Regal Partners shares slide as performance fee revenue falls
Make us a preferred source
Make us a preferred source on Google
The news: Shares in Regal Partners dropped at the start of trading on the ASX after the investment group beat estimates for funds under management (FUM) in the December quarter, but recorded lower-than-expected performance fee revenue during the second half of 2024.
The numbers: Regal shares were down 1.9% to $3.68 by 10:45am AEDT, having advanced around 50% over the last 12 months.
Regal reported FUM of $18 billion as of 31 December 2024, a 4.6% increase from $17.2 billion at 30 September 2024. The result was also ahead of consensus forecasts of $17.3 billion, according to Visible Alpha data.
The company received around $700 million of net inflows during the quarter. It also confirmed a binding commitment of $200 million from an offshore investor, not included in the $18 billion FUM estimate. However, Regal's investment performance was down $200 million during the quarter.
E&P Capital analyst Olivier Coulon noted that "after a very strong July-October run [...] performance tailed off in Nov/Dec". This contributed to lower-than-expected performance fee revenue for the six months to 31 December. Second-half performance fees of $25 million fell short of consensus estimates of $34.1 million.
The context: Coulon said that Regal's miss to forecast performance fees during the second half of the year was a "small negative". However, he sees the company's "strong net flow momentum" as more indicative of its trajectory.
Last month, Regal shares lowered after talks with ASX rival Platinum Asset Management ended. The discussions had been designed to allow Regal to improve on its initial takeover offer for Platinum that was rejected in September.
The sources: ASX announcement, E&P Capital research
