Regal Partners Limited · ASX:RPL
Regal Partners — H1 2022 Earnings Presentation
45 slides from Regal Partners's earnings presentation, Aug 23, 2022
Slide 1: 1H22 Financial Results Briefing Presentation
Regal Partners Limited ABN 33 129 188 450 Level 47 Gateway, 1 Macquarie Place Sydney NSW 2000 Australia T. +61 2 8197 4350 AFSL No. 321789 | SEC Registered www.regalpartners.com 23 August 2022 ASX Market Announcements Office ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 1H22 Financial
Slide 2: Contact Information
CONTACT INFORMATION: Ingrid Groer, CFA Head of Corporate Affairs Regal Partners Limited Phone: 1800 571 917 (inside Australia) +61 2 8197 4350 (outside Australia) Email: investorrelations@regalpartners.com 2
Slide 3: 1H22 Results Presentation
Regal Partners Limited (ASX:RPL) 1H22 Results Presentation 23 August 2022
Slide 4: Disclaimer
Disclaimer Regal Partners Limited (ABN 33 129 188 450) (Regal Partners) is the holder of an Australian Financial Services Licence (No. 321789) and is SEC registered. The information in this presentation (Information) has been prepared by Regal Partners and is current as at the date of this presentat
Slide 5: Contents
Contents Page Section Speaker Page 4 Section 1: 1H22 Highlights Brendan O’Connor (CEO) Page 6 Section 2: Corporate update Brendan O’Connor (CEO) Page 21 Section 3: Financials Ian Cameron (CFO) Page 25 Section 4: Strategy and outlook Brendan O’Connor (CEO) Page 28 Section 5: Q&A Brendan O’Connor (CEO
Slide 6: 1. 1H22 Highlights
1. 1H22 Highlights Brendan O’Connor (Chief Executive Officer) July 2022
Slide 7: 1H22 Highlights (six months to June 2022)
1H22 Highlights (six months to 30 June 2022) Merger • Merger between VGI Partners Limited (VGI Partners) and Regal Funds Management Pty Limited (RFM) completed on 3 June 2022 • Merged group named Regal Partners Limited (ASX ticker: RPL) • Creates a market-leading provider of alternative investment s
Slide 8: 2. Corporate update
2. Corporate update Brendan O’Connor (Chief Executive Officer) July 2022
Slide 9: Regal Partners aims to be the leading provider
“Regal Partners aims to be the leading provider of alternative investment strategies in Australia, delivering superior investment returns through a high-quality investment and operational team” 7
Slide 10: Introducing Regal Partners Limited
Introducing Regal Partners Limited (ASX:RPL)1 Regal Partners Limited is an ASX-listed, specialist alternative investment manager with approximately $4.7bn RPL $531m A$4.7bn in funds under management. • Regal Partners (ASX:RPL) was formed on 3 June 2022, following Funds Under ASX ticker Market capita
Slide 11: Five key takeaways
Five key takeaways Regal Partners Limited is a specialist, diversified alternatives investment management business: 1. managing $4.7bn1 in FUM across Long/Short Equities, Private Markets, Real and Natural Assets and Capital Solutions, on behalf of institutional, family office, charitable and private
Slide 12: Exceptional investment capabilities across a range of alternative asset classes
Exceptional investment capabilities across a range of alternative asset classes Regal Funds is a multi- VGI Partners Limited is a Kilter Rural1 offers private Attunga Capital1 offers award winning specialist global, high conviction market exposure to private market exposure to alternatives investmen
Slide 13: Introducing Regal Funds Management
Introducing Regal Funds Management July 2022
Slide 14: Introducing Regal Funds Management (RFM)
Introducing Regal Funds Management (RFM) A history of growth and leading performance since 2004 RFM is a specialist alternatives investment manager, pioneering the hedge fund, private market and alternatives industry in Australia since 2004 FUNDS UNDER MANAGEMENT1 • Multi-award winning asset managem
Slide 15: Regal Funds Management: Strong momentum in FUM growth
Regal Funds Management Strong momentum in FUM Growth: CAGR +23% over last 5 years $3,174m June 2017 June 2022 3,500 3,000 INVESTMENT 5 13 x2.6 STRATEGIES 2,500 2.8x IN 5 YEARS 2,000 INVESTMENT 1,500 PROFESSIONALS 19 40 x2.1 $1,116m 1,000 500 ASSET CLASSES 1 4 x4 0 30-Jun-17 30-Jun-22 Long/short equi
Slide 16: Regal Funds Management performance
Regal Funds Management performance Fund performance since inception1 Fund (as at 30 June 2022) Launch year Since inception p.a. Fund (as at 30 June 2022) Launch year Since inception p.a. Long/short equities (unlisted) Private markets Regal Atlantic Absolute Return Fund 2004 23.8% Regal Emerging Comp
