MA Financial Group

Over the past 18 months the real estate market has undergone an adjustment on the back of the most aggressive interest rate tightening cycle on record, causing the cost of debt financing to triple in many cases.   Real estate values have been impacted significantly, which has created immense pressure on some owners who acquired assets at very low interest rates and now have limited access to new equity and need to sell.   In his latest insight our Joint CEO Julian Biggins explains why we are seeing once-in-a-cycle pricing for acquisitions, and why astute investors are capitalising now to position portfolios to take advantage of the market as it improves.

In an interview with ausbiz’s Juliette Saly, Executive Director Guy Kaufman discussed our new $1 billion strategic partnership with humm group’s asset finance platform flexicommercial Australia.   Guy explained how both teams saw the power of co-lending programs in the US and capitalised on the opportunity to introduce the same innovative strategy into our local market, helping advance Australia’s private credit industry.   This Australian-first partnership arrangement allows us to access an attractive pipeline of prime asset finance deal flow, diversify our private credit portfolio and participate in the growth of the commercial asset finance sector for our managed funds. 

“In MA Financial’s history we've made numerous acquisitions and there's one stand-out issue which is the same every single time, and it determines whether you get it right or wrong.” In the latest episode of our What Matters Podcast, our Group Vice Chairman Andrew Pridham AO, Senior Advisor Amelia Hill Salter and three-time Olympic gold medallist and Group CEO of Generation Life - Outthinking today. Grant Hackett OAM share their insights on how to successfully integrate new businesses. Listen to the full episode on Apple Podcasts and Spotify. Spotify: https://lnkd.in/geuU6XYT Apple Podcasts: https://lnkd.in/ghewmjfs

When it comes to private credit, we’ve spent many years designing and refining an investment process allowing us to lean into our core competencies, harness the talents of our people, unearth good ideas and try to mitigate avoidable mistakes.   In this short video we offer an inside look into how our investment process works, what we focus on, and what differentiates our approach to private credit.   This video is part of a new series where our Joint CEO Chris Wyke and Head of Credit Investments and Lending Frank Danieli provide transparency into our detailed and diligent approach to private credit investing. To learn more visit our website https://lnkd.in/gKUhM9JS

In an interview with The Australian Financial Review our Joint CEO Julian Biggins discussed our new $1 billion real estate credit deal with leading global growth investor Warburg Pincus LLC.   The deal will see Warburg Pincus back our Australian real estate credit vehicle which will lend to high quality developers across high-density, medium-density and subdivision projects. The vehicle will provide global institutional investors with unique access to Australia’s real estate credit market and help meet the demand for sophisticated borrowers as Australia addresses a nationwide housing shortage.   With population growth over the next five years set to run 30 per cent higher than that of the past five, a shortage of about 254,000 dwellings is expected to build up. As the tightening of credit provisions by traditional lenders continues, non-bank lenders will need to fill a gap estimated to be about $55 billion.   Julian said “We can help plug that funding gap. It’s getting harder and harder to get projects off the ground, so in every part of that funding solution for quality developers, we think that there’s good returns to be made. We think the housing undersupply will support ongoing, robust pricing around residential property in Australia.”   Of the deal with Warburg Pincus Julian said “We’ve had a very good track record, and it’s obvious Warburg Pincus believe that, and they’ve done the due diligence to verify that. But they’re also very astute investors as well. So in terms of that project and investment selection, it’s a joint effort in that sense… They’ve got a fair bit of belief in us as a company, that from here, we’re going to create value as well.”

We are extremely proud to announce the establishment of a A$1 billion Australia Real Estate Credit Vehicle with Warburg Pincus LLC – a leading global growth investor and one of the largest investors of real estate private equity in Asia.   The Vehicle will provide global institutional investors with unique access to Australia’s real estate credit market, funding high-quality developers and residential real estate projects. We will manage and co-invest in the Vehicle, while Warburg Pincus will facilitate offers to certain Warburg Pincus funds and has indicated their intention to invest in notes issued by the Vehicle.   Our Joint CEO Julian Biggins said, “We are very proud to be collaborating with Warburg Pincus – one of the world’s most successful and respected real estate managers. This initiative is a strong endorsement of and testament to MA Financial’s proven track record and significant expertise and capabilities in real estate credit investing. Through the Vehicle, we will originate and manage credit facilities for high-quality real estate developers and projects with a focus on Australia’s residential build-to-sell sector, aiming to help close the funding gap in the acutely undersupplied housing market.   With the projected rate of annual population growth in the next five years expected to increase by over 30% on that of the last five years, it is estimated the cumulative dwelling shortage to be approximately 254,000 units for the same period. As the tightening of lending practices by traditional banks continues, there is an estimated US$37 billion funding gap projected by 2025 that non-bank lenders are looking to address. Our new Vehicle will help meet the demand for non-banking lending options from sophisticated borrowers as Australia addresses a nationwide housing shortage. The significant demand for housing in Australia’s residential property market provides strong tailwinds for this strategy.”   Anthony Habis our Head of Global Partnerships said, “This initiative provides institutional investors around the globe with unique access to the combined expertise and track record of MA Financial and Warburg Pincus. Warburg Pincus have a track record of being selective in partnering with management teams to build out strategies, and this is an exciting development for MA Financial”. Visit our website for more information https://lnkd.in/g5yjhUA7

