Regal Investment Fund · ASX:RF1
Regal Investment Fund — Investor Presentation (September 2022)
38 slides from Regal Investment Fund's investor presentation, Sep 15, 2022
Slide 1: Regal Investment Fund (ASX:RF1) Investor Update and Q&A
Regal Investment Fund (ASX:RF1) Investor Update and Q&A September 15, 2022 This presentation deck accompanies an audio recording at 11:30am AEST on September 15, 2022. To view the full webcast please click on the link here and register for the webinar. To access the replay of this recording, please
Slide 2: Regal Investment Fund September Quarter Update
September Equity TrusteesQuarter Limited FY22 Board ACN 004 Update 031 298 AFSL 240975 AFSL: 277737 Regal Funds Management Distribution & Marketing Regal Investment 2021-2022 Fund Financial Year: (ASX:RF1) September Quarter Update September 2022 0
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 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 4: Agenda
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Agenda 1 Introducing Regal Partners Limited (RPL) 4 2 Regal Investment Fund (RF1) – Overview 7 3 Market Update 11 3a Resource Update 17 3b China Weakness 21 3c Australian Equities – Consumer Sector 23 4 Cullen Gunn - Introd
Slide 5: Speakers
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Speakers BRENDAN O’CONNOR PHILIP KING JOVITA KHILNANI CULLEN GUNN Chief Executive Officer Chief Investment Officer Portfolio Manager Chief Executive Officer Regal Partners Regal Funds Australian Equities Kilter Rural Regal
Slide 6: Introduction to Regal Partners Limited (ASX:RPL)
August 2022 | Strictly Confidential Introduction to Regal Partners Limited (ASX:RPL) Parent Company of Regal Funds Management 4
Slide 7: Regal Partners Limited (RPL.ASX)
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Regal Partners Limited (RPL.ASX) ASX-Listed Specialist Alternatives Manager Regal Partners Limited is an ASX-listed, specialist alternative investment manager with over A$5.0bn in funds under management1. • Regal Partners (
Slide 8: Regal Partners – A strong platform for continued growth
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A 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 CHANNEL1 Capi
Slide 9: Regal Investment Fund (ASX:RF1)
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Regal Investment Fund (ASX:RF1) RF1 provides investors with exposure to a selection of alternative investment strategies with an objective to produce attractive risk-adjusted absolute returns over a period of more than five
Slide 10: The Regal Investment Fund (ASX:RF1) Highlights
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A The Regal Investment Fund (ASX:RF1) HIGHLIGHTS - Performance: Since inception in June 2019, RF1 has generated a total unitholder return of 110%1, including cash distributions totalling $1.69 Launch date per unit - Team: Hig
Slide 11: RF1 Investment Strategies
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A RF1 Investment Strategies Regal Investment Fund (ASX:RF1) Market Long Short Global Small Long Short Emerging Water Resources Neutral Equity Alpha Companies Healthcare Companies Strategy Royalties Fundamental, Fundamental, a
Slide 12: RF1 Strategy Allocations – August 2021 vs. August 2022
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A RF1 Strategy Allocations – August 2021 vs. August 2022 Allocations as at August 2021 Allocations as at August 2022 Change (yoy): Market Neutral Market Neutral 21% 31% +10% Long Short Health Care Long Short Health Care 10% 1
Slide 13: Rising bond yields weigh on NASDAQ
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Rising bond yields weigh on NASDAQ NASDAQ vs. 10yr US Treasury yield (inverted) NASDAQ US Treasury yield (inverted) 17,000 NASDAQ (LHS) 10yr US Treasury yield (RHS) -- 16,000 0.50 15,000 1.00 14,000 1.50 13,000 2.00 12,000
Slide 14: Recent rise in US 10yr Treasury yields put into context
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Recent rise in US 10yr Treasury yields put into context 10yr US Treasury yields over the last 50 years Yield 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 -- 1971 1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 Source
Slide 15: Echoes of 2001 – Resources outperformed technology
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Echoes of 2001 – Resources outperformed technology ASX Resources Index and NASDAQ (1990 – 2007) 100 = 31 January 1990 1,200 ASX Resources NASDAQ 1,000 800 600 400 200 -- 1990 1991 1993 1995 1997 1998 2000 2002 2004 2005 200
Slide 16: Equities remain attractive
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Equities remain attractive Equity yield vs. real bond yield Equity risk premium 10% AU 10YR Indexed Bond Yield Earnings Yield (12mths fwd) 10% 8% 8% 6% 6% 4% 4% 2% 2% 0% 0% -2% -2% 2013 2014 2016 2017 2019 2020 2022 2013 20
Slide 17: Record takeover activity continues
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Record takeover activity continues Announced M&A involving an Australian target (A$bn) 400 Public Non-Public 357 350 342 300 274 257 250 238 228 213 200 203 200 184 161 158 149 150 120 122 124 114 100 50 -- CY06 CY07 CY08 C
Slide 18: Changing market leadership
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Changing market leadership Market capitalisation by sector – share of total index (ASX 300) (%) 80 Financials Resources & Energy 1 70 60 50 40 30 20 10 0 1917 1922 1927 1932 1937 1942 1947 1952 1957 1962 1967 1972 1977 1982
Slide 19: Mining investment continues to lag
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Mining investment continues to lag Mining investment and commodity prices % of GDP Mining investment share of GDP1 Commodity price index2 Index 10% 180 9% 162 8% 144 7% 126 6% 108 5% 90 4% 72 3% 54 2% 36 1% 18 --% -- 1987 1
