CommIF review board rejects Plenary’s takeover bid

The independent board found a change of management for the AMP Capital-run vehicle was not in the best interests of investors.

Plenary Group‘s takeover bid for AMP Capital‘s A$1.4 billion ($1.03 billion; €876.6 million) Community Infrastructure Fund has been rejected by the fund’s independent board committee.

In a letter sent to investors yesterday, IBC chairman Ming Long said the committee had “unanimously” reached the conclusion that a proposal put forward by Plenary – as well as rival bids from Morrison & Co and Palisade Investment Partners – to take over the management of CommIF ultimately “did not exhibit sufficiently compelling or certain benefits to CommIF members to outweigh the uncertainty and risks that would arise from changing the management of CommIF”.

“Accordingly, the IBC does not consider that undertaking a process to change the management of CommIF is in the best interests of CommIF members,” Long added.

The outcome follows AMP Capital’s fund enhancement proposal shared with CommIF investors last week – ahead of Plenary’s presentation to the IBC – in which the former said it would lower management fees and increase governance in the vehicle.

The IBC’s letter to investors also acknowledged the recent departure of key staff from CommIF, six of whom left the fund last month to join Plenary’s new infrastructure funds management business. Former AMP Capital global head of social and aged care, Julie-Anne Mizzi, who previously oversaw CommIF, is set to lead the new business across Australia and New Zealand when she joins Plenary in September.

Despite these changes, Long said the current CommIF management team had “the knowledge, expertise and capability” to run the fund and “continue to successfully execute the investment strategy”.

In a statement, a spokeswoman for AMP Capital said the firm welcomed the committee’s decision: “AMP Capital is committed to continuing to deliver strong outcomes for investors in CommIF as it has done consistently over the past decade. We are pleased that after a comprehensive, independent review we have been selected to continue managing the fund.”

“The IBC decision is a welcome recognition of the investment-management experience and expertise of the 90-strong team that manages CommIF on behalf of its unitholders.”

A spokesman for Plenary said: “We believe we have put a compelling case to investors that demonstrates why the Plenary Funds Management team is best placed – in terms of talent, experience and stability – to manage the CommIF portfolio and we look forward to hearing what investors have to say about it.”

A forum for CommIF unitholders is expected be held on Monday, where an update will be provided by AMP Capital.