Brendan O'Connor – Alpha Opportunities in Australia at Regal Partners (EP.485) - Capital Allocators Recap

Podcast: Capital Allocators

Published: 2026-02-05

Duration: 57 minutes

Guests: Brendan O'Connor

Summary

Brendan O'Connor, CEO of Regal Partners, discusses the firm's growth from a $1 billion hedge fund to a $21 billion multi-strategy firm. The episode explores Australia's unique market dynamics and Regal's approach to leveraging sector expertise for alpha generation.

What Happened

Brendan O'Connor, CEO of Regal Partners, detailed the firm's transformation from a founder-led hedge fund into a comprehensive multi-strategy platform managing A$21 billion across various asset classes. He highlighted the unique characteristics of the Australian market, where financials and materials sectors dominate, providing an idiosyncratic return profile that is appealing to global investors.

O'Connor discussed Australia's substantial superannuation system, which has accumulated $4 trillion in savings, making it the fourth largest globally. This massive pool of capital is gradually shifting towards alternative investments, presenting opportunities for firms like Regal Partners to innovate and capitalize on.

Regal Partners has diversified beyond long-short equities to include credit, royalties, real and natural assets, and growth equities, driven by strong net flows, investment performance, and strategic acquisitions. The firm's growth strategy is centered on risk management, improving risk-adjusted returns, and hiring key personnel, such as a dedicated chief risk officer and a HR director to enhance internal communication and culture.

O'Connor emphasized the importance of sector expertise and the ability to be 'the first call on the street,' which are crucial for alpha generation. Regal's investment strategy includes a four-step selection process focusing on valuation, macro environment, catalyst, and edge, ensuring informed investment decisions.

The conversation touched on Regal's significant presence in agricultural debt and being the largest owner of water rights outside the Australian government, highlighting their innovative approach to asset management. The firm also benefits from Australia's economic structure, which is well-positioned to take advantage of the global increase in capital expenditure on energy and critical minerals.

Regal went public in June 2022 through a reverse acquisition, becoming an ASX listed business, which provided governance improvements and enhanced marketing opportunities. Looking forward, Regal aims to expand its brand recognition and increase its non-Australian client base, focusing on delivering compelling investment returns.

Key Insights