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HMC secures first strategic climate deal

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By Jessica Penny
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3 minute read

The ASX-listed alternative asset manager has unveiled an investment into an operator of utility-scale battery energy storage systems.

HMC Capital will invest up to $50 million for a majority stake in Stor-Energy, a specialist developer, owner, and operator of utility-scale battery energy storage systems (BESS).

In an ASX listing on Monday, HMC confirmed an initial investment plus additional funding over a three-year period, while Stor-Energy’s senior management team, who will continue to lead the business, will retain a minority interest in the business.

Commenting on the investment, HMC’s head of energy transition, Angela Karl, said: “We are impressed by the calibre of Stor-Energy’s management team and believe the business has the potential to be scaled significantly. HMC has already identified other complementary bolt-on opportunities which are currently under review”.

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The investment manager explained that this investment is the first by its energy transition platform, the HMC Capital’s Energy Transition, which aims to assemble a 15GW development portfolio across the energy value chain, including wind, solar, battery, bio-fuels, and emerging technologies.

HMC said it remains on track to commence fundraising in 2H2024 for the platform, which is seeking to raise up to $2 billion.

HMC managing director and chief executive David Di Pilla said: “Our investment in Stor-Energy 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”.

In particular, the investment will enable Stor-Energy to progress its 1.4GW development portfolio – comprising six utility-scale BESS opportunities located proximate to existing grid infrastructure across four mainland National Electricity Market (NEM) states – which is expected to cost around $2 billion to develop and deliver attractive risk-adjusted returns.

“We are delighted to have secured this partnership with HMC Capital, with whom interests are closely aligned, to help fulfil Stor-Energy’s potential. We look forward to working closely with HMC to implement the investment strategy,” Gerard Dover, co-founder and managing director of Stor-Energy, said.

Last week, HMC also announced that the acquisition of Payton Capital, a commercial real estate (CRE) private debt fund manager, has reached financial close.

In May, the firm said it would be acquiring 100 per cent of the business for an upfront consideration of $127.5 million, with the acquisition signalling a strategic alignment aimed at capitalising on the robust growth projected in Australia’s private CRE debt sector – a sector which is expected to grow to $144 billion over the next five years.