AMP has knocked A$30 million off the upfront price of its global equities and fixed income (GEFI) unit following a A$13 billion slump in assets under management last year.
Under a deal first brokered mid-2021, Macquarie agreed to buy the GEFI business – which includes most of the AMP Capital NZ arm – for up to A$110 million in cash and a further A$75 million up for grabs in a two-year earn-out period.
“The aggregate consideration was subject to meeting certain conditions,” according to an AMP annual results document released last week, “including revenue targets, with the upfront cash component now expected to be approximately A$80 million.”
Macquarie is due to take possession of GEFI by the end of next month in a move that will add A$46.6 billion to the firm’s funds under management (FUM) based on the December 31 figure: at the same time in 2020 GEFI managed almost A$60 billion.
AMP Capital NZ accounted for a large chunk of the GEFI asset reduction after shifting about A$9.2 billion to BlackRock when still-sister firm, AMP Wealth NZ, reset most of its KiwiSaver and superannuation funds to a passive mandate.
Overall, the AMP Capital NZ business (likely to be rebranded as Macquarie at some point) reported net outflows of more than A$13.7 billion over 2021 as total FUM fell from about A$21.7 billion at the start of the year to under A$7.9 billion by December 31.
The soon-to-be-dismantled AMP Capital conglomerate reported FUM of close to A$178 billion at year-end compared to almost A$190 billion 12 months previously.
Aside from the GEFI assets, the company has re-homed over A$71 billion of AMP Capital third-party managed funds (dubbed the multi-asset group – or MAG) under AMP Australia control while pinning big payday hopes on a planned listing or sale of the A$40 billion plus private markets business.
The AMP Capital private markets unit – re-named as Collimate Capital last week – was slated for an ASX listing later this year with AMP retaining up to 20 per cent of the stock.
However, Collimate – an obscure term plucked from physics describing parallel alignment – might be sold prior to listing with gathering interest from private buyers.
In a statement last week, AMP confirmed “it has received inbound enquiries regarding the AMP Capital business, which is not unusual at this point in a demerger preparation process”.
“AMP will consider any approaches in line with its obligation to act in the best interests of shareholders,” the release says.
Either way, AMP should be rid of any in-house funds management capabilities later this year, leaving a bank, a still loss-making Australian wealth management business and the NZ wealth arm intact.
AMP Bank turned in a net profit after tax of A$153 million last year (a tad under the AMP Capital result of A$154 million) followed by A$48 million and A$39 million for the Australian and NZ wealth divisions, respectively.
Despite the underlying divisional profits, miscellaneous costs of some A$608 million dragged AMP into the red by A$252 million for the year: the company won’t pay a final dividend, the release says.
The Australian wealth business continues to be weighed down by costly legacy advice issues and restructure expenses, dragging on a decent investment platform growth.
AMP NZ Wealth, by contrast, kept profit about even year-on-year despite experiencing significant net outflows of $1 billion plus from its KiwiSaver (losing about $700 million from the default scheme change alone) and other funds. The NZ business reported net profit after tax of A$39 million for 2021, split between A$25 million from wealth management while financial advice contributed A$14 million.
But the NZ profit looks set to fall this year due to “margin headwinds and amended general insurance arrangements”, AMP says.
AMP NZ adviser numbers (all now under the AdviceFirst brand) dropped to 53 from 57 at the end of 2020 while total staff figures declined from 345 to 311 over the same period.
Blair Vernon, AMP NZ chief, said in a release: “Looking ahead we will continue to innovate our business including further enhancing and simplifying our products and services to deliver more value for clients. In the first half of the year this includes our intention to deliver a new digital only managed fund product, leveraging our state-of-the-art technology and our sustainable investment approach to help our clients continue to grow their investments.”
Vernon returned to NZ in January 2021 following a short stint as head of AMP Australia that saw him rewarded with ‘key management personnel’ (KMP) remuneration of A$650,000.
The total KMP remuneration pool (including base pay, superannuation plus various other performance-based benefits) at AMP tipped above A$25.3 million last year – more than double the 2020 amount partly due to the $7.6 million allocation to departed CEO, Francesco De Ferrari.
De Ferrari replacement, Alexis George, said in a statement: “We have good momentum in the transformation of AMP, repositioning our core capabilities to take advantage of the opportunities ahead of us, as we progress towards and beyond demerger as a simpler and purpose-led business.”
As well as a busy restructuring schedule AMP plans to build some direct-to-consumer banking and wealth management products this year, the results presentation says while also continuing “to review [the] portfolio of assets to ensure AMP is the right owner”.