Regal Investment Fund · ASX:RF1

Regal Investment Fund — Investor Presentation (April 2020)

28 slides from Regal Investment Fund's investor presentation, April 2020

  1. Slide 1: Webinar audio recording notice

    This presentation deck accompanied an audio recording. To view the full webcast please click on the link here. 0

  2. 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 April 2020

  3. 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

  4. Slide 4: Agenda

    Agenda 1 Regal Funds Management 3 2 Looking back – March 6 3 Where To From Here – Economic Outlook 11 4 Regal Investment Fund (RF1.ASX) 22 5 Investor Q&A 25 3

  5. Slide 5: Regal Funds Management

    Regal Looking Back Outlook RF1 Q&A Regal Funds Management Regal has a heritage built on long / short investing, pioneering the development of the hedge fund & alternatives industry in Australia since 2004 PERFORMANCE SCALE ALIGNMENT FOCUS ― Top quartile long ― Managing over ― 100% privately ― A dedi

  6. Slide 6: Experience Across Market Cycles

    Regal Looking Back Outlook RF1 Q&A Experience Across Market Cycles Brexit Trump US / China Global Financial Crisis European Debt Crisis Vote Elected Trade Wars COVID-19 800 Tasman Market Neutral Fund S&P/ASX 300 Accumulation Index +279% 400 200 +51% 100 50 2004 2006 2008 2010 2012 2014 2016 2018 202

  7. Slide 7: Investment Team - Speakers

    Regal Looking Back Outlook RF1 Q&A Investment Team - Speakers Phil King Dr Craig Collie Jovita Khilnani Ben McCallum Chief Investment Officer Portfolio Manager Portfolio Manager Portfolio Manager 6

  8. Slide 8: The Steepest Decline In Equity Markets On Record

    Regal Looking Back Outlook RF1 Q&A The Steepest Decline In Equity Markets On Record --% (10%) S&P 500 1973/'74 (20%) ASX All Ords 1980/'81 (30%) (40%) Great Depression COVID-19 (Dow Ind. | 1929/'30) (50%) (S&P/ASX 200 | 2020) Global Financial Crisis (S&P/ASX 200 | 2008/'09) Black Monday - 89% | 1,04

  9. Slide 9: Worst Quarter For The ASX Since 1987

    Regal Looking Back Outlook RF1 Q&A Worst Quarter For The ASX Since 1987 Healthcare and Consumer Staples outperform, S&P/ASX 200 – March quarter Energy and Real Estate lag – March quarter 7,500 2.5 Healthcare 4% 7,000 Cons. Stap. (2%) 2.0 Utilities (9%) 6,500 Telecom (15%) 1.5 6,000 Materials (21%) 5

  10. Slide 10: Selling Was Widespread In March

    Regal Looking Back Outlook RF1 Q&A Selling Was Widespread In March S&P/ASX 300 — cumulative proportion of stocks with performance worse than a given percentage in March 6% of stocks (18) +ve 100% 13% fallen by > 50% 61% fallen by > 25% 90% -21%, S&P/ASX 300 return 80% 70% -30%, median stock return 6

  11. Slide 11: Australia — Underperforming In Up And Down Markets

    Regal Looking Back Outlook RF1 Q&A Australia — Underperforming In Up And Down Markets S&P/ASX 200 – March quarter Eurozone Australia South Korea World USA Japan Hong Kong China 35% 29% 29% 32% 27% 20% 17% 16% 16% 17% 17% 12% 12% 13% 9% 3% -19% -29% -28% -37% -36% -34% -34% -38% 1 Janruary 2019 to Pe

  12. Slide 12: Growth Continues To Outperform Value

    Regal Looking Back Outlook RF1 Q&A Growth Continues To Outperform Value S&P/ASX 200 Value and Growth – March quarter Premium of 'High' vs 'Low' P/E firms 120 90 110 80 100 70 90 87 60 80 79 50 70 69 40 60 50 30 ASX200 Growth Value Top 40 vs bottom 40 across the ASX 200 on basis of NTM P/E Source: Br

  13. Slide 13: Flattening The Curve Appears To Be Working

    Regal Looking Back Outlook RF1 Q&A Flattening The Curve Appears To Be Working Number of reported COVID-19 cases, 8 days after Australian daily new confirmed cases recording a country’s 1,000th case 500 14,000 450 12,000 400 350 10,000 300 8,000 250 200 6,000 150 4,000 100 2,000 50 -- -- Source: Aust

  14. Slide 14: Containment Measures Likely In Place For 12 Months

    Regal Looking Back Outlook RF1 Q&A Containment Measures Likely In Place For 12 Months Development and manufacturing difficult, deployment could be staged • Vaccines are not straightforward to develop and can have efficacy and durability limitations Vaccine likely, but still eg (influenza vaccine, SA

  15. Slide 15: Very Difficult To Predict How Bad The Recession Will Be

    Regal Looking Back Outlook RF1 Q&A Very Difficult To Predict How Bad The Recession Will Be Global GDP forecasts, yoy % change US weekly jobless claims — 000’ people Australia US Europe Asia World 8,000 Peak: 6.8m jobless claims 2018 2019 2020 F 2021 F 15% 7,000 6,000 10% 5,000 5% 4,000 3,000 --% 2,0

