The hedge fund hook-up between Phil King’s Regal Funds Management and Rob Luciano’s VGI Partners has revealed a few more details on the workings of the cashed-up fundies.
Public documents related to the merger disclose Regal managed a cool $823 million in non-fee-earning funds under management as at February 2022. That’s from a total of $3.4 billion in FUM.
It’s not disclosed who’s getting all that money managed for free, but Regal’s profit and loss statement includes a $32.1 million fee rebate to suggest it is making staff or other entities whole on fees.
In fairness, not charging staff fees to manage their own net worth sure helps with alignment and is not an especially unusual practice at a fund manager. But it’s unclear who benefits from the $823 million in non-fee-earning FUM, with a further disclosure revealing total fee- and non-fee-earning FUM includes all interests in Regal, Regal Asia, Kilter and Gresham joint venture businesses.
For the record, Regal reported a profit before income tax of $68.7 million on net income of $178.2 million over the year to December 31. Over the same period, VGI posted a profit before income tax of $62 million on net income of $82.6 million, with no fee rebates.
On a pro-forma basis, the merged group known as Regal Partners would have earned a $135.2 million profit before income tax for 2021, even after adjusting for Regal’s fees rebates. Nice work, if you can get it.