HMC Capital to acquire Payton Capital as part of $5b private credit strategy
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The news: HMC Capital will acquire commercial real estate (CRE) fund manager Payton Capital, as part of its strategy to establish a $5 billion private credit platform.
The numbers: HMC said the acquisition of Payton includes an upfront consideration of $127.5 million.
To fund the takeover, the ASX‑listed alternative asset manager will launch a $100 million institutional placement and a security purchase plan to raise around $30 million.
HMC said it had realised $50 million from a reduction of its stake in the HomeCo Daily Needs REIT from 14% to 12.1%.
The Sydney-based investor said Payton was a "highly profitable and scalable platform" with $1.5 billion in assets under management.
Earlier this month, HMC shares surged on the ASX after the asset manager said its operating earnings per share for the 2024 financial year was tracking 21% higher than previously guided, and unveiled former prime minister Julia Gillard as an executive on its energy transition fund.
The context: HMC said the acquisition of Payton was "the first step" in its strategy to establish a $5 billion diversified private credit asset management platform, spanning real estate, corporate, mezzanine and infrastructure loans.
HMC also announced the appointment of Matt Lancaster as chair of its new private credit platform. Lancaster previously led Macquarie Group's US principal finance business, and will be tasked will building internal capability in new areas of private credit for HMC.
What they said: HMC managing director and CEO David Di Pilla said: "...we are excited to announce the establishment of our private credit platform. We see the growth opportunity in this sector as too big to ignore with private credit asset managers playing an increasingly larger role in Australia's $1.2 trillion credit market".
"The acquisition of Payton provides HMC with an attractive entry into the private credit sector via a highly profitable and scalable platform. This will enable HMC to take advantage of attractive industry fundamentals and investor appetite for CRE private credit," he said.
"Non-bank CRE is experiencing strong growth which is supported by the growing role of private credit asset managers in Australia and the significant need for new housing supply to address Australia's strong population growth and lack of affordable housing."
The source: ASX announcement
