This article first appeared on GuruFocus .
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Operating EPS:$0.404 for FY26, in line with guidance.
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Fee-Generating AUM:$16.9 billion, up 15% on FY25.
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Recurring Funds Management Revenue:$165.5 million, up 22% on FY25.
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Operating Earnings Before Tax:$166.8 million.
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Adjusted Operating EPS:$0.437 per share, excluding discontinued operations of StratCap USA.
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Management Fee Revenue:Increased 23% to $159.3 million.
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Transaction and Performance Revenue:$41.2 million, reflecting the absence of larger transaction revenue recorded in FY25.
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Funds Management EBITDA:$88.5 million, adjusted for discontinued operations.
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Dividend:Final dividend of $0.06 per share declared, bringing full-year dividend to $0.12 per share.
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Net Tangible Assets:$1.2 billion or $2.95 per share at 30 June.
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Gearing:10.7% as at June '26.
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Drawn Debt:$219.5 million, with over $500 million in cash and undrawn debt.
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Real Estate Management and Transaction Fee Revenue:Almost $90 million in FY26.
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Unlisted Real Estate AUM:Grew 15% in FY26 to $2.9 billion.
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Private Credit AUM:Grew 17% in FY26 to $2.3 billion.
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Digital Infrastructure (DGT) Underlying EBITDA:$127 million, ahead of guidance, generating $35 million of management fee revenue for HMC.
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Energy AUM:$1.5 billion across wind, solar, and battery storage.
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FY27 Guidance:Underlying earnings of at least $0.35 per share, up 16% year on year (60% growth excluding the energy transition fee capital charge of $35 million earned in FY26).
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FY27 Dividend Guidance:$0.15 per share, up 25% on FY26.
Release Date: August 26, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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HMC Capital Ltd ( HMCLF ) delivered FY26 operating EPS of $0.404, in line with guidance, and declared a final dividend of $0.06, bringing the full-year dividend to $0.12.
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Fee-generating AUM grew 15% to $16.9 billion, with recurring funds management revenue up 22% to $165.5 million, driven by strong growth in institutional capital partnerships.
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The balance sheet was materially strengthened through capital recycling, ending the year with approximately $1.9 billion in liquidity and investment capacity, including $500 million in undrawn debt.
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Secured $1.35 billion in new institutional mandates for private credit, including a strategic partnership with TPG Credit, positioning the platform for significant AUM growth.
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The energy platform, Illuma Energy, completed a $603 million institutional partnership with KKR, validating the platform and providing capital for future developments, with a clear pathway to $3 billion+ AUM.
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Digital infrastructure (DGT) delivered strong FY26 results with underlying EBITDA of $127 million, ahead of guidance, and is progressing 67 MW of new capacity with a pathway to $250 million stabilized Australian EBITDA.
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The company has over $5 billion in growth opportunities across all verticals, including $2 billion in real estate dry powder and $1 billion+ in private credit investment capacity.
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FY27 guidance of at least $0.35 EPS represents 60% growth year-on-year (excluding the one-off energy transition fee), underpinned by over 30% growth in recurring funds management revenue and fixed cost leverage.
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The company expects 100% cash conversion of underlying earnings in FY27, with no cash tax expected, and has increased dividend guidance to $0.15 per share, up 25%.
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Private credit platform has been upgraded to institutional-grade with independent valuations, dynamic provisioning, and a strong track record of zero principal losses, attracting global capital.
Negative Points
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Transaction and performance revenue declined to $41.2 million, reflecting the absence of larger transaction revenue recorded in FY25.
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Private credit loan origination volumes slowed in the second half of FY26 due to a disciplined approach in response to evolving market conditions, impacting financial results.
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The company is winding down its US digital operations (StratCap USA), which will incur costs in FY27 and is reported as a discontinued operation.
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Distribution income declined, reflecting no distributions received from HCW during the period, and the company faces ongoing uncertainty regarding the Healthscope situation.
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Interest expenses increased to $22.8 million due to senior debt drawn to warehouse energy transition assets.
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The company recorded a fair value loss of $55 million in the HMC Capital Partners fund, partially offsetting gains from the energy platform.
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The company's guidance excludes any upside from capital recycling, large transactions, and one-off gains, indicating potential volatility in future earnings.
