AMP office fund vote pushed back to Monday as Dexus, Mirvac battle for management control

The company’s key office fund vote has been delayed as Dexus and Mirvac tussle for control of the $7.5bn vehicle.

AMP’s key office fund vote has been delayed as Dexus and Mirvac tussle for control of the $7.5bn vehicle.

The battle for control of the flagship $7.5bn office fund run by AMP has been delayed after a key vote to determine its future was pushed out until next week.

The vote, which was set to be held on Friday, is effectively a showdown between Dexus, which has bought the $28bn Collimate Capital local real estate and infrastructure platform from AMP, and Mirvac, which has marshalled the support of investors in the vehicle.

The vote has been postponed with senior sources suggesting the move came just as proxies for the meeting were due to close at 11am on Wednesday morning.

The move risks angering the investors in the AMP Capital Wholesale Office Fund who had been hoping for a final resolution to the saga.

The shift could signal that Mirvac’s efforts to take control of the fund are gaining momentum with AMP on Monday making an eleventh hour fee concession if investors went with a transfer to Dexus, and saying it would only do the legal minimum to transfer the assets to Mirvac if that company won the vote.

But the contenders are facing a tight vote on the fund’s management with both well-regarded as major office landlords and developers. Dexus can claim a larger development pipeline and an existing pooled funds operation, while Mirvac has cutting edge mixed use capabilities.

The vote was adjourned by the independent chair of the meeting, former ASIC chairman Alan Cameron, so that investors could have the time to consider the last minute changes proposed by AMP.

Major investors had indicated that they were about to put in their proxies by 11am on Wednesday but had only received the new information last Monday. The meeting will be adjourned for one day according to a message from the fund trustee to investors. The vote is expected to be held on Monday.

“The AWOF Trustee has now consulted with the independent chair of the Meeting, Mr Alan Cameron AO (Chair). After taking advice, the Chair has concluded and informed the AWOF Trustee that he considers that: the AMP Update of 11 July 2022 is unlikely to be material information in respect of the resolutions to be considered at the Meeting,” the note said.

The note said that “nevertheless it may be desirable for Members to have additional time to consider the AMP Update and whether any information in the AMP Update impacts the Member’s voting decision”.

It added that “an extended adjournment of the Meeting would only add to the current uncertainty” and “in any event the AWOF Trustee must hold the Meeting by 20 July 2022 being within two months of the requisition notice received from the group of AWOF investors”.

The fee changes could be significant. The management fee cut offered by AMP could mean its proposal is a cheaper option for superannuation funds over the next decade with investors estimated to be about $27m better off by the end of 2026. But some investors have taken issue with AMP’s governance of the funds, rather than the fee levels.

The Dexus purchase of the local Collimate empire has come under attack from rival fund managers seeking to gain control of key vehicles with Plenary Group also targeting an infrastructure fund.

Plenary has been meeting with investors to gauge support for a bid to win management control of AMP’s Community Infrastructure Fund.

The firm was knocked back by an AMP independent board committee last year and the fund has recently had success under AMP control as it shifts into the Dexus stable, raising more than $40m in recent weeks, with commitments coming from Korean investors.

Dexus has outlaid $250m for the platform but further payments partly depend on it keeping the management of the funds longer term.

Dexus has pitched itself as offering the most stable alternative as it has control of the full Collimate platform but rival fund managers have raised concerns about the potential for conflicts of interest and concentration risk if too few large property fund managers are available for superannuation fund investors.

The conflicts of interest issue has been raised by asset consultants but affects only a small number of existing investors in the AWOF vehicle. Dexus has also told investors it has strict conflicts policies in place and major property firms often team up with their wholesale vehicles in order to buy and develop very large premium assets.

The AMP office fund owns key assets including a stake in Sydney’s Quay Quarter Tower.