  16. Slide 16: Australian Government Well Positioned To Respond

    Regal Looking Back Outlook RF1 Q&A Australian Government Well Positioned To Respond Federal Government net debt to GDP – before the GFC and now 180% 154% 2007 2019 140% 121% 100% 90% 83% 81% 76% 69% 60% 42% 40% 26% 21% 20% 14% 8% (20%) Source: Broker research 15

  17. Slide 17: Consumer Sector — Stimulus Is Significant

    Regal Looking Back Outlook RF1 Q&A Consumer Sector — Stimulus Is Significant Fiscal policy measures — top 3 Announced fiscal stimulus — % of GDP Job Keeper Payment $1,500 / fortnight subsidy $130bn payments for employees 12% 11% Cashflow to business Up to $100k to small businesses $32bn Small bank f

  18. Slide 18: Australian Household’s With Record Debt

    Regal Looking Back Outlook RF1 Q&A Australian Household’s With Record Debt Household debt to asset ratios Household debt to income ratios 35% Total household Debt / Household Assets 200% Total Household Debt to disposable income Housing Debt / Housing Assets Housing Debt to disposable income 30% 160

  19. Slide 19: Low Interest Rates Hide Rising Corporate Debt

    Regal Looking Back Outlook RF1 Q&A Low Interest Rates Hide Rising Corporate Debt S&P/ASX 200 net debt back at GFC levels EBIT interest coverage has risen 7.0x 3.5x 5x 4.3x 3.0x 4x 6.0x 3.0x 2.9x 2.8x 2.5x 3x 2.5x 5.0x 1.9x 2.0x 2x 4.0x 1.5x 1x 3.0x 1.0x --x 2002 2005 2008 2011 2014 2017 2020 EBIT in

  20. Slide 20: Heavily Indebted Companies At Risk

    Regal Looking Back Outlook RF1 Q&A Heavily Indebted Companies At Risk S&P/ASX 200 REITs – Debt as a share of assets Net debt / 12m forward EBITDA 40% 16x Unibail 35% 14x Westfield Challenger Ltd $26b $6b 30% 12x Scentre Group 25% 10x Sydney Airport $14b 2002 2005 2008 2011 2014 2017 2020 $10b Transu

  21. Slide 21: ECM Activity Certain To Pick-up Short Term

    Regal Looking Back Outlook RF1 Q&A ECM Activity Certain To Pick-up Short Term Secondary capital raisings — % of ASX market cap, last twelve months Regal 12% forecast 10% 8% 6% 4% 2% --% 2007 2008 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Source: Broker research, Reserve Bank o

  22. Slide 22: The GFC Experience

    Regal Looking Back Outlook RF1 Q&A The GFC Experience GFC equity raisings for capital structure purposes >$2bn — performance relative to the S&P/ASX 300 98% 104% 1 day 1 week 26% 27% 21% 20% 20% 19% 15% 16% 13% 10% 8% 8% 8% 8% 8% 4% 3% 4% 4% 2% 1% -1% Date Jun-09 Apr-08 Nov-08 Jun-09 May-09 May-09 N

  23. Slide 23: Lessons From The GFC

    Regal Looking Back Outlook RF1 Q&A Lessons From The GFC 1 Stay liquid 2 Balance Sheet drives stock returns 3 Quantum of recapitalisation will surprise 4 Western weakness eventually impacts China and commodity prices 5 Quality of investors and Redemption Terms matter 6 Be patient for upturn but captu

  24. Slide 24: RF1 Strategy & Weightings

    Regal Looking Back Outlook RF1 Q&A RF1 Strategy & Weightings Market Neutral Strategy Emerging Companies Australian Small Global Alpha Australian Long Strategy Companies Short Equity Strategy Strategy Strategy 41% 26% 16% 10% 7% 40% ― 60% 0% ― 25%2 0% ― 25% 0% ― 25% 0% ― 25% Regal Investment Fund (RF

  25. Slide 25: RF1 Investment Performance

    Regal Looking Back Outlook RF1 Q&A RF1 Investment Performance Performance since listing Since Fund performance April3 20204 20195 inception6 Regal Investment Fund1 +10% -17% +11% -8% ASX 300 Total Return Index +8% -17% +5% -13% Since 2 3 4 5 Strategy performance within RF1 April 2020 2019 inception6

  26. Slide 26: RF1 Share Price And NAV Since Inception

    Regal Looking Back Outlook RF1 Q&A RF1 Share Price And NAV Since Inception RF1 share price and NAV $3.0 Buy-back announced 4.5c distribution $2.5 $2.27 $2.0 $2.06 $1.5 $1.0 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 1 RF1 NAV ($/share) RF1 Share Price S&P/ASX 300 To

  27. Slide 27: Investor Q&A

    Regal Looking Back Outlook RF1 Q&A Investor Q&A Phil King Dr Craig Collie Jovita Khilnani Ben McCallum Chief Investment Officer Portfolio Manager Portfolio Manager Portfolio Manager 26

  28. Slide 28: Australia’s Most Highly Awarded Alternatives Manager

    Australia’s Most Highly Awarded Alternatives Manager Fund | Ratings Awards Regal Funds Management Australian Hedge Fund of the Nominee, Australian Winner, Firm of the Australian Hedge Fund of Year ― 2019, 2016, 2014 Equities Alternatives ― 2019 Year ― 2018 the Year ― 2011 Market Neutral Strategy Win

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