Regal Partners has achieved 20 per cent annual returns since its launch two years ago, bolstered by strategic allocations to water and surging small-cap investments within its multi-strategy fund. Regal Partners is a high-profile money management firm. Their multi-strategy funds aim to generate profits regardless of market conditions. Founder Phil King highlighted the increasing relevance of such strategies given heightened geopolitical risks. He noted that 2026 presents opportunities to capitalise on market volatility.
The Regal Partners Private Fund, managing $650 million in assets, has allocated 10 per cent to water through an investment in Kilter Rural’s water fund. Kilter Rural generates revenue by leasing water entitlements to farmers and irrigators. This investment proved lucrative, with the Kilter fund achieving an 11.5 per cent return in 2025, surpassing the S&P/ASX 200’s 6.8 per cent, driven by droughts and government buybacks that increased water prices. Regal’s CEO, Brendan O’Connor, mentioned they increased the fund’s water exposure in August due to dry conditions, which paid off when the government announced further water buybacks in the Murray-Darling Basin.
Water was a key contributor to the private fund’s 15.8 per cent return in 2025 and its 20.1 per cent annualised return since December 2023. However, the fund’s largest gains came from emerging companies, yielding 32.7 per cent. Notable successes include Firmus Technologies, an artificial intelligence infrastructure start-up expected to list on the ASX in 2026, and Artrya, an ASX-listed coronary software platform business in which the fund holds a nearly 10 per cent stake.
Despite a setback with online used car dealer Carma’s underwhelming IPO, Regal remains optimistic about a resurgence in IPO markets. O’Connor anticipates further gains, citing opening IPO markets and increased demand for capital. HLB Mann Judd reported a 22 per cent drop in total IPO funds raised in Australia last year due to trade wars and geopolitical tensions.
