AMP’s last ditch attempt to retain control of its diversified real estate fund was understood to have involved a cash injection worth about $800 million that would result in the group holding shopping centres on its own balance sheet.
As predicted, the independent board of the AMP Capital Diversified Property Fund made a decision late Monday to recommend a proposal to merge ADPF with the Dexus Wholesale Property Fund and it will be voted on by unitholders in the coming weeks.
AMP Capital said in a statement that it would now continue to engage directly with unitholders, as well as with the independent board.
The alternative proposal was flagged by DataRoom on Monday before the announcement that the Dexus Property Group proposal had been recommended by the board.
The understandings is that AMP Capital had planned to put shopping centre assets in the fund worth about $800m on its own balance sheet, but the offer was not seen favourably by its investors.
The latest agreement comes after Sunsuper was recently said to have replaced AMP Capital as its manager with Mirvac Group and UniSuper said to be also in search of new management services.
AMP is in the middle of a plan to sell the majority of AMP Capital’s real estate and infrastructure asset management arm to US-based Ares Management, which has struck a nerve with some real estate investors who are unsure about its credentials.
AMP Capital on Tuesday was talking up the merits of its management track record of the fund since 1971, but two concerns said to be at the forefront of the minds of AMP Capital’s real estate investors is that senior members of management, including the overall real estate head Carmel Hourigan, have recently departed.
The former asset management experience of Ares centres more on other asset classes rather than real estate.
ADPF includes investments in buildings such as Sydney’s Quay Quarter office and retail complex at Circular Quay and the shopping malls Macquarie Centre in Sydney’s north and Pacific Fair on the Gold Coast.
Its properties are understood to be worth about $5bn and Dexus was first revealed to be circling the fund by this column on September 29.
Working for ADPF’s manager has been Evans and Partners Corporate Advisory and law firm Herbert Smith Freehills while Dexus has been working with Greenhill.
The looming loss of ADPF comes as AMP Capital will also likely soon see about $500m of Swiss Re’s real estate investment wrestled out of its grasp, as the global financial group looks to place its properties on the market.
AMP Capital is also looking to sell half of the $1bn EY tower at Circular Quay, a move that is thought to have been prompted by a need to fund redemptions out of the $7bn AMP Wholesale Office Fund.
AWOF investors, led by UniSuper, have hired Jarden to run a process to also consider another manager for that fund.
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