Regal Investment Fund · ASX:RF1
Regal Investment Fund — Investor Presentation (October 2024)
40 slides from Regal Investment Fund's investor presentation, Oct 30, 2024
Slide 1: Regal Investment Fund (ASX:RF1) Investor Update & Q&A
Regal Investment Fund (ASX:RF1) Investor Update & Q&A | 30 October 2024 This presentation deck accompanies a webinar scheduled for 11:00am AEDT on 30 October 2024. To view the webinar, please click on the link here to register. To access the recording, or should you have queries relating to Regal, p
Slide 2: Investor Update & Q&A
Investor Update & Q&A Regal Investment Fund October 2024
Slide 3: Welcome & Regal Update
Welcome & Regal Update Charlie Aitken, Investment Director, Regal Partners
Slide 4: Disclaimer
Disclaimer Equity Trustees Limited (“Equity Trustees”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Regal Investment Fund and has authorised the issue of this document (Information). Equity Trustees is a subsidiary of EQT Holdings Limited (ABN 22607 797 615), a publicly liste
Slide 5: Contents
Contents Page Section Page 4 Welcome & Regal Update Page 14 Market Update Page 15 Global Long Short Page 22 Small Companies Page 26 Emerging Companies Page 30 Global Alpha Page 34 Water Strategy Page 39 Q&A Discussion 5
Slide 6: Speakers
Speakers CHARLIE AITKEN PHILIP KING JAMES SIOUD BEN McCALLUM JOHN MANCHEE Investment Director Co-Founder & CIO Portfolio Manager Portfolio Manager Head of Trading Regal Partners Long/Short Equities Small Companies Emerging Companies Regal Funds Regal Funds Regal Funds Regal Funds RF1 Investment RF1
Slide 7: The Regal Investment Fund (RF1) listed in 2019
The Regal Investment Fund (RF1) listed in 2019 to provide investors with exposure to a diversified selection of alternative investment strategies managed by Regal Its objective is to produce attractive risk-adjusted absolute returns over a period of more than five years, with limited correlation to
Slide 8: Regal Partners Limited (RPL) Overview
Regal Partners Limited (ASX:RPL) Overview Regal Partners Limited is an ASX-listed, specialist alternative investment manager with $17.2 billion1 in pro forma funds under management. $17.2bn RPL >90 Pro forma FUM 1 ASX ticker Investment professionals2 • The Group manages a broad range of investment s
Slide 9: Strong recent performance across all listed investment vehicles
Strong recent performance across all listed investment vehicles 1 yr portfolio TOTAL SHAREHOLDER RETURN2 Fund Launch Description return1 150 PGF RF1 RG8 VG1 +41% VG1 PGF 2013 Global L/S Equities +30.5% 140 +40% RF1 +40% PGF 130 +27% RG8 Multi-strategy RF1 2019 alternatives +25.9% 120 110 Asian L/S H
Slide 10: Alternative listed investment vehicles premium/discount to NTA
Alternative listed investment vehicles 12 MONTH PRE-TAX NTA RETURN 5% 0% -15% -10% -5% 0% 5% Peer 1 10% 15% 20% 25% 30% -5% -10% PREMIUM/DISCOUNT TO NTA Peer 2 Peer 5 -15% Peer 4 Peer 7 Peer 6 Peer 3 -20% -25% -30% Peer 8 -35% Source: Bell Potter analysis as at 18 October 2024. Vertical axis represe
Slide 11: Increasing allocations to uncorrelated investment strategies
Increasing allocations to uncorrelated investment strategies RF1 STRATEGY ALLOCATIONS RF1 STRATEGY ALLOCATIONS As at 31 October 2020 As at 30 September 2024 Strategies added since inception: Global Long Short Water Strategy 7% Market Neutral 9% Resources Royalties Global Alpha Private Credit Market
Slide 12: Rolling correlation and volatility since RF1 inception
Rolling correlation and volatility since RF1 inception ANNUALISED VOLATILITY RF1 & ASX 300 ACCUM. CORRELATION 50% RF1 ASX 300 Accum 100% 90% 40% 80% 30% 70% 60% 20% 50% 10% 40% 0% 30% 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 Source: Regal. Maximum of rolling 3 year volatility and correlatio
Slide 13: RF1 performance since inception
