Regal’s private fund leans into water bets as returns stay above 20%

Regal Partners’ private fund has made water one of its largest allocations, helping drive strong performance.

The private fund delivered 15.8% in 2025 and has now generated an annualised 20.1% return since launching in December 2023.

Around 10% of its $650 million portfolio is allocated to water assets through an investment in Kilter Rural’s water fund.

“In practical terms, 2026 looks like a year where volatility can be monetised rather than merely endured,” said Regal Partners in its investor update.

The Kilter fund returned 11.5% in 2025, supported by drought conditions and government water buybacks that lifted entitlement prices.

Regal increased its exposure in August, a move that proved timely after further Murray-Darling buybacks were announced in November.

“Australia’s land mass is vast, but our water is scarce, and the only way you get it is by buying entitlements, or leasing the water,” said Regal chief executive Brendan O’Connor.

Water was a key contributor, though the fund’s emerging companies strategy performed even more strongly, returning 32.7% over the year.

Regal-backed names such as Firmus Technologies and Artrya drove gains, while the manager expects improving IPO conditions to support future returns.