Shares in ASX-listed property and fund manager Home Consortium Ltd (ASX: HMC) are on a rollercoaster today. After spending much of the day in the red, HomeCo shares have switched direction and are trading 1.57% higher at $7.78 in afternoon trading.
Meanwhile, the broader market is down today, with the S&P/ASX 200 Index (ASX: XJO) trading 0.45% lower.
The Home Consortium share price is moving today as investors respond to the company's annual general meeting (AGM) where it provided an overview of FY21 operations and its outlook for FY22.
It's been a busy period for the group of late, having listed two new real estate investment trust (REIT) vehicles on the ASX in recent months. Read on for more details.
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What did HomeCo announce in its AGM?
In its AGM, HomeCo's managing director and group CEO, David Di Pilla, gave an overview of the company's FY21 operations and its outlook in FY22.
The release notes that FY21 was a "transformational year" for the company and that these growth trends have continued into FY22.
Most notably, HomeCo refers to the successful listing of HealthCo Healthcare and Wellness REIT in early September and the proposed merger of the HomeCo Daily Needs REIT and Aventus Group that was announced in mid-October.
Following these moves, the group's total assets under management (AUM) will grow to approximately $5 billion compared with $900 million since listing in October 2019, per the release. That represents a 441% growth schedule in that time period.
As such, HomeCo touts that it is now "well on the path towards our ambition to become Australia's alternative asset manager of the future with scalable growth platforms across real estate and in the future private equity, infrastructure, and credit".
Alongside this, the group delivered a 145% total return for shareholders to enjoy last year, making it the "best performing constituent in the S&P/ASX 300 A-REIT index" in FY21.
Following the proposed Aventus transaction, Home Consortium will manage around $5 billion of external AUM via two ASX-listed vehicles that will generate "high quality and recurring capital light management fees".
HomeCo says the growth outlook for the merged group has an identified development pipeline of $450 million and is targeting at least a 7% return on invested capital (ROIC).
The company also recently announced $200 million of acquisitions in its HealthCo Healthcare and Wellness REIT, which will increase the portfolio to $850 million on an as-complete basis, per the release.
What's the outlook for Home Consortium?
In its report, the company reaffirmed its FY22 guidance of pre-tax funds from operations (FFO) per security of 26 cents.
This figure represents an upward revision of 41% on previous guidance in August 2021 and 89% growth on top of FY21.
The company also announced its next major growth initiative in the AGM today, called HMC Capital Partners.
HomeCo believes there is a gap in the Australian market for a specialist alternative asset manager. It reckons the new initiative will give Aussie investors exposure to "carefully constructed portfolios of real assets" that are protected against the downside and uncorrelated to the equity market.
As such the company reckons HMC Capital Partners has the potential to further accelerate the growth and diversification of its alternative funds management platform.
The new venture will target three central investment themes, including high conviction strategic stakes in ASX-listed entities, private equity and structured credit.
It will target an internal rate of return (IRR) of 15% while providing a 3-5% income yield, HomeCo says.
In the past 12 months, the Home Consortium share price has climbed 94% after rallying another 88% this year to date.
