The global asset manager announced on Thursday the launch of a $1 billion-plus Australia real estate credit vehicle for institutional investors with global private equity giant Warburg Pincus, just hours after it publicised a $1 billion strategic financing partnership with a subsidiary of non-bank lender Humm Group.
The deal with Warburg Pincus is tilted towards providing institutional investors across the globe with unique access to Australia’s real estate credit market, funding high-quality developers and residential real estate projects.
With an initial target of $1 billion in note commitments, MA Financial said the vehicle will aim to “assist in closing the current funding gap in the Australian residential real estate market”.
Under the arrangement, MA Financial will market debt investments in the vehicle to institutional investors, while Warburg Pincus will facilitate offers to certain Warburg Pincus funds which have indicated their intention to invest in notes issued by the vehicle.
“We are very pleased to announce two major initiatives today including the launch of a new institutional real estate credit vehicle with Warburg Pincus and the establishment of a strategic partnership with Humm Group,” joint CEOs Julian Biggins and Chris Wyke said.
MA Financial’s partnership with Humm will see the asset manager acquire up to $1 billion of commercial asset finance receivables, originated by Humm’s Flexicommercial unit, via its private credit managed funds.
According to the deal, MA Financial managed funds will finance the assets with a global bank, leaving Flexicommercial responsible for servicing and loan management.
The $1 billion commercial finance loans include an initial seed pool of $500 million. These loans represent a significant portion of Flexicommercial’s origination volume during the initial term of the partnership, alongside warehouse and term deal programs.
“These relationships are expected to significantly broaden the reach of MA Financial and continue to build on the strong foundations that our teams have built over the past 15 years,” Biggins and Wyke said of the two deals on Thursday.
Poised for the future
Also on Thursday, MA Financial said underlying business momentum continued into early 1H24 with group underlying revenue gaining 5 per cent on 1H23 to reach $134.5 million.
Assets under management added 13 per cent on the year to hit $9.7 billion at the end of June, while underlying EBITDA shrunk 16 per cent to $38.3 million on the back of heightened expenses due to strategic investment spend.
Underlying earnings per share (EPS) dropped 27 per cent on 1H23 to 11.1 cents, while statutory EPS came in at 22 per cent lower at 8.4 cents.
Commenting on the results, Biggins and Wyke said: “Underlying EPS in 2H24 is expected to be materially higher than 1H24 as MA Money transitions to a profitable monthly earnings contribution and our established businesses continue to grow.
“We believe that the group is in great shape and ready to deliver strong earnings growth into the future.”
