Regal Partners (RPL) performance
Hi James, As always, thank you for the great work you all do at MM. I am interested in MM's current view on Regal Partners. Thank you, Ian
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Answer
Hi Ian,
We discussed RPL at the end of March, and in hindsight adopted a bullish bias too soon, although “Liberation Day” didn’t help! There is no doubt they’ve had a tough time performance wise in some of their strategies; we have too in some of our portfolios in the last 6-months.
Buying into a manager with a good long term track record during periods where performance has been weak is generally a good approach, and one we subscribe to. Investors often fall into the trap of investing in strategies after good performance periods, when the opposite is generally true. One caveat to that is the managers ability to adapt to changing market dynamics, and we think Phil King is very good at this. Unlike say a Platinum or a Magellan which seemed to be so rusted on to a very specific investment approach to their detriment (MFG now has ‘tweaked things).
We remember the Regal Atlantic fund fell ~75% in COVID, eye watering volatility and certainly not for everyone, however, as a quote we like says, buying when there is blood on the streets, ever when it’s your own, is often a good strategy. The fund bounced back very sharply.
In any case, RPL is now a multi asset, multi branded investment manager, rather than just a one trick pony. This diversifies their funds business to a greater degree.
While periods of weak performance generally lead to outflows, which can take some time to materialise, we’re inclined to back Phil King and the team to turn around performance, and flows will eventually follow. We like RPL ~$2.
