In today’s ROCast, we’re joined by Johann Kenny, CFA, Investment Director at Allcap Securities. Johann brings deep experience across capital markets, structured credit, and private equity—having held senior roles at ANZ, ING, Fitch Ratings, Equifax and Arowana before joining Allcap. His current focus is on structuring investment opportunities that aim to deliver income, capital protection, and exposure to real-world assets and government-backed infrastructure projects.

We often speak with asset managers who raise capital via managed funds—but today’s episode brings a different structure. Allcap uses special purpose vehicles (SPVs) to raise capital for specific transactions, allowing wholesale investors to participate directly in defined, asset-backed investment opportunities with fixed terms and transparent risk profiles.

Before diving into the specifics, Johann offers a broader perspective on the construction landscape—comparing private sector builds, like industrial and commercial developments, with government-commissioned infrastructure. The former tends to be more cyclical, tied to credit markets and investor sentiment. The latter, by contrast, is often long-dated and essential—driven by population growth, regulatory mandates, and service delivery. In today’s higher rate environment, that contrast has become especially relevant for investors focused on risk and resilience.

In this episode, we explore Allcap’s current acquisition—an equity co-investment in Haslin, a Tier 2 construction firm focused on delivering essential water infrastructure for local government clients across NSW and QLD. This includes the construction of sewage treatment plants, water filtration facilities, pump stations, stormwater systems, and upgrade works to existing utilities. Haslin’s client base is concentrated at the municipal level, rather than servicing state-level authorities such as Sydney Water.

The total capital structure for the acquisition is $89.6 million, comprising:

• $29 million in senior debt, provided by National Australia Bank
• $26.75 million in equity raise, representing a 44% stake in the target group
• $12.13 million in equity from the sponsors representing a 20% stake in the target group
• $21.75 million allocated to the sponsors to meet differed consideration in three years time and representing a 36% stake in the target group

Haslin is being acquired at a 5.0x FY25 forecast EBITDA multiple, based on expected earnings of $14.5 million. The equity is structured to deliver a target cash yield of over 10% per annum, with a projected 2.5x multiple on invested capital over a three-year period—inclusive of dividends. Johann also explains how Haslin’s contracts often include mobilisation payments of up to 20% on awarded projects—providing early-stage liquidity and helping to accelerate debt reduction on the senior facility.

We also touch on governance, risk management, deal structuring, and Allcap’s infrastructure-focused platform—which includes interests in Inter-Port Global. While Allcap expects Haslin to potentially win future work under Inter-Port’s rollout, no revenue from that channel is included in the current forecasts or investor returns.

As always, this ROCast is made for entertainment purposes only. I encourage you to listen to the disclaimer at the end of the episode and keep your feedback coming. You can reach me at [email protected].

With that being said, I hope you enjoy this conversation as much as I did. So sit back, relax, and enjoy.