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The company is reducing its co-investment stakes in DGT and HCW, which may result in negative contributions to underlying EPS if sold below NTA.
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The energy platform's contribution to underlying earnings is limited as it is a long-term investment, with realizations expected only in the future.
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The company faces market dislocation in the residential real estate market, which, while creating opportunities, also poses challenges for some managers and may impact deployment.
Q & A Highlights
Q: Can you provide insights into the $25 million to $50 million per annum earnings uplift you mentioned from optimizing balance sheet investments? Is this from recycling capital into higher-yielding investments or from generating transaction profits? A: David Di Pilla (CEO): It's the formergenerating a better return on our capital by recycling from lower-yielding investments into higher-yielding returns. The guidance for FY27 explicitly excludes any transaction fees, one-off gains, or investment income on existing principal investments.
Q: What are your assumptions for the trajectory of your private credit pooled funds, given rising redemption requests, and how does this factor into FY27 guidance? A: David Di Pilla (CEO): Our credit standards are in good shape, and we stay close to our wholesale investors. We've seen a small amount of redemption activity recently, but it's negligible when offset against inflows. We actually saw net inflows this month, as inflows largely offset outflows.
Q: Does your FY27 underlying earnings guidance include any allowance for unrealized fair value gains on investment assets? A: Will McMicking (CFO): No, it doesn't. David Di Pilla (CEO): The guidance is based on cash recurring earnings only.
Q: How are you thinking about reducing your co-investment stakes in DGT, HCW, and HDN, and would selling below NTA be a negative contributor to underlying EPS? A: David Di Pilla (CEO): These are strategic stakes, and we see significant upside in DGT and HCW near-term. We're likely not holders at over 20% levels in both long-term, but we're not telegraphing any moves. Will McMicking (CFO): Yes, if we sold below NTA, it would be recorded as a negative in underlying EPS.
Q: Can you elaborate on the cost savings expected in FY27, particularly regarding the digital platform and overall fixed cost leverage? A: David Di Pilla (CEO): The $15 million in cost savings flagged in May for the digital business were fully executed in FY26. For FY27, we expect revenue growth to outpace cost growth materially. We absorbed integration costs for three new verticals in FY26, and now we expect to hold costs flat or slightly reduce them, providing natural efficiencies and fixed cost leverage.
Q: What was the reason for the slowdown in private credit loan origination in the second half, and what is the current average LVR? A: Victoria Hardie (COO): It was a deliberate, disciplined decision to slow lending in response to evolving market conditions following interest rate hikes. We've seen an uptick in origination volumes at the start of FY27. David Di Pilla (CEO): The pooled fund targets an average LVR of 70%, but it's currently running below 60%, at 58% on average.
Q: What is the strategy for StratCap USA, and how will it evolve? A: David Di Pilla (CEO): Based on our evaluation, the most cost-effective path is an orderly wind-down. There will be some costs associated with this in FY27, largely gone by FY28. We'll keep a small representative office in the US for optionality.
Q: Can you discuss the basis for the Energy transition valuation of $1.2 billion versus the $1.5 billion AUM, and what is the tax outlook? A: Will McMicking (CFO): The $1.5 billion AUM figure adopts AASB accounting, which uplifts derivative contracts within the business, while the $1.2 billion is the fair value of the platform. On tax, we still have a material historical tax loss balance and guide to no cash tax in FY27, which is why we report on a pre-tax basis.
Q: How do you think about look-through leverage across the group, and is there a target gearing number you manage to? A: David Di Pilla (CEO): All debt in the funds is non-recourse. We focus on prudent gearing at the HMC Capital level, which is almost zero when considering liquid investments. We have plenty of financial flexibility. Look-through leverage is not a primary focus given 67% of funds are in open-ended permanent capital structures with appropriate gearing for their asset classes.
Q: What asset classes are the seed loans for the new private credit mandates, and what is the deployment strategy for the $1 billion dry powder? A: David Di Pilla (CEO): The business remains focused on commercial real estate (CRE) mid-market loans, consistent with our strategy. The seed loans were existing loans within our ecosystem, averaging over $100 million to $150 million in size. We'll continue to deploy into CRE where we see dislocation and opportunity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
