Regal Partners Limited (RPL) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Michael Cole. I'm an independent Chairman of Regal Partners Limited. Thank you for joining us for today's 2025 Annual General Meeting. Before we go any further, could I please ask all people in the room to turn your phones to silent. Thank you. The company secretary has advised me, we do have a quorum, so I declare the meeting open. The Notice of Meeting, which was sent to shareholders on the 28th of April, will be taken as read. I'm chairing today's meeting from PwC's office in Sydney, and the company's directors are all in attendance. With me today are members of the Board, Brendan O'Connor, CEO and Managing Director; Jaye Gardner; and Sarah Dulhunty, both independent Nonexecutive Directors; and Ian Gibson, an Executive Director. On the far side of the table, we have Candice Driver, our joint company secretary. Also in attendance are representatives of our share registry, Boardroom; and our auditor, KPMG, is represented by David Kells and Matthew Brunton. Please note, we are conducting today's meeting in a hybrid format, meaning people can participate in person, online or over the phone. This will provide plenty of opportunities for shareholders to ask questions during the meeting. For detailed instructions on how to participate, please refer to the meeting materials distributed to our shareholders. We will run through the key logistics shortly. Turning to our agenda today. As reflected in the agenda, I'll begin with a short introductory address. Brendan O'Connor will then provide an update on the group. We will then move to the formal resolutions where we will take questions on each resolution. Following this, there will be an opportunity to ask general questions, and we will then collect all the votes. Once we formally conclude the AGM, we will host the light refreshments for our shareholders attending in person. Please note today's meeting is about Regal Partners Limited, and we will focus primarily on the key items on the Notice of Meeting. Questions about equity markets, individual portfolios and funds are best kept to other forums such as webinars, client events that we host throughout the year. Questions about your personal holdings may be directed to our Investor Relations team or the share registry after this meeting, both of whom will be only too happy to help you. Now in terms of the meeting logistics, I would like to hand to Ingrid Groer briefly to run through the process for asking questions and voting. Ingrid is Head of Corporate Affairs at Regal Partners. So thank you, Ingrid.

Okay. Thank you. Thanks, Michael. For today's meeting, all resolutions are being voted on by poll. For those in the room, when you registered today, you would have received 1 of 3 colored cards. Green cards were given to shareholders who have not submitted proxy forms prior to this meeting and proxy holders. Green cardholders can therefore vote on the resolutions being put forward. Holders of the green card are also entitled to ask questions when prompted throughout the course of the meeting. Yellow cards were given to shareholders who have submitted proxy forms prior to this meeting and who, therefore, cannot cast votes again during this meeting. However, you are welcome to ask questions when we reach the relevant parts of the meeting. White cards were given to nonshareholder guests who cannot vote or ask questions during the meeting. You can complete your voting at any time during the meeting. Just make sure that you give your card to one of our Boardroom representatives before we close voting at the end of the meeting. In terms of asking questions in the room, when we reach the relevant item in the meeting, we will ask the people with questions who have a green or yellow card to put up their hand for a microphone. One of our staff will provide a microphone to that person once our staff have seen the card. The Chair will then indicate when it is the person's turn to ask the question. Depending on time and the number of questions, we may need to limit each shareholder to 2 questions or comments per item of business. For those of you who have logged into the webcast with your user name and password, you'll have the opportunity to submit questions online as well as vote on the resolutions. If you have already prepared a question, please submit it now through the website, and we will aim to answer it at the appropriate stage of the meeting. If your question relates to a specific item of business, please state the resolution number or reference the financial report at the start of the question. All other questions will be considered during the section for general questions. If we receive multiple questions on the same topic, we may group those together. Again, depending on time and the number of questions, we may also need to limit each shareholder to 2 questions or comments per item of business. With regards to online voting, to give you ample time to vote, we are going to open the polls now. This means you can submit your online votes at any time between now and when we close the polls at the end of the meeting. If you change your mind about any vote, you can also override your original online vote between now and when the polls close. For those of you who have logged into the webcast as a guest, you'll be able to view our webcast but not submit questions or vote. And for shareholders who have joined over the phone, if you have provided your passcode to the call center and been verified, you will be able to ask questions. Please note that the process for registering your questions is very different to the webcast. For those on the phone, please do not try to register for any questions or comments yet as we will only open the phone lines when we reach each item of business. So when we arrive at the first item, we'll ask if you want to register for a question on that topic. [Operator Instructions] Once we finish that item of business, we will move to other business and repeat this process. Please do not register to ask a question for an item of business before we reach that item. So that we can give all shareholders a reasonable opportunity to ask their questions, once we have answered a question -- a shareholder's question on the phone, we'll move to the next person in the phone queue. If you have an additional question or comment on that same item of business [Operator Instructions] For other people on the phone, that is guests and shareholders who have not provided their passcode, please note the phones will be listen only. I should also point out that if you are listening on the phone but viewing the webcast as well, that the webcast may lag the phone by 10 seconds or more. It may be simpler just to use the webcast for the sound as well. Note that you will not be able to vote over the phone. With that, I have now concluded this section. So I will hand back to Michael to make his Chairman's address.

Thank you, Ingrid. On behalf of the Board of Regal Partners, I would like to warmly welcome all shareholders today, and very much thank you for your support. As most of you would know, 2024 was another strong year of growth for the group. As shown on this slide, average funds under management, or FUM, grew 141% to $14.4 billion, boosted by record net inflows of $1.9 billion and positive investment performance. During the year, Regal also acquired Merricks Capital, a hard asset investment specialist and 40% of the Argyle Group, a manager of water entitlement portfolios. These transactions have further diversified Regal Partners in terms of investment capabilities, geographic exposure and client base as well as adding scale. The portion of Regal's FUM that has a low correlation to equity markets has also risen, which we believe enhances the resilience of the Regal business. Turning now to financial performance. The company's results in 2024 were pleasing, with revenue up 151% to $281 million on a normalized basis. Normalized net profit after tax was $97.5 million, up 198% on the prior year, and an $0.18 fully franked dividends were determined and paid for the period. While fund performance has been softer this year-to-date, especially around March and April when markets sold off around U.S. tariff announcements and the potential for broader trade wars, we have been pleased to see many portfolios recovering in recent weeks. It's also been encouraging to see positive net FUM flows continuing in 2025, with $149 million in the March quarter and additional net inflows in both April and May. Consequently, we are very excited about Regal's future and the many opportunities that we have to grow the business further. I'd now like to hand over to Brendan O'Connor, the CEO, to provide his address.

