Pressure on AMP as Sunsuper pulls office mandate

Picture: NCA NewsWire / Steven Saphore

Further signs are emerging that AMP is under siege, with the $79bn Australian superannuation fund Sunsuper understood to be sacking AMP Capital as its real estate manager.

Sunsuper owns the central Melbourne office block at 330 Collins Street, which has been managed by AMP Capital and is worth hundreds of millions of dollars.

However, DataRoom understands Sunsuper has taken the mandate away from AMP Capital, with Mirvac to be the new manager of the complex.

ISPT — one of Australia’s largest property fund managers — will now also hold the mandate for Sunsuper when it comes to future real estate investments for the superannuation fund.

Analysts believe UniSuper, which has more than $90bn worth of funds under management, will follow suit with the funds it has invested in retail assets that are under the control of AMP Capital, AMP’s real estate and infrastructure manager.

It comes as Dexus Property appears poised to gain control of the AMP Capital-run AMP Capital Diversified Property Fund, which is worth more than $4bn, with negotiations potentially reaching the pointy end.

The Dexus proposal involves merging the ADPF with its Dexus Wholesale Property Fund.

Investors in AMP Capital, which has $190bn of assets under management, have been losing patience with the asset manager because of concerns about its performance and a string of controversies at its parent company AMP.

AMP Capital has also seen a raft of high profile departures, including real estate head Carmel Hourigan, who jumped ship to Charter Hall.

AMP is now considering a break-up or sale as it faces a number of challenges.

These include a decline in performance following the Hayne royal commission findings and controversy surrounding the head of AMP Capital, Boe Pahari, who was fined $500,000 for sexual harassment.

This all comes at a time that Ares Management continues to carry out work on a potential acquisition of AMP after it earlier put forward an informal bid at $1.85 per share, valuing the whole company at $6.4bn.

The group, which counts former Credit Suisse Australia boss John Knox within its ranks, has its eye on the prize within the business — AMP Capital — and has hopes of finding buyers for the bank and wealth management arm.

However, while Ares Management has been talking to a number of parties around the market, including regional banks, many insiders are sceptical that a sale will occur.

Regional banks like Bank of Queensland, Suncorp and Bendigo Bank would only be interested in buying the bank at a discount, according to sources.

Macquarie Group previously looked at a break-up of AMP but later walked away.

Sources say it would only buy the bank if it could be secured at a steep discount to its current book value.

One source said that lenders out of Japan and Singapore have recently been looking at buying regional banks in Australia, but the AMP Bank was not one of the top three, with others such as Bank of Queensland considered more attractive.

ME Bank has also been gaining attention from an M&A perspective, with Bendigo Bank said to have been looking.

Bendigo has previously worked with Goldman Sachs and JPMorgan and has also looked at AMP Bank, as reported by this column last year.

Elsewhere, it will be interesting to see if the recently launched investment bank Barrenjoey Capital Partners emerges on the ticket for the float of Blackstone’s Milestone Logistics business further down the track.

JPMorgan and Morgan Stanley have been working on a potential $1bn initial public offering.

Jabe Jerram — JPMorgan’s Australian investment banking co-head — and its Australian head of equity capital markets, Dyson Bowditch, resigned from the North American bank to join Barrenjoey late last week.