Regal Partners (RPL) is a specialist alternative asset manager, with total funds under management (FUM) of $15.1 billion (30 April 2024 proforma for the Merricks deal), diversified across a range of alternative investment strategies.
“Calendar year 2024 (year-to-date) has seen record performance and strong FUM inflows, which may see the business deliver some of the best performance fees since calendar year 2021 (when the business was less than half the size),” Raymond said.
“More importantly, the recurring management fees from FUM growth continue to build. “Through a mix of organic growth and acquisitions, RPL has grown FUM to $15.1 billion, representing 133% per annum compound annual growth rate (CAGR) since June 2022 (pre-VGI merger). “Excluding acquisition FUM, RPL has organically grown an impressive 36% pa (CAGR), delivering an additional $2.4 billion of new FUM (since June 2022), seeing our calendar year 2024F base management fees double on calendar year 2022A.
“Whilst challenging to forecast, RPL has demonstrated a history of performance-led FUM growth, augmented by four transformative acquisitions (VGI, PM Capital, Taurus, Merricks). “With solid fundamentals, industry tailwinds and an aligned register (insiders control c.56% of diluted shares on issue, with Phil King and Associates owning c.21%), we believe RPL is well-positioned to expand its portfolio of fund managers and strategies, achieve greater scale, and deliver consistent, recurring earnings.
“On this basis, we initiate coverage with an Add rating and A$4.70 a share target price,” Raymond said.
Regal Partners Ltd (RPL.AX)
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