AMP Capital has A$8.1bn of dry powder to deploy in real assets as AUM falls 5.3%

The fund manager says it ‘continues to pursue quality infrastructure investment opportunities’ as AUM falls due to equity market declines.

AMP Capital has A$8.1 billion ($5.2 billion; €4.8 billion) of dry powder ready to deploy into real assets, according to a quarterly update from parent AMP Limited, but the asset manager’s overall assets under management declined by 5.3 percent in Q1 2020 due to “weaker investment markets”.

The firm’s average AUM over the quarter increased to A$203.4 billion from A$202.7 billion in Q4 2019, but the decline in public markets in Australia and around the globe saw AUM fall to A$192.4 billion at 31 March 2020. This was down from A$203.1 billion at the end of Q4 2019.

AMP Capital said it has A$8.1 billion of committed capital ready to deploy, of which A$1.6 billion is earmarked for transactions yet to close. The firm said it “continues to pursue quality infrastructure investment opportunities in the market”.

When asked about infrastructure asset valuations and whether this had impacted the decline in AUM, a spokesman for AMP Capital said the fall had been mostly driven by the losses in equity markets.

“Through our Multi-Asset Group, some underlying fund managers may have revalued unlisted infrastructure assets. However, given the small allocation, the impact on AMP Capital’s overall AUM would be minimal. There was no material impact to AMP Capital’s AUM from unlisted infrastructure during Q1,” the spokesman said.

AMP Capital carries out valuations on its direct unlisted infrastructure assets twice per year and again during significant events, the spokesman said. Infrastructure Investor understands that AMP Capital revised the value of some assets downwards during Q1 2020.

Outflows during the quarter included the return of A$300 million to investors in AMP Capital Infrastructure Debt Fund II and III after “strong performance outcomes”.

Net external cash inflows for AMP Capital increased to A$1.3 billion during the quarter, up from A$20 million of outflows in Q4 2019, primarily driven by inflows to fixed income products managed by China Life AMP Asset Management as investors moved to more defensive asset classes.

AMP Limited chief executive Francesco de Ferrari said: “Markets in Q1 were extremely volatile, particularly in March, with significant falls in equities, fixed income and key commodities impacting our assets under management. We have seen some recovery since the quarter-end, but expect market volatility to continue and the economic impact of the pandemic to emerge over the remainder of the year.

“AMP Capital saw strong external cashflows, particularly into fixed income products through our asset management partnership in China. Our infrastructure teams are also seeing opportunities for further investment, particularly in infrastructure debt.”