HMC Capital hits 7-week low; KKR deal derisks earnings but at a cost, says brokerage

Diversified alternative asset manager HMC Capital shares HMC.AX fall as much as 5.5% to A$3.705, their lowest level since December 19

KKR-managed KKR.N funds will invest up to A$603 million ($423.73 million) in preferred equity in HMC's Energy Transition Platform

Morgan Stanley notes deal reduces FY26 EPS downgrade risk, eases balance sheet pressure

However, MS flags that the deal is not structured in a typical way where HMC would earn management and development fees

Highlights JV may need to repay KKR A$900 mln-1 bln at term end; KKR retains 20-35% equity stake even after return of, and return on, its investment

HMC down 5.1% YTD

($1 = 1.4231 Australian dollars)