Good afternoon, everyone, and welcome to today's 2023 results briefing by Regal Partners Limited. Today's results will be presented by the Chief Executive Officer, Brendan O'Connor, and Chief Financial Officer, Ian Cameron, and the briefing is being conducted by webinar and phone.
As shown on slide five, the agenda for today is that Brendan will start with the result highlights, Ian will then cover the key financials, and hand back to Brendan for a business update and outlook. This will be followed by a short question-and-answer session.
We'll provide more details on how to submit questions over the phone at that point, but for those of you who are online, please feel free to submit your questions at any time during the briefing so that we can lead with those. Please note we may have media in attendance today. I would now like to hand over to Brendan.
Thanks very much, Ingrid. Good afternoon. My name is Brendan O'Connor, CEO of Regal Partners Limited. As Ingrid mentioned, joining me today for our results announcement is Ian Cameron, our Group CFO, and Ingrid Groer, Head of Investor Relations. Our FUM has doubled over the period to AUD 11 billion after a busy 2023.
Importantly, our revenue is up 17% to AUD 112 million, and pleasingly, this has been driven by a strong rebound in our performance and therefore performance fees across a range of strategies.
Also, pleasingly, the momentum that we experienced in net flows from 2022 and 2023 has continued, and in particular, as you'll see later in this results announcement, we've got further good news from a great start to 2024. The business continues to diversify across a range of asset classes, investment strategies, and client channels.
Importantly, we continue to execute on our growth strategy and are seen as an attractive partner to grow businesses from an institutional-grade corporate platform. I'll remind you that Regal Partners Limited is an ASX-listed specialist manager of alternative investment strategies.
Alternative investment strategies are increasingly being sought by our clients for the diversification and their uncorrelated nature to traditional financial assets and, when we're performing well, the strong absolute returns we can generate for our clients. With now over 150 staff, we manage AUD 11 billion across four asset classes.
Importantly, each strategy in our stable has a strong track record and strong investment performance, either in absolute or relative to an index. As Ingrid mentioned, I'll provide a few highlights from our results. I'll then pass to Ian on the financials. I'll finish by talking a bit about the business and an update on our strategy and outlook.
I'm pleased to highlight that in the full year 2023, we generated a normalized net profit of AUD 32.7 million, up nearly 32% on the prior corresponding period. The board last night declared a AUD 0.05 per share dividend, 100% franked, equating to AUD 0.10 per share over 2023. That represents a yield of over 5% when grossed up for the full franking.
Our statutory result of AUD 1.6 million was held back by the amortization of non-cash items related to the VGI acquisition as well as expensing some deferred acquisition costs or consideration costs for the Taurus acquisition earlier in 2023. The key drivers of our normalized NPAT for 2023 was the growth in FUM.
Now, that FUM has increased not only through investment performance but, as I've highlighted, net flows of AUD 500 million as well as the acquisition of Taurus Funds Management in early November 2023 and AUD 2.8 billion due to the addition of PM Capital. That transaction settled just before Christmas 2023.
Our revenues, as I've highlighted, were up to AUD 112 million, largely driven by management fees, other income, and performance fees. Our cost of AUD 65 million, up 11%, largely relates to high deferred compensation amortization of performance share rights granted.
The outlook for the business overall is that our fund performance continues to improve with the flow momentum we've achieved in 2022 and 2023 that has continued into calendar 2024 with a further AUD 400 million of additional flow commitments in calendar year- to- date. They're not reflected in the numbers above.
We have a strong balance sheet and, on a net cash perspective, AUD 200 million in cash, net cash short dated fee receivables and investments at 31 December. Finally, we are observing a number of inorganic growth opportunities, but we're taking a disciplined approach to prosecuting those.
Our net inflows across the calendar year of 2023 comprise net flows in each half. In addition, that's been assisted by positive investment performance in each period. Obviously, the two acquisitions in late 2023, being Taurus and PM Capital, make a material contribution to our end-of-year FUM of AUD 11 billion.
Pleasingly, the net flows that we experienced during calendar 2023 were broad-based across a range of our asset classes. As signalled, I'm pleased to announce a further AUD 400 million in additional commitments in the first two months of 2024.
