Fund Manager Summary on Lendlease Group (ASX:LLC)
Lendlease Group (ASX:LLC) is navigating a transformative phase characterized by substantial simplification efforts and capital recycling initiatives exceeding $2.5 billion, which have been well-received by investors, evidenced by recent share price recoveries. Fund managers highlight the upcoming $500 million buyback, potentially representing around 14% of the market cap, as a significant catalyst for revaluation. However, risks remain, particularly concerning the timing and pricing of ongoing non-core asset sales, as well as the replenishment of the Australian development pipeline, which presents $25 billion in identified opportunities over the next year. While the market is slow to recognize the company’s core competencies and competitive advantages, Lendlease’s strategic focus on reducing capital intensity and enhancing operational efficiency is expected to bolster its growth trajectory amidst a favorable interest rate environment.
Commentary From The Managers
There are 9 insights from 3 fund managers regarding their investment in Lendlease Group (ASX:LLC) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
HMC Capital
30 Nov 2025
$5.17
Summary
- HMC Capital notes Lendlease's progress on its simplification plan as highlighted during the recent AGM.
- Management has agreed on commercial terms for asset sales totaling approximately $1bn (TRX Malaysia and Retirement Living Australia), with final due diligence underway.
- This follows $2.5bn in previously announced or completed capital recycling initiatives.
- Proceeds from these transactions, alongside around $300m from The Crown Estate Joint Venture, are expected to facilitate a buyback of up to $500m in 2H FY26.
- HMC Capital believes Lendlease is well-positioned for a re-rate due to:
- Further capital recycling supporting the $500m buyback, which represents approximately 14% of market cap.
- A replenished Australian development pipeline, with $25bn of opportunities identified for the next year and $10bn targeted for conversion.
- Growth in new investment mandates, with around $4bn in new funds under management through its international platform, and potential for an additional $24bn pipeline via the UK Crown Estate JV.
- The stock trades at a significant discount to net tangible assets (~21%), reflecting underappreciated strengths in its core Investments, Development, and Construction sectors.
HMC Capital
30 Sept 2025
$5.50
Summary
- Lendlease finished the quarter up 2.3%.
- FY25 result in August was in line with guidance and reinforced progress on the simplification plan encouraged by HMC Capital.
- The share price reaction (+6.7%) reflects improving confidence in the turnaround.
- HMC Capital believes Lendlease is positioned for a re-rate:
- Further capital recycling with $2.5bn executed to date and additional sales in advanced stages, enabling a $500m buyback (~13% of market cap).
- Replenishment of the Australian development pipeline with $25bn of opportunities identified for the next 12 months and $10bn targeted to convert.
- Growth in new investment mandates with ~$4bn of new FUM underway through its international platform, alongside the UK Crown Estate JV providing optionality over a further ~$24bn pipeline across build-to-rent, life sciences, and sustainable office.
- The stock continues to trade at a discount to NTA, with little recognition of the strength in its core Investments, Development, and Construction businesses.
Oracle Advisory Group
30 Sept 2025
$5.50
Summary
- Oracle Advisory Group initiated their investment thesis two years ago based on Lendlease Group (LLC) selling down development assets.
- The objective was to reduce capital intensity in their business model.
- This strategy has largely played out, yet there has been little reaction from the sharemarket.
- As a result, Oracle Advisory Group identifies no current catalyst to rerate the stock.
- Consequently, they have sold Lendlease Group stock from their portfolio.
HMC Capital
31 Aug 2025
$5.66
Summary
- Lendlease delivered a full year result in line with guidance, achieving a total return of +8.5%.
- The stock rose 6.7% on the day of the result, indicating increasing market confidence in the turnaround.
- HMC Capital continues to engage with management and new Chair John Gillam on the ongoing delivery of the strategy.
- Lendlease is expected to launch a $500m buyback, pending further capital recycling.
- There is progress in restocking the development pipeline and winning new investment mandates.
- Lendlease is positioned to benefit from a more benign interest rate environment, enhancing its strengths in residential development.
- The stock continues to trade at a discount to NTA, with core Investments / Development / Construction business undervalued despite its competitive advantages.
HMC Capital
30 June 2025
$5.38
Summary
- Lendlease was the biggest drag on portfolio performance during the quarter, ending down 8.8%.
- The company made further progress on simplification and non-core asset sales during the June quarter.
- Established a joint venture with The Crown Estate and completed the sale of Capella Capital.
- Total announced or completed capital recycling initiatives reached $2.5bn.
- Despite continued execution on the strategy, there are risks around timing and pricing of remaining non-core asset sales.
- Concerns also exist regarding the restocking of the Australian development pipeline.
- HMC Capital believes the market has been overly punitive, given the track record and competitive positioning of the core Australian focused business.
- There is a significant rerate opportunity anticipated.
- HMC Capital awaits the next catalyst for the stock, including further capital recycling announcements and the commencement of a previously flagged $500 million buyback.
HMC Capital
31 May 2025
$5.73
Summary
- HMC Capital notes the formation of a new joint venture between Lendlease and The Crown Estate.
- The joint venture involves the sale of six UK development projects, enabling Lendlease to release over $300 million in capital.
- This transaction is anticipated to reduce future funding commitments for Lendlease.
- It is expected to accelerate planning and project delivery for the UK projects.
- Lendlease's total announced or completed capital recycling initiatives now stand at $2.5 billion for FY25, with a target of $2.8 billion.
- HMC Capital expects Lendlease to be positioned to proceed with a $500 million buyback soon.
