AMP and Ares to enter JV

AMP Limited and Ares are moving enter into a joint venture for AMP Capital’s Private Markets business.

AMP has announced to the Australian Securities Exchange that it has entered into a heads of agreement to pursue the formation of the joint venture which would see Ares acquire 60% of private markets and assume management control.

AMP and Ares have entered into a 30 day exclusivity period.

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Explaining the rationale behind the proposed transaction, AMP said the partnership would facilitate an acceleration of growth in Private Markets while unlocking immediate value for AMP shareholders.

“Ares, with a current market capitalisation of more than $US13 billion has a global footprint and capabilities in credit, private equity and real estate which are highly complementary to Private Markets,” it said.

It described the key components of the transaction as being:

− A Private Markets joint venture valued at A$2.25 billion (excluding retained assets and contingent consideration outlined below) with Ares acquiring 60 per cent for A$1.35 billion and AMP retaining the residual 40 per cent (A$0.90 billion).

− The Private Markets joint venture businesses will include: o Infrastructure equity

o Infrastructure debt

o Real estate

o Other minority investments.

− AMP to retain up to A$0.9 billion of assets and contingent consideration related to the current private markets businesses comprising: o Seed and sponsor and related investments of approximately A$0.5 billion

o Surplus capital released of A$0.1 billion; and

o Contingent consideration of up to A$0.3 billion related to future performance including carried interest from existing funds.

− Total implied value for AMP Capital’s existing private markets business of up to A$3.15 billion.

 




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