HMC Capital completes acquisition of private loan

HMC Capital has completed the acquisition of fund manager Payton Capital to create a $5 billion private lending platform.

In May, it was announced that the alternative asset manager was considering acquiring Payton Capital to create a diversified mid-term private credit platform with investment management in private credit across real estate, corporate, mezzanine and infrastructure.

The company confirmed that its acquisition of 100 percent of Payton has now reached financial close and is on track to be integrated with HMC Capital “in the coming weeks.”

Payton is expected to be well-positioned for organic growth in excess of $2 billion to $3 billion in the medium term. The company recently received a combined $500 million in approved credit facilities from UBS AG, Australia, and Goldman Sachs for new fund financing facilities that HMC Capital hopes will accelerate its growth potential.

In a statement, Matt Lancaster, chairman of private credit at HMC Capital, said: “We are focused on building Australia’s leading private credit platform with a broad focus and capabilities. The private credit market in Australia is still in its early stages of development, which has significant similarities to what I experienced in the United States over a decade ago.

“The acquisition of Payton provides a solid growth platform in mortgage lending, and we are now focused on expanding our capabilities to capitalize on the significant opportunity in corporate lending.”

Following the completion of the acquisition, the company is currently recruiting an investment team to focus on corporate credit and is in active discussions with banks to establish a warehouse for its corporate credit investment strategies.

The strategic rationale for launching a private lending platform is that there is $350 billion of investment potential opening up in Australia over the next five years, more superannuation funds are investing in the asset class and the current environment of high credit risk premiums represents a ‘golden period’ for private lending.

The firm forecasts that the value of Australian private credit will rise from $188 billion in 2023 to $346 billion in 2028.

The proposed private lending platform will be split between commercial real estate and corporate and will include development finance, asset finance, corporate finance, private warehouse finance, alternative asset-based finance and structural growth finance.