AMP hit with top-level exodus amid fund scrutiny as Carmel Hourigan leaves AMP Capital for Charter Hall

Property boss Carmel Hourigan heads departing senior executives as new CEO Boe Pahari looks to put his stamp on AMP Capital.

Carmel Hourigan was the most senior female executive at AMP Capital. Picture: Chris Pavlich

AMP’s influential funds arm AMP Capital has been rocked by the departure of global property chief Carmel Hourigan, who has left the company to head Charter Hall’s office unit.

The once blue-chip fund manager has been under siege since it emerged that its new chief executive, Boe Pahari, had been appointed despite a $500,000 fine for past sexual harassment.

Ms Hourigan, the most senior female executive at AMP Capital, was a contender for the top job after growing the property unit, and three other senior executives have also exited as the business that is a linchpin of AMP’s strategy is shaken up.

The shock move will see the property veteran step into the role of chief executive, office, at Charter Hall, with a mandate to expand the listed group’s $20bn office holdings. Incumbent Adrian Taylor will leave the company and she will report to chief executive David Harrison.

Mr Harrison told The Australian that bringing Ms Hourigan into the company’s executive committee added to its “bench strength” and industry players suggested that she could be in line to succeed him as chief executive once his 16-year tenure ends. Mr Harrison said he had no plans to leave.

Charter Hall was last year named as a contender to buy AMP Capital’s real estate business and although this prompted vigorous denials at the time, the $40bn funds manager could be well placed should the business either be sold off or carved up.

In a major shake-up AMP Capital’s director people, culture and corporate ESG, Madeleine Mac Mahon, also resigned after 12 years at the funds manager. The global head of infrastructure debt, Andrew Jones, will also leave AMP Capital and Adrian Williams stepped down from his role as the acting CFO and chief operating officer for personal reasons.

Their roles were filled by other AMP Capital executives — with the gender balance remaining. Aideen O’Donovan was appointed CFO and Lisa Hurley and Lauren Crystal appointed co-heads of people and culture.

A series of other appointments have been made across the infrastructure and distribution businesses, as Mr Pahari intends to unveil his vision for AMP Capital at the parent company’s results early next month, with his reshuffle sold internally as a way of driving a new strategy.

Funds management executives said AMP Capital’s real estate platform was “under duress”, partly due to the underperformance of its shopping centres, and also due to executive change, most notably Ms Hourigan’s sudden exit.

But the challenge now lies in convincing the global pension and local superannuation fund investors who have queried the handling of Mr Pahari’s elevation and the company’s subsequent defence of its processes and culture.

Asset consultant JANA this month put AMP Capital’s funds “on watch” over the handling of the Pahari matter and industry experts said there would be a similar reaction at most research houses as they watched for significant personnel changes.

“That will be a red flag when investors are considering their products following a period of significant upheaval,” one consultant told The Australian.

“If you start seeing a lot of personnel change you do dig a lot deeper and it takes investors a longer time to get comfortable,” he said, with implications beyond the $29bn property unit and across the entire $192bn platform.

One funds manager said wholesale investors would be really concerned about the direction of AMP Capital, which may come under pressure to quickly fill Ms Hourigan’s role after it replaced other departing executives.

AMP Capital has been under siege since the appointment of Boe Pahari as CEO. Picture: Britta Campion

AMP Capital has been under pressure since the decision to appoint Mr Pahari as head of the business effective July 1, rapidly replacing the highly regarded Adam Tindall, amid reports that the London-based infrastructure boss had threatened to leave or even buy out the business unless he was given the top job.

During the public furore, the company confirmed Mr Pahari had been appointed despite the $500,000 fine for a sexual harassment complaint in 2017.

Ms Hourigan, a special adviser to the Property Male Champions of Change group, was reported to have been a contender for the top role, after taking the property business into the US in a busy five years at AMP Capital after missing the top role at property company GPT Group.

As global head of property she restructured the business, also pushing into real estate debt, growing retail funds and kicking off major projects including Sydney’s Quay Quarter Tower. The company’s office fund performed strongly but its shopping centre fund was hit by hefty writedowns.

AMP Capital said after five successful years of building the real estate business, “Carmel Hourigan has decided to leave AMP Capital to take up a new role at Charter Hall”.

“A process to replace Carmel has already commenced and Carmel will remain in the role to manage an orderly handover of responsibilities,” a statement said.

AMP Capital said at the time the Pahari incident became public that it had treated it seriously and conducted an investigation led by an external lawyer, that identified lower level breaches of its code of conduct for which he was hit with a financial penalty and counselling.

Mr Pahari later apologised to the woman who complained about his conduct and expressed his regret. AMP’s board and chief executive reviewed the matter and the investigation before he was appointed.

AMP chief executive Fran­cesco De Ferrari has said Mr Pahari’s comments were not acceptable, but he was remorseful and accepted the consequences.

Mr Pahari has not publicly addressed the allegations at length since his appointment, which has also been defended by AMP Capital chairman John Fraser and AMP chairman David Murray.