Slide 17: Well diversified across asset class and liquidity profile
Regal Funds Management Well diversified across asset class and liquidity profile FUM BY ASSET STRATEGY FUM BY FUND LIQUIDITY Capital solutions, 2% Daily, 16% Real and natural assets, 12% Term and closed- end capital, 29% Private markets, Monthly, 21% 26% Long short equities, 59% Quarterly & semi- an
Slide 18: Favourable client mix and distribution channels
Regal Funds Management Favourable client mix and distribution channels FUM BY CLIENT CHANNEL >40% Institutional & other, 8% Of client relationships held Closed end capital/retail, 21% directly HNW/family office, 22% Internal & philanthropic, 25% <5% No external client with greater than 5% of FUM Adv
Slide 19: FY22 – A transformational year
Regal Funds Management FY22 – A transformational year • Over $700m in Net Flows in the 12 months to 30 June 20221 • Successful completion of Capital Raise for ASX-listed investment trust, the Regal Investment Fund (ASX:RF1) Over $200m raised via oversubscribed Wholesale Placement and 1:3 Entitleme
Slide 20: Regal Partners
Regal Partners July 2022
Slide 21: Merger update
Merger update • Integration and collaboration between teams progressing well. Management • New RPL branding and website launched; marketing and distribution being led by Regal Funds Management. and operations • Transitioning to one dealing and risk management system. • Work underway on building and
Slide 22: Regal Partners – A strong platform for continued growth
Regal Partners – A strong platform for continued growth Well diversified across asset class, liquidity profile and client type – FUM as at 30 June 2022 FUM BY ASSET STRATEGY FUM BY FUND LIQUIDITY FUM BY CLIENT CHANNEL Capital solutions, Institutional & 1% other, 6% Real and natural assets, Daily, 13
Slide 23: 3. Financials
3. Financials Ian Cameron (Chief Financial Officer) July 2022
Slide 24: Pro forma normalised profit or loss statement
Pro forma normalised profit or loss statement 6 months to 6 months to 6 months to 12 months to Jun 2021 Dec 2021 Jun 2022 Jun 2022 (1H21)1 (2H21) (1H22) $m Average FUM ($bn)2 5.8 6.0 5.6 5.8 • The statutory results have been accounted for under the Average management fee (%) 1.28% 1.18% 1.20% 1.19%
Slide 25: Pro forma group FUM
Pro forma group FUM Movements over last 12 months Investment Investment 30 Jun 20211 Net flows Other3 31 Dec 20211 Net flows Other3 30 Jun 20221 performance2 performance2 $bn Investment business Regal Funds Management4 2.6 0.6 0.5 0.1 3.8 0.2 (0.7) (0.0) 3.2 VGI Partners 3.2 (0.3) (0.3) (0.1) 2.5 (0
Slide 26: Statutory balance sheet
Statutory balance sheet 30 June 2022 • Robust and liquid balance sheet; no debt; surplus capital of approximately $50m primarily $m Group represented by seed capital in listed funds (VG1 and VG8) and Regal Funds Management (RFM) unlisted funds Cash and cash equivalents 47.2 • No interim dividend, no
Slide 27: 4. Strategy and outlook
4. Strategy and outlook Brendan O’Connor (Chief Executive Officer) July 2022
Slide 28: Well positioned for growth through the cycle
Well positioned for growth through the cycle Diversified, scalable and growing Attractive market Strong business platform tailwinds economics • Attractive management fee margins • Well diversified across types of clients, skew • Increasing investor appetite for to high-value wholesale investors, HNW
Slide 29: Multiple opportunities for growth
Multiple opportunities for growth 1. 2. 3. 4. 5. Maintain current Seed new strategies Continue investment Inorganic growth Attract & retain the fundraising momentum / partnerships in distribution opportunities best talent • Continue to grow and scale • Seek to hire or partner with • Assess and revie
Slide 30: 5. Q&A
5. Q&A Brendan O’Connor (Chief Executive Officer) & Ian Cameron (Chief Financial Officer) July 2022
Slide 31: Appendix
Appendix July 2022
Slide 32: Reconciliation of statutory to pro forma normalised NPAT
Reconciliation of statutory to pro forma normalised NPAT 6 months to 6 months to Jun 2021 Jun 2022 (1H21) (1H22) • The statutory results for the half year ended 30 June 2022 have $m been presented to reflect Regal Funds Management for the period from 1 January 2022 to 3 June 2022, and the newly Stat
Slide 33: Merger rationale
