Hygiacura Group has confirmed it is in discussions around the securitisation of revenues generated from long-term facilities management contracts, as part of a deliberate shift in how the business thinks about capital.
The UK-wide group is currently reviewing additional ways to fund its rapid growth which has seen it acquire several companies in the sector as part of its expansion plans.
“Capital markets have always been willing to finance predictability,” Hygiacura director Sacha Jakovljevich said, “We’re in discussions to understand whether long-term FM contracts can be analysed, and potentially financed, in the same way other contracted revenues already are.”
Securitisation is not new
Capital markets have long financed predictable revenue streams, from music royalties, including the well-known “Bowie Bonds” linked to David Bowie’s catalogue, to professional sports teams monetising future season ticket income to fund long-term investment.
Sacha added, “What is unusual is the application of that thinking to everyday service contracts. We in facilities management operate on multi-year agreements with extremely stable and predictive cashflow, yet the sector has historically relied on generic bank lending that treats that cashflow as operating income rather than a financeable asset.”
Hygiacura FM is now asking whether that distinction still makes sense.
The company said discussions remain exploratory and that no transaction has been agreed. However, management believes the question itself is timely, as banks continue to retrench from mid-market lending and capital increasingly favours structures backed by defined, contractual cashflows.
Market participants note that if such approaches gain traction, they could mark a shift in how mid-market service businesses access growth capital, moving away from balance-sheet lending towards cashflow-driven structures.
Hygiacura FM said it will continue discussions with advisers and institutional market participants as part of its ongoing capital strategy review.
