AMP Capital eyes US acquisition

AMP’s infrastructure manager AMP Capital may be poised to embark on a major acquisition in the US, with investment bank UBS said to be working with the group that controls $178.9 billion worth of assets.

The move comes as the listed AMP continues to work with both UBS and Macquarie Capital on options for its life insurance operations that may include a sale, as management comes under pressure to improve the company’s performance.

AMP Capital owns a major portfolio of shopping centres as well as infrastructure assets globally, and the speculation surrounding its interest in the US comes after it recently moved to expand its $23.7bn real estate empire by weighing into the US-based real estate debt markets.

AMP Capital is a keen investor in renewable energy assets and may also compete for the $16.8bn WestConnex Sydney motorway project. However, toll roads globally and also airports are also on its agenda.

AMP would not comment on the speculation, but at the company’s half-year results, chief executive Craig Meller and executives said the company would consider acquisitions in areas where the company had key strengths. He also noted the company’s interest in taking minority stakes in offshore businesses. Such moves had worked well for it in China.

UBS is working for AMP as some bet that the Swiss banking powerhouse is already in line to be an adviser to Commonwealth Bank of Australia on options for its Colonial First State Global Asset Management business.

JPMorgan has been working on options for CFSGAM on behalf of the CBA since at least April and it is understood that the bank will move to appoint other advisers swiftly.

However, market talks is that it will not run any official process to do this.

UBS and Macquarie Capital are both equity capital markets leaders in Australia, but their joint role advising AMP on the sale of its life insurance unit may create a conflict that CBA cannot ignore.

Goldman Sachs has been repeatedly mentioned as the bank that is in line for a mandate, given the strong relationship with its head of mergers and acquisitions being one of the investment bank’s former employees.

However, while Goldman’s may be well positioned to run the contest, there is room for conflict as it also handles the sale of ANZ wealth unit. If that sale extends until next year, Goldman would face a situation where it is also offering counsel to one of CBA’s biggest rivals at the same time it is working on a sale of its assets.