Home Co’s establishment of a portfolio of assets in key sub-sectors including hospitals, primary care, childcare, aged care and life sciences is taking shape as HomeCo prepares for a $1bill capital raising.
HealthCo’s model portfolio of Health and Wellness sectors is focused on delivery of stable distributions, long term capital growth while also delivering positive outcomes for local communities through HomeCo’s environmental and social impact asset management initiatives.
The strategy to establish two capital sources across the listed and unlisted markets reflects the breadth of the investment opportunity universe and the strong level of investor demand for this exposure which is currently unavailable at institutional scale on the ASX. To satisfy this need, HealthCo’s listed and unlisted vehicles will co-invest where appropriate, providing the most flexibility to secure assets at scale and to best implement target model portfolio construction and sub-sector diversification.
Subject to market conditions, HomeCo is now targeting an initial equity raise of $1.0 billion, double the size of the proposed equity raising flagged in HomeCo’s 1HFY21 results on 24 February 2021 across both listed and unlisted investment vehicles.
HomeCo Group Head of Capital Partnerships, Heechung Sung said: “Feedback from investors has provided us with confidence that there is significant appetite for exposure to the health and wellness sector. The sector is highly attractive given its diversification benefits and the critical need nationally, to build future capacity for the delivery of health services. HealthCo is uniquely positioned to offer investors the potential to scale up exposure to this growth sector in a carefully constructed, well managed diversified portfolio of assets.”
HomeCo will target maintaining a 10-15% investment over the long term and will contribute $250 million of stabilised seed assets ($350 million on an as-complete basis) currently held on HomeCo’s balance sheet. The acquisition pipeline for HealthCo continues to grow with ~$800 million of assets3, currently under due diligence or held on HomeCo’s balance sheet as seed assets.
HomeCo Group Managing Director and Chief Executive Officer David Di Pilla said: “HealthCo’s proposed model portfolio offers strong diversification and attractive risk adjusted returns with low levels of correlation to traditional property sectors. We like the growth fundamentals of this sector and the ability to keep re-investing into long duration assets.
“HealthCo’s vision is to improve the health and wellness for people living in our communities through the delivery of high-quality health focussed infrastructure. We subscribe to the position that better access to healthcare services leads to better health outcomes.
“To that end, our investment, management and asset development plans and decision making will be guided by a specialist advisory board of leaders across the private hospital, medical, childcare and financial services space.”
HomeCo has established a specialist Advisory Board for HealthCo to assist on the execution of the HealthCo strategy across the specific sub-sectors that HealthCo is targeting. The Advisory Board is comprised of leaders across the private hospital, medical, childcare and financial services sectors.
Importantly, the Advisory Board will complement the existing skills of the HomeCo management team and
directors. The Advisory Board will be comprised of:
• Mr Joseph Carrozzi (Former Managing Partner at PwC & EY and Chairman, Centenary Institute for Medical Research)
• Mr Tom Hardwick (Former CEO of Guardian Early Learning)
• Ms Natalie Meyenn (Former CIO of MLC Private Equity)
• Prof. Bruce Robinson (Former Dean of Medicine, University of Sydney & MBS Review Chairman)
• Mr Danny Sims (Former CEO of Ramsay Health Care Australia)
HomeCo also announces the appointment of Mr Sam Morris as Senior Portfolio Manager for HealthCo. Mr Morris was previously Head of ANZ Health across corporate and institutional sectors where he was responsible for the growth of ANZ’s national Health business.
Macquarie Capital (Australia) Limited and Morgan Stanley Australia Securities Limited have been appointed as Joint Lead Managers and Financial Advisers and Morgans Financial Limited has been appointed as Joint Lead Manager for the establishment and listing of HealthCo.
HomeCo Group Managing Director and Chief Executive Officer David Di Pilla said, “The proposed HealthCo is on track and it is pleasing to receive positive investor demand for the proposed vehicles. The proposed establishment of HealthCo is transformational for HomeCo and accelerates our transition to a capital light structure with a significantly larger asset base generating annuity income streams. We look forward to providing further updates as our plans for HealthCo progress.”
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