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Good investing requires real sacrifices, according to Oaktree’s Howard Marks, but you can’t expect to be compensated just for making them.
AMP listed restructure as Mitsubishi takes a bigger bite
by David Chaplin
AMP Capital has created a new ‘public markets’ business to be headed by Sydney-domiciled Simon Warner, previously global CIO for fixed income. The London-based equities CIO, David Allen, will report to Warner.
Multi-asset group (MAG) New Zealand-born chief, Sean Henaghan, heads off an a 15-month “sabbatical” next March with his direct reports “reappointed” to Warner.
“… Henaghan will continue as a member of the AMP Capital Leadership team and will report to CEO Adam Tindall,” the group says in a release. The new AMP Capital Public Markets division houses about $140 billion of the group’s total $189 billion under management.
AMP Capital, including the NZ division, will remain under the broader ASX-listed entity umbrella following a major revamp revealed late in October. The AMP move saw the group offload its life insurance and ‘mature’ books while slating NZ financial services for an IPO next year.
Also last week, Japanese financial conglomerate Mitsubishi UFJ (MUFJ) – which owns 15 per cent of AMP Capital – announced the purchase of the Colonial First State Global Asset Management (CFSGAM) business for about A$4.2 billion. Commonwealth Bank, which owns CFSGAM, previously announced plans for an IPO of the asset management and wealth business.
AMP’s share price bumped a little higher from historic lows following the CFSGAM news and a rumoured takeover bid by Macquarie. As at last Friday AMP was trading at A$2.69 compared to a low of about A$2.30 last week.
It is understood that Mitsubishi also had preliminary discussions with AMP about buying the funds management subsidiary, but now there is a perceived cloud over its 15 per cent stake, stoking the rumour of another buyer.
According to a Bloomberg report, MUFJ was likely looking to CFSGAM as a way to tap into the burgeoning Australian superannuation fund market and “pick up some expertise to benefit existing clients” rather than a quick return on capital.
“If the motivation is chasing overseas growth to offset a stolidly unexciting domestic Japanese market, too, CFSGAM is an odd way to go about it,” Bloomberg says. “Fund-management income at the unit has essentially stood still for a decade, even as assets under management have grown by about half. New investors aren’t exactly beating down the door: Net outflows in 2018 came to A$25.9 billion.”
CFSGAM was initially to be included in an IPO of Commonwealth Bank of Australia (CBA) wealth management assets planned for later this year.
Instead, the IPO will only bundle up the remaining CBA wealth assets – namely investment platform and third-party financial advice groups – for the ASX. Former Westpac executive and current head of high-end peer-to-peer lender, SocietyOne, Jason Yetton, will lead the Colonial First State spin-off, CBA said last week.
Over the last couple of years, Australia’s big four banks and AMP have collectively offloaded more than A$18 billion of assets, Reuters reported last week, following commercial and regulatory pressures – most notably the ongoing Royal Commission into financial services.
– Investment News NZ
