Macquarie Group eyes an AMP break-up

Could AMP be headed for a break-up? Picture: Hollie Adams for The Australian

It appears that it is not only fuel retailer and wholesaler Caltex that has caught the eye of Macquarie Group — the bank is believed to be keeping a watching brief assess the merits of a buyout of the listed AMP.

DataRoom understands that Macquarie has made approaches about acquiring AMP’s bank and asset management business, AMP Capital.

However, deterring Macquarie from launching an on-market bid for all of the business is that it does not want to acquire its wealth management operations.

Macquarie has been around AMP since 2017, when this column revealed it was vying for the company with partners China Life and Kohlberg Kravis Roberts as part of a consortium deal.

But the fresh talk comes after a disappointing set of numbers delivered by AMP, with the financial giant plunging $2.5bn into the red, as earnings from its wealth management arm fell 49.9 per cent to $182m.

The bank delivered $141m in profit and AMP Capital $198m.

Working with AMP is investment bank UBS, which is said to have been assessing options for AMP Capital.

However, the thinking is that should that part of the business — seen as the jewel in the crown — be placed on the market, then the company would be heading for a break-up.

Experts say AMP’s sum of parts are now worth more than the company as a whole. However, AMP Capital is reliant on the AMP bank’s deposits.

European bank ING is known to have been keen to enter the Australian banking market so it will be interesting to see if it lines up for the lender should a carve-up occur.

AMP’s New Zealand wealth management sale is heading towards the final stages, with final bids due next month.

It is understood that one of the parties closing in on the business is TA Associates, which has a stake in New Zealand-based Fisher Funds Management and Australian equities and fixed income manager Yarra Capital.

Fisher Funds is a specialist investment manager with more than 250,000 clients serving the KiwiSaver, retail, pension and wholesale markets. The business has been expected to sell for between $NZ450m ($430m) and $NZ600m after it delivered $44m in profit for the 2019 year. Working on the sales process is Jarden in NZ and Credit Suisse.

AMP chief executive Francesco De Ferrari is a former Credit Suisse executive.

The Swiss bank on Thursday announced the appointment of Phin Glover to head its Asia-Pacific ESG research.

Meanwhile, some had suggested TPG Capital could be in the auction, although this column understands it is not. The group is instead gunning for ANZ’s equipment lender UDC Finance in New Zealand, as revealed by DataRoom, with Apollo and Heartland Bank, advised by Jarden.

TPG Capital managing director Malcolm Jackson is New Zealand-based and apparently eager to build up a presence in that market.