Hmc Capital Limited · ASX:HMC
Hmc Capital — H1 FY2024 Earnings Presentation
40 slides from Hmc Capital's earnings presentation, Feb 20, 2024
Slide 1: 1H FY24 Results Presentation
HM Capital Li 1H FY24 RESULTS PRESENTATION 20 February 2024
Slide 2: Presenters
David Di Pilla Group Managing Director & CEO Will McMicking Group CFO Misha Mohl Group Head of Strategy, Research & IR 1
Slide 3: Journey Tracks to Sacred Sites
2 Journey Tracks to Sacred Sites Tony Sorby (2021) © the artist courtesy Kate Owen Gallery
Slide 4: Introduction
Introduction HMC Capital is today announcing three new strategic growth initiatives ✓ HMC has delivered a strong 1H FY24 result which demonstrates the momentum across our increasingly diversified platform ✓ Our funds are delivering strong investment returns for investors which is supporting our mark
Slide 5: HMC Capital Track Record
HMC Capital Track Record Our platform has rapidly grown and evolved through innovating transactions & successful fundraising HMC FUM track record ($bn) FY17 >6x MOIC HMC FUM track record ($bn) 20+ FY20 156% TSR1 Opportunities in Previous 10+ advanced DD FY21 $300m IPO $10bn target 1.6 Development >7
Slide 6: HMC Capital Strategy
HMC Capital Strategy High ROE alternative asset manager operating in Australia with increasing global focus Business models Strategy Diversified global alternative asset manager focused on high conviction growth sectors we admire Financial Target 20%+ return on equity target over the medium-term Com
Slide 7: 1H FY24 Results Overview
HM Capital 1H FY24 RESULTS OVERVIEW
Slide 8: 1H FY24 Results Overview
1H FY24 Results Overview Significant earnings growth underpinned by successful fundraising, investment performance and active deployment across increasingly diversified platform 1H FY24 KEY HIGHLIGHTS UNLISTED FUND IRR SINCE INCEPTION3 Operating Funds Under Earnings Management 24% IRR 16.6cps $8.5bn
Slide 9: 1H FY24 Highlights
1H FY24 Highlights Period of solid investment returns across funds supporting strong fundraising momentum Established Funds Update ✓ Completed fundraising for new $1.3bn unlisted Healthcare Fund1 with 4 domestic & global institutional investors Healthcare & Life – High ROE transaction for HMC with a
Slide 10: Funds Management
HM Capital FUNDS MANAGEMENT
Slide 11: Funds Management Strategy
Funds Management Strategy Focused on high conviction trends which are informing our sector investment focus HEALTHCARE DECARBONISATION DIGITALISATION DEGLOBALISATION Global imperative with accelerating Essential ‘infrastructure’ like asset momentum – over 140 countries have Structural trend driving
Slide 12: Global & Diversified Alternative Asset Manager
Global & Diversified Alternative Asset Manager New divisional structure to execute transition to more diversified high ROE business ESTABLISHED ANNOUNCED TODAY IN DEVELOPMENT CAPITAL ENERGY DIGITAL GLOBAL PRIVATE REAL ESTATE PRIVATE EQUITY SOLUTIONS TRANSITION INFRASTRUCTURE HEALTHCARE CREDIT Sector
Slide 13: HMC Capital Economic Flywheel
HMC Capital Economic Flywheel High velocity capital base will continue to drive our economic flywheel and platform expansion HMC Capital Economic Flywheel Well positioned to grow FUM beyond $20bn HMC will continue to actively recycle its capital base to Medium-term maintain our strong growth traject
Slide 14: Economic Flywheel | Investment Case Studies
HMC Capital Economic Flywheel | Investment Case Studies Two major transactions where HMC provided strategic balance sheet support to our funds and delivered a 20%+ return on equity Partners Fund I Transaction ▪ $1.2bn portfolio acquisition of 11 private hospitals ▪ High conviction investment opportu
Slide 15: Fundraising Strategy
Fundraising Strategy Opportune time for HMC to expand into sectors which are attracting the largest capital inflows Investor allocation intentions by sector2 HMC has strong fundraising momentum HMC Sources of Capital Target sectors ✓ ✓ ✓ ✓ ✓ Private Credit 43% 39% 18% ✓ HNW / Institutions Super & So
