Regal Partners Limited is sealing its position as one of the fastest-growing non-banks, yesterday announcing that on Sunday night it reached terms to acquire JRJJ Capital Pty Ltd - the head entity of the business trading as Merricks Capital.
Merricks Capital manages $2.9 billion in capital across three dedicated funds and a number of co-investment vehicles for a broad range of wholesale wealth advisory firms, institutional client groups and family offices.
The addition of Merricks Capital to the Regal Partners group will increase Regal Partners’ funds under management by one quarter to $15.1 billion.
“The addition of Merricks Capital to the Regal Partners platform will significantly expand the origination and underwriting capabilities for both groups, bringing Regal’s total FUM across credit and royalty solutions alone to over $6 billion” Brendan O’Connor, CEO of Regal Partners said.
Immediately prior to completion of the transaction, Merricks Capital will be 50.5 per cent owned by founder Adrian and 49.5 per cent owned by private investors. The Liberman and Abeles families are two of these private investors.
As at April 2024, Merricks Capital managed:
• the Merricks Capital Partners Fund (a multi-strategy private credit fund) – $1.3 billion;
• the Merricks Capital Agriculture Credit Fund (a specialist agriculture credit fund) – $470 million;
• the Merricks Capital FOO Fund (a Cayman Islands-domiciled private credit fund focused primarily on commercial real estate) – US$344 million;
• other separately managed accounts and special purpose vehicles – $524 million; and
• MC Power (a specialised infrastructure power project in the Northern Territory) – $72 million.
All three of the Merricks Funds “have generated consistent positive performance since their respective inceptions, generating net returns between 9.5 per cent and 10.5 per cent per annum with low volatility and positive monthly performance in more than 99 per cent of time periods since inception” Regal said.
Commercial real estate comprises around 70 per cent of the loan book; agriculture 25 per cent – financing growth across the agriculture supply chain, including property acquisitions for primary producers and infrastructure projects; and •specialised industrial and infrastructure, five per cent.
Regal Partners will pay around $235 million, comprised of $40 milllion in cash and the issuance of RPL shares at a price of $3.05 per share. The market yesterday liked the deal, marking up Regal Partners’ share price by 3 cents, or one per cent, to $3.20.
The value of the offer is around 6.5 times normalised EBITDA in the calendar year to December 2023.
Completion is targeted for early July 2024.