Boe Pahari leaves AMP Capital as it seeks to list private markets biz

A CEO for the new unit is being sought, as parent AMP Ltd says the demerger and ASX listing would ‘unlock further value’ in AMP Capital’s infra and real estate businesses.

Outgoing AMP Capital CEO Boe Pahari

Boe Pahari, AMP Capital’s global head of infrastructure equity, is leaving the firm. The departure comes as AMP Limited is pursuing a demerger and public listing of AMP Capital’s private markets business, after an end to talks with Ares Management Corporation about the potential sale of the firm, according to PDI‘s sister title Infrastructure Investor.

“As part of the separation of Private Markets… Boe Pahari has decided to leave the business. Mr Pahari will work closely with the infrastructure equity leadership team to ensure a smooth transition,” AMP said in a statement.

Pahari was briefly chief executive of AMP Capital from June to August 2020, stepping down after controversy erupted over the revelation of allegations of sexual harassment made against him by a female subordinate in 2017.

The furore over Pahari’s appointment and subsequent resignation led to the departure of AMP chairman David Murray. Murray was replaced by Debra Hazelton, who swiftly launched a strategic review of the business that led to Ares’ initial interest.

An “international search process” for a new chief executive to lead Private Markets, as AMP is calling the new unit, is ongoing, the company added, with deputy chief executive David Atkin to continue leading the business in the interim.

Earlier this month, AMP announced that chief executive Francesco De Ferrari, who was leading AMP Capital on an interim basis, would be replaced in Q3 by ANZ deputy chief executive Alexis George.

Unlocking value

The proposed demerger, set to be completed in the first half of 2022, would “unlock further value” in AMP Capital’s private markets business, which comprises infrastructure equity and debt as well as real estate, parent company AMP said. The intention is to list the business on the Australian Securities Exchange under a new brand name.

The announcement follows months of speculation regarding Ares’ bid to take over the firm, with the US-based alternatives fund manager initially seeking to acquire AMP before withdrawing its bid in February.

It announced its intention to seek a 60 percent stake in AMP Capital for A$1.35 billion ($1.04 billion, €868 million) soon afterwards, before reportedly indicating an interest in pursuing a bid for 100 percent of the firm’s private markets business as recently as early April.

AMP indicated that it would seek to retain a stake of up to 20 percent in Private Markets. It will also retain ownership of AMP Capital’s global equity and fixed income business, for which AMP is still exploring sale or partnership options for, and AMP Capital’s multi-asset group, which is in the process of being transferred to the AMP Australia business.

An AMP spokesman did not respond to a request for further comment prior to publication on why it had chosen to end talks with Ares and pursue the demerger instead.

AUM down

A market update from AMP published this week revealed AMP Capital’s overall assets under management fell by 1.7 percent to A$186.5 billion during the quarter (down from A$189.8 billion in Q4 2020), and was also down on the same period last year when average AUM stood at A$203.4 billion.

In addition, the firm saw net external cash outflows of A$1.3 billion for the quarter, a figure it said was driven mainly by fixed income outflows and “planned divestment” of assets in closed-end infrastructure equity funds.

A spokeswoman for AMP Capital told Infrastructure Investor the sales of three infrastructure assets from its first Global Infrastructure Fund – part of AMP Capital’s Global Infrastructure Platform, which closed on $2.4 billion in December 2016 – had contributed to the firm’s net external cash outflows.

The divestments included: the sale of AMP Capital and Infracapital’s combined ownership interest in clean energy solutions provider Adven in September 2020 to institutional investors advised by JPMorgan Asset Management; the sale of Spanish broadcasting and telecommunications infrastructure provider Axion to Asterion Industrial Partners in October; and the sale of AMP Capital’s stake in Alpha Trains to APG in January.