Q4 2026 HMC Capital Ltd Earnings Call

August 26, 2026

Operator 2: Thank you for standing by, and welcome to the HMC Capital Limited FY26 full year results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. David Di Pilla, Group Managing Director and Chief Executive Officer. Please go ahead.

Operator: Thank you for standing by, and welcome to the HMC Capital Limited FY 2026 full year results briefing. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you would like to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. David Di Pilla, Group Managing Director and Chief Executive Officer. Please go ahead.

Speaker #1: There will be a presentation followed by a question-and-answer session. If you would like to ask a question, you'll need to press the star key followed by the number 1 on your telephone keypad.

Speaker #1: I am now pleased to hand the conference over to Mr. David Depella, Group Managing Director and Chief Executive Officer. Please go ahead.

Speaker #2: Good morning, and thank you for joining today's call. With me on the call this morning are Group CFO Will McMicking and Group COO Victoria Hardy.

David Di Pilla: Good morning, and thank you for joining today's call. With me on the call this morning are Group CFO, Will McMicking, and Group COO, Victoria Hardie. I will start the presentation on slide 5. Financial year 2026 was a year of disciplined execution against our key strategic priorities, leaving the business well-positioned for growth in financial year 2027. Firstly, we delivered financial results in line with our guidance. Second, we made substantial progress on the strategic initiatives we outlined to simplify, scale, and strengthen the business. Over the last 12 months, we have sharpened our focus on the areas where we have the greatest competitive advantages and the strongest growth opportunities, improving both the quality of earnings and the scalability of the platform. Third, we have materially strengthened the balance sheet through capital recycling. HMC today has considerable balance sheet liquidity to accelerate organic growth across all our verticals.

David Di Pilla: Good morning, and thank you for joining today's call. With me on the call this morning are Group CFO, Will McMicking, and Group COO, Victoria Hardie. I will start the presentation on slide five. Financial year 2026 was a year of disciplined execution against our key strategic priorities, leaving the business well-positioned for growth in financial year 2027. Firstly, we delivered financial results in line with our guidance. Second, we made substantial progress on the strategic initiatives we outlined to simplify, scale, and strengthen the business. Over the last 12 months, we have sharpened our focus on the areas where we have the greatest competitive advantages and the strongest growth opportunities, improving both the quality of earnings and the scalability of the platform. Third, we have materially strengthened the balance sheet through capital recycling. HMC today has considerable balance sheet liquidity to accelerate organic growth across all our verticals.

Speaker #2: I'll start the presentation on slide 5. Financial year '26 was a year of disciplined execution against our key strategic priorities, leaving the business well positioned for growth in financial year '27.

Speaker #2: Firstly, we delivered financial results in line with our guidance. Secondly, we made substantial progress on the strategic initiatives we outlined to simplify, scale, and strengthen the business.

Speaker #2: Over the last 12 months, we've sharpened our focus on the areas where we have the greatest competitive advantages and the strongest growth opportunities, improving both the quality of earnings and the scalability of the platform.

Speaker #2: Third, we've materially strengthened the balance sheet through capital recycling. HMC today has considerable balance sheet liquidity to accelerate organic growth across all our verticals.

Speaker #2: And finally, we're entering financial year '27 with significant dry powder and fundraising momentum. We see multiple pathways to grow our fee-generating AUM and recurring earnings across each of our verticals.

David Di Pilla: Finally, we are entering financial year 2027 with significant dry powder and fundraising momentum. We see multiple pathways to grow our fee-generating AUM and recurring earnings across each of our verticals. I would now like to turn to the result itself on slide 6. Operating EPS finished at AUD 0.404 for the year, in line with our guidance. Fee generating assets under management increased to AUD 16.9 billion, up 15% on financial year 2025. This is predominantly underpinned by growth in institutional capital partnerships during the period. Recurring funds management revenue increased to AUD 165.5 million, up 22% on financial year 2025, demonstrating strong growth in high-quality recurring income, which we expect to accelerate in financial year 2027. We also finished the year with a strengthened balance sheet. We now have liquidity and investment capacity with tangible assets and undrawn debt capacity of approximately AUD 1.9 billion.

David Di Pilla: Finally, we are entering financial year 2027 with significant dry powder and fundraising momentum. We see multiple pathways to grow our fee-generating AUM and recurring earnings across each of our verticals. I would now like to turn to the result itself on slide six. Operating EPS finished at AUD 0.404 for the year, in line with our guidance. Fee generating assets under management increased to AUD 16.9 billion, up 15% on financial year 2025. This is predominantly underpinned by growth in institutional capital partnerships during the period. Recurring funds management revenue increased to AUD 165.5 million, up 22% on financial year 2025, demonstrating strong growth in high-quality recurring income, which we expect to accelerate in financial year 2027. We also finished the year with a strengthened balance sheet. We now have liquidity and investment capacity with tangible assets and undrawn debt capacity of approximately AUD 1.9 billion.

Speaker #2: I'd now like to turn to the result itself on slide 6. Operating EPS finished at 40.4 cents for the year, in line with our guidance.

Speaker #2: Fee-generating assets under management increased to $16.9 billion, up 15% on financial year '25. This is predominantly underpinned by growth in institutional capital partnerships during the period.

Speaker #2: Recurring funds management revenue increased to $165.5 million, up 22% on financial year 2025, demonstrating strong growth in high-quality recurring income, which we expect to accelerate in financial year 2027.

Speaker #2: We also finished the year with a strengthened balance sheet. We now have liquidity and investment capacity, with tangible assets and undrawn debt capacity of approximately $1.9 billion.

Speaker #2: And finally, the Board has declared a final dividend of 6 cents per share for the period, bringing the full-year dividend to 12 cents per share.

David Di Pilla: Finally, the board has declared a final dividend of AUD 0.06 per share for the period, bringing the full-year dividend to AUD 0.12 per share. Turning now to slide 7, our strategy. This is the strategy we outlined in May. I am not going to spend a lot of time walking through it today because it remains unchanged and continues to underpin the way we are building HMC Capital. At its core, our purpose is simple: to create value in quality real assets through operational expertise, particularly where we see opportunities that are overlooked, underutilized, or can benefit from active management. The key message is that this strategy provides a repeatable framework for value creation by building scalable platforms which deliver high-quality recurring funds management earnings. Moving now to slide 8 and progress on our strategic objectives. Starting with simplify.

David Di Pilla: Finally, the board has declared a final dividend of AUD 0.06 per share for the period, bringing the full-year dividend to AUD 0.12 per share. Turning now to slide seven, our strategy. This is the strategy we outlined in May. I am not going to spend a lot of time walking through it today because it remains unchanged and continues to underpin the way we are building HMC Capital. At its core, our purpose is simple: to create value in quality real assets through operational expertise, particularly where we see opportunities that are overlooked, underutilized, or can benefit from active management. The key message is that this strategy provides a repeatable framework for value creation by building scalable platforms which deliver high-quality recurring funds management earnings. Moving now to slide 8 and progress on our strategic objectives. Starting with simplify.

Speaker #2: Turning now to slide 7, our strategy. This is the strategy we outlined in May, and I'm not going to spend a lot of time walking through it today because it remains unchanged and continues to underpin the way we're building HMC Capital.

Speaker #2: At its core, our purpose is simple: to create value in quality, real assets through operational expertise, particularly where we see opportunities that are overlooked.

Speaker #2: Underutilized, or can benefit from active management. The key message is that this strategy provides a repeatable framework for value creation by building scalable platforms which deliver high-quality, recurring funds management earnings.

Speaker #2: Moving now to slide 8 and progress on our strategic objectives, starting with Simplify. During the period, we completed the wind-up of HMC Capital Partners and commenced the scale-back of our US digital operations.

David Di Pilla: During the period, we completed the windup of HMC Capital Partners and commenced the scale back of our US digital operations, which is now reported as a discontinued operation. These actions have delivered run rate cost savings and released approximately AUD 150 million of capital to the balance sheet from HMCCP. On scale, in private credit, we secured AUD 1.35 billion of new institutional mandates, providing substantial dry powder to grow fee generating AUM. In real estate, we continued to grow our unlisted institutional AUM, supported by strong demand for retail development opportunities. In energy, we completed the AUD 603 million institutional partnership with KKR. This validates the quality of the platform and provides capital to fund future developments. In digital, we have taken important steps to recycle capital out of lower returning US assets and to high yielding opportunities within the Australian platform. Finally, on strengthen.

Speaker #2: Which is now reported as a discontinued operation. These actions have delivered run-rate cost savings and released approximately $150 million of capital to the balance sheet from HMC CP.

Speaker #2: On scale, in private credit, we secured $1.35 billion of new institutional mandates, providing substantial dry powder to grow fee-generating AUM. In real estate, we continue to grow our unlisted institutional AUM, supported by strong demand for retail development opportunities.

Speaker #2: In Energy, we completed the $603 million institutional partnership with KKR. This validates the quality of the platform and provides capital to fund future developments.

Speaker #2: And in digital, we've taken important steps to recycle capital out of lower-returning US assets and into high-yielding opportunities within the Australian platform. And finally, on strengthening…

Speaker #2: The steps taken this year have strengthened the balance sheet, and we end the year with increased liquidity to support future growth. Importantly, we have over $5 billion of AUM growth opportunities across the platform and are ready to scale our verticals further.

David Di Pilla: The steps taken this year have strengthened the balance sheet as we end the year with increased liquidity and support future growth. Importantly, we have over AUD 5 billion of AUM growth opportunities across the platform and are ready to scale our verticals further. We are building a business driven by recurring management fees, supported by long duration institutional capital and multiple growth platforms. Turning now to slide 9, which highlights the significant progress we have made in building HMC Capital into a scaled alternative asset manager over the last five years. Since 2021, fee generating AUM has grown from just over AUD 2 billion to AUD 17 billion, representing a compound growth rate of approximately 52% per annum. Over the same period, funds management revenue has increased at around 60% per annum. Importantly, the majority of that growth has been generated organically.