RF1 performance since inception A$/share RF1 PERFORMANCE SINCE LISTING A$/share Launch date 4.00 1.40 4 4 Adjusted NAV (LHS) Adjusted share price (LHS) Distribution (RHS) 17 June 2019 3.50 1.20 Fund size1 $644m 3.00 1.00 Annualised Return Since Inception2,3 +19.6% 2.50 0.80 Share Price at Listing To
Slide 14: Market update
Market update Key takeaways 1 Passive bubble has burst – Active management is back – ‘Magnificent 7’ underperforming rest of the S&P 500 – Australian banks starting to underperform 2 Small caps bull market appears to have started – – Regal Small Caps Fund up 51.6% in the last 12 months Regal Emergin
Slide 15: Global Long Short
Global Long Short Philip King, Co-Founder & CIO Long/Short Equities, Regal Funds
Slide 16: Global Long Short performance
Global Long Short performance 180 160 140 120 100 80 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Jul-24 Oct-24 Source: Regal. As the Global Long Short Strategy in RF1 only commenced in April 2024 (and has less than 12 months of performance data), the above chart shows the performance of the VGI
Slide 17: US continues to lead
US continues to lead S&P 500 STOXX Europe 600 MSCI Asia Pacific 200 180 160 140 120 100 80 60 Oct-19 Apr-20 Oct-20 Apr-21 Oct-21 Apr-22 Oct-22 Apr-23 Oct-23 Apr-24 Oct-24 Source: Bloomberg as at 25 October 2024 (weekly data). Index levels rebased to 100. Past performance is not a reliable indicator
Slide 18: US market rally starting to broaden
US market rally starting to broaden S&P 500 ex Magnificent 7 (LHS) Magnificent 7 (LHS) Magnificent 7 quarterly relative return (RHS) 50% 800 700 40% 600 30% 500 20% 400 10% 300 0% Rally broadening with Mag 7 underperforming 200 rest of S&P 500 -10% 100 -20% 0 -30% Oct-19 Apr-20 Oct-20 Apr-21 Oct-21
Slide 19: CBA's earnings growth outlook appears challenged
CBA’s earnings growth outlook appears challenged A$ EARNINGS PER SHARE P/E (NEXT 12 MONTHS) 7.00 25.0x 6.00 20.0x 5.00 4.00 15.0x 3.00 2.00 10.0x 1.00 0.00 5.0x 1994 1998 2002 2006 2010 2014 2018 2022 2026 2005 2008 2011 2014 2018 2021 2024 Source: LHS – Bloomberg, forecasts based on Regal internal
Slide 20: Resources: Supply constrained, demand predicted to increase
Resources: Supply constrained, demand predicted to increase MAJOR COPPER DISCOVERIES (1990-2023) COPPER DEMAND (Mt) Copper in recent initial resources (MMt, LHS) 60 ~1.7x Copper in reserves, resources and past production (MMt, LHS) Copper exploration budget ($m, RHS) 180 5,000 50 Copper discoveries
Slide 21: Top quartile small and emerging companies managers can generate significant alpha
Top quartile small and emerging companies managers can generate significant alpha AUSTRALIAN FUND MANAGER OUTPERFORMANCE (ALPHA) PER ANNUM VS BENCHMARK 30.0% 5 YEARS TO SEPTEMBER 2024 Australian Large Cap Managers Australian Small Cap Managers Australian Emerging Companies Managers 25.0% vs S&P/ASX
Slide 22: Small Companies
Small Companies James Sioud, Portfolio Manager
Slide 23: Australian Small Companies Strategy
Australian Small Companies Strategy The Australian Small Companies Strategy is a fundamental, long / short equities strategy, focused on investing in Australian companies listed outside the ASX 100 STRATEGY PERFORMANCE 1 MONTH 3 MONTH 6 MONTH 1 YEAR 2 YEAR P.A. 3 YEAR P.A. INCEPTION P.A. (GROSS %) S
Slide 24: The opportunity and Regal's edge
The opportunity and Regal’s edge ANNUALISED AVERAGE EXCESS RETURN1 AVERAGE NO. OF ANALYSTS (PER STOCK)3 (MARCH 2001 TO AUGUST 2024) 25 3.0% Australia 2.5% generates The average the highest stock in our All Country World Index 2.0% alpha portfolio is Asia Pacific ex-Japan 20 covered by just Global Em
Slide 25: Small cap themes: Share price performance since Sep-23
Small cap themes: Share price performance since Sep-23 GLOBAL LEADERS BIOTECH 1,000 ZIP 360 NXL QOR 1,000 CU6 OPT 900 800 800 700 600 600 500 400 400 300 200 200 100 0 0 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 RESOURCES1 ELECTRIFICATION 300 PNR WA1 SMI BRE 400 A4N IPX M
Slide 26: Emerging Companies
Emerging Companies Ben McCallum, Portfolio Manager
Slide 27: Emerging Companies Strategy
