It has been a tough 12 months for ASX financials stock Regal Partners Ltd (ASX: RPL).
The specialist alternative investment manager has seen its share price fall more than 30% year to date.
However, a new report from Ord Minnett points to a major rebound over the next year.
The company manages a range of investment strategies covering hedge funds, growth equity, real & natural assets and credit & royalties on behalf of institutions, family offices, charitable groups and private investors.
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Not just a dividend stock
In recent months, this ASX financials stock has been highlighted for its generous dividend yield – and for good reason.
It currently offers a very healthy dividend yield of 11.1%, after more than doubling its net profit over the past financial year.
However, recent share price weakness now makes it an attractive growth option as well.
According to Ord Minnett, it delivered a strong first-half FY26 result (1H26), though attention focused mainly on the announced transition to retirement of founder and portfolio manager Philip King.
Mr King is responsible for approximately 16% of RPL's funds under management (FUM), or $3.4 billion, and will remain in his current roles until at least 30 June 2027. The extended handover period should help support continuity. RPL declared a fully franked interim dividend of 12 cents per share (cps) which was double last year's interim. Financially, the result was robust. Normalised net profit after tax reached $93 million (guidance was for at least $90 million), more than double the prior corresponding period, and 3% ahead of consensus.
Flows remain strong
Ord Minnett also highlighted the standout contributor during the most recent half was performance fees which came-in at $119 million.
This was above guidance for at least $115 million, and significantly higher than the $42 million generated in the first-half of FY25. "Performance fees may moderate in the second-half of FY26 given the amount of FUM that is at, or within, 5% of its high-water mark, has fallen by $1.1 billion in the six months to 30 June 2026.
This has likely declined further in July given softer investment returns from a range of long/short strategies. Flows remain strong. Net inflows totalled $300 million in July, with additional inflows during August across credit and listed investment company products. This momentum has prompted us to lift our expectations for CY26 net inflows to $2.2 billion, ahead of management's guidance of $2 billion.
Big upside for ASX financials stock
Based on this guidance, Ord Minnett slightly lowered its price target on this ASX financials stock. However, significant upside remains.
The broker now has a price target of $4.90 (previously $5.40).
We maintain a Buy recommendation. Despite the leadership transition risk, RPL is trading on an attractive FY27 price to earnings multiple of circa 8x, and on our numbers, offers around 14% per annum growth in EPS over FY26–29.
From current levels, this indicates 118% upside potential.
