Capital Allocators Podcast: Brendan O'Connor – Alpha Opportunities in Australia at Regal Partners (EP.485)

Date: February 5, 2026
Host: Ted Seides
Guest: Brendan O'Connor, CEO of Regal Partners

Episode Overview

In this episode, Ted Seides interviews Brendan O'Connor, CEO of Regal Partners—a $21 billion Australian alternatives manager. The conversation dives into the evolution of Regal from a boutique long-short equity shop to an integrated, multi-strategy alternatives platform. Brendan discusses the special attributes of the Australian market, Regal’s approach to generating alpha, the build-out of diversified strategies, team integration, risk management, and his vision for the future of Australian investing.

Key Discussion Points and Insights

Brendan O’Connor’s Background and Career Path

• Upbringing & Early Life:

  • Grew up in regional Australia as the youngest of seven children.
  • Family background focused on community service—father worked for a government agency helping disadvantaged families.
  • Moved to Sydney during adolescence; early work ethic built through part-time jobs and a close-knit family.

    "We didn't have much money, but that didn't matter when you were riding around on your bike exploring the quiet streets." (04:39)

• Education and Career Start:

  • Studied accounting, joined KPMG in audit—viewed it as a paid extension of business school, gaining exposure to various sectors.

• Transition to Financial Services:

  • Moved to Westpac, serving as Group Controller, gaining deep insight into the banking system, especially during a period of significant economic reform and consolidation in Australia’s financial sector.
  • Joined Challenger Limited for asset management experience, overseeing assets and liabilities in Australia’s growing superannuation system, and navigating the financial crisis as CFO for asset management.

• Joining Regal Partners:

  • Met founder Phil King, who wanted to professionalize and expand Regal beyond its long-short equity roots.
  • Saw an opportunity to harness Regal’s investment acumen and technology platform for broader alternatives offering.

    “Phil wasn’t ready to hang up the boots and turn it into a family office. He wanted to build a business.” (14:17)

The Unique Investment Case for Australia

• Distinctive Market Structure:

  • Australian equity market is heavily weighted to financials and materials—about 55% combined—unique compared to other developed markets.
  • Dominance of the commodities and resource sector (currently ~25% of the ASX), with historical precedence for even higher prominence.

    “Resources today represent about 25% of the equity market... In the late 60s and 70s, it was as much as 65%.” (15:28)

• Structural and Policy Factors:

  • Micro and macroeconomic reforms in the 80s and 90s, including a compulsory pension system (superannuation), have shaped market dynamics.
  • Australia now ranks among the world’s four largest pension systems, despite being the 50th in population size.

    “Within a 36 year period, Australia has accumulated $4 trillion of superannuation savings... the fourth largest pension system in the world.” (18:24)

• Opportunities for Alpha:

  • Aimed at small and mid-cap sectors, which are less familiar and more inefficient for foreign investors.
  • The slow adoption of alternatives and passive investment strategies among large institutions leaves room for active, expert management.

    “It also means there’s been a slower adoption to alternative investment strategies, which is really Regal’s sweet spot.” (19:34)

Regal’s Multi-Strategy Evolution

• Product Expansion:

  • From $1bn in long-short equities in 2016 to $21bn (2026), expanding into:
    • Credit and royalties
    • Real and natural assets (e.g., water rights, agriculture, carbon)
    • Growth equities (including pre-IPO investing)
  • Largest pre-IPO investor for companies in Australia.

    “There’s been a significant diversification of investment capability and products that we can take to market.” (22:23)

• Strategic Synergies:

  • Cross-asset capabilities allow Regal to offer tailored financing to companies—equity, debt, or royalties—based on market intelligence.
  • Syνεργies between teams foster more informed decisions and unique, solution-driven deal structures.
    • Example: Passing on an equity deal but offering a royalty solution.

    “We can have informed conversations about whether we’re a debt provider, equity provider, or royalty provider… that leads to better returns.” (23:20)

• Talent and Integration:

  • Focuses on attracting talented returnees from Australia’s global financial ‘diaspora,’ integrating acquired teams into a unified culture and platform.
  • Emphasizes a “one team” approach with centralized risk, compliance, and distribution.

    “Everyone at Regal from an investment perspective has a buzz, a drive around achieving... we concentrate and focus on rewarding achievement...” (33:29)

Investment Edge and Alpha Generation

• Technical Expertise in Resources:

  • Employs sizable teams of mining engineers and geologists; pivotal in resources investing, both in Australia and globally.
  • Unparalleled deal origination in complex sectors like resources, agriculture, and water rights.