Speaker #2: We're building a business driven by recurring management fees, supported by long-duration institutional capital and multiple growth platforms. Turning now to slide 9, which highlights the significant progress we've made in building HMC Capital into a scaled alternative asset manager over the last five years.

Speaker #2: Since 2021, fee-generating AUM has grown from just over $2 billion to $17 billion, representing a compound growth rate of approximately 52% per annum. Over the same period, funds management revenue has increased at around 60% per annum.

Speaker #2: Importantly, the majority of that growth has been generated organically. What's often overlooked is that 3 of our 4 verticals—being digital, private credit, and energy—were only established over the last few years.

David Di Pilla: What is often overlooked is that three of our four verticals, being digital, private credit, and energy, were only established over the last few years. A considerable portion of our effort during the past 18 months has been focused on institutionalizing and operationalizing these platforms, investing in people, systems, governance, and origination capability to create a scalable foundation. Today, we are seeing the benefits of that investment. Each platform is now well-positioned to attract capital and grow its recurring earnings through 2027 and beyond. 60% of our AUM is now held in perpetual vehicles, creating long duration capital that underpins our earnings. Moving now to slide 10, our balance sheet. Over the last three years, we have used our balance sheet to seed and scale new platforms.

Speaker #2: A considerable portion of our effort during the past 18 months has been focused on institutionalizing and operationalizing these platforms—investing in people, systems, governance, and origination capability to create a scalable foundation.

Speaker #2: Today, we are seeing the benefits of that investment. Each platform is now well positioned to attract capital and grow its recurring earnings through 2027 and beyond.

Speaker #2: 60% of our AUM is now held in perpetual vehicles, creating long-duration capital that underpins our earnings. Moving now to slide 10, our balance sheet.

Speaker #2: Over the last three years, we've used our balance sheet to seed and scale new platforms. We've executed over $3 billion of strategic acquisitions to establish our digital, private credit, and energy verticals.

David Di Pilla: We have executed over AUD 3 billion of strategic acquisitions to establish our digital, private credit, and energy verticals, and in so doing, increased fee generating AUM by AUD 8.8 billion and added more than AUD 100 million per annum of funds management revenue. Minimal goodwill was paid to create these recurring earning streams. Today, following the capital recycling achieved through the energy partnership and the wind up of HMCCP, our balance sheet is back to AUD 500 million of undrawn debt capacity and AUD 1.4 billion of investments. We are now focused on driving higher returns from these balance sheet investments across our co-investments, our listed positions, and our Illuma Energy platform. We have identified a number of opportunities to recycle our capital into higher returning investments over the medium term. Now, let's put this into context.

Speaker #2: And in so doing, increased fee-generating AUM by $8.8 billion, and added more than $100 million per annum of funds management revenue. Minimal goodwill was paid to create these recurring earnings streams.

Speaker #2: Today, following the capital recycling achieved through the energy partnership and the wind-up of HMC CP, our balance sheet is back to $500 million of undrawn debt capacity and $1.4 billion of investments.

Speaker #2: We're now focused on driving higher returns from these balance sheet investments across our co-investments, our listed positions, and our Illumina Energy platform. We've identified a number of opportunities to recycle our capital into higher-returning investments over the medium term.

Speaker #2: Now, let's put this in context. The chart on this slide highlights this transition and demonstrates that by optimizing our balance sheet investments of approximately $1.4 billion, we believe we could generate an additional $25 million to $50 million per annum of underlying earnings over time.

David Di Pilla: The chart on this slide highlights this transition and demonstrates that by optimizing our balance sheet investments of approximately AUD 1.4 billion, we believe we could generate an additional AUD 25 to 50 million per annum of underlying earnings over time. As we think about it today, there are multiple pathways to achieve this, and as part of that, we expect the weighting towards principal investments to increase from around 35% to 50% as we recycle our balance sheet capital positions. Now moving to slide 11, which highlights why we have so much momentum coming into 2027 with over AUD 5 billion of growth opportunities across our verticals. In real estate, we have around AUD 2 billion of dry powder through our unlisted funds, HARP, HUG, LML, and our listed HDN.

Speaker #2: As we think about it today, there are multiple pathways to achieve this. And as part of that, we expect the weighting towards principal investments to increase from around 35% to 50% as we recycle our balance sheet capital positions.

Speaker #2: Now, moving to slide 11, which highlights why we have so much momentum coming into '27, with over $5 billion of growth opportunities across our verticals.

Speaker #2: In real estate, we have around $2 billion of dry powder through our unlisted funds—HARP, HUG, and LML—as well as our listed fund, HDN. In digital, DIGICO is progressing 67 megawatts of new capacity across Seed 1 and Adelaide 1, representing $1.2 billion of near-term capital growth.

David Di Pilla: In digital, DigiCo is progressing 67 megawatts of new capacity across SYD1 and ADL1, representing AUD 1.2 billion of near-term capital growth. HMC is also progressing a further 1 gigawatt of greenfield opportunities across digital infrastructure, leveraging our digital and energy expertise. In private credit, following the establishment of two institutional mandates in recent months, we now have over AUD 1 billion of investment capacity across our mandates and pooled funds. While the current dislocation in the residential real estate market is creating challenges for some managers, we believe it will create opportunities to deliver increased fund returns for our investors without materially increasing risk. We believe our platform is now market leading in terms of risk and asset management, independent valuations, and governance.

Speaker #2: HMC is also progressing a further 1 gigawatt of greenfield opportunities across digital infrastructure, leveraging our digital and energy expertise. In private credit, following the establishment of two institutional mandates in recent months, we now have over $1 billion of investment capacity across our mandates and pooled funds.

Speaker #2: While the current dislocation in the residential real estate market is creating challenges for some managers, we believe it will create opportunities to deliver increased fund returns for our investors without materially increasing risk.

Speaker #2: We believe our platform is now market-leading in terms of risk and asset management, independent valuations, and governance. In energy, we have committed equity for our first BES project, with around 2 gigawatts of further developments moving towards FID over the next couple of years.

David Di Pilla: We believe our platform is now market leading in terms of risk and asset management, independent valuations, and governance. In energy, we have committed equity for our first BESS project with around 2 gigawatts of further developments moving towards FID over the next couple of years. As you can see, each vertical has a clear pathway to grow, and we are well-positioned to execute across all of them. With that, I will now hand over to Victoria to take us through the detail.

David Di Pilla: In energy, we have committed equity for our first BESS project with around 2 gigawatts of further developments moving towards FID over the next couple of years. As you can see, each vertical has a clear pathway to grow, and we are well-positioned to execute across all of them. With that, I will now hand over to Victoria to take us through the detail.

Speaker #2: As you can see, each vertical has a clear pathway to grow, and we are well positioned to execute across all of them. With that, I'll now hand over to Victoria to take us through the detail.

Speaker #1: Thanks, David, and good morning. Starting with our real estate vertical on slide 13, this remains our largest and most established platform, contributing almost $90 million in management and transaction fee revenue in FY26.

Victoria Hardie: Thanks, David, and good morning. Starting with our real estate vertical on slide 13, this remains our largest and most established platform, contributing almost AUD 90 million in management and transaction fee revenue in FY2026. Our unlisted real estate AUM grew 15% in FY2026 to AUD 2.9 billion, underpinned by strong deployment across our retail property strategies. David already touched on our AUD 2 billion of growth opportunities in this vertical, providing a clear path to further scale the platform. A key differentiator for HMC's real estate platform is that we are not simply allocators of capital. We actively manage and develop assets to create value for our investors. This is evidenced by the performance track record of our existing unlisted funds, which have generated a 12% weighted average IRR since inception.

Speaker #1: Our unlisted real estate AUM grew 15% in FY26 to $2.9 billion, underpinned by strong deployment across our retail property strategies. David already touched on our $2 billion of growth opportunities in this vertical, providing a clear path to further scale the platform.

Speaker #1: The key differentiator for HMC's real estate platform is that we are not simply allocators of capital. We actively manage and develop assets to create value for our investors.

Speaker #1: This is evidenced by the performance track record of our existing unlisted funds, which have generated a 12% weighted average IRR since inception. We also continue to assess selective asset sales and capital recycling opportunities across the listed platform to support a reduction in gearing, enhance balance sheet flexibility, and take advantage of value-accretive acquisitions.

Victoria Hardie: We also continue to assess selective asset sales and capital recycling opportunities across the listed platform to support a reduction in gearing, enhance balance sheet flexibility, and take advantage of value-accretive acquisitions. On HCW, the dividend guidance has been reinstated at AUD 0.06 per share in FY2027, subject to the Healthscope situation being resolved, which we expect in the coming weeks. Importantly, 100% of Healthscope rents has been paid up to and including August 2026. Turning to private credit on slide 14, our private credit business grew 17% in FY2026 to AUD 2.3 billion, driven by strong inflows from wholesale investors into both our pooled and direct funds. That is before the AUD 1.35 billion institutional mandates we recently announced.

Speaker #1: On HCW, the dividend guidance has been reinstated at 6 cents per share in FY27, subject to the Healthscope situation being resolved, which we expect in the coming weeks.

Speaker #1: And importantly, 100% of Healthscope rent has been paid up, up to and including August 2026. Turning to private credit on slide 14. Our private credit business grew 17% in FY26 to $2.3 billion, driven by strong inflows from wholesale investors into both our pooled and direct funds.

Speaker #1: And that’s before the $1.35 billion of institutional mandates we recently announced. The financial result for FY26 for private credit was impacted by reduced loan origination volumes in the second half, reflecting a more disciplined approach to deployment in response to evolving market conditions.

