The two appointments bring significant skills and experience in digital transformation, technology and financial services to the board, relevant to building AMP’s Banking and Wealth Management businesses in Australia and New Zealand.

AMP also announced Kate McKenzie will step down from her role as a Non-executive director, effective 31 December 2023. Ms McKenzie will conclude her roles on both the AMP Limited and AMP Bank boards after three years of service.

Ms McKenzie, who was appointed in November 2020, will step down to focus on her roles as Chair of NBN Co., interim Chair of Healius Ltd and Non-Executive Director on the Stockland Corporation board.

AMP Chair Debra Hazelton commented: “I would like to sincerely thank Kate for the invaluable experience, insight and governance she has brought to the board. Her commitment and passion for the business over the past 3 years has been instrumental to the ongoing transformation of AMP.

“I am also delighted to welcome Kathleen and Anna to the Board. We have sought to continue to build on the skills of the board to develop in the areas of technology and customer-focused transformation which are critical to AMP’s success into the future.

“Both Kathleen and Anna will complement the existing skills of the board as AMP embarks on the next phase of its strategy, building its Banking and Wealth Management businesses in Australia and New Zealand.”

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Alexis George

AMP Limited has announced it has entered into an agreement for the sale of Collimate Capital’s international infrastructure equity business to DigitalBridge Investment Holdco, LLC, a wholly-owned subsidiary of DigitalBridge Group, Inc. (DigitalBridge) for an upfront consideration of A$462 million and total value of up to A$699 million.

Combined with the A$430 million from the sale of the domestic infrastructure equity and real estate business announced on 27 April, 2022 and the A$578 million from the sale of the infrastructure debt platform completed in February 2022, this values the total Collimate Capital business at up to A$2.04 billion including the value of retained assets, and up to A$2.5 billion when including the maximum earn-outs.

The AMP Limited Board intends to return the majority of net cash proceeds from the recent transactions to shareholders. The capital return will be subject to requisite regulatory and shareholder approvals. AMP will also use some of the proceeds to pay down corporate debt.

Overview of transactions

AMP has agreed to sell its international infrastructure equity business to DigitalBridge, a leading global digital infrastructure investment firm, in a transaction that values the business at up to A$699 million comprising approximately A$462 million upfront cash payment for the management platform and seed and sponsor investments, an estimated A$57 million of retained future carry and performance fees, and an additional amount of up to A$180 million contingent on future fund raisings. The transaction, expected to complete by Q4 2022^[1], includes:

• international infrastructure equity assets under management (AUM) of A$9 billion^[2]
• the management platform, including Global Infrastructure Fund (GIF) series and other related funds and the majority of unrecognised future performance fees and carried interest
• all of AMP’s seed and sponsor investments in international infrastructure equity funds
• a substantial portion of the teams located across the UK and Europe, North America and Asia.

Impact on capital and separation costs

The net capital impact for AMP Limited of the sale of the international infrastructure debt and equity platforms and the real estate and domestic infrastructure equity business is expected to be an increase of approximately A$1.1 billion. The final amount will be confirmed post transaction completion.

Work to date on the separation of Collimate Capital’s businesses from AMP, as part of the demerger preparations, is well advanced. Accordingly, the incremental transaction and separation costs for the two transactions to sell Collimate Capital’s businesses is approximately A$20 million post tax.

Return of capital

As AMP finalises its capital and liquidity requirements, it is the Board’s intention to pay down a portion of its outstanding corporate debt and to return to shareholders the majority of the net proceeds from the two sales and the sales of the infrastructure debt platform and GEFI business. This is likely to be via a mix of capital return and on-market share buy-back.

The return of capital will be subject to requisite regulatory and shareholder approvals, and completion of the transactions. AMP will provide a further update closer to transaction completion as to the timing and quantum of the return of capital.

Demerger update

As announced yesterday, subject to the completion of the Collimate Capital sales, AMP will no longer pursue a demerger of Collimate Capital.

The Board determined that, when evaluated against a demerger, the two transactions would deliver greater value and certainty for shareholders, accelerate the realisation of that value, and provide greater stability for Collimate Capital’s clients and employees. As part of the transaction, key employees in Collimate Capital have also committed to moving to the new businesses to ensure continuity for clients.

