Regal, an investment powerhouse overseeing approximately $21 billion in assets, faced a challenging July, which co-founder Phil King described as one of the tougher months for its fund suite. The firm, which manages a range of investment portfolios across various asset classes, was significantly exposed to the violent unwinding of South Korea’s leverage-fuelled artificial intelligence trade, a sharp pullback in gold stocks, and persistent struggles for Australia’s smallest companies. For instance, the Australian Small Companies Fund plunged almost 16 per cent, with holdings like Cardiac software company Artya (down 34 per cent) and defence tech Elsight (down 21 per cent) seeing substantial declines. Regal’s global small-cap strategy also suffered, sinking about 20 per cent due to widespread investor sell-offs in AI-related holdings.
Despite this market turbulence, Mr King indicated the firm doubled down on its convictions, effectively recouping most of those losses in the initial weeks of August. He highlighted Regal’s consistent ability to rebound strongly from crises by maintaining strategy during sell-offs and capitalising on subsequent recoveries. Separately, Mr King firmly refuted recent rumours from a Rampart report suggesting a potential merger between Regal and investment bank Barrenjoey. He stated unequivocally that there have been no discussions regarding a merger, and such a move is “not even on our radar,” citing the firm’s current extensive commitments.
While July presented a temporary setback, Regal’s longer-term performance shows resilience, with its Australian small-cap fund returning 19.5 per cent annually since 2015. Investment Director Charlie Aitken and Mr King continue to emphasise the undervalued state of Australian small-cap companies, a view supported by recent takeover bids for Regal holdings such as Reliance Worldwide, EQT Holdings, and Ausgold. August has also seen a turnaround in performance, partly driven by investor unease over major bank earnings, rising interest rates, and federal budget changes. Regal’s emerging companies opportunities fund emerged as a bright spot in July, returning 7.2 per cent and extending its rolling 12-month gain to over 40 per cent, largely propelled by its successful investment in data centre provider Firmus Technologies.