Oracle Advisory Group
30 Sept 2024
$7.10
Summary
- Oracle Advisory Group identifies Lendlease as undervalued, with an estimated Net Tangible Asset Value (NTA) of $7.10 per share.
- Stock prices have consistently remained below NTA, prompting Oracle Advisory Group to increase positions.
- The market cap was approximately $4.3bn, with an Enterprise Value of $8.4bn, while Lendlease plans to release $4.5bn from its assets.
- Out of the asset release, around $500m is allocated for stock buybacks and the rest primarily for debt repayment.
- There is potential for value accretion for shareholders, assuming the asset release is completed.
- Delays in the Stockland deal projects are not seen as detrimental to the overall investment thesis.
- On 1st August 2024, Lendlease announced a sale of the Asia Pacific Life Sciences JV with Warburg Pincus, generating $80m for FY25 OPAT.
- A favorable global interest rate environment enhances the potential for value creation through asset sales, amid expectations for rate cuts across G7 regions.
- Lendlease has already announced $1.9bn in transactions towards its $2.8bn FY25 target, with most sales occurring at attractive prices.
- Overall, Oracle Advisory Group believes Lendlease can successfully sell its Capital Release Unit (CRU) assets and improve its depressed stock price.
Cooper Investors
30 June 2024
$5.63
Summary
- Cooper Investors recently added Lendlease (LLC) to the portfolio.
- The investment proposition is centred around a cyclical reversion in the development business.
- The broader property cycle is expected to recover from current lows.
- Lendlease's development business has generated a ~4.4% ROIC over the past four years.
- This ROIC is well below the 10-13% through-the-cycle target historically achieved.
- A pathway exists for development returns to revert to historical levels in the coming years.
- The stock is currently trading at ~0.75x last reported net tangible assets.
- This valuation aligns with the trough of ~0.8x experienced during the GFC.
- Cooper Investors believes this represents compelling Risk-Adjusted Value Latency.
- Significant value creation is also seen in global real estate funds management.
- Lendlease’s market presence, brand, and asset creation capability support this potential.
- Successful execution will require a greater focus and intentionality than historically displayed.
- Current management’s strategy update in May showed a positive step change in focus.
- Plans to simplify the organisational structure include a managed exit from international development and construction.
- Capital will be redeployed into the high-returning Australian development business and international investment management platform.
Oracle Advisory Group
31 Mar 2024
$6.36
Summary
- Oracle Advisory Group initiated a position in Lendlease due to improved execution under new CEO Tony Lombardo.
- Recent involvement of activist investors is expected to drive further business improvements.
- The fund manager acknowledges that the entry occurred before a post-results share price decline, but the thesis remains intact.
- Tony Lombardo has focused on streamlining by selling unwanted assets and shifting to a funds management model.
- Lendlease is two years into a five-year turnaround plan, indicating a long-term recovery strategy.
- Three major activist investors are pushing for faster progress, highlighting ongoing frustrations with Lendlease's turnaround pace.
- Funds under management (FUM) increased by 9% in FY23 to $48bn, with a target of reaching $70bn by FY26.
- Oracle believes the market undervalues the funds management aspect, indicating a potential upside of more than 50% in share price.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Frequently Asked Questions
Who is investing in Lendlease Group (ASX:LLC)?
Fund managers including Cooper Investors, Oracle Advisory Group and HMC Capital have invested in Lendlease Group (ASX:LLC).
Why do fund managers invest in Lendlease Group?
Fund managers invest in Lendlease Group due to its strong asset management strategy and ongoing capital recycling initiatives, totaling $2.5 billion. This enhances liquidity and supports a planned $500 million buyback, reflecting confidence in future growth. The company is positioned to restock its Australian development pipeline, which has $25 billion in opportunities. Despite recent share price declines, its core businesses are trading at a significant discount to net tangible assets, suggesting potential for a favorable re-rating.
What happened to Lendlease Group (ASX:LLC)?
Fund managers have invested in Lendlease Group due to its strategic simplification plan, which is yielding progress in capital recycling and significant asset sales totaling $2.5 billion. This initiative supports a planned $500 million buyback, enhancing shareholder value. Furthermore, Lendlease is replenishing its robust $25 billion Australian development pipeline, with a target of converting $10 billion, and is expanding its international investment mandates, totaling approximately $4 billion. The company's stock continues to trade at a substantial discount to net tangible assets (NTA), indicating untapped value in its core business sectors.
What is the short interest in Lendlease Group (ASX:LLC)?
The short interest in Lendlease Group (ASX:LLC) is 2.48% which makes it the 107th most shorted stock on the ASX. Of the 690.6M shares that Lendlease Group has on issue, 17.1M have been sold short.
What does Lendlease Group (ASX:LLC) do?
Lendlease Group operates as a property and infrastructure development company. It engages in designing, developing, constructing, funding, owning, co-investing or managing property, and infrastructure assets. The firm operates through the following segments: Investments, Development, Construction, and Capital Release Unit. The Investments segment includes an investment management platform and the group's ownership interests in residential, office, retail, industrial, retirement and infrastructure investment assets. The Development segment includes the development of inner-city mixed-use developments, apartments, communities, retirement, retail, commercial assets and social and economic infrastructure. The Construction segment includes the provision of project management, design and construction services, predominantly in the commercial, residential, mixed use, defense, and social infrastructure sectors. The Capital Release Unit segment includes overseas construction operations, overseas development projects, the group’s residual ownership interest in retirement assets and the US Military Housing business, Australian communities projects and the retained engineering and services projects. The company was founded by Gerardus Jozef Dusseldorp in 1957 and is headquartered in Barangaroo, Australia.