Thank you, Michael. As Michael just described, Regal Partners has had another busy year since we held our last AGM, and I'd like to thank you, our shareholders and our clients who have been with us during this time. To begin my presentation, I'd like to start with this slide, which is a quick snapshot of our business today. As shown here, our funds under management of $16.5 billion sits across 4 key alternative asset classes, long/short equities, private markets, real and natural assets, and credit and royalties. The acquisition of Merricks Capital in July 2024, particularly boosted our credit capabilities with the Merricks business being a significant nonbank lender for assets across the commercial real estate, agriculture and specialized infrastructure sectors in Australia and New Zealand. Importantly, this transaction has broadened Regal's ability to offer income solutions to our clients as well as being very complementary to the agricultural nature of the significant water portfolios within the group. Further, Adrian Redlich, Merricks' Founder has taken on the broader role of Chief Investment Officer for our group's income strategies, which is leading to additional product innovation opportunities and as I will describe later in this presentation. Also in July 2024, Regal acquired a 40% interest in the Argyle Group. For those who are not aware, Argyle is a pioneer within the Australian water entitlements market, having first launched Astra's first investable water fund in 2012. This fund, the Argyle Water Fund, has generated a 12.5% annualized return net of fees for investors since inception with a 0 correlation to equity markets. Pleasingly, the outlook for the Argyle business has improved further in recent months with spot water prices jumping 50% from mid-April to early May and asking values for water entitlement transactions increasing. This bodes well for the likelihood of water prices and Argyle's finance valuations being marked higher later this calendar year. I'd also like to take a moment to reflect on the PM Capital business. You may recall that we acquired the PM Capital business in December 2023 and so has now contributed its first full year earnings to our business in calendar 2024. This transaction has been highly accretive for Regal and provides an excellent example of what is possible under Regal's inorganic growth strategy. As this slide shows, PM Capital's FUM has grown 43% from $2.8 billion at the time of the acquisition to $4.1 billion as at the end of March this year. And importantly, this has been through a combination of strong investment performance and net flows. In particular, PM Capital's global long/short strategy has performed -- has continued to perform exceptionally well, with the flagship Global Companies Fund being ranked #2 out of 131 on investment performance over the 10 years to March 2025 amongst its peers in the recent Morningstar survey. PM Capital's FUM flows have also accelerated since Regal's acquisition of the business with $533 million of net inflows achieved in 2024 compared to $114 million in the prior year. Strong flow momentum has continued into 2025, and we are excited about the opportunity to grow this business further especially given the global equity strategy has the capacity to be many multiples of its current size. We're also pleased to highlight that earlier this month, the city-based teams of PM Capital and Merricks Capital co-located in Regal's head office in Sydney. While many back-office functions had already been integrated before this, bringing together staff into one central location, has already had strong cultural benefits and will hopefully accelerate collaboration and cross-sell opportunities across the Group. Another important point related to the PM Capital acquisition has been the further broadening of the investment team that drives the group's long/short equity strategies and indeed the credit strategies. As shown on this slide here, Paul and his team's long/short equity capabilities represent almost half of the $7 billion in long/short equities within the group. This, alongside of our expansion of our credit and water strategies that I mentioned earlier, has contributed to a far larger and far more diversified mix of funds under management than existed back in June 2022 when Regal Partners was formed. We see many benefits of this evolution since 2022, including: improving the resilience of the firm to withstand a range of market conditions; a reduction in key man risk across the group; the ability for performance fees to be earned from a larger pool of uncorrelated assets and therefore, serve as a more consistent source of revenue for the group; the opportunity to offer a wider range of capital solutions to companies, improving Regal's relevance to them; and finally, the opportunity to also offer a broader suite of investment solutions to clients, both in Australia and offshore. Touching upon the corporate solution aspect first, I believe this slide is a powerful illustration of Regal's importance in being a material provider of capital to Australian companies. Our scale and our ability to offer funding via equities, debt and royalties across both public and private markets should lead to better deal origination, greater relevance to our clients and ultimately, superior performance for our investor clients. If we then consider what this diversification means for Regal -- for our clients, Regal Partners has now built an impressive set of capabilities across the alternative investment space. This has increased our ability to offer products that suit our client's particular circumstances and in many cases, tailor mandates for them. As shown on this slide, it also means that we can design multi-strategy products that blend a range of our greatest capabilities with the objective of generating attractive risk-adjusted returns, with low volatility and minimal correlation to traditional financial assets. This thinking was behind the launch of our very own Regal Investment Fund, RF1, back in 2019, which has generated annualized returns of over 15% net of fees since inception and has contributed to evolve in the recent years by adding more nonequity strategies. It has also led to our creation of the unlisted Regal Partners Private Fund in December 2023. Since then, the Partners Fund has delivered a solid 10.6% annualized return net of fees. The fund has also reached almost $0.5 billion in size after only 17 months, which further demonstrates strong demand for this type of product and gives us confidence that this could be the flagship fund for Regal Partners in the years to come. We'll also continue to work on additional multi-strategy ideas. For example, later this year, we are targeting the launch of a multi-strategy income fund, which will draw upon the broader credit and royalty investment capabilities across the group. We expect and indeed, we observe high demand for such a product given the aging population in Australia, the demographic trend, the phasing out of bank hybrids and more recently, the current federal government's plans to tax unrealized gains within high superannuation balances. Importantly, this type of multi-strategy product has only been made possible because of the acquisitions of Merricks and PM Capital and that Regal has made in recent years, which has materially bolstered our credit expertise. In terms of other opportunities, we see plenty of runway for further organic growth within Australia, and we're also very excited about the potential to further expand our offshore product set and client base. This is a market that we've only just started targeting recently by appointing a senior distribution executive in Singapore in 2022. Since then, we've been steadily building our relationships in Asia and the Middle East and have launched Cayman or offshore versions of a number of our domestic strategies, including our multi-strategy Partners Fund. We also have gained more than 20 North American institutional clients through our acquisition of half of Taurus in late 2023. As a result, offshore clients have contributed approximately $600 million or 30% of our $1.9 billion in net flows in 2024. Further, offshore client FUM now represents about $3.3 billion or 20% of Regal's total funds under management, and we are optimistic that this can grow materially in coming years based upon our expanding product range, current due diligence discussions and executive capability. I'm also delighted to announce that we are finalizing the recruitment of a senior executive to represent Regal Partners in North America to service our North American clients and to seek new clients that could benefit from the diverse capabilities within the alternative investment strategies that we're building. Moving now to Regal Partners Limited 2024 results. Michael has covered the key points earlier, which are listed again on this slide, so I won't repeat those. However, I might make some additional comments. Firstly, our 2024 profit of $97.5 million only includes the earnings from Merricks and Argyle transactions from their time of acquisitions in July 2024, so 2025 should benefit from a full year of earnings from these businesses. Thinking about this another way, Regal's average FUM in calendar 2024 was $14.4 billion. Regal's FUM is now at least $16.5 billion, and Regal's management fees should benefit from a higher average FUM in 2025 compared to 2024 even if funds under management remained flat for the rest of this year. Secondly, as Michael mentioned earlier, Regal's net flows in the first quarter of 2025 were $149 million. Flows have continued to be positive in both April and May 2025. And whilst flows are likely to be less than the $341 million achieved in the second quarter of 2024, I think there'll still be a strong outcome, and this reflects a weaker fundraising environment as many clients opted to defer investment decisions in April and May, pending improved clarity on the U.S.-initiated trade war. In terms of performance fees, it's just over 1 month until 30 June 2025, which is a key anniversary date for a number of our strategies to earn performance fees. So the first half '25 performance fees could still change quite a bit between now and their crystallization date. However, we have already crystallized some performance fees in the half, and we are hopeful that we will earn additional performance fees at 30 June 2025. We will provide you with an update of our first half performance fees in July this year when we release our June quarter funds under management. Finally, while not shown on this slide, the balance sheet is also strong with over $230 million of cash and investments at the end of December '24 or $197 million once adjusting for the payment of dividend in March. In addition, Regal has repaid and closed its HSBC debt facility and early this year, upgraded to a larger $100 million facility with Standard Chartered, giving Regal additional balance sheet flexibility. Another development I wanted to highlight is the material progress we have made in evolving the Regal Partners share register in the recent years. We understand and realize that passive investing or index investing is a large part of the share market these days. So our efforts to improve the free flow to the group are important in ensuring that we trade at a fair valuation. When Regal Partners was formed in June 2022, we estimate its free float was only about 9%. This reflected the fact that most of the shares were held by individuals with substantial shareholders that is more than 5% each or in escrow. Consequently, there was limited liquidity for any investor wanting to buy or sell RPL shares. There was also no formal broker coverage for retail and institutional investors, making it more difficult for investors to obtain independent advice on the stock. Today, Regal's free float has risen materially to around 62%, and this, combined with a larger number of shares on issue and market capitalization, has led to increased liquidity and relevance, including RPL becoming eligible for certain key indexes with more to hopefully come in the next year. As part of this, we have seen a rise in the number of shareholders, including a significant increase in more recent weeks. Turning now to my final slide. Our core strategic message remains the same. That is our growth-focused strategy is built on 3 key pillars: to continue to diversify and scale our growing platform; to continue operating within the attractive market tailwinds operated by the alternative investment strategy segment and recognizing that our investors are increasingly seeking alternative ways to generate returns; and then thirdly, harnessing the strong business economics given our business is able to command higher fees relative to traditional long-only managers of equities or fixed income or passive vanilla products. As you've heard today, this means we have multiple avenues for growth organically, and we also continue to review inorganic opportunities while remaining disciplined on the price we're willing to pay. In the meantime, we will look to harness the full benefits from our past acquisitions. So thank you again for your support of Regal Partners, and I look forward to updating you further in August when we release our results. I'd like to particularly thank our shareholders and clients but also staff for the contributions they've made during calendar 2024. It puts us in a great position to expand. I'd also like to acknowledge the tragic passing of one of our beloved portfolio managers in 2024, Todd Guyot. Todd was a great example of a wonderful culture at Regal. We miss him dearly. And whilst we continue to build the business, we've continued to reflect on the contribution that Todd had made to the business. I'd now like to hand back to Michael for the next stage of the meeting.

