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Regal fund suspended from Asgard platform

• The Australian
• 03 June 2015
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One of Australia’s best known boutique fund managers, Regal Funds Management, has reportedly had its $1.3 billion Australian Long Short Equity Fund suspended from the platform managed by the Asgard group.

While it is common practice for funds to drop off platforms once fund targets have been reached, a Regal investor update revealed it had become aware that ASIC was conducting a hearing under the Corporations Act relating to a specific trade made in 2013.
It is also standard practice in the industry for a platform manager to suspend a fund when notified of an ASIC hearing.
While Regal or ASIC did not identify the event the fund’s chief investment officer is Philip King, brother of the company’s founder, Andrew King.

Philip King said last night: “We have been told by ASIC these notices are very common. We are active traders and are not surprised that our trades get reviewed from time to time.”

Regal, which operates out of Sydney’s Circular Quay, was founded in 2004 and has regularly won prizes, for instance in 2012 winning the Australian Long Short category at the Lonsec Fund Manager of the Year awards.

Regal is 30 per cent-owned by Westpac, which also owns Asgard, via the Ascalon Financial Services group.

The fund differs from traditional “long-only” funds in that its managers are allowed by its mandate to short sell shares in companies whose shares it expects to fall. Such a practice means the manager should make money by selling the shares at a high price, borrowing the stock to settle the trade, and buying it back more cheaply. It can then use proceeds from those sales to take further long positions in companies in which it believes the share price will rise.

Its main target is to beat the S&P/ASX 300 index and as at December last year it had returned 10.28 per cent for the year, almost twice as much as the 5.3 per cent return from its benchmark index.

Philip King joined Regal in 2006 and prior to that was a hedge fund manager at DPFM in London for six years and before that was a sell side analyst with Macquarie Bank for five years. Before working at Macquarie Bank, Philip worked at KPMG for eight years. Before founding the firm Andrew King had spent more than 10 years as a broker and fund manager, most recently at Paradice Investment Management.