Merger rationale • Creation of a market-leading provider of alternative investment strategies with total FUM of approximately $4.7 billion1 Diversification • Provides exposure to a growing, scalable and well-diversified investment management group, providing hedge fund, private market and real asset
Slide 34: Merger summary and timeline
Merger summary and timeline 1. • 31 January 2022 - Regal Funds Management (Regal) and ASX-listed VGI Partners Limited (VGI) enter exclusive discussions regarding a potential merger of the two businesses, signing a non-binding merger term sheet. • 30 March 2022 – Discussions progress, with a binding
Slide 35: RPL steered by a Board with deep experience
RPL steered by a Board with deep experience Michael Cole AM, Independent Chair Ian Gibson, Executive Director Michael has over 40 years’ experience in investment banking and portfolio Ian has over 25 years’ experience in financial markets, spending the last 15 years management. Michael has held the
Slide 36: Experienced and high calibre team
Experienced and high calibre team Board with a deep bench of experience Michael Cole AM Sarah Dulhunty Jaye Gardner Ian Gibson David Jones AM Brendan O’Connor Independent Chair Independent NED Independent NED Executive Director Non-Executive Director CEO & Managing Director Supported by an experienc
Slide 37: Our behaviours
Our behaviours Never lose sight of our clients and always act with integrity. Seek to constantly exceed expectations, both in investment performance and client experience. Clients first Delighted clients are our best advocates. Custodians of Everyday we remind ourselves of the fiduciary duty we owe
Slide 38: Why alternatives?
Why alternatives? Significant increase in allocation to alternatives1 Global AUM (split By product %/US$trillions) Global revenue split By product (%/US$billions) Alternative asset management can deliver enhanced returns that are $32 $46 $93 $103 $136 $112 $163 $315 $331 $437 uncorrelated to traditi
Slide 39: Asset class: Long/short equities
Asset class: Long/short equities Annualised performance (10 years)1 WHAT IS LONG/SHORT EQUITIES? 16% 13.7% 14% 12.0% – Long/Short equity funds contain a range of strategies that provide certain exposure to market risk (or beta) and 12% 10.8% 9.4% can enhance market returns and/or reduce risk. 10% 8%
Slide 40: Asset class: Private markets
Asset class: Private markets WHAT IS PRIVATE MARKETS? – Private market opportunities combines the attributes of private equity and hedge fund investing to provide access to unlisted and listed opportunities among the next generation of Australia’s leading companies. – Spanning both private and publi
Slide 41: Asset class: Real & natural assets – water
Asset class: Real & natural assets – water WHAT IS WATER? Murray Darling Basin region – The southern Murray Darling Basin (sMDB) market investment returns comprise an attractive mix of yield and capital growth. The number of permanent water entitlements available in Australia are fixed adding to the
Slide 42: Asset class: Real & natural assets – carbon
Asset class: Real & natural assets – carbon WHAT IS CARBON? Compliance vs voluntary carbon prices (USD) $120 – International agreements such as the Kyoto Protocol and Paris Agreement have been established to codify and co- $100 Compliance Voluntary ordinate global efforts to reduce emissions in the
Slide 43: Asset class: Capital solutions – private credit
Asset class: Capital solutions – private credit WHAT IS PRIVATE CREDIT? Illustrative capital structure – Private Credit typically refers to directly originated, illiquid debt instruments that are not traded on an exchange and 100% therefore are typically held-to-maturity. Investments are made both b
Slide 44: Asset class: Capital solutions – Resources Royalties
Asset class: Capital solutions – Resources Royalties WHAT IS RESOURCES ROYALTIES? Security and rights – The nature of a royalty often enables it to circumvent many of the direct risks of mining, thereby improving the Debt • Royalties sit between debt and equity in the capital risk/reward normally as
Slide 45: Regal Funds: Australia's most highly awarded alternatives manager
Regal Funds: Australia’s most highly awarded alternatives manager REGAL FUNDS MANAGEMENT INDIVIDUAL STRATEGIES AWARDED Market Neutral Australian Long Short Australian Small Emerging Companies Regal Investment Kilter Rural Strategy Equity Strategy Companies Strategy Strategy Fund (ASX:RF1) Finalist,