by Daniel Smith
US investment giant BlackRock has been tipped to be the winning contender in a three-horse race to purchase the AMP public markets arm.
The news was reported last week in the Australian Financial Review, which stated “The sale of the GEFI business was recently whittled down to three potential buyers, of which Challenger was recently ruled out and sources say BlackRock is a potential winning suitor.”
AMP’s GEFI suite is valued at A$130 billion out of the group’s total funds under management of A$186 billion, according to March quarter results.
Part of the larger strategy at AMP, the sale is to focus on its private markets division, due to be split next year as a separate listed entity, according to the private markets strategy announced in April after sale negotiations with US investment firm Ares fell through.
The statement released at that time stated that the AMP strategy is to “create two more focused businesses, better equipped to pursue and allocate capital to distinct growth opportunities, and realise efficiencies”.
Business one would be AMP Limited, “A retail-focused, wealth management, investment and banking group with scale and market-leading positions in the Australian and New Zealand market.”
And the second business, Private Markets, “A leading global private markets investment manager with a strong performance track record in differentiated asset classes of infrastructure equity, infrastructure debt and real estate, and capabilities to expand into attractive growth adjacencies.”
The statement added, AMP Limited would retain: a minority stake in Private Markets of up to 20% to participate in the future growth of the business; AMP Capital’s global equity and fixed income (GEFI) business, for which AMP is currently exploring sale or partnership options.
It seems those sale options may have been found.
BlackRock is already a company known to have a keen interest in AMP, after AMP NZ hired the US firm to manage its KiwiSaver portfolio in a passive fund switch last year.
Until the sale of GEFI is formally announced, AMP Capital has appointed Michael Gray, a former leader of investment strategy with Commonwealth Bank’s insurance arm, to head the group’s New Zealand investment team.
Gray will lead the team in this interim position until October 2021.
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