Regal Partners shares gain on performance fees, FUM growth
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The news: Shares in Regal Partners gained in morning trade on the ASX, after the investment manager flagged anticipated growth in funds under management (FUM) for the June quarter.
The numbers: Regal shares were up 4.3% to $3.43 by 11:25am AEST.
The company, which said it plans to release its first-half results on 26 August, estimates that it will recognise around $55 million to $56 million in performance fee, pre-tax revenue for the six months to 30 June.
Regal also anticipates FUM at 30 June of approximately $12.2 billion. Net inflows for the June quarter are expected to be around $0.3 billion, taking net inflows for the first half to $0.7 billion.
Investment performance was around $0.4 billion over the quarter, but offset by other factors such as distributions, buy-backs and foreign exchange movements.
The context: Regal noted its FUM estimate did not include FUM related to the proposed acquisition of fund manager Merricks Capital, announced last month.
Regal was formed in 2022 through the merger of rival hedge funds Regal Funds Management and VGI Partners.
E&P Capital analysts said the FUM update was "mostly inline" with forecasts, "albeit compositionally pleasing". They retained their 'positive' rating on the stock, noting that the result "should remind investors of the significant upside [Regal] retains to strong investment performance".
What they said: "With a much higher percentage of the FUM now back above high watermark we remain of the view that the risks to our outer year period [performance fees] are to the upside," the analysts said.
The source: ASX announcement
