Regal Partners’ H1 Profit Drops 48% as FUM Hits $17.7 Billion

Financial Performance Highlights

Regal Partners Limited (ASX – RPL) has released its interim financial results for the half year ended 30 June 2025, revealing a significant contraction in profitability despite an increase in assets under management. The group’s statutory profit after tax attributable to shareholders fell by 48% to $26.3 million, down from $50.2 million in the prior corresponding period. This decline contrasts with a 44% growth in funds under management (FUM), which rose to $17.7 billion from $12.3 billion a year earlier.

Normalised net profit after tax, which adjusts for one-off costs and non-cash items, also declined by 24% to $44.8 million. The reduction in earnings was accompanied by a notable increase in operating expenses, which climbed to $85.1 million from $68.2 million, reflecting costs related to recent acquisitions and integration activities.

Strategic Acquisitions and Expansion

The period saw Regal Partners deepen its footprint in alternative investments through key acquisitions. Notably, the group acquired a 50% interest in Ark Capital Partners, a specialist real estate investment and advisory firm focused on hotel accommodation assets in Australia and New Zealand. This move marks a strategic expansion into direct real estate investments, particularly in the hotel sector.

Supporting this new venture, Regal Partners completed the $75 million acquisition of the Mayfair Hotel in Adelaide, a 170-suite freehold property. The purchase was financed through a combination of $45 million in bank debt secured by a first mortgage and equity contributions from Regal, Ark Capital Partners, and other investors. The group is actively raising external equity to syndicate this investment, aiming to reduce its stake over time.

Capital and Liquidity Position

Regal Partners maintains a robust balance sheet, with net tangible assets per share increasing slightly to $0.68 as of 30 June 2025. The company upgraded its corporate credit facility during the half to $130 million from $50 million, enhancing financial flexibility. As of the reporting date, $20 million of this facility was drawn, and the group remained compliant with all debt covenants.

Seed capital investments, used to support new strategies, decreased modestly to $108.4 million, reflecting partial sell-downs that crystallised gains. Cash and short-term receivables increased to $132.5 million, underpinning liquidity.

Dividend and Shareholder Returns

Regal Partners declared a fully franked interim dividend of 6.0 cents per share, payable on 1 October 2025, continuing its commitment to shareholder returns. This follows a 10.0 cents per share dividend paid in March 2025. The company’s Dividend Reinvestment Plan remains in operation, offering shareholders the option to reinvest dividends into new shares.

Outlook and Market Positioning

Despite the profit decline, Regal Partners’ expansion into hotel real estate and the strengthening of its credit facilities position it for diversified growth. The group’s broad suite of alternative investment brands and increasing FUM suggest resilience amid market volatility. However, elevated expenses and integration costs highlight the challenges of rapid expansion.