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HMC Capital (ASX: HMC) has secured $650 million in commitments from local and international investors for its $1.3 billion Healthcare and Life Sciences Unlisted (UHF) real estate fund, underscored by what it describes as rising investor appetite globally for medical property assets.
The latest capital raise will be used to fund the third tranche of the acquisition of 11 Healthscope hospitals announced by HMC Capital in March, with the first four acquired separately earlier this year by the group’s affiliated entity, HealthCo Healthcare & Wellness REIT (ASX: HCW).
UHF successfully settled the second tranche of the acquisition totalling $474 million in May, aided by funding support from HCW. The third and final tranche of $470 million will be funded via the third-party capital commitments announced today.
When finalised, the acquisition will give UHF ownership of seven acute-care hospitals in Australia leased to Healthscope.
Of the $650 million secured by HMC, $251 million is coming from three ‘major global institutional investors’ and $322 million HCW, with the third tranche set to settle in early October pending approvals from the Foreign Investment Review Board.
HMC Capital’s head of funds management Nicholas Harris says the first close welcomes several ‘top-tier major new strategic capital partners’ to UHF.
“This is a high conviction strategy which is benefiting from global megatrends and expected to generate greater investor appetite over time,” Harris says.
UHF is the group’s second unlisted institutional fund raising by HMC Capital in calendar 2023, bringing to $2 billion the total value of committed unlisted institutional funds under management by the group.
HMC Capital says this puts the group on track to achieve its target of $10 billion in committed assets under management by the end of this year, 12 months ahead of schedule.
CEO David Di Pilla says the latest inflow of funds highlights significant progress in the group’s ‘transition to becoming a high ROE (return on equity) alternative asset manager’.
“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,” Di Pilla says.
“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 fundraising process and the calibre of institutions we partnered with.”
Di Pilla says HMC Capital plans to grow its 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,” he says.
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