These represent additional commitments from three institutional clients that are expected to be fully funded by 31 March 2024. Further, I'll remind you that effective 1 January 2024, the rebate for staff in Regal Investment Products falls to 50%, leading to a circa AUD 5 million increase in ongoing management fees based on FUM to date as well as an unknown opportunity for additional performance fees.
We are investors first and foremost. That is an ethos that has been at the center of Regal since its very beginning. With all our investment strategies eligible to earn performance fees, it's pleasing to see a strong rebound in our investment performance resulting in nearly half our fee-earning FUM now above high-water mark. Importantly, this trend in terms of the percentage of FUM increasing above high-water mark predated the acquisition of Taurus and PM Capital.
However, these two businesses, with their own performance fee-generating strategies, certainly add to our fund above high-water mark as at the end of the year. I think it puts us in a very strong position as we enter 2024, coupled with the additional flows, to drive additional profitability going forward. On that note, I'll pass to Ian Cameron, who will take us through the financials.
Thanks very much, Brendan. Turn to slide 12, which is the normalized profit or loss statement. We've normalized the P&L to exclude non-cash accounting items such as the accounting amortization of management rights and contract assets as well as certain non-recurring expenses. So full year 2023 normalized NPAT, AUD 32.7 million, up nearly 32% versus the PCP.
Focusing here on our 2H results, we ended the period with FUM of AUD 11 billion at an average management fee percentage of 1.08%. That equates to management fees of AUD 36.1 million. Performance fees for H2 were AUD 16.9 million with strong contributions from the Resources Long Short Fund, the Tactical Opportunity Strategy, the private credit fund, as well as the Attunga Power strategy.
Other income of AUD 11.3 million in 2H relates largely to, as well as, the return on our seed investments, our mark-to-market movements, as well as the dividend and distribution income that we receive on those investments with strong contributions from a number of our long-short strategies. Employee benefits expense of AUD 24 million, that includes the period where we owned PM Capital and Taurus in calendar year 2023.
That expense line includes fixed staff costs as well as add-on costs and the discretionary bonus expenses. Deferred compensation amortization of AUD 4.2 million relates to prior year STI bonuses that are deferred over two years, and so that's the non-cash amortization expense. Other expenses of AUD 9.3 million include finance costs, and some of the expenses in there relate to insurance, the operating costs of the funds, audit and legal fees.
So normalised NPAT for H2, AUD 19.6 million, up materially from 1H of AUD 13.1 million with a cost-to-income percentage of 58% remaining flat versus 1H. Turning to slide 13, which is the pro-forma normalised financials. We've prepared this slide for each business, splitting up Taurus and PM Capital, and we're prepared on the basis that we've owned those businesses from 1 January and showing what the pro-forma result looks like.
So key points to flag here are normalised NPAT on a pro-forma basis of nearly AUD 49 million for calendar year 2023, fee-earning FUM of nearly AUD 10 billion. Not reflected in that AUD 10 billion is the staff fund managed by Regal Funds Management where we've turned on fees from 1 January. So you can see there that the pro-forma management fee percentage of 102% would have been 106% after adjusting for that rebate that turns on 1 January 2024.
You can see there the strong contribution of management fees and performance fees from Taurus and PM Capital with PM Capital earning just over AUD 19 million of performance fees in calendar year 2023. The other income from Taurus and PM Capital of AUD 3.6 million relates to the seed investments that hold a balance sheet on balance sheet in relation to their underlying funds.
This slide also excludes AUD 3 million-AUD 4 million of identified expense savings. Turning to slide 14, which is our balance sheet. You can see there we've got a robust balance sheet with cash and trade receivables of nearly AUD 50 million, and that's after the cash payments we've made in relation to acquisitions of PM Capital and Taurus Funds Management as well as the dividend payments of nearly AUD 23 million in calendar year 2023.
The trade and other receivables of AUD 32 million largely relate to the management fees and performance fees that we crystallize at 31 December where we receive the cash in the month of January. The investments in financial assets of AUD 194 million relates to the investments we've got in both our listed and unlisted funds. Intangible assets of AUD 368 million largely relate to the goodwill that we recognize at the time of the VGI-Regal merger in June 2022 as well as our recent acquisition of PM Capital.
