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Highlights

  • FUM drops to $16.5 billion in March quarter, down from $18 billion in December

  • $540 million in negative investment performance and $1.1 billion in asset reductions weigh on results

  • Opthea write-down to zero impacts long/short equity strategies

Regal Partners (ASX:RPL) has reported an 8.3% fall in funds under management (FUM) for the March quarter, with total assets slipping to $16.5 billion, down from $18 billion at the end of December 2024. The decline was largely attributed to negative investment performance and a mix of capital distributions, buybacks, and currency-related losses.

According to the fund manager, $540 million of the drop came from negative investment performance, reflecting challenging market conditions during the quarter. A significant contributor was a complete write-down of Regal’s 30% stake in biotech firm Opthea, held across several of its long/short equity strategies. The equity was written down to zero after Opthea flagged concerns over its viability.

The biotech company, dual-listed on the ASX and Nasdaq, shocked investors last month when it disclosed a “material uncertainty” about its ability to continue operating, following a failed clinical trial. The announcement triggered a sharp sell-off in both Opthea and Regal shares, compounding Regal’s investment headwinds.

In addition to the market-driven losses, Regal also experienced a $1.1 billion decline in assets due to a combination of client distributions, dividend payments, share buybacks, and unfavourable foreign exchange movements.

Despite the setbacks, Regal reported net inflows of $149 million for the quarter, with positive momentum in a number of its strategies still attracting investor interest. This suggests some resilience in its broader portfolio offering, even as macroeconomic and stock-specific challenges weigh on headline performance.

Founded and led by well-known investor Phil King, Regal Partners has carved out a reputation for active investment strategies across equities, credit, and alternatives. However, the volatility seen in early 2025 has added pressure on fund managers to maintain returns, particularly in higher-risk areas such as biotech.