This article is from the Australian Property Journal archive
DAVID Di Pilla’s HMC Capital, harbouring aims to build a $5 billion private credit platform, has acquired commercial real estate private debt fund manager Payton Capital in a $127.5 million deal.
HMC Capital has grown out of a portfolio of former Masters hardware chain stores to manage over $13 billion in assets on behalf of institutional and high-net-worth investors, and the acquisition sees it make its move into private commercial real estate (CRE) debt, a sector which is expected to grow from circa $74 billion to $144 billion over the next five years
“HMC Capital expects to build a $5 billion private credit platform over the medium term,” Di Pilla said.
“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.
“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.”
“We like the DNA that Payton has and together intend to build on that strong foundation to achieve great success in the future.”
Payton manages around $1.5 billion in commercial real estate credit.
HMC will look to raise $100 million from institutional investors, alongside a $30 million share purchase plan. Shares will be offered at $6.50 each, after trading at $6.92 before entering a trade halt. HMC also sold down a 1.9% share in its HomeCo Daily Needs REIT for $50 million.
HMC also announced the appointment of Matt Lancaster as chair of HMC’s private credit platform. Lancaster previously led Macquarie Group’s US Principal Finance business where he was responsible for over $14 billion of private credit principal investments.
David Payton, Payton Capital CEO, said the transaction will significantly enhance Payton’s market profile and is a reflection of the strong tail winds and growth of private commercial real estate debt in Australia.
“The transaction will also ensure Payton continues to provide a deep pipeline of investment offerings to wholesale and sophisticated investors, whilst also offering access to a broader range of lending products for borrowers.”
“While our primary focus remains on delivering certainty and value for borrowers and investors, this development will enable us to extend our product range and to grow our influence in the Australian private credit market.”
Payton said the acquisition strengthens the company’s financial position, provides access to a strong balance sheet with associated institutional capital, and would “empower us to compete in a maturing market and to deliver our future growth aspirations”.
