Few would disagree that a strong regulator is required for a strong superannuation system. But APRA’s myopic focus on cost to members means its $70,000 Christmas party is unlikely to help its reputation.
Good investing requires real sacrifices, according to Oaktree’s Howard Marks, but you can’t expect to be compensated just for making them.
Alexis George cuts the Gordian Knot
AMP Capital is effectively no more, sold off to a menagerie of domestic and international managers. But the challenge of turning AMP around has barely begun.
The wretched story of AMP’s attempts to spin off its asset management arm, AMP Capital, has perhaps commanded more attention than even the savaging the wealth business received during the Hayne royal commission.
Adam Tindall was the first to propose that AMP Capital be spun-off from the main business in the wake of Hayne, but AMP’s board rejected the idea. New group CEO Francesco De Ferrari (returned now to Credit Suisse) sought a private buyer for the whole of AMP Capital in PE player Ares, who ultimately took the infrastructure debt business off its hands. Global equities and fixed income was hocked to Macquarie.
Alexis George, the latest executive to take the apparently cursed position of AMP CEO, ultimately decided to follow through on the public market divestment, renaming the business “Collimate Capital” before selling the local infrastructure and real estate business to Dexus and the international infrastructure equity arm to global infrastructure manager DigitalBridge.
Doubtless there will be some acrimony. The proposed float wasn’t that far off; Shawn Johnston, Collimate’s new CEO, had upped sticks from Boston to join the business; a lot of good graphic design work and market research has been squandered.
“The board determined that, when evaluated against a demerger, the two transactions would deliver greater value and certainty for shareholders, accelerate the realisation of that value, and provide greater stability for Collimate Capital’s clients and employees,” AMP told the ASX on Thursday (April 28). “As part of the transaction, key employees in Collimate Capital have also committed to moving to the new businesses to ensure continuity for clients.”
At any rate, AMP Capital’s short second and third lives as PrivateMarketsCo and Collimate Capital are now over. Alexis George has cut the gordian knot that bedeviled her predecessors, and the sale will leave the business holding a couple of billion dollars that it will use to pay down its corporate debt, execute a share buyback, and hand cash directly to its long-suffering shareholders.
The true challenge – and what will keep the commentariat from feting George just yet – will be turning the wealth management business around. That will be achieved mostly by following the de Ferrari-era plan of combining digital and human advice for a more “episodic” experience, with robots covering the day-to-day and humans stepping in when customers make big decisions about buying a house or starting a family. It speaks to the magnitude of that challenge that the piecemeal sale of an international business with some $178 billion of AUM is just a warm-up to the main game. But George has spoken on this before; there will be no revolution at AMP, so much as a righting of the ship.
“I want to simply leave the place better than when I found it,” George told Women in Super’s Sydney chapter in December 2021. “That doesn’t sound very visionary, but I mean that in every way. I want there to be an obvious successor; I want us to be respected in the industry, as a leader in what we do; I want the shareholders to love us – or at least like us,” George said.
“But I really want the place to be somewhere people want to work, want to be our customers, and want to be our shareholders. And if I can just make it a little bit better, that is good for me. That’s what will be important to me.”