AMP Limited Chair, Debra Hazelton commented: “The transactions we have announced in the past two days represent a strong outcome for AMP shareholders and Collimate Capital stakeholders. It was clear in our 2021 portfolio review that we had two businesses that would be better separated and simplified and in doing so realise greater value and that is what we have achieved.

“AMP and Collimate Capital have built outstanding private markets businesses in infrastructure and real estate over many years. In selling these businesses to such respected specialists in DigitalBridge and Dexus, we are confident that the businesses’ clients and the talented teams transferring with them will benefit.

“Post separation and these sales, AMP Limited has a focused strategy to grow AMP Bank and the wealth management businesses under CEO Alexis George’s leadership with the benefit of a stronger capital and liquidity position.

“As we work through the capital implications of the transactions the Board will be focused on returning the majority of cash proceeds to AMP shareholders.”

AMP Chief Executive, Alexis George commented: “This is an important moment for AMP shareholders, clients and our people, as we announce the sale of our remaining Collimate Capital business. These sales realise significant value for shareholders and deliver certainty for clients and for our people.

“In DigitalBridge and Dexus we are confident we have found the right owners for both businesses. They are focused on delivering strong returns for Collimate Capital’s clients and opportunities for our people. We expect both will add significant value through their scale, capability and depth of talent, which our teams will complement.

“Post completion of the two sales, AMP Limited will be a more focused entity, concentrated on driving our core banking and retail wealth businesses in Australia and New Zealand, with a core objective of accelerating our strategy and increasing our competitiveness.”

As noted in AMP’s announcement yesterday, the full earn-out for the real estate and domestic infrastructure equity business is dependent on the retention of all AUM in the nine months following completion. AMP considers it unlikely the full earnout will be received given anticipated loss of AUM. At this point, AMP anticipates approximately A$3.0 billion of AUM to leave the platform.

The full earn-out for the international infrastructure equity business is dependent on future fund raisings over several years and AMP anticipates the maximum earn-out may not be received.

In addition to the values in the above table, AMP Limited retains other assets that were previously part of AMP Capital, including the Multi-Asset Group (MAG), its China Life AMP Asset Management (CLAMP) investment, and proceeds from the sale of the GEFI business.

Conditions precedent to completion

Completion of the sale to Digital Bridge is subject to conditions precedent, including:

• regulatory approvals
• applicable client and third-party consents
• no material adverse effect occurring prior to completion
• retention of key employees.

———

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Together Mr Snowball and Mr Fay bring broad international experience of financial services and investment management, including real estate and infrastructure investment. Both have strong knowledge and experience of listed companies, corporate governance, and investor engagement.

Mr Snowball, who is based in London, is a respected Board director and executive, with a 30-year career in financial services, in the United Kingdom and Australia. He led the transformation of ASX-listed Suncorp Group as its Group CEO from 2009 to 2015, driving a recovery in the group’s performance and market value.

Since leaving Suncorp, he has served as Chairman of Sabre Insurance Group plc and IntegraFin Holdings plc, both of which he led to successful initial public offerings on the London Stock Exchange. He is currently Chairman of UK-based specialist lender, Provident Financial plc.

Mr Fay, based in Sydney, brings deep experience gained from over three decades working in funds and investment management including as the CEO and Chief Investment Officer (CIO), and later as Chairman, of Deutsche Asset Management in Australia, as well as Regional CIO, Asia-Pacific for the business.

He is currently a non-executive director, and Chair of the Remuneration and Nomination Committee, of ASX-listed Pendal Group, from which he will retire in December 2021.  Mr Fay is also a non-executive director of Spark Infrastructure Group, from which he is due to step down following the completion of a scheme of arrangement to take over the business. He has also served as Deputy Chairman and a non-executive director of Cromwell Property Group, a non-executive director for Gateway Lifestyle and Alternate Director for Dexus Property Group.

Effective 1 November 2021, Mr Snowball and Mr Fay will work with AMP Capital CEO Shawn Johnson and non-executive director Michael Sammells to continue progressing the operational separation and demerger of Private Markets, which remains on track to complete in 1H 22.

AMP expects to make further non-executive appointments to support the planned demerger in 1H 22, with a focus on establishing a Private Markets Board with strong diversity, governance and business experience and global perspective.

