HMC forms consortium to target hospital company amid funds surge

HMC Capital boss David Di Pilla. Picture: Jane Dempster/The Australian

David Di Pilla’s HMC Capital is riding high as the year begins with investors backing its vision of making a play for troubled hospital operator Healthscope and its moves in data centres, energy transition and real estate.

Mr Di Pilla confirmed that the company’s private equity unit was in the “early stages” of establishing an HMC-sponsored consortium to acquire and recapitalise Healthscope.

He emphasised that HMC was “looking for a solution that seeks to maintain the Healthscope’s operating platform, avoids or minimises hospital closures and maintains jobs”, while also flagging some facilities could be shut down.

Another part of the HMC empire – the listed HealthCo trust and another unlisted fund – is a landlord to Healthscope and the company has set up protocols to handle conflicts.

HMC Capital boss David Di Pilla. Picture: Jane Dempster/The Australian

HMC, which came under pressure after its data centre fund flopped when it listed in December, flagged that it was upgrading its facilities and chasing new assets in Australia and the US, where it is also planning a new fund. The local fund has also bounced back, and HMC flagged that it could bring partners into some assets.

The unique funds company is doubling down on its model of setting up funds that capitalise on megatrends including the ageing population, decarbonisation, digitalisation and deglobalisation.

The innovative model, which has seen HMC move faster than many traditional operators in industries it has recently entered, appears to be paying off.

Investors drove up the stock by 98c to $10.88 on Tuesday as HMC said based on its year-to-date performance, annualised fiscal 2025 operating earnings per security pre-tax were currently tracking at 80c,

This was an 8 per cent bump and it said the growth across the platform is expected to be driven by a series of highly scaleable businesses.

In real estate, the strong momentum is expected to drive further assets under management growth as the next interest rate easing cycle gets underway. In energy transition, HMC said an inaugural $2bn-plus fundraising was advancing.

In digital infrastructure, HMC said the $4.3bn of new assets under management from the setting up the DigiCo platform was driving increased recurring earnings and it expects growth from the publicly registered US non-traded REIT.

Private credit is expected to deliver strong earnings growth with back-ended income, deal flow and a new diversified credit fund. HMC’s private equity unit now has a materially higher recurring earnings base, and it is launching new funds.

The company kept fiscal 2025 dividend guidance at 12c a share, in line with a strategy to maintain the dividend at this level and reinvest retained earnings into growth opportunities

In property, it has set up a series of new funds, capitalising on trends that few others are pursuing. The HMC Capital Unlisted Greenfield Fund was set up this month and will grow to $1bn-$1.2bn with seed equity commitments amounting to 40 per cent of the fund. It will acquire land parcels in key metro growth corridors to deliver new supermarket anchored centres.

The new HMC Capital Australia Retail Partnership has raised an initial $100m that could grow to $1bn and the HMC Capital Urban Retail Fund is also on track with commitments to the fund expected to grow to $1-1.5bn-plus target size.

HMC manages $9.8bn of real estate and is also expanding in last mile logistics, where it is buying shopping centres and then repositioning them.

Jarden analyst Lou Pirenc said that fee-earning asset under management of $14.8bn was ahead of our expectations and its forecast of $16.8bn could prove conservative.

Mr Pirenc said that momentum in the group continues with new initiatives announced across all platforms. “We believe this result will please the supporters of the group but the marginal new investor may need to see more evidence of all the growth initiatives delivering more recurring earnings,” he said.