AMP behind in race for Westpac wealth unit

AMP is lagging in the race for Westpac’s wealth unit. Picture: John Gass

AMP is said to be falling behind in the competition to buy Westpac’s $1bn-plus wealth management unit.

Westpac is understood to have short-listed parties for the unit, as the Kohlberg Kravis Roberts and CBA-owned Colonial First State, advised by JPMorgan, remains the favourite in the competition, which is being run by Morgan Stanley.

The understanding is that offers have come in below expectations – they were not far from the $1bn mark after Westpac had earlier hoped to achieve a price of between $1.5bn and $2bn for the business.

There have been suggestions that AMP, advised by UBS, had been working with a private equity firm – perhaps Blackstone – in its efforts to buy the wealth manager.

Macquarie Group is among the parties understood to have lobbed offers, along with other private equity parties, with The Australian earlier reporting that 15 first-round offers had been received.

Some also believe Macquarie’s interest is waning.

Final offers are due in July.

Mercer Group is believed to be closing in on Westpac’s superannuation business.

Funds under administration from the Westpac Panorama wealth management platform business were $105bn as at March 31, up from $104.8bn six months earlier.

Group funds on Westpac’s platforms were $140.2bn as at March 31, up from $139.3bn in the previous six months.

DataRoom revealed AMP’s interest in the wealth management unit in January.

Sources believe Netwealth is likely to be in the mix, but will have probably partnered with another group.

The understanding is that much of the separation work of Westpac’s wealth management unit from the bank will need to still be completed after a sale agreement has been reached.

AMP’s interest in the business comes as it sells its funds management arm Collimate Capital to DigitalBridge and Dexus.

Despite the agreement with Dexus, sources say that its real estate rival Mirvac is continuing attempts to gain control of Collimate’s wholesale office fund, while GPT and Vicinity Centres are angling for the opportunity to own the Collimate fund that manages its retail properties.