Advisers to the AMP Capital Wholesale Office Fund have recommended a short list of two candidates to take control of the $7bn real estate landlord.
The fund’s trustee board is due to announce the shortlist by the end of the week to the candidates in the running.
The process to consider a new manager for AWOF comes after the trustee this year set up an advisory committee of three real estate and corporate figures – former Future Fund property head Barry Brakey, Wesfarmers director Sharon Warburton and property veteran Paul Say.
Working as an adviser on the options for the fund‘s trustee board is investment bank Jarden.
Dexus, Mirvac, GPT, Charter Hall, Stockland and Queensland Investment Corp were all short-listed as possible parties to take over the running of the fund after they earlier submitted proposals.
The trustee board consists of executives from AMP Capital and are not considered to be independent by investors due to their AMP links.
AWOF’s investors themselves are understood to have recently been holding talks among themselves to establish the best party to take over the running of the fund after major staff losses in AMP Capital’s real estate unit has prompted them to seek alternatives.
Once recommended groups are put forward to investors, they will cast their vote on what party they believe is the best to manage their interests.
For the recommended party to take the reins as manager, investors holding more than 75 per cent of the fund need to be in favour.
The market talk is Mirvac is the front runner, given it does not already have a wholesale funds management arm, which may render it less conflicted than other contenders.
Major investors in the fund include UniSuper, Victorian Funds Management Corp and Treasury Corp.
AMP Capital’s real estate and infrastructure units have been under attack from rivals hoping to wrest control of its funds away from AMP after a tumultuous few years that included revelations from a royal commission of fees being charged for no service, sexual harassment claims against former AMP Capital boss Boe Pahari and a string of departures among top staff.
Already, investors in the AMP Capital Diversified Property Fund have voted to replace AMP Capital as its manager with Dexus.
AMP Capital has been earmarked for demerger, but some believe those plans may be derailed should AWOF fall into the hands of another manager.
AWOF consists of prized office assets including a stake in the Quay Quarter complex at Circular Quay, the office complex at Sydney’s Angel Place and its Collins Place office development in Melbourne.
AMP comprises a bank, wealth management unit and the AMP Capital funds management arm.
Last year the financial giant was subject to a buyout proposal by private equity firm Ares Management, but it opted not to pursue the proposal.
Shares in AMP, which recently appointed former ANZ Bank executive Alexis George as its chief executive, are trading at about $1 with its market value at $3.34bn.
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