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.
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.
Recommended for you
Clime Investment Management has enacted a range of growth initiatives to boost the firm’s reach with wholesale investors and a new approach targeting the retail market.
Generation Development Group, parent of Generation Life, has entered the ASX 200, having grown its funds under management to almost $4 billion.
Lonsec and SQM Research have highlighted manager selection as a crucial risk for financial advisers when it comes to private market investments, particularly due to the clear performance dispersion.
Macquarie Asset Management has indicated its desire to commit the fast-growing wealth business in Australia by divesting part of its public investment business to Japanese investment bank Nomura.