Other assets of AUD 77 million up from AUD 20 million at 30 June, and the movement largely relates to our acquisition of Taurus Funds Management where we've recognized our investment in associate and equity accounting in relation to the acquisition. Net assets of AUD 578 million at year end with excess franking credits of nearly AUD 28 million or three times the 2H dividend.
We've also got a AUD 50 million debt facility with HSBC, and at year-end, AUD 42 million was drawn. Our full year dividend for the calendar year was AUD 0.10 per share equating to 89% of dividend payout ratio. Back to you, Brendan.
Thanks very much, Ian. As I mentioned, I'll just skip through a few business highlights for the year and finish with a bit of an outlook for the business. So on slide 16 here, five key points. FUM is up more than doubled over the year. Obviously, as I said, driven by net flows, improved performance, and the material acquisitions at the end of 2023.
Revenue up. Performance fees are an important part of that in the second half of 2023. We have strong momentum in net flows. Not only is it the AUD 400 million we've announced today as new commitments in calendar 2024, which should be funded by 31 March 2024, the activity around investment due diligence and operational due diligence across the group continues. The diversification, a very deliberate strategy right across the group, is adding significant value to the Regal shareholder.
Finally, the significant and rapid growth that we have achieved really is built upon a level of confidence from an institutional-grade corporate platform and a strong management team with deep asset management experience. Our fund has grown significantly over the past 5-6 years.
One of the key measures, I think, that have that set a success really is the growth in the number of institutional investors over that period. In our experience, institutional investors, particularly offshore, are often great early identifiers of strong investment teams and product. We're experiencing a significant increase in institutional investor inquiry both from domestic clients and offshore across a diverse range of our investment strategies. It is great vindication of the investment talent that we're building here at Regal Partners.
When you couple that with the significant operational due diligence exercises they go through before they invest, it's pleasing to see the growth in the number of institutional clients we have. We now have over 30,000 investors and nearly 40 institutional investors on board, and I expect that number to continue to grow.
Our investment performance of the past three years, a period may I add, of significant volatility, material headwinds from rapidly rising interest rates, coordinated central bank reductions in balance sheets, so quantitative tightening, high inflation, and I think a deteriorating geopolitical landscape has been strong.
I think best demonstrated that we have a range of strategies that can generate returns regardless of the broader macro climate. Now, following the acquisition of PM Capital, we have four listed investment vehicles, over AUD 2.4 or nearly AUD 2.4 billion in FUM.
We are now one of Australia's largest managers of ASX listed investment vehicles, and we are very proud of the investment strategies and the returns that we are helping generate on behalf of those clients. Digging into our net flows a little bit further, this slide here highlights that the AUD 500 million of flows for the 12 months to 31 December 2023 was now AUD 900 million if you add in the additional flows for the first two months or commitments in the first two months of 2024.
As I highlighted, we've had an increase in institutional interest, particularly for uncorrelated investment strategies, and I see that trend continuing in through the rest of 2024. Importantly, our expanding product set and client channel add significant capacity for our distribution and marketing team. Our fund diversification continues not only by asset class but also by liquidity.
I think this is a very, very unique point and differentiator relative to many other ASX listed asset managers with nearly 50% of our fund either term or closed-end capital. As I've highlighted, numerous times before, not only does that provide benefits when constructing portfolio to achieve stronger long-term returns, it also gives the management team confidence to project the future earnings of the business and plan the growth of the business from a capital management perspective.
T hen finally, diversification by client channel. Now, nearly 29% of our fund from institutional sources and nearly 40% of our fund from retail when you include the listed vehicles. It would be a miss not to mention the recent acquisitions of PM Capital and Taurus. First on the right-hand side, Taurus, that transaction completed on the 4th of November 2023.
Just to remind you, Taurus is a specialist provider of financing solutions, principally credit, private credit, or royalties, to global mid-tier and junior mining companies. They have a wonderful track record. They have an even better collection of blue-chip institutional clients, mostly out of North America and largely state and county pension funds. They have truly demonstrated a track record of being able to generate strong returns and, importantly, have been able to sell that in the largest asset management market in the world.
