AMP office fund’s $8bn battle to go to a vote

The battle for AMP’s real estate assets will go to a vote that could see Mirvac take control of the key office fund away from Dexus.

MP’s sale of its $2bn Collimate Capital business is coming under pressure with big investors. Picture: supplied.

Financial services company AMP’s sale of its $2bn Collimate Capital business is coming under pressure with big investors requisitioning a meeting for a vote on the future of a major office fund that could see property group Mirvac take control.

AMP last month agreed to sell the management of its local real estate and infrastructure empire to Dexus with about $27.9bn of assets, split between $18.2bn of real estate and $97.bn of infrastructure, slated to switch across.

However, this move could be hit as close to 60 per cent of the investors in the AMP Capital Wholesale Office Fund have written to the vehicle’s trustee to call the meeting to decide the near $8bn vehicle’s future.

Those seeking the meeting are keen for Mirvac to run the fund rather than going ahead with the planned switch to Dexus, with the matter to be resolved by a vote in about two months.

Both managers have been pitching to the big superannuation funds who are invested in the vehicle, which owns interests in major assets like the Quay Quarter Tower at Sydney’s Circular Quay.

Mirvac has chased control of the fund for about 18 months and was previously short-listed to run it last year after a controversial process which decided to keep the incumbent in charge.

But AMP’s surprise dumping of plans to spin off Collimate Capital, and the sale of the local platform to Dexus and the offshore infrastructure equity business to DigitalBridge, reparked the contest for the fund.

Both parties have pitched themselves as presenting the best long-term option for the wholesale investors with Mirvac billing itself as a cleanskin manager which can run the fund with fewer conflicts.

Dexus has drawn upon its track record as the premier manager of pooled capital with the firepower to deliver unique opportunities to access large property deals.

Property players said that the wholesale investors were keen to decide the office fund’s destiny themselves, rather than simply following AMP’s $250m sale of the Collimate’s local management platform to Dexus, which is also protected by a price mechanism if funds do not transfer across.

Senior figures suggested that investors had decided to carve out their own path after becoming fed up with the drawn process and uncertainty while AMP worked out its exit.

The calling of a meeting in the wholesale funds world is rare and has drawn parallels with when Westpac-backed Hastings Funds Management was ousted as manager of The Infrastructure Fund in 2017.

Investors in the AMP fund have also been concerned by the impact on the staff and its board, advised by Jarden, is reviewing proposals from both Mirvac and Dexus.

AMP could take a hit as the price it receives from Dexus for the local Collimate platform is partly contingent on the funds successfully transferring to it for the longer term.

Analysts are watching the battle closely with Dexus having the capacity to win upgrades if it retains the bulk of the funds. It is not exposed if some funds leave but is keen to keep the platform together to deliver for investors.

For Mirvac, taking control of the office fund would be a huge step up for its funds management ambitions at a time when the residential market is slowing.