Victoria Hardie: The financial result for FY2026 for private credit was impacted by reduced loan origination volumes in H2, reflecting a more disciplined approach to deployment in response to evolving market conditions. We have, however, seen a strong start to loan origination volumes this year. The business continues to focus on middle market CRE loans of AUD 20 to AUD 250 million, primarily senior secured lending in the residential and industrial segments across the Sydney, Melbourne, Brisbane, and Gold Coast metro markets. We have a pipeline of over AUD 4 billion of deals under evaluation to support deployment in FY2027 and are continuing to strengthen our origination capability, expanding into the New South Wales market, increasing our average loan sizes, and deepening our repeat borrower relationships. The quality of the book underpins continued growth in our private credit business.

Speaker #1: We have, however, seen a strong start to loan origination volumes this year. The business continues to focus on middle-market CRE loans of $20 million to $250 million, primarily senior secured lending in the residential and industrial segments across the Sydney, Melbourne, Brisbane, and Gold Coast metro markets.

Speaker #1: We have a pipeline of over $4 billion of deals under evaluation to support deployment in FY27, and are continuing to strengthen our origination capability.

Speaker #1: Expanding into the New South Wales market, increasing our average loan sizes, and deepening our repeat borrower relationships. The quality of the book underpins continued growth in our private credit business.

Speaker #1: Portfolio construction is deliberately diversified, with the largest single exposure approximately 3% of the book. Institutional-grade risk management and governance, and the significant investment we've made in the platform, positions us to keep growing with discipline.

Victoria Hardie: Portfolio construction is deliberately diversified with the largest single exposure, approximately 3% of the book. Institutional-grade risk management and governance, and the significant investment we have made in the platform, positions us to keep growing with discipline. Slide 15 demonstrates why this is now an institutional-grade platform. You can see the transformation between 2024 and 2026. Committed AUM has grown from AUD 1.5 billion to AUD 3.3 billion, and the proportion held in pooled funds and mandates has increased from 49% to 85%. We have also introduced institutional mandates, a majority independent trustee board, quarterly independent valuations, and dynamic AASB 9 provisioning, none of which were in place two years ago. Supporting this is a market-leading team of more than 70 specialists, most drawn from senior banking backgrounds. Our key leaders in credit, property risk, and lending bring an institutional approach developed over long careers at the major banks.

Speaker #1: Slide 15 demonstrates why this is now an institutional-grade platform. You can see the transformation between 2024 and 2026. Committed AUM has grown from $1.5 billion to $3.3 billion, and the proportion held in pooled funds and mandates has increased from 49% to 85%.

Speaker #1: We've also introduced institutional mandates, a majority independent trustee board, quarterly independent valuations, and dynamic AASB 9 provisioning, none of which were in place two years ago.

Speaker #1: Supporting this is a market-leading team of more than 70 specialists, most drawn from senior banking backgrounds. Our key leaders in credit, property risk, and lending bring an institutional approach developed over long careers at the major banks.

Speaker #1: Our property risk team is, in our view, best in market, with in-house valuers, construction managers, and quantity surveyors that most managers simply don't have.

Victoria Hardie: Our property risk team is, in our view, best in market with in-house valuers, construction managers, and quantity surveyors that most managers simply don't have. We also provision for credit losses like a bank does, with EY conducting quarterly independent reviews of provisioning and carrying values. The track record of our flagship core fund speaks for itself, returning 8.7% over the last 12 months and with zero principal losses since inception. This is now a scalable, institutional-grade platform with the capability to attract and retain global capital. You can see the proof of that on slide 16. With AUD 1.35 billion of new institutional mandates from global investors, as previously announced in June. These mandates will take our AUM to AUD 3.3 billion once deployed, representing growth of 120% over the past two years.

Speaker #1: We also provision for credit losses, like a bank does, with EY conducting quarterly independent reviews of provisioning and carrying values. The track record of our flagship core fund speaks for itself.

Speaker #1: Returning 8.7% over the last 12 months, and with zero principal losses since inception, this is now a scalable, institutional-grade platform with the capability to attract and retain global capital.

Speaker #1: And you can see the proof of that on slide 16, with $1.35 billion of new institutional mandates from global investors, as previously announced in June.

Speaker #1: These mandates will take our AUM to $3.3 billion once deployed, representing growth of 120% over the past two years. These mandates include a strategic partnership with TPG Credit, one of the largest and most experienced credit investors globally.

Victoria Hardie: These mandates include a strategic partnership with TPG Credit, one of the largest and most experienced credit investors globally. The partnership was established following TPG's rigorous manager selection and due diligence process in Australia, and the partnership is focused on larger opportunities, having been seeded with AUD 375 million of loans. Importantly, our origination pipeline is building to support these mandates and to seed new ones, and we expect institutional capital to represent a growing share of AUM over the medium term. Turning to digital infrastructure on slide 17. DGT delivered a strong FY2026 result with underlying EBITDA of AUD 127 million ahead of the AUD 125 million guidance, and generating AUD 35 million of management fee revenue for HMC. Simon Mitchell and Ralph Goninan were last week appointed as co-heads of DGT, with both having played critical roles leading the development and execution of DGT's refreshed strategy.

Speaker #1: The partnership was established following TPG's rigorous manager selection and due diligence process in Australia, and the partnership is focused on larger opportunities, having been seeded with $375 million of loans.

Speaker #1: Importantly, our origination pipeline is building to support these mandates and to seed new ones, and we expect institutional capital to represent a growing share of AUM over the medium term.

Speaker #1: Turning to digital infrastructure on slide 17. DGT delivered a strong FY26 result, with underlying EBITDA of $127 million, ahead of the $125 million guidance, and generating $35 million of management fee revenue for HMC.

Speaker #1: Simon Mitchell and Ralph Ganinnan were last week appointed as co-heads of DGT, with both having played critical roles leading the development and execution of DGT's refreshed strategy.

Speaker #1: Alongside this, Damien Seakin has been appointed as HMC's Managing Director, Infrastructure, covering both our digital and energy verticals. The DGT strategy update announced in May is now largely progressed, with the sale of Chicago and LAX well advanced.

Victoria Hardie: Alongside this, Damian Secen has been appointed as HMC's Managing Director, Infrastructure, covering both our digital and energy verticals. The DGT strategy update announced in May is now largely progressed, with the sale of Chicago and LAX well advanced. In addition, we have recently reached agreement with our tenant at Dallas and Kansas to extend the lease terms to 2036. We are now focusing on Australia, where DGT has operational and development capabilities with a team of over 100 people. The expansion of our marquee SYD1 asset is well underway. The first 20-megawatt deployment has been completed on time and budget. DGT has executed LOIs for the remaining 52 megawatts of capacity with high-quality customers, and the expansion has been accelerated with a targeted delivery over FY2027 and 2028. The sale of US assets will increase DGT's liquidity to around AUD 1.2 billion, which fully funds the highly accretive SYD1 expansion.

Speaker #1: In addition, we have recently reached agreement with our tenant at Dallas and Kansas to extend the lease terms to 2036. We are now focusing on Australia, where DGT has operational and development capabilities with a team of over 100 people.

Speaker #1: The expansion of our marquee SID1 asset is well underway. The first 20-megawatt deployment has been completed on time and on budget. DGT has executed LOIs for the remaining 52 megawatts of capacity with high-quality customers, and the expansion has been accelerated, with targeted delivery over FY27 and FY28.

Victoria Hardie: The expansion of our marquee SYD1 asset is well underway. The first 20-megawatt deployment has been completed on time and budget. DGT has executed LOIs for the remaining 52 megawatts of capacity with high-quality customers, and the expansion has been accelerated with a targeted delivery over FY2027 and 2028. The sale of US assets will increase DGT's liquidity to around AUD 1.2 billion, which fully funds the highly accretive SYD1 expansion. DGT is also progressing the ADL1 15-megawatt brownfield expansion, underpinned by advanced customer discussions.

Speaker #1: The sale of US assets will increase DGT's liquidity to around $1.2 billion, which fully funds the highly accretive SID1 expansion. DGT is also progressing the Adelaide 1, 15-megawatt brownfield expansion, underpinned by advanced customer discussions.

Victoria Hardie: DGT is also progressing the ADL1 15-megawatt brownfield expansion, underpinned by advanced customer discussions. Together, these developments support a pathway to a stabilized Australian platform EBITDA of AUD 250 million for DGT, once the SYD1 and ADL1 expansions reach stabilized occupancy and billing. The digital platform continues to benefit from powerful megatrends with AI, cloud migration, and data growth driving sustained demand for high-quality power-backed infrastructure and supporting future growth in digital AUM. In Australia, the ability to originate, develop, and operate power-enabled sites responsibly with a clear focus on community engagement and social license is becoming a key differentiator. HMC is assessing a pipeline of over one gigawatt of greenfield opportunities where we can bring together development expertise, operational capability, and energy market insights from across the group. Turning now to energy on slide 18.

Speaker #1: Together, these developments support a pathway to a stabilized Australian platform EBITDA of $250 million for DGT, once the SID1 and Adelaide 1 expansions reach stabilized occupancy and billing.

Victoria Hardie: Together, these developments support a pathway to a stabilized Australian platform EBITDA of AUD 250 million for DGT, once the SYD1 and ADL1 expansions reach stabilized occupancy and billing. The digital platform continues to benefit from powerful megatrends with AI, cloud migration, and data growth driving sustained demand for high-quality power-backed infrastructure and supporting future growth in digital AUM. In Australia, the ability to originate, develop, and operate power-enabled sites responsibly with a clear focus on community engagement and social license is becoming a key differentiator. HMC is assessing a pipeline of over one gigawatt of greenfield opportunities where we can bring together development expertise, operational capability, and energy market insights from across the group. Turning now to energy on slide 18.

Speaker #1: The digital platform continues to benefit from powerful megatrends, with AI, cloud migration, and data growth driving sustained demand for high-quality, power-backed infrastructure and supporting future growth in digital AUM.

Speaker #1: In Australia, the ability to originate, develop, and operate power-enabled sites responsibly, with a clear focus on community engagement and social license, is becoming a key differentiator.

Speaker #1: HMC is assessing a pipeline of over 1 gigawatt of greenfield opportunities, where we can bring together development expertise, operational capability, and energy market insights from across the group.