Thanks, Brendan. We will now turn to the formal business of the meeting. I will take each item and resolution in the order that is set out in the Notice of Meeting. Our meeting today involves tabling and reviewing the accounts and the 4 resolutions to be decided. In terms of logistics, when we reach the point for questions, we will start with online questions from the webcast first, then questions over the phone, then questions from the room. For those online, please remember, you can submit your questions at any time during the meeting. Just please type clearly at the top whether it relates to our financial reports or type the resolution -- the number of the resolution or state if it is a general business. Nothing we will cover in general questions after the formal business. As a reminder, for those on the phones, please wait until each item of the business before registering for a question on that item. [Operator Instructions] As we mentioned earlier, we will conduct a poll of all the resolutions today, combining votes submitted before the meeting with votes cast during the meeting, both in the room and online. As we mentioned earlier, we will conduct a poll on all resolutions by combining votes submitted before the meeting with votes that are going to be cast at the meeting both online and in the room. Since the online poll is already open, if you would like to vote now, please do so. Alternatively, it's also fine if you prefer to only vote after we have discussed each resolution. I'll also allow some time at the end of the meeting for you to finalize your votes. For those voting online, if you make a mistake or change your mind, please select the preferred voting option that will override your original vote. I note that Boardroom are the returning officers for today's meeting and will conduct our poll. Certain votes will be excluded in accordance with the Corporations Act and the ASX listing rules. The proxy votes will be shown before discussion of each individual resolution. I advise the meeting that I'll be voting all undirected proxies in favor of all resolutions as indicated in the Notice of Meeting. As the results of the poll will not be available before the close of the meeting, they will be released to the ASX and made available on our website later today. Turning now to the first item of formal business, which is the tabling of the financial report, the directors' report, and the auditor's report for the financial year ending December 31, 2024. The company is required to lay before the meeting the last audited annual statements and reports, which were released to the ASX on the 26th of February 2025, as part of the company's annual report. No resolution on this matter is required. However, I now invite shareholders and their proxies to ask questions on the reports. Questions may also be asked to the auditors in relation to conduct of the audit, the content of the audit report, accounting policies adopted by the company and the independence of the auditor in carrying out the audit. So let's start with the online questions. I'll ask Ingrid to read out the questions as they come through on the webcast.

