attractive v. Bonds
RF1 Review Market Update Observations RF1 Outlook Q&A Equities Still Attractive v. Bonds Equity yield v. real bond yield 12% AU 10YR Indexed Bond Yield Earnings Yield (12mths fwd) 10% 8% 6% 4% 2% --% (2%) 2009 2011 2013 2014 2016 2018 2019 2021 Source: Goldman Sachs as at September 2021 Note: 1. Mon
Slide 12: The Path Out Of The Pandemic
RF1 Review Market Update Observations RF1 Outlook Q&A The Path Out Of The Pandemic Australian experience United Kingdom experience Daily cases Daily cases 2,500 80,000 2,000 60,000 1,500 40,000 1,000 20,000 500 -- -- Jan-20 Jul-20 Jan-21 Jul-21 Jan-20 Jul-20 Jan-21 Jul-21 Daily deaths Daily deaths 7
Slide 13: Changing Market Leadership
RF1 Review Market Update Observations 3A. Super Cycle RF1 Outlook Q&A Changing Market Leadership Resources are poised to retake Australian stock market leadership Market capitalization by sector — share of total index 80% Financials Resources 70% 60% 50% 40% 30% 20% 10% --% 1917 1924 1932 1939 1946
Slide 14: Mining Investment Has Lagged
RF1 Review Market Update Observations 3A. Super Cycle RF1 Outlook Q&A Mining Investment Has Lagged Mining investment and commodity prices % of GDP Index 10 Commodity price index1 Mining investment share of GDP2 (LHS) 180 9 160 8 140 7 120 6 100 5 80 4 60 3 2 40 1 20 -- -- 1987 1991 1995 1999 2003 20
Slide 15: 100 Years Of Commodity Valuation
RF1 Review Market Update Observations 3A. Super Cycle RF1 Outlook Q&A 100 Years Of Commodity Valuation Commodity prices are at their cheapest level relative to stocks in over 100 years Goldman Sachs Commodity Index (‘GSCI’) v. Dow Jones Index 1.4 Ratio | GSCI : Dow Jones 1.2 1.0 0.8 0.6 0.4 0.2 -- 1
Slide 16: Commodity Prices Squeeze
RF1 Review Market Update Observations 3A. Super Cycle RF1 Outlook Q&A Commodity Prices Squeeze Commodity prices since beginning of 2020 — indexed to 100 600 Aluminium Lithium Carbonate 500 +424% Hard Coking Coal Natural Gas 400 Uranium +274% 300 +168% 200 +104% +59% 100 -- Dec-19 Apr-20 Aug-20 Dec-2
Slide 17: Electric Vehicles Sales To Accelerate
RF1 Review Market Update Observations 3B. EV & Batteries RF1 Outlook Q&A Electric Vehicles Sales To Accelerate Electric Vehicles sales are projected to increase to more than 90m by 2040 Battery Electric Vehicles sales globally, million vehicles 2012 → 2021: +55% CAGR 2022 → 2039: 17% CAGR 2040 → 205
Slide 18: Global Battery Market To Triple Over Next 10 Years
RF1 Review Market Update Observations 3B. EV & Batteries RF1 Outlook Q&A Global Battery Market To Triple Over Next 10 Years Falling battery prices has accelerated adoption and market growth Price for lithium-ion battery packs Global battery market size projection US$ per kWh US$billion per annum -88
Slide 19: A Strong Year For Green Metals
RF1 Review Market Update Observations 3B. EV & Batteries RF1 Outlook Q&A A Strong Year For Green Metals Mining-focused industries — share price performance 2021, rebased to 100 300 Year to date 280 +165% 260 240 +140% 220 200 180 +75% 160 140 +30% 120 100 80 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Slide 20: A Strong Year For Battery Technology
RF1 Review Market Update Observations 3B. EV & Batteries RF1 Outlook Q&A A Strong Year For Battery Technology Battery-focused industries — share price performance 2021, rebased to 100 550 Year to date 500 +396% 450 400 +260% 350 300 250 200 150 +62% 100 50 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 J
Slide 21: Increasing M&A and Corporate Activity
RF1 Review Market Update Observations 3C. M&A Boom RF1 Outlook Q&A Increasing M&A and Corporate Activity Boom in M&A and corporate activity an ongoing tailwind Announced M&A involving an Australian target (A$bn) 250 239 231 Public Non-Public 215 200 166 151 150 150 143 136 136 116 103 108 109 107 98
Slide 22: Small Cap Tech Acquisitions
RF1 Review Market Update Observations 3C. M&A Boom RF1 Outlook Q&A Small Cap Tech Acquisitions Share price return since beginning of 2019 — rebased to 100 1,000 BigTinCan (BTH) +847% 900 Family Zone (FZO) 800 Aussie Broadband (ABB) 700 Dubber (DUB) 600 +388% 500 +381% 400 300 +198% 200 100 -- Jan-19
Slide 23: Private Market Deals
RF1 Review Market Update Observations 3C. M&A Boom RF1 Outlook Q&A Private Market Deals Capital raised prior to IPO for VC-backed companies $250m $200m $150m $100m $50m $0m 2006 2008 2010 2012 2014 2016 2018 2020 Source: Goldman, as at July 2021 21