We look forward to continuing to grow that relationship with Taurus and help them expand their product set further. The PM Capital business, as I've highlighted when we made the acquisition in late 2023, didn't settle until the 20th of December 2023. But Paul Moore and his investment team have one of the best track records in global long-short investing within Australia.
Across the Morningstar data of each of the global long-short funds that are sold into Australia, PM Capital and the team led by Paul are number one for their global equities capability or sorry, in the top five of their global equities capability across either three, five, or 10 years. It's a wonderful achievement. The opportunity there for Regal partnering with PM Capital is to be able to grow their FUM within that award-winning capability to many multiples of their current AUD 2 billion in FUM.
Remember, they have about AUD 800 million in an enhanced yield fixed income product that is also generating strong returns in a cash-plus strategy. To talk about the completion in late 2023, the integration's progressing well. We're on track to achieve our initial 90-day milestones.
We expect synergies over time, and in particular, in respect of the AUD 2 billion of equities, we are aiming to have those equities on the Regal system by June this year. Talking about the Regal system, it is quite unique. The Regal Funds Management System that is now being extended across broader aspects of the group is an end-to-end proprietary technology platform that, in one system, provides order management, execution management, risk management, and back office.
As we neatly demonstrated through the VGI acquisition where we onboarded AUD 1.5 billion of fund within the first six months of that acquisition, it unleashed significant benefits not only to the dealing and execution expertise we have within Regal Funds Management but also with significant benefits from a risk management and a back office perspective, automating tasks that were previously manual, therefore reducing risk, and, importantly, freeing up valuable headcount to better employ in more productive activities.
We've got extensive connectivity. We've got significant broker relationships. We've got multiple prime brokering relationships, and that will be extended to the PM Capital business as we onboard that fund. F inally, the integrated controls, risk, and compliance framework that is built around that system has been tested numerous times as institutional clients come and do their operational due diligence, and we continue to receive wonderful feedback as to its capability.
The other hot part of the team I'd like to highlight, and that is the distribution and marketing capability. The momentum that we talk about in terms of net flows doesn't happen by chance. We have really transitioned from very much a product-led distribution and marketing capability to very much a client-centric approach. We have increased our marketing capabilities over the years to build capability across various channels, jurisdiction, and with deep investment and sales experience.
Further, we have a multi-asset product capability across a range of vehicles. The bottom line is that we seek to partner with best-in-class asset managers who have a demonstrated edge in generating leading investment outcomes, and that capability, the platform, and our distribution and marketing capability are increasingly sought by other parties. I'll finish with a few comments on our strategy and outlook before I turn to Q&A for questions.
We really are continuing to execute on the growth-focused strategy that we signaled to the market post the acquisition of VGI when the group was formed in June 2022. We are continuing to build that diversified and scalable platform. We believe, as a specialist provider of alternative investment strategies, we are playing in an area of the market that has very attractive market tailwinds, and we believe those tailwinds are getting stronger and so show no signs of abating.
Business has strong economics, not only in terms of a higher-than-many management fees due to the differentiated product set but obviously significant earnings leverage that can come from the investor alignment where our investors are aligned to investment performance by the generation of performance fees. Finally, we're increasingly seeing a number of opportunities for growth.
We'll take a disciplined approach to prosecuting those and only do so where the business or team clearly has a demonstrated edge in what they do. Two, we can acquire that business or team in a manner that is accretive to the RPL shareholder, a nd three, there is a strong cultural fit as investor-first for the benefit of the group overall. I'll pause there and now turn to questions.
Thanks, Brendan. For questions today, if you are online, please submit your questions through the Ask Question box. For those on the phone, please press star one to register for a question and star two to cancel your question in the queue.
I'll now start with a couple of questions online, and then we'll move to the phones. So starting online, Brendan, when you've been talking about growth, how should we think about capacity for the funds now that we've also acquired PM and Taurus?
