Sydney-based AMP Ltd is poised to sell AMP Capital’s infrastructure debt platform to Ares Management in a A$428 million ($310 million; €273 million) deal, reports PDI‘s affiliate title Infrastructure Investor.
The divestment of the platform from PrivateMarketsCo, as AMP Capital is now known ahead of a planned rebrand, comes before the expected demerger and public listing of the firm next year. The firm’s infrastructure debt arm currently has A$7 billion in assets under management.
According to a statement, AMP expects the cash proceeds from the sale to strengthen the capital position of the company. “Separation of the balance sheet and allocations of surplus capital between AMP Ltd and PrivateMarketsCo is continuing as part of the demerger preparations, with a further update to be provided closer to the date of the demerger,” it said. “The transaction will cease the future capital requirements for PrivateMarketsCo for the infrastructure debt platform.”
PrivateMarketsCo chief executive Shawn Johnson said: “PrivateMarketsCo and AMP will realise significant value from the divestment, as well as retaining our valuable sponsor investments and carried interest in the closed infrastructure debt funds.
“PrivateMarketsCo’s go-forward business will be focused on our key strength in managing equity investments in real estate and infrastructure with A$44 billion in AUM, and a pipeline for developing new products that meet the needs of our clients.”
The transaction is expected to complete in the first quarter of 2022. When it does, “the entire infrastructure debt investment strategy… and its investment team will transfer to Ares”, according to the statement. The demerger of PrivateMarketsCo is “on track” to complete in the first half of the year.
Ares initially sought to acquire AMP Ltd before withdrawing its bid in February. The US-based alternatives fund manager then announced its intention to seek a 60 percent stake in AMP Capital for A$1.35 billion soon afterwards, before reportedly indicating an interest in pursuing a bid for 100 percent of the firm’s private markets business in early April. Speculation regarding Ares’ bid came to a close when AMP Ltd announced the proposed demerger in late April.
Johnson’s appointment as chief executive of PrivateMarketsCo was announced in June, following an almost year-long search for a chief executive.