Performance & Fundraising

In April 2025, Regal Capital delivered strong performance despite broad market declines, showcasing the resilience of our long-short equity strategy. Our fund recorded an all-time high total profit, with realised gains driven primarily by short positions in Tesla, Salesforce, Oracle, and the S&P 500 index.

This outperformance was achieved even as global markets reeled from U.S. trade policy uncertainty, underscoring our commitment to capital protection and opportunistic investing. Additionally, we began building our South African portfolio, marking our expansion into regional equity markets with positions in Mr Price Group (retail apparel) and Karooooo Ltd (vehicle tracking services).

So far in 2025, Regal Capital has seen significant momentum in capital raising, reflecting growing investor confidence in our strategy and performance. From January 2025 to April 2025, we successfully raised $3,285.19 (BWP 44,837.00) in new deposits from existing clients alone, bringing our total assets under management to a record high of $10,483.22 (BWP 143,077.29).

Current Portfolio

Our current portfolio is diversified across active and passive allocations, with;

• Active Portfolio (60%): Global long-short equity positions

• Passive Portfolio (40%): Six thematic sub-indices for long-term exposure:

  • Real Estate Index – Global REITs for yield and capital appreciation

  • Growth Index – Tech, clean energy, automation, blockchain

  • High Dividend Index – Stable income from dividend-paying equities

  • Bond Index – Focus on emerging market and sovereign debt

  • Private Equity Index – Exposure to private markets, startups to buyouts

  • Medical & Health Index – Pharma, biotech, healthcare services

Find specific portfolio constituents in the report.

Summary & Outlook

South Africa Outlook

South Africa’s economic outlook for the remainder of 2025 is one of cautious optimism, underpinned by modest growth, easing inflation, and tentative improvements in energy stability and business sentiment. GDP is projected to grow by approximately 1.6% to 1.7% for the year, a slight upward shift from the subdued growth of 0.6% in 2024, but still reflecting ongoing structural challenges and subdued domestic demand. This growth is being supported by the absence of load shedding for an extended period, thanks to Eskom’s improved performance and the entry of private players into the electricity market, which has restored some stability and confidence for businesses and consumers.

Inflation has surprised to the downside, dropping to 2.7% in March 2025-its lowest level since 2020-largely due to lower fuel prices and softer increases in education costs. This has allowed the South African Reserve Bank to keep interest rates steady at 7.5%, with the potential for further rate cuts if inflation remains contained. Lower borrowing costs are expected to support both household consumption and business investment.

Political developments have also played a role in shaping the outlook. The formation of a Government of National Unity following the 2024 elections has improved business and investor confidence, as reflected in a stronger rand and rising business sentiment indices. However, these positive signals have yet to translate into robust economic gains, and the risks to growth remain tilted to the downside, especially given persistent infrastructure bottlenecks, high unemployment, and fiscal pressures.

Structural reforms, particularly in infrastructure and regulatory efficiency, are seen as crucial for accelerating growth and attracting investment. The government’s commitment to these reforms, along with ongoing improvements in the energy sector, could lay the groundwork for stronger growth in the coming years. However, challenges such as weak transport and logistics, water shortages, and a wide fiscal deficit continue to weigh on the outlook.

In summary, South Africa is expected to experience slow but positive economic recovery in 2025, with inflation under control and energy stability improving. The outlook remains contingent on the effective implementation of reforms and the ability to address longstanding structural weaknesses.

United States Outlook

The U.S. economic outlook for the coming quarter (Q2 2025) suggests a period of modest growth amid persistent challenges from recent policy changes and lingering inflation. After a sharp slowdown in GDP growth to an estimated 0.4% annualized rate in Q1 2025, forecasts indicate a moderate rebound to around 2.1% in Q2. This improvement, however, remains below the pace seen in late 2024, reflecting weaker consumer spending, the impact of new tariffs on trade, and a wave of federal workforce reductions. Industrial production is expected to contract slightly as businesses adjust to shifting supply chains and softer export demand.

The labor market, while still resilient, is showing signs of cooling. Payroll growth has slowed, with job gains projected to fall below 100,000 per month in Q2, and the unemployment rate is expected to rise to about 4.3% by June. Recent federal layoffs may further weigh on job numbers later in the year. Inflation remains a concern, with consumer prices likely to hover around 3% year-over-year due to tariff-related cost pressures, and core inflation staying above the Federal Reserve’s target. In response, the Fed is expected to keep interest rates steady through the quarter, with only a slight chance of a rate cut later in the year.

Trade tensions, particularly with China, have disrupted markets and contributed to increased volatility, while both consumer and business sentiment have declined sharply. Although the risk of an immediate recession appears low, the outlook is clouded by the potential for prolonged trade disputes or further labor market weakness. Conversely, a quicker resolution to tariff issues or a stronger global economy could provide some upside. Overall, the U.S. economy is set for modest growth in Q2 2025, with inflation and policy uncertainty remaining key challenges.

Summary

Regal Capital continues to prove the value of active, agile investment management in an era of heightened market volatility. While traditional passive strategies have struggled amidst the sharp downturns triggered by macroeconomic and geopolitical uncertainties, our long-short equity approach has delivered both downside protection and consistent gains. This is not by chance—our mandate is to remain uncorrelated to the broader market, allowing us to generate alpha regardless of direction. For investors seeking capital preservation with meaningful upside in turbulent environments, now is the time to get invested. Funds like Regal Capital are built for these moments—when flexibility, discipline, and research-driven conviction separate true performance from market averages.

Disclaimer

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