HMC Capital Limited (ASX:HMC) Declares $300M Interim FY25 Distribution and Launches Fund II
Interim Distribution and Fund Performance
HMC Capital Limited (ASX:HMC) has declared an interim FY25 distribution of approximately $300 million from HMC Capital Partners Fund I (HMCCP Fund I). HMC Capital, the largest investor in HMCCP Fund I, will receive around $150 million. The distribution reflects significant profits from investments in Sigma Healthcare and Ingenia Communities. HMCCP Fund I achieved over 55% net returns in CY24, making it the best performing Australian equity fund as ranked by Morningstar.
Launch of HMCCP Fund II
HMC Capital has announced the launch of HMCCP Fund II, a closed-end private equity fund focusing on high conviction listed and unlisted investments. The new fund aims to leverage HMC’s expertise to deliver strong returns by targeting strategic stakes with potential for corporate mergers and acquisitions, including opportunities like Healthscope.
Financial Performance and Trading Update
For FY25, HMC Capital projects an annualised operating EPS (pre-tax) of 70 cents, unaffected by the HMCCP Fund I distribution. The company has reaffirmed its DPS guidance of 12.0 cents.
Balance Sheet Strengthening
Following the distribution, HMC Capital expects to have no drawn debt and retains $675 million in committed and undrawn funding lines. The strengthened balance sheet supports growth initiatives, including the establishment of HMC’s inaugural Energy Transition Fund.
Executive Comments
HMC Managing Director and CEO, David Di Pilla, stated, “HMC Capital Partners Fund I has proven our ability to deliver outsized and uncorrelated returns for investors by applying a private equity mindset to investing in listed equities. We are excited about the upcoming launch of our second private equity vehicle which will target both listed and unlisted opportunities. We have refined the strategy and structure of Fund II to maximise potential returns for investors. HMCCP Fund II will target our highest conviction investments in a more traditional closed-end private equity fund structure.”
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended HMC Capital. The Motley Fool Australia has recommended HMC Capital. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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