L1 Capital's history boys
There's only one reason for an ascendant private fund manager to buy a distressed listed one: liquidity.
Regal Funds Management chief executive Brendan O'Connor told the Macquarie conference on Tuesday that Regal walked away from its proposed acquisition of Platinum Asset Management in December because "they wanted too high (a) price for the business, which frankly is a falling knife or a melting ice cube in terms of funds under management".
This was Regal seeking to portray itself as a disciplined acquirer at a beauty parade of public companies hawking their equity. No surprise there. It was also an available distraction from its humiliating ill-discipline around Opthea, the $300 million ice cube of his client's frozen cash that Phil King recently put through the office microwave.
Joe Aston
But O'Connor's comments need to be considered in their context. He was speaking just two hours after Platinum revealed the loss of a $960 million institutional mandate, causing its funds under management to fall below $10 billion for the first time since John Howard was prime minister. And days earlier, private Melbourne fund manager L1 Capital had swooped in with a reverse takeover proposal for Platinum – backed in, unlike Regal's bid, by Platinum founder Kerr Neilson.[[L1 has already acquired 10 per cent of Platinum shares directly from Neilson, with a call option over his remaining 12 per cent of the company.]]
L1's Platinum play bears all the hallmarks of Regal's own backdoor listing via VGI Partners three years ago. King knows you're only likely to get one Rob Luciano in your career, and now Raffi Lamm and Mark Landau may have just landed theirs.