Nick Dignam from Fortitude Investment Partners shares insights with Lachlan Maddock from Fortitude Investment Partners on how a diversified portfolio in mid-market private equity is structured. The Inside Adviser
The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
Institutional backing sees HMC Capital launch $1.3B healthcare fund
Commercial property juggernaut HMC Capital is doubling down on surging demand for hospitals and healthcare assets, recently launching its Healthcare and Life Science (UHF) unlisted real estate fund.
The new fund will kick off with around $1.3 billion in total equity commitments, the bulk of that coming from global institutional investors keen to take a slice in a healthcare sector experiencing surging demand.
HMC’s existing healthcare property trust, HealthCo Healthcare and Wellness REIT (ASX:HCW), will funnel $322 million and three major institutions have committed a combined $251 billion as part of $651 million already secured for the new fund. According to HMC Capital’s ASX release, a fourth institutional investor is currently undertaking due diligence for the remaining equity commitment, with HMC covering the delta in the short term.
The fund will initially own a portfolio of seven acute care hospitals leased out to Healthscope, Australia’s leading operator in the sector, with more projects on the way.
“UHF has a substantial embedded brownfield development pipeline within the existing Healthscope hospitals with an end value of $1.3bn based on committed projects,” the ASX note stated. “The fund is expected to realise positive valuation gains on completion of these developments.”
HMC now has over $2 billion in capital committed to Unlisted Institutional Funds, with this second launch for the calender year highlighting the group’s ability to manage high-value, complicated transactions in healthcare property assets, which it calls a “core growth vertical supported by favourable megatrends”.
The launch also puts ex-UBS banker David Di Pilla’s consortium on track to meet its $10 billion “committed AUM target” by the end of the year – 12 months ahead of schedule.
“We continue to make significant progress in our transition to becoming a high ROE alternative asset manager,” Di Pilla Commented. “The Healthcare and Life Sciences Unlisted real estate fund is a good example of HMC’s ability to source highly strategic acquisitions through unique deal structuring and underwriting. Our strategic partnership with Brookfield helped us secure the portfolio on attractive terms and will generate material recurring income for the group.
“We are very pleased with the level of demand we received throughout the fund raising process and the calibre of institutions we partnered with,” he continued. “Today’s announcement also underpins our conviction around growing our healthcare and life sciences platform into a global strategy over time. There is significant and growing institutional investor demand from both Australian and global investors as they actively down weight from structurally challenged sub sectors”,