We are pleased to present our financial results for the six months to 30 June 2024 (1H24).   Operational highlights include: ◾ Record first half gross fund inflows of $1.1 billion, up 16% on 1H23 AUM up 13% on 1H23 to $9.7 billion ◾ Finsure managed loans up 23% on 1H23 to $121 billion ◾ MA Money loan book grew 231% on 1H23 to $1.4 billion ◾ Announced two significant institutional initiatives: ▪ Launch of $1 billion Australian Real Estate Credit Vehicle with global growth investor Warburg Pincus LLC ▪ $1 billion strategic partnership with humm group's flexicommercial Australia unit.   Given strong momentum across the business Underlying EPS is anticipated to be materially higher in 2H24.   Visit our website for full details https://lnkd.in/gT2dtbXW

We are proud to have acted as exclusive corporate and financial adviser to Diona on its agreed divestment to SRG Global for A$111 million. The acquisition is highly strategic, with Diona’s market-leading position in program and asset management services in water security and energy transition, and its established partnerships with utility and government agency clients under long-term agreements, complementing SRG Global’s current end-to-end full asset lifecycle capability in water, defence, resources, transport, and energy transition. Chris Stefanovski, Managing Director in our Corporate Advisory team said “We were delighted to work with Diona – a leading specialist Australian infrastructure services provider with deep expertise in the delivery of essential infrastructure services across Australia. This acquisition by SRG Global is strongly aligned with its vision to become the most sought-after diversified infrastructure business, and we look forward to watching the ongoing success of Diona under SRG’s banner.” Andrew McGilvery Sara Tomaz, CFA Tommy Brennan

We are delighted to be sponsors of Portfolio Construction Forum’s Strategies Summit 2024 taking place today and tomorrow at @UNSW.   At the event today our Head of Credit Investments and Lending Frank Danieli presented a compelling argument on why the 60/40 portfolio shouldn’t be what it used to be.   Frank explained that while the 60/40 portfolio is a useful discipline, the composition needs to evolve and be adjusted to account for the increasing market proportion of private assets. Private assets tend to be focused on fundamentals, while public markets are increasingly dominated by passive and systemic strategies that may lead to increased volatility – Frank outlined how including an allocation to alternatives in a portfolio has the potential to improve returns and lower volatility. 

We are extremely proud to announce our strategic partnership with humm group's flexicommercial Australia asset finance platform in an Australian first co-lending deal.   The deal will see us acquire up to $1 billion worth of Flexicommercial’s commercial asset finance loans (with a seed portfolio of ~$500m) via our private credit managed funds in a forward flow arrangement, giving us and our investors access to a substantial pipeline of high quality, prime asset finance loans.   In an interview today with the The Australian Financial Review's Aaron Weinman our Head of Credit Investments and Lending Frank Danieli said “Our new strategic partnership with Flexicommercial is an innovative financing strategy and an advancement for Australia’s private credit industry. We have seen the power of co-lending programs globally and are seeking to introduce these opportunities to our local market. This arrangement allows us to access an attractive pipeline of prime asset finance deal flow, diversify MA Financial’s private credit portfolio and participate in the growth of the commercial asset finance sector for our managed funds.   We have identified asset financing as an attractive lending space for some time. The rise of the broker channel is creating more options for borrowers and a more level playing field for non-bank financiers to provide customers lending solutions. We like sectors where banks are ceding market share and are no longer the most efficient provider of capital. We think there are compelling risk-adjusted returns available in these market gaps. This unique partnership structure with Flexicommercial is an effective way for us to capitalise on these thematics in asset finance for our managed funds.” https://lnkd.in/gH5e-JPQ