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As the S&P/ASX 200 Index (ASX: XJO) drifts almost 1% lower over the last month of trade, one ASX 200 stock is separating itself from the pack in FY25.
HMC Capital Ltd (ASX: HMC), an alternative asset manager traditionally known for its holdings in real estate and finance, has announced a strategic acquisition today.
While the announcement isn’t market-sensitive, it builds on the momentum the ASX 200 stock established in FY24. As discussed in my recent analysis, HMC Capital was one of the top-performing Australian real estate investment trusts (REITs) last financial year.
Here’s a closer look at the upcoming transaction’s details.
ASX 200 stock pivoting to energy
HMC announced on Monday it has committed to an investment of up to $50 million over three years into StorEnergy Pty Ltd, a battery storage company.
The move extends the ASX 200 stock’s recent entry into the renewable energy market. Traditionally, the company – which manages more than $12.5 billion of client assets – has expertise in real estate assets. As such, this is quite the leap sideways.
However, as part of its Energy Transition platform, HMC aims to “assemble a 15GW development portfolio across the energy value chain…”
This includes renewable energies such as wind, solar, battery, and bio-fuels, it says.
According to the ASX 200 stock, StorEnergy develops and operates “utility-scale battery energy storage systems (BESS)”.
It currently holds a 1.4GW development portfolio valued at approximately $2 billion. These projects are reportedly near existing grid infrastructure, which HMC thinks could be an advantage.
The investment includes an initial tranche of an unspecified amount, with additional commitments planned over the next three years depending on various milestones.
Following the investment, the ASX 200 stock will own a majority stake in StorEnergy. It is expected to close by early July 2024.
What did management say?
Looking ahead, HMC says it is preparing a campaign to raise a potential $2 billion for its Energy Transition Platform.
Regarding this current investment, HMC’s head of Energy Transition, Angela Karl, expressed optimism about the partnership with StorEnerg. Karl highlighted synergies and the asset’s “potential to be scaled significantly” as part of HMC’s growth plans.
CEO and managing director David Di Pilla highlighted the strategic significance of the investment, noting:
Our investment in StorEnergy represents an exciting step in the establishment of HMC Capital’s Energy Transition platform, something we have both the ambition and capability to develop into the National Champion for Australia’s decarbonisation.
HMC share price snapshot
HMC has started the new year in the green. The ASX 200 stock is up 0.48% at $7.29 at the time of writing and has lifted more than 50% in the past 12 months.