Regal Funds Management chief investment officer Phil King has laid out ambitious growth plans for his hedge fund despite a rejected takeover tilt at storied wealth manager Perpetual, as he conceded the market believes the audacious deal is unlikely to proceed.
Sydney-based hedge fund Regal last month made a bold move for Perpetual, one of Australia’s oldest wealth managers, which has a separate agreement in place to merge with rival Pendal. Regal, which last year absorbed prominent hedge fund VGI, teamed up with a private equity fund and made two consecutive bids for the much larger Perpetual, both of which were ultimately rejected.
Investors now believe it is unlikely Regal will come back with a higher bid, after a court ruling that meant Perpetual could face stiff penalties for ditching its merger with Pendal.
Speaking at an event held by philanthropic investment firm Future Generation and moderated by this masthead this week, King said he could not comment on whether Regal could make a further move on Perpetual because he was not on Regal’s board.
However, he also said:“I think certainly the stockmarket has taken the view that another bid from Regal is unlikely.”
Meanwhile, King also said Regal had its eye on further growth opportunities after its merger with VGI Partners in June this year.
The merged company, Regal Partners, raised $110 million from shareholders in September to accelerate its growth strategy, and it said at the time the funds would give the company the opportunity to pursue “inorganic growth.”
This week, King said: “It’s a very exciting time for us, we see ourselves as a growth company. We’ve raised capital already, and we see lots of opportunities for growth.”
King said Regal had made the offer for Perpetual – which was rejected by the target’s board last month – because Perpetual’s share price was “quite depressed,” and because it had been approached by a private equity firm, Barings, which wanted to buy Perpetual’s trust business.
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