Qualitas (QAL) Investor update summary

Strategic rationale and market opportunity

• Acquisition of Starz, a London-based commercial real estate private credit manager, and establishment of a European office mark a milestone in long-term growth strategy.

• European commercial real estate credit market is valued at EUR 2.2 trillion, over five times the size of the Australian market, offering significant expansion potential.

• Entry is timed to capitalize on market dislocation, with refinancing pressures and regulatory-driven bank retrenchment creating a EUR 70 billion funding gap over the next three years across 20 European countries and six sectors.

• Acquisition provides immediate access to a GBP 376 million loan portfolio and a 10-person team with established institutional LP relationships.

• Offshore expansion aligns with stated long-term strategy, leveraging conditions similar to those that enabled prior domestic growth.

Transaction structure and financial impact

• Total acquisition consideration is AUD 36.5 million (GBP 28 million for co-investment, GBP 8.5 million for working capital), funded from existing cash reserves.

• Transaction closed simultaneously with signing, with no execution lag.

• Acquisition is structured to be earnings neutral for FY 2026 and FY 2027, with upside potential from co-investment revaluation and performance fees not included in base case.

• Fee and earnings from the European division will be reported separately for transparency.

• Starz portfolio is in capital repatriation phase, providing a 24-month runway to originate new assets and maintain fee income.

Team integration and retention

• Starz team of 10, spanning origination, asset management, and operations, joins immediately; two senior staff from Australia will relocate to London to embed culture and standards.

• Staff retention prioritized through remuneration and retention structures, with key performers secured prior to acquisition.

• Vendor was a private equity fund, not staff; staff remain incentivized for future success.