Slide 20: Commodity prices over the last 100 years
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Commodity prices over the last 100 years Copper Nickel Iron ore USD / metric tonne USD / metric tonne USD / dry metric tonne 16,384 65,536 256 4,096 16,384 64 1,024 4,096 16 256 1,024 4 64 256 1 1921 1946 1971 1996 2021 192
Slide 21: Shortfalls in most commodity inventories are expected to persist
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Shortfalls in most commodity inventories are expected to persist Balances as % of demand 2021 2022 (projected) 2% 1% -- -1% -2% -3% -4% Soy Wheat Aluminium Copper Corn Zinc Nickel European gas Iron ore Oil Source: Goldman S
Slide 22: Global battery market outlook
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Global battery market outlook Global battery market outlook by application US$bn per annum 140 Consumer electronics 120 On-grid ESS Projected 2023-30 CAGR: ~18% (approx. US$13b p.a.) Off-grid ESS 100 Commercial EVs 80 Proje
Slide 23: China equity markets closer to capitulation
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A China equity markets closer to capitulation Index levels rebased to 100 250 NASDAQ: NASDAQ MSCI China 33% drawdown (Nov-21 to Jun-22) 200 MSCI China: 50% drawdown (Feb-21 to May-22) 150 100 50 Jan-19 May-19 Sep-19 Jan-20 Ma
Slide 24: China developers' sales slowdown showing no sign of turnaround
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A China developers’ sales slowdown showing no sign of turnaround Contracted sales growth (January-August, yoy%) -- -10% -3% -20% -17% -18% -30% -25% -29% -40% -35% -37% -40% -50% -43% -44% -47% -60% -56% -57% -59% -70% -67% -
Slide 25: Australian Equities – Consumer Sector
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Australian Equities – Consumer Sector - Portfolio Manager Jovita Khilnani - 23
Slide 26: ASX-listed discretionary retailers have underperformed post results
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A ASX-listed discretionary retailers have underperformed post results Recent share price performance (rebased to 100) 130 JBH SUL FLT WES HVN DMP ASX 200 Performance Discretionary retailers since 15-Aug: have generally +0.1%
Slide 27: The consumer is spending now but cautious about the future
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A The consumer is spending now but cautious about the future Westpac-Melbourne Institute Consumer Confidence Consumer Sentiment 130 120 110 100 90 80 70 60 2000 2001 2001 2002 2002 2003 2004 2004 2005 2005 2006 2006 2007 2008
Slide 28: Inventory levels are elevated
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Inventory levels are elevated Retailer inventory balances (A$m) 3 yr pre-COVID average 2021 2022 ASX 100 retailers ASX ex-100 retailers 6,084 800 696 4,502 4,246 529 228 196 1,231 1,135 160 1,013 879 939 784 99 93 67 55 68
Slide 29: Kilter Rural Water Strategy
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Kilter Rural Water Strategy - Chief Executive Officer Cullen Gunn - 27
Slide 30: Australia's most experienced water investment manager
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Australia’s most experienced water investment manager Established in 2004, Kilter Rural are one of the largest water managers in Australia, delivering long-term value to investors through uncorrelated, resilient, farmland a
Slide 31: Exposure to the most sophisticated water market in the world
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Exposure to the most sophisticated water market in the world An introduction to the Australian Water Market Govt. • $33b market Environmental • Annual turnover in Entitlements and Allocation > A$1Bn Water • By value state a
Slide 32: Kilter Water Strategy – performance and overview
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Kilter Water Strategy – performance and overview • The Kilter Water strategy invests in water entitlements and water allocations. Kilter Water Strategy • Permanent water entitlements generate income by either selling or lea
Slide 33: Increasing scarcity is driving water prices higher
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Increasing scarcity is driving water prices higher Since 1980: Water supplied to irrigators has declined by >50%, whilst value of irrigated agriculture has grown by 500% Water Allocation Available to Irrigators Southern Mur
Slide 34: RF1 Portfolio & Investment Characteristics – 31 August 2022
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A RF1 Portfolio & Investment Characteristics – 31 August 2022 CURRENT EXPOSURE BY STRATEGY (NAV) BALANCE SHEET EXPOSURES (% OF NAV) Market Neutral 31% SECTOR LONG SHORT NET Percentage of Positive Months Long Short Equity Comm
Slide 35: Delivering Unitholder Value
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Delivering Unitholder Value RF1 STATISTICS RF1 NAV AND SHARE PRICE PREMIUM – ADJUSTED FOR DISTRIBUTIONS Launch date A$/share Premium/(discount) to NAV 17 June 2019 4.00 S&P/ASX 300 Total Return Index rebased to RF1 NAV (A$/
Slide 36: Key Pillars of a Successful Listed Investment Vehicle
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Key Pillars of a Successful Listed Investment Vehicle Investment Performance Investor Engagement & Capital Management RF1 Fund Size Communication Initiatives $573m Deliver attractive risk-adjusted Experienced sales and Defi
Slide 37: Investor Q&A
Regal Partners RF1 - Overview Market Update Water Strategy RF1 - Outlook Q&A Investor Q&A BRENDAN O’CONNOR PHILIP KING JOVITA KHILNANI CULLEN GUNN Chief Executive Officer Chief Investment Officer Portfolio Manager Chief Executive Officer Regal Partners Regal Funds Australian Equities Kilter Rural Re
Slide 38: 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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