Last Thursday David Di Pilla’s HMC Capital notified the ASX it had acquired 2.69% of Lifestyle Communities. It looks like they may also have access to another 4.6%, a total of 7.3%, whilst also owning around 8% of Ingenia. What is his strategy?
Di Pilla understands the ageing sector, housing and aged care. He founded Aurrum Aged Care around 2016 and they now have eight modern aged care homes.
At the same time he founded Home Co which renamed itself HMC Capital, and it now has $15.4B in funds under management.
Di Pilla appreciates the following wind of the ageing population. His HealthCo REIT states:
Land lease is the gold rush sector in ageing housing. Di Pilla also likes cheap, and both Lifestyle Communities and Ingenia are cheap.
Lifestyle Communities has lost 50% of its value, from $2 billion down to $1 billion in the past four months thanks to Adele Ferguson and her ABC 7.30 program describing their DMF contracts a ‘financial prison’.
Ingenia is trading at $4.75. Two years ago it was $6.75, and today its business is bigger and stronger.
Ingenia is valued at $1.9 billion, including estimates of its holiday parks valued at $1 billion.
Di Pilla could buy both Lifestyle and Ingenia, sell the Ingenia parks and be the largest land lease operator at a fraction of the price Stockland, Mirvac and Pacific Equity Partners have paid to get in.
He will also have to come to some resolution on what to do about the DMF contracts at Lifestyle Communities. With big operators like Stockland heavily marketing no DMF in Lifestyle’s home state, Victoria, sales will continue to be slow. Di Pilla has the cash to sort this out with existing residents.
The one certainty is that Di Pilla has a track record for shrewd moves well timed. And he doesn’t take small steps.
Watch this space.