Yeah, it's a great question. So I think the short answer is it's increased. Prior to the acquisition of Taurus and PM Capital, we talked about the business having about AUD 15 billion in FUM, so definitely a third of AUD 10 billion of capacity remaining.
Obviously, with the additional flows that we've highlighted here, we may be getting close to closing a strategy or two as it starts to fill up to capacity, but there is still ample growth. I think on business today, we have the ability to be managing over AUD 20 billion across the strategies we've got.
Great. The next question online is, is Regal still seeking to make acquisitions? If so, in which areas does it deem attractive or complementary?
We are. We continue to sort of have half an eye on the lookout for attractive opportunities. I think it's the disciplined approach around the three measures that I highlighted first. Firstly, we are looking for businesses or teams that have a demonstrated edge in generating strong absolute or strong relative returns or alpha in what they do.
Two, the business needs to be acquired on attractive economics, i.e., accretive to the RPL shareholder. T hree, there needs to be a strong cultural fit that, as we integrate those businesses, it is a case of one plus one equals three. Importantly, there are a number of opportunities out there, but that is not the sole focus. The primary focus of our business is continuing to sort of prosecute great investment performance on behalf of our clients.
Great. I'll now go to the phones, and the first person in the queue is Nick McGarrigle from Barrenjoey . Could you put him through, please, operator? Hello, Nick. Are you there?
Yeah, I assume the operator's put me in. Can you hear me okay?
Hi, Nick.
Good day. The first question I had was just around the AUD 400 million of commitments. Can you give us some context on which products those are going into and the nature of the relationship? Are they new, or are they kind of additional monies from existing investors?
Yeah, good question. So three institutional clients. One of them new, two of them existing. One's a top-up. The largest part of it is a new relationship into a strategy that hasn't previously had an institutional client in that strategy before. I won't name the strategy. That's being funded as we speak. But as I mentioned before, the commitment is expected to translate into funds and management and will be reported as such as part of our 31 March update.
Nick, while you're there, did you have any further questions?
Yeah, it looked like the management fees were quite good versus what I was thinking. Just the contribution from Taurus and PM, it's good to understand that as well. I mean, the pro forma that you've presented includes some synergies. I guess that AUD 48.6 number would be kind of what you'd be thinking as a run rate, but obviously, it depends on performance fees, particularly in PM. Is that the way to think about the combination table that you've put together on slide 13?
Yeah, I appreciate that there's a few moving parts there, but that's probably a good benchmark to sort of build a platform to build upon. Obviously, sort of that's a little bit crude in the sense it's backward-looking. It's the pro forma based on the financials for Taurus and PM Capital for the 12 months to 31 December. Both businesses have good momentum. We're expecting sort of earnings to increase beyond that in the year ahead.
Secondly, we've identified expense savings right across the Regal Partners group that we're expecting to be able to prosecute to sort of drive earnings further a nd obviously, with a much more material portion of our fund at or above high-water mark, we're expecting an increase in performance fees over period. So obviously, that last bit's obviously not guaranteed, but the stage is set for that to be a stronger contribution.
With Taurus and PM, can you talk through the way they crystallize performance fees? Typically, annually at December or June, and any comments on kind of current accruals?
Yeah, PM Capital first is probably similar to ourselves in that it's mostly—or sorry, June-based. It's not exclusively. There are some other sort of performance fee earning cycles in there with some of their mandates and their products, but mostly June. They're ahead of high-water mark, pleasingly.
They're at or above ahead of high-water mark at the time of the acquisition. They've moved further ahead since the acquisition, so that's positive. Taurus is a little bit different. It's a little bit more like a private equity scenario where it's based on carry. T he best way to think about carry is it's like a performance fee on a cash-in, cash-out basis.
Nick, we've got another person in the queue, so if you'd like to ask further questions, would you mind just registering again, and we can come back to you? Great. Operator, can we now go to Laf from MST, please? Laf, are you there?
Hi, guys. Yeah. Can I just follow up a little bit? Just wanted to dive a little bit more into the PM Capital and Taurus acquisitions now. If you think back to when you announced these acquisitions, you gave us a rough idea on the fund and run rates a nd when we got to the end of December period, PM Capital was tracking ahead and Taurus slightly behind. So there's two parts to my question.
