Centuria's multiple platform business has enabled the business to grow FUM by $3Billion over the past 3 years.
In FY 2016 the FUM was $1.9Bn
in FY 2017, the FUM doubled to $3.8bn, and
In FY 2018, the FUM increased further to $4.9Bn
and now with the Hines Portfolio transaction, the FUM has increased again to $5.5Bn with more to come in 2019.
Historically, Centuria Capital Group has been essentially a funds management business, deriving most of its revenues from fund management fees. More recently however, income from performance fees and their co-investments in CNI, CMA and PLG have also contributed significantly to their total revenue stream. In 2018, Centuria doubled their operating revenue to $100M with $20M coming from co-investments and a further $26M from the performance fees derived from the sale of 10 Spring Street.
Centuria's investment targets in the industrial and commercial markets has played well into the current cycle. The absence of retail and residential investment has always been to Centuria's advantage.
Centruia's distribution platform has enabled capital to be raised across the listed, and unlisted wholesale and retail markets.
At the AGM this week John McBrain says that the Centuria’s performance in 2017 shows for the first time, how the highly scalable nature of their funds management platform and strong growth in assets under management has translated directly into increased funds management operating profits and in particular property funds management profitability.
The FY2019 year has started strong with Centuria raising a further $100 million comprising of a $80 million 1-for-5 entitlement offer together with a $20 million institutional placement. The additional capital has been used to support CMA’s equity raising, as CMA’s largest securityholder for the Hines portfolio which marked the second largest real estate acquisition in Australia this year.
Centuria Capital also completed an $80 million corporate bond issuance with proceeds providing continued support for CNI’s co-investment programs, seed capital within the unlisted funds division, broadening wholesale fund initiatives and to support corporate initiatives to expand the platform.
The elephant in the room is of course, the moves by ESR to take a foothold in Australia through its proposed acquisition of Propertylink, in which Centuria also hold a 19.5% stake. ESR also continue to hold a 14.9% stake in Centuria and may also have their eyes on CNI.
Centuria appear to be watching and waiting to see how successful ESR are with the takeover of PLG and may support the takeover or use their stake to leverage a deal with ESR.
In the meantime, Centuria are proceeding to protect their AUM (whether in the investors interests, i am not sure) by inserting several large assets with co-investments with Paul Lederer which include poison pills in the case of a change in control.
It will be an interesting 2019.