Following the announcement of a new joint venture with US investment manager Ares, the institution flagged it would likely sell down its funds management business to focus predominantly on the wealth space in future.
Speaking to media on Friday, Francesco De Ferrari said that while AMP Capital had “great capability” across the global equity and fixed income space, it lacked the scale to effectively compete in public markets – and that it was looking to “find a better solution for shareholders” around the businesses.
“We are competing against global players, a lot of the trends have shifted to passive, and ultimately it is a scale game. Size really counts in terms of being able to continuously invest in the platform and in global distribution … We have great product, we simply don’t have the scale required to grow this globally,” Mr De Ferrari said.
He said that AMP has already had a “number of discussions” and that will “definitely inform the market as soon as we can”. AMP will now focus on the Australian and New Zealand wealth businesses and AMP Bank, which will be supported by its strategic partnerships with Resolution Life and Ares, among others.
“All of those are very synergistic and supportive of the rest of the business, but effectively where these businesses are run by somebody else. It will be an Australian and New Zealand wealth manager powered by a series of very important and strategic synergistic partnerships,” Mr De Ferrari said.
The joint venture with Ares, which will see it own a controlling stake in AMP Capital’s private markets business, comes in the wake of the its decision not to pursue an offer for 100 per cent of AMP. Mr De Ferrari sees the deal as an opportunity to “accelerate the expansion and penetration” of AMP Capital products globally.
“They bring significant scale to our great product and we bring the great product and the client proximity … we’re really excited about the potential this Ares partnership can unlock for our investors, for our teams and for our shareholders,” he said.
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