Hmc Capital Limited · ASX:HMC
Hmc Capital — FY2023 Earnings Presentation
33 slides from Hmc Capital's earnings presentation, Aug 23, 2023
Slide 1: HMC Capital
HM Capital 23 August 2023
Slide 2: Journey Tracks to Sacred Sites
1 Journey Tracks to Sacred Sites Tony Sorby (2021) © the artist courtesy Kate Owen Gallery
Slide 3: Presenters
David Di Pilla Group Managing Director & CEO Will McMicking Group CFO Misha Mohl Group Head of Strategy, Research & IR 2
Slide 4: HMC Capital Overview
HMC Capital Overview ASX-listed alternative asset manager led by experienced and aligned management team $8.1bn 109% #5 >80 Funds under management1 TSR since IPO2 Funds established Professionals Overview Funds Management Platform ASX-listed alternative Outperformed the S&P/ASX 200 index by 84% 1 ass
Slide 5: Investment Track Record
Investment Track Record Our business has rapidly grown and evolved through successful fund raising & capital deployment ✓ FY17 >6x MOIC Highly structured $750m acquisition from Woolworths (ASX: WOW) ✓ FY20 109% TSR1 Grown AUM from $0.9bn at listing in Oct-19 to ~$8bn today ✓ FY21 $300m IPO AUM incre
Slide 6: Results Overview
HMCopital RESULTS OVERVIEW
Slide 7: Results Overview
Results Overview Established 3 major new unlisted growth platforms and expanded institutional investor base FINANCIAL FUNDS RESULT MANAGEMENT NEW FUNDS ESTABLISHED Operating Funds Under HMC Capital Partners Fund I (HMC-CP) Earnings Management ✓ Private Equity Fund launched in Sep-22 and delivering s
Slide 8: Funds Management
HMCopital FUNDS MANAGEMENT
Slide 9: HMC Capital Strategy
HMC Capital Strategy High return on equity alternative asset manager Business models Strategy To be a diversified large-scale alternative asset manager and scale we admire Financial Target 20%+ return on equity target over the medium-term Competitive Creating value through large-scale and complex tr
Slide 10: HMC Capital Economic Flywheel
HMC Capital Economic Flywheel Our economic flywheel driven by ability to execute large, complex transactions IPO | Oct-19 ~$1bn TODAY | Aug-23 $8.1bn MEDIUM-TERM $20bn+ FUM FUM1 FUM On track to hit $10bn target1 | Dec-23 20%+ target ROE HMC funds management platform today Listed ▪ Two ASX-listed REI
Slide 11: Healthscope Hospital Portfolio Case Study
Healthscope Hospital Portfolio Case Study High ROE transaction underpinned by unique deal structuring and underwriting support by HMC $1.2bn >$700m $1.1bn 20%+ Acquisition price1 HCW AUM growth New unlisted healthcare fund2 Return on equity Transaction highlights High return on equity transaction ✓
Slide 12: New Growth Frontiers
New Growth Frontiers Our entry into new sectors will support our strategy to maintain our strong FUM growth trajectory Assessing multiple strategic growth opportunities to significantly grow FUM Situation overview Future growth opportunities ▪ HMC Capital is investigating a range of opportunities to
Slide 13: 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 $4.8bn $0.6bn $434m Open-ended Funds under management Development pipeline Sponsor investment2 ASX-listed FUM growth (%) 94% CAGR Investment ▪ Own high qualit
Slide 14: A-REITs | HealthCo Healthcare & Wellness REIT
A-REITs | HealthCo Healthcare & Wellness REIT Transformational Healthscope acquisition significantly enhances portfolio quality and scale $1.7bn >$1bn $167m Open-ended Funds under management1 Development pipeline2 Sponsor investment3 ASX-listed FUM growth (%) 87% ▪ Own critical healthcare infrastruc
Slide 15: 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 Fund update ▪ The Last Mile Logistics (LML)
Slide 16: Unlisted Real Estate | Healthcare & Life Sciences
Unlisted Real Estate | Healthcare & Life Sciences New $1.1bn unlisted institutional fund seeded with 7 Healthscope private hospitals $1.1bn 40-50% ~50% 10%+ Deployed FUM1 Target gearing Co-investment from HCW Target equity IRR Fund Overview Fund update ▪ The Healthcare & Life Sciences Fund (UHF) wil
Slide 17: 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 $0.4bn1 3 $150m Open-ended Deployed FUM Strategic stakes Sponsor investment Unlisted fund Net asset value per unit since inception2,3,4 Fund update ▪ Fund esta