Firstly, in those first two months, are there any positive flows into PM Capital included in that AUD 400 million? S econd, can you just talk us and remind us, now that you've had more time on Taurus, which funds are they looking to raise money in? Do you anticipate this calendar year getting any positive flows into Taurus?
Yeah. So hi, Laf. First question first. So PM Capital, positive net flows since acquisition. Obviously, when the business completed or the acquisition completed on the 20th of December, coincides with a bit of a quiet period in the Australian marketplace, not only investing-wise but fundraising-wise. S o pleasing to see that notwithstanding that, it's small positives in that period of time.
In respect of Taurus, a couple of things you may not have noticed is in the notes that we put out in the annual report, b ut subsequent to year-end, we've reached agreement with the former owner of that equity stake in Taurus to effectively acquire the carry that was otherwise going to be passed to them. So importantly, all future cash flows from carry that come from our 50% interest in Taurus will come to Regal and no longer be required to be passed on is point one.
Point two is they are in the midst of fundraising for a royalties fund. They've already achieved, I think as previously indicated, $200 million of commitments. They're expecting to be able to add to that, and they'll probably close that fundraising period somewhere during 2024. So they're out in the marketplace at the moment.
In addition to that, they continue to look for opportunities to deploy money within their mining finance fund. So yeah, Taurus is sort of running ahead, leaps and bounds. I think they're in a good position. They've got good momentum a nd I think the backdrop around providing capital to capital-starved resource companies is probably a pretty good backdrop for them to be doing so.
Can I just follow up just in relation to PM Capital and appreciate the Taurus information? I understand there was positive flows into PM Capital in the December quarter, but just more specifically, in the first two months of this year, the AUD 400 million-odd net flows that you've achieved, is any of that in PM Capital?
No, sorry, and I missed that question. Good point. So no, it's not. The AUD 400 million in flows sort of commitments there that'll be turned into flows in the March quarter, that does not include PM Capital.
Okay, got it. Thank you.
Operator, could we now go to Marcus from Bell Potter, please?
Yeah, morning. Can you hear me okay?
Hey, Marcus. It's you.
Yeah, just a quick question on that facility you've got, the revolving corporate credit facility. I see you've drawn AUD 42 million. What's your intention there? Sorry if I missed it in the presentation, but there's been a lot going on.
No, it's good question. It's used as a working capital facility. So the timing of the acquisitions in particular and the cash required for those acquisitions being late in the year, rather than liquidating investments what we thought was an inopportune time and certainly at a less liquid time in the marketplace, we've used the working capital facility for exactly its purpose.
So we have effectively drawn that down. We've paid that money across to the former owners of the Taurus business and to obviously, as part of the PM Capital acquisition, and expect to be able to and indeed, we've made repayments on that in calendar 2024.
Right. Okay. P resumably, you're expecting to pay that down fairly quickly as a working cap facility. I mean, I imagine it's quite expensive. I can't recall off the top of my head if you've told us what the cost structure is on that or the fee structure?
It's actually quite cost-effective in my mind. I think it's all in rates of around sort of 6%-ish, 6.5%. You're right. You're disclosing an account on page 58, note 18, that is priced at BBSY plus 125 basis points. It's pretty cost-effective. But you're right. It's not intended to be a permanent part of our balance sheet in terms of being drawn. It truly is a working capital facility.
Okay. Fantastic. Thank you for that. No more questions.
Great. I've just got a couple more online if that's okay. So I think there's something that just needs a bit of clarification here. The person asking a question thought that you stated that 100% of funds paid performance fees. I think actually, we had said in the presentation that 100% of fee-earning FUM have the ability to earn performance fees, essentially.
Yeah, clarifying that. That's exactly right. If I misspoke, sorry. So you're exactly right. 100% of our products have the capability to earn a performance fee. We have not earned. Not all those products have generated performance fee in the period.
Thanks for clarifying that. Another question here online. What retention strategies have you in place for key team members of Taurus and PM Capital? Will they continue to operate largely independently?
