Macquarie has emerged as the new owner of AMP Capital NZ, ending almost a year of uncertainty about the future of the funds management group and marking a return across the ditch for the so-called ‘Millionaires Factory’.
The NZ investment operation was slated for sale as part of the parent AMP company plan to offload its Global Equity and Fixed Income (GEFI) arm, which Macquarie bought for about A$185 million.
In a statement, acting AMP chief, James Georgeson, said: “In bringing together two well-known Australian investment businesses with strong track records, we’re pleased to deliver such a positive outcome for our clients, our GEFI teams and AMP shareholders. Our review of the GEFI business last year showed it had strong investment capabilities and performance but needed greater scale and broader distribution reach to compete effectively.”
The NZ component of the GEFI, which will likely see assets under management halve to about $10 billion in July as sister firm, AMP Wealth NZ, shifts most of its KiwiSaver and superannuation funds to BlackRock. Both BlackRock and Macquarie were previously tipped as potential buyers for the AMP Capital GEFI assets.
AMP Capital NZ is headed by Rebekah Swan, who took over from Bevan Graham last year amid a raft of departures at the Wellington-headquartered firm. The NZ business manages local fixed income assets in-house with equities outsourced to other firms, most notably Salt Funds Management.
Swan said: “Macquarie Asset Management is a great home for the GEFI and NZ business, given its deep expertise in asset management and similar commitment to delivering for clients. We are excited to be working with MAM, it’s great for our clients, great for our team and we are really pleased and looking forward to the future.”
In April this year, AMP revealed a new strategy to list the more profitable AMP Capital private markets business as a stand-alone entity while earmarking GEFI for sale or ‘partnership’ deals.
The announcement followed a long-winded, and ultimately aborted, process to sell first the entire ASX-listed business and then the AMP Capital private markets division to US firm Ares Management.
March quarter AMP Capital results released at the end of April value the listed equities and fixed income assets at about A$130 billion out of the group’s total funds under management (FUM) of A$186 billion. However, Macquarie will assume control of just A$60 billion (including the AMP Capital NZ $9 billion or so contribution) under the GEFI deal. Post completion, Macquarie assets under management will hit A$720 billion, the release says.
Former AMP chief, Francesco De Ferrari, said in April the company was “continuing to make progress on potential sale or partnership opportunities” for GEFI.
At the time he said the mooted “demerger” of the private markets business would “provide our clients with the optimal structure to provide stability, including operational independence”.
“The demerger will create a focused private markets business that is better equipped to pursue and allocate capital to distinct growth opportunities,” the now ex AMP chief said.
De Ferrari formally wrapped up his near three-year term helming the troubled financial services giant at the end of June with his replacement, Alexis George, due to assume the role on August 2.
Meanwhile, former US hedge fund manager, Shawn Johnson, started as the new AMP Capital chief also near the end of June, replacing caretaker operational head, David Atkin.
Ben Way, head of Macquarie Asset Management, said in the release today: “This transaction represents another opportunity to add high-quality, complementary capabilities as we continue to scale the MAM public investments platform. It cements Macquarie’s position as the leading investment manager in Australia by AuM and allows us to further diversify our client offering and bring new opportunities to clients joining us from AMP Capital. Clients will be at the centre of our considerations as we work closely with AMP on a successful integration.”
Macquarie previously owned the seminal NZ boutique fund manager, Brook Asset Management, taking full control in 2008 after first buying almost half of the company in 2006.
But just six years after completing the buyout, Macquarie wound-up Brook in the wake of massive outflows that saw FUM drop to about $60 million from a peak of more than $1 billion. In 2018 Macquarie also exited its NZ wealth management business in a buy-out deal engineered by Warren Couillault, who rechristened the firm, Hobson Wealth. Macquarie retains just under 9 per cent of Hobson shares.
AMP has been through significant changes since emerging on the wrong end of proceeding in the 2018/19 Australian Royal Commission (RC) into financial services.
Post the RC – and other distractions including a sexual harassment scandal involving the (briefly) AMP Capital chief, Boe Pahari – AMP has shrunk its once-dominant Australian financial advice network, sold the life insurance division, consolidated other wealth management functions into AMP Australia (including transferring the Multi-Asset Group funds from AMP Capital) and devised the funds management break-up plan. Once tagged for sale as a ‘manage for value’ asset, the AMP NZ wealth management business now also remains part of the parent ASX-listed group.
AMP NZ manages about $12 billion including about $6.4 billion in KiwiSaver and $3.6 billion in the workplace superannuation platform, the NZ Retirement Trust.