• Proprietary Sourcing:

  • Being “the first call on the street” for many deals ensures potential to influence pricing, structure, and terms.

    “Alpha is intrinsically linked to being that first call on the street and that origination capability.” (43:16)

• Four-Step Investment Process (44:16)

  1. Valuation – Foundation of every decision.
  2. Macro Assessment – Understand sector-level drivers.
  3. Catalyst Identification – Know what triggers value realization.
  4. Edge Analysis – Ask: What insight do we have that others don’t?

Risk Management and Performance Culture

• Objective Assessment:

  • Asset management offers naturally objective performance tracking.
  • Focus on risk-adjusted returns, not just absolute numbers.

    “The scoreboard doesn’t lie. Performance is best viewed through a risk-adjusted lens.” (29:41)

• Enhancing Returns:

  • Brought on the first dedicated Chief Risk Officer and a HR director to align culture, standards, and communication, and to drive improvement across teams.

Governance and Going Public

• Rationale for Listing (ASX, June 2022):

  • Enabled long-term incentive liquidity for staff, expanded governance, and boosted global marketability.
  • Reverse acquisition on the ASX provided profile, transparency, and a valuable acquisition ‘currency.’

    “There is an engagement that comes from being part of a growing listed business. That’s been a real thrill.” (48:22)

• Drawbacks:

  • Increased governance requirements and greater media scrutiny.
  • More time spent with the board and investor relations, but the strategic benefits outweigh the costs.

The Future of Regal Partners and Australian Alternatives

• Growth Philosophy:
  • Prioritizes quality investment returns and capability expansion over mere asset gathering.

    “A better measure is more nuanced… success will be continuing to develop and acquire additional investment capability where we are generating great investment returns for our clients.” (52:04)

  • Sees strong long-term tailwinds for alternatives in Australia due to structural market changes and global trends (inflation, geopolitical shifts, resource intensity).
  • Expectation to exceed $50bn AUM in due course, but the focus remains on alpha, not scale for its own sake.

Notable Quotes & Memorable Moments

• On the Unique Nature of Australia:

  "Australia uniquely provides a very idiosyncratic return series that is diversifying to what you'd find elsewhere." – Brendan O'Connor [00:00, 15:28]

• On the Edge in Resources:

  "We would have 25 of those [200 staff] dedicated to a resources strategy... mining engineers, geologists... picking the stocks, making the investment decisions." – Brendan O'Connor [20:12]

• On Building Teams:

  "Asset management businesses are inherently people businesses... the motivations of the key investment professionals are the essence as to whether it's going to be a good acquisition or not." – Brendan O'Connor [25:10]

• On Cultural DNA:

  "I've never worked in a place where there has been such energy and enthusiasm for the business to succeed." – Brendan O'Connor [33:29]

• On Four-Step Investment Process:

  “Valuation is the cornerstone... then macro, then catalyst, and finally, the edge – what is the market missing?” – Brendan O'Connor [44:16]

• On Family Wisdom:

  "If a job's worth doing, it's worth doing really well." (Advice from Brendan's mother) [55:14] "Measure twice, cut once." (Advice from Brendan's father) [55:26]

Timestamps for Important Segments

• Introduction & Early Career – [04:39–08:06]
• Westpac & Challenger Experiences – [09:54–13:07]
• Joining Regal Partners – [14:17–15:28]
• Why Invest in Australia? – [15:28–20:00]
• Resource Sector Focus – [20:12]
• Regal's Multi-Strategy Expansion – [22:23–24:14]
• M&A and Integrating Teams – [25:10–28:00]
• Talent & Performance Assessment – [28:06–30:17]
• Risk Management & Culture – [30:24–32:04]
• Investment Process & Origination – [44:16–46:35]
• Going Public, Governance – [48:22–50:35]
• Future Goals & Philosophy – [52:04–53:40]
• Quickfire Personal Qs (Surfing, Childhood, Advice) – [53:49–55:41]

Episode Tone

Brendan is frank, reflective, and analytical, expressing pride in Regal’s team culture and Australia’s unique opportunities, but always insistent on disciplined, risk-minded investing and the importance of maintaining a performance-driven, founder-led ethos. Ted guides the discussion with a mix of curiosity and practical focus, extracting both technical insight and personal narrative.

For those considering investment in Australia or the evolution of institutional alternatives, this episode offers a rich, detailed look at both the technical and human factors driving success at the frontier of the market.