Speaker #1: Turning now to energy on slide 18. Through Illuma Energy, we've now established a scaled, integrated renewables and storage platform—a top-10 platform in the National Electricity Market.

Victoria Hardie: Through Illuma Energy, we have now established a scaled, integrated renewables and storage platform, a top 10 platform in the National Electricity Market, with AUD 1.5 billion of AUM across wind, solar, and battery storage. Importantly, we have transitioned energy from balance sheet seeding to institutional capital with a development pipeline and multiple pathways to realize value over time. The platform has 652 megawatts of operating capacity, of which 85% is contracted, and a substantial development pipeline of around 5 gigawatts across 19 projects. Within that, we have roughly 2 gigawatts of near-term projects progressing towards final investment decision, including the Moorabool, Molong, Booroorban, and Kentbruck projects. The introduction of institutional capital gives us a capital-light growth pathway while preserving HMC's exposure to platform value creation.

Speaker #1: With $1.5 billion of AUM across wind, solar, and battery storage. Importantly, we've transitioned energy from balance sheet seeding to institutional capital, with a development pipeline and multiple pathways to realize value over time.

Speaker #1: The platform has 652 megawatts of operating capacity, of which 85% is contracted, and a substantial development pipeline of around 5 gigawatts across 19 projects.

Speaker #1: Within that, we have roughly 2 gigawatts of near-term projects progressing towards final investment decision, including the Mirabel, Merlong, Bawara, and Kentbruck projects. The introduction of institutional capital gives us a capital-light growth pathway, while preserving HMC's exposure to platform value creation.

Speaker #1: Through our institutional partnership, Illuma has secured a $248 million capital commitment to fund up to 90% of the equity component of the platform's first-best project, and HMC's invested capital has reduced to around $200 million, while retaining the majority of future upsides.

Victoria Hardie: Through our institutional partnership, Illuma has secured a AUD 248 million capital commitment to fund up to 90% of the equity component of the platform's first BESS project, and HMC's invested capital has reduced to around AUD 200 million while retaining the majority of future upside. There are multiple pathways to realize value in the platform, including the introduction of additional third-party capital into the platform via syndication or to fund further growth, and a clear AUM pathway of AUD 3 billion-plus from near-term projects. Slide 19 sets out Illuma's near-term development projects. We are actively progressing these projects across batteries and wind, with each advancing well through land, approvals, grid connection, and offtake. Importantly, we expect these projects to deliver 20%-plus target returns on our invested capital. Finally, on sustainability on slide 20, which remains core to how we operate.

Speaker #1: And there are multiple pathways to realize value in the platform, including the introduction of additional third-party capital into the platform via syndication or to fund further growth, and a clear AUM pathway of $3 billion plus from near-term projects.

Speaker #1: Slide 19 sets out Illuma's near-term development projects. We are actively progressing these projects across batteries and wind, with each advancing well through land approvals, grid connection, and offtake.

Speaker #1: And importantly, we expect these projects to deliver 20%+ target returns on our invested capital. Finally, on sustainability, on slide 20, which remains core to how we operate.

Speaker #1: As the group has expanded, we're aligning our sustainability framework with our broader platform. During the year, we reviewed our priorities to reflect the new Illuma Energy and Digital verticals, and this is informing the evolution of our strategy and targets, with a further update expected later this year.

Victoria Hardie: As the group has expanded, we are aligning our sustainability framework with our broader platform. During the year, we reviewed our priorities to reflect the new Illuma Energy and digital verticals, and this is informing the evolution of our strategy and targets with a further update expected later this year. We made solid progress across all three pillars. From an environmental perspective, our Illuma Energy partnership is supporting the decarbonization of the NEM, and two of our real estate developments achieved 4-star Green Star certifications. We continue to focus on social and community impact with the HMC Capital Foundation making grants to nine organizations, including six scholarships supporting First Nations and regional students. Gender diversity improved to 67% female representation for our independent board director positions across the group, and we maintained our MSCI ESG rating of A.

Speaker #1: We made solid progress across all three pillars. From an environmental perspective, our Illuma Energy partnership is supporting the decarbonization of the NEM, and two of our real estate developments achieved 4-Star Green Star certifications.

Speaker #1: We continue to focus on social and community impact, with the HMC Capital Foundation making grants to nine organizations, including six scholarships supporting First Nations and regional students.

Speaker #1: Gender diversity improved to 67% female representation for our independent board director positions across the group, and we maintained our MSCI ESG rating of A.

Victoria Hardie: Gender diversity improved to 67% female representation for our independent board director positions across the group, and we maintained our MSCI ESG rating of A. It is an ongoing priority, and we remain committed to pursuing growth that supports positive long-term impacts for all stakeholders. I will now hand to Will McMicking to discuss our financial results.

Speaker #1: It's an ongoing priority, and we remain committed to pursuing growth that supports positive long-term impacts for all stakeholders. I will now hand over to Will McMicken to discuss our financial results.

Victoria Hardie: It is an ongoing priority, and we remain committed to pursuing growth that supports positive long-term impacts for all stakeholders. I will now hand to Will McMicking to discuss our financial results.

Speaker #2: Thanks, Victoria. Turning now to the earnings summary on slide 22. For FY26, HMC delivered operating earnings before tax of $166.8 million, or 40.4 cents per share, which was in line with guidance.

Will McMicking: Thanks, Victoria. Turning now to the earnings summary on slide 22. For FY2026, HMC delivered operating earnings before tax of AUD 166.8 million or AUD 0.404 per share, which was in line with guidance. Adjusted for the discontinued operations of StratCap USA, the group recorded funds management EBITDA of AUD 88.5 million and operating earnings increased to AUD 0.437 per share. Management fee revenue increased 23% to AUD 159.3 million, driven by fee earning AUM growth in real estate and a full year contribution from digital. Transaction and performance revenue reduced to AUD 41.2 million, reflecting the absence of larger transaction revenue that was recorded in FY2025. Employee expenses were stable year-on-year, while corporate expenses increased modestly as we continued to invest in platform capability.

Will McMicking: Thanks, Victoria. Turning now to the earnings summary on slide 22. For FY 2026, HMC delivered operating earnings before tax of AUD 166.8 million or AUD 0.404 per share, which was in line with guidance. Adjusted for the discontinued operations of StratCap USA, the group recorded funds management EBITDA of AUD 88.5 million and operating earnings increased to AUD 0.437 per share. Management fee revenue increased 23% to AUD 159.3 million, driven by fee earning AUM growth in real estate and a full year contribution from digital. Transaction and performance revenue reduced to AUD 41.2 million, reflecting the absence of larger transaction revenue that was recorded in FY2025. Employee expenses were stable year-on-year, while corporate expenses increased modestly as we continued to invest in platform capability.

Speaker #2: Adjusted for the discontinued operations of StratCap USA, the group recorded funds management EBITDA of $88.5 million, and operating earnings increased to 43.7 cents per share.

Speaker #2: Management fee revenue increased 23% to $159.3 million, driven by fee-earning AUM growth in real estate and a full-year contribution from Digital. Transaction and performance revenue reduced to $41.2 million, reflecting the absence of larger transaction revenue that was recorded in FY25.

Speaker #2: Employee expenses were stable year on year, while corporate expenses increased modestly as we continued to invest in platform capability. Distribution income declined, reflecting no distributions received from HCW for the period, while investments comprised an unrealized fair value gain from the energy platform of $146 million, partly offset by a fair value loss in the capital partners fund of $55 million.

Will McMicking: Distribution income declined, reflecting no distributions received from HCW for the period, while investments comprised an unrealized fair value gain from the energy platform of AUD 146 million, partly offset by a fair value loss in the capital partners fund of AUD 55 million. Interest expenses increased to AUD 22.8 million due to senior debt drawn to warehouse energy transition assets. A final dividend of AUD 0.06 per share has been declared, bringing total FY2026 dividends to AUD 0.12. Turning to the balance sheet on slide 23. Net tangible assets at 30 June were AUD 1.2 billion, or AUD 2.95 per share. Following the completion of the energy sell down, HMC's investment in the platform has moved to an equity accounted investment, while the HMC Capital Partners in specie return has transitioned to a direct investment held at fair value following the wind up of the fund.

Speaker #2: Interest expenses increased to $22.8 million due to senior debt drawn to warehouse energy transition assets. And a final dividend of 6 cents per share has been declared, bringing total FY26 dividends to 12 cents.

Speaker #2: Turning to the balance sheet on slide 23. Net tangible assets at 30 June were $1.2 billion, or $2.95 per share. Following the completion of the Energy sell-down, HMC's investment in the platform has moved to an equity-accounted investment, while the HMC Capital Partners in-specie return has transitioned to a direct investment held at fair value, following the wind-up of the fund.

Speaker #2: Gearing was 10.7% as at June 26, which decreased compared to December 25, with the completion of the energy transaction. Moving to capital management on slide 24.

Will McMicking: Gearing was 10.7% as at June 2026, which decreased compared to December 2025 with the completion of the energy transaction. Moving to capital management on slide 24. Drawn debt of AUD 219.5 million is substantially lower than December 2025, leaving more than AUD 500 million in cash and undrawn debt, which when combined with AUD 1.4 billion of tangible balance sheet assets, positions HMC well into FY2027. I will now hand it to David.

Speaker #2: Drawn debt of $219.5 million is substantially lower than December 25, leaving more than $500 million in cash and undrawn debt. When combined with $1.4 billion of tangible balance sheet assets, this positions HMC well into FY27.

Speaker #2: I will now hand it to David.

Speaker #3: Thanks, Will. Now, turning to the outlook for financial year '27, we're moving into FY27 with real momentum, a strong balance sheet, and a platform with dry powder for earnings growth.

