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Ares U-turn on AMP buyout

Global asset management company Ares have pulled out of their proposal to buy AMP.

Friday, February 12th 2021, 6:00AM 8 Comments

In a portfolio review of FY20, AMP have revealed that Ares Management have withdrawn their non-binding indicative proposal to buy out AMP.

The report said that, “Following detailed discussions, AMP has been advised last night by Ares that it does not intend to proceed with its non-binding indicative proposal for 100% of AMP [at] $1.85 per share.”

While acquisition of AMP is off the table, the report states that, “AMP continues to engage constructively with Ares in relation to AMP Capital as part of the portfolio review.”

The U-turn from global asset management giant, Ares, may come as a surprise to some but AMP’s broader position is one of positivity according to the report.

“The review has confirmed AMP’s transformation strategy for the AMP Australia (Australian wealth management and AMP Bank) and New Zealand wealth management businesses is likely to be the optimal outcome for shareholders. The AMP Board has therefore concluded the review of these assets.”

Ares put their non-binding indicative offer on the table shortly after the appointment of BlackRock Investment Management to the passive management of AMP’s KiwiSaver and wider investment scheme in October 2020

Tags: AMP AMP Capital AMP Life AMP Wealth Management Ares Blackrock

« Responsible talk not enough in 2021Mann on a mission to diversify financial advice »

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Comments from our readers

On 11 February 2021 at 3:26 pm Pragmatic said:
That's the thing with due diligence: once you pick at the scab you soon realize the scope of the problem...
On 12 February 2021 at 10:04 am Matron said:
Love to be a fly on the wall back at AMP HQ right now. It's been a slow news start to the year.
On 14 February 2021 at 6:15 pm gayle turner said:
AMP is fast fading to becoming irrelevant. However many NZers have interscated with the company over many years so it still has an interest.

It will be interesting if the govt officials selecting the go forward default providers finally put AMP out of its misery. A lot of active KiwiSaver members are still paying AMP high fees.
On 16 February 2021 at 1:43 pm Graeme33 said:
...offcourse closing their Commodity Fund exposure...indicates as the cycle turns another example..off them being out of touch Graeme Adams
On 16 February 2021 at 3:21 pm two cents said:
Low fee, more socially engaged, responsive and transparent firms are inheriting this space.
On 17 February 2021 at 11:08 am Contrarian said:
Nobody loves me, everybody hates me,
Guess I'll go eat worms...
On 17 February 2021 at 1:48 pm Amused said:
Completely in agreement with the above comments. Ares have well and truly dodged a bullet with this decision.
On 17 February 2021 at 4:11 pm Pragmatic said:
It will be fascinating to see how much of the price reduction from AMPs decision to move to passive investing. The following management fees (taken from the AMP Kiwisaver PDS dated 22 June 2020) remain:

AMP Default Fund: 0.35%
AMP Conservative Fund 0.88%
AMP Moderate Fund 0.98%
AMP Moderate Balanced Fund 1.03%
AMP Balanced Fund 1.03%
AMP Growth Fund 1.03%
AMP Aggressive Fund 1.13%

Members also incur a fee of $23.40 per annum per investor, with an additional charge of $1.95 per month even if they choose more than one fund

With Blackrock index fees circa 10bps (depending on the asset of course), the AMP Kiwisaver fees should look more like:

AMP Default Fund: <0.25%
AMP Conservative Fund <0.35%
AMP Moderate Fund <0.40%
AMP Moderate Balanced Fund <0.40%
AMP Balanced Fund <0.45%
AMP Growth Fund <0.50%
AMP Aggressive Fund <0.55%

Bet they don't!!!

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