HMC Capital's 70% Collapse Turns Into a Top Conviction Pick

Healthscope receivership contagion and a lagging data centre float wiped out most of the stock's value, before fund managers began calling it deeply undervalued.

14 Oct 2026 · 3 min read

HMC Capital's stock plummeted 70 percent from its 2025 highs to below $3 by Christmas as contagion from a Healthscope hospital receivership, a lagging DigiCo data centre float, and broader alternative asset manager weakness compounded, before fund managers who called it a contrarian buying opportunity watched a recovery build through 2026.

A dramatic collapse tied to portfolio company troubles

Renaissance Asset Management said the stock plummeted 70 percent to below $3 by Christmas, prompting the fund to dive back in on the view that veteran dealmaker David Di Pilla was starting to resolve the underlying problems, calling it a great contrarian opportunity while acknowledging the company is not yet out of the woods. Investors Mutual Limited said the stock fell 33.8 percent as investors grew frustrated with progress toward long-term growth targets despite continued fundraising momentum, compounded by contagion from overseas alternative asset manager share prices, though it believes the sell-off for both is overblown. Seneca Financial Solutions said the stock sold off following its result on what it viewed as largely irrelevant media noise, even as HMC reported assets under management up 4 percent to $19.5 billion and recurring management fees up 34 percent to $84.5 million, describing its stable of fixed capital listed investment companies as a reliable, predictable and high-quality revenue base.

By Christmas, HMC's stock had plummeted 70 per cent to below $3. They are not out of the woods yet, but this is a great contrarian opportunity.

— Renaissance Asset Management, Article, February 2026

Contagion from listed REITs, but a re-entry opportunity

Investors Mutual Limited said the stock fell a further 39.5 percent on contagion from poor performance of HMC's listed healthcare and data centre REITs, alongside weak performance from comparable offshore companies, though it believes a growing private capital base and positive developments within HMC's energy transition strategy leave it well placed to recover. Asymmetric Asset Management said it added a new position acquired near the share price's recent low, attracted by significant downside protection embedded in HMC's balance sheet, which owns a substantial portfolio of listed REITs trading at a significant discount to their net tangible asset backing.

Resolving overhangs and a beneficiary of REIT re-rating

Seneca Financial Solutions said that if HealthCo Healthcare and Wellness REIT re-rates as expected, attention will turn to the biggest beneficiary of that shift in asset quality, HMC Capital itself, which externally manages the REIT. Following the Healthscope receivership and the decision to suspend HealthCo distributions, HMC announced a package of measures to align with unitholders, including waiving 50 percent of its base management fees. By August, Seneca named HMC its top conviction pick, viewing the roughly $3.20 share price as the market having overshot first up and then down, on three overhangs it sees resolving: the HealthCo and Healthscope situation, a lagging DigiCo data centre float despite a recent above-book US asset sale, and an energy transition division analysts aren't yet modelling, with the stock trading near the net tangible asset value of its co-investment stakes alone.

Views the ~$3.20 share price as the market having overshot first up then down, on three overhangs, the HealthCo/Healthscope situation, a lagging DigiCo data-centre float, and an energy-transition division analysts aren't yet modelling, all seen as resolving.

— Seneca Financial Solutions, Presentation, August 2026

What fund managers say they are watching next is resolution of the HealthCo and Healthscope situation and whether the REIT re-rates, progress on the DigiCo data centre float following the above-book US asset sale, delivery of the energy transition division several managers say the market isn't yet modelling, and whether HMC's fund management business gets properly valued once these overhangs clear.