David Di Pilla: Thanks, Will. Turning now to the outlook for financial year 2027. We move into financial year 2027 with real momentum, a strong balance sheet, and a platform with dry powder for earnings growth. We are guiding to financial year 2027 underlying earnings of at least AUD 0.35 per share, and that is a 16% year-on-year growth. However, if we exclude the energy transition fee capital charge of AUD 35 million earned in financial year 2026, this represents 60% growth year-on-year. That step up is underpinned by three drivers. One, more than 30% in recurring funds management revenue driven by our digital and private credit platforms. Two, a 35% increase in co-investment distributions from DGT, HCW, and HDN. Finally, fixed cost leverage, as we expect to grow our recurring revenues faster than the cost base.

Speaker #3: We're guiding to financial year 2027 underlying earnings of at least $0.35 per share, and that's a 16% year-on-year growth. However, if we exclude the energy transition fee capital charge of $35 million earned in financial year 2026, this represents 60% growth year-on-year.

Speaker #3: That step up is underpinned by three drivers. One, more than 30% in recurring funds management revenue, driven by our Digital and Private Credit platforms.

Speaker #3: Two, a 35% increase in co-investment distributions from DJT, HCW, and HDN. And finally, fixed cost leverage, as we expect to grow our recurring revenues faster than the cost pace.

Speaker #3: Importantly, this guidance excludes any upside from capital recycling on our balance sheet, large transactions, and one-off gains and investment income on existing principal investments.

David Di Pilla: Importantly, this guidance excludes any upside from capital recycling on our balance sheet, large transactions, one-off gains, and investment income on existing principal investments. We also expect 100% conversion of underlying earnings guidance to cash in financial year 2027 as non-cash adjustment arrangements for management fees cease. On the dividend, we are guiding to AUD 0.15 per share, up 25% on financial year 2026, supported by the growth in recurring earnings and consistent with our strategy of largely reinvesting retained earnings into accretive growth opportunities. I would like to thank everyone for joining, and I will now hand the call back to the operator for Q&A.

Speaker #3: We also expect 100% conversion of underlying earnings guidance to cash in financial year 2027, as non-cash adjustment arrangements for management fees cease. On the dividend, we're guiding to $0.15 per share, up 25% on financial year 2026, supported by the growth in recurring earnings and consistent with our strategy of largely reinvesting retained earnings into accretive growth opportunities.

Speaker #3: I'd like to thank everyone for joining, and I'll now hand the call back to the operator for the Q&A.

Speaker #2: Thank you. If you'd like to ask a question, please press star 1 on your telephone to have your name announced. If you would like to cancel your request, please press star 2.

Operator 2: Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Solomon Zhang from UBS. Please go ahead.

Operator: Thank you. If you would like to ask a question, please press star one on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star two. If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Solomon Zhang from UBS. Please go ahead.

Speaker #2: If you are on a speakerphone, please pick up the handset to ask your question. Your first question today comes from Solomon Jiang from UBS.

Speaker #2: Please go ahead.

Speaker #4: Morning, David, and same to you. Thanks for your time. I'm just interested in your feedback on your private credit funds, particularly on the pooled side.

Solomon Zhang: Morning, David and team. Thanks for your time. I am interested in your feedback on your private credit funds, particularly on the pooled side. We are seeing a redemption request lift. What have you assumed in your 2027 guidance around the trajectory of that component, noting that you have obviously got strong inflows coming through from the insta side and the deployment of that mandate?

Speaker #4: We're seeing redemption requests lift. What have you assumed in your '27 guidance around the trajectory of that component, noting that you've obviously got strong inflows coming through from the InSto side and the deployment of that mandate?

David Di Pilla: As I said earlier, our credit standards across the group are in really good shape. We have a really good team on the ground dealing with most of our pooled fund wholesale investors. We stay close to them. We communicate regularly. We have seen a small amount of redemption activity in the last few months, but when we offset that against inflows, it is quite negligible.

Speaker #3: As I said earlier, our credit standards across the group are in really good shape. We have a really good team on the ground dealing with most of our pooled fund, our wholesale investors—we stay close to them; we communicate regularly. We've seen a small amount of redemption activity in the last few months, but when we offset that against inflows, it's quite negligible.

Speaker #4: Great. So you’re still seeing net inflows, I take it, from your comments?

Solomon Zhang: Great. So you are still seeing net inflows, I take it, from your comments?

Speaker #3: Yeah, there were inflows this month, and so they largely offset the outflows.

David Di Pilla: There were inflows this month, so they largely offset the outflows.

Speaker #4: Great. And maybe just a question for Will—just taking a look at page 30 on the earnings by division. Just on the energy transition line, it doesn't seem like there's any EBITDA coming through, or any debt cost from the platform.

Solomon Zhang: Great. Maybe just a question for Will. Just taking a look at page 30 in the earnings presentation. Just on the energy transition line, it does not seem like there is any EBITDA coming through, any debt costs from the platform. Just want to confirm, are those excluded from your measure of underlying earnings?

Speaker #4: Just wanted to confirm, are those excluded from your measure of underlying earnings?

Speaker #2: Yes. So the gain of $146 million there, that was net of the platform operating cash flows and financing. So we ended up booking a fair value gain on the assets of about $200 million after the transaction.

Will McMicking: Yeah. So the gain of AUD 146 there, that was net of the platform operating cash flows and financing. So we ended up booking a fair value gain on the assets of about AUD 200 million after transaction. So we effectively valued the platform AV at AUD 1.2 billion.

Speaker #2: So we effectively valued the platform AV at $1.2 billion.

Speaker #4: Great. And just in terms of contribution into '27, just on the operating side post-interest expense, could you just give us a little bit of a steer there?

Solomon Zhang: Right. Just in terms of contribution into 2027, just on the operating side, post interest expense, could you just give us a little bit of steer there?

Speaker #2: Yeah. I mean, we're really trying to focus the attention on underlying earnings, which is the funds management EBITDA, cash distributions, and then any realized gains from principal investments.

Will McMicking: Well, we are really trying to focus the attention on underlying earnings, which is the funds management EBITDA cash distributions, and then any realized gains from principal investments. So we will probably just leave it at that. As Vic sort of touched on, the platform is delivering well, but that is very much a long-term investment. So, it will be realized in the future, and that is when it will go into earnings.

Speaker #2: So we'll probably just leave it at that. As Vic sort of touched on, the platform is delivering well, but that's very much a long-term investment.

Speaker #2: So, it'll be realized in the future, and that's when it'll go into earnings.

Speaker #4: Thanks, Will.

Solomon Zhang: Thanks, Will.

Speaker #2: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Operator 2: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Operator: Thank you. Your next question comes from Simon Chan from Morgan Stanley. Please go ahead.

Speaker #5: Hi, good day, guys. Hey David, you spent a bit of time talking about optimizing returns this morning from balance sheet investment. I think you threw out the number out there, $25 to $50 million on a per annum basis from optimizing returns.

Simon Chan: Hey, good day, guys. Hey, David, you spent a bit of time talking about optimizing returns this morning from balance sheet investment, and I think you threw out the number out there, AUD 25 to 50 million on a per annum basis from optimizing returns. Can you just give me some insights into what you mean there? Is this simply putting stuff, putting your money into higher yielding investments, yielding 9% rather than 6%, and hence you get the AUD 25 to 50 million a year? Or is it more, hey, we're going to get the transaction machine going and we're going to do deals that will generate AUD 25 to 50 million a year of our transaction profits?

Simon Chan: Good day, guys. David, you spent a bit of time talking about optimizing returns this morning from balance sheet investment, and I think you threw out the number out there, AUD 25 to 50 million on a per annum basis from optimizing returns. Can you just give me some insights into what you mean there? Is this simply putting stuff, putting your money into higher yielding investments, yielding 9% rather than 6%, and hence you get the AUD 25 to 50 million a year? Or is it more, hey, we're going to get the transaction machine going and we're going to do deals that will generate AUD 25 to 50 million a year of our transaction profits?

Speaker #5: Can you just give me some insights into what you mean there? Is it simply putting stuff—putting your money into higher-yielding investments? Yielding 9% rather than 6%, and hence you get the $25 to $50 million a year?

Speaker #5: Or is it more, "Hey, we're going to get the transaction machine going, and we're going to do deals that will generate $25 to $50 million a year of transaction profits?"

Speaker #3: So you've asked two questions in one, and I'll break that up into two questions, Simon. You're very insightful in terms of the comment.

David Di Pilla: You've asked two questions in one, and I'll break that up into two questions, Simon. You're very insightful in terms of the comment. It's the former. It's basically generating a better return on our capital. Yes, you're correct. Recycling from lower yielding investments into higher yielding returns. That's where the comment around the AUD 25 to 50 million of increased earnings comes from. It's really just recycling into higher yielding returns. Then in terms of the guidance, I was very clear and explicit. The guidance does not include any transaction fees.

Speaker #3: It's the former. So, it's basically generating a better return on our capital. So yes, you're correct—recycling from lower-yielding investments into higher-yielding returns.

Speaker #3: So that's where the comment around the $25 to $50 million of increased earnings comes from. So it's really just recycling into higher-yielding returns.

Speaker #3: And then, in terms of the guidance, I was very clear and explicit: the guidance does not include any transaction fees.

Speaker #5: Great. That's very clear. I just have a follow-up to the previous chap's question to Will about energy. Hey Will, am I reading you right?

Simon Chan: Great. That's very clear. I've just got a follow-up to the previous chap's question to Will about energy. Hey, Will, am I reading you right to conclude that energy is unlikely to generate any EBITDA contribution in FY26 then? Sorry, FY27.

Speaker #5: To conclude, energy is unlikely to develop—sorry, to generate any EBITDA contribution in FY26 then? I'm sorry, FY27.

Speaker #2: No, that's not correct. I guess what we're saying is, for all our equity investments, we include cash distributions in our underlying earnings. I mean, that's a long-term investment.

Will McMicking: No, that's not correct. I guess what we're saying is all our equity investments, we include cash distributions in our underlying earnings. That's a long-term investment. It's planning to invest, not declare dividends. As and when those investments are realized in the future, that's when it'll go into earnings. But no, that's profitable.

