Fund manager corporate action hit another high across the Tasman last week as a buyer loomed into frame for the AMP Capital listed investments business and Nikko sold down its Australian operations to a boutique firm.
According to Australian media reports, ASX-listed financial services firm Challenger was kicking tyres on the AMP Capital public equities and fixed income arm, which was slated for sale late in February.
AMP chief, Francesco De Ferrari, put the group’s listed equities and fixed income funds on notice when announcing a revised deal with potential suitor Ares Management late in February.
In a deal flagged last year, Ares was to buy all of the ASX-listed AMP for about A$6.5 billion but the firm baulked at the last moment, proposing a more limited agreement.
Ares is currently half-way through a month-long exclusive period to finalise details of the proposed joint-venture that would see the US manager take 60 per cent of the AMP Capital infrastructure debt and real asset business. Under the mooted JV, AMP Capital would retain the remaining 40 per cent of the real assets arm.
But De Ferrari said in a statement at the time that AMP was “actively exploring sale or partnership opportunities for the Global Equities and Fixed Income (“GEFI”) business”.
“Ultimately, it is a scale game. Size really counts in terms of being able to invest in the platform and global distribution,” he told Australian press. “We have a great product, but we simply do not have the scale to grow this globally.”
AMP Capital NZ is largely exposed to the for-sale GEFI business but it also manages funds in the so-called ‘multi-asset group’ (MAG) family.
The MAG funds will be shifted this year from AMP Capital control to the new AMP Australia unit (comprising wealth management and banking) as part of the group’s ‘transformational’ strategy “to create an end-to-end super and investment platform business”, the firm said at its full-year results announcement early in February.
AMP share price was down almost 5.7 per cent last week to A$1.41.
But while the fate of AMP Capital hangs in the balance, last week Nikko engineered a surprise majority sale of its Australian funds business to Yarra Capital.
Following the deal, Nikko will retain a 20 per cent stake in the broader business.
Yarra launched in 2017 in an earlier management buyout (backed by US private equity player TA Associates) of the Goldman Sachs Asset Management Australian equities business.
TA Associates is also part-owner of Russell Investments and the NZ boutique, Fisher Funds.
Post-sale the Nikko fixed income team will operate under the Yarra banner while the newly acquired Australian equities division will resurrect the old Tyndall brand.
Yarra managing director, Dion Hershan, said in a statement: “We are also extremely pleased to bring Nikko AM on board as a strategic investor alongside TA Associates. This partnership will help us expand the global reach of our investment strategies, in particular in Japan where we have achieved significant growth in recent years.”
Hershan will move to the executive chair role on completion of the restructure.
George Carter, Nikko NZ chief, said the Australian sale would not affect the business on this side of the Tasman.
“We are a profitable, stand-alone business that has operated separately from Australia for a long time,” Carter said.
He said the Nikko NZ “unplugged” from the Australian business when the Japanese firm bought the storied Tyndall asset management firm in 2011.
The Nikko Australian equities business does, however, have a sizable exposure in NZ via a roughly $1 billion mandate with ANZ Investments.
In 2018 ANZ Investments awarded Nikko the-then $850 million Australian equities mandate to replace incumbent, Arnhem Investment Management, which shuttered that year.