Thanks, Michael. At this point, I can't see any online questions, but we might just give them a few moments. In the meantime, I don't think there are any questions on the phone, but I'll just double check that with our operators. Are there any questions on the phone?

There are no questions via the phone lines.

Okay. We'll come back to those shortly, but we now might go to questions in the room then.

Okay. Is there any questions in the room that people would like to ask in relation to the annual report, the conduct of the audit.

It's Charlie Kingston from K Capital. Just a few questions around the accounts, please. Firstly, just around, I suppose, the nature of the business, but the performance fees, their proportion of the company's profits, generally, they're around 80% to 90% of the normalized NPAT. I appreciate the business has changed a lot. You've been acquiring a lot of businesses, but 2023 performance fees of $25 million; total NPAT, $32 million; 2024, $84 million of performance fees, $97 million NPAT. So it does seem like the business really is just subject to however the underlying managers perform. And that's fine if that's just the nature of the business, is very, very volatile. But I'm just thinking, going forward, can we expect that performance fee contribution to profit to reduce and it become more of a consistent sort of base fee profitable business because, yes, it's clearly -- maybe that is Regal. A lot of the funds are highly volatile. But going forward, should we expect more of a recurring NPAT, please?

Okay. Brendan, do you want to comment on that?

Yes, certainly. Thank you, Charlie. I think you're exactly right. So the performance fee contribution across our strategies continues to be a material portion of our earnings but importantly, will diversify and therefore dilute in its percentage contribution going forward. As we've diversified the business beyond just long/short equities into credit and royalties, real and natural assets, and private markets, we have a growing proportion of our performance-fee-eligible FUM that is tied to nonequity-related products. That, as a result, should lead to a more consistent earning of performance fees across the period. But I think as well as we've integrated these businesses, we'll look to improve the operating margin of the business overall. So performance fees will always continue to be an important part of our earnings, but I think going forward, they will become a smaller percentage portion of our profit.

And then just following up on that, the average management fee is 1.09% in 2023, 1.13% 2024. It does seem fairly high, especially relative -- I know you've got some listed funds but -- and you're diversifying into other asset classes, et cetera. But from an equities perspective, that does seem very high. Clearly, there's a lot of pressure on fees coming down. So maybe just within the context of all the different asset classes that you are diversifying into and noting the constant pressure on fees, especially equities like some institutions, I don't know, they're on 20, 30 basis points, so would just appreciate your thoughts on if that is sustainable going forward well above 1%, particularly across equities, fixed income and the other areas that you are getting into, please, and I suppose fixed income. Like I know you're going to raise one of those funds, but that's getting very competitive. So is there fee pressure in fixed income? And I'd just appreciate your thoughts there.

Yes. Thank you again. You're absolutely right. I agree with the trend that you're seeing in the market that asset management fees generally are trending lower. And basically, it's forcing managers to either become mass producers of low-cost products like ETFs and passive investing, where you're basically getting your beta for equities or fixed income close to 0 or you're at the other end of the spectrum where you're originating differentiated asset classes such as water, resource royalties, private credit or indeed trading traditional investment strategies in a nontraditional manner. If you can differentiate the investment strategy and generate strong performance or good risk-adjusted returns, you'll be able to command typically higher fees. And that's typically where an alternative investment product sits. So an alternative investment product distinguishes it from a traditional product by managing a traditional product in a nontraditional manner by investing long/short or by harvesting and managing alternative sources of beta such as water, agriculture, carbon, private credit, resource royalties for example. Many studies of the world show that as a capital allocator, over half a capital allocated fee budget would be reserved for alternative investment strategies. That's why we choose to play within that space, and provided we can generate strong risk-adjusted returns, I think we've got a strong position to defend the fee margin -- the management fee margin we charge on those products.

Equity is sustainable, you think, from here?

Yes. It will move around based on sort of currencies, depending on whether we're raising more U.S. dollar fund versus domestic fund and whether the fixed income funds are growing faster than the equity funds. But I think where we're sitting today is probably a good proxy for the medium term going forward.

And then just finally, Regal, and credit to you for getting a very high share market rating notwithstanding the recent fall, but I suppose everyone has fallen somewhat. But Regal, we're trading at around 5% of our FUM, probably a bit over, but you can adjust for your NTA. But let's just call it 5%, but that is still a very high multiple of FUM relative to some other peers like Perpetual, again, equity, so very different and probably not comparable, but they're probably sub-1% of FUM. I think whatever Macquarie sold there equities business, I think it's around about 1%. So us at 5% and again, I appreciate it's a very different type of fee and fund offering. But given we have acquired a lot and used our scrip and you've spoken to more inorganic opportunities, is that a real focus for you going forward, whilst we do have a very healthy valuation or multiple of our FUM, to continue to use it, given I suppose we have today? And we bought PM. We bought Merricks. So yes, do you view that as a multiple of FUM. Now is time to strike and use it whilst we have it, so to speak. Or should we expect you try to buy Platinum, et cetera? So you've been very acquisitive and very busy. But should we expect that to continue?