AMP Limited Chair, Debra Hazelton commented: “Patrick and Andy are respected business leaders who will bring deep experience, market knowledge and integrity to the Board of Private Markets when it lists next year. Both have led significant financial institutions and have the experience of bringing businesses to a share market listing. Patrick has been a CEO of one of Australia’s largest financial services groups and led its transformation, as well as chairing listed companies in the UK. Andy is a highly regarded non-executive director with an impressive track record in investment management, including infrastructure and real estate.

“These appointments mark another important step as we prepare for the separation and demerger of Private Markets, with Patrick and Andy getting involved to support Shawn Johnson and Michael Sammells to shape the strategy, governance and culture for the stand-alone company. The AMP Board is pleased to welcome them, and we look forward to working together to execute a successful demerger.”

Private Markets Chairman Designate, Patrick Snowball commented: “The Private Markets business has significant potential to be one of the leading global asset managers in private markets, building on the strengths it has already built in infrastructure equity, infrastructure debt and real estate. I feel privileged to be joining the business as it moves to independence, and charting its own future. I look forward to working with Shawn Johnson as we prepare for the demerger of the business next year, establishing a diverse Board of directors and setting a strategy that will realise its full potential in the future.”

———-

[1] Subject to finalisation of onboarding and regulatory confirmations.

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Mr Hirst brings extensive experience to the AMP Board, with more than 40 years in board and senior executive leadership roles.

Mr Hirst was the Chief Executive Officer of Bendigo and Adelaide Bank from 2009 to 2018, following senior executive roles within the bank and with Colonial Limited. He is currently a non-executive director of ASX-listed investment company, AMCIL Limited, and private health insurer, GMHBA Limited. He is also Chairman of Butn, a fintech focused on SME business lending.

AMP Chair Debra Hazelton commented:

“Mike is a respected business leader who will bring significant breadth of experience and insight to the AMP Board.

“As the CEO of Bendigo and Adelaide Bank Mike led and grew the business in a highly challenging and competitive environment with a clear focus on people and clients.

“His detailed knowledge of Australia’s retail banking and wealth environment, as well as his broad sector experience as a non-executive director, including innovative fintech start-ups and across Government, will be invaluable.”

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Mr Johnson served as Senior Managing Director and Chairman of the Investment Committee of State Street Global Advisors (SSGA) for almost a decade. In this role, he had global oversight and responsibility for over 450 investment strategies and US$2.1 trillion in client assets, including management of all SSGA’s private equity businesses.

While at SSGA, Mr Johnson also served as the volunteer Chairman of the Financial Services Sector Coordinating Council (FSSCC) from 2008-10. FSSCC is a non-profit organisation that coordinates critical infrastructure and US homeland security activities within the financial services industry and works collaboratively with key government agencies.

More recently, Mr Johnson led his own alternative investments businesses, including management of a global macro hedge fund and various private investment strategies.

As AMP Capital CEO, Mr Johnson will lead its international growth strategy and the proposed demerger of the private markets businesses (“Private Markets”) which is expected to complete in 1H 22.

Mr Johnson will begin his role on 28 June 2021. Mr Johnson will be based initially in Sydney, Australia but will work on a global basis across the key international offices of the Private Markets business.

David Atkin, AMP Capital Deputy CEO, will continue in his role until 31 July 2021 to facilitate a smooth handover to Mr Johnson, before leaving the organisation as planned.

AMP Chair Debra Hazelton commented: “We are delighted to announce the appointment of Shawn as AMP Capital Chief Executive. Shawn’s extensive experience and knowledge of global investment management, particularly private markets, makes him an exceptional leader for AMP Capital.

“His experience as a leader in one of the world’s largest asset management firms, State Street Global Advisors, where he played a key role in markedly growing the business and navigating the global financial crisis, will be invaluable.

“Shawn has managed a joint venture holding of boutique asset management firms across North America, the UK, Europe and Asia, while also having experience in retirement planning in the US and Australia. Moreover, Shawn’s more recent experience with his own alternative asset businesses is a practical demonstration of his entrepreneurial capabilities.

“As AMP Capital separates from AMP and establishes a new culture and brand, Shawn has clearly demonstrated his capability to lead and inspire teams of highly capable investment professionals.

