Fund Manager Summary
The fund managers believe that the outlook for Lendlease Group is promising, particularly due to a potential cyclical reversion in the development business as the broader property cycle recovers. They note that Lendlease’s development business has generated a ~4.4% ROIC over the past four years, significantly below the 10-13% target historically achieved. With the stock trading at ~0.75x net tangible assets, they see this as a compelling Risk-Adjusted Value Latency. Additionally, the fund managers highlight the potential for significant value creation in global real estate funds management. However, they emphasize that achieving this opportunity will require a greater focus and cultural change from Lendlease management, which they noted positively during the recent strategy update.
Source: Trading View
Commentary From The Managers
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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.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
HMC Capital
30 Sept 2025
$5.50
- 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.
Summary
HMC Capital
31 Aug 2025
$5.66
- 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.
Summary
HMC Capital
30 June 2025
$5.38
- 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.
Summary
HMC Capital
31 May 2025
$5.73
- 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.
Summary
Oracle Advisory Group
30 Sept 2024
$7.10
- 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.
Summary
Cooper Investors
30 June 2024
$5.63
- 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.
Summary
Oracle Advisory Group
31 Mar 2024
$6.36
- 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.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"Amidst a recovering property cycle, Lendlease may be poised for a resurgence, trading at compelling valuations. However, success hinges on a cultural shift and strategic focus that the company has yet to fully embrace. The potential is there, but execution will be key."
Last Updated: 30 Sept 2025
Query The Data
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 like Cooper Investors are investing in Lendlease Group due to the anticipated cyclical recovery in its development business, which has underperformed historically low returns. With the stock trading below its net tangible assets, they see a compelling risk-adjusted value opportunity. Additionally, Lendlease's strong market presence and potential for value creation in global real estate funds management further support their investment thesis, especially following management's recent strategic focus on simplifying operations and enhancing returns.
What happened to Lendlease Group (ASX:LLC)?
Fund managers are investing in Lendlease Group due to its alignment with strategic goals, evidenced by a full-year performance meeting guidance and ongoing execution of a simplification plan. Key factors include a planned $500 million buyback, progress in replenishing the development pipeline with $25 billion in opportunities, and growth in new investment mandates totaling approximately $4 billion. Additionally, Lendlease trades at a discount to net tangible assets (NTA), reflecting untapped value in its core Investments, Development, and Construction sectors, positioning the company favorably for a potential re-rate.