I think there are 2 questions within there, one in terms of our valuation. I would say that, today, we're trading at a discount to alternative investment managers in the United States. And I think there are many trends in financial services that start in the United States and ultimately make their way to Australia. And I certainly believe that the trends around the growth in alternatives is a good example of that. If you have a look at the average valuation on a multiple basis for those U.S. managers, they're trading around sort of high teens to 20-plus multiples. So on that basis, I think we're trading a discount to that. I think as we grow the business, I think there's absolute opportunity for us to re-rate to that level. In respect to the inorganic, we continue to be looking for other opportunities, but our first priority is to continue to grow the businesses that we have today and the capabilities. That we certainly will be disciplined in keeping on an eye on other opportunities out there. And if we can identify as a great addition because they've got a proven edge in what they're doing. And it would be accretive to our platform and accretive to our share price, we would certainly continue to grow inorganically.

Sorry, one final one, and I'll hand it over. But the free float that you spoke to because we have used a lot of currency to buy others. I think a lot of it is crowed. Can you just micro question, but I'm trying to get a sense of how many shares are yet to be issued, what our actual total share base is assuming they are all issued. And is that potentially an overhang if PM and Merricks do want to sell. I'm not sure how long they're crowed for, but what is that quantum and how does that play into the free float, do they need to sell down? But two questions, what's the actual fully diluted shares that we are going to have on issue and how much is with companies that we've acquired potentially going to be an overhang, please?

You're right. It's a fairly detailed question, so it may be better that we take it off-line. But what I would say, if you have a look at our results that we've been putting into the market and including the most recent results on the 26th of February, the appendix that result has a very helpful table that shows the forecast issuance of shares as a result of the acquisitions. So maybe post this AGM, I can take you through those numbers. Thanks. Ian?

The only point I'd add, Charles, is that going to your point about the inorganic acquisitions, we're always looking to increase earnings per share via those acquisitions. So naturally, we're looking for companies which have got a lower PE at the point of purchase and what we've got in the market at that kind of point in time in order to boost the EPS level as a result of the acquisition. So the point is spot on that you highlighted. Ingrid, did we ever get anything from the rest of the world out there.

We have some online questions coming through, but not for this item. I'll just trying to get but nothing more.

Well, there's no more questions. We will now move to resolution 1, which is the adoption of the remuneration report. Under the Corporations Act. Listed companies are required to include as part of the director's report, a remuneration report. The remuneration report for the financial year ended 31/12/2024, is included in the company's 2024 Annual Report. Corporation Act requires companies put to shareholders a nonbinding vote to enable shareholders to voice their opinion on matters included in the remuneration report. Given the vote is advisory only, it does not bind the Board or the company. However, the Board will take the outcome of the vote into account when considering future remuneration decisions. The Board recommends our shareholders vote in favor of adopting the 2024 remuneration report. I'll now move this resolution and we'll show proxy notes on the screen in a moment before asking for questions. You can see the proxy votes on this slide. Open proxies are in favor of the Chair at the time of the meeting will be voted in favor of the resolution. Adjusting for these votes for resolution 1, approximately 126 million shares are in favor, 71,000 other proxy discretion and 406,000 against. This equates to 99.6% in favor, 0.1% of other proxy discretion, and 0.3% against. Are there any questions or comments in relation to the 2024 remuneration report? Ingrid, can we start with the online questions?

At this point, we have no online questions, and I don't think there are any questions on the phone either. Is that correct, operator?

There are no questions via the phone.

Okay. Why don't we throw it open to questions from the room. There's no questions from the room for proxy -- sorry, for shareholders and proxy holders who have questions. And have either a green or yellow card, could you please put your hand up to talk. I don't think there's anybody wanting to do that. No? Okay. Thank you. So if there's nothing there, we will now move on to the voting aspect of it for those people who have it for those in the room with green cards. If you're a shareholder, proxy holder and eligible to vote online, could you please complete your vote in relation to resolution 1. Alternatively, if you prefer to wait, please complete your voting at any time between now and the end of the meeting. We'll now move on to resolution #2, which is the re-election of Jaye Gardner as a Director of the company. With regards to this resolution, Listing Rule 14.4 requires a director must not hold office without reelection past the third AGM following their appointment or 3 years, whichever is longer. As Ms. Gardner was last elected at the 2022 AGM, she accordingly retires at this AGM are being eligible, offers herself for reelection. The details are set out in the explanatory memorandum of the notice and are also shown on this slide. As you can see, Jaye has extensive experience in corporate finance and valuation work. Culminating in the current role as a Managing Director of Grant Samuel. This experience has proven very useful to Regal over the past 3 years, particularly given Regal is considered and executed a number of acquisitions. Personally, I've enjoyed working with Jaye over this time, I have greatly appreciated her input and expertise. I'll now hand over to Jaye to say a few words about her reelection.

Thanks, Michael. Good afternoon. Thank you for giving me the opportunity to address your meeting. I'm pleased to put myself forward for reelection to your Board of Directors. By way of background, I was appointed to the VGI Partners Board in conjunction with its IPO in June 2019, and was reelected on the merger with Regal Funds Management in June 2022. It's been a privilege over the last 6 years to work with and make a contribution to the Board, particularly in my role as Chair of the Audit and Risk Committee. As Michael mentioned, I have more than 30 years' experience in corporate finance and valuations as a Managing Director at Grant Samuel, and I believe this gives me strong commercial and financial skills, and the government's capabilities that are necessary to be an effective contributing member of the Board and its committees. I'm committed to the effective operation of the Board and its committees and willingly to vote the necessary time to fulfill my roles. I appreciate the opportunity to continue to represent shareholders as an independent Non-Executive Director on the Regal Partners Board. Thank you. I'll now hand back to Michael.

Thanks, Jaye. The Board, with Ms. Gardner abstaining supports the reelection of Jaye Gardner as a Director. I'll now move that Jaye Gardner to be reelected as a Director of the company, and I'll show the proxy votes on the screen before asking for questions. Turning to the proxy vote, open proxies in favor of the chair at the meeting at the time will be voted in favor of the resolution. Adjusting for these, the vote for resolution 2 are approximately 135 million in favor, 71,000 other proxy discretion and 1.4 million against. This equates to 98.9% in favor, 0.1% other proxy discretion and 1.0% against. I'll now go to questions. Ingrid?

