HMC Capital (ASX:HMC) Lands $603M KKR Partnership- Time to Buy This Beaten-Down ASX Growth Stock?

HMC Capital gains KKR backing, but shares slip

HMC Capital (ASX: HMC) jumped as much as 7.7 per cent to A$4.34 after landing a major deal with global investment powerhouse KKR, which will pour up to A$603 million into HMC’s Energy Transition Platform. However, the early gains didn’t last. By the end of the day, the share price fell back to A$3.92, down 2.73%. Given that the stock is already more than 65% below its previous highs, this pullback shows that many investors are still cautious.

That said, the deal itself is important. KKR is a well-known and highly selective global investor, and it would not commit this level of money without strong confidence. In our view, this partnership is the strongest sign of credibility and support HMC has received this year.

What are the Best ASX Stocks to invest in right now?

Check our buy/sell tips

Why KKR’s $603M Changes HMC’s Money Story

Here is how the deal works. KKR will pay A$355 million upfront, with another A$248 million set aside for future projects. The money is structured as preferred equity over seven years, and importantly, HMC is not on the hook if things go wrong; there is no recourse to the parent company. In return, KKR becomes a partner in HMC’s 652 MW of working energy assets and its much larger 5.7GW pipeline of battery storage and wind projects.

The big win for HMC Capital is what this does to its balance sheet. The cash will pay off existing debt, bringing HMC’s own capital in the platform down to about A$200 million. That frees up money for other parts of the business. HMC also picks up A$5 million a year in service fees. The deal is expected to close around mid-2026, pending regulatory approval.

HMC Capital Is Much More Than an Energy Play

One thing many investors miss is that HMC Capital is not just an energy company. It is a diversified asset manager running about A$19 billion across five areas: real estate, private equity, private credit, energy transition, and digital infrastructure. When HMC listed on the ASX in 2019, it had just A$900 million in assets. Growing to A$19 billion in six years is a standout track record.

The earnings growth backs this up. HMC Capital has grown pre-tax earnings per share at a rate of 45 per cent per year since listing. Management fees hit A$146.9 million in FY25, up 84 per cent on the year before, which shows the business model is really starting to scale. Looking ahead, management wants to push AUM past A$50 billion over the next few years. The KKR deal helps the energy side of the business, but it is just one piece of a much bigger growth story.

The Investor’s Takeaway

On a price-to-earnings ratio of about 10.8 times, HMC Capital looks cheap for an asset manager growing this fast. Analysts have a Buy rating with an average target of A$4.74, pointing to roughly 20 per cent upside from A$3.92.

But there are clear risks. The fact that shares could not hold the KKR rally shows the market is still sceptical. Turning a 5.7 GW development pipeline into real, working assets will take years, and a lot of things need to go right. The A$248 million follow-on from KKR is not locked in, and the whole deal still needs regulatory sign-off.

We believe the KKR backing is a real turning point for sentiment. When one of the world’s biggest investors puts money behind your platform, it opens doors with other partners. But investors should look for early signs of project delivery before building a full position. For those willing to be patient, this beaten-down price may not last if HMC keeps executing.