“We would like to thank both Francesco De Ferrari and David Atkin for their leadership of AMP Capital and are delighted that David has agreed to extend his period as Deputy CEO to ensure a smooth handover to Shawn throughout July.”

Shawn Johnson commented: “AMP Capital is a globally-respected investment manager, and I’m excited by the significant potential for international growth but also in Australia. I’m confident of its underlying strength and the depth of its investment, distribution, and operational talent. Our focus will be to harness these strengths as we set up as a new, independent organisation following separation from AMP.

“It’s an exciting challenge to which I believe I can bring my experience, passion and energy for growing businesses and leading a highly skilled organisation. I look forward to working alongside our talented teams, meeting our key clients, and moving our business forward.”

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Debra Hazelton

AMP Limited has announced its intention to pursue a demerger of AMP Capital’s private markets business (“Private Markets”) of infrastructure equity, infrastructure debt and real estate.

The proposed demerger follows a decision by the AMP Board to conclude discussions with Ares Management Corporation regarding a potential sale of Private Markets.

The demerger would create two more focused businesses, better equipped to pursue and allocate capital to distinct growth opportunities, and realise efficiencies:

• AMP Limited: a retail-focused, wealth management, investment and banking group with scale and market-leading positions in the Australian and New Zealand markets and strategic investments in key international partnerships. AMP Limited will also retain:
  • A minority stake in Private Markets of up to 20 per cent to participate in the future growth of the business
  • AMP Capital’s Global Equity and Fixed Income (GEFI) business, for which AMP is currently exploring sale or partnership options; and
  • AMP Capital’s Multi-Asset Group, which is in the process of being transferred to the AMP Australia business
• Private Markets: a leading global private markets investment manager with a strong performance track record in differentiated asset classes of infrastructure equity, infrastructure debt and real estate, and capabilities to expand into attractive growth adjacencies.

The proposed demerger would unlock further value in the Private Markets business by simplifying its structure, providing operational independence and enabling it to establish a new brand. Private Markets will also put in place a new management equity plan, to attract and retain talented investment professionals and management.

The targeted timeline is for the demerger to be completed in 1H 22.

Leadership

As previously announced, Alexis George will be the CEO of AMP Limited and will be joining AMP in Q3 21.

An international search process for a new CEO to lead Private Markets is already underway, with David Atkin continuing to lead the business on an operational basis.

As part of the separation of Private Markets, AMP Capital’s Global Head of Infrastructure Equity and North West Region, Boe Pahari, has decided to leave the business. Mr Pahari will work closely with the Infrastructure Equity leadership team to ensure a smooth transition.

AMP Chair Debra Hazelton commented: “Our portfolio review confirmed that AMP has two distinct businesses in retail wealth and institutional private markets, with different client bases and growth opportunities. From the extensive work that has been done we believe that operational and structural separation will significantly benefit both business units. The Private Markets business operates in growing, global markets in which investment management talent and strong client relationships are critical. While AMP Australia and New Zealand Wealth Management share the same commitment to clients, they are predominantly domestic businesses focused on wealth, banking and investment solutions for retail customers.

“Through our review, we assessed the alternatives of a sale or separation for Private Markets and found both options would support the acceleration of growth in the business. We have had substantial and constructive discussions with Ares regarding a sale, however, we have not been able to reach an agreement that would deliver appropriate value for our shareholders. The Board has therefore concluded a demerger provides investors with the strongest value outcome, creating two more focused entities, with the agility to pursue new growth opportunities in their respective markets. We will now accelerate our demerger planning, building on the preliminary work already undertaken.”

Next steps

AMP will commence the internal separation of Private Markets immediately, including establishing operational independence for management, new branding and a Private Markets Board of Directors. Michael Sammells will be appointed as interim Chairman of the Private Markets Board. Mr Sammells, a non-executive director of AMP Limited and current Chairman of AMP Capital, has extensive experience with private equity and preparing a company for an ASX listing.

On demerger, existing AMP shareholders would receive shares in Private Markets proportional to their existing shareholdings in AMP Limited, after taking into account any shares to be retained by AMP. Under the proposed demerger, Private Markets is expected to be listed on the ASX.

