Regal Partners has regained the funds under management (FUM) lost after the Opthea failure to close out the financial year at $18.9 billion.
In its quarterly update for the three months to 30 June, the fund manager said FUM was $18.9 billion, up from $17.9 billion at the end of March. This was driven by net client inflows and positive investment performance across a range of investment strategies, the firm said.
Net FUM inflows were $0.6 billion, while positive investment performance was almost $1 billion with strong performance reported on the long/short equities and multistrategy funds.
Credit and royalties remain the firm’s largest division by FUM at $5.7 billion, followed by real and natural assets at $2.1 billion. The real and natural assets division includes the minority stake in Argyle Group, which Regal acquired in July 2024.
The gain of 5.5 per cent was positive news after the firm saw an 8.3 per cent decrease in the previous quarter from $18.2 billion to $17.9 billion.
This was the result of losses associated with the failure of biotech Opthea where Regal’s listed Investment Fund was the largest shareholder in the company. Opthea saw a steep share price decline after a clinical trial was discontinued, and its shares have been suspended since 14 March.
While FUM has rebounded, shares in the fund manager are still down by 24 per cent since the start of the year.
During the quarter, Regal announced the acquisition of a 50 per cent stake in real estate and advisory platform Ark Capital Partners, which it said is “highly complementary” to its existing real estate debt capabilities within Merricks Capital that it acquired in June 2024.
Regal chief executive Brendan O’Connor and Merricks Capital chief investment officer Adrian Redlich will join the Ark board, while hotel industry finance specialist Ed Faraguna will also join the firm as chief financial officer.
“The partnership with Ark represents a notable expansion of Regal’s existing alternative investment platform to include a direct alternative real estate investment capability focused on value-add equity investments in the hotel accommodation sector,” it said.
As well as this, Regal has acquired the five-star Mayfair Hotel for $75 million. Located in Adelaide’s CBD, the deal is set to complete in August 2025. The hotel will represent the seed asset for the Regal Partners Australian Hotel Opportunities strategy.
