AMP offloads shares, bonds business

AMP Capital has entered into a deal with Macquarie, for the sale of its global equity and fixed income (GEFI) business, for a consideration of up to $185 million.

Macquarie will cough up a base payment of up to $110 million in cash, with a cash-earn out of up to $75 million to follow, which could be paid after the second anniversary of the transaction completion.

The GEFI business manages around $60 billion in assets under management (AUM) for AMP Australia, as well as external institutional, retail and direct clients.

Post completion, Macquarie expects to gain new and expanded investment capabilities in Australia and a number of international markets, with its AUM to total $720 billion.

James Georgeson, acting chief executive of AMP, commented that his company had reviewed the GEFI business in 2020, and found it needed greater scale to be competitive.

Ben Way, head of Macquarie Asset Management, added the transaction represents an opportunity to add scale and expand the company’s public investment capabilities, following its recent acquisition of US wealth manager Waddell & Reed.

“It cements Macquarie’s position as the leading investment manager in Australia by AUM and provides new clients joining us from AMP Capital with access to Macquarie’s diversified investment offerings and global platform,” Mr Way said.

The sale is expected to close in the first quarter of 2022.

There has continued to be a raft of changes at AMP, including a wave of reshuffled leads across the banking, advice and superannuation divisions, as well as a revamped operating model.

AMP also recently appointed former Bendigo and Adelaide Bank CEO, Mike Hirst, to its board.

The group is also set to see ANZ deputy chief Alexis George start in her new role as AMP CEO from 2 August.

For the meantime, Mr Georgeson, who is also chief financial officer, will lead the group as acting CEO.

[Related: Westpac exits insurance businesses]