A demerger would be subject to final AMP Board approval, required regulatory approvals, applicable consents and approval from AMP’s shareholders. Further details regarding capital structure, dividend policy, separation, management and governance will also be announced in due course.

Having concluded the portfolio review the Board will restart the share buy-back of up to A$200 million.

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Alexis George

AMP Limited has announced it has appointed Alexis George as its new group Chief Executive Officer (CEO), to take over from Francesco De Ferrari who will retire from the role as the company completes its portfolio review.

Ms George will join AMP from ANZ where she has served as Deputy Chief Executive Officer, as well as Group Executive Wealth Australia, overseeing the sale of the business in 2018. She will join AMP Limited as CEO in Q3 this year, subject to required regulatory approvals.

Mr De Ferrari will continue to lead AMP during the interim period and ensure a smooth handover to Ms George. He will continue to work in partnership with the Board and lead AMP’s key strategic initiatives, including discussions on the proposed transaction for AMP Capital’s private markets business with Ares Management Corporation.

AMP Chair Debra Hazelton commented: “On behalf of the Board, I would like to thank Francesco for his significant service to AMP and recognise his commitment to a smooth leadership transition. We wish him every success for the future and know he will continue to be the exemplary leader he has been at AMP. As we noted last week, with our portfolio review reaching completion, the Board and Francesco agreed that it is an appropriate time to begin the transition to a new CEO to take AMP forward.

“Francesco has led AMP through an extraordinary period, responding to unprecedented external challenges, all while successfully executing a complex transformation program. His strategy has materially reshaped the group, simplified AMP and sharpened the focus of each of our businesses on their strongest growth opportunities. He led our business through the disruption of COVID-19 and successfully delivered key programs including client remediation and the completion of the sale of AMP Life.

“In Alexis George, we have a great leader and strong fit for the future of our company. On any measure, she has outstanding industry experience in wealth management and banking, and is committed to continue the transformation of AMP’s business, and importantly, our organisation’s culture. Alexis will work with our executive team to complete and build on the strategic initiatives started under Francesco’s leadership and take AMP forward to its next phase of growth.”

Francesco De Ferrari commented: “On our transformation journey we have taken bold steps to rebuild AMP as a simpler, client-led and growth-oriented business. We have completed the AMP Life sale, embarked on the reinvention of wealth management in Australia and repivoted AMP Capital towards its strength in private markets.

“The portfolio review concluded that unlocking the growth potential in private markets is best delivered either in partnership with a global player or via separation from the group. As a result, the future AMP will be largely focused on domestic wealth management and banking opportunities. I’m confident this will deliver the strongest outcome for our shareholders, however, it means the group will have a very different business mix and geographic profile requiring a different strategic focus from the CEO.

“While there is no optimal time for transition, the Board and I agreed that for AMP to deliver on the next phase of its ambitious transformation, at this juncture long-term certainty of leadership is critical for our business, our employees and our clients. Leading AMP, a business that is part of the fabric of Australia and New Zealand, is a privilege. I wish Alexis and AMP only the best and you can count on me to continue cheering for its success from the sidelines.”

Alexis George biography

Alexis has more than 25 years’ experience in the financial services industry in Australia and overseas.

She spent seven years at ANZ, including most recently as the Deputy Chief Executive Officer, working with the CEO to drive group-wide strategic initiatives in addition to responsibility for its shared service centres and banking services.

As the Group Executive Wealth Australia, Alexis led ANZ’s ~$4 billion wealth divestment program, including the separation and sale of its life insurance and superannuation businesses.

Prior to ANZ, Alexis spent ten years with ING Group in a number of senior roles including CEO Czech Republic and Slovakia responsible for banking, insurance and funds management and Regional COO Asia responsible for product, marketing, technology and operations.

Alexis is a member of the Institute of Chartered Accountants and a graduate of the Australian Institute of Company Directors. She is a member of Chief Executive Women.