Slide 24: Opportunities In Emerging Companies
RF1 Review Market Update Observations 3C. M&A Boom RF1 Outlook Q&A Opportunities In Emerging Companies Successful pre IPO investments in RF1 Select pre IPO investments in RF1 coming to market Source: Regal as at 20 September 2021 Note: This is a selection of pre IPO investments made by the Regal Eme
Slide 25: Small Caps Shine In Low Growth Market
RF1 Review Market Update Observations 3D. Small Caps RF1 Outlook Q&A Small Caps Shine In Low Growth Market ASX200 Index (top 10 companies) Select Regal Small Caps Revenue CAGR (FY19 – FY23) Revenue CAGR (FY19 – FY23) CSL Ltd (CSL) 8% PointsBet (PBH) 120% Wesfarmers (WES) 6% Zip Co (Z1P) 83% Rio Tint
Slide 26: Broker Research Coverage In Decline
RF1 Review Market Update Observations 3D. Small Caps RF1 Outlook Q&A Broker Research Coverage In Decline Total number of Australian sell-side earnings estimates 1,600 1,500 1,400 1,300 1,200 1,100 1,000 2013 2014 2015 2016 2017 2018 2019 2020 2021 Source: Bloomberg, Broker research as at September 2
Slide 27: Active Management Adds Alpha In Small Caps
RF1 Review Market Update Observations 3D. Small Caps RF1 Outlook Q&A Active Management Adds Alpha In Small Caps Australian Fund Manager Outperformance Per Annum vs Benchmark — 5 years to August 20211 16% +14.7% 14% Australian Large Cap Managers Australian Small Cap Managers vs S&P/ASX 300 Total Retu
Slide 28: Excellent Opportunities in Asian Health Care Stocks
RF1 Review Market Update Observations 3E. Health Care RF1 Outlook Q&A Excellent Opportunities in Asian Health Care Stocks Health care spend in Asia is set to continue to grow at a multiple of GDP, fueled by economic growth and a population which is aging more rapidly than in the West¹. Asia health s
Slide 29: Wide Dispersion Equals More Opportunity For Alpha
RF1 Review Market Update Observations 3E. Health Care RF1 Outlook Q&A Wide Dispersion Equals More Opportunity For Alpha Healthcare sector performance — 2021 year to date Japan Korea China & Hong Kong Range = 51% Range = 60% Range = 111% Samsung Biologics 17% Wuxi Biologics 17% Chugai -22% Hoya 25% C
Slide 30: Shorting Bear Market
RF1 Review Market Update Observations 3F. Shorting RF1 Outlook Q&A Shorting Bear Market Performance of the Top 20 most shorted stocks1 in the S&P/ASX 200 Index 30% Short Alpha | positive when shorts underperform the Index Rolling 12 months Short Alpha (RHS) 50% 40% 20% Short Alpha: underperformance
Slide 31: Delivering Unitholder Value
RF1 Review Market Update Observations RF1 Outlook Q&A Delivering Unitholder Value RF1 NAV and share price premium – adjusted for distributions A$/share Premium/(discount) to NAV 4.5 S&P/ASX 300 Total Return Index rebased to RF1 NAV (A$/share │ LHS) 30% Top quartile Regal Investment Fund NAV (A$/shar
Slide 32: Investor Q&A
RF1 Review Market Update Observations RF1 Outlook Q&A Investor Q&A Brendan Campbell Phil King O’Connor Craig Collie Chambers Chief Investment Chief Executive Portfolio Manager Portfolio Manger Officer Officer Head of Healthcare Head of Aus. Trading 30
Slide 33: Appendix
REGAL FUNDS MANAGEMENT, APPENDIX 31
Slide 34: RF1 Strategy Returns
RF1 Review Market Update Observations RF1 Outlook Q&A Appendix RF1 Strategy Returns Performance since listing Annualised Since Fund performance 20193 2020 20214 Inception5 Regal Investment Fund1 +11% +47% +33% +43% S&P/ASX 300 Total Return Index2 +5% +2% +16% +10% Annualised Since Strategy performan
Slide 35: Distribution History
RF1 Review Market Update Observations RF1 Outlook Q&A Appendix Distribution History Regal Investment Fund – net asset value A$/share Regal Investment Fund NAV S&P/ASX 300 Total Return Index rebased to RF1 NAV 4.5 4.5c distribution 18.6c distribution 5.0c distribution 101.1 c distribution $3.912 4.0
Slide 36: Regal Investment Fund (ASX: RF1)
Thank you for joining the Investor Update for the, Regal Investment Fund (ASX: RF1) If you have any questions following this presentation, please contact our Registry on: regalfund@linkmarketservices.com.au Alternatively, please visit the manager’s website: www.regalfm.com Thank you again for your c
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