Sydney hedge fund Regal sees surge in inflows as Middle East conflict sparks demand for inflation hedges

Source: Global Market Report

Boosted by the demand for investment strategies to hedge against inflation risks amid the Middle East conflict, Sydney-based fund management firm Regal Partners Ltd. is expected to achieve a net inflow of 2 billion AUD (1.4 billion USD) this year.

CEO Brendan O’Connor said at the Macquarie Australia Conference in Sydney on Wednesday that the company’s net inflow in April was about 200 million AUD, while the net inflow reported in the first three months of the year was 449 million AUD. He stated that since the company’s listing nearly four years ago, this has been the best start to a year.

According to data provided by O’Connor, the inflow in April brought Regal’s total assets under management to approximately 21 billion AUD.

“Given the current strong demand, we would be disappointed if this year's inflow does not exceed 2 billion AUD.” He noted that part of the inflow comes from “geopolitical events happening around the world,” with investors looking to strengthen portfolios to address the threat of rising prices.

O’Connor said that there is strong demand from institutional clients in North America, the Middle East, and Europe. He pointed out that these clients are “thinking about” how to protect their portfolios from the effects of intensifying inflation and rising interest rates.

He said institutional investors are the main target for inflows, and they are usually over-allocated to US assets and are turning to uncorrelated, diversified strategies, especially those that can hedge against inflation risks.