NZ institutional investors have piled into two long-standing Australian-domiciled AMP Capital infrastructure funds for the first time as local interest in the asset class accelerates, according to the group’s NZ chief, Grant Hassell.
In a statement last week, Hassell said more NZ investors were “seeking to increase their exposure to the [infrastructure] asset class” attracted by its “stable long-term returns and defensive qualities”.
He said the inaugural batch of NZ investors (including several iwi funds) in the AMP Capital Diversified Infrastructure Trust (ADIT) and AMP Capital Core Infrastructure Fund (CIF) – established in 1995 and 2007, respectively – were also swayed by the products’ environmental, social and governance (ESG) process.
NZ investors were “particularly interested in funds and assets that have strong ESG credentials”, Hassell said in the statement.
“ADIT and CIF are actively managed against a rigorous ESG framework, which has caught the attention of a number of New Zealand investors,” he said.
The $1.3 billion ADIT, which currently boasts 25 institutional clients across Australia, Asian and NZ, “primarily targets mature unlisted assets with diversified exposure to transport links, transport nodes, energy and utilities, and social infrastructure”, the AMP statement says.
According to the release, the $540 million CIF offers “diversified exposure to multiple sectors, OECD regions and asset types including airports, transport infrastructure, water, gas, and electricity”.
Overall, AMP Capital has grown its external institutional business strongly with ex-Australia client numbers up 46 per cent to 291, according to the parent group’s latest financial report released earlier this month.
AMP Capital, which grew profit 8 per cent in the last financial year to A$156 million, appears to have secured a place in the parent stable as several units in the business, including the NZ financial services arm, faced review.
Craig Meller, AMP chief, told investors the fate of the “manage for value” business units – life insurance, the ‘mature’ book, and NZ financial services (which includes the fourth-largest KiwiSaver scheme) – would be announced prior to the group’s AGM in May.
According to the Australian Financial Review, AMP has struggled to offload its troublesome life insurance arm with both the ASX-listed annuity firm Challenger and US insurer AIG reportedly losing interest in a deal.
The AMP life insurance business racked up a profit of A$848 million in the latest annual results after losing A$344 million over the previous year. However, margins in the life business fell as new AMP reinsurance agreements took effect.
Meller said “all alternatives [regarding the life business] were being considered and talks continued with a number of parties”, the AFR reported.
The group’s strategy note issued along with the annual results plonks AMP Bank, Australian Wealth Management (advice and investment platforms), and AMP Capital under an ‘invest to grow’ label. Global investment management, offshore partnerships (such as current deals with China Life and Mitsuibishi UFJ Financial Group), and international advice and “innovative” operating systems, would accelerate further growth, the AMP note says.
Meanwhile, former Perpetual chief, Geoff Lloyd, was being touted as a potential successor to Meller, the AFR reported.