Home Consortium to raise $1 billion for healthcare real estate push
Property funds house Home Consortium is ramping up its dramatic expansion into healthcare real estate and will raise $1 billion of equity for specialist vehicles in the area.
The move doubles the planned raising for its HealthCo entity that will target hospitals, primary care, childcare, aged care and life sciences assets.
Investors are chasing these areas in the wake of the pandemic because they offer stable distributions and long-term capital growth, rather than volatile returns that larger malls have been generating.
HomeCo will tap both the listed and unlisted markets as it gets HealthCo off the ground, saying it will fill a gap on the ASX as health exposure is currently unavailable at institutional scale on the bourse.
The group says HealthCo’s listed and unlisted vehicles will co-invest where appropriate, giving it the ability to take down large portfolios and to diversify.
HomeCo said it was now targeting an initial equity raise of $1 billion, which would be across both listed and unlisted investment vehicles.
This will add to its firepower, as HomeCo’s register includes some of the wealthiest families in the country.
They are led by former banker David Di Pilla’s Aurrum Group of investors, alongside the founders of Spotlight and Chemist Warehouse. HomeCo’s float was also backed by the Oatley family, Aussie Home Loans founder John Symond and the Besen family.
HomeCo head of capital partnerships Heechung Sung was bullish about the appetite for exposure to the health and wellness sector. “The sector is highly attractive given its diversification benefits and the critical need nationally to build future capacity for the delivery of health services,” she said.
HomeCo will target a 10-15% investment over the long term and will contribute $250 million of seed assets it holds. HealthCo has about $800 million of assets under due diligence or seed assets.
HomeCo chief executive David Di Pilla said the proposed portfolio “offers strong diversification and attractive risk adjusted returns with low levels of correlation to traditional property sectors”.
“HealthCo’s vision is to improve the health and wellness for people living in our communities through the delivery of high-quality health focused infrastructure,” he said. “We subscribe to the position that better access to healthcare services leads to better health outcomes.”
Mr Di Pilla said the proposed HealthCo had received positive investor demand for the proposed vehicles and flagged a further shift into running funds.
“The proposed establishment of HealthCo is transformational for HomeCo and accelerates our transition to a capital light structure with a significantly larger asset base generating annuity income streams,” he said.
The company has formed a specialist advisory board across the private hospital, medical, childcare and financial services space.
It will include former managing partner at PwC and EY Joseph Carrozzi, who chairs the Centenary Institute for Medical Research, ex-chief of Guardian Early Learning Tom Hardwick, former chief investment officer of MLC Private Equity Natalie Meyenn, the former dean of medicine at the University of Sydney Professor Bruce Robinson and ex-Ramsay boss Danny Sims.
Former ANZ banker Sam Morris will be senior portfolio manager for HealthCo.
Macquarie Capital and Morgan Stanley are advising with Morgans also on the listed fund.
This article originally appeared on www.theaustralian.com.au/business/property.
