Australia uniquely provides a very idiosyncratic return series that is diversifying to what you'd find elsewhere.

If you have a look at the Australian marketplace, financials and materials, materials think of resource companies,

represent about 55% of the market. That's very different to many other equerry markets around the world.

The nature of the Australian economy, we're probably the 15th largest economy in the world.

We sit just below South Korea from an economy size. We've got half the population of South Korea as an example,

so a GDP per capita is double theirs.

There is market structure that means that we're being able to generate alpha from a section in the market that an offshore investor perhaps just is less familiar with.

Part of the answer to that is being able to explain some unique structural elements

to the Australian market. Australia is an interesting miracle in this regard. Some of those micro and

macroeconomic reforms that the government introduced in the late 1980s translated into the introduction

of a superannuation guarantee levy in 1992, it first started,

where 3% of everyone's salary was put aside as pension savings. That rate is now 12% of everyone's

salaries. There are three key things that have shaped the pension system in Australia.

There is a multi-decade trend to internalize asset management capability rather than using

third-party providers. There's an acceleration of a pre-existing trend around passive and

ETF fund investing. Obviously, that's

been a good trade for them, but it misses out on some of the positive aspects of active management.

It also means there's been a slower adoption to alternative investment strategies, which is

really Regal's sweet spot. Regal's edge in providing investors, not just in Australia, but around the world, access to the

best of Australia's alternative investment strategies inherently or necessarily means that we need

to be originating those opportunities.

I'm Ted Sides, and this is Capital Allocators.

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