Regal’s royalties fund rattles the tin for $50m; eyes Canadian deals

afr.com:

Regal Partners’ resources royalties fund is rounding up investors for a $50 million capital raising to help bankroll two Canadian deals.

Regal’s Phil King.  

It is understood Regal Resources Royalties Fund opened books for the raise this week, with the aim of having the proceeds locked by September 28. Portfolio managers Simon Klimt and James Morrison were fronting investors on Tuesday to talk up the two investments.

Invites sent to potential backers said Klimt and Morrison had thrashed out due diligence and reached in-principle agreement on two deals which were not named. The first one, at $US22.5 million ($34.9 million), would see it acquire a gold stream over what it described as one of Canada’s “highest-grade open pit gold miners”.

The second one, worth $US17.5 million, was an investment in an existing portfolio of royalties.

The fund would use existing cash in addition to the $50 million raise to fund the purchases. Should Regal not be able to see them to completion, it intended to retain the raise’s proceeds to other investments within the fund’s mandate.

Post completion, the fund’s portfolio would have a 60 per cent weighting to energy, followed by 25 per cent to precious metals, 8 per cent to precious metals and 7 per cent to battery metals. The beefed-up portfolio would have revenue of more than $30 million in 2025.

Regal launched the fund in 2019 and targets 10 per cent to 20 per cent internal rate of return. Performance stood at 28.7 per cent at July end. On a cumulative basis, it has returned about 172 per cent since inception.

Together with Regal’s private credit strategy, the two funds had $460 million in funds under management at June 30.

The raise is a reminder that despite its many M&A interests, it’s