ASX:HMC
HMC Capital Ltd
Investment Summary
The fund managers believe that HMC Capital Ltd. represents a compelling investment opportunity characterized by its capital light business model and significant growth potential. Currently managing $17.5bn in AUM, they highlight that HMC has established platforms across four core verticals—including Real Estate, Private Credit, Digital Infrastructure, and Private Equity, with a fifth vertical in Energy Transition set to launch in FY25. The fund managers are particularly impressed with the management team, led by founder David Di Pilla, and their proven track record in the sector. In their opinion, with long-term trends favoring scalability, HMC could realistically grow to $50bn in AUM within the next 3-5 years. Comparisons with industry giants like Macquarie and Blackstone further affirm their optimism. They estimate significant upside from the current share price, reinforcing their commitment to this promising investment.
Commentary From The Managers
Cooper Investors
31 Dec 2024
$9.86
- Cooper Investors continues to build on the portfolio's position in capital-light alternative asset manager HMC Capital (HMC).
- HMC was founded by ex-UBS investment banker David Di Pilla, successfully acquiring the Masters Property portfolio in 2016.
- This acquisition returned a >6x multiple on invested capital, underpinning the IPO of HMC in 2019.
- HMC has grown to manage approximately $17.5bn in assets under management (AUM).
- Established platforms operate in four key verticals: Real Estate (~$10bn), Private Credit (~$2bn), Digital Infrastructure (~$5bn), and Private Equity (~$1bn).
- A fifth vertical, Energy Transition, is in development with a second seed asset acquisition agreement signed.
- The verticals are in end markets supported by positive long-term trends and scalable growth opportunities.
- HMC's current trajectory is likened to that of Macquarie and Blackstone 25 years ago, both of which have scaled tremendously.
- HMC's current stage is comparable to Macquarie and Blackstone when they had ~$20bn in AUM.
- The investment proposition is backed by the potential for HMC to grow from $17.5bn AUM to $50bn over the next 3-5 years.
- This growth could yield significant upside to the current $10ps share price.
- The pathway to $50bn AUM includes: growth in real estate, private credit expansion, digital infrastructure development, and execution of the energy transition platform.
- The management team is founder-led with significant ownership and a strong track record.
Cooper Investors
30 Sept 2024
$8.20
- Cooper Investors recently added HMC Capital (HMC) to the portfolio.
- HMC is a capital light alternative asset manager at an early stage in their growth journey.
- HMC currently manages $12.6bn in funds across four key verticals:
- Real Estate: $9.6bn
- Private Credit: $1.6bn
- Digital Infrastructure: $0.7bn
- Private Equity: $0.8bn
- A fifth vertical, a Renewables platform, is under development and targets a launch during FY25.
- The verticals operate in end markets supported by positive long-term trends with significant scalability.
- Each vertical has the potential to match HMC’s total current FUM of $12.6bn.
- The opportunity set, combined with a founder-led management team with significant ownership, lays the groundwork for growth.
- Cooper Investors sees potential for HMC to grow into a $50bn+ alternative asset manager over the medium term.
- This represents compelling risk-adjusted value latency.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.