Summary of new CEO contract

• Salary (including superannuation) of A$1.715 million per annum.
• Short-term incentive opportunity equivalent to 100% of salary for on-target performance, and 200% at maximum, subject to achievement of performance hurdles and other terms.
• A maximum long-term incentive opportunity with a target value equivalent to 100% of salary, subject to achievement of performance hurdles and other terms.
• Sign-on award with a face value of A$4.091 million to be delivered in AMP equity, to replace existing incentive arrangements foregone with previous employer, comprising:A$1,086,911 subject to a continued service condition.
  • A$750,862 subject to a Total Shareholder Return (TSR) condition, which will require compound annual growth in AMP’s TSR of 8.5% or greater for full vesting to occur. 50% of the award will vest if AMP’s TSR is positive with pro-rata straight line vesting between 50% and 100%.
  • A$2,252,669 subject to a relative TSR condition, with 100% vesting if AMP is in the 75th percentile or higher of ASX 100 Financials. 50% of the award will vest if AMP is in the 50th percentile of the ASX 100 Financials, with pro-rata straight line vesting between 50% and 100%.
  • All sign-on awards outlined above will vest in tranches over a three-year period (to November 2024), if required conditions are met.
• A further sign-on award with a face value of A$732,500, delivered in cash in December 2021 subject to a continued service condition.
• Either party can terminate the agreement with six months’ notice. The Company may summarily terminate the CEO’s employment without notice in certain circumstances.
• There is a post-employment restraint of 12 months.

Summary of Francesco De Ferrari’s exit arrangements

• Francesco has agreed to stay in the CEO role until at least 1 July 2021, after which time he will be available to the Company to assist with handover and ongoing support.
• All of Francesco’s incentives will be treated in accordance with his contract and the original offer terms, as previously disclosed.
• Francesco will remain eligible for his short-term incentive for 2021. In addition, he will receive a payment of A$300,000 (less applicable tax) in respect of the additional work he undertook in FY 2021 to support the AMP Capital business. He will not be eligible to receive any other incentive awards in respect of future years.
• Francesco will receive a lump sum of A$200,000 (gross) as reimbursement of some of his relocation costs. Francesco will also be entitled to be provided with taxation and visa advice.

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Francesco De Ferrari

AMP Limited (“AMP”) and Ares Management Corporation (NYSE: ARES) (“Ares”) today announced that they have entered into a non-binding Heads of Agreement to pursue the formation of a joint venture for AMP Capital’s private markets businesses of infrastructure equity and infrastructure debt, real estate and other minority investments (“Private Markets”).

Under the proposed transaction, Ares would acquire 60 per cent of Private Markets and assume management control, with AMP retaining 40 per cent. AMP and Ares will enter into a 30-day period of exclusivity, to work towards a binding transaction.

The partnership would facilitate an acceleration of the growth of Private Markets, while unlocking immediate value for AMP shareholders. Ares, with a current market capitalisation of more than US$13 billion, has a global footprint and capabilities in credit, private equity and real estate which are highly complementary to Private Markets.

The key components of the proposed transaction are as follows:

• A Private Markets joint venture valued at A$2.25 billion (excluding retained assets and contingent consideration outlined below) with Ares acquiring 60 per cent for A$1.35 billion and AMP retaining the residual 40 per cent (A$0.90 billion).
• The Private Markets joint venture businesses will include:
  • Infrastructure equity
  • Infrastructure debt
  • Real estate
  • Other minority investments.
• AMP to retain up to A$0.9 billion of assets and contingent consideration related to the current private markets businesses comprising:
  • Seed and sponsor and related investments of approximately A$0.5 billion
  • Surplus capital released of A$0.1 billion; and
  • Contingent consideration of up to A$0.3 billion related to future performance including carried interest from existing funds
• Total implied value for AMP Capital’s existing private markets business of up to A$3.15 billion.
• AMP will retain ownership of AMP Capital’s public markets businesses, which in FY 20 made a modest NPAT contribution. The public markets strategy will continue, including the Multi-Asset Group (“MAG”) being transformed and transferred to AMP Australia, and actively exploring sale or partnership opportunities for the Global Equities and Fixed Income (“GEFI”) business.
• The joint venture is expected to raise A$0.5 billion of debt to maximise capital efficiency which would reduce the pro rata equity contributions for each party in the joint venture. Therefore, under this assumption, Ares would fund A$1.05 billion in equity to the joint venture and AMP would receive expected gross cash proceeds of up to A$1.55 billion (before separation costs and capital release).
• The board of the Private Markets joint venture would initially comprise 10 board seats with six nominees from Ares and four from AMP.
• Ares and AMP to have structured call and put options, respectively, in relation to AMP’s residual holdings in Private Markets, commencing after five years.

