Regal Partners Limited (RPL) – Handing over the reins

Regal Partners Limited is an ASX-listed specialist alternative investment manager. It manages a range of investment strategies covering hedge funds, growth equity, real & natural assets and credit & royalties on behalf of institutions, family offices, charitable groups and private investors. Regal Partners Limited was founded in 2004 and is based in Sydney, Australia.

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Regal Partners (RPL) delivered a strong first-half FY26 result (1H26), although the attention was mainly on the announced transition to retirement of founder and portfolio manager Philip King. Mr King is responsible for approximately 16% of RPL’s funds under management (FUM), or $3.4 billion, and will remain in his current roles until at least 30 June 2027. The extended handover period should help support continuity. RPL declared a fully franked interim dividend of 12 cents per share (cps) which was double last year’s interim. Financially, the result was robust. Normalised net profit after tax reached $93 million (guidance was for at least $90 million), more than double the prior corresponding period, and 3% ahead of consensus.

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Management and loan fee revenue increased 14% to $114 million. However, the standout contributor during the half was performance fees which came-in at $119 million, above guidance for at least $115 million, and significantly higher than the $42 million generated in the first-half of FY25. Performance fees may moderate in the second-half of FY26 given the amount of FUM that is at, or within, 5% of its high-water mark, has fallen by $1.1 billion in the six months to 30 June 2026. This has likely declined further in July given softer investment returns from a range of long/short strategies. Flows remain strong. Net inflows totalled $300 million in July, with additional inflows during August across credit and listed investment company products. This momentum has prompted us to lift our expectations for CY26 net inflows to $2.2 billion, ahead of management’s guidance of $2 billion.

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RPL ended FY26 with approximately $289 million of balance sheet capital and access to a further $130 million of undrawn debt facilities. Together with cash and investments, this provides significant capacity for acquisitions, although we do not assume this in our numbers. We update for the 1H26 result, and lift our net flow assumptions, however this is offset by higher operating expense forecasts especially in the outer years. Our EPS is revised up by 3.9% in FY26, but down by 14.2% in FY27 and 11.4% in FY28. Our target price is lowered to $4.90 from $5.40. We maintain a Buy recommendation. Despite the leadership transition risk, RPL is trading on an attractive FY27 price to earnings multiple of circa 8x, and on our numbers, offers around 14% per annum growth in EPS over FY26–29.

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