Speaker #2: It's planning to invest, not declare dividends. So, as and when those investments are realized in the future, that's when it'll go into earnings. But it's profitable.

Speaker #5: Right. So, is it possible that if the Mirable battery—if a decision gets made over the next 12 months, over the course of FY27, for example—if you decide to sell the project or sell the land, that could contribute to HMC Group profit?

Simon Chan: Right. Is it possible that if the Moorabool battery, a decision gets made over the next 12 months over the course of FY27, for example, if you decide to sell the project, sell the land, that could contribute to HMC group profit?

Speaker #2: Yes. I mean, the definition is if we're realizing net cash gains, then we'll book it into underlying profits.

Will McMicking: Yes. The definition is if we are realizing net cash gains, then we will book it into underlying profits.

Speaker #5: Excellent. And just my final question: I think in Victoria's comments she talked about a slowdown in private credit in the second half. Can you just give me some insight into what happened there?

Simon Chan: Excellent. Just my final question. I think in Victoria's comments, she talked about slowdown of private credit in the second half. Can you just give me some insight into what happened there? Is it just you guys hitting the brakes, or was it a slowdown in the general market conditions?

Speaker #5: Is it just you guys hitting the brakes, or was it a slowdown in the general market conditions?

Speaker #6: It was a disciplined decision, and a deliberate one, to slow down on the lending side, in response to the evolving market conditions that we were seeing following the interest rate hikes and the budget. So, it was a risk management strategy.

Victoria Hardie: It was a disciplined decision and a deliberate one to slow down on the lending side, just in response to the evolving market conditions that we were seeing following the interest rate hikes and the budget. So it was a risk management strategy. As I said in my remarks, we have seen an uptick in origination volumes in the beginning of FY27.

Speaker #6: But as I said in my remarks, we have seen an uptick in origination volumes in the beginning of FY27.

Speaker #5: What's the average LVR across the platform now?

Simon Chan: What's average LVR across the platform now?

Speaker #3: I think we would say that we quote within the pooled fund, so that's probably the best way to look at it. We've got the bulk of our exposures.

David Di Pilla: I think we would say that we quote within the pooled fund. That's probably the best way to look at it, where we've got the bulk of our exposures. The way the pooled fund works is it has an average target of 70%, but that's what we aspire to or that's what we aim for. No more than 70%. But it's running today in the mid-60s on average. It's actually 58% actually on average, so it's lower than that actual. Today, below 60%, but the average that the pooled fund targets is 70%.

Speaker #3: The way the pooled fund works is it has a maximum—it has an average target of 70%. But that's what we aspire to, or that's what we aim for.

Speaker #3: No more than 70%. But it's running today in the mid-60s. On average, it's actually 58—actually, on average. So, it's lower than that actual. So today, below 60, but the average that the pooled fund targets is 70.

Speaker #5: That's very good. Thanks very much, guys. Cheers.

Simon Chan: That's very good. Thanks very much, guys. Cheers.

Speaker #2: Thank you. Your next question comes from Ben Brayshaw from Barrenjoey. Please go ahead.

Operator 2: Thank you. Your next question comes from Ben Brayshaw from Barrenjoey. Please go ahead.

Operator: Thank you. Your next question comes from Ben Brayshaw from Barrenjoey. Please go ahead.

Speaker #3: Good morning, David and Will. Thanks for the presentation. Could I just clarify— and I think I know the answer, because you discussed it on a couple of occasions— but does guidance include any allowance for unrealized fair value gains on investment assets?

Ben Brayshaw: Good morning, David and Will. Thanks for the presentation. Could I just clarify, I think I know the answer because you discussed it a couple of occasions, but does guidance include any allowance for unrealized fair value gains on investment assets?

Will McMicking: You are correct, Ben. It does not.

Speaker #3: Ben, it doesn’t. We were very clear—no. The guidance is based on cash recurring earnings. Great. Could you just talk about the situation with StratCap?

David Di Pilla: We were very clear. No. The guidance is based on cash recurring earnings.

Ben Brayshaw: Great. Can you just talk about the situation with StratCap? How do you see that, I guess, evolving? Is the objective there to undertake a sale of the business, or is it more a case of pursuing an orderly wind down?

Speaker #3: I mean, how do you see that, I guess, evolving? Is the objective there to undertake a sale of the business, or is it more a case of pursuing an orderly wind-down?

Speaker #2: Look, I think we—based on the evaluation we've undertaken—we think the most cost-effective way for us as a group is just to go down the path of a more orderly wind-down.

David Di Pilla: Look, I think based on the evaluation we've undertaken, we think the most cost-effective way for us as a group is just to go down the path of a more orderly wind down, and you'll see that reflected in the numbers. We think that probably there'll be a bit of cost associated with that wind down in 2027, and it'll be largely gone in 2028. And what we'll keep in the US is just a small representative office there going forward to keep some optionality.

Speaker #2: And you'll see that reflected in the numbers. So, we think that probably there'll be a bit of cost associated with that wind-down in '27, and it'll be largely gone in '28. What we'll keep in the US is just a small representative office there going forward, to keep some optionality.

Speaker #3: Great. Thanks for your time, David.

Ben Brayshaw: Great. Thanks for your time, David.

Speaker #2: Thank you. Your next question comes from Richard Jones from J.P. Morgan. Please go ahead.

Operator 2: Thank you. Your next question comes from Richard Jones from JP Morgan. Please go ahead.

Operator: Thank you. Your next question comes from Richard Jones from JP Morgan. Please go ahead.

Speaker #7: Oh, thanks. Just trying to clarify, in your underlying earnings, I think you’ve cleared your unrealized gains and losses are stripped out. Just on slide 30, the $13.6 million loss in corporate, is that StratCap predominantly?

Richard Jones: Thanks. Just trying to clarify, just in your underlying earnings, I think you've cleared your unrealized gains and losses are stripped out. Just in slide 30, the AUD 13.6 million loss in corporate, is that StratCap predominantly?

Speaker #2: No, that was balance sheet investments. Balance sheet investments, yeah.

Will McMicking: No, that was balance sheet investments in asset equities. Balance sheet investments.

Richard Jones: Land lease. Okay.

Speaker #7: Land lease, okay. And then what's the net interest on unrealized principal investments?

Will McMicking: Okay.

Richard Jones: What is the net interest on unrealized principal investments?

Will McMicking: Yeah. The majority of the interest. Keep in mind, we had net cash at June last year. The main investment that we undertook during the year was energy transition. So yeah, assume all the interest was attributable to debt drawn to warehouse that asset and hold that AUD 200 million investment today.

Speaker #2: Yeah. So the majority of the interest—so keep in mind, we had net cash at June last year. The main investment that we undertook during the year was energy transition.

Speaker #2: So yeah, assume all the interest was attributable to debt drawn to warehouse that asset and hold that $200 million investment.

Speaker #7: Okay, thank you. And then, can you just compare the—

Richard Jones: Okay. Thank you. Can you just compare the-

Richard Jones: Okay. Thank you. Can you just compare the.

Speaker #3: Before Richard, before you move on, that was obviously going through the numbers in '26. That won't be there in '27. So that's, again, another big factor in terms of why you're seeing such a big uplift in earnings.

David Di Pilla: Richard, before you move on, that was obviously going through the numbers in 2026. That won't be there in 2027. That's again, another big factor in terms of why you're seeing such big uplift in earnings.

Speaker #7: Yep, yep. Just the basis for the energy transition valuation at $1.2 billion, and the obviously associated fair value adjustment—how does that compare with the $1.5 billion AUM that you quote?

Richard Jones: Yep. Just the basis for the Illuma Energy valuation at AUD 1.2 and the obviously associated fair value adjustment, how does that compare with the AUD 1.5 billion AUM that you quote?

Speaker #2: Yeah. So for all our equity investments, we basically adopt WASP total assets. So the WASP accounting for energy has it at $1.5 billion, which basically uplifts derivative contracts that it has within the business.

Will McMicking: Yeah. All our equity investments, we basically adopt double ASP total assets. So the double ASP accounting for Illuma Energy has it at AUD 1.5 billion, which basically uplifts derivatives contracts that has within the business. So yeah, I guess they're two slightly different numbers, but that's essentially it.

Speaker #2: So, yeah, I guess they're two slightly different numbers, but that's essentially it.

Speaker #3: Balance sheet.

Speaker #7: Okay. And then, can I just ask about tax? Everything seems to be quite on a pre-tax basis. Is the intention to move to a post-tax underlying earnings in the future?

Richard Jones: Okay. Can I ask about tax? Everything seems to be quoted on a pre-tax basis. Is the intention to move to a post-tax underlying earnings in the future? Can you maybe touch on what the tax looks like, the tax benefit in 2026 was? I guess, clarify your tax status around future losses to offset underlying earnings.

Speaker #7: And can you maybe touch on what the tax—it looks like a tax benefit in '26 was—and I guess clarify your tax status around future losses to offset underlying earnings?

Speaker #2: Yeah, so I mean, we still have a material historical tax loss balance, which is sort of driven from the origins of the group as a developer.

Will McMicking: Yeah. We still have a material historical tax loss balance, which is driven from the origins of the group as a developer. We are still using those losses. I guess, we would guide to no cash tax in 2027, which is why we still report our earnings on a pre-tax basis. I guess we will keep updating the market as we go. You can assume no cash tax in 2027. That tax benefit in 2026 was as a result of holding the energy assets for 12 months. As a development business, there was some large tax depreciation that essentially topped up the losses.

Speaker #2: We're still using those losses, and I guess we'd guide to no cash tax in '27, which is why we still report our earnings on a pre-tax basis.

Speaker #2: And I guess we'll keep updating the market as we go. But yeah, you can assume no cash tax in '27. And that tax benefit in '26 was as a result of holding the energy assets for 12 months.

Speaker #2: There was, as a developer development business, some large tax depreciation that essentially topped up the losses.

Speaker #7: Thanks, Will. Thanks, David.

