AMP Limited has launched a portfolio review that includes all its assets and businesses, including funds management arm AMP Capital.
The board of the firm, which is listed on the Australian Securities Exchange, said in a statement today that it remained committed to its transformation strategy under chief executive Francesco De Ferrari and newly-appointed chair Debra Hazelton, and that it was “making significant progress” in its aims.
However, it said it has recently seen an increase in unsolicited interest in its assets and businesses so has decided to launch a portfolio review to explore those opportunities further.
The review would ensure that all offers are assessed in a “considered and holistic manner, evaluating the relative merits as well as potential separation costs and dis-synergies, with a focus on maximising shareholder value”, the firm said.
AMP’s decision to assess its options follows the departure of chairman David Murray and board member John Fraser, and the demotion of Boe Pahari from his role as CEO of AMP Capital, following pressure from shareholders over how the firm handled allegations of sexual harassment made against Pahari by a female subordinate in 2017.
AMP Ltd’s operations can be broadly divided into three units: its Australian wealth management business; AMP Bank; and AMP Capital. It also has a smaller wealth management business in New Zealand.
A spokesman confirmed to Infrastructure Investor that all business units are up for review, including AMP Capital.
AMP Capital generated A$72 million ($53 million; €44 million) in operating earnings in H1 2020, equivalent to just over 36 percent of AMP Ltd’s total A$199 million operating earnings from retained businesses. This made it AMP Ltd’s most profitable business unit by some distance, with Australian wealth management the next-most profitable on A$59 million in operating earnings.
AMP Capital’s assets under management decreased by A$13.2 billion (6 percent) to A$189.9 billion in H1 2020 from FY 2019, while its fee income decreased by 4 percent to A$387 million in the same period, reflecting lower performance and transaction fees.
AMP Ltd earlier this month announced it would pay A$470 million in cash to buy back a 15 percent stake in AMP Capital that had been acquired by Japanese bank Mitsubishi UFJ Trust and Banking Corporation in 2011. That transaction will complete in Q3 2020.
The firm signalled that it saw a “significant opportunity” in private markets, with AMP Capital positioned to grow through further investment in markets adjacent to its existing experience in global infrastructure and Australian real estate.
In a statement, AMP chair Hazelton said: “The board believes that AMP has high-quality businesses with significant strategic value. The board and management firmly believe in our existing strategy, including a repivot to private markets in AMP Capital and are confident that this will deliver long-term value for shareholders.
“However, we have taken a decisive step to undertake a portfolio review to ensure we appropriately assess all options to maximise shareholder value in a considered and disciplined manner.”
AMP has appointed Goldman Sachs, Credit Suisse and King & Wood Mallesons as advisors to manage the review.