No, there's nothing online for this resolution at the moment. And nothing on the phone.

Anything from the floor?

Thank you. Just a question, I suppose I've already asked it, but Jaye, you seem to be the in-house M&A expert given all your current role elsewhere. So similar question, but we've clearly done a lot of M&A and -- as you know, it is notoriously difficult to do M&A, let alone how many companies we bought and integrated, whether it be Perpetual and Pendal and all the things they bought, especially asset managers, they're people heavy, and there's been a lot of shareholder wealth destroyed by M&A, but we've done very well thus far. But just would like your thoughts, please, given your experience about going forward. Can we digest more? Or what's the general thoughts? Where have we got the gaps? Are there any particular areas that you think would be good for Regal shareholders going forward? Just your general thoughts on M&A going forward, please?

Thanks, Charlie. Look, we're very disciplined when it comes to M&A. And we are certainly prepared to step back when we don't believe it works. And we did that with Platinum. So I've got a lot of confidence in that process as we go through before we approve an acquisition. And we will only approve them and we believe they're going to be in the best interest of shareholders. Yes, we are an alternative asset manager. And yes, there are some gaps in our offering. I think we might keep sort of our strategic priorities, confidential unless Brendan would like to sort of share where our focus is in those regards. But we're always looking for opportunities where we've got gaps, but we will always be disciplined in the approach we take.

Anything you want to add, Brendan?

No, I think it's been fairly clear. I think the traditional areas of alts that we're not in at the moment are things like real estate, infrastructure of private equity. I'd say we're underweight in credit, for example, relative to what we could be. So they all remain areas of interest to us.

Mike, as Jaye and Brendan emphasized with a strong disciplined process around the sifting of those opportunities fall review by the Board. Okay. Thank you. There's no further questions. We can now move on to resolution 3. So people in relation to resolution 2, if they could vote, that would be the process or the right time to do that now to completely vote for resolution 2. Moving on to resolution 3, the reelection of Sarah Dulhunty as a Company Director. With regards to this resolution as noted in the previous resolution Listing Rule 14.4 requires that a director must hold -- sorry, must not hold office without reelection past the third AGM or following their appointment or 3 years, whichever is longer. As Ms. Dulhunty was elected at the 2022 AGM, she accordingly retires at this AGM but being eligible, offers itself for reelection as Mr. Dulhunty's details are set out in the explanatory memorandum of notice, and they are also shown on this slide. As you can see, Sarah has a distinguished legal career over 35 years. With experience across corporate and securities law, equity capital markets and corporate governance as with Jaye, it has been a pleasure working with Sarah over the past 3 years and have greatly valued to insights. I'll now hand over to Sarah to say a few words about her reelection.

Thanks, Michael. Good afternoon, everyone. I'm also pleased to put myself forward for reelection to your Board today. I've served on your board for 3 years now, joining the Board as an Independent Non-Executive Director and Chair of the Nomination and Remuneration Committee at the time of the merger of VGI and Regal. Over this period, I've had the privilege of being able to contribute to Regal's growth and success, and I'm excited about the opportunities for Regal that lie ahead. Prior to joining your Board, I was a corporate partner at Ashurst, an international law firm. As Mike mentioned, with over 35 years' experience of advising ASX-Listed companies and funds primarily on equity capital markets and M&A transactions and corporate governance. I also served on the Board of Blake Dawson at the time of its merger with Ashurst and on the take of this panel, the AICD Law Committee and the Corporations Committee. This experience has equipped me with the skills to be able to contribute effectively to the operation of the Regal Board in overseeing Regal's transition to life as a listed company, the implementation of Regal's strategic objectives and the development of Regal's remuneration framework. I am committed to enhancing shareholder value and ensuring the long-term success of Regal and believe in upholding strong corporate governance and transparency. I'm willing to commit the time and attention to serving as an Independent Non-Executive Director and contributing to Regal's future growth and success. I appreciate the opportunity also to continue to represent shareholders as an Independent Non-Executive Director on your Board. Thank you. I will now hand back to Michael.

Thanks, Sarah. The Board with Ms. Dulhunty of staining supports the reelection of Sarah Dulhunty as a Director. I'll now move that Sarah Dulhunty be reelected as a Director of the company and show the proxy votes on the screen before turning to ask for the questions. Turning to the proxy votes open and in favor of the chair at the time of the meeting will be voted in favor of the resolution. Adjusting for these, the votes for resolution 3 approximately 113 million in favor 71,000 other discretionary proxies, 23.4 million against, and this equates to 82.9% in favor, 0.1% other proxy discretion and 17.1% against. I'll now go to questions. Ingrid?

At this point, there is nothing online or on the phone.

Okay. I'll now go to the floor. Charlie?

17% against, but I have an idea, but curious what was the reasons if you know of any, for that?

I don't know of any reasons for that, but I am hoping to find out after the meeting and arrange a meeting with the relevant shareholder to find out the reason for that vote.

Nothing further from the floor. Nothing further from Ingrid. Nothing. I will now move on to voting. Could anyone who is eligible now please vote, you will vote in relation to resolution 3. Okay. The final resolution #4, the improving ratification of the issuance of securities for the employee incentive plan. This is essentially a matter of internal housekeeping part as a background. September 2024, the company announced the issuance of performance share rights to PSRs to certain employees to promote retention and alignment of the employees with the shareholders. In relation to this, 3,424,887 rights were issued to employees under the terms of the company's employee incentive plan for no cash consideration and under the 15% annual capacity limit permitted from the Listing Rule 7.1, last not requiring shareholder approval. Majority of these rights related to a deferred bonus grant for the financial year 2024 remuneration. In other words, are issued in line with the company's practice of deferring a portion of variable remuneration for certain employees whose remunerated exceeds a specific amount for a period up to 2 years. The remainder of the rights related to the new long-term incentive plan where the rights were able to vest after 3 years if the relevant criteria were met. Purpose of resolution 4 today is to seek shareholder approval and ratification for the prior issuance of these rights that were granted in September 2024. If shareholders approve the resolution, the rights will be no longer treated as having been issued under the 15% placement capacity, thus making that capacity available for further business opportunities. If shareholders do not approve the resolution, the rights will remain issued under Regal's 15% placement capacity. The Board recommends shareholders vote in favor of resolution 4, and I now move this resolution. I'll show the proxy votes on the screen. Open proxies in favor of the chair at the time of the meeting will be voted in favor of the resolution. Adjusting for these, the votes are approximately 123 million in favor, 70,000 other proxy discretion and 318,000 against. This equates to 99.7% in favor, 0.1% other proxy discretion and 0.3% against. Now going to questions. Ingrid, anything?