Slide 16: Growth Pipeline | Australia & Global
Growth Pipeline | Australia & Global Pathway to $20bn+ medium-term target underpinned by conversion of identified pipeline Medium term target ✓ Establishing Energy Transition platform with highly credentialed investment team led by Angela Karl 1 Energy Transition – Expect to launch inaugural Energy
Slide 17: 1H FY24 Sustainability Progress
1H FY24 Sustainability Progress Key sustainability achievements driving long term value creation and positive community impact ENVIRONMENTAL ▪ Successfully executing Net Zero Energy Roadmap across real estate platform – On-track to reduce Scope 1 & 2 carbon emissions by 30% in FY24 (versus FY22 base
Slide 18: Financials
FINANCIALS HM Capital 7
Slide 19: Earnings Summary
Earnings Summary Strong growth in underlying investment and funds management segments $ million 1H FY23 1H FY24 % Management and Performance fees Revenues ▪ +44% increase in management fees to $40.9m in 1H FY24 driven by FUM Management fees 28.4 40.9 +44% growth including new Last Mile Logistics and
Slide 20: Balance Sheet
Balance Sheet Balance sheet continues to provide warehouse support for new funds management initiatives and capital markets activities HMC Standalone Jun-23 Dec-23 Dec-23 Dec-23 $ million HMC HMC HMC-CP Consolidated Balance Sheet (HMC) Cash and cash equivalents 20.4 17.7 72.6 90.5 ▪ HMC continues to
Slide 21: Capital Management
Capital Management Net cash position with undrawn debt and net tangible assets of ~$1.2bn HMC Standalone $ million Jun-23 Dec-23 Capital management Bank debt ▪ Proceeds from warehousing received in December resulted in a net Maturity Jan-24 Mar-25 cash position as at 31 December 2023 Limit 275.0 275
Slide 22: Outlook & Guidance
OUTLOOK & GUIDANCE HM Capital 2]
Slide 23: Outlook and Guidance
Outlook and Guidance Pathway to $20bn+ medium-term target underpinned by strong fundraising momentum and establishment of scalable new growth verticals ▪ HMC is well positioned to transition into a high ROE global alternative asset manager, with our more diversified platform on- track to scale FUM b
Slide 24: Appendices
APPENDICES HM Capital 23
Slide 25: HMC Group Structure
HMC Group Structure Corporate Divisional Heads Funds Management Sid Sharma Nicholas Harris Marie Nguyen David Di Pilla Will McMicking Head of Funds Management LML Fund Manager Head of Real Estate Group Managing Group CFO Director & CEO Fergal Harris Paul Doherty Victoria Hardie Managing Director, HD
Slide 26: Angela Karl | HMC Head of Energy Transition
Angela Karl | HMC Head of Energy Transition Deep investment and advisory background ▪ Most recently Angela was Partner at QIC Global Infrastructure (2012-2023), a member of the internal infrastructure management committee and oversaw the infrastructure investment origination process. During her time
Slide 27: Funds Management Platform
Funds Management Platform Partners Established Nov-20 Sep-21 Aug-22 Mar-23 May-23 Daily needs retail High conviction Daily needs Hospitals & life Sector focus Healthcare property strategic stakes transition assets sciences Unlisted Capital source ASX listed ASX listed Unlisted Unlisted Investors Ret
Slide 28: Digital Infrastructure | Strategic Platform Acquisition
Digital Infrastructure | Strategic Platform Acquisition Specialised North American asset management platform with deep pipeline 1 3 Accretive Acquisition Immediately Scalable Opportunity Powerful Megatrends Digital Transformation Existing base of c.$0.7bn of fee-paying AUM across 8x growing at 8x th
Slide 29: Energy Transition | Establishing New Investment Team
Energy Transition | Establishing New Investment Team Energy Transition represents the investment opportunity of a generation and is one of the fastest growing sectors in the global private markets landscape 1 2 3 Market Leading Investment Team Large Scale Investment Opportunity New Fundraising Oppor
