Regal CEO Brendan O’Connor did not soften it on this week’s Switzer Show.
“It’s an industry that doesn’t transition leadership very well, typically,” the Regal Partners chief executive told the Switzer Show.
“There are some really poor examples.”
He is describing his own industry’s central weakness. Certain boutique managers are built on one person’s judgment, and the day that person leaves, clients quickly figure out whether they were buying a strategy or a personality.
Regal announced on 24 August that King will begin a transition to retirement. The announcement was made at 8:05am, flagged price sensitive, but with plenty of notice built-in. It read: “Mr King will remain in his current roles with Regal until at least 30 June 2027, ensuring an orderly transition of responsibilities, and continuity for clients and investors.”
That’s 22 months of notice. O’Connor argues that – regardless of the long lead time – the groundwork for the transition is already in place.
“We put down the foundational layers quite early on, by separating Phil’s investment capability from the management of the business,” he said. “I have run the business whilst Phil has focused on the investments. That put us in a very strong position to allow a long period of transition.”
So who replaces the King? According to Regal, his chair (throne?) will stay empty. In the same results release, O’Connor described “the near-term establishment of a Regal Investment Committee, comprising Regal’s most experienced investment leaders”. And: “Over time, the Regal Investment Committee will replace the existing singular Chief Investment Officer structure and the multi-strategy investment committees.”
O’Connor reached for a metaphor to describe it: “There’s an indelible watermark that Phil has left behind, because it creates a DNA about how we assess investments. They’ve been schooled or trained under Phil now, and they will lead those strategies with the training and the leadership that Phil has provided.”
Whether a committee can hold a watermark is the question every boutique eventually faces. Regal has given itself close to two years to find out, which is more than most.
