Regal Partners (ASX:RPL) used its full-year results briefing to highlight record earnings, continued fundraising momentum, and a strong balance sheet, while also outlining product and distribution priorities for 2026 and confirming an upcoming CFO transition.
Record earnings and dividend increase
Chief Executive Officer Brendan O’Connor said the 12 months to 31 December 2025 were “a year of two halves,” with equity market volatility and macro and geopolitical uncertainty in the first half followed by stronger hedge fund performance in the second half amid a resurgence in the resources sector.
The board approved a fully franked final dividend of AUD 0.15 per share, bringing full-year dividends to AUD 0.21 per share. O’Connor said the dividend reflected “strong organic cash generation,” a strong capital position, and surplus franking credits.
Funds under management growth and performance fee positioning
Regal ended the year with AUD 20.9 billion in funds under management (FUM), supported by more than AUD 1.5 billion of net flows. O’Connor said momentum continued into the new year, citing a further AUD 193 million of net flows in January and FUM “now over AUD 21 billion.”
A key focus of the presentation was positioning for performance fees. O’Connor said AUD 14.8 billion of FUM was at or within 5% of high-water mark at year-end, describing it as a leading indicator for future performance fees. He later said the company had about AUD 15 billion—around 87% of performance-fee-eligible FUM—at or within 5% of high-water mark after the strong start to 2026.
O’Connor also emphasized the structure of performance fees, saying more than 50% of this FUM had a fixed hurdle or high-water mark, which he said supported a “high recurring level” of future performance fees.
Financial details: fees, expenses, and capital
Chief Financial Officer Ian Cameron said average FUM was AUD 18.5 billion, up 28% year-over-year, which drove management fees and “loan management fees” totaling AUD 203 million. Cameron said performance fees of AUD 175 million reflected strong second-half performance, with most strategies above high-water mark.
Cameron said the final dividend represented a 54% payout ratio, which he said preserved balance sheet flexibility for future growth. He also noted that the average management fee was 1.09% in 2025 and said changes in the margin were largely driven by product mix rather than fee discounting, citing strong inflows into PM Capital’s Global Strategy (around a 1% management fee).
Other income was AUD 40 million, up 16% on the prior comparative period, which Cameron attributed to strong investment performance of Regal’s seed investments. On expenses, Cameron said variable remuneration increased in 2025 primarily due to a 108% increase in performance fee revenue. He also said Regal changed its remuneration year to align with its financial reporting period.
On costs, Cameron said other expenses increased due to the annualization of acquired business costs and included approximately AUD 4 million of project costs expensed in the second half related to continued investment in the “One RPL” corporate platform. He said those projects were “larger than usual” and that while project costs could continue, future projects were expected to be smaller in scale.
On the balance sheet, management reiterated the company ended 2025 with approximately AUD 250 million of capital and no drawn debt. Cameron said Regal upgraded its credit facility from AUD 50 million to AUD 130 million, undrawn at 31 December 2025. He also noted AUD 120 million of seed capital at year-end and said capital management tools now include an on-market buyback program recently approved by the board.
Strategy and 2026 priorities: offshore growth, new product, disciplined M&A
O’Connor said Regal’s strategy continued to be built on three pillars: expanding and diversifying investment capabilities, expanding and diversifying the client base, and evolving a centralized scalable platform. He said since listing 3.5 years ago Regal has increased FUM by AUD 16.2 billion, including AUD 4.6 billion from organic net flows and AUD 5.1 billion from investment performance.
On distribution, O’Connor said Regal’s marketing capability now covers every major segment of the Australian market, and noted three staff dedicated to offshore markets in Singapore and North America. He described offshore distribution as a “key priority,” arguing offshore allocators typically allocate in larger size and are “less fee constrained” than Australian superannuation allocators.
Looking to 2026, O’Connor listed several priorities:
- A “strong pipeline” of domestic FUM and confidence in net flows for the remainder of 2026
- A “strong pipeline” of offshore separately managed accounts, with “four or five” investment committee-approved SMAs in legal documentation after completing investment and operational due diligence
- Launching a Regal Partners Income Multi-Strategy product in the second quarter of the calendar year
- Continuing to build out the One RPL approach to support resiliency and scale
- Pursuing M&A opportunities while remaining disciplined on pricing and culture
In Q&A, O’Connor said January flows were “fairly diverse,” dominated by hedge fund products, and said the Partners Fund continued to rebound with tailwinds from the back half of the prior year.
On M&A, he said Regal had seen an “acceleration of opportunities” over the last 12 months, but called pricing “a key tension point.” He said opportunities under review would typically expand the firm into non-hedge fund products, including areas such as real estate, private equity-like capabilities, and additional capabilities within the broader credit sphere.
Additional Q&A: accrued fees, Taurus fundraising, private credit, and IPO expectations
Addressing accrued performance fees payable at the end of June, O’Connor said the largest portion related to the global long-short strategy and that Regal was “sitting with quite a large amount in the money today” across both a listed and unlisted fund. He estimated “close to $100 million” of accrued but not earned performance fees, noting the figure was subject to volatility.
On Taurus Mining Finance Fund III, O’Connor pointed to Fund II performance (an IRR of about 23% post fees) and said the firm was raising the third mining finance fund. He said Regal expected a “very strong first close” before 30 June—likely around May—and expected it to be at least $500 million. He also said Fund II was expected to wind up and complete by the end of 2027.
In response to a question about events in the U.S. private credit market and the Blue Owl evergreen fund structure, O’Connor said Regal was monitoring developments. He emphasized that Regal had no exposure to the type of AI-driven software private credit exposures seen in the U.S. and said the U.S. market is dominated by leverage levels that “just doesn’t exist” in Australia. He said Regal’s private credit returns were “almost exclusively” delivered without leverage, and cautioned that evergreen structures can face challenges due to mismatched liquidity expectations, describing private credit as harvesting an illiquidity premium that is not suited to regular quarterly withdrawals.
Finally, asked about an investment in Firmus held in the Emerging Companies Strategy, O’Connor said the firm was excited about the position and said it was hopeful the company could IPO later in the year as IPO markets open up.
The company also confirmed a CFO transition: Cameron welcomed Head of Strategy Alana Stringer as incoming CFO in late March, with O’Connor thanking Cameron for his service over the past 3.5 years and saying he looked forward to working with Stringer through the next phase of growth.
About Regal Partners (ASX:RPL)
Regal Partners Limited is a privately owned hedge fund sponsor. The firm invests in the public equity and hedging markets across the globe with a focus on Australia. It employs market neutral and absolute return strategies to make its investments. The firm also employs fundamental analysis along with bottom up stock picking approach to create its portfolios. Regal Partners Limited was founded in 2004 and is based in Sydney, Australia.
