HMC Capital delivered on its guidance for the 2026 financial year, reporting operating earnings before tax of 40.4 cents per share while growing fee-generating assets under management by 15 percent to $16.9 billion. The alternative asset manager’s recurring funds management revenue increased 22 percent year-on-year to $165.5 million, signalling improving cash generation from its diversified platform strategy across real estate, private credit, digital infrastructure and energy.
The growth reflects HMC’s execution across its four core platforms over the past year. The real estate business, including its listed retail funds, grew unlisted AUM by 15 percent to $2.9 billion, with the daily needs retail portfolio maintaining 99 percent occupancy and 4.0 percent comparable net operating income growth. The private credit platform expanded rapidly, with assets under management increasing 17 percent to $2.3 billion following the successful securitisation of new institutional mandates, including a strategic partnership with TPG Credit that provides roughly $1 billion of dry powder for future deployment. Digital infrastructure delivered underlying EBITDA ahead of guidance at $127 million and refocused its strategy toward the Australian market following the announcement of approximately $1.2 billion in US asset disposals.
The energy platform completed a significant milestone with the $603 million strategic partnership with KKR, which reduces HMC’s invested capital to approximately $200 million while retaining the majority of future upside. This transaction generates an upfront fee of $35 million and secures $248 million of committed equity for battery energy storage development. The rebranded Illuma Energy platform holds 652 megawatts of operating capacity with 85 percent contracted and approximately 2 gigawatts of near-term projects progressing toward final investment decision.
The balance sheet remains well positioned, with $1.9 billion of tangible assets and undrawn debt capacity. HMC has deployed over $3 billion in strategic acquisitions over the past three years to establish its digital infrastructure, private credit and energy platforms, while increasing fee-generating AUM by $8.8 billion with minimal goodwill. The company also progressed the simplification of the group through completing the wind-up of HMC Capital Partners and commencing the wind-up of US digital operations, which management expects will deliver cost benefits in coming years.
The company returned 12.0 cents per share to shareholders in dividends for the financial year. Looking forward, management guides to underlying earnings of at least 35 cents per share in 2027, representing 16 percent growth on the current year. This guidance assumes more than 30 percent growth in recurring funds management revenue, a 35 percent increase in expected distributions from co-investments including the recommencement of HealthCo distributions, and fixed cost leverage. The company has also increased its dividend guidance to 15 cents per share for 2027, up 25 percent on the current year, supported by growth in recurring earnings. Management expects 100 percent conversion of underlying earnings guidance to cash in 2027 as non-cash arrangements for management fees cease.
Our exclusive top 5 stock picks
Five high conviction stocks that didn't make the public list. Backed by institutional research. Subscribe for free access.
Thanks for subscribing, please check your email to confirm your subscription to instantly access your report.
Investors should monitor HMC’s ability to deploy the identified $5 billion of growth opportunities across its platforms, the execution of the SYD1 digital infrastructure expansion, and outcomes from the energy platform’s battery storage project development in the coming year.
View the full ASX announcement (PDF)
About HMC Capital Limited (ASX: HMC)
HMC Capital Limited is an Australian real estate investment company that manages funds focused on global megatrends and scalable real assets. The company serves institutional investors, individuals, and superannuation funds with approximately 7.5 billion dollars in assets under management across real estate and private equity strategies.
If you would like to discuss this announcement, request a callback or call us on 1300 889 603.