Richard Jones: Thanks, Will. Thanks, David.

Speaker #3: Thanks, Richard.

David Di Pilla: Thanks, Richard.

Speaker #5: Thank you. Your next question comes from David Pobucki from Macquarie Group. Please go ahead.

Operator 2: Thank you. Your next question comes from David Pobucky from Macquarie Group. Please go ahead.

Operator: Thank you. Your next question comes from David Pobucky from Macquarie Group. Please go ahead.

Speaker #6: Good morning, David, Victoria, and Will. Thanks for taking my questions. Just one follow-up on the expectation that the weighting to principal investments increases from 35% to 50% over time.

David Pobucky: Morning, David, Victoria and Will. Thanks for taking my questions. Just one follow-up on the expectation that the weighting to principal investments increases from 35% to 50% over time. Are you able to talk a bit more about some of the opportunities you are seeing near term to recycle your balance sheet capital positions?

Speaker #6: Are you able to talk a bit more about some of the opportunities you're seeing near-term to recycle your balance sheet capital positions?

Speaker #3: David, if we wanted to talk about those, we would have highlighted them in the result, I think. What we're suggesting is that, as has always been the case, HMC is the kind of group that likes choppy, difficult markets.

David Di Pilla: David, if we wanted to talk about those, we would have highlighted them in the result. I think what we are suggesting is that, as has always been the case, HMC is the kind of group that likes choppy, difficult markets. We have got a strong balance sheet going into a choppy, difficult market, and we think that is going to present some really interesting opportunities. And there is a number of those under evaluation at the moment. So we feel emboldened by the outlook, and we feel emboldened by the strength of the balance sheet going into 2027. So it will not be necessarily something that we are going to telegraph out there, but we feel as though we have got really good opportunity to recycle the capital.

Speaker #3: We've got a strong balance sheet going into a choppy, difficult market, and we think that's going to present some really interesting opportunities. There are a number of those under evaluation at the moment.

Speaker #3: So we feel emboldened by the outlook, and we feel emboldened by the strength of the balance sheet going into '27. So it will not necessarily be something that we're going to telegraph out there, but we feel as though we've got a really good opportunity to recycle the capital.

Speaker #6: Yeah. And just the second question, on your distribution guidance of 15 cents per share, which is up from the 12 cents in FY26.

David Pobucky: Yeah. Just the second question on your distribution guidance of AUD 0.15 per share, which is up on the AUD 0.12 in FY26. If you could, please just talk to the distribution policy beyond FY27 and how you think about balancing capital for growth versus paying distributions.

Speaker #6: If you could, please just talk to the distribution policy beyond FY '27, and how you think about balancing capital for growth versus paying distributions.

Speaker #3: Look, I think we've always been of the view that we want to size our distribution based on our underlying cash generation and our cash earnings.

David Di Pilla: Look, I think we've always been of the view that we want to size our distribution based on our underlying cash generation and our cash earnings. What you'll see today is a very clear statement in the earnings outlook, that we believe that with the earnings that we're guiding the market to today, there'll be a very high level of cash conversion in that. Therefore, we've decided to lift the distribution going into 2027 to reflect that strong cash conversion.

Speaker #3: What you'll see today is a very clear statement in the earnings outlook that we believe that, with the earnings that we're guiding the market to today, there will be a very high level of cash conversion in that.

Speaker #3: And therefore, we've decided to lift the distribution going into '27 to reflect that strong cash conversion.

Speaker #6: Thanks. And just my last one on cost savings: I think you previously noted about $15 million of cost savings from the digital platform.

David Pobucky: Thanks. Just my last one on cost savings. I think you previously noted about AUD 15 million of cost savings from the digital platform. If you could please just talk a bit more about, and if there are additional cost savings and cost out expected in FY27 versus what was delivered in the FY26 result.

Speaker #6: So if you could please just talk a bit more about, and if there are additional cost savings and cost out expected in FY27 versus what was delivered in the FY26 result.

Speaker #3: Yeah. So I'd say that what we articulated, interestingly enough, on the day of your conference earlier in May, we flagged a range of cost savings that we were articulating at the time with primarily folks in the digital business.

David Di Pilla: Yeah. I'd say that what we articulated, interestingly enough, on the day of your conference earlier in May, we flagged a range of cost savings that we're articulating at the time, which primarily focused in the digital business. That was all completed and executed in financial year 2026. If you look at the guidance going into 2027, there's a very clear point there on the guidance outlook slide on 2026, where we've said we expect fixed cost leverage going into this year. With cost efficiencies, we believe that our earnings and revenue growth will grow. Our revenue will grow faster than our costs, quite materially, and that will give us some level of further outperformance. I think the way to potentially explain that is, three new verticals coming onto the platform, two of which were infrastructure-like.

Speaker #3: That was all completed and executed in financial year '26. If you look at the guidance going into '27, there's a very clear point there on the guidance outlook slide on '26 where we've said we expect fixed cost leverage going into this year.

Speaker #3: So, with cost efficiencies, we believe that our earnings and revenue growth will grow—our revenue will grow faster than our costs, quite materially—and that will give us some level of further outperformance.

Speaker #3: I think the way to potentially explain that is three new verticals coming onto the platform, two of which were infrastructure-like. There was probably a level of cost that the group absorbed through the course of '26 to integrate those businesses.

David Di Pilla: There was probably a level of cost that the group absorbed through the course of 2026 to integrate those businesses. We feel as though going into 2027, there'll be some natural efficiencies that we'll be able to take out of the group, as we absorb those businesses and just get some run rate efficiencies going forward. So we're assuming that we're going to be able to hold costs where they are or probably slightly reduce them going into 2027. That's what's giving us the fixed cost leverage.

Speaker #3: We feel as though going into '27, there'll be some natural efficiencies that we'll be able to take out of the group as we absorb those businesses and just get some run-rate efficiencies going forward.

Speaker #3: So we're assuming that we're going to be able to hold costs where they are, or probably slightly reduce them going into '27. And that's what's giving us the fixed cost leverage.

Speaker #5: Thank you. Your next question is from Tom Bodo from Jordan. Please go ahead.

Operator 2: Thank you. The next question is from Tom Bodor from Jarden. Please go ahead.

Operator: Thank you. The next question is from Tom Bodor from Jarden. Please go ahead.

Speaker #7: Good morning, David, Victoria, and Will. Just be interested in back to slide 10, how you're reducing your co-investment stakes and relative to principal investments.

Tom Bodor: Good morning, David, Victoria, and Will. Just be interested in, back to slide 10, how you are reducing your co-investment stakes relative to principal investments. Just be interested in your appetite to sell down your cornerstone stakes in DGT, HCW, and HDN over time. The second question is, if you sell down below NTA, does that get recorded as a negative contributor to underlying EPS?

Speaker #7: Just be interested in your appetite to sell down your cornerstone stakes in DGT, HCW, and HDN over time. And a second question is, if you sell down below NTA, does that get recorded as a negative contributor to underlying EPS?

Speaker #3: Yeah. So what I would say to you is, they are strategic stakes that we've taken. We're not going to call out what we're thinking or what we're planning to do around any of that.

David Di Pilla: Yeah. What I would say to you is they are strategic stakes that we have taken. We are not going to call out what we are thinking or what we are planning to do around any of that. We see still a lot of upside in DGT. As we flagged at the result, there are very significant LOIs in a very advanced state. Let us let that play out over time. HCW, again, we are close to resolution on the Healthscope situation. Again, there is fundamentally plenty of value in both of those entities and plenty of upside over the near term. Are we a holder at the levels that we are holding at the moment over 20% in both? Probably not. But we are not flagging or telegraphing anything in regard to those at this point in time. HDN, we are happy with our level of holding.

Speaker #3: We still see a lot of upside in DGT. As we flagged at the result, there are very significant LOIs in a very advanced state. So let's let that play out over time.

Speaker #3: HCW again, we're close to resolution on the Healthscope situation. So again, there's fundamentally plenty of value in both of those entities and plenty of upside over the near term.

Speaker #3: Are we a holder at the levels that we are holding at the moment—over 20% in both? Probably not. But we're not flagging or telegraphing anything in regard to those at this point in time.

Speaker #3: HDM, we're happy with their level of holding. At the moment, we're also holding nearly $150 million of listed investments on the balance sheet, post the wind-up of Capital Partners.

David Di Pilla: At the moment, we are also holding nearly AUD 150 million of listed investments on the balance sheet post the wind up of Capital Partners. We have got a number of different options, and I flagged it pretty clearly. We have got a number of different ways that we are thinking about recycling that capital. I am not going to telegraph any sort of moves that the group is going to make at this point in regard to its co-investment positions. But we would not have put that slide forward if we did not have a very clear path and a clear view. We see good upside in those two stocks, and we will just be sensible in the way we go about that transition.

Speaker #3: So, we've got a number of different options—and I flagged it pretty clearly. We've got a number of different ways that we're thinking about recycling that capital.

Speaker #3: And so I'm not going to telegraph any sort of moves that the group's going to make at this point in regard to its co-investment positions.

Speaker #3: But we wouldn't have put that slide forward if we didn't have a very clear path and a clear view. So, we see good upside in those two stocks.

Speaker #3: And we'll just be sensible in the way we go about that transition.

Speaker #7: Yeah, thanks. And so, the second part of my question: if you did sell something below NTA, would that be included in underlying EPS as a negative?

Tom Bodor: Thanks. The second part of my question, if you did sell something below NTA, would that be included in underlying EPS as a negative?

Speaker #3: Yeah. That's right, Tom.

David Di Pilla: Yeah, that is right, Tom.

Speaker #7: Okay. Thanks.

Tom Bodor: Okay, thanks.

Operator 2: Thank you. Once again, if you would like to ask a question, please press star 1 on your telephone and wait for your name to be announced. Your next question comes from James Druce from CLSA. Please go ahead.

Operator: Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from James Druce from CLSA. Please go ahead.

Speaker #5: Thank you. Once again, if you would like to ask a question, please press star one on your telephone and wait for your name to be announced.

