Regal’s Global Small Caps Fund Rises 40%

Regal Funds Management has introduced a new small caps strategy targeting high-growth international stocks to boost performance. The launch comes during a period marked by volatile investments and past setbacks.

The firm has seen mixed results this year, dealing with significant market fluctuations and a costly $220 million hit from its investment in biotech company Opthea. Despite this, its recent push into global small caps has delivered a notable success. A new fund focused on smaller international businesses has surged 40% in its first three months, far outpacing the Russell 2000’s 8% gain during the same period.

The strategy is managed by a team with strong experience in small-cap investing and was launched in April with a fundraising goal of $50 million to $100 million. The fund has quickly gained traction by investing in sectors such as buy now pay later platforms, crypto lenders and data centre operators. These areas have benefited from renewed investor confidence and solid revenue growth.

Key contributors to performance include sharp gains in companies like Zip Co, Sezzle and Dave, which offer short-term or deferred payment services. AI-focused infrastructure players such as CoreWeave and Iris Energy also added to returns. Data centre operators performed particularly well after a $US7 billion lease deal, followed by merger activity that helped lift stock prices across the fund's holdings. These developments have positioned the fund as a standout in Regal's portfolio, raising expectations of higher-than-anticipated performance fees.

Although these early gains are promising, continued success depends on broader market conditions and whether these growth trends can be sustained. Regal has built a reputation for bold plays in the small-cap space, though not without some high-profile setbacks. Still, this new fund appears to align with emerging global trends in industries with scalable potential, especially those linked to AI, digital finance and modern infrastructure.

Source: Australian Financial Review, Listcorp, Regal Funds Management