Emerging Companies Strategy The Emerging Companies Strategy focuses on investments in pre-IPO, unlisted expansion capital and listed micro-cap opportunities. STRATEGY PERFORMANCE 1 MONTH 3 MONTH 6 MONTH 1 YEAR 2 YEAR P.A. 3 YEAR P.A. INCEPTION P.A. (GROSS %) Emerging Companies Strategy +2.1% +8.0% +
Slide 28: Emerging companies appear poised to outperform
Emerging companies appear poised to outperform EMERGING COMPANIES HAVE LAGGED BUT CAN STRONGLY OUTPERFORM IN BULL MARKETS 200 ASX Emerging Companies Index ASX Small Ords ASX 200 180 ASX Emerging Companies drawdown -34% ASX Emerging Companies 160 ASX Emerging Companies +27% rally from lows +271% rall
Slide 29: Recent placement activity
Recent placement activity 144% Avg. post deal performance: +31% 79% 53% 52% 37% 39% 38% 36% 36% 27% 20% 19% 8% 10% 10% -4% -24% -28% 3DA AAR ABA AMA ASL CVB EBR IMR KPO LRK LTP MVP QOR SRG SRJ VYS WRK WTM Source: Bloomberg. Post-deal returns as at 25 October 2024. Recent placement activity represent
Slide 30: Global Alpha
Global Alpha John Manchee, Head of Trading
Slide 31: Global Alpha Strategy
Global Alpha Strategy The Global Alpha Strategy seeks to generate absolute returns by identifying pricing inefficiencies in global equity markets. STRATEGY PERFORMANCE 1 MONTH 3 MONTH 6 MONTH 1 YEAR 2 YEAR P.A. 3 YEAR P.A. INCEPTION P.A. (GROSS %) RF1 Global Alpha Strategy +11.6% +14.5% +46.6% +76.0
Slide 32: Passive bubble creates opportunity
Passive bubble creates opportunity AUSTRALIAN ETFS ASX 200 BANKS VS MATERIALS PERFORMANCE ASSETS UNDER MANAGEMENT INDEX LEVELS REBASED TO 100 150 ASX 200 Banks ASX 200 Materials Passive Active 143 140 Billions $180 $160 130 $140 $120 120 $100 $80 110 $60 $40 100 101 $20 $0 2013 2018 2023 90 80 Oct-2
Slide 33: IPO market activity appears to have bottomed
IPO market activity appears to have bottomed ANZ IPO MARKET VALUE BY YEAR (A$B) 20.0 18.0 17.6 16.0 14.0 11.9 12.0 11.3 After previous periods 10.0 of low IPO issuance, there have been 8.0 sustained rebounds 8.0 7.3 7.1 when the IPO window 6.7 6.5 opens 6.0 5.2 4.4 4.0 2.0 1.2 1.0 0.8 0.5 0.6 0.0 20
Slide 34: Water Strategy
Water Strategy Charlie Aitken, Investment Director, Regal Partners
Slide 35: Kilter Water Fund performance
Kilter Water Fund performance 300 250 200 150 100 50 2017 2018 2019 2020 2021 2022 2023 2024 Source: Regal. Performance of the Kilter Water Fund is shown from 1 January 2017 to 30 September 2024 (monthly data, indexed to a starting value of 100), noting that RF1's initial allocation to the Water Str
Slide 36: The dry is coming
The dry is coming – The Southern Murray-Darling Basin (SMDB) has experienced significant rainfall deficits over the last 8 months. Winter/spring rainfall (Jun-Sep) was below the ten-year average in the SMDB – River Murray inflows year to date tracking significantly below the long-term and ten-year a
Slide 37: Government buybacks could generate tailwinds
Government buybacks could generate tailwinds SMDB ANNUAL ENTITLEMENT TRADE VOLUME COMPARED TO BUYBACK TARGETS – Current Basin Plan shortfall more than 900GL 600GL/yr 800GL – Shortfall represents circa 8 years total market turnover 700GL 120GL – Program for initial 3 stage program announced in July 6
Slide 38: Investor Q&A
Investor Q&A Submit your questions via the side menu on the webcast PHILIP KING JAMES SIOUD BEN McCALLUM JOHN MANCHEE player Co-Founder & CIO Long/Short Equities Portfolio Manager Small Companies Portfolio Manager Emerging Companies Head of Trading Regal Funds Regal Funds Regal Funds Regal Funds RF1
Slide 39: RF1 portfolio & investment characteristics
RF1 portfolio & investment characteristics As at 30 September 2024 CURRENT EXPOSURE BY STRATEGY (NAV) Market Neutral SECTOR LONG SHORT NET 9% Global Alpha Communication Services 5 -2 3 9% Consumer Discretionary 8 -10 -2 Percentage of Positive Months Small Companies 72% Consumer Staples 2 -2 0 13% Di
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