Yeah, good question. So, PM Capital first, given sort of the similarities between sort of the public equities business that they run in global, is very similar to what our heritage is in long-short equities. As we acquired that business, there was a sort of long-term incentive plan in place as part of that acquisition that will continue to work for the medium term.
Ultimately, as that business becomes more integrated into the broader Regal Partners group, the long-term incentive structures that we employ more generally across the Regal Partners group will equally apply to PM Capital. In respect of Taurus, we're absolutely collaborating, principally from an investment perspective, initially, given our talent in the resource sector, both from a resource royalty capability perspective and a long-short equities perspective and private credit.
We're collaborating around investment ideas, but that business will initially be a little bit more standalone relative to the businesses. Having said that, we're looking for opportunities to collaborate where we can. We're doing so in respect of some of the back-office areas such as finance, compliance, company secretary, etc. We'll continue to look for opportunities to combine teams where we can.
Great. The next question online relates to dividend. We've declared AUD 0.05 for the current period. How should we think about the dividend in future?
Yeah, good question. So I think the thought process the board went through last night was looking firstly at the normalized profit generated during the period. It was within the envelope of the normalized profit for the calendar year. Two, have a look at the balance sheet. The balance sheet's strong, as I said, as of 31 December, AUD 200 million or thereabouts of net cash, cash receivables and investments.
T hree, we've got significant excess franking credits. So on each of those criteria, we went through the board was satisfied to pay out a significant proportion of our normalized net profit as dividends. So I think it's around 89%-90% of our normalized net profit for the calendar year paid as dividends during the period.
I think we've committed to paying a minimum of 50%, but while we've got excess capital and Franking Credits, I suspect that we'll pay a much higher percentage of our profit as dividends going forward.
Great. We've just got a couple more online questions, and then we'll be wrapping up shortly after that. So the next question was, the business has been diversifying quite a bit, so it's no longer as reliant on long-short equities. How do you think about how correlated the businesses now to equity markets? Can you earn performance fees? Do you think in a lot of other areas of equity markets are doing badly?
Yeah, great question. I think one way of demonstrating that is on slide 17, the investment presentation. Back in June 2017, as a privately owned business, the long-short equities represented 90% of our assets under management. If you roll on forward to today, long-short equities represent 54%.
So significant diversification across other private asset classes. However, even within the long-short equities category, a number of the strategies that are attracting flows are more market-neutral-like strategies.
So I think, as a generalization, a bit like the benefits of a multi-asset strategy, Regal has far less beta to the vagaries of the market and is generating its earnings and its investment performance far more off the idiosyncratic alpha returns of the back-to-the-investment time.
Great. I've just got one more question online, and then we'll conclude. The last question was, there was already a slide that talked about some of the institutional mandates that you've won recently. Do you just want to talk further about where you're seeing opportunities offshore in terms of countries and particular strategies?
Yeah, I think a couple of points there. One is you'll recall that we've placed up in Singapore a distribution executive who's been up there now for coming up to two years, and that's been really important in being able to prosecute the case for the investment product and talent that we have here in Australia and taking that to institutional investors offshore.
They're not necessarily Singapore-based investors, but importantly, that's the hub by which either North American, European, or Asian-based investors are allocating. I refer back to my previous experience when I was at Challenger Limited, the CFO of their asset management business for nearly a decade.
I saw firsthand then some of the benefits when an institutional client or indeed an asset consultant, once they'd rated one strategy and completed operational due diligence on one strategy, the synergies that existed in rolling out that same capability in other strategies, given that they're already sort of gone through the same risk and control process and back-office across others was significant.
I think we're starting to see some of that benefits now. Some clients, institutional clients that have come on board within the last 12 months, are now starting to not only look at but invest in multiple products of ours. We expect that trend to continue as they become familiar with the broader array of investment products and investment talent that we've assembled.
Thanks, Brendan. So that looks to be all the questions for today. So would you please wrap up with some concluding remarks?
I'd like to thank everyone for their attention today. It's always a delight to be in front here of you all presenting Regal's results. It's built upon, I think, a wonderful team here at Regal. It's a great privilege to be presenting our results. Thank you for your ongoing support.
Thank you. That now concludes the call.