Nothing online or on the phone for this item.

Anything from the floor? Okay. I will now move to voting. But everyone who is eligible, please complete your vote for resolution 4. While you're doing that, I would like to give -- like you to note, we have now addressed all 4 resolutions. I intend to now call for any general questions, and I'll leave the polls open during this discussion. This means if you wish to take a little bit longer to decide your votes or change your vote, you may do so. When we are new in the end of the meeting, I'll give approximately 15 seconds notice, we intend to close the poll. [Voting]

I'd now like to ask if shareholders have any general questions. At this time, we'll kick off again with you in group. Charlie, you're in the queue.

So the online question I have is, in light of share price weakens in '25 to date, -- is the Board considering a buyback or other capital management initiatives.

Yes. I think Brendan is a man to answer that.

Good question. It's certainly been something that management has been considering that perhaps refer back to one of my earlier slide showing the considerable efforts we've made to improve the free float of the business over the last 3 years. So remember, at the time of Regal Partners merger with VGI and the creation Regal Partners, our free float was 9%. It's now 62%. A buyback would be a short-term hit to the share price and erode some of that free float. And I think ultimately, in building a sustainable long-term business, we're better served by keeping that capital on balance sheet and continuing to grow the free float of the business.

Nothing else on line or on the front at this point.

Anything from the floor, Charlie, you'll go you're a second in the queue.

Andy Derek, I'm a proxy. First of all, congrats on a great year, and thanks for doing best practice with a hybrid meeting. It's great to see. A couple of questions. During the year, there was an investment with U.S.-based or Aussie-based biotech Opthea. Generally speaking, my understanding is the weighting of that investment was quite heavy towards the likes or at least well represented by the listed investment companies part of the portfolio. Was there any particular reason for that? I know a lot of the funds are very sector-specific or specialists. And I know you've now got multiple portfolio managers and those kinds of things, but was it -- was there any particular reason for that?

Brendan, do you want to take that?

Yes. Thank you, Andy. I think the stock you're referring to is Opthea, ticker OPT, you're right, it was a high conviction position and appeared in a number of our strategies across the Regal branded long/short equity strategy. So just to be clear, didn't appear in any of our credit and royalty strategies, certainly didn't appear in the PM Capital Global strategies either. So within the strategies, it appeared a number of times. I'll reiterate, though, that it was always within the mandates and the risk guidelines of each of those funds. Having said that, I think you touched upon a point where is whether it was appropriate to have such a position so common across those portfolios, particularly of that size in the retail funds. And as a result, we have taken measures internally to restrict the chance of that happening again, particularly as it relates to our multi-strat funds and also in respect of our retail funds being VG1, RG8 and RF1 in particular. So well noted, and we regret what has occurred. However, we've made changes to reduce the impact of that happening again, whilst not impacting the ability of the Regal onshore portfolio managers to continue to generate strong fundamental returns.

Yes. That's very helpful. And just by extension, because naturally, again, you've got multiple portfolio managers, but they might be overseeing multiple strategies. Pardon the ignorance, but how does the firm manage positions where you've got different structured classes, managed funds, et cetera, investing in the same stock? And are there ever crosses or transactions between Regal strategies or just the group strategies, I might say.

So first and foremost, the guiding principle in terms of how each of our strategies, whether they be funds or mandates that run the offering documents in respect to those. So -- if it's a retail product, there will be a PDS. If it's a wholesale product, which would be more commonly what there is, there'll be a offering document. If it's a mandate, there will be a contract that governs how that investment strategy is to be run. So at all times, we're managing the investment strategy in accordance with that either offer document or that contract. And then we're doing what we've been employed to do, and that is typically to generate fundamental returns from investing on the long side and the short side. As I said before, Opthea was a company were known for a long period of time. We had high conviction in its ability to emerge into a global leader. We got that wrong. We've acknowledged that. We've been very transparent to our clients. So we've made a mistake there. We've put some guardrails in place, as I've mentioned before, and we're moving forward. So my priority is to make sure that each of the funds and strategies are being run in accordance with those risk guidelines as in the offer documents, and we were satisfied that it was.

And can they trade with one another, though hypothetically?

If it would be rare that if a fund was a seller for a reason and another fund was a buyer, it would be done at a fair market price. So yes, it technically can. It would be done in the arm's length transaction, recognizing there's a high inherent risk of related party transactions have high inherent risk of concerns perhaps around that.

And just one last question. Again, Regal does have quite a portfolio of leaks. And as the firm has displayed its growth is really, really strong and keen to continue so. There's been a lot of acquisitions and there are some very acquisitive participants in the leak market. Is this something that the firm might look at going forward? Because, again, it's a market that seems to have a lot of acquisition. But as I understand it, the firm hasn't pursued a large amount of climbing up the registers of LICs and...

It's not for -- certainly, there are two examples that I'll highlight. One is a listed investment company called PMC run by Platinum Asset Management; and another one, PAI, as -- another the Asian strategy run by Platinum. We've been very public about our desire to put forward a proposal there to offer those shareholders an alternative. Unfortunately, we've been rejected by each of those Boards. So I guess I'd highlight that as an example, that's a very public example of our desire to ensure that where we've got great investment capability, and we think it's superior to another invest LIC that would like to put that forward. But having been rebuffed by the Boards of those LICs, we've decided to stop work on that.

