AMP has confirmed the final tally of its NZ wealth subsidiary BlackRock-conversion landed at about $9.6 billion (or A$9.2 billion).
Signaled last August, the move to a BlackRock passive mandate for the bulk of the AMP KiwiSaver and other superannuation funds came at cost of sister firm, AMP Capital NZ, which saw its asset under management effectively halved following the transition started this July.
According to an ASX market update last week, the AMP Capital NZ arm lost over A$4.5 billion in global equities and A$3.7 billion in fixed income along with a smattering of property (A$179 million) and alternative assets (A$386 million) post the BlackRock transition.
Previously, AMP Capital NZ managed over NZ$20 billion. The Wellington-based manager is slated to fall under Macquarie ownership by the end of the March quarter next year.
Macquarie agreed to buy the AMP Capital listed global equities and fixed income (GEFI) book for a maximum A$185 million this July in a deal that included the AMP Capital NZ business. At the time, the total GEFI assets amounted about A$60 billion.
In a wide-ranging restructure, AMP is also shifting its multi-asset funds (essentially, third-party investment products) from AMP Capital to AMP Australia control while preparing to spin-off its ‘private markets’ unit in an ASX-listing next year.
Excluding the A$9.2 billion NZ mandate loss, the wider AMP Capital business saw net outflows of over A$2.7 billion in the September quarter with all asset classes bar infrastructure equity recording negative flows. Overall, AMP Capital assets under management dropped more than A$7 billion during the three months to September 30 to close at just above A$182 billion.
Alexis George, AMP chief, said in a release that the outflows “primarily reflected” the NZ wealth management call to change to “an index-based investment strategy”.
“Our private markets teams have continued to invest on behalf of our infrastructure clients and build its pipeline of opportunities,” George said.
She said the private markets demerger was on track for the middle of 2022 with a further update due at the AMP ‘investor day’ in November.
And in addition to the AMP NZ win, BlackRock last week also secured a A$15 billion mandate from the Commonwealth Bank of Australia (CBA)-owned Colonial First State (CFS) to manage investments for its two MySuper funds (akin to KiwiSaver default products).
CFS says in a release that the arrangement “includes, but is not limited to, access to research, recommendations and Aladdin – BlackRock’s proprietary risk and investment system”.
“BlackRock will also provide access to its very strong and diverse investment capabilities (including to third parties via its manager selection team), and sophisticated portfolio and risk management BlackRock’s scale also allows us to lower costs, which has already supported a reduction in the administration fee for FirstChoice Employer Super customers,” the CFS statement says.
Earlier this year, the NZ CBA subsidiary, ASB, revealed a similar deal with BlackRock to oversee the bank’s $20 billion or so of KiwiSaver and other funds.
BlackRock manages about A$150 billion on behalf of Australian and NZ clients, the CFS release says.
During the September quarter, AMP wealth NZ reported net outflows across its newly BlackRocked investment business of almost A$40 million (compared to A$13 million negative flows in the same period last year). Net outflows of almost A$80 million from the AMP NZ superannuation and other products were partially offset by a positive contribution from the KiwiSaver scheme of A$40 million (down from A$64 million in the 2020 September quarter).
As at the end of September, AMP NZ reported about A$12.8 billion under management, split about equally between its KiwiSaver and other products.
The AMP KiwiSaver scheme is set to lose between $800 million to $900 million later this year as it ends a 14-year stint as default provider. AMP, along with four other incumbents, must begin transitioning its ‘non active choice’ default members to newly appointed providers from December 1 under a 75-day deadline to complete the switch.