Slide 30: A-REITs | HomeCo Daily Needs REIT
A-REITs | HomeCo Daily Needs REIT Strong rental growth and portfolio fundamentals offsetting impact of rising interest & capitalisation rates $4.7bn $0.6bn $0.4bn Open-ended Funds under management Development pipeline Sponsor investment2 ASX-listed FUM growth (%) 78% CAGR Investment ▪ Own high quali
Slide 31: A-REITs | HealthCo Healthcare & Wellness REIT
A-REITs | HealthCo Healthcare & Wellness REIT Transformational Healthscope acquisition significantly enhances portfolio quality and scale $1.7bn >$1bn $0.2bn Open-ended Funds under management1 Development pipeline2 Sponsor investment3 ASX-listed FUM growth (%) 59% ▪ Own critical healthcare infrastru
Slide 32: Unlisted Real Estate | Last Mile Logistics
Unlisted Real Estate | Last Mile Logistics Successfully reached $800m first close for institutional fund targeting last mile retail logistics assets ~$0.8bn $0.2bn 12.5% 10%+ Committed FUM Deployed FUM Co-investment from HDN Target equity IRR Fund Overview HomeCo Menai Marketplace ▪ The Last Mile Lo
Slide 33: Unlisted Real Estate | Healthcare & Life Sciences
Unlisted Real Estate | Healthcare & Life Sciences New $1.3bn1 unlisted institutional fund seeded with 7 Healthscope private hospitals $1.2bn 40-50% ~50% 10%+ FUM1 Target gearing Co-investment from HCW Target equity IRR Fund Overview Fund update ▪ The Healthcare & Life Sciences Fund (UHF) invests in
Slide 34: Private Equity | HMC Capital Partners Fund I
Partners Private Equity | HMC Capital Partners Fund I Significant fund outperformance since inception supports future fund-raising ambitions $0.6bn1 3 $1.361 Open-ended Investment portfolio Strategic stakes NAV/unit Unlisted fund Net asset value per unit since inception2,3,4 Fund update ▪ Since ince
Slide 35: Private Equity | Sigma Healthcare Case Study
Partners Private Equity | Sigma Healthcare Case Study Successful investment in Sigma has delivered strong investment returns for HMCCP and can be repeated with other portfolio investments 1 Acquired Strategic Stake ▪ Initial investment acquired on HMC balance sheet in 2022 ▪ Successfully raised ~$30
Slide 36: Funds Under Management
Funds Under Management Committed FUM ($bn)1 2 Divestments / Revaluations & FUM ($bn) FY231 Additions 1H24 (Outflows) other2 Listed Real Estate 6.0 0.1 (0.2) - 5.9 Unlisted Real Estate 1.8 0.2 - 0.2 2.1 Private Equity 0.4 0.1 - 0.1 0.6 Group 8.1 0.4 (0.2) 0.3 8.5 1. Includes currently undrawn capacit
Slide 37: Additional financial information
Additional financial information Earnings reconciliation to net profit/(loss) after tax $ million 1H FY24 Statutory profit after tax 35.2 Non-controlling interest (12.3) Deferred income tax expense 3.3 Share of associate profit 19.9 Amortisation of borrowing costs 0.5 Transaction costs 7.5 Donation
Slide 38: Additional financial information
Additional financial information $ million 1H FY23 1H FY24 Base management fees 11.5 15.8 Acquisition / disposal fees 1.9 5.6 Investment management revenue 13.5 21.4 Asset (property) management fees 11.2 12.4 Development & leasing fees 3.7 7.2 Asset management revenue 14.9 19.6 Total funds managemen
Slide 39: Further Information
Further Information Investors and analysts Media Misha Mohl Will McMicking John Frey Group Head of Strategy, Research & Group Chief Financial Officer Corporate communications Investor Relations +61 422 371 575 +61 451 634 991 +61 411 361 361 misha.mohl@hmccapital.com.au william.mcmicking@hmccapital.
Slide 40: Disclaimer
Disclaimer This presentation (Presentation) has been prepared by HMC Capital Limited (ACN 138 990 593) (“HMC Capital”) Summary information This Presentation contains summary information about the current activities of HMC Capital and its subsidiaries as at the date of this Presentation. The informat