HMC Capital targets PE fund on wholesale platforms
Fund manager HMC Capital is seeking to expand fundraising for its private equity vehicle into wholesale platforms now that it has achieved a three-year track record, scrapping a planned second fund.
In its results for the 12 months to 30 June, the firm said assets under management (AUM) in the private equity division stand at $0.6 billion. Overall AUM at HMC was $18.7 billion which was up 47 per cent on the prior corresponding period.
The unlisted HMC Capital Partners Fund I (HMCCP) has now reached a three-year benchmark which makes it easier to secure a rating from a research house and appear on platforms.
This fund targets public and private companies with real asset backing where there is potential to unlock “trapped” value through improved capital allocation and portfolio management.
Group managing director and CEO, David Di Pilla, said: “The future growth opportunity there is to go to the direct investor market plus wholesale platforms. One of the big gating items with wholesale platforms was the ratings and the three-year track record, both of those have been ticked so we are confident we will be in a strong position to continue fund flow there.
“Our focus is around driving great returns and great outcomes. We have a lot of great investors and we will consolidate and cash in on that in the back half of the year around fundraising. Fundraising has accelerated when we have had event-led raising opportunities. We are sitting on 25 per cent cash in this fund, so watch this space and we have some initiatives underway.”
In April, it announced it wanted to launch a second closed-ended private equity vehicle known as HMC Capital Partners Fund II (HMCCP) which would be a more traditional private equity structure, but this has since been scrapped following investor feedback.
“Previously announced restructuring of the fund as HMCCP II not proceeding following investor feedback regarding the appeal of the existing strategy and a preference for liquidity. [We] intend to focus fund investment and effort on our highest conviction names where we believe we can generate the greatest returns,” the firm said in the FY25 results.
However, it said it continues to explore deal-specific co-investment opportunities to grow the private equity vertical in other ways beyond HMCCP.
Meanwhile, its private credit division was formed from the acquisition of Payton Capital in July 2024 which allowed HMC to establish a diversified private credit platform over the medium term covering real estate, corporate, mezzanine, and infrastructure private credit investment management.
AUM in the sector now stands at $1.9 billion driven by its commercial real estate (CRE) lending business.
Craig Schloeffel, head of private credit, said: “HMC Private Credit is emerging as a leading non-bank lender. Our assets under management grew by 25 per cent, driven by strong flows into the core funds which have doubled in size since we acquired Payton Capital.
“We are well-positioned to grow as Australian investor appetite remains strong and over the medium-term, we will scale several times over while maintaining disciplined credit quality.”
This growth in private credit AUM helped HMC to report an 84 per cent increase in management fees to $146.9 million, up from $79.7 million.
It currently has over 500 investors on the private credit platform which include financial advisers and high-net-worth (HNW) investors, and plans to expand into wholesale platforms.
AUTHOR
Laura Dew
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