The joint venture would enable the Private Markets business to benefit from Ares’ brand and global strengths in investment and distribution as well as already strong infrastructure and real estate capabilities, and continue to build upon AMP Capital’s well-established processes and investment capabilities, improving its scale and potential growth trajectory. At 31 December 2020, Ares had US$197 billion in assets under management (AUM), after growing both AUM and fee-related earnings in excess of 30 per cent over the year and fundraising a record US$41.2 billion. Ares managed US$18.3 billion in infrastructure and real estate AUM with over 100 investment professionals in North America and Europe.

The proposed partnership would enable AMP shareholders to benefit from both the anticipated accelerated growth of Private Markets through its 40 per cent shareholding, as well as realising value from Private Markets’ growth to date. Ares shareholders would benefit from the strategic global expansion of its infrastructure and real estate strategies which would total to over US$60 billion in total AUM, as of 31 December 2020 on a pro forma basis.

If agreed, the transaction will be subject to regulatory approvals, an Independent Expert’s Report, approval by AMP’s shareholders and other customary conditions precedent, including change of control approvals. AMP shareholders do not need to take any action at this stage.

The proposed transaction will mark the conclusion of AMP’s portfolio review.

During the exclusivity period, the AMP group must not directly or indirectly solicit, engage with or accept any competing proposal (including any proposal that may prevent, prejudice or jeopardise the transaction as well as a change in control of AMP), or any inquiries, indications of interest, offers or discussions with, or furnish any information to, any third party in relation to a competing proposal, or that could reasonably be expected to lead to a competing proposal or to AMP not proceeding with the transaction.

There is no certainty that a transaction will proceed, or the terms on which it would proceed.

AMP Chair Debra Hazelton and AMP Chief Executive Francesco De Ferrari commented: “We believe the proposed partnership with Ares would deliver strong outcomes for our clients, our shareholders and our broader business. We expect it would strengthen the business and significantly accelerate our strategy to grow private markets, while de-risking our international expansion plans, and bringing forward the value in AMP Capital for our shareholders. The joint venture would also enable AMP shareholders to participate in anticipated accelerated growth from a business with increased global scale and capability.

“The transaction will enable AMP to increase focus on the transformation of our wealth management business in Australia, drive the continued growth of AMP Bank and New Zealand wealth management and benefit from driving further efficiency. We look forward to working towards a binding agreement with Ares, which will mark the conclusion of the portfolio review.”

Ares Management Corporation Chief Executive Michael Arougheti commented: “We are excited to further expand our real estate and infrastructure investment capabilities through our partnership with AMP.  We believe we can add significant value through our global scale, relationship network, investor relationships and our broad, collaborative investment platform. We’ve been impressed by the growth of AMP Capital’s private markets business over the past several years and our time with the team as part of the portfolio review has further cemented our view on the intrinsic value of this business under our leadership. We expect that this transaction would be highly strategic and complementary to our business and financially accretive for our shareholders.”

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Debra Hazelton

The AMP Limited Board has announced it will undertake a portfolio review of the Group’s assets and businesses.

The Board remains committed to AMP’s transformation strategy and is confident that this will deliver long-term value for shareholders. As updated at the 1H 20 results, following the successful completion of the AMP Life sale, AMP is making significant progress in driving its strategy – reinventing wealth management in Australia, growing its asset management franchise (including a repivot to private markets and refocusing public markets), and creating a simpler, leaner business.

However, AMP periodically receives unsolicited interest in its assets and businesses, and recently has experienced an increase in interest and enquiries. The Board has therefore decided to undertake a portfolio review to assess all opportunities in a considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value.

The review may conclude that AMP’s current mix of assets and businesses delivers the best value for shareholders and may not result in a recommendation to pursue any specific transaction.

Throughout the review, AMP business units will remain focused on implementing the company’s transformational strategy and delivering for clients.

Credit Suisse, Goldman Sachs and King & Wood Mallesons have been appointed as AMP’s advisers to manage the review.

AMP Chair Debra Hazelton said: “The Board believes that AMP has high-quality businesses with significant strategic value. The Board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital and are confident that this will deliver long-term value for shareholders.

“However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”

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