Slide 18: HMC Capital's Sustainability Framework
HMC Capital’s Sustainability Framework Sustainable practices that drive long term value creation and positive community impact ENVIRONMENTAL SOCIAL GOVERNANCE ▪ On track with Net Zero Energy Roadmap ▪ Establishment of HMC Capital Foundation to ▪ Received a rating of AA (on a scale of AAA – accelerat
Slide 19: Financials
FINANCIALS HMCopital 18
Slide 20: Earnings Summary
Earnings Summary Strong growth in underlying investment and funds management segments $ million FY22 FY23 Investments Direct property earnings & other income 11.1 0.3 ▪ FY23 investment income increased by $25.5m to $59.4m and was Share of associate profit (FFO)1 22.8 31.1 driven by the share of HMC
Slide 21: Funds Management revenue
Funds Management revenue FUM growth resulted in recurring (non-transactional) revenue of $57.5m (+72% on FY22) $ million FY22 FY23 Funds management revenue Base management fees 20.0 35.6 ▪ 78% growth in base management fees reflecting significant growth in funds under management including the full y
Slide 22: Balance Sheet
Balance Sheet Flexible balance sheet with NTA increasing to $883m ($2.54 ps) HMC Standalone Jun-22 Jun-23 Jun-23 Jun-23 $ million HMC HMC HMC-CP Consolidated Balance Sheet Cash and cash equivalents 57.6 20.4 28.3 48.8 ▪ HMC net assets increased in the 12 months to Jun-23 by Equity accounted investme
Slide 23: Capital Management
Capital Management Undrawn debt of $239m and net tangible assets of $883m continue to provide funding capacity to support HMC managed funds and new FUM initiatives HMC Standalone $ million Jun-22 Jun-23 Capital management Bank debt ▪ Existing $275m senior secured bank facility maturity date has been
Slide 24: Outlook and Guidance
OUTLOOK AND GUIDANCE HMCopital 23
Slide 25: Outlook and Guidance
Outlook and Guidance Well positioned to maintain strong growth trajectory and establish new major capital partnerships FY24 Outlook & Guidance ▪ HMC Capital moves into FY24 with strong momentum and conviction about the potential to grow funds under management over the next 12 months and beyond. – We
Slide 26: Appendices
APPENDICES HMCopital 25
Slide 27: Funds Under Management
Funds Under Management Committed FUM ($bn) 3 1 2 Revaluations, other & FUM ($bn) FY223 Additions Divestments FY23 LML capacity1,2 Listed Real Estate 5.5 0.6 (0.2) 0.0 6.0 Unlisted Real Estate - 1.1 - 0.7 1.8 Private Equity - 0.3 - 0.1 0.4 Group 5.5 2.0 (0.2) 0.8 8.1 1. Other includes net impact of c
Slide 28: Funds Management Platform
Funds Management Platform Healthcare & Last Mile Life Logistics Partners Sciences 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 li
Slide 29: Private Equity | HMC Capital Partners Fund I
Partners Private Equity | HMC Capital Partners Fund I High conviction strategy targeting undervalued ‘asset rich’ businesses where we can help unlock value Overview of two disclosed high conviction strategic stakes Share price performance Premium / (discount) to NTA backing $0.90 260% 220% $0.80 180
Slide 30: Gross real estate transactions
Gross real estate transactions FY23 Gross transactions1 HDN HCW LML UHF Total Acquisitions ($bn) 0.1 0.5 0.2 0.9 1.7 Disposals ($bn) 0.2 0.0 - - 0.2 Net transactions ($bn) (0.1) 0.4 0.2 0.9 1.4 Gross transactions ($bn) 0.3 0.4 0.2 0.9 1.9 Notes: 1. Includes settled and contracted acquisitions and di
Slide 31: Additional financial information
Additional financial information FFO reconciliation to net profit/(loss) after tax $ million FY22 FY23 Operating earnings post tax 89.0 82.1 Non-controlling interest - 26.2 Deferred income tax expense (12.1) (2.6) Straight-lining of rental income (0.6) - Amortisation of borrowing costs (1.8) (0.4) A
Slide 32: HMC Capital's Sustainability Framework
HMC Capital’s Sustainability Framework Net-Zero Roadmap for HMC Capital REITs - Scope 1 & 2 emissions reduction roadmap Net Zero Progress Baseline Formed Advancing towards a green, low carbon economy & FY22 Net Zero by 2028 FY23 ✓ Solar Baseline Formed ✓ Solar Net Zero Target Solar PV active in 50%
Slide 33: 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.