The US fund manager will pay A$462 million ($328 million; €312 million) up front in cash for the business, which includes its assets under management of A$9 billion, its management platform, all AMP’s seed and sponsor investments in international infrastructure equity funds, and a “substantial portion” of its teams located in the UK, Europe, North America and Asia.
In addition, AMP will be entitled to further payments dependent on performance, including an estimated A$57 million of retained future carry and performance fees and an additional A$180 million contingent on future fundraisings.
In a statement, DigitalBridge said the platform it was acquiring includes the management rights to four investment funds, including the $1.4 billion Global Infrastructure Fund I and the $3.4 billion Global Infrastructure Fund II.
It added that Collimate’s investment team would operate as a distinct business unit within the DigitalBridge investment management platform and would allow it to “capitalise on smaller, high-return mid-market investment opportunities”.
AMP said it would use the proceeds from the sale to return capital to shareholders and pay down corporate debt. The transaction is expected to complete by Q4 2022.
Marc Ganzi, chief executive officer of DigitalBridge, said in a statement: “This transaction represents a unique opportunity to extend our leadership in digital investment management. In addition to accelerating and scaling the growth of our platform, we are empowering a team of high-calibre investment professionals who share our commitment to delivering strong long-term returns for investors and have significant experience investing in the value-added mid-market infrastructure segment directly adjacent to our flagship equity business.
“The business will deliver immediate financial benefits and growth potential, as we aim to enhance our ability to meet and exceed our near- and medium-term business goals.”
AMP confirmed in its own statement to shareholders that its previously planned demerger of Collimate Capital, which would have seen the business list separately on the Australian Securities Exchange, will no longer proceed.
AMP announced yesterday that Collimate Capital’s domestic infrastructure equity and real estate asset management business would be sold to Dexus, an Australian listed real estate fund manager.
AMP Ltd chair Debra Hazelton said that the break-up of AMP Capital represented a “strong outcome” for both AMP shareholders and stakeholders in the funds management business.
“It was clear in our 2021 portfolio review that we had two businesses that would be better separated and simplified and in doing so realise greater value and that is what we have achieved,” she said.
“AMP and Collimate Capital have built outstanding private markets businesses in infrastructure and real estate over many years. In selling these businesses to such respected specialists in DigitalBridge and Dexus, we are confident that the businesses’ clients and the talented teams transferring with them will benefit.”
The sales, once complete, will officially end AMP’s involvement in private markets investment, leaving a smaller company focused on wealth management, financial advice and banking.
AMP Capital was ranked among the largest infrastructure fund managers in the world, according to Infrastructure Investor data. It placed at number 10 in the latest edition of the II 100 ranking, with $19.6 billion of capital raised for infrastructure equity strategies in the period assessed. It was also the second-largest infrastructure debt fund manager, raising $15.5 billion in the period assessed for the latest edition of the II Debt 30 ranking.