Continuing on the topic of LICs, I have to ask, but given our previous interest but VG1, 160 share price odd, 192 NTA, 17% discount, RG8 181, share price 216, NTA [ 16% ] discount and even the flagship product. I think you referred to it as RF1 trading in a 9% or 10% discount, I believe. But yes, clearly, that has -- well, seemingly chronic, I'm not sure how much of Opthea had to do with -- I don't know if it's blowing out the discounts, but -- clearly, there is a trend, as you know, that some or you've tried to correctly with the vehicle that you've had currency because it was trading at a premium, PM tried to take over some underperforming LICs that were at a discount. So that makes sense. But yes, just your thoughts on VG1, VG8, RG8, given those discounts do seem to be chronic. And maybe if you could just does seem like a bit of -- I don't know what the industry term is style drift. I'm not sure that they were sort of global funds. And I don't know how Opthea ended up being such a big position for those funds. It does seem a bit different to what one would normally expect, but I suppose you've answered that. But just addressing the discount, please, any thoughts or updates as to how you can close that because whatever has been done doesn't seem to be working. So just like your thoughts please going forward. Is there anything you're going to be doing differently to try and close those discounts? Or should we just assume that, that is now chronic?

Now thank you for your observation. The VG1 and RG8 is now coming up to 3 years since we basically acquired VGI and we've been working hard to close that discount. Whilst we had a challenging investment performance through sort of March, April, I'm pleased to say that in May, it's performed really strongly, both VG1 and RG8 and so some of that gap more recently has opened up because of the strong investment performance, including even with RF1. We're not satisfied to allow that gap to sort of stay. And so we continue to assess all options above and beyond, I guess, the 3 pillars of what we'd highlight at the time. One, being very clear with investor communications, highlighting what the portfolio is and how we're investing. Two, being very clear from a capital management perspective, so using a combination of buybacks and a very clear dividend yield. And three, more broadly, making sure that we're combining the investment capability, the entire group to get the best outcomes for shareholders. So we haven't given up, and we continue to sort of drive, I think, better performance for those funds going forward. And if we continue to do that, I'm sure that gap will close.

So it is just performance that you're assuming will close the discount because...

In the long term, performance will be the key part of that.

I am just looking, I think it's...

Just had one point Charlie, and that is -- the question may stay the same and the answer is still the same that we're a service provider to those leaks and Brendan has expressed what we do as a service provider in trying to help generate performance, which we believe is ultimately the long-term solution to closing the NTA share price gap. But at the end of the day, it's the directors of LICs, who are independent directors who will make those decisions and those questions in relation to that, a better director to them than they are to RPL with. Service provider brings indicated what we're doing in that capacity, but they are independent companies with independent directors. And at the end of the day, they decide what policies will be implemented in relation to their shareholders.

But just the strategies like I'm looking at RG8 financials and the total loss for the half was $8.8 million, of which there was an interest expense of $7.3 million for the shorting management fees, $2.8 million just for the half. So -- and that's pretty similar for VG1. As you know, we have raised that some of these products like just the fee drug, like so many other people are getting fed before their shareholders, whether it be the banks or the brokers or the manager. And yes, I know you're just a service provider, but the service has not been great to date for those three that you've been managing -- two that you're managing for 3 years now. So do you think that's sustainable? Or is that just chronic given the fee drag that there should be such a significant discount associated with those funds with the interest, with the fees. And it sounds like you're not going to do anything about those fees, which I think is up to the fund manager, but -- take your point. It's up to the other Board, but just those particular funds.

I encourage you to appraise those issues. I'm going to say the good news story is the PM Capital, in which trades at a premium, but we're not going to go there because, again, that's an independent board. So as I said, it's not our bailiwick. We're a service provider. We're more happy comment on the services we provide. But the actual investment strategies and responsibility to the shareholders' lies with those boards and their direct accountability to the shareholders at their relevant meetings.

Do you employ the managers of those strategies?

Do we employ them? Yes. And we provide services to those companies.

So there is some influence over the performance and the strategy, et cetera. We don't have to argue about that, but it just does same chronic. So I look forward to strategies going forward to hopefully close those discounts.

Well, I encourage you to engage with the independent directors of those companies, if you're unhappy with why the performance is going on.

Perhaps for Brendan. But are you able to express as a proportion of the firm, how material the income from the 4 LICs.

I can't off the top of my head, but it's public information. You could work out, obviously, the management fees paid to the manager right across the group and divide that by obviously total revenue. So it's no one answer and it's in the public domain.

And I know there's 4 different strategies of varying time frames and the rest. But it would be material, wouldn't it?

Certainly. $16.5 billion.

No, of the 4 [indiscernible] of the 4.

$2.3 billion.

Okay. So you're roughly 1%, something like that? So that gives you a rough proportion of it. Okay. Any other questions? This is the general question segment.

Anything else on line. Just one last check on the phones.

Thank you. There are no questions by the phone line.

Okay. Well, that finishes the general questions section. In case you've not converted your voting during the meeting, I will now give you a few moments to finalize your voting. As mentioned earlier, Boardroom Partners, our Regal share registry. We'll conduct a poll using voting cards that you will submit today in this room. The online votes that you submit in the votes that were cast online before the meeting. As a reminder, for those in the room, the person is entitled to vote on this poll are all shareholders and proxy holders who hold green voting cards, which look like this. On the reverse of your green admission card is your voting paper and the instructions. Please ensure you print your name where indicated and sign the voting paper. When you're finished filling in your voting card, please provide it to the Boardroom staff to ensure the votes accounted. Boardroom staff will also be able to help you if you need additional time or assistance. If you require any help, please raise your hand. Okay. All votes now done. I hope so. I now declare the poll closed and formally ask Boardroom to start counting the votes. The results of today's AGM will be posted to the market and made available on the Regal Partners' website later today. I'd like to thank everyone for attending. Encouraging the people to contact the Investor Relations team if you have any further questions. As there is no other formal business of the meeting, I declare this AGM of Regal Partners Limited closed. For those in the room, please feel free to join us for refreshments on the other side of the room. Okay. Thanks very much.