Speaker #5: Your next question comes from James Drews from CLSA. Please go ahead.

Speaker #6: Yeah. Hi, good morning. Just around, sort of looking through leverage, how do we think about that? I think there's around $2 billion worth of look-through liabilities.

James Druce: Yeah. Hi, good morning. Just around sort of look-through leverage. How do we think about that? I think there's around AUD 2 billion worth of look-through liabilities. I know a lot of it's non-recourse. But how do you sort of Do you have a look-through gearing number that you try and manage, or how do you think about that?

Speaker #6: I know a lot of it's non-recourse, but how do you—do you have a look-through gearing number that you try and manage, or how do you think about that?

Speaker #8: I mean, all the debt in the funds is non-recourse, just to clarify. We do manage it, but keep in mind this is a very diversified group with very diversified strategies.

Will McMicking: All the debt in the funds is non-recourse, just to clarify. We do manage it, but keep in mind This is a very diversified group, very diversified strategies. So, I guess there's no one-size-fits-all, but of course, it's very closely managed across the group.

Speaker #8: So, I guess there's no one-size-fits-all. But, of course, it's very closely managed across the group.

Speaker #3: Look, to answer that question, just to basically give you a very direct answer, 60% to 70% of the funds we manage in this group are in open-ended, permanent capital structures.

David Di Pilla: Look, to answer that question, just to basically give you a very direct answer, 67% of the funds we manage in this group are in open-ended permanent capital structures. Our underlying businesses are high quality, real asset-based businesses that have an appropriate level of gearing in each of them. At the end of the day, the focus that we, as a manager and as a listed group, think about very carefully is an appropriate and prudent level of gearing at the HMC Capital level. If you look at it today, we'll articulate the net debt number today. If you take into account the liquid investments that we're holding on the balance sheet, our leverage and our gearing at the HMC Capital level is almost zero. So we have plenty of financial flexibility and firepower going forward. So we think our balance sheet is in very robust shape.

Speaker #3: Our underlying businesses are high-quality, real asset-based businesses that have an appropriate level of gearing in each of them. And at the end of the day, the focus that we, as a manager and as a listed group, think about very carefully is an appropriate and prudent level of gearing at the HMC Capital level.

Speaker #3: And if you look at it today, we'll articulate the net debt number today. If you take into account the liquid investments that we're holding on the balance sheet, our leverage and our gearing at the HMC Capital level is almost zero.

Speaker #3: So we have plenty of financial flexibility and firepower going forward, so we think our balance sheet is in very robust shape. Look-through leverage is not a—.

David Di Pilla: Look-through leverage is not a-

Speaker #5: Okay.

James Druce: Okay

Speaker #3: That's not something we should really be focused on in this group.

David Di Pilla: not something that we should be really focused on in this group.

David Di Pilla: Not something that we should be really focused on in this group.

Speaker #5: Yeah. I suppose what I'm trying to get at is that a lot of it sort of sits off the balance sheet. So I appreciate the listed funds are pretty lowly geared, but the energy business is pretty highly geared, I suppose.

James Druce: Yeah, I suppose what I am trying to get at is, a lot of it sort of sits off the balance sheet. I appreciate the listed funds are pretty lowly geared, but the energy business is pretty highly geared, I suppose. I am just trying to

Speaker #5: I'm just trying to.

Speaker #3: No, it's quite the opposite. It's an appropriate level of gearing for an infrastructure business with high-quality underlying cash flows, and it's now got a major capital partnership with KKR, who have committed to fund future growth opportunities.

David Di Pilla: No, it is quite the opposite. It is an appropriate level of gearing for an infrastructure business with high-quality underlying cash flows. It has now got a major capital partnership with KKR, who have committed to fund future growth opportunities.

Speaker #5: Okay. And then just on fund rates.

James Druce: Okay. Just on FUM growth for this year

Speaker #3: Well, where was the other—where was the other look-through gearing that you were worried about?

David Di Pilla: Where was the other look-through gearing that you are worried about?

Speaker #5: No, no. I'm just trying to figure out how you guys think about that.

James Druce: No, no, I am just trying to figure out how you guys think about that. Because a lot of it does sit off balance sheet.

Speaker #3: We think about it a lot, and we're very prudent. We think about it a lot. We've got a strong balance sheet.

David Di Pilla: We think about it a lot, and we are very prudent. We think about it a lot. We have got a strong balance sheet.

Speaker #5: Okay. And then maybe just on fund growth for this year—just thinking about the real estate and private credit—obviously, the mandate's coming through.

James Druce: Okay. Then maybe just on FUM growth for this year. Just thinking about the real estate and private credit, obviously, the mandates are coming through. But just in terms of growth ex mandates, how are we thinking about that? Just real estate, what sort of growth are you expecting from FUM in that business?

Speaker #5: But just in terms of growth, X mandates, how are we thinking about that? And just real estate, is there anything—what sort of growth are you expecting from fund in that business?

Speaker #3: So what we've called out in real estate is that if you go through HARP, HUG, and LML, we've got the vast majority of the $2 billion comes through those.

David Di Pilla: What we have called out in real estate is that if you go through HARP, HUG, and LML, we have got the vast majority of the AUD 2 billion comes through those, and deployment of those mandates. Then there is some development CapEx that comes through HDN, but the vast majority of it comes through our institutional mandates in private credit. We talked about the TPG mandate that we have just secured, and we have also got another mandate that we are not referencing the party, but it is a major global investor as well. We have got over AUD 1 billion of dry powder through mandates in private credit. What we are seeing is the fact that we have invested heavily in that platform. We have been prudent. We have got a clean book. Our underwriting standards are high.

Speaker #3: And deployment of those mandates, and then there's some development CapEx that comes through HDM. But the vast majority of it comes through our institutional mandates.

Speaker #3: In private credit, and we talked about the TPG mandate that we've just secured, and we've also got another mandate. We're not referencing the party, but it's a major global investor as well.

Speaker #3: So, we've got over $1 billion of dry powder through mandates in private credit. What we are seeing is the fact that we've invested heavily in that platform.

Speaker #3: We've been prudent. We've got a clean book. Our underwriting standards are high as a result of that. We are actively progressing a number of other institutional mandates as well in the private credit space.

David Di Pilla: As a result of that, we are actively progressing a number of other institutional mandates as well in the private credit space. We feel really quite optimistic about the outlook in the sense that we think the market disruption and dislocation is potentially positive for our business.

Speaker #3: So, we feel really quite optimistic about the outlook, in the sense that we think the market disruption and dislocation is potentially positive for our business.

Speaker #5: Okay, thank you. Thank you. Your next question comes from Simon Fitzgerald from Jefferies. Please go ahead.

James Druce: Okay. Thank you.

Operator 2: Thank you. Your next question comes from Simon Fitzgerald from Jefferies. Please go ahead.

Operator: Thank you. Your next question comes from Simon Fitzgerald from Jefferies. Please go ahead.

Speaker #7: Hi there. Thank you for taking my question. I've got a really short one here, just on the private credit mandate. I was just wondering, firstly, about the seed loans—in terms of what asset classes they might belong to.

Simon Fitzgerald: Hi there. Thank you for taking my question. Got a really short one here. Just on the private credit mandate. I was just wondering, firstly, about the seed loans in terms of what asset classes they might belong to, and then, hoping you can give us a little bit of color in terms of the AUD 1 billion of dry powder. What sort of asset classes do you think you would attribute that to, or in terms of opportunities outside of real estate?

Speaker #7: And then, hoping you can give us a little bit of color in terms of the $1 billion of dry powder—what sort of asset classes do you think you would attribute that to?

Speaker #7: Or, in terms of opportunities outside of real estate?

Speaker #3: So the business has historically been focused on CRE, mid-market, as Victoria said in the presentation—loans up to $250 million. The new mandate we secured is really consistent with the strategy.

David Di Pilla: The business has historically been focused on CRE, mid-market, as Victoria Hardie said in the presentation, loans up to AUD 250 million. The new mandate we've secured is really consistent with the strategy. It is consistent with what we've always done. But it is really looking at larger opportunities. The seed loans that went in were existing loans within the ecosystem that we had secured and were about to secure, and they were loans on average of over AUD 100, AUD 150 million sizes in terms of the seed loans. So we've seeded it with a small number of larger loans, and that's where we'll continue to deploy through those mandates.

Speaker #3: It's consistent with what we've always done, but it's really looking at larger opportunities. So, the seed loans that went in were existing loans within the ecosystem that we'd secured and were about to secure.

Speaker #3: And they were loans on average of over $100 million, $150 million in size, in terms of the seed loans. So we seeded it with a small number of larger loans, and that's where we'll continue to deploy.

Speaker #3: Through those mandates.

Simon Fitzgerald: And those seed loans are mostly real estate; would that be correct?

Speaker #7: And those seed loans are mostly real estate. Would that be correct?

Simon Fitzgerald: Those seed loans are mostly real estate; would that be correct?

Speaker #3: The business has continued to stick to its strategy, which has been CRE. That's where we see dislocation. That's what we'll continue to execute into at this point.

David Di Pilla: The business has continued to stick to its strategy, which has been CRE. That's where we see dislocation. That's what we'll continue to execute into at this point.

Speaker #7: Great. Thank you.

Simon Fitzgerald: Great. Thank you.

Speaker #5: Thank you. There are no further questions at this time. I'll now hand back to Mr. DePilla for any closing remarks.

Operator 2: Thank you. There are no further questions at this time. I will now hand back to Mr. Di Filipo for any closing remarks.

Operator: Thank you. There are no further questions at this time. I will now hand back to Mr. Di Filipo for any closing remarks.

David Di Pilla: We just want to thank everyone for joining the call, and we look forward to catching up with you over the coming days. Thank you.

More HMC earnings call transcripts

Browse all earnings call transcripts

Q4 2026 HMC Capital Ltd Earnings Call

Request TrialDemo

HMC Capital

Earnings