HMC Capital dumped by investors as energy plan flounders

HMC Capital’s shares have been dumped by investors after it revealed its plans to raise $2bn for an energy transition fund had faltered.

HMC Capital’s former head of energy transition Angela Karl, with managing director David Di Pilla. Picture: Jane Dempster

One-time market darling HMC Capital has been hit by a savage share sell-off, plunging more than 17 per cent on Tuesday, after it revealed that its plans to raise $2bn for an energy transition fund were off course, putting the alternative asset manager’s aggressive growth ambitions in doubt.

Investors had backed the David Di Pilla-led company’s growth as it aimed to become the country’s answer to top global players by hitting a $50bn assets-under-management target in areas ranging from retail property, private credit, healthcare real estate and data centres, as well as energy.

The aggressive leap from the current levels of about $20bn is now in doubt, as the part settlement on the acquisition of a $950m portfolio of renewable generation assets from France’s Neoen has been pushed back a month until August 1.

HMC said it had $200m mezzanine finance from two global banks in place to support its strategy and it would tip in $50m as it developed the assets.

But the company was hit by the surprise departure of head of energy transition Angela Karl, as well as the switch in strategy under which it will merge key assets, and take on the development of wind farms and battery projects in Victoria itself.

HMC had previously said that a $2bn raising for its Energy Transition Fund, chaired by former prime minister Julia Gillard and led by Ms Karl, was on track for the last half.

The company said it was “currently evaluating” a range of options for the energy transition portfolio, which would be aimed at achieving HMC’s return objectives.

Former prime minister and HMC’s Energy Transition Fund chair, Julia Gillard.

HMC said it would keep talking to investors around the energy transition platform but other options are also under consideration. It is considering strategic partnerships and even the possibility of a merger with a major domestic or global financial investor wanting to build a local operating, development and trading platform to handle the energy transition.

Ms Gillard said the news was “another exciting step in our ambition to be a national champion of Australia’s transition to a net zero carbon economy by 2050”.

“The additional financing we have secured will help accelerate the build out of the portfolio’s large scale development pipeline and generate significant value for HMC shareholders and platform investors,” Ms Gillard said.

HMC shares were smashed in early trading, slumping 19 per cent after the exit of the key executive who had thus far shaped the portfolio strategy. The stock closed down 17.25 per cent at $4.22.

Ms Karl is a former partner at QIC Global Infrastructure and founding director of Tilt Renewables. She had moved to HMC in February 2024 to head up the new fund when it was seeking to raise an initial $2bn for investment in renewables and decarbonisation projects across Australia.

Last December, HMC agreed to acquire Neoen Australia’s Victorian assets for $950m via two instalment payments of $750m at financial close in August and a final instalment of $200m at December 29, 2025.

HMC will instead merge the Neoen assets and Stor Energy battery platforms, with the management teams which will run the merged HMC Capital platform to be consolidated under the leadership of Gerard Dover, co-founder and current CEO of Stor Energy and his management team.

HMC’s energy transition fund in July last year secured its first asset, agreeing to pay around $50m for a majority stake in battery developer Stor Energy.

The company said that an independent preliminary valuation of the Neoen assets validated the strategic value of the portfolio and had allowed it to secure the $200m non-recourse mezzanine financing. Any fundraising will now be on the basis of a more focused strategy around the two Victorian assets only.

HMC has been through a tough period.

The company’s data centre float – billed as the marquee float of 2024 – flopped with the DigiCo Infrastructure REIT halving in value before a more recent recovery. But its dismal performance has meant the public markets are effectively closed for the moment for fresh raisings by the manager.

HMC was also caught up in the collapse of private hospital operator Healthscope after Canadian fund manager Brookfield walked away from it and receivers were appointed to the head companies. Its funds owns 11 hospitals that are landlords to the operator.

HMC worked on plans to buy the country’s second largest private hospital operator but its overtures were rebuffed. It later said it would not put equity into any Healthscope deal, despite earlier flagging that an interest in Healthscope could be considered for a new private equity fund.

The sudden shift in the company’s energy plans puts HMC’s track record of pushing into new fields into question among investors who want to see tangible results before backing its next foray.

For now, HMC can rely on its retail property funds empire which has produced more steady returns, as well as its activist investing, including in Sigma Healthcare, where it helped facilitate the merger between Sigma and Chemist Warehouse.

Originally published as HMC Capital dumped by investors as energy plan flounders