AMP Capital sells stocks, fixed income business to Macquarie for $185m

AMP Capital has announced plans to sell its global equities and fixed income business to investment powerhouse Macquarie Asset Management in a deal worth $185 million.

The binding agreement includes a cash payment of $110 million this financial year and an additional $75 million that could be paid over the first two years, subject to meeting revenue targets.

AMP Capital’s equities business manages around $60 billion internally as well overseeing funds for a number of external institutional and retail clients.

AMP Capital has agreed to sell its global equities and fixed income business to Macquarie.Credit: Getty

The sale is part of AMP’s strategy to spin off and separately list AMP Capital’s private market business, which includes unlisted assets such as infrastructure and property, under fresh branding following months of failed takeover negotiations with US firm Ares.

Acting AMP chief James Georgeson said the group’s portfolio review conducted last year found AMP’s global equities business had “strong investment capabilities... but needed greater scale and broader distribution reach to compete effectively”.

The deal will transform Macquarie Asset Manager (MAM) into a $720 billion powerhouse. MAM head Ben Way said his team will work closely with AMP to integrate the business.

“It cements Macquarie’s position as the leading investment manager in Australia by [assets under management] and allows us to further diversify our client offering and bring new opportunities to clients joining us from AMP Capital,” Mr Way said.

Morningstar analyst Shaun Ler said the deal was positive for both parties, with AMP charging a premium and Macquarie gaining access to a business that will grow.

“The business will be more valuable under Macquarie because Macquarie can run this business more economically,” he said.

Mr Ler said AMP had seen “ongoing” money outflows due to its bruised reputation following the banking royal commission in 2018, where it was exposed for charging fees for no service and lying to the regulator. Its image took a further hit during its sexual harassment scandal last year.

“Outflows from AMP Capital’s public markets business have been ongoing. Even before the Boe Pahari scandal,” Mr Ler said. “Macquarie is a good firm with a good reputation. That should help stem some of the outflows.”

AMP chair David Murray and director John Fraser resigned last year amid an investor revolt over the promotion of Mr Pahari to AMP Capital chief executive even though he had been fined for sexually harassing a female subordinate.

Both AMP and Macquarie’s shares bounced in Thursday morning trading, rising by 0.62 per cent and 0.77 per cent respectively amid wider market gains.

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