Mercer has awarded a $1 billion plus cash mandate to Nikko Asset Management NZ, moving the long-held allocation from AMP Capital.
It is understood the Mercer money shifted a couple of weeks ago to its new home.
Cash is a low-margin but nevertheless critical asset class for institutional managers even with interest rates hovering close to zero.
According to the Melville Jessup Weaver (MJW) 2020 December quarter investment survey, AMP Capital was the second-largest cash manager in NZ with about $3.2 billion under management behind ANZ Investments ($5.8 billion).
The rest of the cash market, as measured by MJW, was shared among Westpac NZ subsidiary BT ($1.3 billion), Fisher Funds ($1 billion), Nikko ($830 million) and Kiwi Invest ($500 million).
Meanwhile, the fate of the broader AMP Capital business remains uncertain as its ASX-listed owner engineers another leadership change and negotiates the sale or restructure of various components.
As reported last week, in the wake of market speculation AMP confirmed chief, Francesco De Ferrari, would leave the firm within a few months. Current ANZ Australia deputy chief, Alexis George, would replace De Ferrari in the third quarter of this year, AMP said in statement.
De Ferrari took the reins at AMP in January 2019, replacing former interim chief, Mike Wilkins, who in turn had assumed the role following the resignation of incumbent Craig Meller earlier in 2018.
In a corporate statement released last Thursday, the outgoing AMP chief says the firm’s “transformation journey” under his watch had created “a simpler, client-led and growth-oriented business”.
“We have completed the AMP Life sale, embarked on the reinvention of wealth management in Australia and repivoted AMP Capital towards its strength in private markets.
“The portfolio review concluded that unlocking the growth potential in private markets is best delivered either in partnership with a global player or via separation from the group,” De Ferrari said. “As a result, the future AMP will be largely focused on domestic wealth management and banking opportunities.”
But as at last week, AMP had yet to finalise a mooted sale of its private markets investment arm to US firm Ares Management after emerging from a month-long exclusivity period intended to knock out a joint venture deal. Instead of the planned 60/40 split between Ares and AMP, the Los Angeles-headquartered manager was now angling for 100 per cent of the AMP Capital private markets business, the ASX-listed group said in a statement.
In regulatory filings in the US, Ares said the two firms “continue discussions on a potential transaction involving AMP’s private markets business, any potential transaction would be subject to a variety of conditions and structural considerations and Ares continues to conduct its due diligence”.
“There is no certainty that a transaction will proceed, or the terms, size and structure on which it would proceed. Any transaction could materially differ with respect to size, structure or other material terms in the Heads of Agreement as previously disclosed.”
Last week, though, Ares inked a US$1 billion plus deal to buy Landmark Partners, one of the largest firms “acquiring secondary private fund ownership stakes in the alternative asset management industry”, according to a release.
As well as looking to offload the private markets assets, De Ferrari earlier announced AMP was “actively exploring sale or partnership opportunities for the [AMP Capital] Global Equities and Fixed Income (“GEFI”) business”.
The GEFI business covers the AMP Capital in-house managed funds, including the NZ fixed income business: other funds managed by external firms fall under the multi-asset group (MAG), which is being transitioned to the control of AMP Australia (which houses the wealth management and banking divisions).
“Ultimately, [managing listed assets] is a scale game. Size really counts in terms of being able to invest in the platform and global distribution,” De Ferrari said at the time. “We have a great product, but we simply do not have the scale to grow this globally.”
He remains at the helm of AMP until at least July 1 this year, the group statement says. As at the close of play last Thursday, AMP shares were up almost 5 per cent to A$1.325, still below the 2021 high point of A$1.61.