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Leading small cap manager Regal Funds Management is giving retail investors the opportunity to have their money managed by the fund manager with the launch of a new LIC in June.
After being delayed earlier this year due to softer equity market conditions, The Regal Investment Fund (ASX: RF1) will be open for applications this Monday (April 29) and will list on Wednesday June 17.
Up to $500 million will be raised and 12 advisory and broking firms have been hired to manage the offer including lead arranger NAB and 11 other joint lead managers including Patersons, Bell Potter and Morgan Stanley.
Regal wants its fund to be “the leading alternative investment vehicle listed on the Australian Securities Exchange”. It will invest not only in listed companies but also companies aspiring to list.
Investors who sink their teeth into companies in the immediate pre-IPO can make substantial gains, even if they don’t rise several times post-listing like Splitit (ASX: SPT).
Such investments are common for Regal such as US-based tech company Life360 which will list on the ASX in coming months. In confirming Regal invested in Life360’s pre-IPO round, founder Phillip King told Reuters: “The ASX remains grossly underweight in terms of technology companies with global growth stories.”
Regal’s fund will also invest in debt securities, cash and derivatives (such as options and futures). But whatever the composition of its portfolio, investors will be able to buy and sell it just like an ordinary company.
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What will drive this fund?
Would-be investors have been assured investment strategies will utilise Regal’s existing philosophies. The prospectus said:
“Our core investment philosophy is grounded in the belief that a diversified portfolio of assets, using a range of investment strategies and backed by long term capital is key to achieving superior risk adjusted returns over the long term.”
Regal has said it will aim to perform irrespective of share market performance – hinting at a mixture of long and short strategies.
Its three largest resources holdings are in large cap Ausdrill (ASX: ASL) as well as mid-caps Base Resources (ASX: BSE) and Stanmore Coal (ASX: SMR).
Among its large non-resources’ holdings are LiveTiles (ASX: LVT), iSelect (ASX: ISU) and Huon Aquaculture (ASX: HUO).
Easily their largest holding is in buy now pay later stock Zip (ASX: Z1P). With the share price doubling this year, its 7.6 per cent stake in Zip is now $45 million.
Regal employs over 40 people across Sydney and Singapore and reports a total $1.6 billion in assets under management. This includes its portfolio of directly owned shares as well as its private hedge funds.