AFP drop in at Phil King’s Regal Funds Management

Illustration: Rod Clement

If they are not talking about Westpac, many in the market are discussing what exactly was behind the raid of Phil King’s Regal Funds Management by the Australian Federal Police at the behest of the corporate cop James Shipton’s ASIC earlier this week.

While King is apparently not connected to the raid, Regal, which manages around $2bn of clients’ money, is one of the highest profile hedge funds in the nation.

Hordes of police were involved in Tuesday morning’s fishing expedition at Regal’s Sydney offices up high in the ritzy Gateway building.

“They were pretty keen to get in there,” said one source familiar with the AFP operation, which was overseen by a small party from ASIC.

Clearly!

Not surprisingly, many of Regal’s fellow Gateway tenants, which include investment bank Credit Suisse, Wyatt Roy’s Afiniti team and a host of directors including former ABC chair Justin Milne, are keenly interested in the reason for the fund’s recent uniformed visitors.

Margin Call also understands Regal has got into a spot of bother in Hong Kong in recent times with its investment in ArtGo, a marble-mining company listed on the Hong Kong Stock Exchange.

Before last week, ArtGo had been the best performing stock in the world this year, with a 3800 per cent gain before global index-maker MSCI scrapped plans to add the stock to its indexes after what it said was “further analysis and feedback from market participants on investability”.

The shares fell 98 per cent in a single morning of trading, wiping more than $US5.8bn from ArtGo’s market capitalisation before trading was suspended.

While the fall was reported as highlighting concerns about corporate governance in the Hong Kong market, the chatter back home is that Regal might have lost as much as $20m on its investment.

Whether it has anything to do with ASIC’s action is unknown. On a different tack, the Biotech Daily newsletter noted Regal is an active shareholder in at least a dozen volatile biotechnology companies, including its short position in the David Williams-chaired and backed PolyNovo.

Either way, the regulator’s heavy handed tactics on Tuesday were hardly welcome after last week’s events in Hong Kong.

A great, big mess

There’s nothing like shared experience to draw a relationship closer.

Just ask Peter King, the incoming boss of under siege banking giant Westpac, or CBA banker wife Keryn Thompson.

After a quarter century at Westpac, the 49-year-old career accountant King had previously announced that he was to retire next September.

Now he’s been appointed the interim leader of Westpac as it navigates the legal waves caused by Nicole Rose’s regulator Austrac.

His partner of more than two decades Thompson has some insight into Westpac’s current troubles.

Thompson is a senior banker in the global markets team at Matt Comyn’s Commonwealth Bank, which she joined three years ago in the Ian Narev era.

That meant she was on-board for CBA’s rude encounter with the very same Austrac, which saw the bank fork out $700m in fines thanks to its breaches of anti money laundering and counter terrorism laws.

King and Thompson, who have three older children, will have to suspend plans for a quieter life with King starting in the top office on Monday.

He’ll also be busy dealing with debris on the home front.

The couple live in a historic terrace on Paddington’s Moore Park Road right opposite Sydney’s recently demolished Allianz Stadium which NSW Premier Gladys Berejiklian is renovating.

Just like at Westpac, it’s currently a great big mess.

Stand down

CBA shareholders might have been anxious about seeing the bank’s chair Catherine Livingstone arrive at Canberra airport on Thursday morning.

The CBA chair had already been in the bank-loathing capital at the start of the week to see her political stakeholders.

Shareholders will be relieved to read Livingstone’s return mission had nothing to do we an unfolding bank scandal.

Instead, the former Cochlear boss was visiting Canberra again for her advisory work for the Department of Department of Industry, Innovation and Science.

As you were.

Private party

Deeply private Melbourne investment house Wingate never fails to draw a crowd to its events and last night was no exception as more than 300 of its clients and business partners packed into the Zinc function centre below Federation Square for the firm’s end of year bash, where the keynote speaker was one of its most famed backers, David Smorgon.

Smorgon, a former Western Bulldogs AFL president, recalled hosting a lunch over 22 years ago with Wingate Group boss and founder, Farrel Meltzer.

Apparently, nine of the 10 guests at the lunch became Wingate co-investors with the lone outsider becoming a competitor. Other Wingate backers include Square Peg boss Paul Bassat and Melbourne property magnate Harry Stamoulis.

Meltzer also chairs Smorgon’s family office Generation Investments, owned by Smorgon and his sons Dean, Ricky and Dale, which owns kids amusement ride business Ride On! Entertainment.

Among the crowd listening to Smorgon were other Smorgon family members, reps of the Myer family and the Doggett family of paper merchant fame, and Robert Peck and Yvonne von Hartel, the founding members of architecture firm peckvonhartnel.

Wingate, which now has turnover of more than $200m and assets of $5bn, has been in the headlines for the wrong reasons in recent months after being caught up in the collapse of apartment developer Ralan Group.

But it recently received some good news when Ralan’s administrator Grant Thornton found the developer was running two sets of books in the lead-up to its collapse with debts of more than $500m.