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HMC Capital's Growth Plans Face Reset on Fundraising Snags, Says Jefferies

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HMC Capital (ASX:HMC) may be undergoing a strategy reset from its target of reaching AU$50 billion in assets under management (AUM), primarily due to fundraising headwinds, Jefferies said in a note on Thursday.

Jefferies lowered its forward EPS estimates by 1% to negative 21% due to weaker AUM growth.

Although the alternative asset manager has not formally withdrawn its target, a lack of assuring track record under the HMC brand might be hindering new fundraising amid tough industry conditions, where capital is increasingly flowing toward mega-managers, it added.

Jefferies said a revised growth plan would be the way forward, notably within the company's domestic portfolio of strategies, as it also undertakes measures to deliver AU$15 million in cost savings.

The investment firm maintained its buy rating on HMC Capital but cut its price target to AU$3.40 from AU$4.15.

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